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Political Law Digests

Q: X was forced to return to the Philippines, where he learned that Y, through alleged fraudulent means,
were able to transfer the ownership of the subject property in his name. Hence, X filed the instant complaint
for annulment of title and reconveyance of property with damages against respondents and the Register of
Deeds, alleging that the signature on the Deed of Absolute Sale, by virtue of which he purportedly sold the
subject property to respondents, was a forgery. Is X entitled to annulment of title and reconveyance of
property with damages?

A: Yes. Y's American citizenship was establishe, effectively rendering the sale of the subject property as to him
void ab initio, in light of the clear proscription under Section 7, Article XII of the Constitution against foreigners
acquiring real property in the Philippines. Thus, lands of the public domain, which include private lands, may be
transferred or conveyed only to individuals or entities qualified to acquire or hold private lands or lands of the public
domain. Aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public
domain as well as private lands. A contract that violates the Constitution and the law is null and void and vests no
rights and creates no obligations. It produces no legal effect at all. Furthermore, Y is barred from recovering any
amount that he paid for the subject property, the action being proscribed by the Constitution. The other undivided
one-half share, which pertained to Y, shall revert to X, the original owner, for being the subject of a transaction
void ab initio. (Heirs of Donton v. Stier, G.R. 216491, August 23, 2017)

Q: X, representing Government Corporate Counsel issued two memoranda authorizing the release of
proceeds from the special assessment fees collected from the GSIS Foreclosure Project. Thus, a
Memorandum requested the release of the amounts of P500k to X and P200k to Y. Commission on Audit
found found that disbursements were made directly to the agency officials, i.e., X and Y, instead of to bona
fide suppliers and without proper documentation, in violation of "Government Auditing Code of the
Philippines.” Will Y be administratively liable for simple misconduct and conduct prejudicial to the best
interest of the service?

A: No. Y should not be held administratively liable for grave misconduct and/or dishonesty. Apart from admittedly
receiving the checks purportedly as attorney's fees and for the purchase of reading materials, both charged against
the GSIS Foreclosure Project fees, records do not show that Y directly or actively participated in the disbursement
of the said funds, or authorized the same. To constitute an administrative offense, misconduct should relate to or
be connected with the performance of the official functions and duties of a public officer. The misconduct is
considered as grave if it involves additional elements such as corruption or willful intent to violate the law or to
disregard established rules, which must be proven by substantial evidence; otherwise, the misconduct is only
simple.(Office of the Ombudsman v. Faller, GR No. 215994, June 06, 2016)

Q: During the May 2004 National and Local Elections, COMELEC appointed X as Chairman of the Municipal
Board of Canvassers. MBOC proclaimed Mayor, Vice-Mayor, and eight members of the Sangguniang Bayan
as winning candidates and later on (2 days after), proclaimed a new set of winning candidates. MBOC also
caused the transfer of the place for canvassing of votes from Maguindanao to Cotabato City without prior
authority from the COMELEC. X was charged with Grave Misconduct, Gross Neglect of Duty, Gross
Inefficiency and Incompetence, and Conduct Prejudicial to the Best Interest of the Service. Will the case
prosper?

A: No. X may be absolved from administrative liability for her acts of double proclamation and unauthorized transfer
of the place for canvassing as such acts were done under duress. To warrant dismissal from the service, the
misconduct must be grave, serious, important, weighty, momentous, and not trifling. Gross Neglect of Duty is
characterized by want of even the slightest care, or by conscious indifference to the consequences, or by flagrant
and palpable breach of duty. Meanwhile, certain acts may be considered as Conduct Prejudicial to the Best Interest
of Service as long as they tarnish the image and integrity of the public office. The Court outlined the following acts
that constitute this offense: misappropriation of public funds, abandonment of office, failure to report back to work
without prior notice, failure to keep in safety public records and property, making false entries in public documents,
and falsification of court orders. In order to sustain a finding of administrative culpability, only the quantum of proof
of substantial evidence is required, or that amount or relevant evidence which a reasonable mind might accept as
a equate to support a conclusion. (Comissions on Elections v. Mamalinta, G.R. 226622, March 14, 2017)
Political Law Digests
Q: A Complaint-Affidavit filed by spouses XY before the Ombudsman against Z for criminal and
administrative violations of RA 3019, Rule X, IRR of RA 6713, and money laundering. XY averred that they
are the owners of a Drug Store, while Z was the School Principal of an Elementary School and President of
its Teacher’s Association. XY began the construction of their drug store in line with a MOA with Z. DepEd
officials informed XY that the MOA was illegal as it did not have the proper DepEd approval, and that the
school could not enter into any commercial pursuits because it is not a registered cooperative. XY also
later learned that the Teachers' Association is not a legal entity and, hence, could not enter into the MOA.
Is Z administratively liable only for Simple Misconduct or Grave Misconduct?

A: Grave misconduct. To warrant dismissal from the service, the misconduct must be grave, serious, important,
weighty, momentous, and not trifling. The misconduct must imply wrongful intention and not a mere error of
judgment and must also have a direct relation to and be connected with the performance of the public officer's
official duties amounting either to maladministration or willful, intentional neglect, or failure to discharge the duties
of the office. In order to differentiate gross misconduct from simple misconduct, the elements of corruption, clear
intent to violate the law, or flagrant disregard of established rule, must be manifest in the former. Z had no authority
to lease out a portion of the school premises, it being owned by the Provincial Government. While Z claim that the
money received from the complainants in connection with the lease were spent for public purposes, they failed to
submit official receipts and other documents that would support their claim. (Office of the Deputy Ombudsman for
Luzon v. Molina, G.R. 220700, July 10, 2017)

Q: X, Credit and Collection Officer of a University was filed with estafa in connection with his failure to remit
money representing deductions made from the salaries of the employees of the university in payment of
various accounts and P2M representing tuition and other fees collected from students’ tuition fee. X filed a
Complaint-Affidavit against Y before the Ombudsman, accusing him of violating Section 3 (e) of RA 3019.
X concludes that Y's acts of issuing the Supplemental Resolutions and filing the Informations
for estafa before the RTC were made with manifest partiality, evident bad faith, or gross negligence. Did the
Ombudsman gravely abused its discretion in finding no probable cause to indict Y of violating Section 3
(e) of RA 3019?

A: NO. Court’s consistent policy has been to maintain noninterference in the determination of the Ombudsman of
the existence of probable cause, provided there is no grave abuse in the exercise of such discretion. This observed
policy is based not only on respect for the investigatory and prosecutory powers granted by the Constitution to the
Office of the Ombudsman but upon practicality as well. (Ciron v. Guiterrez, G.R. 194339-41, April 20, 2015)

Q: DOH issued AO 67, s. 1989. It required drug manufacturers to register certain drug and medicine
products with the FDA before they may release the same to the market for sale. FDA issued Circular No. 8,
s. 1997 which provided additional implementation details concerning the BA/BE testing requirement on
drug products. Z manufactures and trades multisource pharmaceutical product which did not undergo
BA/BE testing. FDA sent a letter to Z, stating that no more further revalidations shall be granted until
respondents submit satisfactory BA/BE test result. Z filed a petition for prohibition and annulment of
Circular Nos. 1 and 8, s. 1997 alleging that it is the DOH, and not the FDA, which was granted the authority
to issue and implement rules concerning RA 3720. Will the case prosper?

A: NO. Administrative agencies may exercise quasi-legislative or rule-making powers only if there exists a law which
delegates these powers to them. Accordingly, the rules so promulgated must be within the confines of the granting
statute and must involve no discretion as to what the law shall be, but merely the authority to fix the details in the
execution or enforcement of the policy set out in the law itself, so as to conform with the doctrine of separation of
powers and, as an adjunct, the doctrine of non-delegability of legislative power. In general, an administrative
regulation needs to comply with the requirements laid down by Administrative Code of 1987, on prior notice, hearing,
and publication in order to be valid and binding, except when the same is merely an interpretative rule. This is
because when an administrative rule is merely interpretative in nature, its applicability needs nothing further than
its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. (Republic
v. Drugmaker’s Lab, G.R. 190837, March 5, 2015)

Q: X is an employee of the Court of Appeals, particularly assigned to its Budget Division and holding the
positions of Budget Officer I and Utility Worker I. Crimes of Robbery and Falsification of Public Document
Political Law Digests
were filed against X. X allegedly offered Y 50,000 in exchange for some records in the court. Y reported the
incident and discovered that some of the volumes were missing. Y received a bag containing a gift-wrapped
package which turned out to be the missing records.The contents were reviewed by Y and it was found that
there were new documents inserted therein. It was found that the duplicate original decisions did not bear
such promulgations and that the signatures of the justices were forged. Is X guilty?

A: No. There being no circumstantial evidence sufficient to support a conviction, the Court acquits X. The
Constitution mandates that an accused shall be presumed innocent until the contrary is proven beyond reasonable
doubt. The burden lies on the prosecution to overcome such presumption of innocence, failing which, the
presumption of innocence prevails and the accused should be acquitted. This, despite the fact that his innocence
may be doubted, for a criminal conviction rests on the strength of the evidence of the prosecution and not on the
weakness or even absence of defense. If the inculpatory facts and circumstances are capable of two or more
explanations, one of which is consistent with the innocence of the accused and the other consistent with his guilt,
then the evidence does not fulfill the test of moral certainty and is not sufficient to support a conviction, as in this
case. (Atienza v. People, G.R. 188694, February 12, 2014)

Q: The Republic expropriated the property of X. X contended that the offer price is unreasonably low and
that she should be compensated the fair market value of her properties at the time of the taking which must
also cover the fair and just replacement cost of the improvements on the subject lots. How should just
compensation be determined?

A: In determining just compensation, the courts must consider and apply the parameters set by the law and its
implementing rules and regulations in order to ensure that they do not arbitrarily fix an amount as just compensation
that is contradictory to the objectives of the law. The courts may, in the exercise of their discretion, relax the
formula's application, subject to the jurisprudential limitation that the factual situation calls for it and the
courts clearly explain the reason for such deviation. (Republic v. Ng, G.R. No. 229335, 221698-70, November
29, 2017.)

Q: Corp A, a GOCC, filed a case against Corp B. Corp B filed a petition for reconsideration contending that
the entire proceedings should be nullified on the ground that Corp A, was represented by a private firm,
instead of the OGCC, in violation of the Administrative Order No. 130. Is the contention of Corp B valid?

A: As a general rule, government-owned or controlled corporations, their subsidiaries, other corporate off springs,
and government acquired asset corporations (GOCCs) are not allowed to engage the legal services of private
counsels. Under the Administrative Code of 1987, the OGCC shall act as the principal law office of GOCCs.
Nonetheless, in exceptional cases, private counsel can be hired with the prior written conformity and acquiescence
of the Solicitor General or the Government Corporate Counsel, and the prior written concurrence of the Commission
on Audit. (First Mega Holdings, Corp. v. Guiguinto Water District, G.R. No. 208383, June 8, 2016.)

Q: X joined the government service as a casual clerk for the Municipal Treasurer. A complaint was filed
against X for failing to declare in his SALN several properties under her husband’s name, stock
subscriptions and several real properties. X argues that she acquired the properties through lawful means
and that the purchased property by her husband did not form part of their conjugal property. Is X liable for
Dishonesty and Grave Misconduct for not filing her SALN warranting her dismissal from service?

A: No. The element of intent to commit a wrong is required under both the administrative offenses of Dishonesty
and Grave Misconduct. Indeed, the failure to file a truthful SALN puts in doubt the integrity of the public officer or
employee, and would normally amount to dishonesty.However, the mere non-declaration of the required data in the
SALN does not automatically amount to such an offense. A public officer or employee becomes susceptible to
dishonesty only when such non-declaration results in the accumulated wealth becoming manifestly
disproportionate to his/her income, and income from other sources, and he/she fails to properly account
or explain these sources of income and acquisitions. In this case, there is no substantial evidence of intent
to commit a wrong, hence X should not be dismissed from service. (Daplas v. Department of Finance G.R.
No. 221153, April 17, 2017.)
Political Law Digests
Q: X Corp, a non-stock, non-profit corporation, filed a petition in the SC, praying that a TRO be issued to
restrain the implementation of an Ordinance pertaining to the revised schedule of FMV of all lands and
other structures, whether for residential, commercial, and industrial uses. It also increased the tax
payments made by the QC residents for their real properties. The Sanggunian of QC argued that the petition
is procedurally infirm because X Corp (1) failed to exhaust its administrative remedies and (2) has no legal
capacity to sue since its Certificate of Registration as a corporation was revoked by the Securities and
Exchange Commission (SEC). Will the petition prosper?

A: No. The exhaustion of administrative remedies doctrine requires that before a party may seek intervention from
the court, he or she should have already exhausted all the remedies in the administrative level. However, the rule
admits of exceptions, one of which is when strong public interest is involved. This case falls under the said
exception. The increase in real property taxes to be paid based on the assailed Ordinance triggers a strong public
interest against the imposition of excessive or confiscatory taxes. Courts must therefore guard the public's interest
against such government action However, the petition will still be dismissed for lack of capacity to sue.
Jurisprudence provides that an unregistered association, having no separate juridical personality, lacks the
capacity to sue in its own name. (Alliance of Quezon City Homeowners' Association, Inc. v. Quezon City
Government, G.R. No. 230651, October 16, 2018.)

Q: X filed a case for certiorari and prohibition against COMELEC resolution (No. 9222) approving a direct
contract with Smartmatic for the PCOS machines and extended warranty program dated January 30, 2015.
X contends that it is violative of the GPRA (Procurement Law). Under R.A. No. 9369, the COMELEC
is authorized to use an Automated Election System. Smartmatic proposed to “extend” the warranty of
PCOS machines for 3 years (for 2014 and 2016 elections) including diagnostics of all existing PCOS
machines and preparations for the elections. Will the case prosper?

A: No. Alternative methods of procurement are allowed when (GPRA IRR):


1.) There is prior approval of the head of the procuring entity on the use of alternative methods of procurement.
2.) The conditions required by law for the use of alternative methods are present.
3.) Procuring entity must ensure that the method chosen promotes economy and efficiency.
4.) The most advantageous price is obtained.

The parameters for valid direct contracting are found in Section 50, Article XVI of the GPRA. Here, the 10 year
warranty by Smartmatic only provides for a warranty on availability and access to purchase of parts and services
(Smartmatic only warranted a 1 year replacement). Part of the AES procurement project is that Smartmatic must
train COMELEC personnel to service the machines. This, coupled with the availability of parts (10 years) should
mean that COMELEC already has the means to service the machines. The extended warranty is premature.
Lastly, it is not a continuing contract (extension), it is a new contract, with a new offer and consideration with a new
payment. (Pabillo v. Commission on Elections G.R. Nos. 216098, April 21, 2015.)

Q: A devolution program was implemented by the national government pursuant to a law. Prior to the
devolution, X held the position of Provincial Health Officer I (PHO I). After 2 years of the implementation of
the devolved program, X was appointed by the Governor to the PHO II position. A law was passed, whereby
the hospital positions previously devolved to the local government unit of were re-nationalized and reverted
to the DOH. The position of PHO II was then re-classified to Chief of Hospital II. X was among the personnel
reverted to the DOH, however she was made to retain her original item of PHO II instead of being given the
reclassified position of Chief of Hospital II. Aggrieved, X filed a case claiming she has a vested right to the
said position. Will the case prosper?

A: Yes. Personnel of national agencies or offices shall be absorbed by the LGUs to which they belong or in whose
areas they are assigned to the extent that it is administratively viable determined by the oversight committee:
Provided, that the rights accorded to such personnel pursuant to civil service law, rules and regulations shall not be
impaired. Provided further, that the regional directors who are career executive service officers and other officers
of similar rank in the said regional offices who cannot be absorbed by the LGU shall be retained by
the national Government, without any diminution of rank, salary or tenure. (Civil Service Commission v. Yu
G.R. No. 189041, July 31, 2012.)
Political Law Digests
Q: X was a deputy ombudsman under the administration of President Y who was ordered dismissed after
being charged by the Office of the President with gross neglect of duty and misconduct. Can the President
validly order the dismissal of X?

A: No. Section 8(2) of RA 6770 or The Ombudsman Act of 1989 was unconstitutional by granting disciplinary
jurisdiction to the president over a deputy ombudsman as it violates the independence of the Office of the
Ombudsman. Subjecting the Deputy Ombudsman to discipline and removal by the President, whose own alter egos
and officials in the Executive Department are subject to the Ombudsman's disciplinary authority, cannot but
seriously place at risk the independence of the Office of the Ombudsman itself. The Office of the Ombudsman, by
express constitutional mandate, includes its key officials, all of them tasked to support the Ombudsman in carrying
out her mandate. (Gonzales III v. Office of the President of the Philippines, G.R. Nos. 196231 & 196232, January
28, 2014.)

Q: City A, City B, and City C enact curfew ordinances in line with President X’s program to “rid the streets
of drunks and youths”. All three cities impose curfew hours on minors subject to differing exceptions.

City A lists four exceptions – (1) those accompanied by parents or guardians, (2) those running lawful
errands such as buying medicines, (3) night school students or those required by employment to be outside
beyond 10:00, (4) those who work at night.

City B lists the following exceptions – (1) minors with night classes; (2) those working at night; (3) those
who attended a school or church activity, in coordination with a specific barangay office; (4) those traveling
towards home during the curfew hours; (5) those running errands under the supervision of their parents,
guardians, or persons of legal age having authority over them; (6) those involved in accidents, calamities,
and the like and (7) during these specific occasions: Christmas eve, Christmas day, New Year's eve, New
Year's day, the night before the barangay fiesta, the day of the fiesta, All Saints' and All Souls' Day, Holy
Thursday, Good Friday, Black Saturday, and Easter Sunday

City C lists the following exceptions – (1) Those accompanied by their parents or guardian; (2) Those on
their way to or from a party, graduation ceremony, religious mass, and/or other extra-curricular activities
of their school or organization wherein their attendance are required or otherwise indispensable, or when
such minors are out and unable to go home early due to circumstances beyond their control as verified by
the proper authorities concerned; (3) Those attending to, or in experience of, an emergency situation such
as earthquake and similar incidents; (4) When the minor is engaged in authorized employment; (5) When
the minor is in [a] motor vehicle or other travel accompanied by an adult; (6) When the minor is involved in
an emergency; (7) When the minor is out of his/her residence attending an official school, or other similar
private activity sponsored by the city, barangay, school, or other similar private civic/religious
organization/group; and (8) When the minor can present papers certifying that he/she is a student and was
dismissed from his/her class/es in the evening or that he/she is a working student.

Association D composed of young adults claim that these ordinances are unconstitutional for the following
grounds; [A] result in arbitrary and discriminatory enforcement, and thus, fall under the void for vagueness
doctrine; [B] suffer from overbreadth by proscribing or impairing legitimate activities of minors during
curfew hours; [C] deprive minors of the right to liberty and the right to travel without substantive due
process; and [D] deprive parents of their natural and primary right in rearing the youth without substantive
due process. Rule on the Petition.

A: [A] No. A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that men
of common intelligence must necessarily guess at its meaning and differ as to its application. It is unconstitutional
in two (2) respects: (1) it violates due process for failure to accord targeted persons fair notice of the conduct to
avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions. The petitioners do not assert
confusion as to prohibited conduct but only a lack of enforcement guidelines. But even if the ordinances do not
provide methods for determining whether a suspect violated curfew, officers may still rely on the method for
determination of age in RA 9344. Since suspected violators may be able to present competent evidence of identity,
in the absence of which officers may make a determination in accordance with law, the law is not cannot fall under
the void for vagueness doctrine.
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[B] No. The application of the overbreadth doctrine is limited to a facial challenges and thus, applicable only to free
speech cases. Since there is no allegation of a violation of free speech rights the overbreadth doctrine is
inapplicable.

[C] Only the ordinance of City C is constitutional. Minors enjoy the same Constitutional Rights as adults and is
entitled to the same scrutiny in equal protection challenges. Considering that the right involved is here is a
fundamental right – the right to travel – the test to be used in the Strict Scrutiny Test. The State must show that
there is (i) a compelling state interest and (ii) the means used is least restrictive, or narrowly tailored to achieve the
interest. It has been ruled that children's welfare and the State's mandate to protect and care for them as parens
patriae constitute compelling interests. The State has a compelling interest in imposing greater restrictions on
minors than on adults. Cities A and B’s ordinances however are not narrowly tailored since the exceptions are too
limited, and thus, unduly trample upon protected liberties. Though it allows minors to engage in school or church
activities, it hinders them from engaging in legitimate non-school or non-church activities in the streets. Meanwhile,
although City C does not impose the curfew during Christmas Eve and Christmas day, it effectively prohibits minors
from attending traditions such as simbang gabi without adults. It also does not allow minors to exercise their right
to peaceably assemble through political rallies or city council meetings during curfew hours. City C on the other
hand, carefully lays down exceptions respecting the minors’ constitutional rights such that the only things banned
are unsupervised activities by minors who publicly loiter at night. Thus only City C survives the Equal Protection
Challenge.

[D] No. The rearing of children for civic efficiency are is not only a parental right, but also a duty. It is a reflection of
the State's independent interest to ensure that the youth would eventually grow into well-developed citizens of this
nation. This does not mean that this duty belongs to the Parents alone, since by the Constitution’s use of the qualifier
"primary" connotes only a superior right of the parents over the State in the upbringing of their children. When
actions concerning the child have a relation to the public welfare or the well-being of the child, the State may act to
promote these legitimate interests. Legal restriction on minors, especially those supportive of the parental role, may
be important to the child's chances for the full growth and maturity that make eventual participation in a free society
meaningful and rewarding. The Curfew Ordinances are but examples of legal restrictions designed to aid parents
in their role of promoting their children's well-being. (Samahan ng mga Progresibong Kabataan v. Quezon City,
G.R. No. 225442, [August 8, 2017])

Q: Congress enacted Agency A to accelerate the development of the former military bases in Subic and
Clark through the sale of portions of Metro Manila Military Camps. Fort B in Metro Manila is one of those
which Agency A may dispose of through sale. The Housing Board issued to Agency A, a Certificate of
Compliance for Demolition covering Area 1, composed of housing for both active and retired military
officers, and Area 2 which is classified as the Consular and Diplomatic Area. When the residents of Areas
1 and 2 filed suit to enjoin the demolition planned by Agency A, they included in the suit an allegation that
the Head of Agency A was without authority as he was irregularly filed by the President. May titles to public
office be attacked collaterally?

A: No. The title to a public office may not be contested except directly, by quo warranto proceedings; and it cannot
be assailed collaterally. Also, it has already been settled that prohibition does not lie to inquire into the validity of
the appointment of a public officer. (Consular Area Residents Association, Inc. v. Casanova, G.R. No. 202618,
[April 12, 2016])

Q: Engr. X is the brother of Police Officer Y, who was convicted by Judge Z for Qualified Trafficking in
Persons. PO Y filed a Notice of Appeal, but Engr. X noticed that the records was not forwarded to the Court
of Appeals for three years. Engr. X contends that the sanctions of reprimand and warning issued to Judge
Z was not enough and filed a complaint for Gross Negligece and Dereliction of Duty against the Court
Administrator for allegedly failing to monitor the incompetence of Judge Z. Engr. X alleges that the Court
Administrator is equally guilty of the delay. Will the complaint prosper?

A: No. In cases involving public officials, gross negligence occurs when a breach of duty is flagrant and palpable.
Gross negligence refers to negligence characterized by the want of even slight care, with a conscious indifference
to the consequences, insofar as other persons may be affected. The quantum of evidence necessary to find an
individual liable for gross negligence is substantial evidence, or "that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion." It does not necessarily mean preponderant as
Political Law Digests
in civil cases, but such kind of relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. Engr. X has not shown any prima facie evidence to support his claim that CA Marquez and DCA Bahia
should be held equally liable for the delay in the transmittal of the case records of Police Officer Y to the Court of
Appeals in due time. Absent any proof to the contrary, Court Administrator is presumed to have regularly performed
his duties. (Re: Darwin A. Reci, A.M. No. 17-01-04-SC (Resolution), [February 7, 2017])

Q: Office A issued an Administrative Order implementing a "Do-It-Yourself" Program. Chief X of the


Records Section received a Memorandum instructing her to temporarily relocate her Section's equipment
to another office to accommodate the renovation work. Chief X replied by raising safety and integrity
concerns about the records of her office, while also asking what remains of her Section’s duties after the
Program is implemented. Office A then directed Chief X to show cause why no disciplinary action should
be taken against her for non-compliance with the relocation. Chief X maintained her readiness to comply
with the relocation directive while reiterating the various concerns she raised. Office A constituted a
Disciplinary Board and charged her with Gross Insubordination, Refusal to Perform Official Duties, and
Conduct Prejudicial to the Best Interest of the Service, giving her five to reply and suspending her for a
period of ninety (90) days. Chief X argues that she was denied Procedural Due Process for lack of a
preliminary investigation. Will the suit prosper?

A. No. In administrative proceedings, procedural due process simply means the opportunity to explain one's side
or the opportunity to seek a reconsideration of the action or ruling complained of. Where opportunity to be heard,
either through oral arguments or pleadings, is accorded, there is no denial of procedural due process. Chief X was
afforded Due Process since the Show Cause Memorandum directed her to explain why no disciplinary action should
be taken against her, with her submitting a reply letter. Moreover, Office A allowed her to file an Answer to refute
the charges of Gross Insubordination, Refusal to Perform Official Duties, and Conduct Prejudicial to the Best
Interest of the Service against her, satisfying the requisites of Due Process. (Disciplinary Board, Land
Transportation Office v. Gutierrez, G.R. No. 224395, [July 3, 2017])

Q: In November 2008, Company A filed two applications for sales promotion permit before the the FDA, for
a promo. Company A followed up after 15 days lapsed without action from the FDA. Company A was orally
advised of a Memorandum prohibiting promotional activities by Tobacco companies. Eventually they were
informed that under the Tobacco Regulation Act (RA 9211), all promotional activities by Tobacco
Companies were banned as of July 2008. Company A filed an appeal arguing that RA 9211 merely restricts
and does not prohibit tobacco advertising; that it had acquired a vested right over the granting of its sales
promotional permit applications, considering that the FDA has been granting such applications prior to
January 5, 2009; and that FDA violated its right to due process as well as their right to property. Will the
suit prosper?

A: The controversy in this case is with respect to the differences between RA 7394 and RA 9211. RA 7394, Art.
109 grants the DOH, through the BFAD (now FDA) the power to approve applications for Tobacco advertisements.
Meanwhile, RA 9211, Section 29 created an Inter-Agency Committee to implement the Tobacco Regulation Act.
This impliedly repealed RA 9734 Art. 109 and removed the DOH-FDA’s power to rule over applications for Tobacco
Advertisements. Since the declared policy of RA 9211 is "a balanced policy whereby the use, sale and
advertisements of tobacco products shall be regulated in order to promote a healthful environment, the Inter-Agency
Committee has the exclusive authority to implement the provisions of RA 9211 according to this policy, signifying
that it shall also take charge of the regulation of the use, sale, distribution, and advertisements of tobacco products,
as well as all forms of "promotion". (Department of Health v. Philip Morris Philippines. Manufacturing, Inc., G.R. No.
202943, [March 25, 2015])

Q: President X issued Executive Order 12 creating the Presidential Anti-Graft Commission (PAGC) and
vesting it with the power to investigate or hear administrative cases or complaints for possible graft and
corruption, among others, against presidential appointees and to submit its report and recommendations
to the President. The next President, issued an Executive Order 13 abolishing the PAGC and transferring
its functions to the Office of the Deputy Executive Secretary for Legal Affairs. Is EO 13 Constitutional?

A: Yes. Section 31 of the Administrative Code of 1987 grants the President continuing authority to reorganize the
offices under him in order to achieve simplicity, economy and efficiency. The transfer of the PAGC is within the
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President’s continuing "delegated legislative authority to reorganize". The abolition of the PAGC did not require the
creation of a new, additional and distinct office since it only altered the administrative structure of the Office of the
President. This change did not require Congressional appropriation of funds since the President's authority to "direct
changes in the organizational units" is consistently included in the general appropriations laws. Moreover, the
President is explicitly allowed by law to transfer any fund appropriated for the different departments, bureaus, offices
and agencies of the Executive Department which is included in the General Appropriations Act, to any program,
project or activity of any department, bureau or office included in or approved after the General Appropriations Act.
It is also not illegally vested with judicial power just because the Division was named Adjudicatory. The Division
cannot try and resolve cases, its authority being limited to the conduct of investigations, preparation of reports and
submission of recommendations. Neither does it encroach upon the powers of the Ombudsman since the primary
jurisdiction of the Ombudsman to investigate and prosecute cases refers to criminal cases cognizable by the
Sandiganbayan and not to administrative cases. In any event, the Ombudsman's authority to investigate both
elective and appointive officials in the government is not exclusive. It is shared with other similarly authorized
government agencies. Lastly, it does not violate the equal protection clause by conferring the Division with
jurisdiction only to presidential appointees occupying upper-level positions in the government. Presidential
appointees come under the direct disciplining authority of the President. The President has the corollary authority
to investigate such public officials and look into their conduct in office. There are substantial distinctions that set
apart presidential appointees occupying upper-level positions in government from non-presidential appointees and
those that occupy the lower positions in government since the former occupy their office by virtue of the mandate
of the electorate, while appointive officials hold their office by virtue of their designation thereto by an appointing
authority. (Pichay, Jr. v. Office of the Deputy Executive Secretary for Legal Affairs-IAD, G.R. No. 196425, [July 24,
2012], 691 PHIL 624-645)

Q: The PCGG sequestered Company A, a wholly-owned subsidiary of Company B. Thereafter, it nominated


Mr. X and Mr. Y to sit on the Board of Company A. Senator Z called for a Hearing In Aid of Legislation to
investigate allegations of mismanagement in Company A, while calling Mr. X and Mr. Y as resource persons.
The committee of Senator Z filed a report finding overwhelming mismanagement by the PCGG, Mr. X and
Mr. Y in Company A. This report was approved by the Senate by a resolution on the same day it was filed.
Mr. X and Mr. Y are challenging the resolution for being hastily accepted, and for denying them the right to
counsel. Is the challenge meritorious?

A: No. The legislative power of inquiry upon any committee of Congress, carries with it all powers necessary and
proper for its effective discharge. Senator Z’s Committee cannot be faulted for submitting its report, given its
constitutional mandate to conduct legislative inquiries. Nor can the Senate be faulted approving the report on very
same day otherwise the wide latitude given to Congress in Article VI, Section 21 would be rendered pointless.
Neither can they claim their right to counsel was violated since this can only be invoked by a person under custodial
investigation suspected for the commission of a crime. (Philcomsat Holdings Corp. v. Senate of the Republic of the
Philippines, G.R. No. 180308 (Resolution), [June 19, 2012], 688 PHIL 260-265)

Q: Two teenagers approached and informed the police that a woman with long hair and a dragon tattoo on
her left arm had just bought shabu in the area. The police saw X, a woman who matched the said description
and smelled like liquor. The police asked to search X and she agreed and gave a plastic containing some
crystals later examined and verified to be methamphetamine. Are the search and arrest valid?

A: The arrest and the search are both illegal. First, the act of walking while reeking of liquor per se cannot be
considered a criminal act nor did X act suspiciously. Absent any overt act showing the commission of a crime, the
warrantless arrest is rendered invalid. Second, the police did not have any personal knowledge that X had just
committed a crime. A hearsay tip by itself does not justify a warrantless arrest. Last, in order to deem as valid a
consensual search, it is required that the police authorities expressly ask, and in no uncertain terms, obtain the
consent of the accused to be searched and the consent thereof established by clear and positive proof, which were
not shown in this case. (Reyes y Capistrano v. People of the Philippines, G.R. No. 229380, June 16, 2018)

Q: A writ of amparo was denied by the SC and remanded for the RTC to take cognizance. An investigation
by the NBI is still going on but the AFP and CHR investigation have been at a standstill. After 2 years of
investigating where the missing person is, the RTC recommends archiving the case. Should the SC grant
the recommendation of the RTC?
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A: No. Archiving of cases is a procedural measure designed to temporarily defer the hearing of cases in which no
immediate action is expected, but where no grounds exist for their outright dismissal. Under this scheme, an inactive
case is kept alive but held in abeyance until the situation obtains in which action thereon can be taken. While it may
appear that the investigation conducted by the AFP reached an impasse, it must be pointed out that there was still
an active lead worth pursuing by the NBI. Thus, the investigation had not reached a dead-end. (Balao v. Ermita,
G.R. No. 186050, June 21, 2016)

Q: The NBI filed an information with the Office of the Ombudsman against X. The information alleged that
X committed grave misconduct when he connived with other people to defraud a bank when he processed
the government’s expropriation of a piece of land in Laguna. The Ombudsman found him guilty and the
case was brought to the CA where the CA found X guilty of simple neglect of duty. Can the Ombudsman
intervene in a case after the court gives its judgment?

A: Yes. Even if not impleaded as a party in the proceedings, the Office of the Ombudsman has legal interest to
intervene and defend its ruling in administrative cases for it is his duty to act as a champion of the people and to
preserve the integrity of the public service. The Ombudsman has legal standing to intervene in appeals from its
rulings in administrative cases, provided, that the Ombudsman moves for intervention before rendition of judgment
pursuant to Rule 19 of the Rules of Court. The rule requiring intervention before rendition of judgment, however, is
not inflexible since it is merely a rule of the court. Jurisprudence provides that intervention after judgment was
allowed when the validity or constitutionality of the Ombudsman's powers and mandate was put in issue. Since the
Court does not find any of the excepting circumstances laid down in jurisprudence and while the Ombudsman had
legal interest to intervene in the proceeding the period for the filing of its motion to intervene had already lapsed as
it was filed after the CA had promulgated its Decision. (Office of the Ombudsman v. Bongais, G.R. No. 226405, July
23, 2018)

Q: The government, as part of the Comprehensive Agrarian Reform Program, has expropriated a piece of
land and determined its value by using the average gross product (AGP) formula. Is the use of the AGP
method a valid way of determining just compensation for the land expropriated?

A: No. There are factors that must be considered by the RTC as Special Agrarian Court. These are:
1. Compensation must be valued at the time of taking, or the time when the landowner was deprived of the
use and benefit of his property, such as when title is transferred in the name of the Republic of the
Philippines.
2. The land’s character and its price determine valuation from the time of taking at the time of taking. In
addition, the factors enumerated under Section 17 of RA 6657, as amended, i.e., (a) the acquisition cost of
the land, (b) the current value of like properties, (c) the nature and actual use of the property and the income
therefrom, (d) the owner's sworn valuation, (e) the tax declarations, (f) the assessment made by government
assessors, (g) the social and economic benefits contributed by the farmers and the farmworkers, and by
the government to the property, and (h) the non-payment of taxes or loans secured from any government
financing institution on the said land, if any, must be equally considered.
3. The Regional Trial Court may impose interest on the just compensation as may be warranted by the
circumstances of the case and based on prevailing jurisprudence.
4. The Regional Trial Court is not strictly bound by the DAR’s valuation.

The case is remanded back to the RTC to follow the guidelines. (Department of Agrarian Reform v. Berina, G.R.
No. 183901, July 9, 2014)

Q: The City Government of X signed a CNA with Union Y for the rank and file employees. The COA
disallowed the salaries given to the employees of Union Y because said union was not registered and
accredited by the CSC. The COA held all the members of Union Y as well as the Mayor of City X solidarily
liable for the amount disallowed. Did the COA commit grave abuse of discretion?

A: The COA can disallow expenses but they committed grave abuse of discretion in holding the entire Union Y
liable. The members of the Union who were not officers during the CNA signing should be held to be innocent due
to their lack of participation and good faith. It should only be the officers of Union Y, the Mayor of City X and the
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Sangguniang Panglungsod of City X that are liable. (Silang v. Commission on Audit, G.R. No. 213189, September
8, 2015)

Q: The Commission on Audit disallowed the salary expenses of employee X who was working under POEA.
The COA also held Y, the administrator of POEA, personally liable for the salary expenses. Is there a grave
abuse of discretion by COA in disallowing the salary expense and holding Y personally liable for it?

A: There was no grave abuse of discretion in disallowing the expense but there was a grave abuse of discretion in
holding Y personally liable for it. COA's exercise of its general audit power is among the constitutional mechanisms
that gives life to the check and balance system inherent in our form of government. It has also been declared that
the COA is endowed with enough latitude to determine, prevent, and disallow irregular, unnecessary, excessive,
extravagant or unconscionable expenditures of government funds. As to the second issue, although a public officer
is the final approving authority and the employees who processed the transaction were directly under his
supervision, personal liability does not automatically attach to him but only upon those directly responsible for the
unlawful expenditures. (Dimapilis-Baldoz v. Commission on Audit, G.R. No. 199114, July 16, 2013)

Q: X has been convicted of rape and acts of lasciviousness. He filed for candidacy in Zamboanga City to
run for mayor but COMELEC motu propio denied his COC because of the perpetual absolute
disqualification penalty that came with X’s conviction for the aforementioned crimes. Did the COMELEC
decision violate X’s right to due process? Did the Local Government Code amend the provision for
perpetual absolute disqualification in the RPC?

A: There was no violation of due process. COMELEC’s motu pro denial of X’s candidacy was not quasi-judicial but
administrative in nature and thus, need not involve due process. Administrative power is concerned with the work
of applying policies and enforcing orders as determined by proper governmental organs. As X's disqualification to
run for public office had already been settled in a previous case and beyond dispute, it is incumbent upon the
COMELEC to cancel his CoC or else it will not be fulfilling its duty to enforce and administer all laws and regulations
relative to the conduct of an election.

No. The LGC and the RPC can be reconciled – Section 40 (a) of the LGC allows a prior convict to run for local
elective office after the lapse of two (2) years from the time he serves his sentence but the provision should not be
deemed to cover cases wherein the law imposes a penalty, either as principal or accessory, which has the effect of
disqualifying the convict to run for elective office. Section 40 (a) of the LGC has not removed the penalty of perpetual
absolute disqualification which petitioner continues to suffer. Thus, X remains disqualified to run for any elective
office pursuant to Article 30 of the RPC. (Jalosjos v. Commission on Elections, G.R. No. 205033, June 18, 2013)

Q: Corp A filed a Complaint for recovery of possession with damages or payment of just compensation
against Government Entity B. Corp A found out that Government Entity B’s transmission towers and
transmission lines encroached upon Corp A’s land without its knowledge and consent. On the other hand,
Government Entity B claims that Corp A’s president granted it the permit to enter the subject land construct
the aforementioned towers and lines. In the course of the proceedings, the parties agreed to narrow down
the issue to the payment of just compensation and agreed to settle the case but the proposed compromise
did not push through. The Court of Appeals ruled that since the taking of the property occurred sometimes
in 1985, R.A. No. 8974 which was approved and took effect subsequent thereto does not apply, and the
provisions of Rule 67 of the Rules of Court should govern the case. Is the CA correct?

A: No, the CA is incorrect. Rule 67 of the Rules of Court requires the expropriator to deposit the amount equivalent
to the assessed value of the property to be expropriated prior to entry. The assessed value of a real property
constitutes a mere percentage of its fair market value based on the assessment levels fixed under the pertinent
ordinance passed by the local government where the property is located. In contrast, R.A. No. 8974 requires the
payment of the amount equivalent to 100% of the current zonal value of the property, which is usually a higher
amount. The deposit requirement under rule 67 of the Rules of Court impeded immediate compensation to the
private owner, especially in cases wherein the determination of the final amount of compensation would prove highly
disputed. Thus, it is the plain intent of R.A. No. 8974 to supersede the system of deposit under Rule 67 with the
scheme of ‘immediate payment’ in cases involving national government infrastructure projects.
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Statutes are generally applied prospectively unless they expressly allow a retroactive application. However, if a
right be declares for the first time by a subsequent law, it shall take effect from that time even though it has arisen
from acts subject to the former laws, provided that it does not prejudice another acquired right of the same origin.
In this case, the government had long entered the subject land but Corp A initiated inverse condemnation
proceedings after the effectivity of R.A. No. 8974; hence, procedurally and substantially, the said law should govern.
Moreover, the Court said that physical possession gained by entering the property is not equivalent to expropriating
it with the aim of acquiring ownership thereon. Lastly, it is settled that where actual taking was made without the
benefit of expropriation proceedings, and the owner sought recovery of the possession of the property prior to the
filing of expropriation proceedings, the Court has rules that it is the value of the property at the time of taking that is
controlling for purposes of compensation. (Felisa Agricultural Corporation v. National Transmission Corporation,
G.R. No. 231655 & 231670, July 2, 2018).

Q: There were field trials for “bioengineered eggplants” known as Bt Talong, administered by University X
and Corp Y. Bt Talong contains a very destructive insect pest to eggplants. The Bureau of Plant Industries
issued two 2-year Biosafety Permits for field testing of Bt Talong after University X’ field test proposal
satisfactorily completed biosafety risk assessment for filed testing. Respondent Z filed a Petition for Writ
of Kalikasan alleging that the Bt Talong filed trials violated their constitutional right to health and a balance
ecology considering that the Environmental Compliance Certificate (ECC) was not secured prior to the field
trial, the required public consultations under the Local Government Code were not complied with, and as
a regulated article under DAO 08-2002, BT Along is presumed harmful to human health and the
environment, and that there is no independent, peer-reviewed study showing its safety for human
consumption and the environment. However, the petitioners in this case argue that the case should be
dismissed for mootness in view of the completion and termination of the BT Along field trials and the
expirations of the Biosafety Permits. Moreover, DAO 08-2002 has already been superseded by JDC 01-
2016.Does the case fall under the exception to the general rule that the Court may only adjudicate actual,
ongoing controversies?

A: No. Section, Article VIII of the 1987 Constitution provides that “judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are legal demandable and enforceable…”. When a case
is moot, it becomes non-justiciable. An action is considered “moot” when it no longer presents a justiciable
controversy because the issues involved have become academic or dead or when the matter in dispute has already
been resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be raised again
between the parties. Nevertheless, case law states that the Court will decide cases, otherwise moot, if: first, there
is a grave violation of the Constitution; second, the exceptional character of the situation and the paramount public
interest are involved; third, when the constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review.

Given the foregoing, this case does not fall under exception that the exceptional character of the situation and the
paramount public interest are involved. In this case, the Court mentioned that no perceivable benefit to the public
may be gained by resolving the petition for Writ of Kalikasan. To recount, this case stemmed from the petition for
Writ of Kalikasan was mooted by the undisputed expiration of the Biosafety Permits and the completion and
termination of the BT Talong field trials. These incidents effectively negated the necessity for the reliefs sought as
there was no longer any field test to enjoin. Additionally, there are no guaranteed after-effects to the already
concluded Bt Talong filed trials that demand an adjudication from which the public may perceivably benefit. In fact,
it would appear to be more beneficial to the public to stay a verdict on the safeness of Bt Talong or GMOs for that
matter until an actual and justiciable case properly presents itself before the Court.

Likewise, this case does not fall under the “capable of repetition yet evading review” exception. The Court notes
that the petition for Writ of Kalikasan specifically raised issued only against the field testing of BT Along under the
premises of DAO 08-2002; however, the supersession of DAO 08-2002 by JDC 01-2016 clearly prevents this case
from being once capable of repetition so as to warrant review despite its mootness. The new framework of the latter
is substantially different from that under the former. (International Service for the Acquisition of Agri-Biotech
Applications, Inc. v. Greenpeace Southeast Asia, G.R. Nos. 209271, 209276, 209301, and 209430, July 26, 2016).

Q: A was elected as Punong Barangay in the October 2010 Barangay Elections. He ran for re-election for
the same position in the 2013 Barangay Elections and filed his Certificate of Candidacy (CoC) declaring
under oath that he is eligible for the office he seeks to be elected to. Ultimately, he won in the said elections.
However, the COMELEC Law Department filed a Petition for Disqualification against A pursuant to the
“Local Government Code of 1991”. It claimed that A was barred from running in an election since he was
Political Law Digests
suffering from the accessory penalty of perpetual disqualification to hold public office as a consequence
of his dismissal from service as then Kagawad, after being found guilty of the administrative offence of
Grave Misconduct. Is A’s perpetual disqualification to hold public office a material fact involving eligibility?
Can the COMELEC validly cancel his CoC and annul his proclamation as the winner?

A: For the first issue, the Court held that A’s perpetual disqualification to hold public office is a material fact involving
eligibility. A person intending to run for public office must not only possess the required qualifications for the
positions for which he or she intends to run, but must also possess none of the grounds of disqualification under
the law.

For the second issue, the COMELEC has the duty to motu proprio bar from running for public office those suffering
from perpetual disqualification to hold public office. The COMELEc has the legal duty to cancel the CoC of anyone
suffering from the accessory penalty of perpetual disqualification to hold public office. The cancellation of the COC
is an exercise of COMELEC’s quasi-judicial functions when the grounds therefor are rendered conclusive on
account of final and executory judgments, as in this case, such exercise falls within COMELEC’s functions.
Moreover, with the cancellation of his CoC, A is deemed to have not been a candidate in the 2013 Barangay
Elections, and all his votes are to be considered stray votes. His CoC is considered void ab initio and thus cannot
give rise to a valid candidacy and necessarily to valid votes. (Dimapilis v. COMELEC, G.R. No. 227158, April 18,
2017).

Q: Respondents, Spouses A and Spouses B, are the owners of an agricultural land covered by a Transfer
Certificate of Title. Petitioner, the Department of Agrarian Reform (DAR), compulsorily acquired a portion
of respondents’ property pursuant to PD 27. Thereafter, the DAR caused the generation of emancipation
patents (EPs) in favour of farmer-beneficiaries and the Land Bank of the Philippines (LBP) fixed the value
of the subject land using the formula under EO 228 which is LV = (2.5 x AGP x P35.00) x (1.06)n. Dissatisfied
with the LBP valuation, respondents filed a Petition for Approval and Appraisal of Just Compensation
before the RTC. The RTC rendered a Decision rejecting the LBP valuation. It explained that while the subject
land was acquired pursuant to PD 27, the same is covered by the “Comprehensive Agrarian Reform Law of
1988” which provides that in determining just compensation, the formula should be: LV = (CNI + 0.6) + (CS
x 0.3) + (MV x 0.1). The CA affirmed the RTC Decision, explaining that the expropriation of a landholding
covered by PD 27, such as that of the subject land, is not considered to have taken place on the effectivity
of the said decree, but at the time payment of just compensation is made. Thus, it would be inequitable to
base the amount of just compensation on the guidelines provided by PD 27 and EO 228 when the seizure
of the subject land took place after the enactment of the CARL. Was the subject land properly valued in
accordance with the factors set forth under the CARL?

A: Yes, it is settled that when the agrarian reform process is still incomplete, as in this case where the just
compensation for the subject land acquired under PD 27 has yet to be paid, just compensation should be determined
and the process concluded under the CARL, with PD 27 and EO 228 have mere suppletory effects. For purposes
of determining just compensation, the fair market value of an expropriated property is determined by its character
and its price at the time of taking. In addition, the factors enumerated under the CARL must be equally considered.
Lastly, the Supreme Court set forth the following guidelines for the RTC to observe in the remand of the case:

1. Just compensation must be value at the time of taking, or the time when the landowner was deprived of the use
and benefit of his property, such as when title is transferred in the name of the Republic of the Philippines.
2. The evidence must conform with Section 17 of the CARL, as amended, prior to its amendment by R.A. No.
9700.
3. The RTC may impose interest on the just compensation award as may be warranted by the circumstances of
the case.
4. The RTC is reminded, however, that while it should take into account the different formula created by the DAR
in arriving at its just compensation valuation, it is not strictly bound thereto if the situations before it do not
warrant their application. (Department of Agrarian Reform v. Spouses Sta. Romana, G.R. No. 183290, July 9,
2014).

Q: A filed a Petition to Disqualify Party-list ABC from participating in the 2010 elections and B from being
its nominee. A argued that Party-list ABC is a mere extension of the El Shaddai, which is a religious sect.
As such, it is disqualified from being a party-list under the Constitution as well as the “Party-List System
Act”. Moreover, A alleges that B, who is a billionaire real estate businessman and the spiritual leader of El
Shaddai, does not qualify as “one who belong to the marginalised and underrepresented sector” as
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required by COMELEC Resolution No. 8807. However, A’s Petition was denied for lack of substantial
evidence. As such, the National Board of Canvassers for Party-List (COMELEC En Banc) proclaimed Party-
list ABC as a winner entitled to 2 seats in the House of Representatives. Being the fifth nominee, however,
B was not proclaimed as the representative of Party-list ABC. Meanwhile, 2 days before the proclamation,
A moved for reconsideration before the COMELEC En Banc claiming denial of due process for failure of
the COMELEC to serve him a copy of the Resolution denying his Petition. Furthermore, A alleged that it
was only after the proclamation that he personally secured a copy of the Resolution from the COMELEC.
Who has the sole and exclusive jurisdiction over the qualifications of the representatives of Party-list ABC?
Is it the Court or the House of Representatives Electoral Tribunal (HRET)?

A: The Court has jurisdiction over the present petition. Section 17, Article VI of the 1987 Constitutions provides that
the HRET shall be the sole judge of all contests relating to the election, returns, and qualifications of its Members.
Under the same Article, the members of the House of Representatives are of two kinds: (1) members who shall be
elected from legislative districts; and (2) those who shall be elected through a party-list system of registered national,
regional, and sectoral parties or organisations. In this case, Party-list ABC was entitled to two seats in the House.
B, being the fifth nominee, did not get a seat and thus had not become a member of the House of Representatives.
Indubitably, the HRET has no jurisdictions over the issue of B’s qualifications.

Neither does the HRET have jurisdiction over the qualifications of Party-list ABC, as it is vested by law, specifically,
the “Party-List System Act, upon the COMELEC. (Layug v. Commission on Elections, G.R. No. 192984, February
28, 2012).

Q: The Municipality’s Sangguniang Bayan (SB) passed certain resolution to implement a multi-phased plan
(Redevelopment Plan) to redevelop Plaza ABC where the Imelda Garden and Jose Rizal Monument were
situated. The SB initially passed a Resolution authorising then Mayor X to obtain a loan from Land Bank
and incidental thereto, mortgage a portion of the Plaza ABC as collateral. To serve as additional security,
it further authorised the assignment of a portion of its internal revenue allotment (IRA) and the monthly
income from the proposed project in favour of Land Bank. Subsequently, Land Bank extended the loan in
favour of the Municipality, the proceeds of which were used to construct 10 kiosks in Plaza ABC and was
rented out. The SB passed another Resolution approving the construction of a commercial centre on the
Plaza as part of phase II of the Redevelopment Plan. Mayor X was again authorised to obtain a loan from
Land Bank, posting as well the same securities as that of the First Loan. Land Bank, once again, extended
a loan in favour of the Municipality but unlike phase I of the Redevelopment Plan, the construction of the
commercial centre was objected to by some residents of the Municipality. Respondent Y claims that the
conversion of Plaza ABC into a commercial centre, the proceeds from the First and Second Loans (Subject
Loans), were highly irregular, violative of the law, and detrimental to public interests, and will result to
wanton desecration of the said historical and public park. Unable to get any response, Y filed a Complaint
assailing the validity of the Subject Loans on the ground that the Plaza Lot used as collateral is property of
public dominion and therefore, beyond the commerce of man. 1) Were the Subject Resolutions validly
passed?; 2) Are the Subject Loans ultra vires?

A: 1) No. A careful perusal of Section 444 (b) (1) (vi) of the LGC shows that while the authorization of the municipal
mayor need not be in the form of an ordinance, the obligation which the said local executive is authorized to enter
into must be made pursuant to a law or ordinance. In the present case, while Mayor X's authorization to contract
the Subject Loans was not contained — as it need not be contained — in the form of an ordinance, the said loans
and even the Redevelopment Plan itself were not approved pursuant to any law or ordinance but through mere
resolutions. While ordinances are laws and possess a general and permanent character, resolutions are merely
declarations of the sentiment or opinion of a lawmaking body on a specific matter and are temporary in nature. In
this accord, it cannot be denied that the SB violated Section 444 (b) (1) (vi) of the LGC altogether.

2) Yes. Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined
by the law of its organization and therefore beyond the powers conferred upon it by law. It must be noted that there
is a distinction between an act utterly beyond the jurisdiction of a municipal corporation and the irregular exercise
of a basic power under the legislative grant in matters not in themselves jurisdictional. The former are ultra vires in
the primary sense and void; the latter, ultra vires only in a secondary sense which does not preclude ratification or
the application of the doctrine of estoppel in the interest of equity and essential justice. Moreover, to the former
belongs municipal contracts which (a) are entered into beyond the express, implied or inherent powers of the local
government unit; and (b) do not comply with the substantive requirements of law e.g., when expenditure of public
funds is to be made, there must be an actual appropriation and certi;cate of availability of funds; while to the latter
Political Law Digests
belongs those which (a) are entered into by the improper department, board, officer of agent; and (b) do not comply
with the formal requirements of a written contract e.g., the Statute of Frauds. Applying these principles to the case
at bar, it is clear that the Subject Loans belong to the first class of ultra vires acts deemed as void. Records disclose
that the said loans were executed by the Municipality for the purpose of funding the conversion of the Plaza ABC
into a commercial center pursuant to the Redevelopment Plan. However, the conversion of the said plaza is beyond
the Municipality's jurisdiction considering the property's nature as one for public use and thereby, forming part of
the public dominion. (Land Bank of the Philippines v. Cacayuran, G.R. No. 191667, April 17, 2013).

Q: The case involves the constitutionality of the Congressional Pork Barrel (Priority Development Fund)
and the Presidential Pork Barrel (Malampaya Fund). The Pork Barrel is an appropriation of government
spending meant for localized projects. For the Congressional Pork Barrel, identification of projects and/or
designation of beneficiaries shall conform to the priority list, standard or design prepared by each
implementing agency (priority list requirement). But as practiced, it would still be the individual legislator
who would choose and identify the project from the priority list. On the other hand, the Presidential Pork
Barrel is a special funding facility managed and administered by the Presidential Management Staff through
which the President provides direct assistance to priority programs and projects not funded under the
regular budget. It is sourced from the share of the government in the aggregate gross earnings of PAGCOR.
Additionally, the provisions of the Presidential Pork Barrel include the following: “and for such other
purposes as may be hereafter directed by the President” and “the fund may be used to first finance the
priority infrastructure development projects and to finance the restoration of damages or destroyed
facilities due to calamities, as may be directed and authorised by the Office of the President”. Is the
Congressional Pork Barrel constitutional? Is the Presidential Pork Barrel constitutional?

A: For the first issue, it is unconstitutional because it violates the separation of powers of the three branches of
government, it violates the non-delegability of legislative power, and it violates local autonomy.

The Supreme Court stated that from the moment the law becomes effective, any provision of law that empowers
Congress or any of its members to play any role in the implementation or enforcement of law violates the principle
of powers and is thus unconstitutional. The enforcement of the national budget is a function both constitutionally
assigned and properly assigned to the Executive branch. Unless the Constitution provides otherwise, the Executive
should exclusively exercise all prerogatives which go into the implementation of the national budget. Moreover,
upon approval and passage of the General Appropriations Act (GAA), Congress’ law-making role necessarily comes
to an end and the Executive’s role of implementing the national budget begins. But provisions of the Congressional
Pork Barrel have accorded legislators post-enactment authority to identify projects, participate in fund release, and
participate in fund realignment. Any post-enactment measure allowing legislator participation beyond oversight is
bereft of any constitutional basis, tantamount to impermissible interference and/or assumption of executive
functions.

Moreover, it is violative of the non-delegability of legislative power because legislative power shall be vested in
Congress with a few recognised exceptions. But the Congressional Pork Barrel insofar as it confers post-enactment
identification authority to individual legislators, violates the principle of non-delegability since legislators are
effectively allowed to individually exercise the power of appropriation, which is lodged in Congress. Individual
legislators are given a personal lump-sum fund from which they are able to dictate how much from such fund would
go to a specific project or beneficiary that they determine. These acts comprise the power of appropriation and thus,
the legislators have been conferred the power to legislate which the Constitution does not allow.
Lastly, it violates the constitutional guarantee of local autonomy to local government units because insofar as
individual legislators are authorized to intervene in purely local matters and thereby subvert genuine local autonomy,
the 2013 PDAF Article as well as all other similar forms of Congressional Pork Barrel is deemed unconstitutional.

For the second issue, it is also unconstitutional because some of the provisions in the Presidential Pork Barrel
constitute undue delegation of legislative power. The phrase “and for such other purposes as may be hereafter
directed by the President” gives the President wide latitude to use the funds for any other purpose he may direct
and in effect, allows him to unilaterally appropriate public funds beyond the purview of the law. While the designation
of a determinate or determinable amount for a particular public purpose is sufficient for a legal appropriation to exist,
the appropriation law must contain adequate legislative guidelines if the same law delegates rule- making authority
to the Executive.

Also, with regard to the provision “the fund may be used to finance the priority infrastructure development projects”,
it must be stricken down as unconstitutional since it lies independently unfettered by any sufficient standard of the
Political Law Digests
delegating law. The law does not supply a definition of “priority infrastructure development projects” and hence,
leaves the President without any guideline to construe the same. (Belgica v. Ochoa, G.R. Nos. 208566, 208493,
209251 & L-20768, November 19, 2013).

Q: X shouted “Putang ina mo! Limang daan na ba ito” and was apprehended by the police for violating the
City Ordinance which punishes breaches of peace. He was asked to empty his pockets and was found to
be carrying shabu. Consequently X was charged with possession of dangerous drugs. The then court ruled
that X did not breach the ordinance since the circumstances that were present did not actually amount to
public disturbance during the warrantless arrest. Are the drugs still admissible as evidence?

A: No. Searches incidental to arrest is one of the exceptions of the exclusionary rule. But the apprehending officer
should have probable cause to arrest the person. The court ruled that the words were not slanderous, threatening
or abusive, and the street is filled with people and alive with people. No probable cause existed to justify X’s
warrantless arrest because the circumstances could not have a well-founded belief that any breach of the peace
was committed by X. Thus, probable cause was not present. (Martinez v. People, G.R. No. 198694, February 13,
2013)

Q: X, an investigative agent of the National Bureau of Investigation, was charged by the Ombudsman of
Multiple Frustrated Murder and Double Attempted Murder. From June 7, 2007 to September 17, 2010, only
two incidents happened for the case namely: (a) petitioner's Motion for Substitution of Bond and
Cancellation of Annotation and (b) Philippine Charter Insurance Corporation's Motion to Release a vehicle
involved in a case. May X invoke the right to a speedy trial?

A: Yes. In determining whether a speedy trial may be invoked, four factors must be considered: (a) length of delay,
(b) reason for the delay, (c) the defendant’s assertion of his right, and (d) prejudice to the defendant. For (b), the
period of June 2007 to September 2010 remain to be unjustified. During this time, it appears that the prosecution
never lifted a finger to keep the proceedings from stalling. Worse, despite the fact that two incidents were raised in
this case during the Second Period which would have alerted the prosecution as to the long, drawn-out pendency
of this case, the prosecution remained indifferent in pursuing the case and never pushed for the continuation of trial.
(Magno v. People, G.R. No. 230657, March 14, 2018)

Q: X is the owner of a land that is subject for transfer because of the Operation Land Transfer Program (PD
27). Through a summary proceeding of the Department of Agrarian Reform, it was valued at a certain price
in accordance with RA 6657. In 2007, Land Bank of the Philippines filed before the RTC for re-evaluation.
Subsequently, in view of the passage of RA 9700 and the issuance of the implementing guidelines under
DAR Administrative Order No. (AO) 1, series of 2010, X filed a Motion for Re-evaluation asking the court to
direct the LBP to conduct a revaluation of the subject land pursuant thereto, which the RTC granted. Does
RA 9700 have a retroactive application?

A: No. DAR AO 2, series of 2009, which is the implementing rules of RA 9700, had clarified that the said law shall
not apply to claims/cases where the claim folders were received by the LBP prior to July 1, 2009. In such a situation,
just compensation shall be determined in accordance with Section 17 of RA 6657, as amended, prior to its further
amendment by RA 9700. (Land Bank of the Philippines v. Kho, G.R. No. 214901, June 15, 2016)

Q: Police officers led by Police X, by virtue of a search warrant for an alleged violation of RA 9165, made a
search of Y’s bedroom and vehicle for undetermined value of shabu. Y challenges the validity of the search
warrant, insisting that it was defective as the testimony of the applicant, X, relied on hearsay evidence. As
such, there can be no probable cause to issue the search warrant for lack of personal knowledge on his
part. Decide.

A: The Court held in People v. Tee that "[l]aw enforcers cannot themselves be eyewitnesses to every crime; they
are allowed to present witnesses before an examining judge" for the purpose of determining probable cause in the
issuance of a search warrant.
Political Law Digests
In this case, the judge issued the search warrant not merely on the basis of X’s testimony but further, based on the
first-hand information proffered by the confidential asset that he personally bought shabu from petitioner in the
course of a "test buy" arranged with X. (Cunanan v. People, G.R. No. 237116, November 12, 2018.)

Q: The Tariff Commission established through a resolution its own Employee Suggestions and Incentives
Awards System (ESIAS), which included a Merit Incentive Award and a Birthday Cash Gift. Upon post-audit
conducted by the COA, the grant of the Merit Incentive Award was suspended for "lack of approval of the
Office of the President." The Birthday Cash Gift was likewise suspended for "lack of legal basis."

The Tariff Commission sought reconsideration the Merit Incentive Award be converted instead into "Hazard
Pay," and the Birthday Cash Gift into "Amelioration Assistance" similar to that granted by the National
Economic Development Authority (NEDA) to its employees to dispense with the requirement of a separate
approval from the Office of the President considering that the Tariff Commission is an attached agency of
the NEDA.

The request for was denied by COA stating that the grant of the subject incentives was contrary to
Presidential Administrative Order No. 161 which prohibited heads of departments and agencies from
establishing and authorizing a separate productivity and performance incentive award.

a. Does the Resolution have legal basis?

A: No. The Court finds that AO 161 was issued in the valid exercise of presidential control over the executive
departments. Executive officials who are subordinate to the President should not trifle with the President's
constitutional power of control over the executive branch. This is necessary to provide order, efficiency and
coherence in carrying out the plans, policies and programs of the executive branch. Being contrary to the AO 161,
the resolution has no legal basis

b. Being invalidated, should the commission refund the incentives given?

A: Public officers who were grossly negligent in the approving of the resolution should refund their share for being
in bad faith. Employees, however, are in good faith thus not directed to make the refund. (Velasco v. Commission
on Audit, G.R. 189774, September 18, 2012)

Q: Philippine Deposit Insurance Corporation filed a complaint against a group of crimes of direct bribery
and corruption of public officials. The Ombudsman dismissed the criminal complaint for lack of probable
cause. Is the Supreme Court refrained from interfering with the determination of the Ombudsman of
probable cause?

A: Generally, Yes in respect to the investigatory and prosecutor power granted by the constitution. However, the
Supreme Court is not precluded from reviewing the Ombudsman's action when there is a charge of grave abuse of
discretion. The Ombudsman's exercise of power must have been done in an arbitrary or despotic manner which
must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law. (Philippine Deposit Insurance Corporation v. Casimiro, G.R. No.
206866, September 2, 2015)

Q: X, a utility worker in a MCTC, has not submitted his Daily Time Record from February 2016, and has not
been at work since July 2016. X was apparently arrested at his residence and was formally charged. What
would be the administrative ruling on X?

A: X should be separated from service because of his absences without leave, in which disrupts the normal functions
of the court. This is in reference to Section 63, Rule XVI of the Omnibus Rules on Leave, as amended by
Memorandum Circular No. 13, Series of 2007, which states that “An official or employee who is continuously absent
without approved leave for at least thirty (30) working days shall be considered on absence without official leave
(AWOL) and shall be separated from the service or dropped from the rolls without prior notice “ As pointed by the
MCTC judge, X also exhibits gross disregard and neglect of his duties. However, X is still qualified to receive the
benefits he may be entitled to and may still be reemployed. (Re: Dropping from the rolls of Rowie A. Quimno, A. M.
Political Law Digests
No. 17-03-33-MCTC, April 17, 2017)

Q: RA 10367 mandates COMELEC to implement a mandatory biometrics registration system to new voters
in order to establish a clean, complete, permanent, and updated list of votes through the adoption of
biometrics technology. The law directs registered voters whose biometrics has not been captured shall
submit themselves for validation. In addition, voters who fail to submit for validation on or before the last
day of filling of application for registration for purposes of the Elections shall be deactivated. Is RA 10367
in violation of the right to suffrage?

A: No. The right to vote is not a natural right but is a right created by law. The State may therefore regulate said
right by imposing statutory disqualifications, with the restriction, however, that the same do not amount to, a “literary,
property or other substantive requirement.” Registration is a mere procedural requirement which does not fall under
this limitation. The requirement under RA 10367 is not a “qualification” to the exercise of the right to suffrage, but a
mere aspect of the registration procedure, of which the State has the right to reasonably regulate. (Kabataan Party-
List v. Commission on Elections, G.R. No. 221318, December 16, 2015)

Q: X was charged with illegal possession of dangerous drugs. PO3 Y and PO1 Z was conducting
surveillance on X’s alleged drug trade. One morning, the two saw X meet with W who sold and handed over
a plastic sachet to him. Suspecting that the sachet contained shabu, they rushed to the scene and order X
to empty his pocket. The sachet contained a white crystalline substance which they initially determined to
shabu. The item was seized and was confirmed to be shabu after a laboratory examination. In the direct
examination, PO3 Y admitted that he was 5-10 meters away from X and W when the latter allegedly handed
the plastic sachet to the former. Was there an unreasonable search and seizure?

A: Yes. Considering that PO3 Y was at a considerable distance away from the alleged criminal transaction, not to
mention the atomity of the object, it is highly doubtful that he was able to ascertain that any criminal activity was
afoot so as to prompt him to conduct a lawful in flagrante delicto arrest and thereupon, a warrantless search. Also,
it is settled that “reliable information” alone –– even if it was a product of well-executed surveillance operations ––
is not sufficient to justify a warrantless arrest. It is required that the accused performs some overt act that would
indicate that he has committed, is actually committing, or is attempting to commit an offense. As a consequence of
X’s unlawful arrest, it follows that there could be no valid search incidental to a lawful arrest. Hence, the evidence
seized would be deemed inadmissible. (Sindac v. People, G.R. No. 220732, September 6, 2016)

Q: This case originated from a CA decision of a civil case that ordered W to reimburse U with rentals he
had received over a specific property and make an accounting of all rentals received by him. Judge Y, upon
U’s motion for execution, issued a Joint Order for U to make an accounting of all monies and properties
under litigation. X, attorney of U, alleged in this administrative complaint that Judge Y’s joint order was
inconsistent with the Court of Appeals decision and was intending to delay the execution of the judgment
in favor of W. Judge Y claimed that he resolved the motion for execution through the Joint Order and that
he gave W an opportunity to comment on the said motion. T, another attorney of U, filed a motion to
withdraw deposits. Because of this, an order was issued by the judge who held in abeyance the resolution
of the latter motion as the records of the case were still with the Court. In another administrative complaint,
X claimed that this order was anomalous, considering that the execution of the judgment of the civil case
has been put on hold for five months. Furthermore, X alleged that despite the finality of the decision of the
civil case Y failed to implement the same since he was bribed by W. The Office of the Court Administrator
recommended that the administrative complaints should be dismissed for lack of merit. Should Judge Y be
administratively liable?

A: No. Bare allegations of bias and partiality are not enough in the absence of clear and convincing evidence to
overcome the presumption that the judge will undertake his noble role to dispense justice according to law and
evidence and without fear or favor. There should be clear and convincing evidence to prove the charge of bias and
Political Law Digests
partiality. The charges of bias and partiality against Y have not been substantiated since X failed to present
substantial evidence to prove that Y was motivated by bias or bad faith in the issuances of the order and joint order.
In addition, the filling of an administrative complaint is not the proper remedy for the correction of actions of a judge
since the law provides ample judicial remedies such as motions for reconsideration and appeal. It is only after the
exhaustion of available judicial remedies and appellate tribunals have spoken with finality that the door to an inquiry
into the judge’s criminal, civil or administrative liability may be said to have opened. (Rizalado v. Bollozos, OCA IPI
Nos. 11-3800-RTJ, 12-3867-RTJ, 12-3897-RTJ & 13-4070-RTJ, June 19, 2017)

Q: X is a Chinese citizen who immigrated to the Philippines in 1975 and subsequently acquired a permanent
resident status in 1982. Y filed a complaint against X before the Bureau of Immigration, alleging that the
latter had misrepresented, in his driver’s license application, that he was a Filipino citizen. The BOI Board
of Commissioners ordered the deportation of petitioner on the grounds of: (a) illegal use of alias, which
was the name appearing in his driver’s license application; and (b) misrepresenting himself as a Filipino
citizen. Can the courts interfere with the judgment of the BOI?

A: The BOI is the agency that can best determine whether petitioner violated certain provisions of the Philippine
Immigration Act of 190. In this jurisdiction, courts will not interfere in matters which are addressed to the sound
discretion of government agencies entrusted with the regulation of activities coming under the special technical
knowledge and training of such agencies. As X has not sufficiently demonstrated any cogent reason to deviate from
the Board of Commissioners’ findings, courts won’t defer to its judgment. (Tze Sun Wong v. Wong, G.R. No. 180364,
December 3, 2014)

Q: Corporation A was the owner of several parcels of agricultural land which were voluntarily offered for
sale to the government pursuant to the RA 6657 or Comprehensive Agrarian Reform Law of 1988. X rejected
the offer and valuation from the DAR Provisional Agrarian Reform Officer. Despite the protests of Corp A,
the DAR, following the provisions of RA 6657, directed the Land Bank of the Philippines to deposit
compensation in cash and bonds, and requested Registry of Deeds to issue Transfer Certificates of Titles
in the name of the government. Subsequently, Corp A requested for the exemption of the land from CARP
coverage, alleging that the lands were devoted to cattle and livestock production since their acquisition in
1987. The DAR Secretary denied the contention of Corp A since they failed to present substantial evidence
to show that the subjects lands were exclusively, directly and actually used for livestock, poultry, and swine
and to comply with the livestock and infrastructure requirement. The Court of Appeals issued a decision
reversing the ruling of the DAR Secretary. Did the CA gravely abuse its discretion by excluding the subject
lands from CARP coverage?

A: Yes. The determination of the land’s classification, whether it falls under agrarian reform exemption, must be
preliminarily threshed out before the DAR and its secretary. The issues of exclusion or exemption partake the nature
of Agrarian Law Implementation cases which are well within the competence and jurisdiction of the DAR Secretary.
The latter is ordained to exercise his legal mandate of exempting a property from CARP coverage based on factual
circumstances of each case and in accordance with the law and applicable jurisprudence. Thus, considering his
technical expertise on the matter, courts cannot simply brush aside his pronouncements regarding the status of the
land in dispute. (Department of Agrarian Reform v. Court of Appeals, G.R. No. 170018, September 23, 2013)

Q: X is assailing that Buhay Party-List is a mere extension of the El Shaddai, which is a religious sect. It
would have to be disqualified from being a party-list under the 1987 Constitution and RA 7941 or the Party-
List System Act. Also, Y, who is allegedly a billionaire real estate businessman and the spiritual leader of
El Shaddai, is disqualified for not being one who belongs to the marginalized and underrepresented sector
as required of party-list nominees. COMELEC promulgated a resolution proclaiming Buhay Party-List as a
winner entitled to two (2) seats in the House of Representatives. Being the fifth nominee, Y was not
proclaimed as the representative of Buhay Party-List. Does the HRET have jurisdiction over the issues?
Political Law Digests
A: No. The HRET has no jurisdiction over qualifications of Buhay Party-List and Y. Sec. 17, Art VI of the 1987
Constitution provides that the HRET shall be the sole judge of all contests relating to the election, returns, and
qualifications of its Members. The members of the House of Representatives are: (1) members who shall be elected
from legislative districts; and (2) those who shall be elected through a party-list system of registered national,
regional, and sectoral parties or organizations. Being the fifth nominee, Y did not get a seat and thus had not
become a member of the House of Representatives. Furthermore, the Party-List System Act states that the
COMELEC may upon verified complaint of any interested party, remove or cancel, after due notice and hearing,
the registration of any national, regional or sectoral party, organization or coalition. (Layug v. Commission on
Elections, G.R. No. 192984, February 28, 2012)

Q: X, Y, and Z’s names were included in the JCICC “AGILA” 3rd Quarter 2007 Order of Battle Validation
Result of the Philippine Army’s 10th Infantry Division, which is a list containing the name of organization
and personalities, supposedly connected to the Communist Party of the Philippines and its military arm,
the New People’s Army. They perceive that by the inclusion of their names in the OB List, they become
easy targets of unexplained disappearances or extralegal killings. In addition, they assert that the totality
of the events, which consists of respondents’ virtual admission to the media of the existence of the OB
List, as well as, the fact that known victims of past extrajudicial killings have been labeled as communist
fronts, more than satisfies the standard required to prove that their life, liberty, and security are at risk.
Does the totality of evidence satisfy the degree of proof required under the Amparo Rule?

A: No. Section 17 and 18 of the Rule on the Writ of Amparo provide that the parties establish their claims by
substantial evidence. Attributing the violent deaths of known activists to the inclusion of their names in the OB list
as proof of the threat to their securities would be unmeritorious since the OB List could not be directly associated
with the menacing behavior of suspicious men or the violent deaths of certain personalities. The alleged threat to
the petitioners’ rights must be actual, and not merely of one of supposition or with the likelihood of happening. Even
if the existence of the OB List or the inclusion of their names can be properly inferred from the totality of the evidence
presented, no link has been sufficiently established to strongly suggest that the inclusion of one’s name in an Order
of Battle would eventually result to enforced disappearance and murder of those persons tagged as militants.
(Ladaga v. Mapagu, G.R. Nos. 189689, 189690 & 189691, November 13, 2012)

Q: Prior to the election of Speaker X as the majority leader of the House of Representatives, the following
rules were established: (a) all those who vote for the winning Speaker shall belong to the Majority and those
who vote for the other candidates shall belong to the Minority; (b) those who abstain from voting shall
likewise be considered part of the Minority; and (c) the Minority Leader shall be elected by the members of
the Minority. No objection to such rules were made thereafter. Speaker X garnered the highest votes,
followed by Reps. Y and Z, respectively. Rep. Y hoped that as a "long-standing tradition" of the House, the
candidate who garnered the 2nd highest number of votes automatically becomes the Minority Leader. But
Rep. Z was officially recognized as the Minority Leader, after some members who did not vote for Speaker
X elected Rep. Z. Rep. Y filed a petition for mandamus before the Court to compel such members to
recognize him as the Minority Leader. Can the Court interfere with such internal matters of the HoR, a co-
equal branch of the government?

A: No. This case concerns an internal matter of a coequal political branch of government which, absent any showing
of grave abuse of discretion, cannot be judicially interfered with. The Constitution vests in the HoR the sole authority
to determine the rules of its proceedings.1 The HoR may decide to have officers other than the Speaker, and that
the method and manner as to how these officers are chosen is something within its sole control. (Baguilat v. Alvarez,
G.R. No. 227757. July 25, 2017)

Q: X engaged the services of Y, a court stenographer, to cause the transfer to X’s name the original
certificate title of a land she purchased. X gave Y copies of the documents needed for the transfer and paid

1
PHIL. CONST. art. 6, § 16.
Political Law Digests
the amount of P15,000.00 for his services. But after 19 years, Y still had not caused the transfer of the title
to X’s name. X demanded the return of the documents, which went unheeded. Thus, X filed an
administrative case against Y. Should Y be held administratively liable?

A: Yes. Y’s engagement was clearly in pursuit of a private business venture, akin to the services offered by real
estate brokers, which is not part of her duties as a court stenographer. Officials and employees of the judiciary must
serve with the highest degree of responsibility and integrity and are enjoined to conduct themselves with propriety
even in private life. They are prohibited from engaging directly in any private business, vocation, or profession even
outside office hours to ensure fulltime service so that there may be no undue delay in the administration of justice
and in the disposition of cases as required by prevailing rules. (Fernandez v. Alerta, A.M. No. P-15-3344. January
13, 2016)

Q: The PNP searched X’s residence, pursuant to a search warrant issued by a judge. Despite that fact that
they were informed by X’s children and housekeeper that X was not home, they proceeded to X’s room and
discovered 3 plastic sachets of shabu. X was not in his residence when the search was conducted, his
daughter, Y, was not able to witness the search of X’s room as she was kept in the living room and was
instructed to leave the house to contact her parents, and the 2 Kagawads neither witnessed the search as
they remained outside X’s residence. After receiving a phone call from his daughter, X immediately went
home and was thereafter arrested by the PNP. Are the sachets of shabu obtained by the PNP admissible?

A: No. The search was conducted below the standard mandated,2 and thus deemed unreasonable within the
purview of the exclusionary rule of the 1987 Const. Evidence obtained and confiscated on the occasion of such
unreasonable searches and seizures are deemed tainted and should be excluded for being the proverbial fruit of a
poisonous tree.3 Thus the 3 plastic sachets of shabu recovered therefrom are inadmissible in evidence for being
the proverbial fruit of the poisonous tree. (Bulauitan v. People, G.R. No. 218891. September 19, 2016)

Q: Judge Y had to reset a scheduled trial of a criminal case for failure of X, a court stenographer, to
transcribe and submit the stenographic notes of its pre-trial proceedings. X admitted such failure but
contended that her omission was not due to her gross inefficiency but rather, due to simple oversight or
inadvertence on her part. Should X be held administratively liable for simple neglect of duty?

A: Yes. A court stenographer performs a function essential to the prompt and fair administration of justice. A public
office is a public trust, and a court stenographer, without doubt, violates this trust by failing to fulfill his duties. While
X admitted to incurring delay in the performance of her duties, she nonetheless completed the same in time for the
calendar of cases. Under the circumstances, her failure to timely transcribe the stenographic notes constitutes
simple neglect of duty, which is a disregard of, or a failure to give proper attention to a task expected of an employee,
simple neglect of duty signifies carelessness or indifference. (Baguio v. Lacuna, A.M. No. P-17-3709. June 19,
2017)

Q: X, an employee of A, accomplished a Personal History Statement (PHS), which requires her attestation
that the information stated therein are true and correct, and that any misdeclaration or omission would be
sufficient ground for separation. X indicated therein that she had no relatives currently employed with A,
but listed Z as her sibling. It was later found out that X had a nephew who worked in A. Atty. Y of A’s
Corporate Investigation Unit, sent X a notice (Formal Charge) charging her of Deception/Fraud. In the
Memorandum, X was found administratively liable and was thus dismissed. CSC dismissed the
administrative case on the ground that X was deprived of her right to due process. Is CSC correct?

A: Yes. Though A is the proper disciplinary authority of its employees, and formal charges against its employees in
administrative disciplinary proceedings should emanate from it through its Board of Directors, the Formal Charge
and the Memorandum did not come from A through its BOD, but merely from Atty. Y. The records do not show that
he was authorized to issue such charge. As such, the Formal Charge and the Assailed Memorandum are null and
void. X’s removal without a valid formal charge was done in violation of her right to due process, warranting the

2
REVISED RULES OF CRIMINAL PROCEDURE.
3
PHIL. CONST. art. 3, § 3.
Political Law Digests
dismissal of the administrative case against her, without prejudice to its re-filing. (Pagcor v. De Guzman, G.R. No.
208261. December 8, 2014)

Q: X was appointed as Municipal Assessor on temporary status. She later on applied for change of status
to permanent, which was denied at first, but was approved on appeal through the CSC-Regional Office’s
Order. She reported for work and sought recognition of her appointment and the grant of the emoluments
from Mayor Z. Her requests having been denied, she filed a petition for mandamus against Mayor Z. Prior
to the CA decision, CSC set aside the Order of the CSC-Regional Office upon a finding that there was no
permanent appointment as the concurrence of the Local Sanggunian was not obtained. X moved for the
issuance of an alias writ of execution by the RTC for the alleged unsatisfied judgment award representing
her unpaid salaries and allowances, which the RTC granted. Mayor Z through Attys. Y, the counsels he had
retained since the initial stage of the litigation, filed a petition for certiorari seeking to annul and set aside
the order of RTC. CA dismissed the petition on the ground of lack of legal authority on the part of Atty. Y,
a private attorney. Is the CA correct in dismissing the petition?

A: No. The damages sought in this case could have resulted in personal liability, hence, Mayor Z cannot be deemed
to have been improperly represented by private counsel. In instances where personal liability on the part of local
government officials is sought, they may properly secure the services of private counsel. Thus, Attys. Y had the
authority to represent Mayor Z at the initial stages of the litigation and this authority continued even up to his appeal.
(Gontang v. Alayan, G.R. No. 191691. January 16, 2013)

Q: Y lost to X in the elections of district representatives of the legislative district A. Y contends that the
initial revision of ballots showed a substantial discrepancy between the votes of the parties per physical
count vis-a-vis their votes per election returns. Y moved for the revision of ballots in all of the protested
clustered precincts arguing that the results of the revision of 25% of said precincts indicate a reasonable
recovery of votes in her favor. HRET issued a Resolution directing the continuation of the revision of ballots
in the remaining 75% protested clustered precincts, or a total of 120 precincts. HRET justified its action by
its need “to re-examine what appears to be a peculiar design to impede the will of the electorate,” and that
a revision of all the protested clustered precincts will allow it “to see the whole picture of the controversy.”
Did HRET commit grave abuse of discretion?

A: No. The Constitution mandates that the HRET shall be the sole judge of all contests relating to the election,
returns and qualifications of its members. The word “sole” connotes that the jurisdiction of the HRET in the
adjudication of election contests involving its members is intended to be its own — full, complete and unimpaired.
There can be no challenge to such exclusive control absent any clear showing of arbitrary and improvident use by
the Tribunal of its power that constitutes a denial of due process of law, or upon a demonstration of a very clear
unmitigated error, manifestly constituting such grave abuse of discretion that there has to be a remedy therefor.
(Vinzons-Chato v. HRET, G.R. No. 199149, 201350, January 22, 2013)

Q: X, then a Postal Inspector at A, was investigated in view of an anonymous complaint charging him of
dishonesty and conduct grossly prejudicial to the best interest of the service. A’s office under DOTC was
subsequently abolished, and all its powers, duties and rights were transferred to B, which now has its own
charter. B in its decision, found X guilty as charged and was dismissed from the service. But the decision
for such dismissal was not implemented until 5 years later. X contends that since the decision had been
dormant for more than 5 years, it may not be revived without filing another formal charge. X elevated the
case to the CA via a special civil action for certiorari and mandamus, instead of filing an appeal with B, or
of an appeal to CSC. Did X fail to exhaust the administrative remedies available to him?

A: Yes. X failed to subscribe to the rule on exhaustion of administrative remedies since he opted to file a premature
certiorari case before the CA instead of filing an appeal with B, or of an appeal to the CSC. The CSC has jurisdiction
over all employees of government branches, subdivisions, instrumentalities, and agencies, including government-
owned or controlled corporations with original charters, and, as such, is the sole arbiter of controversies relating to
Political Law Digests
the civil service. B4 is a government-owned and controlled corporation with an original charter. Thus, being an
employee of B, X should have, after availing of the remedy of appeal before the PPC Board, sought further recourse
before the CSC. (Philippine Postal Corp. v. CA, G.R. No. 173590. December 9, 2013)

Q: The PNP entered into a Memorandum of Agreement (MoA) with company A. The MoA was allegedly
signed by X, the chief of PNP, despite its procedural and legal infirmities. X was charged before the Office
of the Ombudsman and was preventively suspended by the said court. Does the Office of the Ombudsman
have the authority to issue a preventive suspension?

A: Yes. R.A. 6670 Section 24 explicitly provides for the authority of the Ombudsman to issue preventive suspension
provided that two conditions are met: First, the evidence of guilt is strong based on the Ombudsman’s judgment.
Second, any of the three (3) are present: (a) the charge against such officer or employee involves dishonesty,
oppression, or grave misconduct or neglect in the performance of duty; (b) the charges would warrant removal from
service; or (c) the respondent’s continued stay in office may prejudice the case filed against him. (Purisima v.
Carpio-Morales, G.R. No. 219501, July 26, 2017.)

Q: X, who is a foundling, is running for Presidential elections. Petitioners assail the validity of X’s COC on
the ground that she is not a natural-born Filipino citizen being a foundling and her parentage’s nationality
cannot be proven. Is X a natural-born Filipino?

A: Yes. Despite the silence in the enumeration of the constitution regarding foundlings, the 1935 Constitutional
Deliberations would show that the intention is to include foundlings as natural born citizens. A study conducted by
the NSO would show that there is a 99% probability that she is a natural born Filipino citizen. Along with this, the
UN Convention Law states that foundlings are automatically conferred with natural-born status from the country
where they were born. (Poe-Llamanzares v. COMELEC, G.R. No. 221697, 221698-700, March 8, 2016.)

Q: X, a senator, Y, his chief of staff, and Z are all charged of plunder in the alleged pillaging of the Priority
Development Assistance Fund (PDAF) of the office of senator X. The alleged PDAF scam started from Z’s
offer to senator X in the allotment of budget for certain projects and NGOs and that the latter would receive
commission from said anomalous activities. The Office of the Ombudsman found probable cause and
indicted all of them. Is the Office of the Ombudsman correct?

A: Yes. There is a probable cause to indict all of them. The signatures of senator X in the PDAF documents and
other pertinent records are sufficient to prove that there is a probable cause. Being the chief of staff, there is also
sufficient evidence against Y since he exercised operational authority over senator X’s office. Lastly, the evidence
and testimonies would point to Z as the mastermind behind the alleged PDAF scam, finding probable cause against
her. (Cambe v. Office of the Ombudsman, G.R. Nos. 212014-15, December 6, 2016.)

Q: X filed a complaint affidavit accusing Y and Z for the crimes of Falsification of Public Documents, False
Certification, and Slander by Deed. The Office of the Provincial Prosecutor (OPP) dismissed the petition for
lack of probable cause. Elevating in the Office of the Regional State Prosecutor (ORSP), the same was
denied stating that there was no intention to malign, dishonor, or defame X. Finally, X appealed in the CA
and the same was denied stating that the appeal should have been made first before the Secretary of Justice
(SoJ). Did CA erred in dismissing the petition?

A: Yes. The appeals process in the National Prosecution Service (NPS) with regards to complaints are dependent
upon two (2) factors: (1) Where the complaint was filed (whether in NCR or province) and (2) which court has
original jurisdiction over the case. Applying the rules of NPS, only the crime of Falsification of Public Documents,
being cognizable by RTC, may be referred to SoJ. Therefore, the crimes of False Certification and Slander by Deed
may be resolved by CA. (Cariaga v. Sapigao, G.R. No. 223845, June 28, 2017.)

4
Created under RA 7354
Political Law Digests
Q: X’s property was voluntary sold to the Government pursuant to R.A. 6657 (Comprehensive Agrarian
Reform Law). Bank A fixed the valuation of said property. Both RTC and CA departed from Bank A’s
computation and used different formulas in determining the just compensation and arrived at a difference
price. Did Bank A’s computation in accordance with settled rules in computing just compensation?

A: No. Bank A did not consider (1) the economic and social benefits of the subject lands, and (2) the current value
of like properties within the vicinity. Verily, the determination of just compensation must be valued at the time of the
taking of the property and the factors enumerated under Section 17 of RA 6657 must be considered in computing
just compensation. (Land Bank of the Phils. v. Heirs of Alsua, G.R. No. 211351, February 4, 2015.)

Q: X, who was a victim of abuse by her husband Y, filed a petition for Temporary Protection Order (TPO)
pursuant to R.A. 9262 (Anti-VAWC Law). Y assails the constitutionality of R.A. 9262 contending, among
others, that it violates the equal protection clause of the laws. Will Y’s contention prosper?

A: No. The requirements for a valid classification were met: (a) It must rest on substantial distinction (b) Must be
germane to the purpose of the law (c) Not be limited to existing conditions only (d) Apply equally to all members of
the same class. In compliance with these requirements, the constitutionality of R.A. 9262 must be upheld. (Garcia
v. Drilon, G.R. No. 179267, June 25, 2013.)

Q: X, Y, and Z, are candidates vying for a position in the House of the Representatives for the 2013 elections.
X filed a petition to declare Y as a nuisance candidate. During the pendency of the petition, Z was already
proclaimed winner by the COMELEC, took her oath, and already assumed office. X contends before the
COMELEC that the votes of Y be credited to him and this will make him the winner for the post. Does the
COMELEC still has the jurisdiction over X’s petition?

A: No. Article VI Section 17 of the Constitution provides for the jurisdiction of the HRET to all contests relating to
elections, returns, and qualifications of its respective members. Given that Z was already proclaimed by the
COMELEC, the jurisdiction is now transferred to HRET. (Tañada v. COMELEC, G.R. Nos. 207199-200, October
22, 2013.)

Q: X sold 2 parcels of agricultural land to the government. Landbank of the Philippines assessed it at
P28,282.09 according to the formula of DAR. X rejected the valuation so Landbank deposited the amount
in X’s name. RTC ruled that the valuation was low, unrealistic, and not based on the market value as
reflected on the tax declaration. Does the valuation of RTC constitute just compensation?

A: No. The RTC considered only the nature of the land's use and its assessed value based on the tax declarations,
without a showing that the other factors under Section 17 of RA 6657 were taken into account or found to be
inapplicable. The Fair Market Value of an expropriated property is determined by its character and its price at the
time of taking or the time when the landowner was deprived of the use and benefit of his property. (Land Bank of
the Philippines v. Rural Bank of Hermosa (Bataan), Inc., G.R. No. 181953, July 25, 2017)

Q: An administrative order created a Presidential Ad Hoc Fact Finding Committee to investigate behest
loans granted during the Marcos years. The Committee investigated loans granted by Bank A to Company
B even though the collaterals were inexistent. Company B ceased operations and was unable to meet the
overdue obligations with Bank A. PCGG filed a complaint accusing the Board of Directors of Company B
of violating R.A. 3019 for participating in the granting of behest loans extended by Bank A.

The Ombudsman dismissed the complaint and ruled that there was no probable cause. The Committee did
not make any independent valuation neither did it secure any documentation showing that Company A
exaggerated the value. Was there grave abuse of discretion in finding no probable cause?

A: Yes. The Court does not ordinarily interfere with the Ombudsman’s determination as to the existence of probable
cause, except if there’s grave abuse of discretion. Company B’s loans appear to bear the badges of a behest loan,
as indicated by the following circumstances: It was undercapitalized, the loans extended to it were
undercollateralized, its officers were identified as "cronies," President Marcos had an endorsement which facilitated
Political Law Digests
the approval of another loan in its favor, and the loans were approved with extraordinary speed. These should have
been sufficient basis for the Ombudsman to find probable cause. (PCGG v. Office of the Ombudsman, G.R. No.
193176)

Q: ERC in accordance with EPIRA and after several public consultations issued a resolution shifting its
methodology to PBR methodology in fixing the wheeling rates of regulated entities. Company A filed an
application for the approval of its rates. ERC issued a draft determination and invited several stakeholders
to the consultation, ask clarifications, and even intervene. However, they failed to do so despite notice.
ERC declared a general default and approved Company A’s rates. Petitioner now assails ERC’s approval
of Company A’s rates pursuant to the PBR methodology for being inconsistent with EPIRA. Can ERC’s shift
to PBR method be assailed?

A: No. Administrative regulations have the force of law and enjoy the presumption of constitutionality until they are
set aside with finality by a competent court. As such, they cannot be attacked collaterally. Opposition against the
PBR methodology was not made through a proper case directly attacking its validity. No discernible objection was
raised by petitioners during the public consultations conducted by the ERC neither did they raise their opposition to
the ERC's adoption of the same in the case regarding the application by Company A. Petitioners were given an
ample opportunity to question the ERC's shift to the PBR methodology, but to no avail. Consequently, they can no
longer question the judgment rendered in said case which had long become final and executory and hence,
immutable. (NASECORE v. MERALCO, G.R. No. 191150, October 10, 2016)

Q: The police were conducting a routine patrol. While at the distance of about five (5) meters, Policeman Y
noticed X removing a plastic sachet from his pocket. Policemen Y and Z both approached X. At an arm’s
length distance, Y saw X holding a plastic sachet containing marijuana. Y and Z approached X and
introduced themselves as police officers. X attempted to run, but Y was able to grab his hands and recover
the plastic sachet. Z apprised X of his rights, while Y conducted a search on the body of X. The search
yielded another 12 sachets of marijuana from X’s pocket. Was there a valid warrantless arrest?

A: Yes. A lawful arrest without warrant may be made by a peace officer or a private individual when, in his presence,
the person to be arrested has committed, is actually committing, or is attempting to commit an offence. Two
elements must concur: 1) the person to be arrested must execute an overt act indicating that he has just committed,
is actually committing, or is attempting to commit a crime; and 2) such overt act is done in the presence or within
the view of the arresting officer. X was actually committing a crime when he was arrested. The warrantless arrest
was justified. (Santos y Italig v. People, G.R. No. 232950, August 13, 2018)

Q: Municipal Appraisal Board (MAB) issued a resolution which decreased the assessed market values of
the lands. The Municipality auctioned a parcel of land at the minimum bid price. The lot was awarded to
Company A, who paid approximately P505.51 per sq. m. A COA report stated that the proper fair market
value of the lot should have been P878.26 per sq.m. Members of MAB were found guilty by Ombudsman for
Grave Misconduct because of passing a resolution based upon a reappraisal without basis. CA reversed
the findings of the Ombudsman. Was the MAB guilty of Grave Misconduct?

A: No. In administrative cases, only substantial evidence is required. Substantial evidence is such relevant evidence
as a reasonable mind may accept as adequate to support a conclusion. There was no substantial evidence to hold
the members of MAB administratively liable. Records are bereft of any showing that members of MAB, in the
reappraisal of subject lands, wrongfully intended to transgress some established rule of action attended by
corruption, clear intent to violate the law, or fIagrant disregard of the rules. (Office of the Ombudsman v. Zosa, G.R.
No. 205433, January 21, 2015)

Q: NTC issued a Certificate of Public Convenience in favor of Company A to install and operate a radio
station in Palawan. Upon expiration on July 14, 1998, Company A failed to renew but continued its
broadcast operations on the basis of temporary permits. It only filed for renewal after four (4) years. On
Feb. 26, 2009, NTC set a classificatory hearing and directed Company A to submit a written explanation
why it should not be administratively sanctioned for operating with an expired permit. Company A invokes
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Sec. 28 of the Public Service Act, stating that the NTC could no longer sanction it after the lapse of sixty
(60) days. Can company A be held administratively liable by NTC?

A: Yes. NTC's imposition of a fine pursuant to Sec. 21 of the Public Service Act is made in an administrative
proceeding, and thus, must comply with the requirements of notice and hearing. The fine imposed is regulatory and
punitive in character. Company A’s reliance on the 60-day prescriptive is misplaced considering that the fine it
assails was imposed in an administrative and not a criminal proceeding. The imposition by NTC was made in line
with its authority to enforce the rules and regulations concerning the conduct and operation of Company A as a
public service utility, which was particularly meted out to ensure its compliance with the terms and conditions of its
provisional authority.(GMA Network, Inc. v. National Telecommunications Commission, G.R. No. 196112, February
26, 2014 )

Q: X filed his Certificate of Candidacy (COC) seeking congressional office for the 4th district of Leyte. He
misrepresented in his COC that he resided in Ormoc City. Y, an opposing candidate, sought to disqualify
X arguing that he was a resident of San Juan City. Additionally, Y prayed that X’s COC be denied due course
or cancelled. X was disqualified by COMELEC.

Z (X’s wife) then filed her COC as substitute of X. COMELEC allowed the substitution ruling that
disqualification does not automatically cancel one’s COC. Z was able to run and was proclaimed winner. Y
filed a petition for quo warranto against Y. HRET dismissed the petition and ruled that Z was qualified to
run since X was only disqualified by COMELEC. Was there a valid substitution?

A: NO. There was no valid substitution. The dispositive portion of the COMELEC states that the prayer was granted
without qualification. X’s COC was actually denied due course or cancelled. Sec. 77 of the Omnibus Election Code
requires that there be an “official candidate” before the substitution. Since X’s COC was cancelled due to his
misrepresentation of a material qualification, he was not considered a an official candidate. A cancelled COC is
considered void ab initio and cannot give rise to a valid substitution. Z was not a bona fide candidate and she could
not have been validly elected. (Tagolino v. House of Representatives Electoral Tribunal, G.R. No. 202202, March
19, 2013)

Q: Pursuant to an administrative complaint filed against Mayor X, the Ombudsman placed Mayor X under
preventive suspension. Mayor X filed a petition for certiorari with prayer for the issuance of a TRO and a
Writ of Preliminary Injunction (WPI) which was granted by the CA, on the ground that the subsequent re-
election of Mayor X effectively condoned his administrative liability. Does the CA have jurisdiction over the
certiorari case filed by Mayor X?

A: Yes. The second paragraph of Section 14, RA 6770, which bans courts, other than the Supreme Court, from
providing remedies against issuances of the Ombudsman, is invalid for expanding the jurisdiction of the Supreme
Court without its consent. Hence, it is unconstitutional. With the unconstitutionality of the second paragraph of
Section 14, RA 6770, the Court, consistent with existing jurisprudence, concludes that the CA has subject matter
jurisdiction over the main petition. (Carpio-Morales v. Court of Appeals, G.R. Nos. 217126-27, [November 10, 2015])

Q: Does the CA have the authority to issue TRO and WPI to enjoin the Ombudsman?
A: Yes. The first paragraph of Section 14 of RA 6770, which prohibits any court from issuing injunction against
the Ombudsman, is declared unconstitutional. Hence, with Congress interfering with matters of procedure
without the Court's consent thereto, it remains that the CA had the authority to issue the questioned injunctive
writs enjoining the implementation of the preventive suspension order against Mayor X, as these issuances
were merely ancillary to the exercise of the CA's certiorari jurisdiction conferred to it by law. (Carpio-Morales
v. Court of Appeals, G.R. Nos. 217126-27, [November 10, 2015])

Q: Did the CA gravely abused its discretion in issuing the TRO and WPI to enjoin the Ombudsman
from preventively suspending Mayor X?

A: Yes. By nature, a preventive suspension order is not a penalty but only a preventive measure. The
law sets forth two (2) conditions that must be satisfied to justify the issuance of an order of preventive
suspension pending an investigation, namely:
Political Law Digests
(1) The evidence of guilt is strong; and
(2) Either of the following circumstances co-exist with the first requirement:
(a) The charge involves dishonesty, oppression or grave misconduct or neglect in the performance of
duty;
(b) The charge would warrant removal from the service; or
(c) The respondent's continued stay in office may prejudice the case filed against him.
The CA erred in issuing the injunction on the basis of the condonation doctrine. The condonation doctrine
has been abandoned and the abandonment is applied prospectively.

Q: A small tin can containing various pieces of jewelry was confiscated and withheld in the In-Bond Room
Section of the Bureau of Customs at the NAIA. Customs Security Guard delivered the inbonded tin can of
jewelry to the Customs Cashier even though (a) it was not among their duties; (b) they had no authority to
release the same; and (c) they failed to justify or offer an explanation for their actions, in disregard of
established rules pertaining to the release and custody of items stored in the In-Bond Room Section. He
disregarded even the most basic established procedural requirement of prior authorization from a higher
BOC official before removing the subject jewelry from the custody of the In-Bond Room Section, which
paved the way for its loss, and the consequent damage to the owner of the subject jewelry. The CA ruled
that respondent was guilty only of Simple Misconduct because the elements of corruption, clear intent to
violate the law, or flagrant disregard of established rules that characterize the offense as Grave Misconduct
were lacking. Is respondent guilty only of simple misconduct?

A: No. Respondent acted in flagrant disregard of established rules when he transferred the subject jewelries from
the In-Bond Room to the Cashier Section without any authority.

In Imperial, Jr. v. Government Service Insurance System, the Court elucidated the instances where flagrant
disregard of rules obtains, thus: Flagrant disregard of rules is a ground that jurisprudence has already touched
upon. It has been demonstrated, among others, in the instances when there had been open defiance of a customary
rule; in the repeated voluntary disregard of established rules in the procurement of supplies; in the practice of
illegally collecting fees more than what is prescribed for delayed registration of marriages; when several violations
or disregard of regulations governing the collection of government funds were committed; and when the employee
arrogated unto herself responsibilities that were clearly beyond her given duties. The common denominator in these
cases was the employee's propensity to ignore the rules as clearly manifested by his or her actions. Accordingly,
the Court finds respondent guilty of Grave Misconduct which is classified as a grave offense punishable by dismissal
even for first time offenders, with all the accessory penalties. Ombudsman vs. Castillo, G.R. No. 221848, August
30, 2016

Q: Acting Sec. X issued the Formal Charge against respondents, who were then DPWH Officials and BAC
Members, for Grave Misconduct. In the said issuance, respondents were: (a) directed to file their answer,
together with supporting evidence; (b) given the option to elect or waive the conduct of a formal
investigation; and (c) placed under preventive suspension for a period of ninety (90) days. Accordingly,
respondent filed their Answer wherein they had presented their position before the agency, and expressly
waived their rights to a formal hearing, as they sought instead, that the case against them be decided based
on the records submitted. In proceedings conducted before the DPWH, respondents were not made to file
their initial comment on the anonymous complaint; and (b) no preliminary investigation was conducted
before the filing of the Formal Charge against them, contrary to the sequential procedure. Respondents
claim that their rights to due process were violated. Decide.

A: There was no violation of due process. The essence of procedural due process is embodied in the basic
requirement of notice and a real opportunity to be heard. In administrative proceedings, as in the case at bar,
procedural due process simply means the opportunity to explain one's side or the opportunity to seek a
reconsideration of the action or ruling complained of. "To be heard" does not mean only verbal arguments in court;
one may also be heard thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings,
is accorded, there is no denial of procedural due process. while there were missteps in the proceedings conducted
Political Law Digests
before the DPWH, they were, nonetheless, accorded a fair opportunity to be heard when the Formal Charge directed
them to file their answer. Respondents themselves filed an express waiver to a formal hearing in their Answer.
Hence, whatever procedural lapses the DPWH had committed, the same had already been cured by the foregoing
filing. (Ebdane vs. Apurillo, G.R. No. 204172, December 09, 2015)

Q: A Complaint-Affidavit was filed by petitioner Garcia, incumbent Provincial Governor of the Province of
Bataan, before the Ombudsman, against respondent public officials charging them with Malversation of
Public Funds through Falsification of Public Documents and violation of the “Anti-Graft and Corrupt
Practices Act." The Ombudsman found probable cause to indict some, but cleared some respondents from
liability on the ground of insufficiency of evidence. Dissatisfied, Garcia moved for reconsideration arguing
that the respondents, who acted in conspiracy with each other, should be held liable this time for the crime
of Technical Malversation under the RPC. Can the Court pass upon the issue of sufficiency of evidence to
indict respondents for Technical Malversation?

A: No. While Garcia insists upon the sufficiency of his evidence to indict respondents for Technical Malversation,
the Court cannot pass upon this issue, considering that the Complaint-Affidavit filed before the Ombudsman
originally charged respondents not with Technical Malversation but with Malversation of Public Funds through
Falsification of Public Documents, a complex crime. The elements of Malversation of Public Funds are distinctly
different from those of Technical Malversation. In the crime of Malversation of Public Funds, the offender
misappropriates public funds for his own personal use or allows any other person to take such public funds for the
latter’s personal use. On the other hand, in Technical Malversation, the public officer applies public funds under his
administration not for his or another’s personal use, but to a public use other than that for which the fund was
appropriated by law or ordinance. Technical Malversation does not include, or is not necessarily included in the
crime of Malversation of Public Funds.

Since the acts supposedly committed by respondents constituting the crime of Technical Malversation were not
alleged in the Complaint-Affidavit and the crime for which respondents raised their respective defenses was not
Technical Malversation, the petition must perforce be denied on this score. Otherwise, the Court would be
sanctioning a violation of respondents’ constitutionally-guaranteed right to be informed of the nature and cause of
the accusation against them, so as to deny them a reasonable opportunity to suitably prepare their defense.
(Garcia vs. Ombudsman, G.R. No. 197567, November 19, 2014)

Q: Respondents inherited an agricultural land located in Iloilo. They voluntarily offered the land for sale to
the government pursuant to the Comprehensive Agrarian Law of 1988. RTC rendered a decision fixing the
just compensation. The trial court arrived at its own computation by getting an average of the price per
hectare as computed by LBP in accordance with DAR guidelines and the market value of the land per
hectare as shown in the tax declaration. LBP appealed to the CA arguing that the computation made by the
RTC failed to consider the factors in determining just compensation an enumerated under section 17 of RA
6657. The CA ruled that the determination of just compensation in eminent domain proceedings is
essentially a judicial function, courts should be given ample discretion and should not be delimited by
mathematical formulas. Does the RTC still need to consider the factors in determining just compensation
enumerated under section 17 of RA 6657?

A: Yes. While the determination of just compensation is essentially a judicial function vested in the RTC acting as
a special agrarian court, the judge cannot abuse his discretion by not taking into full consideration the factors
specifically identified by law and implementing rules. The RTC merely proceeded to add said valuation by the LBP
to the market value of the subject land as appearing in the 1997 tax declaration, and used the average of such
values to fix the just compensation. The principal basis of the computation for just compensation is Section 17 of
RA 6657,which enumerates the following factors to guide the special agrarian courts in the determination thereof :

[1] Acquisition cost of the land


[2] Current value of the properties
[3] Its nature, actual use, and income
[4] The sworn valuation by the owner
[5] The tax declaration
[6] The assessment made by government assessors
Political Law Digests
[7]The social and economic benefits contributed by the farmers and the farmworkers, and by the government to the
property
[8] The non payment of taxes or loans secured from any government financing institution of the said land, if any.
Land Bank v. Palmares, G.R. No. 192890 (Resolution), June 17, 2013

Q: In 1997, the City filed a complaint for expropriation with the RTC in order to acquire a parcel of land,
owned and registered under the name of Sy, which was intended to be used as a site for a multi-purpose
barangay hall, day-care center, playground and community activity center for the benefit of the residents
of Barangay Balingasa. However, prior to that, the City’s took the subject property without even initiating
expropriation proceedings. Despite the lack of proper authorization because there was no resolution to
effect expropriation, as early as 1986, the expropriated property was already being used as Barangay day
care and office. The RTC had granted 6% legal interest in Siy's favor. What is the correct rate of legal interest
to be applied? What is the reckoning point on which the legal interest should accrue?

A1: Based on a judicious review of the records and application of jurisprudential rulings, the Court holds that the
correct rate of legal interest to be applied is twelve percent (12%) and not six percent (6%) per annum, owing to the
nature of the City’s obligation as an effective forbearance.

In the case of Republic v. CA,39 the Court ruled that the debt incurred by the government on account of the taking
of the property subject of an expropriation constitutes an effective forbearance which therefore, warrants the
application of the 12% legal interest rate.

A2: As to the reckoning point on which the legal interest should accrue, the same should be computed from the
time of the taking of the subject property in 1986 and not from the filing of the complaint for expropriation on
November 7, 1996. This is based on the principle that interest "runs as a matter of law and follows from the right of
the landowner to be placed in as good position as money can accomplish, as of the date of the taking." Notably,
the lack of proper authorization, i.e., resolution to effect expropriation, did not affect the character of the City’s taking
of the subject property in 1986. Case law dictates that there is "taking" when the owner is actually deprived or
dispossessed of his property; when there is a practical destruction or a material impairment of the value of his
property or when he is deprived of the ordinary use thereof. Therefore, notwithstanding the lack of proper
authorization, the legal character of the City’s action as one of "taking" did not change. (Sy vs. Quezon City, G.R.
No. 202690, June 5, 2013)

Q: Lara obtained an Industrial Sand and Gravel Permit from the DENR, authorizing him to conduct quarrying
operations in a twenty-hectare area situated in Barangay Centro. Lara commenced his quarrying
operations. Later that day, however, trucks loaded with sand and gravel extracted were stopped and
impounded by several local officials. Lara received a Stoppage Order this time from the Cagayan Governor
directing him to stop his quarrying operations for the following reasons: (a) the Philippine Mining Act of
1995, and its implementing rules and regulations; (b) Lara’s failure to pay sand and gravel fee under
Provincial Ordinance; and (c) Lara’s failure to secure all necessary governor's permit or clearances from
the local government unit concerned as required by the ECC. Hence, Lara filed an action for injunction and
damages with an urgent and ex-parte motion for the issuance of a temporary restraining order before the
RTC. Should the RTC issue the injunction?

A: A governor’s permit is a pre-requisite before one can engage in a quarrying business in Cagayan. Lara admittedly
failed to secure the same; hence, he has no right to conduct his quarrying operations within the Permit Area.
Consequently, he is not entitled to any injunction. A writ of injunction would issue upon the satisfaction of two (2)
requisites, namely: (a) the existence of a right to be protected; and (b) acts which are violative of the said right. In
the absence of a clear legal right, the issuance of the injunctive relief constitutes grave abuse of discretion. Injunction
is not designed to protect contingent or future rights. Where the complainant’s right is doubtful or disputed, injunction
is not proper. The possibility of irreparable damage without proof of actual existing right is not a ground for an
injunction.

In order for an entity to legally undertake a quarrying business, he must first comply with all the requirements
imposed not only by the national government, but also by the local government unit where his business is situated.
Particularly, Section 138(2) of RA 716026 requires that such entity must first secure a governor’s permit prior to the
start of his quarrying operations. (Province of Cagayan vs. Lara, G.R. No. 188500 (Resolution), July 24, 2013)
Political Law Digests

Q: Mr. X’s Red Toyota Corolla was used as one of getaway vehicles in a hold-up incident. The 3 robbery
suspects involved were Mr. X’s employees in his roasted chicken business and that they were staying at
Mr. X’s house. With these pieces of information, the police set up a checkpoint the next day in Sitio,
Panagdait. At around 9:30 in the evening, Mr. X, driving his Red Toyota Corolla, passed by the checkpoint.
Mr. X’s vehicle was stopped. The police did a thorough search of his vehicle but there was no contraband.
Mr. X was then frisked, resulting in the discovery of one plastic sachet of shabu. Mr. X denied that the
plastic sachet was his. Is the plastic sachet of shabu a fruit of a lawful warrantless arrest, thereby rendering
the plastic sachet as admissible evidence?

A: No. Under the Section 5, Rule 113 of the Revised Rules of Criminal Procedure, there are 3 instances when
warrantless arrests are deemed lawful. These are: “(a) an arrest of a suspect in flagrante delicto, (b) an arrest of
a suspect where, based on personal knowledge of the arresting officer, there is probable cause that said
suspect was the perpetrator of a crime which had just been committed; and (c) an arrest of a prisoner who
has escaped from custody serving final judgment or temporarily confined during the pendency of his case or has
escaped while being transferred from one confinement to another. For (b), it must also be coupled with the element
of immediacy. It has been evident that before the checkpoint was set up, the police were already able to “(a) find
out that the armed robbers were staying in Barangay Del Rio Pit-os; and (b) trace the getaway vehicles to Manago.”
These pieces of information shows that the police could have secured the necessary warrants against the robbery
suspects. There was no need for the set-up of a checkpoint. The fact that Mr. X was frisked and searched before a
lawful arrest was made reinforces that the discovery of the plastic sachet containing shabu was indeed a fruit of the
poisonous tree. (People v. Manago y Acut, G.R. No. 212340, August 17, 2016).

Q: Mr. Y, a sheriff is ordered to enforce a decision. However, Mr. Y continues to assert that the complainants
need to conduct a resurvey to ascertain the boundaries of the property that should be included in the
demolition. In order to expedite the process, the complainants first gave 10,000 pesos to Mr. Y as
operational expenses for the demolition. Mr. Y later asked for additional funds and the complainants gave
additional 15,000 pesos. However, the demolition did not happen. Mr. Y denies having received the 10,000
pesos but acknowledges the additional 15,000 pesos, which was used for financial assistance to the
Mangyans in order for them to voluntarily vacate and remove their structures on the subject premises. Did
Mr. Y, exceeded his own authority in deferring the implementation of writ of execution and demolition and
should be held administratively liable?

A: Yes. Mr. Y exceeded his own authority and substituted his own judgment. The duty of a sheriff to execute a writ
is purely ministerial. His failure in enforcing the writ of execution and demolition constitutes a dereliction of duty. He
also caused prejudice to the complainants in causing delay in the enforcement of the writ of execution and
demolition. Thus, Mr. Y is found GUILTY of dereliction of duty, grave misconduct, dishonesty, and conduct
prejudicial to the best interest of the service (Olympia-Geronilla v. Montemayor, A.M. No. P-17-3676, June 5, 2017)

Q: Corp A applied for a loan with GSIS in order to finance its condominium project in Ermita, Manila.
However, the loan was denied. Corp A then tried to apply for a surety bond with the GSIS and PVB as
obligee which was later on "APPROVED in principle subject to analysis/evaluation of the project and the
offered collaterals" (Office of the Ombudsman v. Valencerina, G.R. No. 178343, July 14, 2014). Mr. X made
it seem that Corp A’s reinsurance and real estate collaterals were secured. Corp A’s application was
approved. Later on, the certificate of title of major collateral, was found to be “spurious”. Thus, Mr. X wrote
letters to Corp A, informing them that the subject bond is “invalid and unenforceable”. Corp A also
defaulted in its payments. These events prompted GSIS to conduct fact-finding investigations. From these
investigations, recommendations for the filing of criminal and administrative charges such as Gross
Neglect of Duty, and Inefficiency and Incompetence in the Performance of Official Duties against the GSIS
officials, including Mr. X. OMB found Mr. X guilty of grave misconduct and ordered Mr. X his dismissal
from service. Mr. X then filed before the CA a petition for review, with the prayer of issuance of a TRO and
writ of preliminary injunction. Did the CA commit grave abuse of discretion in issuing the writ of preliminary
injunction?
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A: Yes. The OMB is allowed by the constitution to promulgate its own rules of procedure. The CA, by allowing Mr.
X to return to work, effectively disregarded the enforcement of OMB’s procedures, thus encroaching on their
constitutional mandate. Also, when there is a clash between which rule should govern on the case, “that which was
specially designed for the said case must prevail over the other.” In this case, the OMB’s Section 7, Rule III should
prevail over Section 12, Section 43 of the Rules of Court. (Office of the Ombudsman v. Valencerina, G.R. No.
178343, July 14, 2014)

Q: Corp B, the respondent, owns a parcel of agricultural land in Esperanza, Agusan Del Sur. The
government has acquired the said parcel through the Comprehensive Agrarian Reform Law of 1988. Corp
A initially valued the land to be worth 823,204.08 pesos, which Corp B rejected. Corp B then files a complaint
for determination of just compensation before RTC. The RTC rendered their decision, fixing the value of
just compensation at almost 8 million pesos. The increase in the value was due to the reclassification of
the property from it being rainfed riceland, bushland and bushland rolling to cornland and cocoland. Corp
A appealed to the CA, to which they rendered their decision, fixing the value of just compensation at
4,615194 pesos. Corp A contends that the CA has erred in classifying the acquired property into coconut
lands and corn lands. Did the CA err in determining the just compensation?

A: Yes. In determining just compensation, the character and price of the acquired property is at the time of the
taking. The RTC and CA ignored that, at the time of the ocular inspection, substantial portion of the property was
“idle and abandoned” Although farmer-beneficiaries were starting to cultivate the land, this does not lead to the
reclassification of the land. This is because under DAR A.O. No. 11, Series of 1994, "(t)he landowner shall not be
compensated or paid for improvements introduced by third parties such as the government, farmer-beneficiaries or
others." The acts done by the farmer-beneficiaries can be only be deemed as economic benefits to the property in
determining its valuation. (Land Bank of the Phils. v. Montinola-Escarilla and Co., Inc., G.R. No. 178046
(Resolution), June 13, 2012).

Q: Mr. X, the policeman, was driving his motorcycle along 5th aveneue when he saw Mr. Y from a distance
of 8-10 meters, holding a plastic sachet of shabu. Mr. X approached Mr. Y whom he recognized as someone
he had previously arrested for illegal drug possession. Mr. Y tried to escape to no avail. Mr. X was able to
board Mr. Y onto his motorcycle, confiscated the plastic sachet, and went to the police station. Upon
examination of the plastic sachet, .03 grams tested positive for shabu. Mr. Y was charged in violation of
Section 11, Article II of RA 9165 or the Comprehensive Dangerous Drugs Act of 2002. The RTC rendered
their decision, stating that plain view doctrine was present, as the confiscated item was in plain view of Mr.
X at the place and time of arrest. The CA sustained the RTC’s decision, “finding ‘a clear case of in flagrante
delicto warrantless arrest. Was the discovery of the plastic sachet of shabu a fruit of a lawful warrantless
arrest, thereby rendering the plastic sachet as admissible evidence?

A: No, The following are the instances when warrantless arrests are lawful:

(a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to
commit an offense;
(b) When an offense has just been committed and he has probable cause to believe based on personal
knowledge of facts or circumstances that the person to be arrested has committed it; and
(c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place where
he is serving final judgment or is temporarily confined while his case is pending, or has escaped while being
transferred from one confinement to another.

For paragraphs (a) and (b), the officer's personal knowledge of the fact of the commission of an offense is absolutely
required (People v. Villareal y Lualhati, G.R. No. 201363, March 18, 2013). Mr. X’s testimony revealed that it was
impossible for Mr. X to ascertain that Mr. Y was in the act of committing a suspicious act. Mr. X, while riding his
motorcycle, saw Mr. Y from a distance of 8-10 meters, holding a plastic sachet containing 0.03 grams of shabu. Mr.
X, who had knowledge that Mr. Y had a past criminal record of the same offense, cannot justify the warrantless
arrest. (People v. Villareal y Lualhati, G.R. No. 201363, March 18, 2013)

Q: Mr. X is assailing that the LGU’s should be one tasked to identify possible beneficiaries of the
Conditional Cash Transfer Program (CCTP) of their communities and not the national government. he CCTP
Political Law Digests
budget allocation under the DSWD in the GAA 2011 violates the Constitution in relation to Sec. 17 of the
Local Government Code of 1991 by providing for the recentralization of the National Government in the
delivery of basic services already devolved to the LGU’s?

A: No. The Court recognizes the importance of the LGU’s in delivering basic services. However, in the Local
Government Code, Section 17, paragraph (c) serves as an express reservation of power by the national
government.

“(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure projects
and other facilities, programs and services funded by the National Government under the annual
General Appropriations Act, other special laws, pertinent executive orders, and those wholly or
partially funded from foreign sources, are not covered under this Section, except in those cases
where the local government unit concerned is duly designated as the implementing agency
for such projects, facilities, programs and services.”

Unless the LGU has been designated as the implementing agency, it has no power over a program from which its
funding comes from the national government. (Pimentel, Jr. v. Ochoa, G.R. No. 195770, July 17, 2012)

Q: Petitioner Republic of the Philippines, represented by the DWPH, filed before the RTC a complaint
against an unknown owner for the expropriation of a 200-square-meter (sq. m.) lot for the construction of
the North Luzon Expressway (NLEX). Petitioner thereafter applied for, and was granted a writ of possession
on May 5, 2008 over the subject lot and was required to deposit with the court the amount of P550,000.00
(i.e., at P2,750.00/sq. m.) representing the zonal value thereof (provisional deposit). Respondent X was
substituted as party-defendant upon sufficient showing that the subject lot is registered in her name.
Respondent X did not oppose the expropriation, and received the provisional deposit. The appointed
Commissioners’ Report recommended a fair market value of P9,000.00/sq. m. as the just compensation.
The RTC found the recommendation of the commissioners to be reasonable and just. Dissatisfied,
petitioner Republic appealed before the CA, questioning the award of twelve percent (12%) interest rate
p.a., instead of six percent (6%) p.a. as provided under Bangko Sentral ng Pilipinas-Monetary Board (BSP-
MB) Circular No. 799, Series of 2013. The CA affirmed the RTC’s decision. Is the imposition of interest at
the rate of twelve percent (12%) p.a. on the unpaid balance, computed from the time of the taking of the
subject lot until full payment is proper?

A: NO. The twelve percent (12%) p.a. rate of legal interest is only applicable until June 30, 2013. Thereafter, legal
interest shall be at six percent (6%) p.a. in line with BSP-MB Circular No. 799, Series of 2013. The award of legal
interest to be imposed on the unpaid balance of the just compensation for the subject lot shall be computed at the
rate of twelve percent (12%) p.a. from the date of the taking on May 5, 2008 until June 30, 2013. Thereafter, or
beginning July 1, 2013, until fully paid, the just compensation due respondent shall earn legal interest at the rate of
six percent (6%) p.a. (Republic of the Philippines v. Leonor Macabagdal, G.R. No. 227215, January 10, 2018)

Q: The LBP contends that it is not liable for the payment of interest, considering the absence of: (a) delay
since it promptly deposited the initial valuation for the subject lands; and (b) substantial difference between
the amount of initial valuation and the final just compensation. Moreover, LBP contends that interest shall
be pegged at the rate of 12% p.a. on the unpaid balance, reckoned from the time of taking, or the time when
the landowner was deprived of the use and benefit of his property, such as when title is transferred to the
Republic of the Philippines, or emancipation patents are issued by the government, until June 30, 2013,
and thereafter, at six percent (6%) p.a. until full payment. Is the LBP exempted from paying interest? If LBP
is required to pay interest, from when shall the date be reckoned for proper computation?

A: No, LBP is not exempted from paying interest. In the present case, the just compensation for the subject lands
was finally fixed at P2,398,487.24,16 while the payments made by the LBP only amounted to P1,237,850.00 (initial
valuation). Hence, there remained an unpaid balance of the principal sum of the just compensation, warranting the
imposition of interest. The requirement of the law is not satisfied by the mere deposit by the LBP with any accessible
bank of the provisional compensation determined by it or by the DAR, and its subsequent release to the landowner
after compliance with the legal requirements set forth by RA 6657.
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The payment of interest should be reckoned from the date of issuance of the titles. While the LBP averred that the
landowner’s title was cancelled in favor of the Republic, copies of the Republic’s title/s was/were not attached to
the records of these consolidated cases. Accordingly, the Court hereby directs the LBP to submit certified true
copies of the Republic’s title/s to the RTC upon remand of these cases, and the latter to compute the correct amount
of legal interests due to the Heirs of X reckoned from the date of the issuance of the said titles/s. Land Bank of the
Philippines v. Hababag, Sr., G.R. Nos. 172352 & 172387-88, June 8, 2016

Q: Respondent X was elected and proclaimed Punong Barangay of Brgy. 76-A. An election protest was filed
by the opposing candidate, Y, before the Municipal Trial Court in Cities, Davao City (MTCC). Y’s election
protest was initially dismissed by the MTCC, but was later granted by the COMELEC on appeal. Hence, Y
was declared the duly-elected Punong Barangay of Brgy. 76-A.

Respondent X filed a motion for reconsideration before the COMELEC, but to no avail. Thus, X filed a
Petition for Certiorari, Mandamus and Prohibition, with prayer for Issuance of a Temporary Restraining
Order, before the Supreme Court. The Supreme Court En Banc gave due course to the petition and issued
a Status Quo Ante Order (SQAO) which was immediately implemented by the Department of Interior and
Local Government (DILG). Thus, respondent X was reinstated to the disputed office.

Upon his reinstatement, respondent X presided over as Punong Barangay of Brgy. 76-A and passed
Ordinance No. 01, otherwise known as the “General Fund Annual Budget of Barangay Bucana for Calendar
Year 2005” totalling up to P2,216,180.20. Likewise included in the local government’s annual budget is the
Personnel Schedule amounting to P6,348,232.00, which formed part of the budget of the General
Administration, appropriated as salaries and honoraria for the 151 employees and workers of Brgy. 76-A.

Subsequently, the Supreme Court En Banc rendered a Decision dismissing respondent’s X petition.
Consequently, it also recalled its SQAO issued on November 9, 200414 (Recall Order). Undaunted,
respondent X filed a motion for reconsideration on April 29, 2005. The City Legal Officer of petitioner opined
that the Recall Order was in effect, an order of dissolution which is immediately executory and effective.
The City of Davao thus refused to recognize all acts and transactions made and entered into by respondent
as Punong Barangay after his receipt of the Recall Order as it signified his immediate ouster from the
disputed office.

Respondent X filed a Petition for Mandamus before the RTC seeking to compel petitioner to allow the
release of funds in payment of all obligations incurred under his administration. Is the City of Davao
mandated to release the funds to respondent X?

A: No. Petitioner, as city government, had to exercise its discretion not to release the funds to respondent
considering the COMELEC’s declaration of Tizon as the duly-elected Punong Barangay of Brgy. 76-A. Surely, it
was part of petitioner’s fiscal responsibility to ensure that the barangay funds would not be released to a person
without proper authority. Barangay funds shall be kept in the custody of the city or municipal treasurer, at the option
of the barangay, and any officer of the local government unit whose duty permits or requires the possession or
custody of local government funds shall be accountable and responsible for the safekeeping thereof in conformity
with the provisions of the law. Moreover, the city or municipality, through the city or municipal mayor concerned,
shall exercise general supervision over component barangays to ensure that the said barangays act within the
scope of their prescribed powers and functions. Hence, given the COMELEC’s ruling revoking respondent X’s
election and proclamation as Punong Barangay of Brgy. 76-A, which in fact, was later on validated by no less than
the Court, petitioner could not have been faulted for not automatically releasing the funds sought for by respondent
in his mandamus petition. City of Davao v. Olanolan, G.R. No. 181149, April 17, 2017)

Q: Petitioners X and Y, through their attorney-in-fact, filed unlawful detainer (ejectment cases) before the
Metropolitan Trial Court of Manila (MeTC), seeking to eject respondents and all other persons claiming
rights under them from the portions of the parcel of land located in San Andres, Manila. The complaints
commonly claimed that: (a) respondents have been in physical possession of the subject land and paying
monthly rentals until November 10, 2010; (b) petitioners decided to terminate the leases effective March 17,
2011; (c) respondents refused petitioners' demands to pay and to vacate; and (d) the complaints were filed
within one (1) year from the last demand. The MeTC rendered a decision in favor of petitioners. RTC-Manila
affirmed the decision of the MeTC. Petitioners moved for the execution of the decision. The RTC directed
Political Law Digests
the issuance of a writ of execution, holding that respondents failed to substantiate their claim of the
existence of a supervening event. Subsequently, respondents filed an Amended Motion to Deny/Suspend
Issuance of Writ of Execution raising the filing by the City of Manila before the RTC-Manila of an
expropriation case over the subject land, which led to the issuance of an suspending the issuance of the
writ of execution.
A Decision was rendered by the RTC Manila-Branch 42 in the expropriation case declaring the City of Manila
to have the lawful right to take the subject land, and ordering it to pay the amount of P31,262,000.00 less
the amount of initial deposit, as the just compensation for the subject land. Did the RTC err in suspending
the issuance of the writ of execution?

A: Yes. In ejectment cases, the judgment of the RTC against the defendant-appellant is immediately executory,
and is not stayed by an appeal taken therefrom, unless otherwise ordered by the RTC, or in the appellate court's
discretion, suspended or modified, or supervening events occur which have brought about a material change in the
situation of the parties and would make the execution inequitable.

There is no dispute that at the time the assailed Orders were issued the City of Manila had filed an expropriation
case to acquire the subject land, and in fact, obtained a ruling in its favor. These occurrences notwithstanding,
records fail to show that the City of Manila had either: (1) priorly posted the required judicial deposit in favor of
petitioners in order to secure possession of the subject land, in accordance with Section 19 37 of the Local
Government Code of 1991; or (2) paid the original landowners, i.e., Z's living heirs (the petitioners herein, X and Y),
the adjudged final just compensation for the subject land so as to consider the expropriation process completed
and consequently, effectuate the transfer of ownership to it. Thus, at the time the assailed Orders were issued,
petitioners remained the owners of the subject land, and therefore were entitled to all the rights appurtenant
thereto. Decision of the RTC is reversed. The court a quo is directed to issue a writ of execution. (Maravilla v.
Bugarin, G.R. Nos. 226199 and 227242-54, October 1, 2018)

Q: Petitioners are department managers of the Local Utilities Water Administration (LWUA) who, together with 28
other LWUA officials, sought reimbursement of their extraordinary and miscellaneous expenses (EME) for the
period January to December 2006. The Office of the CoA Auditor issued Audit Observation Memorandum revealing
that the 31 LWUA officials were able to reimburse P16,900,705.69 in EME, including expenses for official
entertainment, service awards, gifts and plaques, membership fees, and seminars/conferences. Out of the said
amount, P13,110,998.26 was reimbursed only through an attached certification attesting to their claimed incurrence.
According to the AOM, this violated CoA Circular No. 2006-01, which pertinently states that the claim for
reimbursement of such expenses shall be supported by receipts and/or other documents evidencing disbursements.
After the post-audit of the LWUA EME account for the same period, Supervising Auditor Cruz issued Notice of
Disallowance No. 09- 001-GF(06), disallowing the EME reimbursement claims of the 31 LWUA officials, in the total
amount of P13,110,998.26, for the reason that they were not supported by receipts and/or other documents
evidencing disbursements as required under CoA Circular No. 2006-01. Did the CA gravely abused its discretion in
ruling this case?

A: No. The CoA’s audit power is among the constitutional mechanisms that gives life to the check-and-balance
system inherent in our system of government. As an essential complement, the CoA has been vested with the
exclusive authority to promulgate accounting and auditing rules and regulations, including those for the prevention
and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of
government funds and properties. This is found in Section 2, Article IX-D of the 1987 Philippine Constitution.
Espinas v. Commission on Audit, G.R. No. 198271, April 1, 2014

Q: Is CoA Circular No. 2006-01 violative of the equal protection clause since officials of GOCCs, such
as the LWUA officials, are, among others, prohibited by virtue of the same issuance from supporting
their reimbursement claims with “certifications,” unlike officials of the national government agencies
(NGAs) who have been so permitted?

A: No. There exists a substantial distinction between officials of NGAs and the officials of GOCCs, GFIs and
their subsidiaries which justify the peculiarity in regulation. Since the EME of GOCCs, GFIs and their
subsidiaries, are, pursuant to law, allocated by their own internal governing boards, as opposed to the EME
of NGAs which are appropriated in the annual GAA duly enacted by Congress, there is a perceivable rational
impetus for the CoA to impose nuanced control measures to check if the EME disbursements of GOCCs,
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GFIs and their subsidiaries constitute irregular, unnecessary, excessive, extravagant, or unconscionable
government expenditures. Indeed, the Court recognizes that denying GOCCs, GFIs and their subsidiaries
the benefit of submitting a secondary-alternate document in support of an EME reimbursement, such as the
“certification” discussed herein, is a CoA policy intended to address the disparity in EME disbursement
autonomy. As pertinently stated in CoA Circular No. 2006-01, the consideration underlying the rules and
regulations contained therein is the fact that governing boards of GOCCs/GFIs are invariably empowered to
appropriate through resolutions such amounts as they deem appropriate for extraordinary and miscellaneous
expenses. (Espinas v. Commission on Audit, G.R. No. 198271, April 1, 2014)

Q: Petitioner X served as governor of the Province of Negros Occidental for three (3) full terms. During his
tenure, petitioner Y served as his Special Projects Division Head, petitioner Z as Y’s subordinate, and
petitioner W as Provincial Health Officer. The Office of the Ombudsman for the Visayas received a letter-
complaint from A, requesting for assistance to investigate the anomalous purchase of medical and
agricultural equipment for the Province in the amount of P20,000,000.00 which allegedly happened around
a month before X stepped down from office. On March 27, 2003, the assigned Graft Investigation Officer
finding probable cause against petitioners for violation of Section 3(e) of Republic Act No. (RA) 3019,
otherwise known as the “Anti-Graft and Corrupt Practices Act,” and recommended the filing of the
corresponding information. On even date, the Information was prepared and and submitted to Deputy
Ombudsman for the Visayas for recommendation. Deputy Ombudsman for the Visayas recommended the
approval of the Information on June 5, 2003. However, the final approval of Acting Ombudsman came only
on May 21, 2009, and on June 19, 2009, the Information was filed before the SB. X filed a Motion to Quash,
arguing that his constitutional right to speedy disposition of cases was violated as the criminal charges
against him were resolved only after almost eight (8) years since the complaint was instituted. The
Sandiganbayan denied the Motion to Quash and ruled that petitioner X’s right to speedy disposition of
cases was not violated. Is petitioner X’s right to speedy disposition of cases was violated?

A: Yes. The Court equally denies the SB’s ratiocination that the delay in proceedings could be excused by the fact
that the case had to undergo careful review and revision through the different levels in the Office of the Ombudsman
before it is finally approved, in addition to the steady stream of cases which it had to resolve. Absent any
extraordinary complication, such as the degree of difficulty of the questions involved in the case or any event
external thereto that effectively stymied its normal work activity – any of which have not been adequately proven by
the prosecution in the case at bar – there appears to be no justifiable basis as to why the Office of the Ombudsman
could not have earlier resolved the preliminary investigation proceedings against the petitioners. Thus, in view of
the unjustified length of time miring the Office of the Ombudsman’s resolution of the case as well as the concomitant
prejudice that the delay in this case has caused, it is undeniable that petitioners’ constitutional right to due process
and speedy disposition of cases had been violated. While the foregoing should result in the acquittal of the
petitioners, it does not necessarily follow that petitioners are entirely exculpated from any civil liability,
assuming that the same is proven in a subsequent case which the Province may opt to pursue. (Coscolluela v.
Sandiganbayan, G.R. Nos. 191411 & 191871, July 15, 2013)
Labor Law Digests
Q: X was recruited and hired by Y for its principal, A, to serve as “Demi Chef De Partie” on board the vessel
MS Prinsendam. In the course of his last employment contract, X experienced severe pain in his ears and
high blood pressure causing him to collapse while in the performance of his duties. He consulted a doctor
in Argentina and was medically repatriated, and eventually died a month later. X’s surviving spouse sought
to claim death benefits pursuant to the CBA of which her husband was a member, but to no avail, and so
she filed a complaint. As their defense, Y maintained that X’s surviving spouse is not entitled to death
benefits because X’s illness was not work-related, considering that said illness is not listed as occupational
disease under the 2000 POEA-SEC and the death did not occur during the term of his employment contract
in view of his prior repatriation. Is X’s surviving spouse entitled to the death benefits?

A: Yes, she is entitled to claim the death benefits. As a general rule, the principle of work-relation requires that the
disease in question must be one of those listed as an occupational disease under Sec. 32-A. Nevertheless, should
it be not classified as occupational in nature, Sec. 20 (B) paragraph 4 of the POEA-SEC provides that such diseases
are disputed are disputably presumed as work-related. Hence, unless contrary evidence is presented by the
employers, the work-relatedness of the disease must be sustained. With regard to the second requirement that the
death should have occurred during the term of employment, the Court held that under such circumstance, the work-
related death need not precisely occur during the term of his employment as it is enough that the seafarer’s work-
related injury or illness eventually causes his death had occurred during the term of his employment. While it is true
that a medical repatriation has the effect of terminating the seafarer’s contract of employment, it is, however, enough
that the work-related illness, which eventually becomes the proximate cause of death, occurred while the contract
was effective for recovery to be had. (Racelis v. United Philippine Lines, Inc., G.R. No. 198408, November 12,
2014)

Q: X has been continuously hired by Y for its foreign principal, A, and deployed to the latter’s various
vessels under 7 consecutive contracts. Despite the lapse of the 6 month contract, X continued to work
aboard the vessel without any new contract. In the course of the performance of his duties as a plumber,
he sustained a back injury while carrying heavy equipment for use in his plumbing job. Upon his arrival in
Manila, after being medically repatriated, he was examined by the company-designated physician and
revealed that he was suffering from “Lumbosacral Strain with right L5 Radiculopathy. Thereafter, he was
referred to an orthopedic surgeon and a psychiatrist for supervision and therapy , and subsequently
declared fit to work. When he sought a second opinion, he was declared unfit to work, and thereafter filed
a complaint for the payment of permanent disability compensation, averring that he (a) sustained his injury
on board the vessel during the course of his employment with Y; (b) assessed unfit to work as seaman-
plumber with a disability; (c) unfit for sea work beyond 120 days; and (d) remained unemployed from the
time of his medical repatriation. Y contends that X is not entitled because (a) he was deployed back to the
PH due to the termination of his contract and not for medical reasons; (b) all the expenses appurtenant to
his assessment and treatment/rehabilitation were shouldered by Y; (c) he was declared fit to resume sea
duties and had executed/signed the corresponding Certificate of Fitness for Work, agreeing thereto and
releasing Y and A from any liability concerning his medical condition. Is he entitled to the payment of
permanent disability benefits?

A; No, he is not entitled to claim permanent disability benefits. Two elements must concur for an injury or illness of
a seafarer to be compensable: (a) the injury or illness must be work-related; and (b) that the work-related injury or
illness must have existed during the term of the seafarer’s employment contract. In this case, X was made to
continuously perform without the benefit of a formal contract, and no explanation was given as to why X was not
repatriated when his contract expired, thus, he was still under the employ of Y and A when he sustained an injury.
Despite the fact that the injury suffered by X was a work-related injury, he was subsequently declared fit to work by
the company-designated physician 65 days after his repatriation, thus negating the existence of any permanent
disability for which compensability is sought. (Bahia Shipping Services, Inc. v. Hipe, Jr., G.R. No. 204699, November
12, 2014)

Q: X was employed by Y as Personnel Manager. Y through it’s “Tonus” initiative – which is a program for
improving working methods – determined that the functions of Personnel Manager could be absorbed by
the Service Center, and consequently terminated X’s employment on the ground of redundancy. X accepted
the separation package and executed a quitclaim. Despite such, X still filed a complaint for illegal dismissal
against Y. The LA dismissed the illegal dismissal complaint, holding that the redundancy program was
valid and done in good faith. X appealed before the NLRC, which was dismissed for not having been duly
perfected, because the Memorandum of Appeal was not accompanied by a certification of non-forum
shopping. X then filed a motion for reconsideration, which was also dismissed, for being filed beyond the
Labor Law Digests
10-day reglementary period. Dissatisfied, X filed a second motion for reconsideration, which was
dismissed. The CA granted the petition for certiorari. Did the CA properly grant X’s petition for certiorari?

A: No, the CA erred in granting the petition. It is clear that the NLRC had amply justified its dismissal in view of X’s
numerous procedural infractions, namely: (a) his failure to attach to his Memorandum of Appeal a certificate of non-
forum shopping; (b) his filing of a motion for reconsideration of the NLRC’s Resolution beyond the 10 day
reglementary period; and (c) his filing of a second motion for reconsideration. Of significant consideration is the
violation of the mandatory requirement on the timely filing of a motion for reconsideration, which thus rendered
NLRC’s Resolution final and executory. Settled is the rule that a decision that has acquired finality becomes
immutable and unalterable. This alone, the CA should have dismissed X’s petition. To compound his mistakes, X
even filed a second motion for reconsideration, which is a prohibited pleading under the NLRC Rules. (Michelin
Asia Pacific Application Support Center, Inc. v. Ortiz, G.R. No. 189861 (Resolution), November 19, 2014)

Q: X is a corporation engaged in Business Process Outsourcing (BPO) which provides support to its
international clients from various sectors by carrying on some of their operations, governed by service
contracts that it enters with them. Y a US based telecommunications firm, contracted X to accommodate
the needs and demands of Y’s clients for its postpaid and prepaid services. Services for the said project
went on smoothly until Y sent 2 letters to X informing the latter that it was terminating all support services
provided by X related to the project. Thus, Y had to dismiss each of its employees due to the termination
of the project. Hence, A (aggrieved employees) filed a complaint against X for illegal dismissal. X averred
that A were not regular employees but merely project-based employees, and that the employment contracts
expressly indicated that their positions as project-based is co-terminus to the project. Further, that X
complied with the notices of termination. Are A regular employees? Was the dismissal unjust?

A: No, A are project-based employees, and they were validly dismissed from the service. For an employee to be
considered project-based, the employer must show compliance with the two (2) requisites, namely that: (a) the
employee was assigned to carry out a specific project or undertaking; and (b) the duration and scope of which were
specified at the time they were engaged for such project. In this case, it was properly held that A were indeed
project-based employees, considering that: (a) they were hired to carry out a specific undertaking; the prepaid and
postpaid services; and (b) the duration and scope of such project were made known to them at the time of their
engagement; “co-terminus with the project”. As regards the second requisite, the law and jurisprudence dictate that
the duration of the undertaking begins and ends at determined or determinable times, while clarifying that the phrase
‘determinable times’ simply means capable of being determined or fixed. In this case, X substantially complied with
this requisite when it expressly indicated in the employment contracts that their positions were “co-terminus with
the project.” (Gadia v. Sykes Asia, Inc., G.R. No. 209499, January 28, 2015)

Q: X was hired by Y as bookkeeper. She rose from the ranks and was promoted as Finance Manager. She
was thereafter demoted, which caused her to file a complaint for constructive dismissal. The NLRC ruled
in her favor, but was silent on the payment of allowances, benefits and attorney’s fees. The CA then
declared X to be entitled to the allowances and any other benefits pertaining to the position of Finance
Manager. In the course of remanding for computation, the LA declared that she was only entitled to salary
differentials excluding the claims for bonus, representation allowance, transportation benefits, and
attorney’s fees. She appealed the exclusion of her benefits as well as her claim for separation pay. Is X
entitled to (a) retirement pay, and (b) representation, transportation, and cellular phone usage allowances?

A: The claim is partly meritorious. Retirement pay as well as representation, transportation, and cellular phone
usage allowances were not specifically mentioned in the final and executory decision of the CA. Nevertheless, with
regard to retirement pay, the complaint should have contained substantial allegations which would show that (a)
she had applied for the same, and (b) her application squares with the requirements of entitled under the terms of
the company’s retirement plan. However, with X’s entitlement to retirement pay not included as an issue in an
illegal dismissal case which had already been finally decided, it is quite absurd for X to submit a “contemporaneous”
claim for retirement pay on the execution phase of the proceedings. As regards the Transportation, Representation,
and Cellular Phone Usage Allowances, it is clear that these allowances ought to be included in the “other benefits
pertaining to the position of Finance Manager” to which X is entitled to under the final and executory decision of the
CA, and thus should not have been modified being immutable and unalterable. (Villena v. Batangas II Electric
Cooperative, Inc., G.R. No. 205735, February 4, 2015)
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Q: X on behalf of its foreign principal A, hired Y as Chief Cook on board its vessel. Y and Z, the Captain of
the vessel, had an argument over a garbage bin. Z summoned and required Y to state in writing what
transpired in the galley that morning. Z then informed Y that he would be dismissed from service and be
disembarked in India. Y consequently filed a complaint for illegal dismissal alleging that (a) no investigation
or hearing was conducted nor was he given a chance to defend himself; (2) he was not given any notice
stating the ground for his dismissal. In their defense, X claimed that (1) Y failed to attend to his task and
failed to perform his duties properly; (2) Z initiated disciplinary proceedings and informed Y during the
hearing of the offenses he committed; (3) he was informed of his dismissal due to insubordination; and (4)
two electronic mail message were sent to X by Z explaining the decision to terminate Y’s employment. Was
Y dismissed for a just and valid cause?

A: No, Y was illegally dismissed. It is well settled that the burden of proving that the termination of an employee was
for a just or authorized cause lies with the employer. In order to discharge this burden, the employer must present
substantial evidence, which is defined as that amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion, and not based on mere surmises or conjectures. Insubordination, as a just
cause for the dismissal of an employee, necessitates the concurrence of at least two requisites: (1) the employee’s
assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he
had been engaged to discharge. In this case, Z’s emails do not establish that Y’s conduct had been willful, or
characterized by a wrongful and perverse attitude. Moreover, Y was not accorded procedural due process, there
being no compliance with the “two-notice rule.” Y was not given the opportunity to explain or defend himself, nor
was he given a written notice of penalty and the reasons for its imposition. Instead, Y was verbally informed that he
was dismissed, and would be disembarked. It bears stressing that only in the exceptional case of clear and existing
danger to the safety of the crew or vessel that the required notices may be dispensed with, and once again, records
are bereft of evidence showing that such was the situation when Y was dismissed. (Maersk-Filipinas Crewing, Inc.
v. Avestruz, G.R. No. 207010, February 18, 2015)

Q: X a business engaged as a security agency, hired Y as one of its security guards. Y filed a complaint for
underpayment. He was then placed on “floating status”; 6 months thereafter, he filed another complaint for
illegal dismissal. In their defense, X denied that Y was dismissed and averred that he was removed from
his post because of several infractions committed while on duty. Notwithstanding the pendency of the
underpayment case, he was request to report back to work but failed to appear, hence deemed to have
abandoned work. However, when he went to report back to the office, he was advised to wait for possible
posting. Was Y constructively dismissed?

A: No, Y was not constructively dismissed nor did he abandon his post. The onus proving that an employee was
not dismissed or, if dismissed, his dismissal was not illegal, fully rests on the employer, and the failure to discharge
the onus would mean that the dismissal was not justified and was illegal. The burden of proving the allegations
rests upon the party alleging and the proof must be clear, positive, and convincing. Specifically with respect to cases
involving security guards, a relief and transfer order in itself does not sever employment relationship between
security guard and his agency. Temporary “off-detail” or the period of time security guards are made to wait until
they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such
status does not constitute beyond 6 months. The onus of proving that there is no post available to which the security
guard can be assigned rests on the employer. In the absence of any showing of an overt or positive act to establish
that X had dismissed Y, the latter’s claim of illegal dismissal cannot be sustained. With regard to the abandonment
claim, two elements must be present: (1) the employee must have failed to report for work or must have been absent
without valid or justifiable reason; and (2) there must have been a clear intention on the part of the employee to
sever the employer-employee relationship manifested by some overt act. The burden to prove whether the
employee abandoned his or her work rests on the employer. The mere absence or failure to report for work, even
after notice to return, does not necessarily amount to abandonment. (Tatel v. JLFP Investigation Security Agency,
Inc., G.R. No. 206942, February 25, 2015)

Q: X was hired by Y as a Staff Nurse. She was eventually terminated for her purported violation of Y’s Code
of Discipline on Acts of Dishonestly. Records reveal that X passed through the Centralization Entrance/Exit
where she was subjected to the standard inspection procedure by the security personnel, and when the
pouch was opened, it contained medical stocks which were subsequently confiscated. She expressly
admitted to the act and wrote a handwritten apology. An initial investigation was conducted and served X
a notice to explain. After hearing her side, X was informed of Y’s decision to terminate her employment. X
filed a complaint for illegal dismissal asserting that (1) she had no intention of bringing outside Y’s
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premises the items in her bag; (2) that she could not be found guilty of pilferage since the questioned items
found in her possession were neither Y’s nor its employee’s property, because it was supposed to be the
patients. Y on its defense claimed that X was validly dismissed for just cause as she had committed theft
in violation of Sec. 1, Rule I of Y’s Code of Discipline, which punishes acts of dishonesty. Was X validly
dismissed?

A: X was validly dismissed for just cause. Among the employer’s management prerogatives is the right to prescribe
reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain
disciplinary measures to implement said rules and to assure that the same would be complied with. At the same
time, the employee has the corollary duty to obey all the reasonable rules, orders, and instructions of the employer;
and willful or intentional disobedience thereto, as a general rule, justifies termination of the contract of service and
the dismissal of the employee. For an employee to be validly dismissed on this ground, the employer’s orders,
regulations, or instructions must be: (1) reasonable and lawful, (2) sufficiently known to the employee; and (3) in
connection with the duties which the employee has been engaged to discharge. IT is clear that the company policy
requiring the turn-over of excess medical supplies/items for proper handling and providing a restriction on taken
and bringing such items out of Y’s premises without the proper authorization are reasonable and lawful, sufficiently
known to the employee, and evidently connected with the X’s work, thus, the dismissal was for a just cause. (St.
Luke's Medical Center, Inc. v. Sanchez, G.R. No. 212054, March 11, 2015)

Q: X hired Y to work as a fitter for the vessel M/T Capricorn Star, owned by A, for a period of 8 months. Y
claimed that while doing grinding work, he slipped and fell, causing pain in his right arm, shoulder, and
chest. On May 20, 2010 Y underwent a medical consultation, where he was diagnosed to be suffering from
a work-related bilateral shoulder strain/sprain and a non-work-related ganglion cyst on his right wrist, as
well as an incidental finding of ureterolithiasis. Y filed a claim for total and permanent disability benefits
against X before the NLRC, averring that he consulted an independent physician, who diagnosed him with
a work-related total and permanent injury on his cervical spine, rendering him unfit to be a seaman in
whatever capacity. X posed as their defense that the illnesses are not work-related, and he was already
declared fit to work. X also avers that there is no total disability, but Y was accorded – 237 days later - a
disability rating of Grade 10. Is Y entitled to permanent total disability benefits?

A: No, Y is not entitled to permanent total disability benefits. A judicious review of the records reveals that Garcia
was indeed unable to obtain any gainful employment for more than 120 days after his repatriation; however, this
fact does not ipso facto render his disability total and permanent. The Court held in Vergara v. Hammonia Maritime
Services, Inc., that the company-designated physician is given a leeway of an additional 120 days, or a total of 240
days from repatriation, to give the seafarer further treatment and, thereafter, make a declaration as to the nature of
the latter’s disability. Thus, it is only upon the lapse of 240 days, or when so declared by the company-designated
physician, that a seafarer may be deemed totally and permanently disabled. It Is undisputed that Y was repatriated
on May 20, 2010 and was immediately subject to medical treatement. Depsite the lapse of the initial 120-day period,
such treatment continued and in fact, January 12, 2011 – or 237 days from Y’s repatriation – the company-
designated physician declared that Y suffers from a disability rating of Grade 10 Moderate stiffness and not from a
permanent and total disability. (Ace Navigation Co. v. Garcia, G.R. No. 207804, June 17, 2015)

Q: X hired Y to work as a “Fitter” on board the vessel Front Fighter owned by A, for a period of 9 months.
While on board overhauling the relief valve of the vessel, a spring valve flew and hit the left side of Y’s face,
causing severe injuries to his teeth as well as multiple abrasions to his cheek, lips and nose. On April 18,
2009, he was repatriated to the Philippines for further treatment. On July 17, 2009, the company designated
physician, gave Y an interim disability rating of Grade 7. On September 4, 2009, Y sought second opinion,
and was diagnosed and certified that because of his condition, he cannot work as a seafarer in any capacity.
Thus, he filed a complaint for disability benefits. This notwithstanding, Y continued to undergo treatment
until October 12, 2009, but the treatment stopped and the company designated physician did not issue his
final disability rating. X countered that Y’s claim is premature, considering he was still undergoing
treatment when he filed his complaint. Is Y entitled to permanent total disability benefits?

A: Y is entitled to the benefits. Notably, the company designated physician neither issued to Y a fit-to-work
certification nor a final disability rating on or before December 14, 2009, the 240th day since Y’s repatriation. Case
law instructs that, if after the lapse of the 240-day period, the seafarer is still incapacitated to perform his usual sea
duties, and the company designated physician had not yet declared him fit to work or permanently disabled, whether
total or permanent, the conclusive presumption that the seafarer is totally and permanently disabled arises. (Bahia
Shipping Services, Inc. v. Flores, Jr., G.R. No. 207639 (Resolution), July 1, 2015)
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Q: X are heirs of Sps Sandueto who died intestated and inherited several agricultural lands in Zamboanga.
One of the parcels of land is a riceland tenanted by Y who were instituted as such by the original owner
prior to the sale to Sps. Sandueta. The subject portion of land was placed under the government’s Operation
Land Transfer (OLT) program pursuant to P.D. 27 and the land was awarded to the Y tenants who were
issued the Emancipations Patents (EPs). X seeks to exercise their right of retention pursuant to R.A. 6657
(Comprehensive Agrarian Reform Law of 1988) and they also sought to annul the EPs of the tenants as well
as compel the tenants to pay back rentals. DAR, DARCO, and CA all denied the petition — hence, this
petition. Is X entitled to avail of any retention right under Section 6 of RA 6657?

A: No. The right of retention, as protected and enshrined in the Constitution, balances the effects of compulsory
land acquisition by granting the landowner the right to choose the area to be retained subject to legislative
standards. Necessarily, since the said right is granted to limit the effects of compulsory land acquisition against the
landowner, it is a prerequisite that the land falls under the coverage of the OLT Program of the government. If the
land is beyond the ambit of the OLT Program, the landowner need not – as he should not – apply for retention since
the appropriate remedy would be for him to apply for exemption

LOI 474 amended PD 27 by removing any right of retention from persons who own:
(a) other agricultural lands of more than seven (7) has. in aggregate areas; or
(b) lands used used for residential, commercial, industrial or other urban purposes from which they derive
adequate income to support themselves and their families.

While landowners who have not yet exercised their retention rights under PD 27 are entitled to new retention rights
provided for by RA 6657, the limitations under LOI 474 would equally apply to a landowner who filed an application
under RA 6657. In this case, records reveal that aside from the 4.6523-hectare tenanted riceland covered by the
OLT Program, i.e. the subject portion, petitioners predecessors-in-interest, Sps. Sandueta, own other agricultural
lands with a total area of 14.0910 has. which therefore triggers the application of the first disqualifying condition
under LOI 474 as above-highlighted. As such, X being mere successors-in-interest, cannot be said to have acquired
any retention right to the subject portion. Accordingly, the subject portion would fall under the complete coverage
of the OL T Program hence, the 5 and 3-hectare retention limits as well as the landowner s right to choose the area
to be retained under Section 6 of RA 6657 would not apply altogether.

X’s entitlement to the remaining 14.0910-hectare landholding, outside of the 4.6523-hectare subject portion, as a
vestige of his retention right. Since the 14.0910-hectare landholding was not shown to be tenanted and hence,
outside the coverage of the OLT Program, there would be no right of retention, in its technical sense to speak of.
Keeping with the Court s elucidation of retention is an agrarian reform law concept which is only applicable when
the land is covered by the OLT Program — this is not the case with respect to the 14.0910-hectare landholding. X’s
right over the 14.0910-hectare landholding should not be deemed to be pursuant to any retention right but rather to
his ordinary right of ownership as it appears from the findings of the DAR that the landholding is not covered by the
OLT Program. (Heirs of Sandueta v Robles (Resolution), G.R. No. 203204, November 20, 2013)

Q: X filed in the DOLE a temporary suspension of operations for 1 month due to lack of orders from its
buyers and eventually posted its notice of permanent closure and cessation of business operations due to
serious economic losses and financial reverses. X and Y however previously agreed in a CBA, among
others, that the Y’s wages and benefits for the next 2 years, and that in the event of a temporary shutdown,
all machineries and raw materials would not be taken out of the X premises. Y then filed a complaint for
unfair labor practice, illegal closure, illegal dismissal, damages and attorney’s fees before the the Regional
Arbitration Branch IV of NLRC, X then offered separation benefits/pay to Y but some (minority employees)
never accepted the checks. LA ruled in favor of X, NLRC sustained ruling of LA with modifications, CA
denied both the MR of X and Y — hence, this petition. Are Y minority employees entitled to separation pay?

A: No. Article 297 of the Labor Code does not obligate an employer to pay separation benefits when the closure is
due to serious losses. To require an employer to be generous when it is no longer in a position to do so would be
unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights
of the working man, authorizes neither the oppression nor the self-destruction of the employer. In this case, the LA,
NLRC, and the CA all consistently found that X indeed suffered from serious business losses which resulted in its
permanent shutdown and accordingly, held the company’s closure to be valid. It is a rule that absent any showing
that the findings of fact of the labor tribunals and the appellate court are not supported by evidence on record or the
judgment is based on a misapprehension of facts, the Court shall not examine a new the evidence submitted by the
parties. Without any cogent reason to deviate from the findings on the validity of X’s closure, the Court thus holds
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that X is not obliged to give separation benefits to the minority employees pursuant to Article 297 of the Labor Code.
X should not be directed to give financial assistance amounting to ₱15,000.00 to each of the minority employees
based on the Formal Offer of Settlement. If at all, such formal offer should be deemed only as a calculated move
on X’s part to further minimize the expenses that it will be bound to incur should litigation drag on, and not as an
indication that it was still financially sustainable. However, since Y chose not to accept, said offer did not ripen into
an enforceable obligation on the part of X from which financial assistance could have been realized by the minority
employees.

Q: Did X comply with the notice requirement of Art. 297 (formerly Art 283) of the Labor Code?

A: No. As per jurisprudence, the mere posting on the company bulletin board does not, however, meet the
requirement under Article [297] of "serving a written notice on the workers. "The purpose of the written notice is to
inform the employees of the specific date of termination or closure of business operations, and must be served
upon them at least one month before the date of effectivity to give them sufficient time to make the necessary
arrangement. In order to meet the foregoing purpose, service of the written notice must be made individually upon
each and every employee of the company.

The LA, NLRC, and CA erred in ruling that X complied with the notice requirement when it merely posted various
copies of its notice of closure in conspicuous places within the business premises. X was required to serve written
notices of termination to its employees, which it, however, failed to do. It is well to stress that while X had a valid
ground to terminate its employees, i.e., closure of business, its failure to comply with the proper procedure for
termination renders it liable to pay the employee nominal damages for such omission. Based on existing
jurisprudence, an employer which has a valid cause for dismissing its employee but conducts the dismissal with
procedural infirmity is liable to pay the employee nominal damages. (Sangwoo Phils Inc v Sangwoo Phils Inc
Employees Union – OLALIA, G.R. Nos. 173154 & 173229, December 9, 2013)

Q: Y is the production worker of X wherein X fired Y because Y allowed his relative to use his company I.D.
in order to use the company bus shuttle to save on their transportation expenses. X found Y guilty of
violating Article 6.12 of the Company Rules and Regulations (CRR) which prohibits the lending of one’s ID
since the same is considered a breach of its security rules and carries the penalty of dismissal.
Subsequently, Y received a letter informing him of his dismissal from service. 3 days after, Y filed a
complaint for illegal dismissal with damages against X. LA ruled in favor of Y, NLRC reversed such ruling,
and CA ruled in favor of Y. Hence, this petition. Is Y entitled to backwages despite the illegality of his
dismissal?

A: No. As a general rule, an illegally dismissed employee is entitled to reinstatement (or separation pay, if
reinstatement is not viable) and payment of full backwages. In certain cases, however, there are exceptions to the
foregoing rule and thereby ordering the reinstatement of the employee without backwages on account of the
following: (a) the fact that dismissal of the employee would be too harsh of a penalty; and (b) that the employer was
in good faith in terminating the employee. The good faith of the employer, when clear under the circumstances, may
preclude or diminish recovery of backwages. Only employees discriminately dismissed are entitled to backpay. In
this case, the Court observes that: (a) the penalty of dismissal was too harsh of a penalty to be imposed against Y
for his infractions; and (b) X was in good faith when it dismissed Y as his dereliction of its policy on ID usage was
honestly perceived to be a threat to the company's security. In this respect, since these concurring circumstances
trigger the application of the exception to the rule on backwages as enunciated in numerous jurisprudence, the
Court finds it proper to accord the same disposition and consequently directs the deletion of the award of back
wages in favor of Y, notwithstanding the illegality of his dismissal. (Integrated Microelectronics Inc v Pionilla, G.R.
No. 200222, August 28, 2013)

Q: Company Y dismissed 94 union officers and members for their participation in an illegal strike stages
by the collective bargaining agent of the rank and file employees of Y. During the pendency of the case
before the NLRC, the striking employees (X) were admitted back to work subject to the outcome of the case
but the strike was declared with finality as illegal and employees’ dismissals valid on Aug 3, 1998. X
employees filed separate complaints for illegal dismissal, money claims and damages averring that there
were supervening events or voluntary acts by Company Y amounting to a waiver/condonation of the effects
of the illegality of the strike but the NLRC declared on Dec 28, 2000 that the intent to waive/condone was
not sufficiently established. Meanwhile, on March 14, 2001, the collective bargaining agent and Company
Y signed a new CBA granting all employees of Y the amount of P133,000 in lieu of wage increases during
the first year of the CBA, effective Nov 9, 2000. X employees filed motions for execution before the Labor
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Arbiter seeking payment of salaries and other benefits granted under the new CBA. Are X employees
entitled to the payment of the CBA-imposed P133,000 because the CBA became effective on Nov 9 prior to
the Dec 28 NLRC Decision that declared their dismissal valid?

A: No. Settled is the rule that the benefits of a CBA extend only to laborers and employees who are members of the
collective bargaining unit. X were no longer employees of Y Company nor members of the collective bargaining unit
when the CBA was signed (Mar 14) or when it became effective (Nov 9) and are, thus, not entitled to avail of the
benefits under the new CBA. (Angelio Castro, Raymundo Saura and Ramoito Fanuncion v. Philippine Long
Distance Telephone Company and Manuel V. Pangilinan (Resolution), G.R. No. 191792, August 22, 2012)

Q: In 1999, Y adopted a company-wide retrenchment program denominated as Corporate Rightsizing


Program and on July 13, 1999, Y notified the DOLE of the initial batch of 47 workers to be retrenched —
among these were 6 elected officers and 29 active members of the LEPCEU-ALU, including herein
respondents. LEPCEU-ALU then filed a Notice of Strike before the National Conciliation and Mediation
Board (NCMB) due to Y’s alleged acts of union busting/ULP. It claimed that Y’s adoption of the
retrenchment program was designed solely to bust X’s union so that come freedom period, Pepsi’s
company union, the Leyte Pepsi-Cola Employees Union, Union de Obreros de Filipinas, would garner the
majority vote to retain its exclusive bargaining status. Did Y commit ULP in the form of union busting?

A: No. Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is threatened
by the employer’s act of dismissing the former’s officers who have been duly-elected in accordance with its
constitution and by-laws. On the other hand, the term unfair labor practice refers to that gamut of offenses defined
in the Labor Code which, at their core, violates the constitutional right of workers and employees to self-
organization, with the sole exception of Article 257(f) (previously Article 248[f]). Unfair labor practice refers to acts
that violate the workers' right to organize. The prohibited acts are related to the workers' right to self-organization
and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices.
The only exception is Article 257(f). (Pepsi-Cola Products Phil Inc v. Molon, G.R. No. 175002, February 18, 2013)

Q: X1 Agency deployed Y employees to Taiwan to work as operators for its foreign principal under 2-year
employment contracts. However, after working for only 11 months and before expiration of the 2-year
period, Y employees’ employment contracts were terminated and they were repatriated to the Philippines;
hence, the filing of a complaint for illegal dismissal against X Agency and its president/general manager.
The LA and CA both found Y employees to have been illegally dismissed for X’s failure to substantiate their
defense of a valid retrenchment, and granted Y’s money claims, citing Sec 10 of RA 8042. X were directed
to pay each respondent, jointly and solidarily:
1. full reimbursement of their individual placement fees with 12% interest per annum
2. 3 months’ worth of their salary
3. The amount illegally deducted from Y’s monthly salaries
4. Reimbursement for the transportation expenses for Y employees
5. Attorney’s fees
Did LA misconstrue and misapply Sec 10 of RA 8042 on money claims?

A: NO (but modified monetary award). As X failed to establish a valid retrenchment, Y were clearly dismissed without
just, valid, or authorized cause. X’s president/general manager is also jointly and severally liable with X1 Agency
as per Section 10 of RA 8042 for any claims and damages that may be due to the overseas workers.
However, the Court modified the monetary award in conformity to Serrano v. Gallant on the unconstitutionality the
clause “or of three months for every year of the unexpired term, whichever is less” found in the same provision.
Although Y’s illegal dismissal occurred in August 2000, the Serrano case declaration in March 2009 shall
retroactively apply. (Sameer Overseas Placement Agency, Inc., and Rizalina Lamson v. Maricel N. Bajaro, Pamela
P. Morilla, Daisy L. Magdaong, Leah J. Tabujara, Lea M. Cancino, Michiel D. Meliang, Raquel Sumigcay, Rose R.
Saria, Leona L. Angulo, and Melody B. Ingal, G.R. No. 170029, November 21, 2012)

Q: X was deployed by Y Corporation for the latter’s foreign principal as a messman. He slipped while
carrying the ship’s provisions, injured his left arm, and was diagnosed to have suffered a fracture. On Feb
28, he consulted with the company-designated physician and underwent an operation on March 3, after
which, he went through a series of consultations and physical therapy sessions until he had reportedly
completed his program on July 5 but needed to undergo a physical capacity test on Aug 28 to evaluate his
fitness for work. However, on Aug 29, X filed a complaint against Y Corporation for medical reimbursement,
sickness allowance, permanent disability benefits, compensatory damages, exemplary damages, and
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attorney’s fees. Y Corporation denied any liability, contending that proper treatment and management were
afforded X but that he deliberately ignored his medical program by failing to appear on his scheduled
appointment with the company-designated physician. Does the inability to work for more than 120 days
warrant the grant of total and permanent disability benefits?

A: NO. A seafarer’s inability to resume his work after the lapse of more than 120 days from the time he suffered an
injury and/or illness is not a magic wand that automatically warrants the grant of total and permanent disability
benefits in his favor. As per Vergara v. Hammonia Maritime Services, Inc, for the duration of the treatment, but in
no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work. If the 120
days initial period is exceeded and no such declaration is made that he is either fit to work or his temporary disability
is acknowledged by the company to be permanent, either partially or totally, because the seafarer requires further
medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject
to the right of the employer to declare within this period that a permanent partial or total disability already exists.
Concededly, the 120-day period under Sec 20 (B) of the POEA-SEC and Art 192 of the LC had already been
exceeded; however, it cannot be denied that the company-designated physician had determined even before his
discharge from the hospital that X’s condition required further medical treatment in the form of physical therapy
sessions, which he had subsequently completed months later, thus justifying the extension of the 120-day period.
The company-designated physician therefore had a 240-day period from the time X suffered his injury within which
to make a finding on his fitness for further sea duties or degree of disability. (Benjamin C. Millan v. Wallem Maritime
Services, Inc., Reginaldo A. Oben and/or Wallem Shipmanagement, Ltd. (Resolution), G.R. No. 195168, November
12, 2012)

Q: X entered into a 12-month Contract with Y1 Corporation on behalf of its foreign principal (Y2) as Chief
Engineer for a vessel.Prior to embarkation, X underwent a pre-employment medical exam (PEME) during
which he disclosed that he had Diabetes Mellitus but denied that he was suffering from High Blood Pressure
(Hypertension). A few months after boarding the vessel, X suddenly lost his sense of hearing while on duty
in the engine room and eventually lost consciousness. X claims that he is entitled to permanent total
disability benefits considering that: (a) his medical records disclose that his Hypertension caused the
impairment of his heart and kidney organs; (b) his Hypertension and CAD developed and/or became
aggravated as a result of the conditions of his employment; and (b) by employing X despite disclose in his
PEME that he had Diabetes Mellitus, Y1 and Y2 assumed the risk of liability arising from his weakened
medical condition. Is X entitled to disability benefits?

A: No. It is well-settled that for a disability to be compensable, the seafarer must establish that there exists “a
reasonable linkage between the disease suffered by the employee and his work to lead a rational mind to conclude
that his work may have contributed to the establishment or, at the very least, aggravation of any pre-existing
condition he might have had.” Not only must the seafarer establish that his injury/illness rendered him permanently
or partially disabled, it is equally pertinent that he shows a causal connection between such injury or illness and the
work for which he had been contracted. The subsequent hiring of X, despite knowledge of his Diabetes Mellitus,
did not make them guarantors of his health nor did it warrant outright compensation in his favour.
Also, his non-disclosure of his suffering from Hypertension during his PEME constituted fraudulent
misrepresentation which disqualifies him from claiming any disability benefits from his employer as per Sec 20 (E)
of the 2000 POEA-SEC. Even assuming it was not-pre-existing, he still failed to prove as per Sec 32-A (20) of the
same that:
(a) It causes impairment of function of body organs like kidneys, heart, eyes, and brain, resulting in
permanent disability; and
(b) There are documents that substantiate such findings, such as chest x-ray report, ECG report, blood
chemistry report, funduscopy report, and C-T scan.
(Martin K. Ayungo v. Beamko Shipmanagement Corporation, Eagle Maritime Rak Fze, And Juanito G. Savatierra,
Jr., G.R. No. 203161, February 26, 2014)

Q: X Corporation hired Y who was then deployed for a contract period of 9 months (until Oct 2002) but
continued to work aboard the vessel past the contract period (until Feb 2003) due to the unavailability of a
replacement. On Feb 13, he complained of significant pain in the abdominal region, was rushed to a hospital
and it was discovered that he had a tumor formation dependent on his right testicle. Although the company-
designated physician declared him fit to work, his condition continued to deteriorate until he later died due
to respiratory failure, pulmonary metastasis, and a germ cell tumor found in the testes and center back wall
of the abdominal cavity. Is Y’s death compensable as to entitle his wife to claim death benefits under the
1996 POEA-SEC (Y hired January 2002 but 2000 POEA-SEC’s suspension lifted only on June 5, 2002)?
Labor Law Digests

A: Yes. The prevailing rule under the 1996 POEA-SEC is that the illness leading to the eventual death of seafarer
need not be shown to be work-related in order to be compensable, but must be proven to have been contracted
during the term of the contract. Neither is it required that there be proof that the work conditions increased the risk
of contracting the disease or illness. An injury or accident is said to arise “in the course of employment” when it
takes place within the period of employment, at a place where the employee reasonably may be, and while he is
fulfilling his dutis or is engaged in doing something incidental thereto. Y contracted his illness in the course of
employment and was aggravated during the same period. Thus, there was a clear causal connection between such
illness and his eventual death. (Inter-Orient Maritime, Incorated and/or Tankoil Carriers, Limited v. Cristina
Candava, G.R. No. 201251, June 26, 2013)

Q: X is the Vice-President for Dealer Network Marketing/Auto Loans Division of Y Bank. During his tenure,
a client entered into and obtained several auto and real estate loans from Y which were duly approved and
promptly paid, but a later auto loan remained unpaid and was later found to have not been authorized nor
personally applied for by the client. An investigation found that a person misrepresented herself as the
client and succeeded in obtaining the delivery of the subject vehicle of the loan pursuant to the Purchase
Order (PO) and Authority to Deliver (ATD) issued by X without the prior approval of Y’s credit committee.
As a consequence, the P2,294,080 lost was divided between X and his 3 other subordinates, with the
P546,000 amount subsequently deducted from X’s benefits which accrued upon his retirement. Was the
deduction made from Ramos’ retirement benefits illegal and unreasonable?

A: No. First, Y Bank was not able to substantially prove its imputation of negligence against X when it failed to
establish that the duty to confirm and validate information in credit applications and determine credit worthiness of
prospective loan applicants rests with the Dealer Network Marketing Department. Well-settled is the rule that the
burden of proof rests upon the party who asserts the affirmative of an issue. Second, X merely followed standing
company practice when he issued the PO and ATD without prior approval from the bank’s Credit Services
Department. The CA noted that Y Bank adopted the practice of processing loans with extraordinary haste in order
to overcome arduous competition with other banks and lending institutions, despite compromising procedural
safeguards. It is readily apparent that X’s action of issuing the PO and ATD ahead of the approval of the credit
committee was actually conformant to regular company practice which Y Bank itself sanctioned; thus, X cannot be
said to have been negligent in his duties. It is well to note that in loan transactions, banks are mandated to ensure
that their clients wholly comply with all the documentary requirements in relation to the approval and release of loan
applications. As Y Bank “uncharacteristically relaxed supervision over its divisions,” yielding as it did to the demands
of industry competition, it is but reasonable that it solely bears the loss of its own shortcomings. (Xavier C. Ramos
v. BPI Family Savings Bank, Inc and/or Alfonso L. Salcedo, Jr., G.R. No. 203186, December 4, 2013)

Q: X organization hired Y as its Consultant Program Coordinator, for a period of one year, with a condition
that either party may terminate the same "at anytime by giving 4 weeks written notice (termination clause)."
X later on terminated the services of Y by virtue of the termination clause. Y filed a complaint before the
NLRC contending that the termination failed to observe the requirements of due process. Labor Arbiter and
the NLRC ruled in favor of Y stating that Y was illegally dismissed, considering that there was no valid
cause and without observance of procedural due process. CA however reversed the ruling stating that Y
has voluntarily entered into the contract thus it has force of law and its stipulations must be observed. Was
Y’s termination valid?

The Court ruled that no it was not. Applicable laws form part of, and are read into, contracts without need for any
express reference thereto; more so, when it pertains to a labor contract which is imbued with public interest. The
contract in this case is clearly a fixed-term employment contract for one year. The termination clause is silent on
the requirement of a legal cause for termination. However since the law is read into every contract, the termination
clause should not be interpreted as a form of blanket-license by which the parties may just abdicate the contract at
will. Rather, it is a clause which allows any of the parties to pre- terminate the employment contract within the
stipulated fixed-term period of one year, provided that the party invoking the same has: (a) a legal cause for
terminating it; and (b) notifies the other party in writing within 4 weeks prior to the intended date of termination. Had
the parties intended to dispense with the need for legal cause, then the contract should have indicated it so, which
in this case it did not. Since there was no legal cause given by X to terminate Y’s employment, the termination is
illegal. (Halili v. Justice for Children International, G.R. No. 194906, September 09, 2015)

Q: X filed a complaint for permanent total disability benefits against Y Company before the NLRC due from
an accident during work rendering X permanently unfit for further sea service despite major surgery and
Labor Law Digests
further treatment by the company-designated physicians. X alleges that his permanent total unfitness to
work was duly certified by his chosen physician whose certification must prevail over the palpably self-
serving and biased assessment of the company-designated physicians. Y Company on the other hand
alleged that the fit-to-work findings of the company-designated physicians must prevail over that of X's
independent doctor; and that X failed to comply with the conflict-resolution procedure under the Philippine
Overseas Employment Administration- Standard Employment Contract (POEA-SEC). Should the findings
of X’s independent doctor prevail over the findings of Y Company’s doctors?

A: The Court ruled that the fit-to-work findings of Y Company’s doctors should prevail. Under the POES-SEC “the
disability suffered by the seafarer shall be determined by a doctor appointed by the Company. If a doctor appointed
by or on behalf of the seafarer disagrees with the assessment, a third doctor may be nominated jointly between the
Company and the Union and the decision of this doctor shall be final and binding on both parties.” In the case of
Veritas Maritimes Corporation v Gepanaga, the Court reiterated that the seafarer's non-compliance with the
mandated conflict-resolution procedure under the POEA-SEC and the CBA militates against his claims, and results
in the affirmance of the fit-to-work certification of the company- designated physician. In this case, since X failed to
comply with the procedure on the joint appointment by the parties of a 3rd doctor in case of disagreement, the Court
denied X’s claims for permanent total disability benefits.

Q: Should the corporate directors and officers of Y Company be held jointly and severally liable for the
payment of income benefit arising from X’s temporary total disability?

A: The Court ruled that Yes, the corporate directors and officers of Y Company should be held jointly and severally
liable. Sec 10 of the Migrant Workers and Overseas Filipinos Act of 1995 expressly provides for joint and solidary
liability of corporate directors and officers with the recruitment/placement agency for all money claims or damages
that may be awarded to OFWs. Although generally corporate officers cannot be held personally liable for liabilities
of the corporation by virtue of the separate and distinct legal personality of a corporation, personal liability of such
corporate director, trustee, or officer, along (although not necessarily) with the corporation, may validly attach when
he is made by a specific provision of law personally answerable for his corporate action. Also, Y Company is
presumed to have submitted a verified undertaking by its officers and directors that they will be jointly and severally
liable with the company over claims arising from an employer-employee relationship when it applied for a license
to operate. Thus, corporate directors and officers of Y Company should be held jointly and severally liable with
company for payment of income benefit to X. (Gargallo v. DOHLE, G.R. No. 215551, August 17, 2016)

Q: X filed a complaint for unfair labor practice, illegal dismissal, underpayment of salary/wages, damages,
and attorney's fees against respondents Y College before the NLRC. X alleged that Y College first hired him
as a Probationary Full-Time Faculty Member of its College of Nursing and Midwifery for the 2nd semester of
SY 2007-2008 and thereafter, his employment was renewed for the succeeding semesters until the Summer
Semester of SY 2010-2011. However, in the 1st semester of SY 2011-2012, he was not assigned a teaching
load and he was informed that being a mere contractual employee, the school has no obligation to give him
a teaching load. Y College however asserted that it gave X a teaching load despite failing the qualifying test
for the said job twice but X did not attend his classes after his request for a change in his schedule was
denied by the school because it entailed a reshuffling of the entire school schedule. Did Y College illegally
dismiss X from work or did X abandon his job?

A: The Court ruled that Y College did not dismiss X from work but X also did not abandon his job. In termination
cases, the onus of proving that an employee was not dismissed or, if dismissed, his dismissal was not illegal fully
rests on the employer; the failure to discharge such onus would mean that the dismissal was not justified and,
therefore, illegal. In this case, Y College already assigned X his teaching load despite X failing to pass the qualifying
exams for the job. This proves that it did not have the intention to dismiss X. For abandonment, there must be a
clear and deliberate intent to discontinue one's employment without any intention of returning. Two elements must
concur: (1) failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever
the employer-employee relationship, with the second element as the more determinative factor and being
manifested by some overt acts. In this case, records are bereft of any indication that X’s absence from work was
deliberate, unjustified, and with a clear intent to sever his employment relationship with the school. There was also
no showing that X was even informed of the assignment of his teaching load. X’s active inquiry of his teaching load
and the filing of the case, negates his intention to sever his employment. Jurisprudence provides that in instances
where there was neither dismissal by the employer nor abandonment by the employee, the proper remedy is to
reinstate the employee to his former position but without the award of back wages. (Mallo v. Southeast Asian
College, G.R. No. 212861, October 14, 2015)
Labor Law Digests

Q: X is the owner of a piece of agricultural rice land where Y and Z are tenants and cultivators who are
obligated to each pay leasehold rentals of 45 cavans of palay for each cropping season. X filed a case for
ejectment against Y and Z for failure of the latter to pay their leasehold rentals. Y and Z alleged that their
failure to pay was because of the calamities, such as the flashfloods and typhoons that affected the area.
The PARAD and the DARAB both ruled that the non-payment of the rentals severed the tenancy relations
between the parties and ordered Y and Z to vacate the property. The CA however reversed the ruling and
stated that while Y and Z have been remiss in the payment of their leasehold rentals, the omission was not
deliberate or willful. Should the ejectment case against Y and Z prosper?

A: The Court ruled that the ejectment case should prosper. Agricultural lessees, being entitled to security of tenure,
may be ejected from their landholding only on the grounds provided by law. One of the grounds under Section 36
of the Agricultural Land Reform Code is when the agricultural lessee does not pay the lease rental when it falls due.
However, to eject the agricultural lessee for failure to pay the leasehold rentals, jurisprudence states that it must be
willful and deliberate in order to warrant the agricultural lessee’s dispossession of the land that he tills. Under Section
37, the burden of proof to show the existence of a lawful cause for the ejectment an agricultural lessee rests upon
the agricultural lessors. In this case, the Court concluded that Y and Z’s failure to pay rentals is willful and deliberate
because of the accumulation of rentals over a considerable amount of time amounting to 446 and 327 cavans of
palay, respectively. The Court stated that in cases where the ejectment case was upheld the circumstances show
that the legality of the contract was assailed or that the lessor did not accept the payment of rentals; such are absent
in the present case. Also, the fortuitous event defense cannot be availed because while this assertion is a defense
provided under Section 36 which, if successfully established, allows the agricultural lessee to retain possession of
his landholding. There was no showing that the claim was substantiated by any evidence proving it. So, since bare
allegations, unsubstantiated by evidence, are not equivalent to proof, and that the failure to pay rentals was done
willfully and deliberately the Y and Z’s ejectment from the land was upheld. (Nieves v. Duldulao, G.R. No. 190276,
April 2, 2014)

Q: Y and X’s General Manager signed an employment contract which stated, inter alia, that she was to be
placed on probation for a period of six (6) months. After some time, Y was called to a meeting where she
was informed that she failed to meet the regularization standards for the position and that she should
tender her resignation, else they be forced to terminate her services. She was also told that, regardless of
her choice, she should no longer report for work and was asked to surrender her office identification cards.
A letter was personally handed to Y stating that her services had been terminated because she:
(a) did not manage her time effectively;
(b) failed to gain the trust of her staff and to build an effective rapport with them;
(c) failed to train her staff effectively; and
(d) was not able to obtain the knowledge and ability to make sound judgments on case processing
and article review which were necessary for the proper performance of her duties.
Y felt that she was unjustly terminated from her employment and thus, filed a complaint for illegal dismissal
and damages. She claimed that she should have already been considered as a regular and not a
probationary employee given X’s failure to inform her of the reasonable standards for her regularization
upon her engagement as required under Article 295 of the Labor Code. In this relation, she contended that
while her employment contract stated that she was to be engaged on a probationary status, the same did
not indicate the standards on which her regularization would be based. Was the probationary employee
illegally dismissed?

A: No but nominal damages are awarded for the failure to adhere to company policy in evaluating employees.

Probationary employment; grounds for termination.


A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary
employment, aside from just or authorized causes of termination, an additional ground is provided under Article 295
of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular
employee in accordance with the reasonable standards made known by the employer to the employee at the time
of the engagement.

Thus, the services of an employee who has been engaged on probationary basis may be terminated for any
of the following:
a) a just OR an authorized cause; AND
Labor Law Digests
b) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the
employer.

Corollary thereto, Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the
employer fails to inform the probationary employee of the reasonable standards upon which the regularization would
be based on at the time of the engagement, then the said employee shall be deemed a regular employee, viz.:
(d) In all cases of probationary employment, the employer shall make known to the employee the standards
under which he will qualify as a regular employee at the time of his engagement. Where no standards are
made known to the employee at that time, he shall be deemed a regular employee.
In other words, the employer is made to comply with two (2) requirements when dealing with a probationary
employee:
1. the employer must communicate the regularization standards to the probationary employee; and
2. the employer must make such communication at the time of the probationary employee’s engagement.
If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee.

General Rule: An employer is deemed to have made known the standards that would qualify a probationary
employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is
expected to do or accomplish during the trial period of probation. This goes without saying that the employee is
sufficiently made aware of his probationary status as well as the length of time of the probation.
Exception: When the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or
messengers.

Also, in Aberdeen Court, Inc. v. Agustin, it has been held that the rule on notifying a probationary employee of the
standards of regularization should not be used to exculpate an employee who acts in a manner contrary to basic
knowledge and common sense in regard to which there is no need to spell out a policy or standard to be met. In
the same light, an employee’s failure to perform the duties and responsibilities which have been clearly made known
to him constitutes a justifiable basis for a probationary employee’s non-regularization.

Application to the case


A punctilious examination of the records reveals that X had indeed complied with the above-stated requirements.
This conclusion is largely impelled by the fact that X clearly conveyed to Y her duties and responsibilities as
Regulatory Affairs Manager prior to, during the time of her engagement, and the incipient stages of her employment.
Considering the totality of the above-stated circumstances, it cannot, therefore, be doubted that Alcaraz was well-
aware that her regularization would depend on her ability and capacity to fulfill the requirements of her position as
Regulatory Affairs Manager and that her failure to perform such would give X a valid cause to terminate her
probationary employment.

Verily, basic knowledge and common sense dictate that the adequate performance of one’s duties is, by and of
itself, an inherent and implied standard for a probationary employee to be regularized; such is a regularization
standard which need not be literally spelled out or mapped into technical indicators in every case. In this regard, it
must be observed that the assessment of adequate duty performance is in the nature of a management prerogative
which when reasonably exercised – as Abbott did in this case – should be respected. This is especially true of a
managerial employee like Alcaraz who was tasked with the vital responsibility of handling the personnel and
important matters of her department. In fine, the Court rules that Y’s status as a probationary employee and her
consequent dismissal must stand.

Probationary employment; termination procedure.


A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not
govern. Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that "if the termination is
brought about by the x x x failure of an employee to meet the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the
effective date of termination."

Application to the case


As the records show, Y's dismissal was effected through a letter dated May 19, 2005 which she received on May
23, 2005 and again on May 27, 2005. Stated therein were the reasons for her termination, i.e., that after proper
evaluation, X determined that she failed to meet the reasonable standards for her regularization considering her
lack of time and people management and decision-making skills, which are necessary in the performance of her
functions as Regulatory Affairs Manager.
Labor Law Digests

Employer’s violation of company policy and procedure.


Nonetheless, despite the existence of a sufficient ground to terminate Y’s employment and Abbott’s compliance
with the Labor Code termination procedure, it is readily apparent that Abbott breached its contractual obligation to
Y when it failed to abide by its own procedure in evaluating the performance of a probationary employee. Veritably,
a company policy partakes of the nature of an implied contract between the employer and employee. Hence, given
such nature, company personnel policies create an obligation on the part of both the employee and the employer
to abide by the same.

Application to the case


In this case, it is apparent that X failed to follow the procedure in evaluating Y. While it is X’s management
prerogative to promulgate its own company rules and even subsequently amend them, this right equally demands
that when it does create its own policies and thereafter notify its employee of the same, it accords upon itself the
obligation to faithfully implement them. Indeed, a contrary interpretation would entail a disharmonious relationship
in the work place for the laborer should never be mired by the uncertainty of flimsy rules in which the latter’s labor
rights and duties would, to some extent, depend. In this light, while there lies due cause to terminate Y’s probationary
employment for her failure to meet the standards required for her regularization, and while it must be further pointed
out that X had satisfied its statutory duty to serve a written notice of termination, the fact that it violated its own
company procedure renders the termination of Y’s employment procedurally infirm, warranting the payment of
nominal damages. Case law has settled that an employer who terminates an employee for a valid cause but does
so through invalid procedure is liable to pay the latter nominal damages. (Abbott Laboratories, Phils. v. Alcaraz,
G.R. No. 192571, July 23, 2013)

Q: Y sent its employees, including herein X, a notice informing them of their intended termination from
employment on the ground of closure and/or cessation of business operations. X, through its Union,
claimed that the company’s supposed closure was merely a ploy to replace the union members with lower
paid workers, and, as a result, increase its profit at their expense. An amicable settlement during the
conciliation proceedings before the NCMB, whereby X accepted Y’s payment of separation pay but X further
proffered a claim for the payment of additional separation pay at the rate of four (4) days for every year of
service. As basis, X invoked Section 1, Article VIII of the existing collective bargaining agreement (CBA)
executed by and between the Union and Benson which states that “[Y] shall pay to any employee/laborer
who is terminated from the service without any fault attributable to him, a ‘Separation Pay’ equivalent to
not less than nineteen (19) days’ pay for every year of service based upon the latest rate of pay of the
employee/laborer concerned.” Y opposed X’s claim, averring that the separation pay already paid to them
was already more than what the law requires. Should the separation pay warranted by the CBA be given
despite the closure of business?

A: Yes. Closure of business may be considered as a reversal of an employer’s fortune whereby there is a complete
cessation of business operations and/or an actual locking-up of the doors of the establishment, usually due to
financial losses. Under the Labor Code, it is treated as an authorized cause for termination, aimed at preventing
further financial drain upon an employer who cannot anymore pay its employees since business has already
stopped. As a form of recompense, the employer is required to pay its employees separation benefits, except when
the closure is due to serious business losses. Article 297 (formerly Article 283)20 of the Labor Code, as amended,
states this rule:
Art. 297. Closure of Establishment and Reduction of Personnel. The employer may also terminate the
employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, x x x. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (½) month pay for every year of service, whichever is higher. A fraction of at least
six (6) months shall be considered one (1) whole year. (Emphasis and underscoring supplied)

While serious business losses generally exempt the employer from paying separation benefits, it must be pointed
that the exemption only pertains to the obligation of the employer under Article 297 of the Labor Code. This is
because of the law’s express parameter that mandates payment of separation benefits “in case of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial reverses.”
Labor Law Digests
When the obligation to pay separation benefits, however, is not sourced from law (particularly, Article 297 of the
Labor Code), but from contract, such as an existing collective bargaining agreement between the employer and its
employees, an examination of the latter’s provisions becomes necessary in order to determine the governing
parameters for the said obligation. To reiterate, an employer which closes shop due to serious business losses is
exempt from paying separation benefits under Article 297 of the Labor Code for the reason that the said provision
explicitly requires the same only when the closure is not due to serious business losses; conversely, the obligation
is maintained when the employer’s closure is not due to serious business losses. For a similar exemption to obtain
against a contract, such as a CBA, the tenor of the parties’ agreement ought to be similar to the law’s tenor. When
the parties, however, agree to deviate therefrom, and unqualifiedly covenant the payment of separation benefits
irrespective of the employer’s financial position, then the obligatory force of that contract prevails and its terms
should be carried out to its full effect. Verily, it is fundamental that obligations arising from contracts have the force
of law between the contracting parties and thus should be complied with in good faith; and parties are bound by the
stipulations, clauses, terms and conditions they have agreed to, the only limitation being that these stipulations,
clauses, terms and conditions are not contrary to law, morals, public order or public policy. Hence, if the terms of a
CBA are clear and there is no doubt as to the intention of the contracting parties, the literal meaning of its stipulations
shall prevail.

Application to the case


In this case, it is undisputed that a CBA was forged by the employer, Y, and its employees, through the Union. It is
equally undisputed that Benson agreed to and was thus obligated under the CBA to pay its employees who had
been terminated without any fault attributable to them separation benefits at the rate of 19 days for every year of
service. This is particularly found in Section 1, Article VIII of the same contract, to wit:
Section 1. Separation Pay – The Company shall pay to any employee/laborer who is terminated from the
service without any fault attributable to him, a “Separation Pay” equivalent to not less than nineteen (19)
days’ pay for every year of service based upon the latest rate of pay of the employee/laborer concerned.
As may be gleaned from the following whereas clauses in a Memorandum of Agreement between the parties, Y
had been fully aware of its distressed financial condition even at the time of the previous CBA (effective from July
1, 2000 to June 30, 2005). Y even admits in its Comment that it was already saddled with loan from banks as early
as 1997 and that it had been unable to service its loan obligations. And yet, nothing appears on record to discount
the fact that it still unqualifiedly and freely agreed to the separation pay provision in the CBA, its distressed financial
condition notwithstanding. Thus, in view of the foregoing, the Court disagrees with the CA in negating Y’s obligation
to pay petitioners their full separation benefits under the said agreement. The postulation that Y had closed its
establishment and ceased operations due to serious business losses cannot be accepted as an excuse to clear
itself of any liability since the ground of serious business losses is not, unlike Article 297 of the Labor Code,
considered as an exculpatory parameter under the aforementioned CBA. Clearly, Y, with full knowledge of its
financial situation, freely and voluntarily entered into such agreement with petitioners. (Benson Industries
Employees Union-ALU-TUCP v. Benson Industries, Inc., G.R. No. 200746, August 06, 2014)

Q: X filed a complaint for illegal dismissal with prayer for the payment of her statutory benefits against Y.
Thus, the LA ordered Y to pay X separation pay. X appealed and the NLRC reversed the LA’s ruling. An
Entry of Judgment was issued by the NLRC, declaring its Resolution to have become final and executory.
Y filed an MR before the NLRC, insisting that just causes attended X’s dismissal, albeit the same was made
without procedural due process. Y filed a petition for certiorari before the CA, claiming to have secured a
copy of the NLRC Resolution and LA Order only upon personal verification and filed a motion for
reconsideration therefrom referring to her second MR. The CA granted Y’s petition for certiorari, holding
that the NLRC gravely abused its discretion in taking cognizance of X’s appeal despite the latter’s failure
to furnish Jose copies of her notice of appeal and appeal memorandum in violation of Article 223 of the
Labor Code and the NLRC Rules of Procedure. Said pronouncement was based on the CA’s finding that
copies of X’s notice of appeal and appeal memorandum were sent to X’s own former counsel, and not Y’s.
Thus, in view of X’s failure to comply with the requirements for the perfection of her appeal, the CA held
that Y was deprived of her right to due process, and that X’s appeal of the LA Decision had never been
perfected, thereby rendering said decision final and executory, and the NLRC without any authority to
entertain X’s recourse. Accordingly, the CA declared the NLRC Resolution as well as the corresponding
entry of judgment and the LA Order null and void, and reinstated the LA Decision. Did the failure of X to
furnish Y with copies of her notice of appeal and memorandum of appeal before the NLRC deprive the latter
of her right to due process?

A: No. While Article 22347 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the
NLRC require the party intending to appeal from the LA’s ruling to furnish the other party a copy of his memorandum
Labor Law Digests
of appeal, the Court has held that the mere failure to serve the same upon the opposing party does not bar the
NLRC from giving due course to an appeal. Such failure is only treated as a formal lapse, an excusable neglect,
and, hence, not a jurisdictional defect warranting the dismissal of an appeal. Instead, the NLRC should require the
appellant to provide the opposing party copies of the notice of appeal and memorandum of appeal.

In this case, however, the NLRC could not be expected to require compliance from X, the appellant, since it was
not aware that the opposing party, Y, was not notified of her appeal. Hence, it cannot be faulted in relying on X’s
representation that she had sent Y, through her counsel, a copy of her memorandum of appeal by registered mail.

More significantly, it is undisputed that Y eventually participated in the appeal proceedings by filing not only one but
two motions for reconsideration from the NLRC Resolution, thereby negating any supposed denial of due process
on her part. As held in the case of Angeles v. Fernandez, the availment of the opportunity to seek reconsideration
of the action or ruling complained of in labor cases amounts to due process. After all, the essence of due process
is simply the opportunity to be heard or as applied in administrative proceedings, an opportunity to explain one’s
side or an opportunity to seek a reconsideration of the action or ruling complained of. What the law prohibits is
absolute absence of the opportunity to be heard, thus, an aggrieved party cannot feign denial of due process where
he had been afforded the opportunity to ventilate his side, as Y was in this case. (Fernandez v. Botica Claudio, G.R.
No. 205870, August 13, 2014)

Q: Y (hired as a high school teacher) filed a complaint for illegal (constructive) dismissal, non-payment of
service incentive leave (SIL) pay, separation pay, service allowance, damages, and attorney’s fees against
X. Y alleged that she was informed that her services were to be terminated pursuant to X’s retirement plan
which gives the school the option to retire a teacher who has rendered at least 20 years of service,
regardless of age, with a retirement pay of one-half (½) month for every year of service. At that time, Y was
only 58 years old and still physically fit to work. She pleaded with X to allow her to continue teaching but
her services were terminated, contrary to the provisions of Republic Act No. (RA) 7641, otherwise known
as the "Retirement Pay Law." For their part, X denied that they illegally dismissed Y. They asserted that the
latter was considered retired after having rendered 20 years of service pursuant to X’ retirement plan and
that she was duly advised that her retirement had been deposited to the trustee-bank in her name.
Nonetheless, her services were retained on a yearly basis when she was informed that her year-to-year
contract would no longer be renewed.Is using the multiplier "22.5 days" in computing the retirement pay
differentials is correct?

A: YES. RA 7641, which was enacted on December 9, 1992, amended Article 287 of the Labor Code, providing for
the rules on retirement pay to qualified private sector employees in the absence of any retirement plan in the
establishment. The said law states that "an employee’s retirement benefits under any collective bargaining
[agreement (CBA)] and other agreements shall not be less than those provided" under the same – that is, at least
one half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one
whole year – and that "[u]nless the parties provide for broader inclusions, the term one-half (1/2) month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five
(5) days of service incentive leaves."

The foregoing provision is applicable where


a) there is no CBA or other applicable agreement providing for retirement benefits to employees, or
b) there is a CBA or other applicable agreement providing for retirement benefits but it is below the requirement
set by law.
Verily, the determining factor in choosing which retirement scheme to apply is still superiority in terms of benefits
provided.

Application to the case


In the present case, X has a retirement plan for its faculty and non-faculty members, which gives it the option to
retire a teacher who has rendered at least 20 years of service, regardless of age, with a retirement pay of one-half
(1/2) month for every year of service. Considering, however, that X computed Y’ retirement pay without including
one-twelfth (1/12) of her 13th month pay and the cash equivalent of her five (5) days SIL, both the NLRC and the
CA correctly ruled that Y’s retirement benefits should be computed in accordance with Article 287 of the Labor
Code, as amended by RA 7641, being the more beneficent retirement scheme. They differ, however, in the resulting
benefit differentials due to divergent interpretations of the term "one-half (1/2) month salary" as used under the law.
Labor Law Digests
The Court, in the case of Elegir v. Philippine Airlines, Inc., has recently affirmed that "one-half (1/2) month salary
means 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the 13th month pay and the remaining
5 days for [SIL]." The Court sees no reason to depart from this interpretation. GCHS’ argument therefore that the 5
days SIL should be likewise pro-rated to their 1/12 equivalent must fail.

Section 5.2, Rule II38 of the Implementing Rules of Book VI of the Labor Code, as amended, promulgated to
implement RA 7641, further clarifies what comprises the "½ month salary" due a retiring employee, to wit:

RULE II
Retirement Benefits

xxxx

SEC. 5. Retirement Benefits.

xxxx

5.2 Components of One-half (1/2) Month Salary.— For the purpose of determining the minimum
retirement pay due an employee under this Rule, the term "one-half month salary" shall include all
the following:

(a) Fifteen (15) days salary of the employee based on his latest salary rate. As used herein, the
term "salary" includes all remunerations paid by an employer to his employees for services
rendered during normal working days and hours, whether such payments are fixed or ascertained
on a time, task, piece or commission basis, or other method of calculating the same, and includes
the fair and reasonable value, as determined by the Secretary of Labor and Employment, of food,
lodging or other facilities customarily furnished by the employer to his employees. The term does
not include cost of living allowance, profit-sharing payments and other monetary benefits which are
not considered as part of or integrated into the regular salary of the employees.

(b) The cash equivalent of not more than five (5) days of service incentive leave;

(c) One-twelfth of the 13th month paydue the employee.

(d) All other benefits that the employer and employee may agree upon that should be included in
the computation of the employee’s retirement pay.

x x x x (Emphases supplied)

The foregoing rules are, thus, clear that the whole 5 days of SIL are included in the computation of a retiring
employees’ pay. (Grace Christian High School v. Lavandera, G.R. No. 177845, August 20, 2014)

Q: X was a security guard of Y Co. In Sept. 2010, X was placed on a floating status. After more than a month,
X filed a complaint for money claims against Y Co. because X remained on floating status despite assurance
that he would be given a new assignment. However, the complaint was dismissed when X executed a
Waiver/Quitclaim and Release in exchange for a consideration of P10,000. After the settlement, X remained
on floating status until Sept. 2011. Thus, X filed a case for illegal dismissal against Y Co. Y Co. argued that
there was no illegal dismissal since X’s employment was already terminated when he signed the Quitclaim
and Release. Did the execution of the quitclaim preclude X from filing a complaint for illegal dismissal
against Y Co.? Was X illegally dismissed?

A: The execution of the quitclaim did not preclude X from filing a complaint for illegal dismissal against Y Co. X was
illegally dismissed.

DOCTRINES:
Grave abuse of discretion in labor disputes
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and the
conclusions reached thereby are not supported by substantial evidence.
Labor Law Digests
This requirement of substantial evidence is clearly expressed in Section 5, Rule 133 of the Rules of Court which
provides that in cases filed before administrative or quasi-judicial bodies, a fact may be deemed established if it is
supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.

The quitclaim did not sever the employer-employee relationship


The Waiver/Quitclaim and Release only pertained to the First Complaint, which had for its causes of action the
following: (a) underpayment of wages; (b) non-payment of overtime pay, holiday pay, rest day pay, night shift
differentials, 13th month pay, and service incentive leave pay; and (c) refund
of cash bond.
Hence, the res judicata effect of this settlement agreement should only pertain to the aforementioned causes of
action and not to any other unrelated cause/s of action accruing in petitioner's favor after the execution of such
settlement,
i.e., illegal dismissal.

Temporary “off-detail” or “floating status” of security guards


The concept of temporary "off-detail" or "floating status" of security guards employed by private security agencies
— a form of a temporary retrenchment or lay-off — relates to the period of time when security guards are in between
assignments or when they are made to wait after being relieved from a previous post until they are transferred to a
new one.
When a security guard is placed on a "floating status," he or she does not receive any salary or financial benefit
provided by law.

Floating status does not automatically mean severance of EER


Placing a security guard in temporary "off-detail" or "floating status" is part of management prerogative of the
employer-security agency and does not, per se, constitute a severance of the employer-employee relationship.

Floating status must not exceed 6 months


A security guard must not remain in a floating status for a period of more than six (6) months; otherwise, he is
deemed terminated. (Quillopa v. Quality Guards Services, G.R. No. 213814, December 2, 2015)

Q: X is a company engaged in servicing various multinational clients such as Z. Y were employees of X that
were given various positions in company Z. However, due to the closure of Z – Y were put on bench or
floating status and were soon terminated from service with payment of separation pay. When Y filed for an
illegal dismissal case, the LA and NLRC ruled against them stating that their termination came about by the
untimely cessation of the operations of Z and the futile efforts to put them on different employment
accounts by X – hence their dismissal was valid. CA later on dismissed Y’s petition for certiorari. Did the
CA correctly dismissed Y’s petition for certiorari?

A: No, certiorari in this case shall be upheld since under the circumstance a motion for reconsideration would be
useless. Moreover, Section 15, Rule VII of the 2011 NLRC Rules of Procedure, as amended, provides, among
others, that the remedy of filing a motion for reconsideration may be availed of once by each party. Only Y has
availed of such in this case hence their proper remedy is no longer an MR but a petition for certiorari. (Genpact
Services Inc. v. Santos-Falceso et al., G.R. No. 227695, July 31, 2017)

Q: X was employed as an able seaman for Y but on February 2005 he was diagnosed of Tolosa Hunt
Syndrome which caused him severe headaches, nausea, and double vision. On June 2005, he was declared
fit by the company physician to resume work but an independent physician assessed that his illness is at
Grade IV disability hence unfit for sea duty. Consequently, X asked for payment of disability benefits and
reimbursement of medical expenses. Can X recover permanent disability benefits?

A: Yes, given that X’s case was filed March 2005 – the Crystal Shipping Doctrine shall apply. This doctrine shall be
applied to all cases filed prior to October 6, 2008 (when the Vergara case was ruled upon). The Crystal Shipping
Doctrine states that permanent disability is the inability of a worker to perform his job for more than 120 days,
regardless of whether or not he loses the use of any part of his body and this shall constitute permanent total
disability. Unlike the Vergara case/doctrine, inability to work beyond 120 days is considered an extension of
temporary disability until the maximum of 240 days. Since the Crystal Shipping Doctrine applies here, there is a
conclusive presumption that X’s disability is total and permanent hence X is entitled to the claimed benefits. (Atienza
v. Orophil Shipping International Co., G.R. No. 191049, August 7, 2017)
Labor Law Digests

Q: X was employed as a mechanical fitter and boarded the vessel of Y. Later on, X claimed that a metal
ceiling fell and wounded his head while walking along the ship alley and soon cause persisting headache
and blurring of his vision. The company physician said he had a tumor on the left side of his brain and
declared this to be not a work-related illness since such is caused by an abnormal growth of tissues in the
brain’s blood vessels. However, upon assessment of an independent physician, it has been declared a
work-related illness which rendered him unfit to go back to the job hence X is now asking for payment of
disability benefits. Is X entitled to disability benefits?

A: No. An abnormal growth of tissue in the brain’s blood vessels is not work-related. To refute this, X claimed that
a metal ceiling fell on him but such incident was never proven. Although brain tumors can be caused by exposure
to different chemicals to be present on the ship, X never took the screening suggested by the neurosurgeon – this
means that probably must be reasonable and based on credible information. A mere possibility will not suffice to
say that a disease is caused by work. Given that X failed to debunk the presumption of work-relatedness, X
concomitantly failed to prove with substantial evidence conditions for compensability. (Romana v. Magsaysay
Maritime Corporation, G.R. No. 192442, August 9, 2017)

Q: X was employed by Y as a seafarer. From the month of February until May, he has been repeatedly
recommended for medical treatment for various ailments and then later on declared fit to work. However,
X was finally discharged in May – a few months later the company physician kept asking X to take
medication but when X consulted an independent physician he was declared unfit to return to sea hence
permanently disabled. X filed a complaint for payment of a total disability compensation on the ground that
X was no longer able to resume working as a seafarer for more than 240 days. Can X recover the total
disability compensation?

A: Yes, the Labor Code provides that a seafarer is declared to be on temporary total disability during the 120-day
period within which the seafarer is unable to work. However, a temporary total disability lasting continuously for
more than 120 days, except as otherwise provided in the Rules, is considered as a total and permanent disability.
Here, there was failure to show that further medical treatment would address X’s alleged temporary disability – this
cannot extend the 120-day period to 240 days. Hence, X was right in asking for a total disability compensation.
(Talaroc v. Araphil Shipping Corporation, G.R. No. 223731, August 30, 2017)

Q: X was a welder at Y’s corporation. X took a seat during office hours to rest but Z, a superior, called her
out for sitting down so X talked back and “insulted and uttered offensive language” towards Z. X was soon
terminated for serious misconduct. The LA, NLRC, and CA found X not guilty of serious misconduct. Is X
guilty of serious misconduct and hence illegally dismissed?

A: No, although X uttered offensive language to her superior, the same was not serious enough to warrant X’s
dismissal and such action was not done with wrongful intent but only due to a rush of emotions. There was no
serious misconduct hence there was illegal dismissal of X that would entitle her to back wages and reinstatement.
However, the court did not opt for reinstatement here since the illegal dismissal already created an atmosphere of
animosity and antagonism between employer and employee. (Fabricator Philippines Inc. v. Estolas, G.R. Nos.
224308-09, September 27, 2017)

Q: X was employed by Y College first as a part-time teacher and then X became a full time faculty member
and was renewed for both semesters for the next school year. Come next school year, the assistant dean
of her department recommend X’s permanent status to the University President. The University President
did not approve X’s permanent appointment on the ground that Sec. 117 of the MORPHE provides that the
probationary employment of an academic teaching personnel shall not be more than a period of 6
consecutive semesters…” X was then appointed as Assistant Professor which is a downgrade from her
current status as Associate Professor – hence, a diminution of salary and benefits. X filed for constructive
dismissal. Is X a probationary employee and has X been constructively dismissed thereby entitling her to
the benefits in relation to the remainder of her probationary period?

A: Yes, X is a probationary employee. Case law provides an exception to Article 296 of the Labor Code for
probationary employment which states that academic personnel shall not be governed by the Labor Code but by
the standards established by the Department of Education and Commission on Higher Education. Sec. 92 of 1992
Revised Manual of Regulations for Private Schools state that “(b) for those in tertiary level, such period shall be
consecutive semesters or 9 consecutive trimesters, as the case may be.” However, there was still constructive
Labor Law Digests
dismissal since a probationary employee cannot be terminated without just or authorized cause or if she fails to
qualify in accordance with reasonable standards prescribed by the College for the acquisition of permanent status
of its teaching personnel. But since it has been a practice that probationary employment in schools enter into
contracts effective only for one year and so is the case with X, X is entitled only to the benefits arising from that 1-
schoolyear contract and not for her whole probationary period. (De La Salle Araneta University v. Magdurulang,
G.R. No. 224319, November 20, 2017)

Q: X was employed as a Chief Cook on board Y’s vessel after undergoing the required pre-employment
medical examination. However, after almost a year at sea, X experienced a hard time urinating which was
later on found to be caused by changes in hormone levels that occur with aging. The company physician
has declared X’s condition to be not work-related but an assessment of an independent physician says
otherwise. Hence, X is now asking for total permanent disability benefits. Is X entitled to permanent
disability benefits?

A: No, according to Section 20(A) of the 2010 POEA-SEC explicitly states that the employer is liable for disability
benefits only when the seafarer suffers from a work-related injury during the term of his contract. Occupational
diseases are listed under Section 32-A but those that are not listed are disputably presumed as work-related. Those
disputably presumed to be work-related shall be supported by substantial evidence that an employee’s work
conditions caused the risk of contracting the illness. X here failed to show a reasonable link or causal connection
between his work as a cook to his illness which is a difficulty in urinating. Hence, X cannot recover permanent
disability benefits. (Ventura v. Crewtech Shipmanagement Philippines Inc., G.R. No. 225995, November 20, 2017)

Q: X and 2 others were hired as staff members in Y’s stalls in different SM branches. X and his fellow
employees claimed that they were never paid monetary value of their unused service incentive leaves, 13
month pay, overtime pay, and premium pay for work during holidays. X claimed that when they went to the
DOLE to inquire on their minimum wage rates, they were later on prohibited from reporting to their work
assignment without justification. They filed for illegal dismissal. Y claims that X and his fellow employees
were the ones who abandoned their work and that Y has paid all their money claims and benefits. Were X
and his fellow employees illegally dismissed? Did X and his fellow employees abandon their work?

A: X and the others were neither illegally dismissed nor did they abandon their work. Case law dictates that the one
alleging illegal dismissal has the burden of proof to prove such dismissal. Article 296 of the Labor Code also lists
what constitutes abandonment – (a) failure to report to work or absence without valid of justifiable cause and (b) a
clear intention to sever the employer-employee relationship. The second element is more controlling. In this case,
Y did not prevent X to report to their working stations or made any overt act dismissing X. X, on the other hand,
may have not reported to work on the misplaced belief that they were already dismissed. In fact, the filing for illegal
dismissal negates the fact of abandonment. Hence, the remedy when there is no illegal dismissal and no
abandonment of employee is to reinstate the employee without the award of backwages. (Jolo’s Kiddie Carts v.
Caballa, G.R. No. 230682, November 29, 2017)

Q: X was employed as a cashier in Y’s cooperative. While on maternity leave, she was subjected to
preventive suspension and was later on terminated on the ground of loss of trust and confidence for
rampant violations of Y’s by-laws, rules, and regulations. X failed to regularly report post-dated checks
received and the checks were not deposited at all. Due to the dismissal, X filed for illegal dismissal. Does
Y have just cause to terminate X’s employment?

A: Yes, according to Article 297 of the Labor Code the requisites for the ground of loss of trust and confidence are
(a) the employee concerned holds a position of trust and confidence and (b) he performs an act that would justify
such loss of trust and confidence. Case provides that fiduciary rank-and-file employees such as cashiers, auditors,
property custodians, or those who in the normal exercise of their functions regularly handle significant amounts of
money or property are considered in a position of trust and confidence. As to the second requisite, the employee’s
act causing the loss of confidence must be directly related to her duties rendering her woefully unfit to continue
working for the employer. Dismissal is due to her failure to deposit checks on due dates despite not being given
discretion to determine whether or not to deposit the checks. Hence, Y had just cause for dismissal. (Aluag v. Bir
Multi-Purpoise Cooperative, G.R. No. 228449, December 6, 2017)

Q: X was employed as a Ship Master by Y. While on board, X had a brain stroke and hypertension. After
consulting with an independent physician, he was declared unfit for sea duty and hence he asked for
permanent disability benefits. Y refused to do so on the ground that X allegedly concealed a previously
Labor Law Digests
diagnosed medical condition since X was found to be carrying Isordil (a prescribed medication) on board
hence disqualifying X from claiming the benefits. Is X entitled to permanent disability benefits?

A: Yes, brain stroke and hypertension are listed under Sub-item 12 and 13 respectively under Section 32-A of the
2010 POEA-SEC. The brain stroke of X was brought about by hypertension which occurred only while in the
performance of his duties as Ship Master. There was no indication that X was known to be previously suffering from
hypertension and his last PEME showed normal blood pressure, chest x-ray, and ECG results. Hence, since his
hypertension is work-related his disability is compensable. The bringing of Isordil is irrelevant given that Isordil is
not even a maintenance against hypertension but only a prescribed drug. The Court also ruled that the joint
appointment of third doctor is no longer necessary despite the fact that the company physician’s and independent
physician’s opinions differ because the company physician failed to issue the required certification to X within the
120-days required by law. (Philsynergy Maritime Inc. v. Gallano, G.R. No. 228504, June 6, 2018)

Q: Y is a construction firm which hired X as laborer. Because he was terminated from employment, he filed
a complaint for illegal dismissal with prayer for the payment of separation benefits against Y. For its part,
Y denied X’s claims, alleging that he was employed only as a laborer who, however, sometimes doubled as
a guard. He was temporarily laid-off after the Cavite project was finished but eventually, X was asked to
return to work through a letter, allegedly sent to him within the six (6) month period under Article 286 of the
Labor Code which pertinently provides that "[t]he bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months x x x shall not terminate employment." As such, Y
argued that X's filing of the complaint for illegal dismissal was premature. Was a project or a regular
employee?

A: The principal test for determining whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees,"
- whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the
duration and scope of which were specified at the time the employees were engaged for that project.

The project could either be


1. a particular job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the company; or
2. a particular job or undertaking that is not within the regular business of the corporation.

In order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from
attaining the status of regular employees, employers claiming that their workers are project employees should not
only prove that the duration and scope of the employment was specified at the time they were engaged, but also
that there was indeed a project.

Application to the case


In this case, the NLRC found that no substantial evidence had been presented by Y to show that X had been
assigned to carry out a "specific project or undertaking," with its duration and scope specified at the time of
engagement. The court, absent any cogent reason to hold otherwise, concurs with its ruling that X was not a project
but a regular employee. This conclusion is bolstered by the undisputed fact that X had been employed by Y for
more than 10 years. Article 280 of the Labor Code provides that any employee who has rendered at least one year
of service, whether such service is continuous or broken, shall be considered a regular employee.

As a regular employee X is entitled to security of tenure, and, hence, dismissible only if a just or authorized cause
exists therefor.

Lay-off, Retrenchment
Among the authorized causes for termination under Article 283 of the Labor Code is retrenchment, or what is
sometimes referred to as a "lay-off”. It is defined as the severance of employment, through no fault of and without
prejudice to the employee, resorted to by management during the periods of business recession, industrial
depression, or seasonal fluctuations, or during lulls caused by lack of orders, shortage of materials, conversion of
the plant to a new production program or the introduction of new methods or more efficient machinery, or of
automation. Elsewise stated, lay-off is an act of the employer of dismissing employees because of losses in the
operation, lack of work, and considerable reduction on the volume of its business, a right recognized and affirmed
by the Court. However, a lay-off would be tantamount to a dismissal only if it is permanent. When a lay-off is only
temporary, the employment status of the employee is not deemed terminated, but merely suspended.
Labor Law Digests

Pursuant to Article 286 of the Labor Code, the suspension of the operation of business or undertaking in a temporary
lay-off situation must not exceed six (6) months. Within this six-month period, the employee should either be
recalled or permanently retrenched. Otherwise, the employee would be deemed to have been dismissed, and the
employee held liable therefor.

Notably, in both a permanent and temporary lay-off, jurisprudence dictates that the one-month notice rule to both
the DOLE and the employee under Article 283 of the Labor Code, as above cited, is mandatory. Also, in both cases,
the lay-off, being an exercise of the employer's management prerogative, must be exercised in good faith - that is,
one which is intended for the advancement of employers' interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid agreements.

Application to the case


In the case at bar, Y asserts that it only temporarily laid-off X from work the reason that its project in Cavite had
already been finished. X, who, as earlier discussed was a regular employee of Y, was not merely temporarily laid
off from work but was terminated from his employment without any valid cause therefor; thus, the proper disposition
is to rule that X had been illegally dismissed. Although the NLRC did not expound on the matter, it is readily apparent
that the supposed lay-off of X was hardly justified considering the absence of any causal relation between the
cessation of Y's project in Cavite with the suspension of X's work. To repeat, X is a regular and not a project
employee. Hence, the continuation of his engagement with Y, either in Cavite, or possibly, in any of its business
locations, should not have been affected by the culmination of the Cavite project alone. In light of the well-
entrenched rule that the burden to prove the validity and legality of the termination of employment falls on the
employer, Y should have established the bona fide suspension of its business operations or undertaking that would
have resulted in the temporary lay-off of its employees for a period not exceeding six (6) months in accordance with
Article 286 of the Labor Code.

No Available Post
Due to the grim economic consequences to the employee, case law states that the employer should also bear the
burden of proving that there are no posts available to which the employee temporarily out of work can be assigned.

Application to the case


The same can be said of the employee in this case as no evidence was submitted by Y to show any dire exigency
which rendered it incapable of assigning X to any of its projects. Add to this the fact that Y did not proffer any
sufficient justification for singling out X for lay-off among its other three hundred employees, thereby casting a cloud
of doubt on Y's good faith in pursuing this course of action. Verily, Y cannot conveniently suspend the work of any
of its employees in the guise of a temporary lay-off when it has not shown compliance with the legal parameters
under Article 286 of the Labor Code. With Y failing to prove such compliance, the resulting legal conclusion is that
X had been constructively dismissed; and since the same was effected without any valid cause and due process,
the NLRC properly affirmed the LA's ruling that X’s dismissal was illegal. (Lopez v. Irvine Construction Corp., G.R.
No. 207253, August 20, 2014)

Q: Y filed a complaint for illegal dismissal, unfair labor practice, i.e., illegal lock out, and damages against
X before the NLRC. The LA ruled in favor of the Y. Dissatisfied, X appealed before the NLRC by filing their
Notice of Appeal and Appeal Memorandum, accompanied by a Manifestation with Motion for Reduction of
Bond, praying that the required bond covering the monetary judgment be reduced because of liquidity
problems. Simultaneously, X posted a partial bond, seeking that the same be considered as substantial
compliance for purposes of perfecting their appeal. Subsequently, they withdrew its initial motion and,
instead, submitted for approval their additional surety bond to cover the full judgment award. Is the appeal
is deemed perfected despite insufficient payment of bond within the 10 day period? Yes

A: Yes. For an appeal from the LA’s ruling to the NLRC to be perfected, Article 223 (now Article 229)61 of the Labor
Code requires the posting of a cash or surety bond in an amount equivalent to the monetary award in the judgment
appealed from. While it has been settled that the posting of a cash or surety bond is indispensable to the perfection
of an appeal in cases involving monetary awards from the decision of the LA, Section 6, Rule VI of NLRC’s Rules
of Procedure, nonetheless allows the reduction of the bond upon a showing of
a) the existence of a meritorious ground for reduction, and
b) the posting of a bond in a reasonable amount in relation to the monetary award
Labor Law Digests
In this regard, it bears stressing that the reduction of the bond provided thereunder is not a matter of right on the
part of the movant and its grant still lies within the sound discretion of the NLRC upon a showing of meritorious
grounds and the reasonableness of the bond tendered under the circumstances.

In Nicol v. Footjoy Industrial Corp., the Court held that "meritorious cases" for said purpose would include "instances
in which
a) there was substantial compliance with the Rules,
b) surrounding facts and circumstances constitute meritorious grounds to reduce the bond,
c) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits, or
d) the appellants, at the very least exhibited their willingness and/or good faith by posting a partial bond during
the reglementary period.

Notably, in determining whether the arguments raised by the X in their motion to reduce bond is a "meritorious
ground," the NLRC is not precluded from conducting a preliminary determination of the merits of the appellant’s
contentions.66 And since the intention is merely to give the NLRC an idea of the justification for the reduced bond,
the evidence for the purpose would necessarily be less than the evidence required for a ruling on the merits.

Application to the case


The Court deems that the circumstances constitute meritorious grounds for the reduction of the bond. The absence
of grave abuse of discretion in this case is bolstered by the fact that X’s motion to reduce bond was accompanied
by a substantial amount of surety bond which was seasonably posted within the reglementary period to appeal. In
McBurnie v. Ganzon, the Court ruled that, "[f]or purposes of compliance with [the bond requirement under the 2011
NLRC Rules of Procedure], a motion shall be accompanied by the posting of a provisional cash or surety bond
equivalent to ten percent (10%) of the monetary award subject of the appeal, exclusive of damages, and attorney’s
fees." Seeing no cogent reason to deviate from the same, the Court deems that the posting of the aforesaid partial
bond, being evidently more than ten percent (10%) of the full judgment award, already constituted substantial
compliance with the governing rules at the onset.

In this relation, it must be clarified that while the partial bond was initially tainted with defects, i.e., that it was initially
issued in favor of the other X and that the bonding company, SSSICI, had no authority to transact business in all
courts of the Philippines at that time, these defects had already been cured by the X’s posting of the full amount of
the bond. Verily, the subsequent completion of the bond, in addition to the reasons above-stated, behooves this
Court to hold that the NLRC actually had sound bases to take cognizance of X’s appeal. (Phil. Touristers, Inc. v.
Mas Transit Workers Union-Anglo-KMU, G.R. No. 201237, September 03, 2014)

Q: X hired Y as garbage truck drivers who were then paid on a per trip basis. When the service contract
with the government was renewed for another year, X required each of the Y to sign employment contracts
which provided that they will be “re-hired” only for the duration of the same period. However, Y refused to
sign the employment contracts, claiming that they were regular employees since they were engaged to
perform activities which were necessary and desirable to X’s usual business or trade. For this reason, X
terminated the employment of Y which, in turn, resulted in the filing of cases for illegal dismissal. Were Y
were regular employees?

A: Yes. A project employee is assigned to a project which begins and ends at determined or determinable times.
Unlike regular employees who may only be dismissed for just and/or authorized causes under the Labor Code, the
services of employees who are hired as “project employees” may be lawfully terminated at the completion of the
project.

According to jurisprudence, the principal test for determining whether particular employees are properly
characterized as “project employees” as distinguished from “regular employees,” is whether or not the employees
were assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified at
the time they were engaged for that project.

The project could either be


a) a particular job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the company; or
b) a particular job or undertaking that is not within the regular business of the corporation.
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In order to safeguard the rights of workers against the arbitrary use of the word “project” to prevent employees from
attaining a regular status, employers claiming that their workers are project employees should not only prove that
the duration and scope of the employment was specified at the time they were engaged, but also that there was
indeed a project.

Even though the absence of a written contract does not by itself grant regular status to Y, such a contract is evidence
that Y were informed of the duration and scope of their work and their status as project employees. As held in
Hanjin Heavy Industries and Construction Co., Ltd. v. Ibañez,citing numerous precedents on the matter, where no
other evidence was offered, the absence of the employment contracts raises a serious question of whether the
employees were properly informed of their employment status as project employees at the time of their engagement

Application to the case


In this case, records are bereft of any evidence to show that Y were made to sign employment contracts explicitly
stating that they were going to be hired as project employees, with the period of their employment to be co-terminus
with the original period of X’s service contract with the Quezon City government. Neither is X’s allegation that Y
were duly apprised of the project-based nature of their employment supported by any other evidentiary proof. Thus,
the logical conclusion is that Y were not clearly and knowingly informed of their employment status as mere project
employees, with the duration and scope of the project specified at the time they were engaged. As such, the
presumption of regular employment should be accorded in their favor pursuant to Article 280 of the Labor Code
which provides that “[employees] who have rendered at least one year of service, whether such service is
continuous or broken [– as respondents in this case –] shall be considered as [regular employees] with respect to
the activity in which [they] are employed and [their] employment shall continue while such activity actually exists.”
Add to this the obvious fact that Y have been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of X, i.e., garbage hauling, thereby confirming the strength of the aforesaid conclusion.

The determination that Y are regular and not merely project employees resultantly means that their services could
not have been validly terminated at the expiration of the project, or, in this case, the service contract of X with the
Quezon City government. As regular employees, it is incumbent upon X to establish that Y had been dismissed for
a just and/or authorized cause. However, X failed in this respect; hence, Y were illegally dismissed. (Omni Hauling
Services, Inc. v. Bon, G.R. No. 199388, September 03, 2014)

Q: X was hired by Y as Third Assistant Engineer. X figured in an accident while in the performance of his
duties on board the vessel, and, as a result, injured the right side of his body and died. X’s death certificate
indicated the immediate cause of his death as acute respiratory failure, with lung metastasis and r/o bone
cancer as antecedent cause and underlying cause, respectively. X’s widow filed a seeking to recover death
benefits, death compensation of minor children, burial allowance, damages, and attorney’s fees. In their
defense, Y denied any liability and contended that the real cause of his death was due to lung cancer. The
said illness is not work-related per advise of their company doctor, hence, not compensable. Should X’s
complaint for death benefits be granted?

A: Yes. The terms and conditions of a seafarer’s employment are governed by the provisions of the contract he
signs with the employer at the time of his hiring. Deemed integrated in his employment contract is a set of standard
provisions determined and implemented by the POEA, called the "Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels," which provisions are considered to be the
minimum requirements acceptable to the government for the employment of Filipino seafarers on board foreign
ocean-going vessels.

The provisions currently governing the entitlement of the seafarer’s beneficiaries to death benefits are found in
Section 20 of the 2000 POEASEC.

Part A (1) thereof states that the seafarer’s beneficiaries may successfully claim death benefits if they are able to
establish that the seafarer’s death is
a) work-related, and
b) had occurred during the term of his employment contract

Part A (4) of the same provision further complements Part A (1) by stating the "other liabilities" of the employer to
the seafarer’s beneficiaries if the seafarer dies
a) as a result of work-related injury or illness, and
b) during the term of his employment
Labor Law Digests

Integral as they are for a valid claim for death compensation, the Court examines this case according to the above-
stated dual requirements.

First Requirement: The Seafarer’s Death Should Be Work-Related.

While the 2000 POEA-SEC does not expressly define what a "work related death" means, it is palpable from Part
A (4) as above-cited that the said term refers to the seafarer’s death resulting from a work-related injury or illness.
This denotation complements the definitions accorded to the terms "work-related injury" and "work-related illness"
under the 2000 POEA-SEC as follows:

Definition of Terms:

For purposes of this contract, the following terms are defined as follows:

xxxx

11. Work-Related Injury – injury(ies) resulting in disability or death arising out of and in the course of
employment.

12. Work-Related Illness – any sickness resulting to disability or death as a result of an occupational disease
listed under Section 32-A of this contract with the conditions set therein satisfied. (Emphases supplied)

Application to the case


Given that the seafarer’s death in this case resulted from a work-related injury as defined in the 2000 POEA-SEC
above, it is clear that the first requirement for death compensability is present.

As the records show, X suffered a work-related injury within the term of his employment contract when he figured
in an accident while performing his duties. The foregoing circumstances aptly fit the legal attribution of the phrase
"arising out of and in the course of employment" which the Court, in the early case of Iloilo Dock & Engineering Co.
v. Workmen’s Compensation Commission, pronounced as follows:

The two components of the coverage formula – "arising out of" and "in the course of employment" – are said to be
separate tests which must be independently satisfied; however, it should not be forgotten that the basic concept of
compensation coverage is unitary, not dual, and is best expressed in the word, "work-connection," because an
uncompromising insistence on an independent application of each of the two portions of the test can, in certain
cases, exclude clearly work-connected injuries. The words "arising out of" refer to the origin or cause of the accident,
and are descriptive of its character, while the words "in the course of" refer to the time, place, and circumstances
under which the accident takes place.

As a matter of general proposition, an injury or accident is said to arise "in the course of employment" when it takes
place within the period of the employment, at a place where the employee reasonably may be, and while he is
fulfilling his duties or is engaged in doing something incidental thereto. 43 (Emphases supplied; citations omitted)

That X was suffering from lung cancer, which was found to have been pre-existing, hardly impels a contrary
conclusion since – as the LA herein earlier noted – the injury actually led to the deterioration of his condition. As
held in More Maritime Agencies, Inc. v. NLRC, "[i]f the injury is the proximate cause of [the seafarer’s] death or
disability for which compensation is sought, [his] previous physical condition x x x is unimportant and recovery may
be had for injury independent of any pre-existing weakness or disease," viz.:

Compensability x x x does not depend on whether the injury or disease was pre-existing at the time of the
employment but rather if the disease or injury is work-related or aggravated his condition. It is indeed safe to
presume that, at the very least, the arduous nature of [the seafarer’s] employment had contributed to the
aggravation of his injury, if indeed it was pre-existing at the time of his employment. Therefore, it is but just that he
be duly compensated for it. It is not necessary, in order for an employee to recover compensation, that he must
have been in perfect condition or health at the time he received the injury, or that he be free from disease. Every
workman brings with him to his employment certain infirmities, and while the employer is not the insurer of the
health of his employees, he takes them as he finds them, and assumes the risk of having a weakened condition
aggravated by some injury which might not hurt or bother a perfectly normal, healthy person. If the injury is the
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proximate cause of his death or disability for which compensation is sought, the previous physical condition of the
employee is unimportant and recovery may be had for injury independent of any pre-existing weakness or disease.
(Emphases and underscoring supplied)

Clearly, X’s injury was the proximate cause of his death considering that the same, unbroken by any efficient,
intervening cause, triggered the following sequence of events:
1. X’s hospitalization at the Shanghai Seamen’s Hospital where he was diagnosed with "bilateral closed
traumatic haemothorax";
2. X’s repatriation and eventual admission to the Manila Doctor’s Hospital;49 and
3. X’s acute respiratory failure, which was declared to be the immediate cause of his death.

Thus, for the foregoing reasons, it cannot be seriously disputed that the first requirement for death compensability
concurs in this case.

Second Requirement: The Seafarer’s Death Should Occur During The Term Of Employment.

With respect to the second requirement for death compensability, the Court takes this opportunity to clarify that
while the general rule is that the seafarer’s death should occur during the term of his employment, the seafarer’s
death occurring after the termination of his employment due to his medical repatriation on account of a work-related
injury or illness constitutes an exception thereto. This is based on a liberal construction of the 2000 POEA-SEC as
impelled by the plight of the bereaved heirs who stand to be deprived of a just and reasonable compensation for
the seafarer’s death, notwithstanding its evident work-connection. The present petition is a case in point.

Here, X’s repatriation occurred during the eighth (8th) month of his one (1) year employment contract. Were it not
for his injury, which had been earlier established as work-related, he would not have been repatriated for medical
reasons and his contract consequently terminated pursuant to Part 1 of Section 18 (B) of the 2000 POEA-SEC as
hereunder quoted:

SECTION 18. TERMINATION OF EMPLOYMENT

xxxx

B. The employment of the seafarer is also terminated when the seafarer arrives at the point of hire for any
of the following reasons:

1. when the seafarer signs-off and is disembarked for medical reasons pursuant to Section 20 (B)[5] of this
Contract.

The terminative consequence of a medical repatriation case then appears to present a rather prejudicial quandary
to the seafarer and his heirs. Particularly, if the Court were to apply the provisions of Section 20 of the 2000 POEA-
SEC as above-cited based on a strict and literal construction thereof, then the heirs of X would stand to be barred
from receiving any compensation for the latter’s death despite its obvious work-relatedness. Again, this is for the
reason that the work-related death would, by mere legal technicality, be considered to have occurred after the term
of his employment on account of his medical repatriation. It equally bears stressing that neither would the heirs be
able to receive any disability compensation since the seafarer’s death in this case precluded the determination of a
disability grade, which, following Section 20 (B)51 in relation to Section 3252 of the 2000 POEA-SEC, stands as
the basis therefor.

However, a strict and literal construction of the 2000 POEA-SEC, especially when the same would result into
inequitable consequences against labor, is not subscribed to in this jurisdiction. Concordant with the State’s avowed
policy to give maximum aid and full protection to labor as enshrined in Article XIII of the 1987 Philippine Constitution,
contracts of labor, such as the 2000 POEA-SEC, are deemed to be so impressed with public interest that the more
beneficial conditions must be endeavoured in favor of the laborer. The rule therefore is one of liberal construction.
As enunciated in the case of Philippine Transmarine Carriers, Inc. v. NLRC:

The POEA Standard Employment Contract for Seamen is designed primarily for the protection and benefit of Filipino
seamen in the pursuit of their employment on board ocean-going vessels. Its provisions must [therefore] be
construed and applied fairly, reasonably and liberally in their favor [as it is only] then can its beneficent provisions
be fully carried into effect.56 (Emphasis supplied)
Labor Law Digests

Medical repatriation cases should be considered as an exception to Section 20 of the 2000 POEA-SEC.
Accordingly, the phrase "work-related death of the seafarer, during the term of his employment contract" under Part
A (1) of the said provision should not be strictly and literally construed to mean that the seafarer’s work-related
death should have precisely occurred during the term of his employment. Rather, it is enough that the seafarer’s
work-related injury or illness which eventually causes his death should have occurred during the term of his
employment. Taking all things into account, the Court reckons that it is by this method of construction that undue
prejudice to the laborer and his heirs may be obviated and the State policy on labor protection be championed. For
if the laborer’s death was brought about (whether fully or partially) by the work he had harbored for his master’s
profit, then it is but proper that his demise be compensated.

Application to the case


Here, since it has been established that
1. the seafarer had been suffering from a work-related injury or illness during the term of his employment,
2. his injury or illness was the cause for his medical repatriation, and
3. it was later determined that the injury or illness for which he was medically repatriated was the proximate
cause of his actual death although the same occurred after the term of his employment, the above-
mentioned rule should squarely apply.

Perforce, the present claim for death benefits should be granted.

Considering the constitutional mandate on labor as well as relative jurisprudential context, the rule, restated for a
final time, should be as follows: if the seafarer’s work-related injury or illness (that eventually causes his
medical repatriation and, thereafter, his death, as in this case) occurs during the term of his employment,
then the employer becomes liable for death compensation benefits under Section 20 (A) of the 2000 POEA-
SEC. The provision cannot be construed otherwise for to do so would not only transgress prevailing constitutional
policy and deride the bearings of relevant case law but also result in a travesty of fairness and an indifference to
social justice. (Canuel v. Magsaysay Maritime Corp., G.R. No. 190161,October 13, 2014)

Q: X entered into a contract for meter reading work with Y where Y will conduct X’s meter-reading activities.
As a result, Z, employees and uion members of of X was relieved and replaced with X’s workers. Z filed a
complaint for ULP against X with NLRC. Z alleged that X’s act of contracting out services, which used to be
part of the functions of the regular union members, is violative of Article 259 (c). Moreover, for engaging in
labor-only contracting, the workers placed by Y must be deemed regular rank-and-file employees of X, and
that Contract for Meter Reading Work be declared null and void. Is X guilty of ULP?

A: NO. Labor-only contracting is considered as a form of ULP when the same is devised by the employer to “interfere
with, restrain or coerce employees in the exercise of their rights to self-organization.” The need to determine whether
or not the contracting out of services (or any particular activity or scheme devised by the employer for that matter)
was intended to defeat the workers’ right to self-organization is impelled by the underlying concept of ULP.

In this case, X committed labor-only contracting when it contracted Y’s services as Y had no substantial capital or
investment w/c relates to the job, work or service to be performed and because it performs functions directly related
to X’s main business. However, X’s act of contracting arrangements with Y did not amount to to ULP. Z was not
able to present any evidence to show that such arrangements violated their right to self-organization, which
constitutes the core of ULP. (Cagayan Electric Power & Light Company v. CEPALCO, G.R. No. 211015, June 29,
2016)

Q: X is a sole proprietorship engaged in hauling services to and from Negros, Cebu and Iloilo w/ 9
employees in its workforce. It hired Y as a driver. Y argues that while on the way to work he received a call
from X informing him to stop reporting for work allegedly to avoid his regularization. X argues that he was
not illegally dismissed and that Y was in fact a regular employee but was dismissed because he abused
the trust and confidence reposed on Y after committing certain anomalies in the performance of work w/c
include acts of stealing from owner money allegedly for gas. Was Y illegally dismissed?

A: NO. Serious misconduct is one of the just causes for termination under Article 297 of the Labor Code. For serious
misconduct to be a just cause for dismissal, the concurrence of the following elements is required: (a) the
misconduct must be serious; (b) it must relate to the performance of the employee's duties showing that
the employee has become unfit to continue working for the employer; and (c) it must have been performed
Labor Law Digests
with wrongful intent. In the case at bar, all of the foregoing requisites have been duly established by substantial
evidence. Records disclose that respondent was charged of misappropriating fuel allowance, theft of fuel and corn,
and sale of spare parts while in the performance of his duties. While there may be no direct evidence to prove that
respondent actually committed the offenses charged, there was substantial proof of the existence of the
irregularities committed by him. It is well to point out that substantial proof, and not clear and convincing evidence
or proof beyond reasonable doubt, is sufficient as basis for the imposition of any disciplinary action upon the
employee. (Ting Trucking v. Makilan, G.R. No. 216452, June 20, 2016)

Q: X alleged that he worked as a messenger/collecter for Y and was later appointed to as a Marketing
Professional tasked to sell 7 vehicles as monthly quota. He only sold one vehicle. He was sent a Notice to
Explain why he could not reach the quota. Thereafter, a hearing was conducted but X failed to appear
despite notice. A letter of termination was sent to X dismissing him for insubordination for failure to attend
hearing and justify absence. Was X illegally dismissed?

A: YES. Y complied with substantive but not with procedural due process requirements for termination. The following
should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to prepare adequately for their defense.
This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice should specifically mention which company
rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees
a written notice of termination indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been established to justify the severance of their
employment.

In this case, while Y afforded X the opportunity to refute the charge of gross inefficiency against him, the latter was
completely deprived of the same when he was dismissed for gross insubordination - a completely different ground
from what was stated in the Notice to Explain. As such, X's right to procedural due process was violated. (Puncia
v. Toyota Shaw/Pasig, G.R. No. 214399, June 28, 2016)

Q: X was initially hired as Sales Agent by Y and was eventually promoted as Project Director. X and Y
entered into a Contract of Agency for Project Director.” X filed a complaint for non-payment of commissions
and damages against Y. Y argues that X was merely its agent tasked with selling its projects. Was X an
employee of Y?

A: Yes. The presence of the following elements evince the existence of an employer-employee relationship: (a) the
power to hire, i.e., the selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee's conduct, or the so called "control test." The control
test is commonly regarded as the most important indicator of the presence or absence of an employer-employee
relationship. Under this test, an employer-employee relationship exists where the person for whom the services are
performed reserves the right to control not only the end achieved, but also the manner and means to be used in
reaching that end. In this case, all of the elements were met. Moreover, while the employment agreement of X was
denominated as a "Contract of Agency for Project Director," it should be stressed that the existence of employer-
employee relations could not be negated by the mere expedient of repudiating it in a contract. (Century Properties,
Inc. v. Babiano, G.R. No. 220978, July 5, 2016)
Labor Law Digests
Q: X is a company engaged in importation and distribution of certain beauty products. X conducted an
inventory in the warehouse and discovered missing beauty products. It conducted an investigation and
received information that Y was part of the group that stole from company. It sent Notices to Explain and
Preventive Suspension to Y. After an administrative hearing was conducted, a Notice of Termination was
sent to Y. Y filed a complaint for illegal dismissal. Was Y illegally dismissed?

A: YES. The rudiments of due process were not observed in dismissing X. Copies of the Notices to Explain and
Preventive Suspension issued to them did not specify the charges against them but simply stated that they
condoned and failed to report anomalies to the management. Time and again, the Court has repeatedly held that
two (2) written notices are required before termination of employment can be legally effected, namely: (1) the notice
which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employer's decision to dismiss him. The failure to inform an
employee of the charges against him deprives him of due process. In any event, there was no valid reason for the
dismissal considering the lack of substantial evidence of their involvement in the alleged pilferage. (Torrefiel v.
Beauty Lane Phils., Inc., G.R. No. 214186, August 3, 2016)

Q: X has a plant in La Union. It hired Y as a packhouse operator and he has been working with X for 19
years. As Y was about to exit the plant, the security guard asked him to submit himself and the backpack
he was carrying for inspection. Y refused and confided to the guard that he has a piece of scrap electrical
wire in his bag. He also requested the guard not to report the incident to the management, and asked the
latter if Y could bring the scrap wire outside the company premises; otherwise, he will return it to his locker
in the Packhouse Office. Guard did not agree hence Y hurriedly went back to office where he took the scrap
wire out of his bag. Subsequently, a security guard arrived and directed him to go to the Security Office
where he was asked to write a statement regarding the incident. On the basis of this, X dismissed Y from
company. Should Y have been dismissed? NO.

A: No. There is no question that the employer has the inherent right to discipline, including that of dismissing its
employees for just causes. This right is, however, subject to reasonable regulation by the State in the exercise of
its police power. In this case, Y's misconduct is not so gross as to deserve the penalty of dismissal from service.
While there is no dispute that Y took a piece of wire from X’s La Union Plant and tried to bring it outside the company
premises, he did so in the belief that the same was already for disposal. At any rate, X did not suffer any damage
from the incident, given that after being asked to submit himself and his bag for inspection, Y had a change of heart
and decided to just return the wire to the Packhouse Office. X has also shown remorse for his mistake, pleading
repeatedly with petitioner to reconsider the penalty imposed upon him. Infractions committed by an employee should
merit only the corresponding penalty demanded by the circumstance. The penalty must be commensurate with the
act, conduct or omission imputed to the employee.

Q: Is Y entitled to backwages?

A: No. Y’s transgression – even if not deserving of the ultimate penalty of dismissal – warrants the denial of
backwages following the parameters in Integrated Microelectronics, Inc. v. Pionilla. In that case, the Court ordered
the reinstatement of the employee without backwages on account of the following: (a) the fact that the dismissal of
the employee would be too harsh a penalty; and (b) that the employer was in good faith in terminating the employee.
(Holcim Philippines, Inc. v. Obra, G.R. No. 220998, August 8, 2016)

Q: X is engaged in manufacture of non-alcoholic beverages. Y ceded its sales functions to X which lead to
the integretation of Y’s employees to X’s workforce. Y’s employees became the account developers (AD)
of X. Meanwhile, X hired new ADs who were subject to different qualifications and given higher monthly
pay. Aggrieved by difference in treatment, Y’s employees submitted its concerns to a grievance machinery
but when grievance proceedings failed, it submitted the case to voluntary arbitration. X aggrieved by
decision of the VA filed a petition for review with the CA but CA denied petition on the ground that VA’s
decision had attained finality pursuant to the provisions of the CBA. Did the CA correctly deny the petition
for review of the decision of the VA filed by X?

A: No. In the context of labor law, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound themselves to
accept the decision of the arbitrator as final and binding.However, in view of the nature of their functions, voluntary
arbitrators act in a quasi-judicial capacity; hence, their judgments or final orders which are declared final by law are
not so exempt from judicial review when so warranted. “Any agreement stipulating that 'the decision of the
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arbitrator shall be final and unappealable' and 'that no further judicial recourse if either party disagrees
with the whole or any part of the arbitrator's award may be availed of' cannot be held to preclude in proper
cases the power of judicial review which is inherent in courts." The proper remedy to reverse or modify a
Voluntary Arbitrator's or a Panel of Voluntary Arbitrators' decision or award is to appeal the award or decision before
the CA under Rule 43 of the Rules on questions of fact, of law, mixed questions of fact and law, or a mistake of
judgment. However, in several cases, the Court allowed the filing of a petition for certiorari from the VA's judgment
to the CA under Rule 65 of the same Rules, where the VA was averred to have acted without or in excess of his
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. In this case, petitioner
availed of the proper remedy. Moreover, the materiality of the issues raised reinforces the conclusion that the CA
should not have refused to exercise judicial review of the assailed VA rulings, notwithstanding the CBA stipulation
that the decision of the Arbitration Committee, i.e., the VA, shall be final and binding upon the parties. Case
remanded to CA. (Coca-Cola Femsa Philippines, Inc. v. Bacolod Sales Force Union-Congress of Independent
Organization-ALU, G.R. No. 220998, August 2016)

Q: X was a faculty member of Y, an educational institution. X was dismissed for Grave Misconduct, Gross
Inefficiency, and Incompetence, after due investigation finding him guilty of employing a grading system
that was not in accordance with the guidelines set by Y. X filed an illegal dismissal case against Y. LA
ordered reinstatement of X. Y appealed to CA and CA reversed LA’s order. Pending appeal, X filed a motion
for issuance of writ of execution seeking to collect (a) the service incentive leave pay ordered in NLRC
decision, and (b) the equivalent wages from the issuance of the LA’s order of reinstatement until the finality
of Decision of NLRC reversing the Decision of LA. CA deleted award of backwages granted to X. Is X still
entitled to backwages despite reversal of finding of illegal dismissal?

A: Yes. Under Article 223 (now Article 229) of the Labor Code, "the decision of the [LA] reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even
pending appeal. The employer is duty-bound to reinstate the employee, failing which, the employer is liable
instead to pay the dismissed employee's salary.

However, in the event that the LA's decision is reversed by a higher tribunal, the employer's duty to reinstate the
dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the
employee in the actual service or in the payroll. The employee, in tum, is not required to return the wages that he
had received prior to the reversal of the LA's decision. Notwithstanding the reversal of the finding of illegal
dismissal, an employer, who, despite the LA's order of reinstatement, did not reinstate the employee during
the pendency of the appeal up to the reversal by a higher tribunal may still be held liable for the accrued
wages of the employee, i.e., the unpaid salary accruing up to the time of the reversal. By way of exception,
an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement
pending appeal was without fault on the part of the employer. (Manila Doctors College v. Olores, G.R. No. 225044,
October 3, 2016)

Q: X alleged that Y employed him as a construction worker on various dates from 2008 to 2011. He claimed
to be a regular employee since he was engaged to perform tasks which are necessary and desirable to the
usual business of Y and rendererd service for several years already. He was however summarily dismissed
without just or authorized cause and due process. Hence, X filed a complaint for illegal dismissal. Y alleged
that X was employed for a one time project only by Z and 2-3 years after the completion of the project, they
were hired by Y, which is a separate and distinct entity from Z. Is X a regular employee of Y? Yes

A: Yes. Article 295 of the Labor Code, as amended, distinguishes a project employee from a regular employee. A
project-based employee is assigned to a project which begins and ends at determined or determinable times. Unlike
regular employees who may only be dismissed for just and/or authorized causes under the Labor Code, the services
of employees who are hired as project-based employees may be lawfully terminated at the completion of the project.

To safeguard the rights of workers against the arbitrary use of the word "project" to preclude them from attaining
regular status, jurisprudence provides that employers claiming that their workers are project-based employees have
the burden to prove that these two requisites concur: (a) the employees were assigned to carry out a specific project
or undertaking; and (b) the duration and scope of which were specified at the time they were engaged for such
project.
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In this case, Y failed to discharge this burden. Y did not state the specific project or undertaking assigned to X. As
to the second requisite, not only was Y unable to produce X’s' employment contracts, it also failed to present other
evidence to show that it informed X of the duration and scope of their work.

Q: X was illegally dismissed?

A: Yes. Since Y failed to discharge its burden to prove that X was a project employee, the NLRC correctly ruled that
he be considered as a regular employee. Thus, the termination of X's employment should have been for a just or
authorized cause, the lack of which, as in this case, amounts to illegal dismissal. (Quebral v. Angbus Construction,
Inc., G.R. No. 221897, November 7, 2016)

Q: Y was hired by X and his duty was with respect to the overall day-to-day operations of X, including the
authority to sign checks, check vouchers, and purchase orders. Chief Finance Officer of X’s affiliate
company, received a call informing her that several checks have been cleared issued to X bearing the words
“or cash” after the payee’s name. After an investigation was conducted, Y was placed under preventive
suspension and was directed to submit her written explanation. The investigation revealed yhat Y signed
27 checks wherein he indicated “or cash” after payee’s name. Y was given a notice of termination hence,
he filed a complaint for illegal dismissal. Was Y illegally dismissed?

A: No. Article 297 of the Labor Code, as renumbered, enumerates the just causes for termination of an employment.

In the case at bar, Y’s termination was grounded on his violation of X’s Code of Conduct and Behavior, which was
supposedly tantamount to (a) serious misconduct and/or (b) willful breach of the trust reposed in him by his
employer.

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment. For serious misconduct to be a just cause for dismissal, the concurrence of the following
elements is required: (a) the misconduct must be serious; (b) it must relate to the performance of the employee's
duties showing that the employee has become unfit to continue working for the employer; and (c) it must have been
performed with wrongful intent.

On the other hand, for loss of trust to be a ground for dismissal, the employee must be holding a position of trust
and confidence, and there must be an act that would justify the loss of trust and confidence. While loss of trust and
confidence should be genuine, it does not require proof beyond reasonable doubt, it being sufficient that there is
some basis for the misconduct and that the nature of the employee's participation therein rendered him
unworthy of the trust and confidence demanded by his position.

In this case, X was able to prove by substantial evidence the participation of Y in the act to defraud X. The
questioned checks would not have been issued if there weren't any spurious purchase orders. As per company
policy, the procurement process of petitioner begins with the preparation of purchase orders by the Purchasing
Officer. These purchase orders have to be approved by Y himself before the delivery and payment process
can even commence. (Buenaflor Car Services, Inc. v. David, Jr., G.R. No. 222730, November 7, 2016)

Q: X was hired by Y as a Claim Adjuster with the task of handling and settling claims of Y’s QC branch. X
received a Notice to Explain why no disciplinary action should be taken against her for her poor services
towards one of the clients of Y (incident). X failed to submit a written explanation and despite several
directives to appear before the Head Office, failed to appear before said Head Office. X again received a
Notice to Explain why no disciplinary action should be filed against her for her failure to file appear before
head office and on the basis of this, X was terminated allegedly for insubordination. X filed a complaint for
illegal dismissal against Y. Was X illegally dismissed?

A: Yes. Willful disobedience or insubordination, as a just cause for the dismissal of an employee, necessitates the
concurrence of at least two (2) requisites, namely: (a) the employee's assailed conduct must have been willful, that
is, characterized by a wrongful and perverse attitude; and (b) the order violated must have been reasonable, lawful,
made known to the employee, and must pertain to the duties which he had been engaged to discharge.

In this case, a plain reading of the Notice to Explain and Notice of Termination reveals that the charge of
insubordination against X was grounded on her refusal to report to the Head Office despite due notice. While Y’s
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directives for X to report to the Head Office indeed appear to be reasonable, lawful, and made known to the latter,
it cannot be said that such directives pertain to her duties as a Claims Adjuster, regardless of whether her refusal
to heed them was actually willful or not. This should only be deemed as a waiver of her right to procedural due
process on the incident and not tantamount to willful disobedience or insubordination. (Sta. Isabel v. Perla
Compañia De Seguros, Inc., G.R. No. 219430, November 7, 2016)

Q: X authorized the affiliation of its individual members to union Y. Y sought an increase of union
dues/agency fees from 1% to 2% of the rank and file employees' monthly salaries. Z, non-members of X,
objected to the assessment of increased agency fees arguing among others that Y failed to comply with
the mandatory requirements for such increase. Did the union have the right to collect increased agency
fees?

A: No. Article 250 (n) and (o) (formerly Article 241) of the Labor Code, as amended, mandates the submission of 3
documentary requisites in order to justify a valid levy of increased union dues. These are: (a) an authorization by a
written resolution of the majority of all the members at the general membership meeting duly called for the
purpose; (b) the secretary's record of the minutes of the meeting, which shall include the list of all members present,
the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or
fees; and (c) individual written authorizations for check-off duly signed by the employees concerned.
In this case, however, union failed to show compliance with the foregoing requirements. It attempted to remedy the
"inadvertent omission" of the matter of the approval of the deduction of two percent (2%) union dues from the
monthly basic salary of each union member through a General Membership Resolution. On the other hand, the
minutes of the 2008 meeting also shows that manner of implementing the increase of union dues was discussed in
General Membership Meeting. However, there was no sufficient showing that the same had been duly deliberated
and approved.

Jurisprudence states that the express consent of the employee to any deduction in his compensation is required to
be obtained in accordance with the steps outlined by the law, which must be followed to the letter; however, Y
failed to comply. Hence no legal basis to impose union dues and agency fees more than allowed in expired CBA.
(Peninsula Employees Union v. Esquivel, G.R. No. 218454, December 1, 2016)

Q: X was hired by Y as a mason in 1998. In 2010, he was asked to move projects back and forth for 2 years.
When he requested to be given a new project, he was told by the paymaster not to report to work anymore,
prompting him to file for illegal dismissal. Y claims that X was a mere project employee whose contract
expired upon the completion of his assignment in a project. Is X a regular employee, not a project
employee?

A: No, he is a project employee. Records reveal that X was adequately informed of his employment status (as
project employee) at the time of his engagement for the NECC and RCB-Malakas Projects. This is clearly
substantiated by the latter's employment contracts duly signed by him, explicitly stating that: (a) he was hired as a
project employee; and (b) his employment was for the indicated starting dates therein "and will end on
completion/phase of work of project. Hence, when the project or phase was completed, he was validly terminated
from employment, his engagement being co-terminus only with such project or phase.

While generally, length of service provides a fair yardstick for determining when an employee initially hired on a
temporary basis becomes a permanent one, entitled to the security and benefits of regularization, this standard will
not be fair, if applied to the construction industry because construction firms cannot guarantee work and funding for
its payrolls beyond the life of each project as they have no control over the decisions and resources of project
proponents or owners. (Dacles v. Millenium, G.R. No. 209822, July 8, 2015)

Q: X was employed by Y for its foreign principal as Mechanical Fitter on board Y’s vessel under a 10-month
contract. X suffered injuries when he hit his right elbow and forearm on a sewage pipe during maintenance
work on the vessel. X filed a complaint for payment of permanent total disability compensation in
accordance with their CBA. Y maintains that X is not entitled to the benefits since he was declared fit to
work by the company-designated physicial and they treated him fairly and in good faith. Is X entitled to
permanent total disability benefits?

A: No. The seafarer, upon sign-off from his vessel, must report to the company-designated physician within three
(3) days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120
days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic wage during
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this period until he is declared fit to work or his temporary disability is acknowledged by the company to be
permanent, either partially or totally, as his condition is defined under the POEA Standard Employment Contract
and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made
because the seafarer requires further medical attention, then the temporary total disability period may be
extended up to a maximum of 240 days, subject to the right of the employer to declare within this period
that a permanent partial or total disability already exists.

Thus, temporary total disability only becomes permanent when so declared by the company-designated physician
within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period
without a declaration of either fitness to work or the existence of a permanent disability.

Records show that from the time X was medically repatriated on May 9, 2010 up to the time the company designated
physicians declared him fit to resume work during his last follow-up consultation on September 15, 2010, a period
of 130 days had lapsed. Concededly, said period exceeded the 120-day period under Paragraph 3, Section 20 (B)
of the 2000 POEA-SEC and Article 192 of the Labor Code. However, X’s injury required further physical
therapy/rehabilitation. Therefore, despite the lapse of the 120-day period, respondent was still considered to be
under a state of temporary total disability, and the company-designated physician, following the Vergara case, has
a period of 240 days from the time the former suffered his injury within which to make a finding on his fitness for
further sea duties or degree of disability. Considering that the company-designated physicians declared respondent
fit to work on September 15, 2010, or well within the 240-day period, respondent cannot be said to have acquired
a cause of action for permanent total disability benefits. (Magsaysay Maritime Corp. v. Panogalinog, G.R. No.
212049, July 15, 2015)

Q: When X was elected as union president, Y allegedly terminated active union members without going
through the grievance machinery procedure prescribed under the Collective Bargaining Agreement. Union
members then marched on the streets to protest Y’s refusal to abide by the CMA. Y investigated and then
issued a notice terminating X from employment on the ground of willful breach of the trust reposed in him
by his employer. The Union then filed a Notice of Strike against Y on the grounds of unfair labor practice,
specifically union busting for the dismissal of its union president and officers. The CA dismissed the
petition on account of one-day delay in its filing. Did the CA err in dismissing the certiorari petition on
account of the one-day delay in its filing despite the serious errors committed by the NLRC in absolving
VECO from the charge of unfair labor practice and illegal dismissal of X?

A: No. The fact that the delay in the filing of the petition for certiorari was only one day is not a legal justification for
non-compliance with the rule requiring that it be filed not later than sixty (60) days from notice of the assailed
judgment, order or resolution. The Union also failed to satisfactorily show that the refusal of VECO to follow the
grievance machinery procedure under Section 4, Article XVII of the CBA in the suspension and termination from
employment of the other union officers and members constituted unfair labor practice.

When general and specific provisions of the CBA are inconsistent, the specific provision shall be paramount to and
govern the general provision. The Court is in accord with the ratiocination of the NLRC that the sweeping statement
"any matter affecting Company-Union or Company-Worker relations shall be considered a grievance" under Section
4, Article XVII is general, as opposed to Section 13, Article XIV of the CBA, which is specific, as it precisely refers
to "what governs employee disciplinary actions." Thus, the NLRC correctly ruled that VECO acted within the bounds
of law when it proceeded with its administrative investigation of the charges against other union officers and
members.

Q: Is the dismissal of X for breach of trust illegal?

A: X intentionally caused disparaging publication blackening the memory of then Corporate Officer Z and
besmirched the company’s name. Instead of him and the rest of the union officers bringing their sentiments and/or
grievances against the management to the proper forum, they intentionally, knowingly and purposefully breached
their employer's trust, by issuing derogatory statements and causing their publication, apparently, to incite public
condemnation against the latter.

As Customer Service Representative, X occupied a position of responsibility especially in dealing with VECO's
clients. His job entailed the observance of proper company procedures relating to processing and determination of
electrical service applications culminating in the . signing of service contracts, which constitutes the very lifeblood
of VECO's existence. He was further entrusted with handling the accounts of customers and accepting payments
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from them. X was terminated for a just and valid cause, for the company had lost its trust and confidence in X and
his ability to perform his tasks with utmost efficiency and loyalty expected of an employee entrusted to handle
customers and funds. (Visayan Electric Co. Employees Union v. VECO, G.R. No. 205575, July 22, 2015)

Q: X was hired as a Purchasing Assistant in 1988. In 2011, the president Y confronted her of the impropriety
of her delivery of a machine part via air freight, in lieu of the approved sea freight. X received two letters
from Y informing her that she had been committing various purchasing policy violations over the past 12
months and hence she should resign, which X then did. X then filed a complaint of illegal dismissal against
the company and president Y claiming that since Y forced her to resign, she was “constructively
dismissed”. Was X constructively dismissed?

A: No. Constructive dismissal exists where there is cessation of work because continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other
benefits. X was given the option to voluntarily resign from the company, instead of dealing with an investigation
which might result in her dismissal. Verily, Y’s decision to give Siason a graceful exit rather than to file an action for
redress is perfectly within the discretion of the former; as it is not uncommon that an employee is permitted to resign
to avoid the humiliation and embarrassment of being terminated for just cause after the exposure of her
malfeasance. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a
chance to resign and save face rather than smear the latter's employment record, as in this case. While it may be
said that she did not tender her resignation wholeheartedly, circumstances of her own making, such as entering
into questionable transactions as reported by the Company’s Audit department, did not give her any other option
but to voluntarily do so. (Central Azucarera de Bais v. Siason, G.R. No. 215555, July 29, 2015)

Q: X and the other petitioners were employed as Y’s taxi drivers. They were members of the Y Union. X
sought inquiry from Y regarding the boundary rates imposed that are not in accordance with the CBA.
Instead of clarifying the matter, X was told that he was free to go as he had no more use in the company. X
and other taxi drivers then filed a complaint for illegal dismissal, violation of the CBA, and unfair labor
practice. Y countered that X and the others went AWOL and abandoned their jobs. Were X and the other
drivers illegally dismissed?

A: Yes. For a valid finding of abandonment, two (2) elements must concur, namely: (a) the failure to report for work
or absence without valid or justifiable cause; and (b) clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor and being manifested by some overt acts. Mere absence
or failure to report for work is not tantamount to abandonment of work. The burden of proof is with the employer.
No proof was adduced by Y to prove their theory of abandonment. Nothing on record would show that X’s absence
from work was deliberate and unjustified, with a clear intent to sever the employment relationship. On the contrary,
such intention is belied by the fact that shortly after X and others ceased from working, they immediately instituted
the complaint for illegal dismissal. An employee who forthwith takes steps to protest his layoff cannot, as a general
rule, be said to have abandoned his work, for it is well-settled that the filing by an employee of a complaint for illegal
dismissal is proof enough of his desire to return to work, thus negating any suggestion of abandonment. (Baron v.
EPE Transport, Inc., G.R. No. 202645, August 5, 2015))

Q: X hired Y as an accountant. Y received a letter signed by the Company Manager, informing her of the
expiration of her contract. Claiming to have been summarily dismissed by virtue of the afore-mentioned
letter and not paid her earned salary and benefits as promised, Y filed a complaint for illegal dismissal, and
argued that she was a regular employee since the nature of her work as necessary and desirable in the
usual business of X. Was Y not a regular employee and hence validly dismissed due to expiration of her
fixed-term contract?

A: Yes, she was not a regular employee. Case law dictates that even if an employee is engaged to perform activities
that are necessary or desirable in the usual trade or business of the employer, the same does not preclude the
fixing of employment for a definite period.39 There is nothing essentially contradictory between a definite period of
employment and the nature of the employee's duties. The decisive determinant in fixed-term employment should
not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for
the commencement and termination of their employment relationship. Here, respondent undisputedly executed a
first employment contract which clearly states on its face that it was for a fixed period of five (5) months.

The crucial factor to it all is that there is no showing that the subject contracts were used as subterfuge to deny
respondent of her security of tenure. Contrary to the findings of the CA, there was no ambiguity in the said contracts
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when it stipulated that the employee may be terminated if he "fails to meet the reasonable standards made known
to him." (OKS DesignTech v. Caccam, G.R. No. 211263, August 5, 2015)

Q: X hired Y as a Motorman on board the vessel MN Drive Mahone. Y however, experienced difficulty in
breathing and pains on the nape. Upon his repatriation, he was diagnosed to have Carpal Tunnel Syndrome,
among others disabilities. Y then filed for disability benefits. During the pendency of the certiorari
proceedings before the CA, the parties executed a Satisfaction Judgment stating X had already given Y full
and complete satisfaction of the NLRC ruling. Y executed a Receipt of Payment but recognizing that such
payment is “understood to be without prejudice to the pending petition for certiorari.” The CA dismissed
the petition ruling that the agreement was in the nature of a compromise agreement. Did the CA correctly
dismiss the certiorari petition on the basis of the compromise agreement?

A: No. While the Satisfaction of Judgment may be properly deemed as a compromise agreement, it is conditional
in nature, considering that it is without prejudice to the certiorari proceedings pending before the CA, i.e., it obliges
Y to return the aforesaid proceeds to X should the CA ultimately rule in the latter's favor. In Leonis Navigation Co.,
Inc. v. Villamater, the Court held that such an agreement will not render a pending case moot and academic as it
does not preclude the employer from recovering from the employee should the courts ultimately decide in favor of
the former.

However, in Leonis Navigation v. Transmarine, the Court considered the "conditional settlement" to be tantamount
to an amicable settlement of the case resulting in the mootness of the petition for certiorari, considering (i) that the
employee could no longer pursue other claims, and (ii) that the employer could not have been compelled to
immediately pay because it had filed an appeal bond to ensure payment to the employee. Stated differently, the
Court ruled against the employer because the conditional satisfaction of judgment signed by the parties was highly
prejudicial to the employee.

A reading of the documents reveals that both X and Y may pursue any of the available legal remedies should any
eventuality arise in their dispute, i.e., when the CA renders a ruling adverse to their respective interests. It can,
therefore, be said that similar to the Philippine Transmarine case, the agreement entered into by the X and Y is fair
and is not prejudicial to either party, and thus, such agreement did not render the certiorari proceedings before the
CA moot and academic. (Phil. Transmarine Carriers v. Pelagio, G.R. No. 231773, August 12, 2015)

Q: X entered into a 9-month Contract of Employment with Y as Chief Cook on board Y’s vessel. During X’s
employment, he complained of breathing difficulty, weakness, severe fatigue, dizziness, and grogginess.
After several tests, he was diagnosed with “Hypertensive Cardiovascular Disease (CVD)” and “Diabetes
Mellitus II.” X filed for disability benefits pursuant to their CBA, alleging that his illnesses were occupational
diseases. Y maintained that Diabetes was familial or genetic in nature and not work-connected, and CVD
was just an offshoot of the former. Should X be awarded total and permanent disability benefits?

A: X’s condition was apparently asymptomatic since he manifested no signs and symptoms of any cardiac injury
prior to his deployment onboard the vessel and was, in fact, declared fit for sea duty. Absent any showing that X
had a pre-existing cardiovascular ailment prior to his embarkation, the reasonable presumption is that he acquired
his hypertensive cardiovascular disease in the course of his employment pursuant to Section 32-A (11) (c) of the
2000 POEA-SEC, which recognizes a "causal relationship" between a seafarer's CVD and his job, and qualifies his
CVD as an occupational disease. In effect, the said provision of law establishes in favor of a seafarer the
presumption of compensability of his disease.

Other than their bare and self-serving assertion that petitioner's Hypertensive Cardiovascular Disease was a mere
complication of his Diabetes Mellitus II, respondents failed to introduce countervailing evidence that would otherwise
overcome the disputable presumption of compensability of the said disease.

The fact that X was also diagnosed as having Diabetes Mellitus II was of no moment since the incidence of a listed
occupational disease, whether or not associated with a non-listed ailment, is enough basis for compensation,
although modern medicine has in fact recognized that diabetes, heart complications, hypertension and even kidney
disorders are all inter-related diseases. (Bautista v. Elburg Shipmanagement Phils., Inc., G.R. No. 206032, August
19, 2015)

Q: X hired Y as a flight attendant. Y failed in X’s Purser Upgrading Program so he was demoted to flight
steward. Y then filed a complaint for illegal demotion against X. The LA declared the demotion to be illegal.
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However, while the case was pending, X implemented a retrenchment program which resulted to the
termination of Y’s employment. Y and other retrenched flight attendants filed for unfair labor practice, and
illegal retrenchment. In 2005, Y reached the 60 year-old compulsory retirement age under the CBA. Should
Bichara be awarded the monetary awards?

A: The final judgment sought to be executed is the LA’s Decision, which was confined to the directive that X reinstate
Y as a flight purser in view of his illegal demotion. X’s supervening retrenchment of its employees, which included
Y, in July 1998, and his compulsory retirement in July 2005, however, prevent the enforcement of the reinstatement
of Y to the position of flight purser under the June 16, 1997 Decision. Nonetheless, since this Decision had already
settled the illegality of Bichara's demotion with finality, this Court finds that Y should, instead, be awarded the salary
differential of a flight purser from a flight steward from the time of his illegal demotion on March 21, 1994 up until
the time he was retrenched in July 1998.

The principle of immutability of judgments, from which the above-stated rule on writ of executions proceed, allow
courts, as an exception, to recognize circumstances that transpire after the finality of the decision which would
render its execution unjust and inequitable and act accordingly. Thus, in view of the supervening events above-
mentioned, this Court deems the award of salary differential to be the just and equitable award under the
circumstances herein prevailing. (PAL v. Bichara, G.R. No. 213729, September 2, 2015)

Q: X was one of the incorporators of Y. As a separate business venture, X and his wife, sourced LPG from
Y and distributed the same through Z owned by them. They had outstanding balance with Y for unpaid LPG.
X was eventually mandatorily retired and Y agreed to acquire X’s shares. After offsetting the payment for
the shares against Z’s outstanding balance to Y, X claimed that given his unpaid salaries and separation,
there is still 671k payable to him. X filed a complaint for non-payment of separation and retirement benefits.
Y averred that the Labor Arbiter (LA) had no jurisdiction over the complaint because Vital is not an
employee, but a mere incorporator and stockholder of WBGI. Does the RTC have jurisdiction over X’s
claims of unpaid salaries and separation pay?

Ruling: No. X’s claims for unpaid salaries and separation pay arose from Vital and WBGI's employer-employee
relations, involving an amount exceeding P5,000.00, hence, belonging to the jurisdiction of the labor arbiters
pursuant to Article 217 of the Labor Code. However, since the dismissal is on lack of jurisdiction, the same is without
prejudice.

However, the RTC has jurisdiction over the two other claims of X. the RTC has: (a) general jurisdiction to adjudicate
on arrearages payable to Y from Z, which was admitted by VitXal but not claimed by Y; and (b) special jurisdiction,
as a special commercial court, to adjudicate on X’s claim from WBGI's acquisition of his shares of stocks. Indeed,
even acting as a special commercial court, the RTC's general jurisdiction to adjudicate on the first-mentioned claim
is retained. (World’s Best Gas v. Vital, G.R. No. 211588, September 9, 2015)

Q: Corp. A and B hired X et. al to sell Corp. B products. After some time X et al. demanded that they be
considered regular employees of Corp B, but they were directed to sign employment contracts to Corp. A
instead, X et al. refused to comply with the directive so they were terminated by Corp. A and B. Corp. A
submits that it hired X et al. as its employees as a distributor of Corp. B’s products, and that because of
the termination of the distributorship agreement of Corp. A and B, Corp. A closed its operations. X et al.
were not terminated but put on floating status. X et. al., filed a complaint claiming that Corp. A is a labor
only contractor, and there was no just cause for their dismissal. The NLRC ruled Corp A is a labor only
contractor because it had no substantial capitalization, X et al. performed activities directly related to the
business of Corp., and that Corp. A had no independent business because it relied on the supply of
products for distribution of Corp. B. Therefore it ruled that Corp. B is actually the true employer of the X et.
al. Corp. B moved for reconsideration alleging that Corp A. is the true employer of the X et al. On appeal
CA affirmed the NLRC ruling. Is Corp. A a labor only contractor, thus making Corp B the true employer of
X et al. ?

A: NO. Closer inspection of the distributorship agreement will show that the relationship between Corp. A and B is
actually that of a seller and buyer/re-seller. As stipulated in the distributorship agreement, Corp. B will sell its
products to to Corp. A, and Corp A will then re-sell the products through its employees. Therefore, the reselling
activities pertains exclusively to the principal business of the Corp. A as a buyer, seller, and distributor of goods
.The distributor agreement does not operate Corp. B to dictate the methods and means by which Corp. A does its
business.The stipulations of the agreement merely gives guidelines towards the achievement of a mutually desired
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result. Therefore Corp. A is not a labor only contractor of Corp. B, in turn the latter is not the true employer of the
X et. al. (Nestle Philippines v. Puedan, G.R. No. 220617, January 30, 2017)

Q: X has is employed by Corp. A, X worked his way up as a supervisor, he then joined the union of
supervisors, Union Y. X was reassigned to the another supervisory position in the sister Corp. A which is
Corp. B. Due to the petition of Union Y to the DAR, the latter awarded 220 hectares of land to the Union.
The land was distributed and transferred to the employees of the Corp. A as beneficiaries, this includes X.
There were talks of a possible agro-industry business with Corp. A but this broke down. Corp. A upon
learning that Union Y opted to enter in a transfer agreement with another company, summoned the Union’s
officers, including X. The manager of Corp. B told X that he would be “putting himself in a very difficult
situation” if he will not shift his loyalty to a pro-company group of employee beneficiaries. X refused, and
some time later received a letter that his services has been terminated in Corp. B ordering his return to
Corp. A. However, Corp. A informed X that there was no more supervisory positions available, and was
relegated to a rank-and-file employee in the meantime. He however requested that he be restored to his
previous supervisory position which was denied. Afterwards, he was terminated along with other members
of Union Y when the take-over of the lands was implemented by DAR. Thus the complaint. Was X
constructively dismissed, thus entitling him to backwages, separation pay, moral damages and attorney’s
fees?

A: YES. Constructive dismissal exists where there is cessation of work, because 'continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other
benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his
continued employment. In the case at bar, top management in Corp. A and B knew that there were no other
supervisory positions that X will come back to in Corp. A, yet they still terminated X’s stint in Corp. B and ordered
his return in the as a rank and file employee. (Sumifru (Philippines) Corp. v. Baya, G.R. No. 188269, April 17, 2017)

Q: Union A and X et. al filed complaints for regularization and illegal dismissal against University A. They
alleged that University repeatedly hired X et al. spanning nine years, to perform a variety of maintenance
duties within its campus. They allege in view of X et a. Length of service they should be deemed
maintenance employees of University A, and they argued that their provision of maintenance services is
necessary and desirable to the campus. University A argues that although X et al. was re-hired for a number
of years, they were hired on a per project basis as evidenced by numerous Contractual Employee
Appointments signed by them.X et. al. project employment were automatically terminated: (a) upon the
expiration of the specific term specified in the CEA; (b) when the project is completed ahead of such
expiration; or (c) in cases when their employment was extended due to the non-completion of the specific
project for which they were hired, upon the completion of the said project. Are X et al. deemed regular
employees?

A: YES. In Universal Robina Corporation v. Catapang, citing Abasolo v. NLRC, the Court laid down the test in
determining whether one is a regular employee: “......The connection can be determined by considering the nature
of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least a year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity
if not indispensability of that activity to the business. Hence, the employment is considered regular but only with
respect to such activity and while such activity exists.

X et al. fall under the second category of regular employees under Article 295 of the Labor Code. Accordingly, they
should be deemed as regular employees but only with respect to the activities for which they were hired and for as
long as such activities exist.

They are also not project employees. The court in the case of Gadia v. Sykes Asia Inc. discussed the requisites for
a valid project employment: the principal test for determining whether particular employees are properly
characterized as "project [-based] employees" as distinguished from "regular employees," is whether or not the
employees were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were
specified at the time they were engaged for that project. The project could either be (1) a particular job or undertaking
that is within the regular or usual business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company; or (2) a particular job or undertaking that is not
Labor Law Digests
within the regular business of the corporation. In order to safeguard the rights of workers against the arbitrary use
of the word "project" to prevent employees from attaining a regular status,employers claiming that their workers are
project [-based] employees should not only prove that the duration and scope of the employment was specified at
the time they were engaged, but also, that there was indeed a project.

X et al. could not be considered as project employees because the specific undertakings or projects for which they
were employed were not clearly delineated. This is evidenced by the vagueness of the project descriptions set forth
in their respective CEAs, which states that they were tasked "to assist" in various carpentry, electrical, and masonry
work. In fact, when the aforesaid CEAs are pieced together, it appears that during the years 1990 to 1999, X et al.
were each engaged to perform all-around maintenance services throughout the various facilities/installations in
petitioner's campus. (University of Santo Tomas v. Samahang Manggagawa ng UST, G.R. No. 184262, April 24,
2017)

Q: X and Y were employed as cooks of the restaurant of Z. The company enforces a “double-absent” policy
wherein an employee is considered absent for two days if he/she is absent work for Friday, Saturday, and
Sunday. Both X and Y absented themselves on these days for various reasons. They were summoned by
the Z and was told them that if they no longer wish to work they should resign. They were handed a blank
piece of paper, and was ordered to write down their resignation letters. The next day they reported for work
but they were barred from entering the restaurant. X and Y were questioned in another restaurant and was
asked to justify their absences, on another occasion they were subjected to an on-the-spot drug test, and
was intimidated by someone in the employ of the Z. Out of fear they did not report for work anymore. Z
however refuted the claims and alleged that the “double absent” policy was proposed by X and Y. They
now file a complaint for illegal dismissal with claim for monetary benefits against Z. Were X and Y were
constructively dismissed?

A: NO. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain on the part of the
employer has become so unbearable as to leave an employee with no choice but to forego continued employment,
or when there is cessation of work because continued employment is rendered impossible, unreasonable, or
unlikely, as an offer involving a demotion in rank and a diminution in pay. The test of constructive dismissal is
whether a reasonable person in the employee's position would have felt compelled to give up his job under the
circumstances.

X and Y were not constructively dismissed, in view of the glaring dearth of evidence to corroborate the same.
Despite their allegations, respondents failed to prove through substantial evidence that they were discriminated
against, or that working at the restaurant had become so unbearable that they were left without any choice but to
relinquish their employment. Neither were they able to prove that there was a demotion in rank or a diminution in
pay such that they were forced to give up their work.

However the allegation of X and Y going AWOL is not true. To constitute abandonment, two (2) elements must
concur: (a) the failure to report for work or absence without valid or justifiable reason, and (b) a clear intention to
sever the employer-employee relationship, with the second element as the more determinative factor and being
manifested by some overt acts. Mere absence is not sufficient. The employer has the burden of proof to show a
deliberate and unjustified refusal of the employee to resume his employment without any intention of returning

In this case, records show that respondents wasted no time in filing a complaint against petitioners to protest their
purported illegal dismissal from employment. As the filing thereof belies petitioners' charge of abandonment, the
only logical conclusion, therefore, is that respondents had no such intention to abandon their work. (Borja v. Miñoza,
G.R. No. 218384, July 3, 2017)

Q: X was employed by Y company. Due to liquidity problems, Y company took out retirement/insurance
plans for all its employees. X suffered a mild stroke and was unable to pursue his work. X wrote a letter to
Y company of his intention to avail of the retirement benefits but his request remain unheeded. Is X entitled
to the retirement benefits?

A: No. At the outset, it must be maintained that the Labor Code provision on termination on the ground of disease
under Article 297 does not apply in this case, considering that it was the X and not Y who severed the employment
relations. Article 297 of the Labor Code contemplates a situation where the employer, and not the employee,
initiates the termination of employment on the ground of the latter's disease or sickness. Thus, given the
inapplicability of Article 297 of the Labor Code to the case at bar, it necessarily follows that petitioners' claim for
Labor Law Digests
separation pay anchored on such provision must be denied. What remains applicable, however, is the Labor Code
provision on retirement. In particular, Article 300 of the Labor Code as amended by Republic Act Nos. 7641 and
8558. In the absence of any applicable agreement, an employee must (1) retire when he is at least sixty (60) years
of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half
(1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one whole
year. Notably, these age and tenure requirements are cumulative and noncompliance with one negates the
employee's entitlement to the retirement benefits under Article 300 of the Labor Code altogether. In this case, it is
undisputed that there exists no retirement plan, collective bargaining agreement or any other equivalent contract
between the parties which set out the terms and condition for the retirement of employees, with the sole exception
of the Life Plan which premiums had already been paid by Y comapany. Neither was it proven that there exists an
established company policy of giving early retirement packages to the Bank's aging employees. All told, in the
absence of any applicable contract or any evolved company policy, X’s should have met the age and tenure
requirements set forth under Article 300 of the Labor Code to be entitled to the retirement benefits provided therein.
(Padillo v. Rural Bank of Nabunturan, G.R. No. 199338, January 21, 2013)

Q: X was employed by Y company as a waitress which required her to settle funds of customers. Y found
out that based from audit that X discounted an amount from the bill of another customer without showing
proof that the latter had a privilege card. As a result, a balance on the bill remained. Y dismissed X for
dishonesty, willful disobedience and serious misconduct amounting to loss of trust and confidence. Was
X illegally terminated?

A: NO. Among the just causes for termination is the employer's loss of trust and confidence in its employee. Article
296 (c) (formerly Article 282 [c]) of the Labor Code provides that an employer may terminate the services of an
employee for fraud or willful breach of the trust reposed in him. But in order for the said cause to be properly invoked,
certain requirements must be complied with namely, (1) the employee concerned must be holding a position of trust
and confidence and (2) there must be an act that would justify the loss of trust and confidence.

It is noteworthy to mention that there are two classes of positions of trust: on the one hand, there are managerial
employees whose primary duty consists of the management of the establishment in which they are employed or of
a department or a subdivision thereof, and to other officers or members of the managerial staff; on the other hand,
there are fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or those who, in the
normal exercise of their functions, regularly handle significant amounts of money or property. These employees,
though rank-and-file, are routinely charged with the care and custody of the employer's money or property, and are
thus classified as occupying positions of trust and confidence. X belongs to this latter class and therefore, occupies
a position of trust and confidence.

Anent the second requisite, records reveal that X committed an act which justified her employer’s loss of trust and
confidence in her. Primarily, it is apt to point out that proof beyond reasonable doubt is not required in dismissing
an employee on the ground of loss of trust and confidence; it is sufficient that there lies some basis to believe that
the employee concerned is responsible for the misconduct and that the nature of the employee's participation
therein rendered him absolutely unworthy of trust and confidence demanded by his position. In addition, it must be
observed that only substantial evidence is required in order to support a finding that an employer's trust and
confidence accorded to its employee had been breached. (Philippine Plaza Holdings v. Episcope, G.R. No. 192826,
February 27, 2013)

Q: X was employed by Y company. Y company found that there were certain remittances which were
unaccounted for by X. X was terminated. X assails illegal dismissal. Was X illegally dismissed?

A: NO. In termination cases, the burden of proof rests on the employer to show that the dismissal is for a valid
cause. Failing in which, the law considers the matter a case of illegal dismissal. In this relation, the quantum of proof
which the employer must discharge is substantial evidence which, as defined in case law, means that amount of
relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds,
equally reasonable, might conceivably opine otherwise.

The statutory procedure for terminating an employee is found in Section 2 (III), Rule XXIII, Book V of the Omnibus
Rules Implementing the Labor Code (Omnibus Rules). The foregoing procedure consists of (a) a first written notice
stating the intended grounds for termination; (b) a hearing or conference where the employee is given the
opportunity to explain his side; and (c) a second written notice informing the employee of his termination and the
grounds therefor. Jurisprudence dictates that it is not enough that the employee is given an "ample opportunity to
Labor Law Digests
be heard" if company rules or practices require a formal hearing or conference. In such instance, the requirement
of a formal hearing and conference becomes mandatory.
(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the
employee to answer the charges against him and submit evidence in support of his defense, whether in a
hearing, conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or
substantial evidentiary disputes exists or a company rule or practice requires it, or when similar
circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing and
conference" requirement in the implementing rules and regulations.
Company policies or practices are binding on the parties. Some can ripen into an obligation on the part of the
employer, such as those which confer benefits on employees or regulate the procedures and requirements for their
termination. (Surigao Del Norte v. Gonzaga, G.R. No. 187722, June 10, 2013)

Q: X was the Senior Logistics Assistant of Y Company. Records show that X altered some of the records
in the Company which caused X’s dismissal from it. Y dismissed X on the ground of Serious Misconduct.
Was X illegally dismissed?

A: NO. Fundamental is the rule that an employee can be dismissed from employment only for a valid cause. Serious
misconduct is one of the just causes for termination under Article 282 of the Labor Code. (a) Serious misconduct or
willful disobedience by the employee of the lawful orders of his employer or representative in connection with his
work.

Thus, not every form of misconduct can be considered as a just cause for termination. The law explicitly qualifies
that the misconduct must be both serious and made in connection with the employee's work.

Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction
of duty, willful in character, and implies wrongful intent and not mere error in judgment." For misconduct to be
serious and therefore a valid ground for dismissal, it must be (1) of grave and aggravated character and not merely
trivial or unimportant and (2) connected with the work of the employee.

In this relation, it is well to stress that the employer bears the burden of proving, through substantial evidence, that
the aforesaid just cause — or any other valid cause for that matter — forms the basis of the employee's dismissal
from work.

Records disclose that Y dismissed X on the ground of serious misconduct which was mainly hinged on Estrella's
alteration and/or tampering of lessors' bids and extortion. (PNOC v. Estrella)

Q: X was employed by Y company as a teller in the Bank. Y conducted an audit and found that there were
deficiencies in the remittances that X provided. X was terminated on the ground of loss of trust and
confidence. Was X illegally dismissed?

A: NO. To validly dismiss an employee on the ground of loss of trust and confidence under Article 296 (c) (formerly
Article 282 [c]) of the Labor Code, the following guidelines must be observed: (1) the employee concerned must be
holding a position of trust and confidence; and (2) there must be an act that would justify the loss of trust and
confidence.

Anent the first requisite, it is noteworthy to mention that there are two classes of positions of trust, namely: (1)
managerial employees whose primary duty consists of the management of the establishment in which they are
employed or of a department or a subdivision thereof, and to other officers or members of the managerial staff; and
(2) fiduciary rank-and-file employees such as cashiers, auditors, property custodians, or those who, in the normal
exercise of their functions, regularly handle significant amounts of money or property. These employees, though
rank-and-file, are routinely charged with the care and custody of the employer's money or property, and are thus
classified as occupying positions of trust and confidence. Being an employee tasked to collect payments and remit
the same to Y, X belongs to the latter class and thus, occupies a position of trust and confidence. Anent the second
requisite, the audit report conducted on X's cash count revealed that he had a shortage. (Martinez v. Central
Pangasinan Electric, G.R. 192306, July 15, 2013)
Labor Law Digests
Q: X was employed by Y but was terminated for cause when the corporation was sold. He was then rehired
as consultant by Y. X then informed Y of his compulsory retirement and sought for the payment of his
retirement benefits pursuant to the CBA. Such was not acted upon and instead he was terminated from
service. Was X illegally dismissed?

A: YES. Records reveal that the NLRC and the LA, as affirmed by the CA found substantial evidence to show that
X was a regular employee who was dismissed without cause. It is essentially a question of fact, beyond the ambit
of a petition for review on certiorari under Rule 45 of the Rules of Court unless there is a clear showing of palpable
error or arbitrary disregard of evidence which does not obtain in this case.
Following Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages computed from the time
he was illegally dismissed. However, considering that X was terminated one day prior to his compulsory retirement
his reinstatement is no longer feasible. He is entitled to the payment of his retirement benefits pursuant to the CBA.
On the other hand, his backwages should be computed only for days prior to his compulsory retirement which in
this case is only a day.

The Court finds no basis to hold the president of Y company jointly and severally liable with the corporation for the
payment of the monetary awards. The mere lack of authorized or just cause to terminate one's employment and
the failure to observe due process do not ipso facto mean that the corporate officer acted with malice or bad faith.
There must be independent proof of malice or bad faith which was not established in this case. (New Philippine
Skylanders v. Dakila, G.R. No. 199547, September 24, 2012)

Q: X was employed by Y company on a probationary basis. However X was then called upon to a meeting
to inform her that she failed to meet the regularization standards of the company. She was then called to
tender her resignation otherwise she would be forcibly terminated. She was terminated and a notice was
given to her. Was X illegally dismissed? NO

A: X was well-apprised of her employer’s expectations that would, in turn, determine her regularization. Verily, basic
knowledge and common sense dictate that the adequate performance of one’s duties is, by and of itself, an inherent
and implied standard for a probationary employee to be regularized; such is a regularization standard which need
not be literally spelled out or mapped into technical indicators in every case.

Keeping with [the Omnibus Rules Implementing the Labor Code], an employer is deemed to have made known the
standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable
efforts to apprise the employee of what he is expected to do to accomplish during the trial of probation.

However, Y failed to follow its procedure in evaluating X. If the dismissal is based on a just cause under Article 296
of the Labor Code but the employer failed to comply with the notice requirement, the sanction to be imposed upon
him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee.
(Abbott Laboratories v. Alcaraz, G.R. No. 192571, July 23, 2013)

Q: X was deployed by Y Company (a placement agency) to Kuwait to work there. As stipulated in the
contract, an error was provided for wherein X was to work only 48 hours a month. However upon arriving
in Kuwait they were told to work 48 hours a week and X agreed to this. X returned to the Philippines but did
not return to Kuwait which prompted the company to terminate him. X filed a case for illegal dismissal with
the NLRC on the ground that he was not paid his overtime pay as he worked 48 hours a week when in fact
the contract provided that he is only to work for 48 hours a month. Was X illegally terminated and is he
entitled to his overtime pay?

A: NO. Y contends that the failure of the respondents to appeal the ruling of the LA denying the latter's claim for
overtime pay rendered the same final and binding upon them. The contention lacks merit. The Court cited an
exception to the rule that a party who has not appealed cannot obtain any affirmative relief other than the one
granted in the appealed decision: “However, when strict adherence to such technical rule will impair a substantive
right, such as that of an illegally dismissed employee to monetary compensation as provided by law, then equity
dictates that the Court set aside the rule to pave the way for a full and just adjudication of the case.” Although X
were found to have been dismissed for cause, depriving them of overtime pay, if rightly due to them, would still
amount to an impairment of substantive rights. Thus, following the dictates of equity and as an exception to the
general rule, the Court finds it proper for the CA to have passed upon the matter of overtime pay, despite the fact
that X did not appeal from the LA Decision denying the same claim.
Labor Law Digests

With regard to the contention that there was an error on the 48hrs/month typo, the court held that the contract
should be interpreted as a whole. X did not complain or assail the implementation of their true number of work
hours. Instead, they proceeded to carry out their work under the correct 48-hour week schedule for more than half
of the entire duration of their employment contract, without any protest. An evaluation of the terms of the
employment contracts and the acts of the parties indeed reveal that their true intention was for X to perform work
of at least forty eight (48) hours per week, and not 48 hours per month.

However, the court found that Y is not totally free from liability. To be totally free from liability, the employer must
not only show sufficient ground for the termination of employment but it must also comply with procedural due
process by giving the employees sought to be dismissed two notices: 1) notice of the intention to dismiss, indicating
therein the acts or omissions complained of, coupled with an opportunity for the employees to answer and rebut the
charges against them; and 2) notice of the decision to dismiss. While it notified X of his dismissal, it failed to furnish
him with a written notice of the charges thus, denying them a reasonable opportunity to explain their side. Y’s failure
to observe due process when it terminated respondents' employment for just cause did not invalidate the dismissal
but rendered petitioners liable for nominal damages. (Global Resource v. Velasco, G.R. No. 196883, August 15,
2012)

Q: X was employed by Y Company as an Officer in Charge for mechanical installation. Sometime thereafter,
he was downgraded from his post 2 times. He was then dismissed from service and as a result X filed a
complaint for illegal dismissal. Y alleges that X went AWOL and violated the company policy.
Was X illegally or constructively dismissed?

A: NO. Constructive dismissal is defined as a quitting because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution of pay. The test of constructive dismissal
is whether a reasonable person in the employee's position would have felt compelled to give up his position under
the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal
is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to
protect their rights and interests from the coercive acts of the employer.

The burden falls upon the company to prove that the employee's assignment from one position to another was not
tantamount to constructive dismissal. In the case at bar, Y failed to discharge said burden. In fact, Y never even
disputed that X was relegated from the position of OIC to supervisor and, subsequently, to an ordinary technician.
Clearly, the reduction in X's responsibilities and duties, particularly from supervisor to ordinary technician,
constituted a demotion in rank tantamount to constructive dismissal.

The Court also held that X did not abandon his employment by failing to report or having gone AWOL.
"Abandonment is the deliberate and unjustified refusal of an employee to resume his employment." To constitute
abandonment of work, two elements must concur: " (1) the employee must have failed to report for work or must
have been absent without valid or justifiable reason; and (2) there must have been a clear intention on the part of
the employee to sever the employer-employee relationship manifested by some overt act." The employer bears the
burden of proof to show the deliberate and unjustified refusal of the employee to resume his employment without
any intention of returning.

Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute
abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee
relationship. Clearly, the operative act is still the employee's ultimate act of putting an end to his employment.

Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work. . . . ."
X’s failure to work was caused by the unwarranted demotion in rank that was imposed upon him by Y , not by any
intention to sever employment ties with them. And his filing of the instant complaint for illegal dismissal indubitably
negates the allegation of abandonment. Had X intended to forsake his job, then he would not have found it
necessary to institute this case against Y. (Dimagan v. DACWORKS United, G.R. No. 191053, November 28, 2011)
Taxation Law Digests

Q: A Corporation filed an administrative claim for refund/credit of its unutilized input VAT. 22
days after, A filed a judicial claim for tax refund/credit. CTA En Banc affirmed CTA division’s
decision in dismissing Panay’s claim on the ground that it failed to observe the 120-day
mandatory period provided under Sec. 112(D) of the NIRC since it filed the judicial claim 22
days after filing the administrative claim. Did the CTA en banc correctly affirm the Division’s
decision?
A: No. BIR Ruling No. DA-489-03 provided an exception to the 120-day rule. It stated that the claimant
need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA.
Therefore, during the December 10, 2003 (when BIR Ruling was issued) to October 6, 2010 (when
the Aichi case was promulgated), claimants need not observe the 120-day period before it could
file a judicial claim for refund of excess input VAT before the CTA. In this case, Panay filed its
administrative and judicial claims for refund/credit of its input VAT during the period when BIR Ruling
was in place. Hence, it need not wait for the expiration of the 120-day period before filing its judicial
claim before the CTA. (Panay Power Corporation v. CIR, G.R. No. 203351, January 21, 2015)

Q: On June 27, 2003, X filed an administrative claim for refund of its unutilized input VAT (first
refund claim) before the BIR. Three days after, it filed a judicial claim for refund before the
CTA. On May 31, 2005, X filed a second administrative claim for refund (second refund claim)
before the BIR. On the same day, it filed a petition for review before the CTA. CTA en banc
affirmed CTA division’s decision in dismissing X’s claim on the ground that it failed to
observe the 120-day mandatory period provided under Section 112(D) of the NIRC. Did the
CTA en banc correctly affirmed the Division’s decision?
A: No. BIR Ruling No. DA-489-03 provided an exception to the 120-day rule. Thus, during the period
December 10, 2003 (when BIR Ruling was issued) to October 6, 2010 (when the Aichi case was
promulgated), claimants need not observe the 120-day period. However, before and after the
said period, the such is mandatory. X’s first refund claim was filed before the period when BIR
Ruling was in effect. Thus, correctly dismissed for being prematurely filed. Cargill’s second refund
claim was file during the period of effectivity of BIR Ruling, and, thus, fell within the exemption
window period. Thus, the en banc erred when it dismissed the case. (Cargill Philippines, Inc. v. CIR,
G.R. No. 203774, March 11, 2015)

Q: A Corporation is a duly registered VAT enterprise selling to PEZA-registered entity. During


the taxable years 2004 and 2005, A filed Quarterly VAT Returns showing its zero-rated sales.
For failure of CIR to act on its administrative claims, A filed for a petition for review before the
CTA on March 17, 2006 (Date of Judicial Claim). A asserts that under Section 112 (A) of the
/Tax Code, the prescriptive period is complied with if both the administrative and judicial
claims are filed within the two-year prescriptive period; and that compliance with the 120-day
and 30-day periods under Section 112 (D) of the Tax Code is not mandatory. Is A correct?
A: No. The 120-day period is mandatory and jurisdictional. However, the Supreme Court categorically
held that BIR Ruling No. DA-489-03 dated December 10, 2003 provided a valid claim for equitable
estoppel under Section 246 of the Tax Code. BIR Ruling No. DA-489-03 expressly states that the
“taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief
with the CTA by way of Petition for Review.” As such, all taxpayers can rely on said ruling from the
time of its issuance on December 10, 2003 up to its reversal by the Supreme Court in Aichi on
October 6, 2010, where it was held that the 120+30 day periods are mandatory and jurisdictional.
(Republic v GST Philippines Inc., G.R. No 190872, October 17, 2013)

Q: A Corporation filed an administrative claim and a judicial claim for refund of its unutilized
input VAT. On August 10, 2011, the CTA Division partially granted A's claim for tax refund,
Taxation Law Digests

and thereby ordered the CIR to issue a tax credit certificate in the reduced amount of
P2,614,296.84. Before its receipt of the said Decision, or on August 12, 2011, A filed a motion
to withdraw, considering that the BIR, acting on its administrative claim, already issued a tax
credit certificate in the amount of P21,675,128.91 on July 27, 2011. The CTA Division and the
CTA En Banc granted the said motion to withdraw. Did the CTA en banc properly granted
Nippon's motion to withdraw?
A: No. While it is true that the CTA Division has the prerogative to grant a motion to withdraw under the
Rules of Court, the attendant circumstances in this case should have incited it to act otherwise. In
this case, the CTA Division had already determined that Nippon was only entitled to refund the
reduced amount of P2,614,296.84 since it failed to prove that the recipients of its services were non-
residents doing business outside the Philippines. Markedly different from this is the BIR's
determination that Nippon should receive P21,675,128.91, which is, in all, P19,060,832.07 larger
than the amount found due by the CTA Division. The massive discrepancy alone between the
administrative and judicial determinations of the amount to be refunded to Nippon should have
already raised a red flag to the CTA Division. Clearly, the interest of the government, and, more
significantly, the public, will be greatly prejudiced by the erroneous grant of refund - at a substantial
amount at that - in favor of Nippon. Furthermore, in matters of taxation, the government cannot be
estopped by the mistakes, errors or omissions of its agents for upon it depends the ability of the
government to serve the people for whose benefit taxes are collected. Thus, the CIR is not estopped
from assailing the validity of the July 27, 2011 Tax Credit Certificate which was issued by her
subordinates in the BIR. Hence, under these circumstances, the CTA Division should not have
granted the motion to withdraw. (CIR v. Nippon Express Phils. Corporation, G.R. No. 212920,
September 16, 2015)

Q: A Corporation, being one of the generating companies recognized by the DOE and pursuant
to the provisions of EPIRA law, treated the delivery and supply of electric energy to PNOCEDC
as VAT zero-rated. A filed an administrative claim for refund of unutilized input VAT. Alleging
inaction on the part of the CIR, it filed a judicial claim for refund. Did A prematurely filed its
judicial claims for refund?
A: Yes. Once the administrative claim is filed within the 2-year prescriptive period, the claimant must
wait for the 120-day period to end and, thereafter, he is given a 30-day period to file his judicial claim
before the CTA, even if said 120-day and 30-day periods would exceed the aforementioned 2-year
prescriptive period. While both claims for refund were filed within the 2 year prescriptive period, A
failed to comply with the 120-day period as it filed its judicial claim in C.T.A. Case No. 6792 four (4)
days after the filing of the administrative claim, while in C.T.A. Case No. 6837, the judicial claim was
filed a day after the filing of the administrative claim. Only C.T.A. Case No. 6792 should be dismissed
on the ground of lack of jurisdiction for being prematurely filed. The Court remands the case to the
CTA. (CIR v. CE Luzon Geothermal Power Company, Inc., G.R. No. 190198, September 17, 2014)

Q: X subcontracted from a consortium of nonresident foreign corporations the actual operation


and maintenance of two 100-megawatt power barges owned by the National Power
Corporation, which services are subject to zero percent (0%) VAT. X filed an application for
tax credit/refund for VAT. CIR argues that while the respondent filed its administrative claim
on July 21, 1999 within the two-year prescriptive period, the same is not true with the petition
for review that was filed with the CTA only on January 9, 2001. Did X file the judicial claim
within the prescriptive period?
A: No. The taxpayer can file its administrative claim for refund or credit at any time within the two-
year prescriptive period. If it files its claim on the last day of said period, it is still filed on time. The
CIR will have 120 days from such filing to decide the claim. If the CIR decides the claim on the 120th
Taxation Law Digests

day, or does not decide it on that day, the taxpayer still has 30 days to file its judicial claim with
the CTA; otherwise, the judicial claim would be dismissed for being filed out of time It bears emphasis
that the 120+30 day period is mandatory and jurisdictional in nature. Notwithstanding that the
administrative claim was filed on time, the judicial claim was filed beyond 120+30 day period, hence,
deemed to be filed out of time. (CIR v. Burmeister and Wain Scandinavian Mindanao, Inc., G.R. No.
190021, October 22, 2014)

Q: The Governments of the Philippines and Japan each entered into an exchange of notes
whereby Japan agreed to loan the Philippines the amount of 40.4B. The Philippine
Government by itself or through its executing agency, undertook to assume all taxes imposed
by the Philippines on Japanese contractors. Meanwhile, NPC entered into an agreement with
A Corporation. Upon completion of the project, A filed a refund for income tax and withholding
taxes on branch profit remittances. Is A entitled to refund from the BIR?
A: Yes. NIRC grants the CIR the authority to credit or refund taxes, which are erroneously collected by
the government. It is fairly apparent that the subject taxes were erroneously collected from petitioner,
considering that the obligation to pay the same had already been assumed by the Philippine
Government by virtue of its Exchange of Notes with the Japanese Government. As explicitly worded,
the Philippine Government, through its executing agencies (i.e., NPC in this case) particularly
assumed "all fiscal levies or taxes imposed in the Republic of the Philippines on Japanese firms and
nationals operating as suppliers, contractors or consultants on and/or in connection with any income
that may accrue from the supply of products of Japan and services of Japanese nationals to be
provided under the [OECF] Loan." The Philippine Government's assumption of "all fiscal levies and
taxes," which includes the subject taxes, is clearly a form of concession given to Japanese suppliers,
contractors or consultants in consideration of the OECF Loan, which proceeds were used for the
implementation of the Project. (Mitsubishi Corporation – Manila Branch v. CIR, G.R.175772, June 5,
2017)

Q: A Mining Corporation filed before the CIR a refund of its excess input VAT. Without waiting
for the CIR’s decision or for the lapse of the 120-day period, A filed a petition for review with
the CTA. This move by A, according to the CIR, and subsequently the CTA En Banc, warrants
a dismissal inasmuch as no jurisdiction was acquired by the CTA. A, according to the
appellate court, should have waited for the CIR’s decision or the lapse of the 120-day period
without any action from the CIR before seeking judicial relief. Is CTA correct?
A: No. An exception to the 120-day rule was recognized as applicable to this case. Thus, from the time
of the effectivity of BIR Ruling No. DA-489-03, or on December 10, 2003, up to its reversal by the
same Court in Aichi on October 6, 2010, the taxpayer-claimant, as settled by the Supreme Court,
need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by
way of Petition for Review. Since Taganito filed his petition for review with the CTA on March 31,
2006, its judicial claim was, therefore, not prematurely filed and should not have been dismissed by
the CTA En Banc. (Taganito Mining Corporation v. Commissioner of Internal Revenue, GR No.
197591, June 18, 2014)
Civil Law Digests
PERSONS

Q: X and Y got married but eventually parted ways because of violent fights and jealous fits. They became
even more estranged when Y became focused on his career and supported his parents and siblings. Y filed
a petition for declaration of nullity of marriage on the ground of psychological incapacity to comply with
his essential marital obligations. Y argued that he married X not out of love but out of the desire to please
the latter's parents who were kind and accommodating to him. He also presented a Psychological
Evaluation Report that he was suffering Obsessive Compulsive Personality Disorder (OCPD), which made
him obsessed with any endeavour he chooses. Should the petition be granted?

A: No. To warrant the declaration of nullity of marriage, the psychological incapacity must: (a) be grave or serious
such that the party would be incapable of carrying out the ordinary duties required in a marriage; (b) have juridical
antecedence, i.e., it must be rooted in the history of the party antedating the marriage, although the overt
manifestations may emerge only after the marriage; and (c) be incurable, or even if it were otherwise, the cure
would be beyond the means of the party involved. In this case, the medical report did not establish that Y's incapacity
existed long before he entered into marriage. In such case, any doubt should be resolved in favor of the validity of
marriage. Marriages entered into for other purposes, limited or otherwise, such as convenience, companionship,
money, status, and title, provided that they comply with all the legal requisites, are equally valid. Love, though the
ideal consideration in a marriage contract, is not the only valid cause for marriage. (Republic v. Romero II, G.R. No.
209180, February 24, 2016.)

Q: X and Y were married. Y, a member of the AFP, left X and went to Sulu where he was assigned. Since
then, X heard no news from Y. After 33 years without communication and trying everything to locate him
such as asking his parents, relatives, and neighbours about his whereabouts, and with the firm belief that
he is already dead, X filed a petition to declare him presumptively dead for purposes of remarriage. RTC
and CA granted the petition ruling that X exerted efforts to find Y. The lapse of 33 years coupled with the
fact that Y was sent on a combat mission to Jolo, Sulu gave rise to X’s well-founded belief that Y was dead.
Is the CA correct?

A: No. There are 4 requisites for the absent spouse to be declared presumptively dead under Art. 41; 1) absent
spouse missing for 4 consecutive years or 2 consecutive years if the disappearance occurred where there is danger
of death under circumstances in Art. 391 of CC, 2) that the present spouse wishes to remarry, 3) that present
spouse has well-founded belief that absentee is dead, and 4) present spouse filed a summary proceeding for the
declaration of presumptive death of absentee. Under the third requisite, the present spouse has to prove that his/her
belief was the result of diligent and reasonable efforts to locate the absent spouse. X’s efforts do not suffice. This
is because she could have called AFP headquarters to request information about her husband, but failed to do so.
Therefore, X’s efforts failed to satisfy the degree of diligence required to create “a well-founded belief” of his death.
Also, her testimony as to her efforts were not corroborated by any additional witness nor were the resource persons
named. (Republic v. Tampus, G.R. No. 214243, March 16, 2016.)

Q: X, a Filipino citizen, married Y, a Japanese national. Subsequently, pursuant to the laws of Japan, they
were divorced. X filed a petition for judicial recognition of foreign divorce and declaration of capacity to
remarry. X presented several foreign documents, including a duly authenticated Divorce Certificate and
two books on the Civil Code of Japan for years 2000 and 2009. The RTC denied X’s petition, ruling that X
fell short of proving the national law, particularly on divorce, of Y. It observed that the books presented
were not duly authenticated by the Philippine Consul in Japan as required by Sections 24 and 25 of the
Rule 132. Is the RTC correct?

A: Yes. Article 26 of the FC allows a Filipino spouse to contract a subsequent marriage in case the divorce is validly
obtained abroad by an alien spouse capacitating him or her to remarry. In order for a divorce obtained abroad by
the alien spouse to be recognized in our jurisdiction, it must be shown that the divorce decree is valid according to
the national law of the foreigner. Since our courts do not take judicial notice of foreign laws and judgment, our law
on evidence requires that both the divorce decree and the national law of the alien must be alleged and proven like
any other fact. This means that the foreign judgment and its authenticity must be proven as facts under our rules
on evidence, together with the alien's applicable national law to show the effect of the judgment on the alien himself
or herself. (Medina v. Koike, G.R. No. 215723, July 27, 2016.)

Q: X, an American citizen, was the owner of a parcel of land which was sold at a public auction. Association
A redeemed the same. A then filed a complaint for issuance of a new title in its name, which the RTC
Civil Law Digests
granted. Subsequently, Y, claiming to be the legitimate son of X, filed a Petition for Relief from Judgment.
He averred that A fraudulently failed to implead him and Z, Y’s mother. He contended that Z was an
indispensable party, being the owner of half of the subject property, which Y claimed to be conjugal in
nature. Is Y correct?

A: No. Article 160 of the New Civil Code provides that all property of the marriage is presumed to belong to the
conjugal partnership, unless it is proved that it pertains exclusively to the husband or to the wife. This presumption
is rebuttable, but only with strong, clear and convincing evidence. However, the presumption refers only to the
property acquired during the marriage and does not operate when there is no showing as to when the property
alleged to be conjugal was acquired. The party who asserts this presumption must first prove the said time element.
In this case, the records are bereft of any evidence of the actual date of acquisition of the subject property; therefore,
it is considered as X’s exclusive property. (Onstott v. Upper Tagpos Neighborhood Association, Inc., G.R. No.
221047, September 14, 2016.)

Q: X was the registered owner of 4 parcels of land which she mortgaged to and was subsequently
foreclosed by Y. X sought the assistance of Z to redeem the property. X sold the land to Z and to one of her
sons. The rest of X’s children filed for the annulment of deeds of conveyance against Z on the grounds that
the transaction is not of sale but an equitable mortgage and that the properties were inherited from their
father—hence, conjugal in nature. The children additionally claim that X has no right to dispose of their
respective shares therein. Are X’s children correct?

A: No. Article 160 of the Civil Code states, "All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband or to the wife." For this presumption to
apply, the party invoking the same must, however, preliminarily prove that the property was indeed acquired during
the marriage. The presumption in favor of conjugality does not operate if there is no showing of when the property
alleged to be conjugal was acquired. Moreover, the presumption may be rebutted only with strong, clear, categorical
and convincing evidence. There must be strict proof of the exclusive ownership of one of the spouses, and the
burden of proof rests upon the party asserting it. Other than their bare allegation, no evidence was adduced by X’s
children to establish that the subject properties were procured during the coverture of their parents or that the same
were bought with conjugal funds. (Tan v. Andrade, G.R. No. 171904, Aug. 7, 2013).

Q: During her lifetime, X had 5 children from her second marriage with Y, in the course of which they
acquired several real properties. After X died intestate, Z, together with three of his children, executed an
Extra-Judicial Settlement of the Estate with Absolute Deed of Sale, in favor of third parties. The other two
children, A & B, who were minors, did not participate in this settlement and sale. Later, all of the children
sought to annul the sale on the ground the properties were sold beyond the 5-year prohibitory period from
the issuance of the homestead patents. In addition, the SC had to consider the effect of the sale with respect
to A and B. Was the sale enforceable insofar as A and B were concerned?

A: No. While the settlement was void, the sale was valid but only with respect to the sellers’ proportionate shares
therein. With respect to A and B who were minors at the time, their natural guardian and father, Y, represented
them in the transaction, pursuant to Arts. 320 and 326 of the Civil Code. However, Y was merely clothed with powers
of administration and bereft of any authority to dispose of their 2/16 shares in the estate of their mother.
Administration includes all acts for the preservation of the property and the receipt of fruits according to the natural
purpose of the thing. Any act of disposition or alienation, or any reduction in the substance of the patrimony of child,
exceeds the limits of administration. Thus, a father or mother, as the natural guardian of the minor under parental
authority, does not have the power to dispose or encumber the property of the latter. Consequently, the sale entered
into by Y in behalf of A and B is unenforceable unless they ratify it upon reaching the age of majority. (Neri v. Uy,
G.R. No. 194366, October 10, 2012)

Q: X and Y were married until Wife X sought for nullification of the marriage on the ground of psychological
incapacity because of Husband Y’s alleged infidelity, his refusal to seek employment, his act of
squandering money on vices, and his temper and alleged propensity for violence towards X. An expert
testimony was presented by X who declared that Y suffers from Antisocial Personality Disorder (APD). The
RTC granted the petition but the CA reversed the decision and declared that these allegations were not so
grave and permanent as to be sufficient to nullify the marriage under Art. 36 of the Family Code. Is the CA
correct?

A: Yes. Psychological incapacity must be characterized by gravity, juridical antecedence, and incurability. X
Civil Law Digests
admitted that their married life ran smoothly in its early years. The expert testimony also did not explain in detail
how Y’s APD could be characterized as grave, deeply rooted in his childhood, and incurable within jurisprudential
parameters. Psychological incapacity under Art. 36 must be more than just a difficulty, refusal or neglect in the
performance of marital obligations; it is not enough that a party prove that the other failed to meet the responsibility
and duty of a married person. There must be proof of a natal or supervening disabling factor in the person which
must be linked with the manifestations of the psychological incapacity. (Del Rosario v. Del Rosario, G.R No. 222541,
February 15, 2017)

Q: X and Y were married and living together until Wife X worked abroad and Husband Y is left in the country.
X filed a petition to nullify their marriage on the ground of psychological incapacity after hearing the news
that Y was having an affair with another woman and was living together with their child. Their psychological
report found that X and Y are both suffering from personality disorders that affect their behaviors even
before they contracted their marriage. The RTC and CA granted the petition. Is there a valid ground for
nullification of X and Y’s marriage under Art. 36?

A: No. Psychological incapacity ought to pertain to only the most serious cases of personality disorders that clearly
demonstrate the party’s/parties’ utter insensitivity or inability to give meaning and significance to the marriage. The
gravity, juridical antecedence and incurability of the psychological incapacity must be proven. Here, the report failed
to show that X’s personality disorder existed prior the marriage and failed to explain the juridical antecedence or its
incurability. A clear and understandable causation between the party’s condition and the party’s inability to perform
the essential marital covenants must be shown. (Republic v. Tecag, G.R No. 229272, November 19, 2018)

Q: X is a lessee of subject parcels of land co-owned by his full-blooded sister and his nephews and nieces.
In 2003, Y offered to sell to X the said lands to which X agreed. However, in 2010, Y decided to cancel their
agreement and informed X of her intent to convert X’s partial payments as rentals instead. X disapproved
of this and claimed that Y and her children sold all their shares to Z, his nephew. The RTC dismissed X’s
complaint for failure to comply with Art. 151 of the Family Code that no earnest efforts were made before
filing a suit. The CA affirmed the decision. Is Art. 151 applicable in the instant case?

A: No. The Court ruled that Art. 151 of the Family Code is inapplicable because the instant case does not exclusively
involve members of the same family. Art. 151 must be construed strictly, it being an exception to the general rule.
Any person having a collateral familial relation with the plaintiff other than what is enumerated in Article 150 of the
Family Code is considered a stranger who, if included in a suit between and among family members, would render
unnecessary the earnest efforts requirement under Article 151. Here, it is undisputed that X and Y are siblings, and
the children of Y are the nieces and nephews of X. It then follows that the children of Y are considered "strangers"
to X insofar as Article 151 of the Family Code is concerned. (Moreno v. Kahn, G.R No. 217744, July 30, 2018)

Q: X and Y are husband and wife. X filed a verified complaint for declaration of nullity of marriage alleging
that Y was psychologically incapacitated to comply with her essential marital obligations. X testified,
among others, that after he decided to join and train with the army, Y left their conjugal home and sold their
house without X’s consent. Y entered into two separate relationships with other men. From the time Y
abandoned X, X was left to take care of their two daughters and he exerted earnest efforts to save their
marriage which, however, proved futile because of Y’s psychological incapacity that appeared to be
incurable. Should the marriage be nullified?

A: No. Psychological incapacity, as a ground to nullify a marriage under Article 36 of the FC, should refer to no less
than a mental — not merely physical — incapacity that causes a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so
expressed in Article 68 of the FC, among others, include their mutual obligations to live together, observe love,
respect and fidelity and render help and support. It is confined in the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance to their marriage.
Psychological incapacity must not merely due to a person’s youth, immaturity or sexual promiscuity. In this case,
the SC found insufficient factual or legal basis to conclude that Y’s emotional immaturity, irresponsibility or even
promiscuity, can be equated with psychological incapacity. (Republic v. De Gracia, G.R. No. 171557, February 12,
2014).

Q: X, a Dutch National, and Y, a Filipina, are husband and wife. The RTC declared the nullity of their marriage
on the basis of psychological incapacity. Subsequently, X filed a Petition for Dissolution of Conjugal
Partnership and prayed for the distribution of several properties claimed to be acquired during the
Civil Law Digests
subsistence of their marriage. In the trial, X admitted that he is aware of the constitutional prohibition
against foreign ownership of Philippine lands and even asseverated that, because of such prohibition, he
and Y registered the subject properties in the name of Y. However, X claimed that he had a right to be
reimbursed on the basis of equity. Was X correct?

A: No. A similar case, In Re: Petition for Separation of Property-Elena Buenaventura Muller, denied a claim for
reimbursement of the value of purchased parcels of Philippine land instituted by a foreigner against his former
Filipina spouse. The foreigner spouse cannot claim reimbursement on the ground of equity where it is clear that he
willingly and knowingly bought the property despite the prohibition against foreign ownership of Philippine land
enshrined under Sec. 7, Art. XII of the 1987 Philippine Constitution. Clearly, X’s actuations showed his palpable
intent to skirt the constitutional prohibition. (Beumer v. Amores, G.R. No. 195670, December 3, 2012).

PROPERTY

Q: X, now deceased, filed for quieting of title with recovery of possession against Y, his brother, claiming
that he (X) purchased three (3) parcels of land from his Aunt through a notarized Deed of Absolute Sale. X
resided in Manila, so he placed one (1) parcel in Y’s care, in exchange for which, Y religiously delivered the
produce of said land. Unfortunately, Y later on continuously refused to deliver the produce of the land or
vacate the same. In Y’s defense, he averred that he has been in open, continuous, peaceful, adverse, and
uninterrupted possession of the subject land, where his residential house stands, and in the concept of an
owner for almost 50 years; thus, X’s action was already barred by prescription. Y also argued that the deed
of absolute sale presented by Jose is not legal or beneficial title contemplated by Art. 476 of the Civil Code.
Should the action for quieting of title prosper?

A: YES. Jurisprudence provides that in order for an action for quieting of title to prosper, it is essential that the
plaintiff must have legal or equitable title to, or interest in, the property which is the subject matter of the action.
Legal title denotes registered ownership, while equitable means beneficial ownership. Equitable title is derived
through a valid contract or relation, and based on recognized equitable principles; the right in the party, to whom it
belongs, to have the legal title transferred to him. In this case, X has equitable title to the subject land because X’s
title to the subject land was derived through a contract of sale, as evidenced by the notarized Deed of Absolute
Sale.

Q: Is the notarized Deed of Absolute Sale constitutes constructive delivery?

A: YES. As a general rule, the execution of a public instrument shall be equivalent to the delivery of the thing, if
from the deed the contrary does not appear or cannot be clearly inferred. However, the execution of a public
instrument gives rise only to a prima facie presumption of delivery, which is negated by the failure of the vendee to
take actual possession of the land sold. In this case, the prima facie presumption of constructive delivery to X was
not negated because there was no failure on the part of X to take actual possession of the land. Jurisprudence
provides that the owner of property has possession, either when he himself is physically in occupation of the
property, or when the another person who recognizes his rights as owner is in such occupancy. In this case, X
exercised his possession of the subject land through Y whom he allowed to stay and care for the land in exchange
for the delivery of the produce thereof. The fact that Y delivered the produce of the land to X can only be construed
as his recognition of X’s ownership of the land. Therefore, X has an actual possession of the land. (Heirs of
Extremadura v. Manuel Extremadura, G.R. No. 211065, June 15, 2016)

Q: H and W, the parents of petitioner heirs, executed in favor of Bank a real estate mortgage (REM) over a
parcel of land as security for the payment of a loan. H and W defaulted in payment, causing the Bank to
extrajudicially foreclose the mortgaged property. H and W failed to redeem the property within the
redemption period. A TCT was issued in the name of Bank, and the latter then sold the property to Spouses
Y. The heirs filed a complaint for annulment of REM. They averred that H had already passed away prior to
the execution of the REM and only W signed the same without their consent, hence, the said mortgage was
null and void. They likewise asserted that Spouses Y were aware that they were in possession of the subject
property, hence, purchasers in bad faith. Was the Real Estate Mortgage void?

A: Yes. The REM is void with respect to the share of deceased H, but valid as to the share of W who signed the
same. Jurisprudence provides that while a co-owner had the right to mortgage or even sell his undivided interest in
the subject property, he could not, however, dispose of or mortgage the subject property in their entirety without the
consent of the other co-owners. The validity of the subject REM should be limited only to the portion which may be
Civil Law Digests
allotted to the co-owner who signed or consented in the event of partition. In this case, only W signed the real estate
mortgage. Therefore, the validity of the REM and the subsequent foreclosure proceedings should be limited only to
the undivided interest of W in the subject property, thereby making the Bank, as W’s successor-in-interest, a co-
owner of the property together with the heirs. Spouses Y as buyers merely stepped into the shoes of the Bank and
they shall only acquire what validly pertains to the Bank as successor-in-interest of W.

Q: Were Spouses Y purchasers in good faith?

A: No. Spouses Y are not purchasers in good faith. Jurisprudence provides that where the land sold is in the
possession of a person other than the vendor, the purchaser must go beyond the certificate of title and make
inquiries concerning the actual possessor. The failure of a prospective buyer to take such precautionary steps would
mean negligence on his part and would thereby preclude him from invoking the rights of a “purchaser in good faith.”
In this case, Spouses Y were aware that the subject property was in possession of the heirs when they bought the
same and they failed to exercise the diligence required in protecting their rights. Therefore, they are not purchasers
in good faith. (Magsano v. Pangasinan Savings and Loan Bank, Inc., G.R. No. 215038, October 17, 2016)

Q: X and her late husband Y borrowed the amount of ₱100,000.00 from X's sister, Z. As security for the
loan, X and Y mortgaged their property covered by a TCT which mortgage was annotated on the title. After
Y died, X ended up being unable to pay the loan, and as such, agreed to sell the subject land to Z for
₱150,000.00, or for the amount of the loan plus an additional ₱50,000.00. They executed a Deed of Sale and
a Release of Mortgage, and eventually, the TCT was cancelled and a new TCT was issued in the name of
"Z, married to A." Thereafter, Z constructed a three (3)-storey building worth ₱2,000,000.00 on the subject
land. Despite the foregoing, X refused to acknowledge the sale, pointing out that since Y died in 1989, his
signature in the Deed of Sale executed in 1992 was definitely forged. As such, X demanded from Z the
amounts of ₱150,000.00 representing the consideration for the sale of the subject land and ₱2,000,000.00
representing the construction cost of the three (3)-storey building, but to no avail. In this case, the
landowner (X) is different from the owner of the improvement built therein, i.e., the three (3)-storey building
(Z). How will the improvements be settled?

There is a need to determine whether X as landowner on the one hand, and Z on the other, are in good faith or bad
faith. The terms builder, planter, or sower in good faith as used in reference to Article 448 of the Civil Code, refers
to one who, not being the owner of the land, builds, plants, or sows on that land believing himself to be its owner
and unaware of the defect in his title or mode of acquisition.

In this case, it bears stressing that the execution of the Deed of Sale involving the subject land was done in 1992.
As such, Z knew all along that the aforesaid Deed of Sale - which contained a signature purportedly belonging to
Y, who died in 1989, or three (3) years prior to its execution - was void and would not have operated to transfer any
rights over the subject land to her name. Despite such awareness of the defect in their title to the subject land, Z
still proceeded in constructing a three (3)-storey building thereon. Indubitably, they should be deemed as builders
in bad faith.

On the other hand, Z knew of the defect in the execution of the Deed of Sale from the start, but nonetheless, still
acquiesced to the construction of the three (3)-storey building thereon. Hence, they should likewise be considered
as landowners in bad faith. According to Article 453 of the Civil Code, If there was bad faith, not only on the part of
the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the
rights of one and the other shall be the same as though both had acted in good faith. Thus, as both being in good
faith, the landowner has two options under Article 448: (1) he may appropriate the improvements for himself after
reimbursing the buyer (the builder in good faith) the necessary and useful expenses; or (2) he may sell the land to
the buyer, unless its value is considerably more than that of the improvements, in which case, the buyer shall pay
reasonable rent. (Delos Santos v. Abejon, G.R. No. 215820, March 20, 2017)

Q: X had two children, Y and Z. X owned a parcel of land, which she conveyed to her children. The heirs of
Y had since occupied the northern portion of the Motherland, while the heirs of Z occupied the southern
portion. The First Accretion adjoined the southern portion of the Motherland. An OCT was issued in the
name of heirs of Z, covering the First Accretion. Decades later, the Second Accretion, abutted the First
Accretion on its southern portion. An OCT was issued in the names of all the heirs of Z covering the Second
Accretion.
Civil Law Digests
Claiming rights over the entire Motherland, Heirs of Y, filed a Complaint for reconveyance, partition, and/or
damages against Heirs of Z. Likewise Heirs of Y alleged that through deceit, fraud, falsehood, and
misrepresentation that Heirs of Z, with respect to the First Accretion and the Second Accretion, had illegally
registered the said accretions in their names, notwithstanding the fact that they were not the riparian
owners. Heirs of Y explained that they did not assert their inheritance claims over the Motherland and the
two (2) accretions because they respected Heirs of Z’s rights, until they discovered that heirs of Z have
repudiated Heirs of Y’s shares thereon. Are the Heirs of Y correct in their allegations?

A: No. Article 457 of the Civil Code states the rule on accretion as follows: "to the owners of lands adjoining the
banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters."
Being the owner of the land adjoining the foreshore area, Heirs of Z is the riparian or littoral owner who has
preferential right to lease the foreshore area as provided under paragraph 32 of the Lands Administrative Order.

In this case, Heirs of Y are not the riparian owners of the Motherland to which the First Accretion had attached;
hence, they cannot assert ownership over the First Accretion. Consequently, as the Second Accretion had merely
attached to the First Accretion, they also have no right over the Second Accretion. Neither were they able to show
that they acquired these properties through prescription as it was ·not established that they were in possession of
any of them. (Heirs of Narvasa, Sr. v. Imbornal, G.R. No. 182908, August 6, 2014)

Q: Y is the owner of a certain parcel of land situated in Caloocan City and has been religiously paying the
real estate taxes therefor since its acquisition in 1974. He is a resident of California, USA, and during his
vacation in the Philippines, he discovered that a new certificate of title to the subject property was issued
by the RD in the name of X, by virtue of a falsified Deed of Absolute Sale dated 1978 purportedly executed
by him and his wife through agent Z by virtue of a falsified SPA. X, also, built a house on the subject land.
The SC ruled that the signature of Y was forged in the Deed of Absolute Sale. Did X build the house in bad
faith?

A: Yes. Jurisprudence provides that to be deemed a builder in good faith, it is essential that a person asserts title
to the land on which he builds, i.e., that he be a possessor in concept of owner, and that he be unaware that there
exists in his title or mode of acquisition any flaw which invalidates it. Good faith implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon inquiry.
X knew – or at the very least, should have known – from the very beginning that they were dealing with a person
who possibly had no authority to sell the subject property considering the palpable irregularity in the subject SPA’s
acknowledgment. Yet, relying solely on said document and without any further investigation on Z’s capacity to sell,
X still chose to proceed with its purchase and even built a house thereon. Based on the foregoing it cannot be
seriously doubted that X were actually aware of a flaw or defect in their title or mode of acquisition and have
consequently built the house on the subject property in bad faith under legal contemplation. (The Heirs of Sarili v.
Lagrosa, G.R. No. 193517, January 15, 2014)

SUCCESSION

Q: The decedent (A) left 4 children and a wife. That when the will was presented for probate, it was opposed
by B for the will was not executed and attested as required by law. That the will is alleged to be invalid
because of a discrepancy in the number of pages as the acknowledgement mentions 7 pages including the
ratification and acknowledgement when in fact it is made up of 8 pages. They argued that the formality is
governed by 805 and that 809 allows substantial compliance. Is the will valid because of substantial
compliance despite the discrepancy in the number of pages?

A: No
805 provides: The attestation shall state the number of pages used upon which the will is written.
809 allows substantial compliance of defects in the form of the attestation clause.

JBL Reyes which was cited in Caneda vs CA said:

The rule must be limited to disregarding those defects that can be supplied by an examination of the will itself:
whether all the pages are consecutively numbered; whether the signatures appear in each and every page; whether
the subscribing witnesses are three or the will was notarized. All these are facts that the will itself can reveal, and
defects or even omissions concerning them in the attestation clause can be safely disregarded. But the total
Civil Law Digests
number of pages, and whether all persons required to sign did so in the presence of each other must substantially
appear in the attestation clause, being the only check against perjury in the probate proceedings.

In this case, the will actually consists of 8 pages including its acknowledgment which discrepancy cannot be
explained by mere examination of the will itself but through the presentation of evidence aliunde. Thus, the will must
be denied for probate. (Lopez v. Lopez, G.R. No. 189984, November 12, 2012)

Q: A had 7 children, 2 by her first husband and 5 by her second husband. When A died, her second husband
and his 5 children executed an extrajudicial settlement (of the estate) with deed of absolute sale. They sold
a certain property from the estate in favor of Sps. B. When the 2 children by A’s first husband found out
about the sale, they filed a complaint for its annulment. Was the sale of the property belonging to the estate
is valid?

A: Sale was partially valid.

According to Sec. 1, Rule 74 of the Rules of Court, an extrajudicial settlement shall not be binding upon any person
who didn’t participate therein or had no notice thereof. In this case, the extrajudicial settlement could not bind the
heirs who didn’t participate in its execution. Hence, they could also not be bound by the sale.

However, the sale was still valid with respect to the shares of the heirs who participated in the extrajudicial
settlement with deed of absolute sale. The participating heirs could sell their individual shares because they became
owners thereof upon the decedent’s death. (Neri v. Heirs of Uy, G.R. No. 194366, October 10, 2012)

Q: A et al. and B were relatives of C. A et al. were collateral relatives while B was his lawful son. B, as C’s
sole heir, executed an affidavit of self-adjudication and transferred parcels of land owned by C in his name.
A et al. filed a complaint for cancellation of title and reconveyance with damages against B. They also
contested B’s filiation and heirship in the said complaint. Could filiation be attacked in a regular court
proceeding?

A: No. Jurisprudence says that determination of who are the legal heirs of the deceased must be made in the proper
special proceedings in court, and not in an ordinary suit for recovery of ownership and possession of property. The
exception is when separate special proceedings can be dispensed with for the sake of practicality. The Supreme
Court said this case did not fall into the exception. Hence, B’s heirship could not be contested in the ordinary civil
case filed by A et al. (Heirs of Ypon v. Ricaforte, G.R. No. 198680, July 8, 2013)

OBLIGATIONS AND CONTRACTS

Rescission

Q: Company A is the owner of 81 mining sites. It entered into an Operating Agreement (OA) with Company
B, granting the latter "full, exclusive and irrevocable possession, use, occupancy, and control over the
mining claims” for a period of 25 years. Later, Company A extra-judicially rescinded the OA, by invoking
its provisions, upon Company B’s failure to pay the stipulated royalties. Company B contested Company
A’s extra-judicial rescission of the OA averring therein that its obligation to pay royalties arises only when
the mining claims are placed in commercial production which condition has not yet taken place. Company
A did not respond and instead, it entered into a Memorandum of Agreement with Company C, whereby the
latter was granted the same rights as Company B to "enter, possess, occupy and control the mining claims"
for a period of 25 years. Is the extrajudicial rescission of the OA by Company A valid?

A: Yes. The right of rescission under Article 1191 is predicated on a breach of faith that violates the reciprocity
between parties to the contract.

As a general rule, the power to rescind an obligation must be invoked judicially and cannot be exercised solely on
a party’s own judgment that the other has committed a breach of the obligation. This is so because rescission of a
contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental violations
as would defeat the very object of the parties in making the agreement. As a well-established exception, however,
an injured party need not resort to court action in order to rescind a contract when the contract itself provides that
it may be revoked or cancelled upon violation of its terms and conditions. Given this, Company A’s unilateral
rescission of the OA due to Company’s B’s non-payment of royalties is valid based on the parties’ express stipulation
Civil Law Digests
in the OA that said agreement may be cancelled on such ground. (Golden Valley Exploration v. Pinkian Mining
Company, G.R. No. 190080, June 11, 2014).

Breach of contractual obligations

Q: In a Contract Manufacturing Agreement (CMA) between 2 groups, their pharmaceutical products should
be exclusively manufactured by Company A and the products will be sold, conveyed, and transferred to
Company B. Subsequently, Company C entered into a Deed of Sale/Assignment with Company B, wherein
the former agreed to transfer and assign all its rights over 28 pharmaceutical products in favor of the latter,
provided that the products will be manufactured by Company A, based on the existing CMA. A month prior
to the expiration of the CMA, Company A proposed a new manufacturing agreement which Company B
found unacceptable. Company B entered into a Contract to Manufacture Products with Company D, and
manufactured some of the products covered by the Deed of Sale/Assignment. A Complaint for Breach of
Contract, Damages, and Injunction was filed against Company B. Company B maintained that they did not
violate the stipulation in the Deed of Sale/Assignment regarding the continuous manufacture of the subject
pharmaceutical products by Company A because: (a) said stipulation did not confer to Company A the
exclusive right to manufacture the said products; (b) Company B's compliance with the stipulation became
impossible or difficult as Company A itself refused to enter into a new manufacturing agreement. Is
Company B liable for breach of its contractual obligations?

A: Yes. The Agreement and the Deed of Sale/Assignment explicitly provided that Company A had the right to
exclusively manufacture the subject 28 pharmaceutical products; thus, the act of Company B in contracting with
Company D to manufacture some of the said products constituted a clear violation of their contractual obligations
for which they are liable for damages. (S.V. More Pharma Corp. v. Drugmakers Laboratories, Inc., G.R. No. 200408
& 200416, November 12, 2014).|

Negligence – common carrier

Q: A boarded a bus bound for Manila. While the bus driver stopped the bus to check the tires, a man seated
at the fourth row of the bus stood up and shot A at his head, and then left with a companion. The bus
conductor notified the driver of the incident and thereafter, A was brought to the hospital but was
announced dead on arrival. The heirs of A then filed a complaint for damages based on a breach of contract
of carriage against the bus company for failure to observe extraordinary diligence in ensuring the safety of
passengers. Is the bus company liable for damages arising from culpa contractual?

A: No. The death was neither caused by any defect in the means of transport or in the method of transporting, or to
the negligent or willful acts of petitioner's employees in their capacities as driver and conductor. Instead, the case
involves a death wholly caused by the surreptitious act of a co-passenger who, after consummating such crime,
hurriedly alighted from the vehicle. Thus, there is no proper issue on petitioner's duty to observe extraordinary
diligence in ensuring the safety of the passengers transported by it, and the presumption of fault/negligence against
petitioner under Article 1756 in relation to Articles 1733 and 1755 of the Civil Code should not apply. (G.V. Florida
Transport, Inc. v. Heirs of Battung, Jr., G.R. No. 208802, October 14, 2015)

Void contracts

Q: A purchased a parcel of land from B, as evidenced by a notarized deed of sale. The former claimed that
since his total agricultural landholdings was below the retention limits under both PD 27 and Republic Act
No. 6647 (CARL) it should have been excluded from the coverage of the OLT program. Thus, he filed a
petition before the Provincial Agrarian Reform Office (PARO), for the cancellation of title based on
emancipation patent and to for the exemption from the government’s OLT program under PD 27. The
Municipal Agrarian Reform Officer (MARO) issued a report indicating that the property was erroneously
identified by the office as the property of A’s father. The property was never actually owned by A, as its
true owner was B who later sold the same to A. MARO recommended that the subject landholding be
exempted from the coverage of the OLT. The PARO adopted the recommendation and accordingly
cancelled respondent’s emancipation patent. Can the A seek exemption from OLT coverage and also the
cancellation of the emancipation patent?

A: NO. PD 27 prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 except
only in favor of the actual tenant tillers thereon. The sale by B to A is null and void. A cannot assert any right over
Civil Law Digests
the subject landholding, such as his present claim for landholding exemption, because his title springs from a null
and void source. A void contract is equivalent to nothing; it produces no civil effect; and it does not create, modify
or extinguish a juridical relation. Hence, notwithstanding the erroneous identification of the subject landholding by
the MARO as owned by A’s father, the fact remains that A had no right to file a petition for landholding exemption
since the sale of the said property to him by B in 1982 is null and void. (Borromeo v. Mina, G.R. No. 193747, June
5, 2013)

Fraud

Q: A was the registered owner of a lot in Cebu. A and her husband entered into an agreement with B for the
sale of the said lot. B learned that the lot had been sold to C, and that said lot was mortgaged to a bank. B
filed a complaint for annulment of certificate of title with damages against A, C and the bank. A claimed that
there was no perfected sale of the lot to B, and that C’s deeds of absolute sale were simulated and intended
to enable C to use the said lot as collateral for a loan with the bank. However, after receiving the loan
proceeds, C reneged on their agreement, leading to A to file a claim against C for damages and the
remaining payment for the lot. C denied knowledge of the transaction between A and B, claiming to have
validly paid for and acquired the lot from A. The bank asserted good faith, allegedly having no knowledge
of C’s defective title. Is C’s and A’s simulated sale fraudulent?

A: YES. Fraud comprises "anything calculated to deceive, including all acts, omissions, and concealment involving
a breach of legal duty or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by
which an undue and unconscientious advantage is taken of another." C’s and A’s deliberate simulation of the sale
intended to obtain loan proceeds from and to prejudice the bank clearly constitutes fraudulent conduct. (Philippine
Banking Corp. v. Dy, G.R. No. 183774, November 14, 2012)

Novation

Q: A purchase order was entered into by and between A, Corp. and B, Corp. (supplier). Subsequently, an
invoice receipt was then again signed by the parties’ representatives which included a title reservation
statement: “title to sold property is reserved in B, Corp. until full compliance of the terms and conditions
of above and payment of the price.” This stipulation was not included in the terms of the purchase order.
Given the subsequent inclusion of the title reservation statement, was the original contract novated?

A: No. Novation is never presumed, the animus novandi must appear: (1) by express agreement of the parties, or
(2) by their clear and unequivocal acts. The fact that the Invoice Receipt was signed by a representative of ACE
Foods does not, by itself, prove animus novandi since: (a) it was not shown that the agent was authorized by ACE
Foods to novate the original agreement; (b) the signature only proves that the Invoice Receipt was received by a
representative of ACE Foods to show the fact of delivery. (ACE Foods Inc. v. Micro Pacfic Technologies Co. Ltd.,
G.R. No. 200602, December 11, 2013).

Compensation

Q: X had outstanding loan obligations to both Bank A and Bank B. X and Bank B entered into a dacion en
pago whereby X ceded in favor of Bank B certain properties in consideration of: (a) the full and complete
satisfaction of X's loan obligations to Bank B, and (b) direct assumption by Bank B of X's obligations to
Bank A. Bank B then leased back the property to X, which was obliged to pay rentals to be shared by Bank
A and B. Bank B also entered into a separate agreement with Bank A whereby the Bank B confirmed its
assumptions of X's obligation to Bank A, and undertaking to remit up to 30% of rentals due from X to Bank
A, serving as payment of the assumed obligations. Meanwhile, Bank A conveyed its rights, including Bank
B's assumed obligations, to Bank C. Bank C then claims that the rentals have not been remitted despite
demands, so Bank C filed a collection case against Bank B. Bank B said that the obligations it assumed
were payable only out of the rental payments made by X, who has yet to pay the same, so Bank B's
obligation to Bank C has not yet arisen. The court ruled in favor of Bank C, and a writ of execution was
made, ordering Bank B to pay, but no order for X. In executing the judgment, however, it was found that
Bank B’s obligation only becomes demandable upon payment by X, so Bank C should return all funds
received by Bank C from Bank B. Bank C then filed a manifestation to apply legal compensation between
itself and Bank B to offset Bank B’s debts with the funds that Bank C has to return to Bank B. The trial court
denied the compensation since Bank B is not a debtor of Bank C, and that there is nether a demandable or
liquidated debt from Bank B to Bank C. Should there be legal compensation in this case?
Civil Law Digests

A: No. Compensation is defined as a mode of extinguishing obligations whereby two persons in their capacity as
principals are mutual debtors and creditors of each other with respect to equally liquidated and demandable
obligations to which no retention or controversy has been timely commenced and communicated by third parties.
The requisites of compensation are found in Art. 1279 of the Civil Code, which, when all are present, takes effect
by operation of law. In this case, legal compensation could not have taken place between these debts for the
apparent reason that requisites 3 and 4 under Article 1279 of the Civil Code are not present. Since Bank B’s debts
become due only upon payment of Company Y, and that Bank B’s obligations cannot be ascertained yet, it cannot
be said that it is already liquidated and demandable. If the lease rentals are not yet paid, there is nothing for Bank
B to pay, and Bank B should not be considered to be in default. (Union Bank of the Phils. v. Development bank of
the Phils., G.R. No. 191555, January 20, 2014)

Fortuitous event

Q: ABC, Corp. is engaged in the business of manufacturing steel, and through its officers obtained several
loans from W Bank. These loan transactions were covered by a promissory note pegged at 15.25% per
annum (p.a.), with penalty charge of 3% per month in case of default and separate letters of credit/trust
receipts with an interest rate of 14% p.a. and 1% penalty charge. By way of security, the ABC,
Corp. executed several Continuing Guaranty/Comprehensive Surety Agreements in favor of W Bank. ABC,
Corp. failed to settle its obligations, hence, W Bank sent them demand letters seeking payment of the total
amount of Php 51,064,093.62, but to no avail. Thus, W Bank filed a complaint for collection of sum of money
against ABC, Corp. ABC, Corp. offered their equipment for sale in order to apply the proceeds of the sale
to their outstanding obligations. However, since there were no takers, the equipment was reduced into ferro
scrap or scrap metal over the years. XYZ, Corp. expressed interest in buying the scrap metal. A MOA was
drawn between abc, Corp. under which XYZ, Corp obligated itself to purchase the scrap metal for a total
consideration of ₱34,000,000.00. Unfortunately, XYZ, Corp. reneged on all its obligations under the MOA.
ABC, Corp. asservated that their failure to pay their outstanding loan obligations to W Bank must be
considered as force majeure because XYZ’s default was beyond their control. Should XYZ’s default be
considered force majeure?

A: No. Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore, not
enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one
impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the
same. To constitute a fortuitous event, the following elements must concur: (a) the cause of the unforeseen and
unexpected occurrence or of the failure of the debtor to comply with obligations must be independent of human will;
(b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in
a normal manner; and (d) the obligor must be free from any participation in the aggravation of the injury or loss.
(Metro Concast Steel Corp v. Allied Bank Corp, G.R. No. 177921, December 4, 2013)

Payment

Q: A, as president of a corporation, applied for commercial letters of credit from a bank for the purchase of
certain products. The bank then issued Letters of Credit Nos. 89/0301 5 and DOM-33041. After A received
the goods, he executed for and in behalf of the corporation trust receipt agreements dated May 24, 1989
and August 31, 1989 in favor of the bank. The bank filed a complaint charging A for violation of P.D. No. 115
in relation to Article 315 (b) of the RPC for his purported failure to turn-over the goods or the proceeds from
the sale thereof despite repeated demands. The CA affirmed the RTC decision holding A civilly liable to the
bank and noted that A signed the "Guarantee Clause" of the trust receipt agreements in his personal
capacity and even waived the benefit of excussion against the corporation. As such, he is personally and
solidarily liable with the corporation. The issue is whether A is personally and solidarily liable with the
corporation for the obligations secured by the trust receipts?

A: NO. A is not liable for the Trust Receipt dated August 31, 1989 and L/C No. DOM- 33041 because it did not bear
the signature of A in the guarantee clause. A review of the records show that A signed only the guarantee clauses
of the Trust Receipt dated May 24, 1989 and the corresponding L/C No. 89/0301. With respect to the Trust Receipt
17 dated August 31, 1989 and L/C No. DOM-3304, the second pages of these documents that would have reflected
the guarantee clauses were missing and did not form part of the prosecution's formal offer of evidence. Hence, it
was error for the CA to hold A likewise liable for the obligation secured by the said trust receipt (L/C No. DOM-
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33041). Neither was sufficient evidence presented to prove that A acted in bad faith or with gross negligence as
regards the transaction that would have held him civilly liable for his actions in his capacity as President of the
corporation. (Crisologo v. People, G.R. No. 199481, December 3, 2012)

Contract of adhesion

Q: A and B entered into two agreements for the delivery of quantities of ready-mix concrete. A was able to
deliver the ready-mix concrete, however B refused to pay. B claims that it opted to suspend the payment
because the ready-mix concrete it received was substandard. The RTC ruled that B is not excused from
payment because according to the agreement between the two parties, any claim on the strength or quality
of the mixed concrete should have been made at the time of the delivery. B only raised the alleged defects
in the ready-mix concrete 48 days after the last delivery. The CA affirmed the RTC ruling. Is B still liable to
pay for the allegedly substandard ready-mix concrete?

A: Yes. A Contract of adhesion is one wherein one party imposes a ready-made form of contract on the other. It is
a contract whereby almost all of its provisions are made by one party. Contracts are of adhesion are not invalid per
se as they are binding as ordinary contracts. While the Court has struck down some contracts of adhesion as void,
it did so when the weaker party was subject to a “take it or leave it” situation---when the weaker party was deprived
of the opportunity to bargain on equal footing. Thus, the validity or enforceability of contracts of adhesion will have
to be determined based on the circumstances of each case. In this case, there is no proof that B was disadvantaged
in dealing with A. (Encarnacion Construction v. Phoenix Ready Mix, G.R. No. 225402, September 4, 2017)

Consignation

Q: B had been leasing A’s property pursuant to a lease agreement with A’s father, X. However, B stopped
paying monthly rentals after X died because it was uncertain as to whom payment should be made, as it
received separate demands from X’s heirs. B consigned the rental amounts with the RTC. A claimed that
the amount consigned by B was insufficient to cover unpaid rentals plus interests. A filed a suit for unlawful
detainer against B. Can A still eject B despite the latter’s compliance with its monthly obligation to pay
monthly rent through consignation?

A: Yes. At the time A filed the unlawful detainer suit, B was not updated in its monthly rental payments. A demanded
payment for the period of February 2007 to May 2011, but the amount consigned by B only covers the period of
February 2007 to March 2011. Thus, even assuming arguendo that B’s consignation of its monthly rentals was
made in accordance with law, it still failed to comply with its obligation under the lease contract to pay monthly
rentals. (Zaragoza v. Iloilo Santos Truckers, Inc., G.R. No. 224022, June 28, 2017)

Novation

Q: B filed a complaint against A, alleging that A owed her P2.1 million. A purportedly issued a check to
guarantee the payment of the debt, but it was dishonored upon presentment. B alleged that A refused to
pay despite repeated demands. A, on the other hand, sought the dismissal on the ground that it was her
deceased parents who owed B the money, hence, B should have participated in the estate proceedings. B
countered that A personally borrowed P1.4million while her deceased parents only borrowed P700,000.
RTC and CA ruled in favor of B, on the ground that novation took place and A was substituted as the debtor
as she assumed the liability of her deceased parents and agreeing to pay their debt in installments. Are the
RTC and CA correct in ruling that novation took place?

A: NO. While A admitted that she agreed to settle her late parents' debt, as evidenced by the check and several
installment payments she made, there was no allegation, much less any proof to show, that the estates of her
deceased parents were released from liability. To constitute novation by substitution of debtor, the former debtor
must be expressly released from the obligation and the third person or new debtor must assume the former's place
in the contractual relations. The mere fact that the creditor accepts payments from a third persons, who merely
assumed the obligation, will result merely in the addition of debtors, not novation. Novation is never presumed and
the animus novandi, totally or partially, must appear by express agreement or by the parties' acts that are too clear
to be mistaken. (Odiamar v. Valencia, G.R. No. 213582, June 28, 2016).
Civil Law Digests
Rescission – Breach of contract

Q: Company A owned 81 mining claims in Nueva Vizcaya. It then entered into an Operating Agreement (OA)
with Company B, granting the latter “full, exclusive, and irrevocable possession, use, occupancy, and
control over the mining claims…” for a period of 25 years. In a Letter addressed to B, A extra-judicially
rescinded the OA due to B’s non-payment of royalties considering their express stipulation in the OA that
said agreement may be cancelled on such ground. B contested A’s extra-judicial rescission of the OA,
averring that its obligation to pay royalties to A arises only when the mining claims are placed in
commercial production which condition has not yet taken place. A no longer responded to B’s letter.
Instead, it entered into a Memorandum of Agreement with C Company, whereby the latter was granted the
right to “enter, possess, occupy, and control the mining claims…” for a period of 25 years. Was there a
valid rescission of the OA?

A: Yes. In reciprocal obligations, either party may rescind the contract upon the other's substantial breach of the
obligation/s he had assumed thereunder. The basis therefor is Article 1191 of the Civil Code. As a general rule, the
power to rescind an obligation must be invoked judicially and cannot be exercised solely on a party's own judgment
that the other has committed a breach of the obligation. This is so because rescission of a contract will not be
permitted for a slight or casual breach, but only for such substantial and fundamental violations as would defeat the
very object of the parties in making the agreement. As a well-established exception, however, an injured party need
not resort to court action in order to rescind a contract when the contract itself provides that it may be revoked or
cancelled upon violation of its terms and conditions. By expressly stipulating in the OA that GVEI's non-payment of
royalties would give PMC sufficient cause to cancel or rescind the OA, the parties clearly had considered such
violation to be a substantial breach of their agreement. Thus, in view of the above-stated jurisprudence on the
matter, PMC's extra-judicial rescission of the OA based on the said ground was valid. (Golden Valley Exploration,
Inc. v. Pinkian Mining Co., G.R. No. 190080, June 11, 2014)

Suspensive Condition

Q: A applied for a position with Company B. After passing the interview and online examination, he was
offered a job by Company B which he accepted on June 8, 2011. In the letter of confirmation of offer, the
terms and conditions of his employment required background, bankruptcy checks, reference checks and
visas which if not satisfactory to Company B, Company B may choose not to employ him or to terminate
his employment, without any liability to pay compensation. He failed his background checks and on the
last day he was to report to Company B, or on July 11, 2011, he was handed a letter of retraction of offer
because of material inconsistencies in the information provided. Was there a perfected contract of
employment and was there an employer-employee relationship?

A: Yes there was a perfected contract of employment but there was no employer-employee relationship established.
There was a perfected contract when A signed Company B’s employment offer and agreed to the terms and
conditions which included the background and other checks. However, there was a suspensive condition to his
employment, that Company B would be satisfied with his background, bankruptcy and other checks all of which
partook of a suspensive condition. He failed these checks thus the suspensive condition of satisfactorily passing
these checks was not met, consequently the obligation to employ A did not come into effect. Because A failed the
suspensive condition of passing the background checks, no employer-employee relationship was established.
(Sagun v. ANZ Global Services and Operations (Manila), Inc., G.R. No. 220399 (Resolution), August 22, 2016)

Specific Performance

Q: A and B entered in a Joint Venture Agreement (JVA). Under the JVA, B who owned three parcels of land
in Tagaytay, agreed for A to construct 10 residential units. A undertook to construct the units at its own
expense, secure the building and development permits, and the license to sell. Out of the 10 units, 7 units
shall belong to A while the share of the remaining 3 units shall belong to B. A was allowed to sell B’s
allocated units under such terms as it may deem fit, subject to the condition that B conforms to the price
agreed upon. A entered into a Contact to Sell with C over one of B’s units. C was able to make full payment,
but A was unable to complete said unit inviolation of its contractual stipulation to finish the same within 12
months from the date of issuance of the building permit. C formally demanded the immediate completion
and delivery of to unit, to which A cited the 1997 financial crisis as the reason for delay. Accordingly. A
asked to be given until the early part of year 2000 to complete the same but still failed to do so. Given this,
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was the grant of the remedy of specific performance in C’s favor proper under the prevailing circumstances
of the case?

A: Yes. Article 1191 provides that the power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become impossible. Specific performance is defined as “the
remedy of requiring exact performance of a contract in the specific form in which it was made, or according to the
precise terms agreed upon.” It pertains to “the actual accomplishment of a contract by a party bound to fulfill it.” On
the other hand, rescission is defined as the “unmaking of a contract for a legally sufficient reason .” Rescission does
not merely terminate the contract and release the parties from further obligations to each other, but abrogates the
contract from its inception and restores the parties to their original positions as if no contract has been
made. (Buenviaje v Spouses Salonga, G.R. No. 216023, October 5, 2016)

Solutio Indebiti

Q: A opened a foreign currency savings account with the bank and deposited US$16,264.00 therein. A also
placed US$2,000.00 in a time deposit account. After the lapse of the thirty (30)-day clearing period, A
withdrew the amount of US$16,244.00 from the US savings account, leaving only US$20.00 for bank
charges. However, the bank received a notice from its correspondent bank, that the subject check was
dishonored due to "amount altered" which prompted the bank to inform A of such dishonor and to demand
reimbursement. The issue is whether the bank’s complaint for sum of money against A will prosper?

A: Yes. Records reveal that the bank's payment of the proceeds of the subject check was due to a mistaken notion
that such check was cleared, when in fact, it was dishonored due to an alteration in the amount indicated therein.
Such payment on the part of the bank to A was clearly made by mistake, giving rise to the quasi-contractual
obligation of solutio indebiti under Article 2154 in relation to Article 2163 of the Civil Code. (Bank of the Philippine
Islands v. Mendoza, G.R. No. 198799, March 20, 2017)

Interest

Q: A obtained a loan from B in the amount of Php100,000, payable from 6 months to 1 year, and subject to
interest at the rate of 10% per month. As security, a real estate mortgage, was constituted over a parcel of
land whose title belongs to A’s husband. A failed to pay the loan even after a demand letter (dated
November 2006), and claims that the mortgage was a loan and that the 10% interest is grossly
unconscionable. The RTC granted Judicial Foreclosure and directed A to pay Php100,000 plus 12% per
annum from December 2007 until full payment. The CA affirmed but modified the interest rate to be 12%
per annum from November 2006 (date of demand letter) until full payment. Did the CA err in awarding the
12% per annum interest rate on the principal obligation until payment?

A: No. Case law provides for 2 types of interest: monetary interest and compensatory interest. Monetary interest is
compensation fixed by the parties for the use or forbearance of money. On the other hand, compensatory interest
is that imposed by law or by the courts as the penalty or indemnity for damages. Thus, interest only arises by virtue
of contract or as damages for delay or failure to pay. Although parties are given the freedom to stipulate their
preferred interest rates, courts are allowed to tempter interest rates found to be excessive or unconscionable. Such
interest rate is nullified and deemed not to be part of the contract. In such instances, the legal rate of interest
prevailing at the time the agreement was entered into will be applied by the courts. In this case, the courts found
that the 10% per month interest rate is unconscionable. Therefore, the CA did not err in substituting the prevailing
interest rate of 12% per annum. (Isla v. Estorga, G.R. No. 233974, July 2, 2018)

Payment

Q: Bank B filed a complaint against Company A and its president. In 1996, Company A was granted financial
assistance by Bank C, which was then succeeded by Bank B. A obtained a loan and executed a promissory
note as a security. A's President also executed a Surety agreement covering all obligations undertaken.
Upon default, Bank C demanded payment, but A did not pay. A did not deny the genuineness and the due
execution of the documents and alleged that the documents by B were self-serving. During trial, A
presented Finance Officer X, who testified that A was able to partially pay its loan, but she does not know
how much has been paid. Given this, did A partially pay its obligation?
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A: NO. While A insisted that they had partially paid, the fact of such payment was not established. One who pleads
payment has the burden of proving it. When the creditor is in possession of the document of credit, proof of
nonpayment is not needed for it is presumed. Here, Bank B's possession of the Credit Agreement, the promissory
note, and the surety agreement, especially with their genuineness and due executed deemed admitted, cements
its claim that the obligation of A has not been extinguished. (Go Tong Electrical Supply Co., Inc. v. BPI Family
Savings Bank, Inc., G.R. No. 187487, June 29, 2015)

Solutio Indebiti

Q: A’s father obtained a loan from B in the amount of PHP160,000 with a stipulated monthly interest of 5%
secured by a real estate mortgage which he subsequently defaulted on. A Complaint for Judicial
Foreclosure of Real Estate Mortgage was filed and the RTC issued a decision ordering A’s father to pay B
PHP 229,200, and declared the interest to be excessive and reduced the same from 5% a month to 1%. Prior
to A’s father having notice of the decision, A agreed to pay B the same loan (which was pegged at
PHP689,000), and A paid the amount of PHP400,000 and issued a promissory note for PHP289,000. After
learning of the RTC decision that the interest was excessive, A refused to pay the amount covered by the
promissory note so B filed a complaint for sum of money and damages on the promissory Note. Was A
liable on the promissory note?

A: No, A is not liable on the promissory note and B should return the excess payment because the payment by A
was made by mistake, giving rise to the quasi-contractual obligation of solutio indebiti. (Marilag v. Martinez, G.R.
No. 201892, July 22, 2015)

Reimbursement

Q: A, a Dutch national, and B, a Filipina, married in March 29, 1980. After several years, the RTC of Negros
Oriental declared the nullity of their marriage on the basis of A’s psychological incapacity. Consequently,
A filed a Petition for Dissolution of Conjugal Partnership praying for the distribution of the properties
claimed to have been acquired during the subsistence of their marriage. B averred that except for the 2
residential houses, A and B did not acquire the conjugal properties during their marriage, the truth that she
used her own money and inheritance to purchase those properties. A contentested that although the
properties were registered in the name of B, these properties were acquired with the money he received
from the Dutch government as his disability benefit. Given this, can A obtain a claim for reimbursement of
the value of the purchased parcels of Philippine lad?

A: No. Reimbursement cannot be granted to an individual given that he acquired no right whatsoever over the
subject properties by virtue of its unconstitutional purchase. Under Article 1412 of the Civil Code, A cannot have
the subject properties deeded to him or allow him to recover the money he had spent for the purchase thereof. The
law will not aid either party to an illegal contract or agreement; it leaves the parties where it finds them. Indeed,
one cannot salvage any rights from an unconstitutional transaction knowingly entered into. (Beumer v. Amores,
G.R. No. 195670, December 3, 2012)

Principle of Quantum Meruit

Q: A entered into a JVA with B for the construction and development of a residential subdivision located in
Cabanatuan City. According to its term, A was to assume the horizontal development works in the
undeveloped portion of the project owned by B, and complete the same within 12 months upon signing.
Also, it was also agreed that A should initially use its own resources before it can start claiming additional
funds from B in relation to the JVA. A was able to undertake the development only for 2 months but ran out
of funds immediately so B took over the responsibility of funding the development. Since A was not able
to fulfill its obligations, it manifested its intention to back out from the JVA. B agreed to dissolve the JVA
and to pay A the amount of Php 3 million for the amount of work that it has done. However, B still failed to
pay so A instituted a complaint for rescission of the JVA and damages against B. B, in turn, argued that
since A was not able to fully comply with its obligation in completing the undeveloped portion of the project,
B will no longer pay for any amount. Is it proper for B to pay A the amount of Php 3 million despite the fact
that A failed to finish the undeveloped portion?
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A: Yes, B should still pay A for the reasonable amount that A has exerted in developing the property within the two
months of development. According to the principle of quantum meruit, a contractor is allowed to recover the
reasonable value of the thing or services rendered despite the lack of a written contract, in order to avoid unjust
enrichment. Quantum meruit means that, in an action for work and labor, payment shall be made in such amount
as the plaintiff reasonably deserves. The measure of recovery should relate to the reasonable value of the services
performed because the principle aims to prevent undue enrichment based on the equitable postulate that it is unjust
for a person to retain any benefit without paying for it. In this case, A has already done certain works in the
development of the property and to deny payment would amount to unjust enrichment in favor of B. Hence, B should
still pay A despite the fact that it was not able to fully develop the agreed property in relation to the JVA. (Rivelisa
Realty v. First Sta. Clara, G.R. No. 189618, January 15, 2014)

Legal Compensation

Q: A had an outstanding loan obligation to X and Y. A and Y entered into a dacion en pago wherein A ceded
in favor of the Y certain properties, including a processing plant in Bulacan, in consideration of the full
satisfaction of A’s loan obligations and Y’s direct assumption of A’s obligations to X. Y leased back the
property to A, which was in turn obliged to pay monthly rentals to X and Y. Y also entered into a separate
agreement with X whereby Y: (a) confirmed its assumption of A’s obligations to X; and (b) undertook to
remit up to 30% of any and all rentals due from A to X (subject rentals) which would serve as payment of
the assumed obligations, to be paid in monthly installments. Claiming that the subject rentals have not
been duly remitted, X filed a collection case against Y. In opposition, Y countered that the obligations it
assumed were payable only out of the rental payments made by A. Thus, since A had yet to pay the same,
Y’s obligation to Bank X has not arisen. Can Bank X claim for legal compensation?

A: No. Art. 1279 provides: In order that compensation may be proper, it is necessary: (1) That each one of the
obligors be bound principally, and that he be at the same time a principal creditor of the other; (2) That both debts
consist in a sum of money, or if the things due are consumable, they be of the same kind, and also of the same
quality if the latter has been stated; (3) That the two debts be due; (4) That they be liquidated and demandable; and
(5) That over neither of them there be any retention or controversy, commenced by third persons and communicated
in due time to the debtor. Legal compensation could not have taken place between the X’s obligation to return the
funds it previously received from Y and with Y’s assumed obligations since the latter is contingent on the prior
payment of A to Y, thus, both debts cannot be said to be due and demandable. (Union Bank of the Philippines v.
Development Bank of the Philippines, G.R. No. 191555, January 20, 2014)

Extinguishment - Fortuitous Event

Q: A Corporation obtained several loans from B Bank. These loan transactions were covered by a
promissory note and separate letters of credit/trust receipts. Later on, A failed to settle its obligations under
the aforementioned promissory notes, hence, B sent them demand letters seeking payment, but to no avail.
In order to settle its debts, A offered the sale of its remaining assets to B, which the latter refused. B then
advised A to sell the assets to others and apply the proceeds of the sale to its outstanding obligations.
However, since there were no takers, the assets were reduced into ferro scrap over the years. C Corporation
then expressed interest in buying the scrap metal. A Memorandum of Agreement (MOA) was drawn between
A and C, under which C obligated itself to purchase the scrap metal payable in installments. Unfortunately,
C reneged on all its obligations under the MOA. In this regard, A asseverated that their failure to pay their
outstanding loan obligations to B must be considered force majeure. Were the loan obligations incurred by
A extinguished by virtue of force majeure?

A: No. To constitute a fortuitous event, the following elements must concur: (a) the cause of the unforeseen and
unexpected occurrence or of the failure of the debtor to comply with obligations must be independent of human will;
(b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in
a normal manner; and, (d) the obligor must be free from any participation in the aggravation of the injury or loss.
While C’s breach of the MOA was unforeseen by A, the same is clearly not "impossible" to foresee or even an event
which is "independent of human will." Neither has it been shown that said occurrence rendered it impossible for A
to pay their loan obligations to B and thus, negates the former's force majeure theory altogether. The performance
or breach of the MOA bears no relation to the performance or breach of the subject loan transactions, they being
separate and distinct sources of obligation. The fact of the matter is that A’s loan obligations to B remain subsisting
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for the basic reason that the former has not been able to prove that the same had already been paid or, in any way,
extinguished. (Metro Concast Steel Corp. v. Allied Bank Corp., G.R. No. 177921, December 4, 2013)

Q: Company A entered into a sub-contracting agreement to supply transmission lines to a main contractor
for a project in Libya. Company A secured loans from a foreign and local bank which were guaranteed and
secured by letters of credit issued by Company B, a GOCC created to guarantee certain foreign loans. The
President of Company A had to execute Deeds of Undertaking in favor of Company B to pay it for any
damages or liabilities it may incur and also had to enter into several surety agreements with bonding
companies. Company A defaulted on its loans to the banks which then demanded payment from Company
B, Company B in turn made demand on the bonding companies before the expiration date of all the surety
bonds. A moratorium request was subsequently issued by the Minister of Finance of the Philippines asking
the members of the international banking community to grant Company B (and other government financing
institutions), a 90 day roll over from their foreign debts, extending the letters of guarantee, which the
bonding companies were not privy to. Were the bonding companies liable on their obligation under the
surety bond considering that a moratorium and restructuring agreement between Company B and the
banks had been entered into without the consent and participation of the bonding companies under Art.
2079 of the Civil Code?

A: Yes the bonding companies are still liable even with the moratorium given by the banks to Company B because
there were 2 sets of transactions: (1) the surety bonds concern Company A’s debt to Company B and not (2)
Company B’s debt to the banks. The payments extensions which concerned Company B’s debt to the banks and
not Company A’s debt to Company B, would not deprive the bonding companies of their right to pay their creditor
(Company B) and to be immediately subrogated to the latter’s remedies against the principal debtor (Company A)
upon the maturity date. The demand made on the bonding companies by Company B arose and had been duly
demanded by Company B within the coverage periods of all the surety bonds. (Trade and Investment Development
Corp. of the Phils. v. Asia Paces Corp., G.R. No. 187403, February 12, 2014)

Rescission

Q: A and B entered into a Contract to Sell where A agreed to sell his parcel of land to B in the amount of
Php33,155,000.00. The contract stipulated that B shall the downpayment of Php11,604,250 (inclusive of the
Php2,000,000 previously paid by B as reservation fee), and the remaining balance of Php 21,550,750.00
payable in 36 monthly installments, each in the amount of Php598,632 through post-dated checks. It also
stipulated that should B fail to pay A, the amounts already paid shall be forfeited in A’s favor, and A shall
be entitled to cancel the subject contract without judicial recourse in addition to the other appropriate legal
actions. A few months later, B sent a letter to A seeking to rescind the subject contract on the ground of
financial difficulties in complying with the same. B also sought the return of the amount of P12,202,882.00
paid to A. Given this, is A entitled to forfeiture of the amounts already paid upon the rescission of the
contract to sell?

A: No. Although in rescission of contracts they payment made by the person in breach can be forfeited in favor of
the injured party, however in the case at bar A failed to file their prayer for this specific relief before the RTC.

In reciprocal obligations, either party may rescind - or more appropriately, resolve - the contract upon the other
party's substantial breach of the obligation/s he had assumed thereunder. "More accurately referred to as resolution,
the right of rescission under Article 1191 is predicated on a breach of faith that violates the reciprocity between the
parties to the contract. This retaliatory remedy is given to the contracting party who suffers the injurious breach on
the premise that it is 'unjust that a party be held bound to fulfill his promises when the other violates his.'" Note that
the rescission (or resolution) of a contract will not be permitted for a slight or casual breach, but only for such
substantial and fundamental violations as would defeat the very object of the parties in making the agreement.
Ultimately, the question of whether a breach of contract is substantial depends upon the attending circumstances.
(Nolasco v Cuerpo, G.R. No. 210215, December 9, 2015)

Novation

Q: X filed a complaint for sum of money and damages against A, alleging that the latter owed her
P2,100,000.00. A sought the dismissal of the complaint on the ground that it was her deceased parents who
owed X money. X countered that A personally borrowed almost half of the P2,100,000.00 from her, as
evidenced by the check which she issued after agreeing to settle the same in installments. The RTC held
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that by assuming the liability of her deceased parents and agreeing to pay their debt in installments a mixed
novation took place and A was substituted in their place as debtor. The issue is whether a novation by
substitution took place?

A: No. While it is observed that A had indeed admitted that she agreed to settle her late parents' debt, there was
no allegation, much less any proof to show, that the estates of her deceased parents were released from liability
thereby. To constitute novation by substitution of debtor, the former debtor must be expressly released from the
obligation and the third person or new debtor must assume the former's place in the contractual relations. Moreover,
the Court ruled that the fact that the creditor accepts payments from a third person, who has assumed the obligation,
will result merely in the addition of debtors and not novation. (Odiamar v. Valencia, G.R. No. 213582, June 28,
2016)

Negligence and Joint Liability

Q: Company A owns a billboard structure in EDSA. This billboard’s structure was misaligned and impaired
when the adjacent billboard structure, crashed against it. This adjacent billboard was owned by Company
B, which was used by Company C. Company A sent demand letters to both Company B and C. Company B
refused to pay for damages, and it averred that the collapse of the billboard was due to strong winds.
Company B filed a third-party complaint against Company D, alleging that the latter built the structure with
weak and poor foundation. Company D denied liability, stating that there was already an existing foundation
for billboard, and that it merely finished such structure. Company C denied liability because it merely
contracted the use of the collapsed billboard -- it has no interest with Company A. Is Company B and
Company D jointly and severally liable for the damage cause to Company A?

A: Yes. Joint tortfeasors are each liable as principals, to the same extent and in the same manner as if they had
performed the wrongful act themselves. Negligence is defined as the omission to do something which a reasonable
man would do, or the doing of something which a reasonable man would not do. The Court has ruled that where
the concurrent or successive of two or more persons, although acting independently, are in combination the direct
and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each
contributed to the injury and either of them is responsible for the whole injury. In this case, Company B’s initial
construction of the billboard without proper foundation, and Company B’s finishing the upper structure, assuming
that Company B would be the one to reinforce the weak foundation, are the acts which lead to the damage sustained
by Company A. Worse, both Company B and D knew that the foundation was weak, but did nothing to remedy the
situation. (Ruks Konsult v. Adworld Sign, G.R. No. 204866, January 21, 2015)

Obligations arising from contracts

Q: A entered into a Trade Contract with B for the execution of architectural work of one of its condominium
projects, wherein A had the right to withhold 5% of the contract price as retention money. The contract also
provided that B is prohibited from assigning or transferring any of its rights, obligations, or liabilities under
the said contract without the written consent of A. When B incurred delays and failed to comply with the
terms of the contract, A took over and did some corrective work on the numerous defects caused by B, the
amount of which was deducted from the retention money. B informed A that the former had already
assigned its receivables to Y by virtue of a notarized Deed of Assignment, which amount was to be taken
from the retention money with A. Despite Y’s repeated requests, A refused to deliver the amount and
informed Y that nothing was left of its retention money with B from which Y’s claims may be satisfied. Is A
bound by the Deed of Assignment between B and Y?

A: No. Obligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith. The contract explicitly provides that B, as the Trade Contractor, cannot assign or transfer
any of its rights, obligations, or liabilities under the Trade Contract without the written consent of A. Y, as mere
assignee of B’s rights under the Trade Contract, is equally bound by the prohibition and hence, cannot validly
enforce the same without A’s consent. By virtue of the Deed of Assignment, the assignee is deemed subrogated to
the rights and obligations of the assignor and is bound by exactly the same conditions as those which bound the
assignor. (Fort Bonifacio Development Corp v. Fong, G.R. No. 209370, March 25, 2015)
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Breach of Contract

Q: A is the officer-in-charge of the Aircraft Hangar at Davao International Airport. A entered into a
Memorandum of Agreement with Captain B from Corporation X, wherein for a period of 4 years, and unless
pre-terminated by both parties with six months advance notice, A shall allow Captain B to use the aircraft
hangar space exclusively for company aircraft/helicopter. However, A found out that the hangar was being
used for trucks and equipments instead of aircraft/helicopter. Because of this, A sent a letter to Captain B
to immediately vacate the premises because of the misuse of the hangar. A also threatened Captain B for
immediate electrical disconnection so as to compel the immediate cessation of all works in the hangar. A
also took over the hangar after Captain B refused to vacate the premises by blocking the hangar space with
barbed wires and by disconnecting the electrical connection. With this, Corporation X filed a case for
breach of contract against A for terminating the contract without the requisite 6-month advance notice of
termination and also by blocking the hangar space. Should A be liable for breach of contract?

A: Yes, A is liable for breach of contract. A has illegally terminated the Memorandum of Agreement by blocking the
hangar space with barbed wires and by disconnecting the electrical connection. If it were true that Captain B was
violating the terms and conditions of the Memorandum of Agreement by using the hangar for trucks and equipments
rather than for aircraft/helicopter, A should have gone to the court to make Captain B and Corporation X to refrain
from its ‘illegal’ activities or seek rescission of the Memorandum of Agreement, rather than taking the law into his
own hands. Hence, A is liable for breach of contract. (Paz vs. New International Environmental Universality Inc.,
G.R. No. 203993, April 20, 2015)

SALES AND LEASE

Q: X and Spouses Y executed a Deed of Sale covering 2 parcels of land. On the face of the subject deed,
the sum of P400,000 appears as the consideration for X's purported purchase of the properties. Sometime
later, spouses Y delivered the owner’s copies of the TCT to X, but it is undisputed that none of the parties
were in actual physical possession of the land. When Spouses Y tried to recover the land from X, the latter
refused. Spouses Y claim that the Deed was absolutely simulated and thus null and void because: (1) there
was no actual consideration paid by X to them; (2) the Deed was executed because another party was
illegally selling the land; and (2) X simultaneously executed an undated Deed of Sale reconveying the
properties in their favor. X, for his part, maintained that he bought the land for the stipulated price and that
the Deed of Sale was not simulated. Is the sale absolutely simulated and thus null and void?

A: Yes. Under Art. 1346 of the Civil Code, “An absolutely simulated or fictitious contract is void. A relative simulation,
when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their agreement.” In the case at bar, there was actually no exchange
of money between the parties. A contract of purchase and sale is null and void and produces no effect whatsoever
where it appears that the same is without cause or consideration which should have been the motive thereof, or
the purchase price which appears thereon as paid but which in fact has never been paid by the purchaser
to the vendor (Tanchuling v. Cantela, G.R. No. 209284, November 10, 2015)

Q: Y purchased a car from Bank X in the amount of P1 million. In connection therewith, Y executed a
Promissory Note with Chattel Mortgage in favor of Bank X, and stipulated that Y will pay the amount in 36-
monthly installments. Y eventually defaulted on her installments, prompting Bank X to send her a demand
letter and file a complaint for Recovery of Possession with Replevin. Y, for her part, admitted that she
defaulted payment for the months of January and February but called Bank X’s officer who consented to a
delayed payment scheme. Y made payments in the amount of P103,000 in March but was surprised when
Bank X filed the instant complaint. Y contends that Bank X had already waived its right to recover any
unpaid installments when it sought for a writ of replevin in order to gain possession of the subject vehicle.
Is Y correct?

A: No. Article 1484 provides that in cases of a contract of sale of personal property the price of which is
payable in installments, “the vendor may exercise: (1) exact fulfillment of the obligation, should the vendee fail
to pay; (2) cancel the sale, should the vendee's failure to pay cover two or more installments; and (3) foreclose the
chattel mortgage on the thing sold if one has been constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of
the price. Any agreement to the contrary shall be void.” In the present case, there was no vendor-vendee
relationship between Bank X and Y as Y did not buy the car from Bank X but merely sought financing from the
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latter. Only a vendor may exercise the remedies provided for under Art. 1484 (Equitable Savings Bank v. Palces,
G.R. No. 214752, March 09, 2016).

Q: X and Y are heirs of Spouses W and Z. Spouses W and Z owned Lot 2 which was registered in W’s name.
The land was eventually subdivided as Lots 2-A, 2-B, and 2-C in 1984. Sometime later, X discovered that
Lot 2-C was sold in 1978 by virtue of a notarized Deed of Sale to Y in the amount of P150,000. The Deed did
not specify the metes and bounds of the lot being sold. This prompted X to file a a complaint for annulment
of title and reconveyance against X, alleging that the Deed of Sale was null and void because the signatures
of Spouses W and Z thereon were forgeries. The lower courts ruled that the Spouses Z could not have sold
a specific portion of Lot 2 to petitioners, having been subdivided only in 1984. Are the lower courts correct?

A: No. Article 1463 of the Civil Code expressly states that "[t]he sole owner of a thing may sell an undivided interest
therein." In the case at bar, Lot 2 , the original lot, was solely owned by W. As W was the sole owner of the original
Lot 2 from whence came Lot 2-C, he is therefore allowed by law to convey or sell an unspecified portion thereof
(Ampray & Ambray v. Tsourous, G.R. No. 209264, July 05, 2016).

Q: Sps. X and Y purportedly executed in favour of Bank A a Real Estate Mortgage over a land as security
of their loan. Sps. X and Y however defaulted, causing Bank A to extrajudicially foreclose the mortgaged
property, Bank A emerged as the highest bidder. Sps. X and Y failed to redeem the property. Bank A
subsequently sold the land to Sps.Z. Y subsequently filed a complaint for annulment of real estate
mortgage, certificate of sale, certificate of sale and the deed of sale , they claim that X had already passed
away prior to the execution of the real estate mortgage hence it is null and void, they were in continuous
possession of the property and that Sps. Z is a purchaser in bad faith. Is Y correct?

A: Yes. While the rule is that every person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the
condition of the property, where the land sold is in the possession of a person other than the vendor, as in this case,
the purchaser must go beyond the certificate of title and make inquiries concerning the actual possessor. Here, Y
was in possession of the subject property when Sps. Z bought the same However, records do not show that Sps.
Z inspected the property and inquired into the nature of petitioners' possession and/or the extent of their possessory
rights as a measure of precaution which may reasonably be required of a prudent man in a similar situation, and
thereby discover the irregularity in the acquisition of title by the respondent bank. Sps. Z, therefore, failed to exercise
the diligence required in protecting their rights; as such, the Court cannot ascribe good faith to them. (Norma C.
Magsano v. Pangasinan Savings & Loan Bank, G.R No. 215038, October 17,2016)

Q: X owned an undivided portion of a lot registered in the name of Y. On a strength of a contract to sell,
purporting to convey half of his share to Z, they were able to transfer their respective rights to Corporation
A. X, claiming that he did not sold his share to Z nor received any consideration of the said transfer, X
sought to annul the deed of sale. Z insisted that she paid X and took possession of X’ portion and declared
the same for taxation purposes. Corporation A, claimed to be a purchaser in good faith. The RTC declared
Corporation A to be a purchaser in bad faith in view of the admission of its representative that he was aware
of the fact that Domingo was part owner of the subject lot and that he even asked a someone to talk to X
about the sale of his share. Is the lower court correct?

A: Yes. Verily, one is considered a buyer in bad faith not only when he purchases real estate with knowledge of a
defect or lack of title in his seller but also when he has knowledge of facts which should have alerted him to conduct
further inquiry or investigation. Corporation A cannot veer away from the admission of its representative,that he was
aware of X’s interest in the subject lot, and that Z had no title in her name at the time of the sale, thus, giving rise
to the conclusion that it had been reasonably apprised of the ownership controversy over the subject lot. Indeed,
what it failed to realize is that, as one asserting the status of a buyer in good faith and for value, it had the burden
of proving such status, which goes beyond a mere invocation of the ordinary presumption of good faith. (Krystle
Realty Development Corp v. Alibin, G.R No. 196117, August 13, 2014)

X filed a complaint for Declaration for nullity of Sale, Reconveyance and damages involving the subject
land originally owned by Y. X alleged that they are grandchildren and successor-in-interest of Z. Y denied
respondents' allegations and countered that he was a buyer in good faith, for value, and was without any
knowledge or participation in the alleged defects of the title thereof; and were never in possession of the
subject land and they never paid real property taxes over the same. Ultimately,X claimed that he was duped
and swindled into buying the subject land twice. The lower courts ruled in favour of Y, declaring that the
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parties are not real parties to the instant case considering that they are mere grand children of Z. Are the
lower courts correct?

A: Yes. The rule on real parties in interest has two (2) requirements, namely: (a) to institute an action, the plaintiff
must be the real party in interest; and (b) the action must be prosecuted in the name of the real party in interest In
the instant case, respondents claim to be the successors-in-interest of the subject land just because they are Z's
grandchildren. Under the law, however, respondents will only be deemed to have a material interest over the subject
land- and the rest of Z's estate for that matter if they would have to show first that their mother: (a) predeceased Z;
(b) is incapacitated to inherit; or (c) was disinherited, if Z died testate. (Andy Ang v. Severino Pacunio; G.R. No.
208928, July 08,2015)

X entered into a Shelter Contract Award with respondent Y, with the following terms: (1) reimburse
petitioner the cost of the residential property in 180 equal monthly payments, (2) three-month grace period
to pay arrears in case of failure to remit three monthly reimbursements, (3) otherwise, the contract shall be
automatically cancelled and respondent shall vacate the premises.When Y failed to pay 25 monthly
reimbursements despite demands, X cancelled the contract and treated all the Y’s reimbursements as rental
payments. Is the Shelter Contract Award between the parties a contract to sell or has it been converted to
a contract of lease?

A: Yes. ”A contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly reserving
the ownership of the subject property despite delivery thereof to the prospective buyer, binds itself 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."The Shelter Contract Award falls within this definition, as it stipulates that upon full
reimbursement payment of the value of the house and lot, X shall execute a Deed of Transfer and shall cause the
transfer of title of the property to Y's name. Any reference to monthly reimbursements in the contract is just a guise
to hide what actually are instalments payments for the value of the house and lot. Despite its name having no
reference to contract to sell, the Shelter Contract Award is in fact a contract to sell. (Associated Marine Officers and
Seamen's Union of the Philippines vs Noriel Decena, G.R. No. 178584, October 8, 2012)

Q: X entered into a Contract to Sell with Spouses Y for the purchase of 2 parcels of land. The contract to
sell stipulated the purchase price of P300,000 and imposed upon X the obligation to pay real property taxes
or to reimburse Spouses Y for any tax payments made by them. No downpayment was given by X. However,
upon full payment of the P300,000, Spouses Y undertook to execute a final deed of sale in favor of X.
Meanwhile, X was given possession of the properties and was allowed to erect a house thereon. However,
before the payment period expired, X passed away. X’s heirs now filed a case for specific performance
against Spouses Y, contending that no downpayment was required of X, X was allowed to pay whenever
she could, and that as of X’s death, she had already paid for the lot in full. Spouses Y, on the other hand,
contend that X did not pay downpayment even if it was required of her, and that X was unable to pay for
the lot in full because of several restructuring agreements that increased the purchase price. Hence,
Spouses Y cannot be compelled to execute a deed of sale. Are the Spouses Y correct?

A: Yes. A contract to sell differs from a conditional contract of sale. A contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the vendor's obligation to transfer title is subordinated to the happening of
a future and uncertain event, so that if the suspensive condition does not take place, the parties would stand as if
the conditional obligation had never existed. In the case at bar, Spouses Y had no obligation to execute a deed of
sale as the amount paid by X was clearly insufficient to cover the principal amount. In a contract to sell, the fulfillment
of the suspensive condition will not automatically transfer ownership to the buyer although the property may have
been previously delivered to him. The prospective seller still has to convey title to the prospective buyer by entering
into a contract of absolute sale. On the other hand, in a conditional contract of sale, the fulfillment of the suspensive
condition renders the sale absolute and the previous delivery of the property has the effect of automatically
transferring the seller’s ownership or title to the property to the buyer (Ventura v. Spouses Endaya, G.R. No. 190016,
October 2, 2013).

Q: Company A is engaged in the trading and distribution of consumer goods in wholesale and retail bases
while Company B is engaged in the supply of computer hardware and equipment. Company B sent a letter-
proposal for the delivery and sale of products to be installed at Company A’s office. The proposal also
provided that payment must be made 30 days after delivery. After delivery, Company B’s demands for
payment went unheeded. Instead of paying for the purchase price, Company A stated that it had been
returning Company B’s products to the latter’s sales representative who had agreed to pull out the said
Civil Law Digests
products but had failed to do so. Company A lodged a complaint against the RTC to compel it to pull out
the subject products from its premises. Company B, on the other hand, contended that Company B refused
to pay the purchase price even after using the products for 9 months. Company B prayed that Company A
be compelled to pay the purchase price. Should Company B’s prayer be granted?

A: Yes. Article 1458 provides, “By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its
equivalent. A contract of sale may be absolute or conditional.” In contrast, a contract to sell is defined as a bilateral
contract whereby the prospective seller, while expressly reserving the ownership of the property despite delivery
thereof to the prospective buyer, binds himself to sell the property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon. In the case at bar, the parties have clearly agreed to a contract of sale and
not a contract to sell. Bearing in mind the consensual nature of contracts, a contract of sale had been perfected at
the precise moment Company A, as evinced by its act of sending Company B the Purchase Order, accepted the
latter’s proposal to sell the subject products in consideration of the purchase price. Hence, the former must pay the
latter the stipulated purchase price. Under Art. 1475, the contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the
parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.
(Ace Foods, Inc. v. Micro Pacific Technologies Co, Ltd., G.R. No. 200602, December 11, 2013).

Q: X is the owner of a parcel of land which he has been religiously paying the real taxes thereon. He is now
a resident of USA. During a vacation in the Philippines, he discovered that a new Certificate of Title was
issued to Y over the same parcel of land. Y maintains that they are innocent purchasers for value since
they relied on the SPA from a certain Z and in his capacity to execute a Deed of Absolute Sale. Is Y an
innocent purchaser for value, making the conveyance of property in his favor as valid?

A: No. As a general rule, every person dealing with registered land may safely rely on the correctness of the
Certificate of Title issued and the will no way oblige him to go beyond the certificate to determine the condition of
the property. However, a higher degree of prudence is required from one who buys from a person who is not a
registered owner, although the object of the transaction is registered. In this case, it is undisputed that Y purchased
the property from Z on the strength of the SPA. The said document, however, readily indicates flaws in its notarial
acknowledgement since Y’s community tax certificate was not indicated therein. Despite this irregularity, Y failed to
show that they conducted an investigation beyond the SPA and into the circumstances of its execution. Y is
therefore, an innocent purchaser for value. The strength of the buyer’s inquiry on the seller’s capacity or legal
authority to sell depends on the proof or capacity of the seller. If there is no SPA or if there is one but constitutes
flaws in its notarial acknowledgement, mere inspection of the documents is not enough. They buyer must show that
his investigation went beyond the document and into the circumstances of its execution. (Heirs of Sarili v. Lagrosa,
G.R. No. 193517, January 14, 2014)

Q: X bought a portion of an unregistered parcel of land from Y. A Deed of Conditional Sale was executed
wherein X was to pay an initial payment upon signing and the balance to be paid upon registration of the
portion of the parcel of land, as well as the segregation and concomitant issuance of a separate title over
the subject portion in his name. After which, a Deed of Absolute Sale shall be issued. After the deed’s
execution, X took possession and introduced improvements on the portion of the land. Y and Z executed a
Joint Affidavit, acknowledging that the subject portion belonged to X. Z, through a Deed of Absolute Sale
sold the entire lot to XX. XX then obtained a loan and used the land as mortgage. When he failed to pay the
loan, the parcel of land was extrajudicially foreclosed. X then filed a complaint for reconveyance. Is the
contract of Conditional Sale a contract of sale?

A: No, it is a CONTRACT TO SELL. Where the seller promises to execute a Deed of Absolute Sale upon completion
by the buyer of payment of the purchase price, the contract is only a contract to sell even If their agreement is
denominated as a Deed of Conditional Sale. In the case at bar, it was stated in the contract between X and Y that
a Deed of Absolute Sale will only be issued upon payment of X of the balance of the purchase price. A contract to
sell is 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 subject property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon. Ownership is retained by the vendor and is not
to pass to the vendee until full payment of the purchase price. (Roque v. Aguado, G.R. No. 193787, April 7, 2014)

Q: X obtained a loan from Lending Corporation A, which was secured by a real estate mortgage over a
parcel of land. X defaulted in the payment, prompting Lending Corporation A to extra-judicially foreclose
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the mortgage. Being the highest bidder in the auction, Lending Corporation A acquired the land and a
Certificate of Sale was registered with the Registry of Deeds. X failed to redeem the subject property within
the one-year reglementary period causing Lending Corporation A to demand X to vacate the property, but
to no avail. X is claiming that he still has one year to redeem the land pursuant to Republic Act 720,
otherwise known as the Rural Banks Act. Is X correct?

A: No. In an extra-judicial foreclosure of registered land, the mortgagor may redeem the property within 2 years
from the date of foreclosure if the land is mortgaged to a rural bank under Republic Act 720, or within 1 year from
the registration of the certificate of sale if the land is mortgage to parties other than rural banks pursuant to Act No.
3135. If the mortgagor fails to exercise such right, he or his heirs may still repurchase the property within 5 years
from the expiration of the aforementioned redemption period pursuant to Section 119 of the Public Land Act. In the
case at bar, the subject property was mortgaged and foreclosed by a lending institution, not a rural bank; hence,
the redemption period is only one year from the registration of the certificate of sale. Given that X failed to redeem
the subject property within the aforestated redemption period, Lending Corporation A is entitled, as a matter of right,
to consolidate its ownership and possess the same. Nonetheless, such right should not negate X’s right to
repurchase said property within 5 years from the expiration of the redemption period. (Spouses Guevarra v. The
Commoner Lending Corporation, Inc., G.R. No. 204672, February 18, 2015)

Q: X owned a parcel of land wherein she constructed a building and resided therein until her death. She
supposedly sold the subject property to her husband, her daughter Y, and the latter’s husband. A Certificate
of Title was issued in their names. Part of the building was being occupied by another daughter, Z. The
certificate was destroyed and a new Certificate of Title was issued, again in the names of three people.
When X died, she allegedly bequeathed, in a disputed last will and testament, half of the subject property
to Z and her granddaughters. An adverse claim was therefore instituted by Z and her granddaughters. Y
was appointed as administratix of the properties of X and subsequently, the adverse claim of Z was
cancelled. On the very same day, through a Deed of Sale, the subject property was sold to ZZ by Y, without
the knowledge of Z and her granddaughters. ZZ then filed for ejectment cases over those occupying the
property. However, Y’s appointment was revoked by the court and was transferred to Z. Z filed for
reconveyance and damages. Is ZZ a purchaser in good faith?

A: NO. A purchaser in good faith is one who buys the property of another without notice that some other person
has a right to, or an interest in, such property and pays a full and fair price for the same at the time of such purchase,
or before he has notice of some other person’s claim or interest in the property. When a piece of land is in the actual
possession of persons other than the seller, the buyer must be wary and should investigate the rights of those in
possession. Without making such inquiry, he cannot be considered a buyer in good faith. A want of caution and
diligence, which an honest man of ordinary prudence is accustomed to exercise in making purchases, is in
contemplation of law, a want in good faith. The buyer who has failed to know or discover that the land sold to him
Is in adverse possession of another is a buyer in good faith. In the case at bar, ZZ would have knowledge of the
existence of an annotation on the title covering the subject property and of the occupation thereof by individuals
other than the sellers which negates any presumption in good faith. A person who deliberately ignores a significant
fact which would create suspicions in an otherwise reasonable man is not an innocent purchaser for value. (Go v.
Estate of De Buenaventura, G.R. No. 211972, July 22, 2015)

LAND TITLES AND DEEDS

Q: X acquired a parcel of land from Y through a Waiver of Rights. Y, however, also executed a Deed of Sale
over the same land in favor of Z. Z later found out that the land subject of the Deed of Sale was not the land
he intended to buy, so he executed a letter stating that the lot referred to in the Deed of Sale belonged to
X. X, meanwhile, learned that spouses W were occupying said land and built structures thereon. The
spouses refused to leave despite X’s demand, prompting X to file an action for forcible entry against the
spouses. The spouses’ defense was that X was never in physical possession of the property, and that they
(W) had possession thereof. They further claimed that their possession should be tacked to that of Z, their
predecessor-in-interest, who Y previously allowed to cultivate the said land. Did X have actual physical
possession of the land?

A: Yes. The only question to be resolved in forcible entry or unlawful detainer cases is who between the parties is
entitled to the physical or material possession of the property in dispute. The main issue is possession de facto,
independently of any claim of ownership or possession de jure that either party may set up.
Civil Law Digests

Here, X had sufficiently proven prior possession de facto of the subject lot: she occasionally visited the subject lot
since she acquired the same from Y; she even paid the lot's realty taxes, as well as requested for a survey authority
thereon. She also submitted old photographs showing herself on the subject lot.
The law does not require a person to have his feet on every square meter of the ground before it can be said that
he is in possession thereof. It was held that “visiting the property on weekends and holidays is evidence of actual
or physical possession. The fact of her residence somewhere else, by itself, does not result in loss of possession
of the subject property.” Hence, there is no doubt that respondent had prior de facto possession.

With regard to W’s argument that their possession should be tacked to that of Z, the Court ruled that tacking of
possession only applies to possession de jure, or that possession which has for its purpose the claim of
ownership. Here, tacking is not applicable as the sole issue in forcible entry cases is possession de facto and not
possession de jure. (Spouses Fahrenbach v. Pangilinan, G.R. No. 224549, August 7, 2017)

Q: Spouses X filed an action for annulment of sale and cancellation of titles against Y. Spouses X alleged
that in 1979, Y forged a deed of sale, transferring in his favor land belonging to Spouses X. Y, denied this
allegation, claiming that he was the lawful owner of the land in question, which he acquired from Spouses
X through a deed of sale executed by the latter in his favor in 1991. The lower courts held that the 1991
deed of sale was valid, and that the 1979 deed was spurious. The land was therefore validly conveyed to Y
through the 1991 deed. It was observed, however, that the 1991 deed was improperly notarized: it was
signed by Y in Makati, by Spouses X in the United States, and was notarized in Cavite. This defect rendered
the instrument unregistrable. Thus, Spouses X were ordered to execute a registrable deed of sale in favor
of Y. Was the 1991 deed of sale valid?

A: Yes, the 1991 deed is valid. Spouses X were unable to rebut the validity of the 1991 deed of sale. Forgery cannot
be presumed and must be proved by clear, positive, and convincing evidence, and the burden of proof lies on the
party alleging forgery to establish his case by a preponderance of evidence. Moreover, the lower courts’ finding of
facts cannot be looked into by the Supreme Court, absent any of the recognized exceptions.

Q: Was it proper to order the execution of a registrable deed of sale?

A: Yes, it was proper to order the execution of a registrable deed of sale. Here, the deed of sale was improperly
notarized, having been signed by Y in Makati City and by Spouses X in the USA, but notarized in Cavite, which is
in violation of the notarial officer's duty to demand that the party acknowledging a document must appear before
him, sign the document in his presence, and affirm the contents and truth of what are stated therein.

The improper notarization of the 1991 deed of sale stripped it of its public character and reduced it to a private
instrument. Although this did not affect the validity of the sale of the subject properties, it rendered the said deed
unregistrable, since notarization is essential to the registrability of deeds and conveyances.

The sale of real property must appear in a public instrument, but this is merely a coercive means granted to the
contracting parties to enable them to reciprocally compel the observance of the prescribed form, and considering
that the existence of the sale of the subject properties in respondent's favor had been duly established, Spouses X
were properly directed to execute a registrable deed of conveyance. (Spouses Aguinaldo v. Torres, Jr., G.R. No.
225808, September 11, 2017)

Q: X filed an action for quieting of title and reconveyance against his brother, Y. X claimed that he bought
a parcel of land from his aunt, which he later entrusted to Y. When X demanded Y to vacate the land, Y
refused and claimed that he had been in open, continuous, peaceful, adverse, and uninterrupted
possession of the land for almost 50 years. Thus, X’s action was allegedly barred. The appellate court found
that X failed to establish legal and equitable title over the subject land, observing that the notarized deed
of sale executed in X’s favor did not transfer the land's ownership to him given that he was never placed in
possession and control thereof. Should the action for quieting of title be granted?

A: Yes. For an action to quiet title to prosper, two indispensable requisites must concur, namely:
(1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of
the action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
Civil Law Digests

Plaintiff must have legal or equitable title to the property. Legal title denotes registered ownership, while equitable
title means beneficial ownership.

Equitable title refers to title derived through a valid contract or relation, and based on recognized equitable
principles; the right in the party, to whom it belongs, to have the legal title transferred to him. To have equitable title,
one must show that the party from whom he derives his right had himself a right to transfer.

Here, X’s title to the land was derived through a notarized contract of sale, whereby the previous owners transferred
the land to X. It was established in trial that the previous owners had the right to transfer the land by virtue of their
ownership.

With regard to the argument that X never took actual possession of the property, the Court noted that it is not
necessary that the owner of a parcel of land should himself occupy the property as someone in his name
may perform the act. The owner of property has possession, either when he himself is physical occupation, or when
another person who recognizes his rights as owner is in such occupancy. Here, X exercised his right of possession
through Y, who impliedly recognized X’s ownership by regularly giving him the produce from the land.

Moreover, X regularly paid realty taxes on the land. While tax declarations or realty tax payments of property are
not conclusive evidence of ownership, they are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property that is not in his actual or constructive possession. It is
proof that the holder has a claim of title over the property. Such an act strengthens one's bona fide claim of
acquisition of ownership.

Here, X was able to prove his title over the subject land through the execution of the Deed of Absolute Sale in his
favor and through his exercise of the rights and obligations of ownership. (Heirs of Extremadura v. Extremadura,
G.R. No. 211065, June 15, 2016)

Q: X is the registered owner of a parcel of land. He authorized Y to sell said property, who, in turn, delegated
his authority to Z. Z entered into a Memorandum of Agreement with A Corp, for the sale of the land.
According to the terms of the MOA, A would deposit the purchase price in escrow and such funds will only
be released after Z submits certain documents to A. The parties agreed that if A fails to make the escrow
deposits, the MOA will be deemed null and void. A had the MOA annotated on the certificate of title covering
the lands. Later, X filed a petition to cancel the entries on the ground that it was improperly notarized.
Moreover he claimed that the purpose for which the annotation was made no longer exists, since A did
nothing to enforce the MOA. The RTC cancelled the entries based on Section 70 of P.D. 1529, holding that
adverse claims are effective for 30 days and may be cancelled after such period, upon filling of a verified
petition. The RTC also held that the MOA no longer had force and effect, considering that A failed to make
the escrow deposits. The CA upheld the RTC. Is the annotation of the MOA an adverse claim?

A: No. An adverse claim is an involuntary dealing designed to protect the interest of a person over a piece of real
property by apprising third persons that there is a controversy over the ownership of the land. It seeks to preserve
and protect the right of the adverse claimant during the pendency of the controversy, where registration of such
interest or right is not otherwise provided for by the Property Registration Decree. It serves as a notice to
third persons that any transaction regarding the disputed land is subject to the outcome of the dispute.

Before a notice of adverse claim is registered, it must be shown that there is no other provision in law for the
registration of the claimant's alleged right in the property.

Here, the MOA was in the nature of a conditional sale where A’'s payment is subject to the submission of certain
documents by Z. In a conditional sale, ownership is transferred after the full payment of the installments of the
purchase price or the fulfillment of the condition and the execution of a definite or absolute deed of sale. The efficacy
or obligatory force of the vendor's obligation to transfer title in a conditional sale is subordinated to the happening
of a condition, such that if the condition does not take place, the parties would stand as if the conditional obligation
had never existed.

Thus, the MOA is essentially a dealing affecting less than the ownership of the subject property that is governed
by Section 54 of PD 1529, which requires that such dealings must be registered through a brief memorandum on
the certificate of title.
Civil Law Digests

Moreover, a conditional sale is a voluntary instrument. The rule is that voluntary instruments are registered by
presenting the owner's duplicate copy of the title for annotation, pursuant to Sections 51 to 53 of PD 1529. The
reason for requiring the production of the owner's duplicate certificate in the registration of a voluntary instrument
is that, being a willful act of the registered owner, it is to be presumed that he is interested in registering the
instrument and would willingly surrender, present or produce his duplicate certificate of title to the Register of Deeds
in order to accomplish such registration. The exception to this rule is when the registered owner refuses or fails to
surrender his duplicate copy of the title, in which case the claimant may file with the Register of Deeds a statement
setting forth his adverse claim.

Here, there is no proof that X refused to present the certificate of title, which would have justified Carmona in seeking
the annotation of an adverse claim on X’s title. Thus, the general rule holds that the MOA, a voluntary instrument,
must be registered as such and not as an adverse claim.

Q: Should the annotation be cancelled?

A: Considering the above discussion, the lower courts were incorrect in treating the annotation as an adverse claim
and cancelling such on the basis of Section 70 of P.D. 1529. (Logarta v. Mangahis, G.R. No. 213568, July 5, 2016)

Q: Spouses X executed a real estate mortgage over their land to secure a loan from Bank A. The spouses
defaulted, prompting the bank to foreclose on the mortgaged property. The land was sold to the bank as
the highest bidder, which later consolidated title in its name after the lapse of the redemption period. The
bank then sold the property to the Spouses Y. Despite repeated demands, Spouses X refused to vacate the
property, so the bank prayed for and was granted a writ of possession and a writ of demolition, resulting
in the demolition of the spouses’ house on the property. Later, the children of Spouses X filed an action to
annul the real estate mortgage. They averred their father had already passed away at the time the mortgage
was executed, and thus it was null and void and could not have conferred any right in favor of the bank,
and later in favor of the Spouses Y. It was also alleged that Spouses Y knew that the children of Spouses
X were in possession of the land, and thus the Spouses Y were purchasers in bad faith. The lower courts
held that the Spouses Y were purchasers in good faith. Is the real estate mortgage void?

A: Yes. The mortgage is void to the extent of the share of the husband (in Spouses X) in the property. When the
real estate mortgage was executed, the husband was already deceased. Thus at that point, the wife could only
mortgage her share in the co-ownership arising from the death of her husband. She could not, however, mortgage
or otherwise dispose of the same in its entirety without the consent of the other co-owners. Consequently, the
validity of the mortgage and the subsequent foreclosure in favor of the bank should be limited only to the portion
which may be allotted to it, as Susana's successor-in-interest, in the event of partition, thereby making it a co-owner
with petitioners pending partition.

The Court found that the bank was a mortgagee in bad faith for having failed to exercise greater care and due
diligence in verifying the ownership of the subject property. It failed to note that when the mortgage was
executed, the husband (Spouses X) was already dead, and thus the wife could not by herself mortgage the whole
co-owned estate.

Q: Were Spouses Y purchasers in good faith?

A: No, Spouses Y were not innocent purchasers for value who can acquire title to the subject entire property.

Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor
and the law will in no way oblige him to go beyond the certificate to determine the condition of the property. However,
where the land sold is in the possession of a person other than the vendor, as in this case, the purchaser
must go beyond the certificate of title and make inquiries concerning the actual possessor.

Here, Spouses X were in possession of the subject property when Spouses Y bought it. However, records do not
show that Spouses Y inspected the property and inquired into the nature of petitioners' possession and/or the extent
of their possessory rights as a measure of precaution which may reasonably be required of a prudent man in a
similar situation, and thereby discover the irregularity in the acquisition of title by the bank. Spouses Y, therefore,
failed to exercise the diligence required in protecting their rights.
Civil Law Digests
Furthermore, the claim of being an innocent purchaser for value is a matter of defense. One asserts the status
of a purchaser in good faith and for value has the burden of proving the same, and this onus probandi cannot be
discharged by mere invocation of the legal presumption of good faith, i.e., that everyone is presumed to act
in good faith. (Magsano v. Pangasinan Savings and Loan Bank, Inc., G.R. No. 215038, October 17, 2016)

Q: X et al. are the registered co-owners of an undivided parcel of land. During his lifetime, X sold portions
thereof to various persons, among others, to Y. By virtue of a court decision, X was ordered to surrender
the owner’s duplicate copy of the title which was given to Z (Y’s wife) in 2009. In 2013, X's heirs filed a
complaint against Z seeking the surrender of the subject owner's duplicate title with damages and claimed
that they are entitled to the possession thereof as the registered owners. Z avers that they should be
allowed to retain possession of said title until the completion of the requirements (e.g., causing the survey
of the land, etc) for the legitimate purpose of registering the sales in their favor and the issuance of titles
in their names. The said title was eventually submitted to the ROD that same year. The trial court granted
the petition and ordered Z and/or the ROD to deliver or surrender possession of the subject owner's
duplicate title to X's Heirs, considering the long period of time that had lapsed for the annotation of the
buyers' deeds of sale. Should the subject owner’s duplicate title be surrendered/delivered to X’s heirs?

A: Yes. The applicable provision of law is Sec. 58 of PD1529 which provides that if a deed or conveyance is only
for a part of the land described in a certificate of title, the ROD shall not enter any transfer certificate to the grantee
until a plan of such land showing all the portions or lots into which it has been subdivided and the corresponding
technical descriptions shall have been verified and approved. Meanwhile, such deed may only be annotated by way
of memorandum upon the grantor's certificate of title, the original and duplicate. Pending approval of said plan, no
further registration or annotation of any subsequent deed or other voluntary instrument involving the unsegregated
portion conveyed shall be effected by the ROD. In this relation, Section 53 requires the presentation of the owner's
duplicate title for the annotation of deeds of sale.

Here, there is no showing that all the affected buyers have already complied with the necessary registration
requirements. Notably, from the time Z received possession of the subject owner's duplicate title in 2009, a
considerable amount of time had passed until she submitted the same to the ROD in 2013. Even up to the time she
filed the instant petition in 2016, she failed to show any sufficient justification for the continued failure of the
concerned buyers to comply with the requirements for the registration of their respective deeds of sale and the
issuance of certificates of title in their names to warrant a preferential right to the possession of the subject owner's
duplicate title as against X's heirs who undisputedly own the bigger portion of the subject land.

Moreover, it bears to stress that the function of a Register of Deeds with reference to the registration of deeds is
only ministerial in nature.Thus, the ROD cannot be expected to retain possession of the subject owner's duplicate
title longer than what is reasonable to perform its duty. In the absence of a verified and approved subdivision plan
and technical description duly submitted for registration it must return the same to the presenter, in this case, Z
who, as aforesaid, failed to establish a better right to the possession of the said owner's duplicate title as against
X’s heirs. (Geñorga v. Heirs of Meliton, G.R. No. 224515, July 3, 2017)

Q: B had 4 children--X,Y,Z (sisters) and P. During her lifetime, B owned a parcel of land (Property 123) which
she conveyed to the sisters in 1920. Meanwhile, C (Z's husband) applied for and was granted a homestead
patent over a riparian land and was issued an OCT in his name which was later replaced by a TCT in the
name of his heirs. Since then, he and his heirs occupied the northern portion of such land while P’s heirs
occupied the southern portion. In 1949, the first accretion adjoined the southern portion of the riparian land
and later an OCT was issued in the name of V (heir of P) covering said accretion. In 1971, the second
accretion adjoined the first accretion on its southern portion and an OCT was issued in the names of all of
P’s heirs covering the second accretion.

Later, the heirs of X and Y (petitioner-heirs), claiming rights over the entire riparian land, filed a complaint
for reconveyance, partition, and/or damages against P’s heirs (respondent-heirs). They allege that C agreed
that once his homestead patent is approved, he will be deemed to be holding the riparian lot in trust for the
sisters, in return for X and Y agreeing to sell Property 123 so C could use the proceeds thereof to fund his
patent application. Trial court ruled in favor of petitioner-heirs and found that an implied trust existed
between C and the sisters with respect to the riparian land. Was there an implied trust between the sisters
and C over the riparian lot?
Civil Law Digests
A: No. While implied trusts may be proven by oral evidence, the evidence must be trustworthy and received by the
courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations. Here, it
cannot be said, merely on the basis of the oral evidence that the riparian lot had been either mistakenly or
fraudulently registered in favor of C. Accordingly, it cannot be said either that he was merely a trustee of an implied
trust holding the riparian lot for the benefit of the Imbornal sisters or their heirs.

A homestead patent award requires proof that the applicant meets the stringent conditions set forth under C.A. 141,
which includes actual possession, cultivation, and improvement of the homestead. It must be presumed, therefore,
that C underwent the rigid process and duly satisfied the strict conditions necessary for the grant of his homestead
patent application. As such, it is highly implausible that the riparian land had been acquired and registered by
mistake or through fraud as would create an implied trust between the Imbornal sisters and C.

Hence, when the OCT covering the riparian land was issued in C’s name pursuant to a homestead patent, C’s title
to the riparian land had become indefeasible. It bears to stress that the proceedings for land registration that led to
the issuance of the subject homestead patent and eventually, the title in C’s name are presumptively regular and
proper, which presumption has not been overcome by the evidence presented by petitioner-heirs. Consequently,
as petitioner-heirs failed to prove their ownership rights over the riparian lot or that they acquired these properties
through prescription, their cause of action with respect to the first accretion and, necessarily, the second accretion,
must likewise fail. (Heirs of Narvasa v. Imbornal, G.R. No. 182908, August 6, 2014)

Q: D owned an undivided 1/2 portion of a lot registered in his name and that of M under an OCT. This OCT
was cancelled on the strength of a contract to sell and a Deed of Absolute Sale dated Aug. 23, 1962
(purporting to convey D's share of the lot to C, M's sister) and another Deed of Absolute Sale dated Dec. 5,
1994 (purporting to transfer M and C's respective rights to the lot in favor of Corp K). In lieu thereof, 3 TCTs
were issued on the same day of Dec. 5, 1994: 2 TCTs in the names of the M and C at 1/2 share each, and
another TCT in the name of Corp K covering the entire lot. Claiming that he had not sold his share to C nor
received any consideration for the alleged transfer, and that the signature on the Deed of Sale was not his,
D sought to annul the said deed, as well as the 3 TCTs.

RTC dismissed the case based on the finding by the NBI that the signature was not forged. CA set aside
and remanded the case. After due trial, the RTC annulled the Deed of Sale of Aug. 23 declaring the heirs of
D as the rightful owners of 1/2 undivided portion and Corp K as to the remaining 1/2. RTC conducted its
own independent examination and found that D's signature was indeed forged. It also declared Corp K to
be a purchaser in bad faith in view of the admission of its representative W that he was aware of the fact
that D was part owner of the subject lot and that he even asked a certain R to talk to D about the sale of his
1/2 share. CA affirmed the RTC ruling. Should the Deed of Sale (Aug 23, 1962) be annulled and Corp K
declared a purchaser in bad faith?

A: Yes. There being no cogent reason to deviate from the finding of forgery by the CA which is the basis for the
annulment of the said deed, the same should be deemed conclusive and binding upon the Court. Corp K cannot
claim that it is a buyer in good faith considering the admission of its representative that he was aware of D’s interest
in the subject lot, and that C had no title in her name at the time of the sale, thus, giving rise to the conclusion that
it (Corp K) had been reasonably apprised of the ownership controversy over the subject lot. This notwithstanding,
records show that Corp K proceeded with the transaction without further examining the seller’s title.

Verily, one is considered a buyer in bad faith not only when he purchases real estate with knowledge of a defect or
lack of title in his seller but also when he has knowledge of facts which should have alerted him to conduct further
inquiry or investigation, as Corp K in this case. Further, the irregularities attending the issuance of the 3 TCTs are
equally indicative of lack of good faith on Corp K’s part. Indeed, what it failed to realize is that, as one asserting the
status of a buyer in good faith and for value, it had the burden of proving such status, which goes beyond a mere
invocation of the ordinary presumption of good faith. (Corp K Development Corp v. Alibin, G.R. Nos. 196117 & G.R.
No. 196129, August 13, 2014)

Q: Sps. X obtained a loan from Corp A, secured by a real estate mortgage over a parcel of land (subject
property) covered by an OCT emanating from a free patent granted to the Spouses in 1986. Corp A extra-
judicially foreclosed the mortgage upon the Spouses' default, emerged as the highest bidder at the auction,
and had registered the certificate of sale with the ROD on Aug. 25, 2000. The Spouses failed to redeem the
subject property within 1 year hence the OCT was cancelled and a TCT issued in the name of Corp A. Later,
Corp A applied for a writ of possession before the RTC and the sheriff issued a Final Deed of Sale.
Civil Law Digests
Maintaining that they were entitled to redeem the property within 5 years from the expiration of the 1-year
redemption period (or on Aug. 25, 2006) under C.A. 141, the Spouses filed a petition for redemption on Sept.
5, 2005. RTC granted Corp A's petition and issued the corresponding writ of possession and also granted
the Spouses' petition recognizing the Spouses' right to repurchase the property. RTC thus directed Corp A
to reconvey the property to the Spouses upon payment of the purchase price of P150,000 (bid amount at
the foreclosure sale) plus interests. CA affirmed the RTC ruling but held that since the redemption period
had already expired, the purchase price to be paid by the Spouses should be that fixed by Corp A as the
present owner. What is the proper amount of the repurchase price of foreclosed property covered by a free
patent when the mortgagee is a lending or credit institution?

A: First, Sps. X's right to repurchase the subject property had not yet expired. In an extra-judicial foreclosure of
registered land under a free patent, the mortgagor may redeem the property within 1 year from the registration of
the certificate of sale if the land is mortgaged to parties other than rural banks, pursuant to Act No. 3135. If the
mortgagor fails to exercise such right, he or his heirs may still repurchase the property within 5 years from the
expiration of the aforementioned redemption period pursuant to Sec. 119 of the CA 141. In this case, the subject
property was mortgaged to and foreclosed by Corp A, which is a lending or credit institution (not a rural bank);
hence, the redemption period is 1 year from the registration of the certificate of sale on Aug. 25, 2000, or until Aug.
25, 2001. Given that Sps. X failed to redeem the subject property within the aforestated redemption period, Corp A
was entitled, as a matter of right, to consolidate its ownership and to possess the same. Nonetheless, such right
should not negate Sps. X's right to repurchase said property within five 5 years from the expiration of the redemption
period, until August 25, 2006.

Case law has equated a right of repurchase of foreclosed properties under Sec. 119 of CA 141 as a "right of
redemption" and the repurchase price as a "redemption price." Thus, in a case the Court applied Sec. 28, Rule 39
of the Rules of Court in the redemption of the foreclosed property covered by a free patent which provides that the
redemption price should be the purchase price at the public auction plus interest at 1% percent per month plus
other assessments and taxes. The Court has also ruled, however, that redemptions from lending or credit
institutions, like Corp A, are governed by the General Banking Law. Hence, the redemption price to which Corp A
is entitled is the total amount under the mortgage contract (not including the claims under the promissory note
contrary to Corp A's contention) plus interests and expenses. (Sps. Guevarra v. The Commoner Lending Corp.,
Inc., G.R. No. 204672, February 18, 2015)

Q: In 1984, R filed an application for registration of Lot No. 1519 on the basis of an Extrajudicial Settlement
with Sale of his parents’ estate executed in his favor. The RTC granted this and he was issued an OCT. Lot
1519-A (subject lot), having been included in OCT No. 511, became the subject matter of three separate
cases.

1) The first case is one for the recovery of possession and damages filed by R against the Sps. T
(Recovery Case). R alleges to be the registered owner of the subject lot while S claimed that the said lot
was donated to Rosario, her mother, by Roberto's father in 1938. Since then, X (and later Susana) had been
in possession of the property in the concept of owner, having built a house thereon and declared it for tax
purposes in Rosario's name. X moved to intervene claiming ownership of the subject lot. RTC dismissed
Roberto’s complaint for lack of merit and declared X as the lawful owner of Lot 1519-A, having acquired
ownership over the property by acquisitive prescription. Pending resolution of his appeal to the CA, Rand
his wife executed a Deed of Donation in favor of their children Jose and Alteza over Lot 1519, who later had
a TCT issued in their names. CA reversed the RTC and upheld the validity of Roberto’s OCT.

2) The second case is one for reconveyance with damages (Reconveyance Case) filed by X against
Rprior to the resolution of Rosario's MR in the appeal of the Recovery Case to the CA. X raised the same
matters as those in her Answer-in-Intervention in the Recovery Case. RTC dismissed the complaint on the
ground of litis pendentia and forum shopping.

3) The third case is one for the annulment and/or rescission of Deed of Donation (Annulment Case)
filed by X when she discovered the donation made by R to his children. RTC later ordered the annulment
and/or rescission of the Deed of Donation and the reconveyance of the subject lot in favor of X's
successors-in-interest. It upheld X's claim of ownership of said lot by virtue of acquisitive prescription. It
likewise found actual fraud on the part of R in concealing in his application for land registration the adverse
possession of respondents in violation of Sec. 15 of PD 1529. Who is the rightful owner of the subject lot?
Civil Law Digests
A: X. It must first be pointed out that X violated the rule on forum shopping when she filed the Annulment Case
during the pendency of the Reconveyance Case. The SC ruled however that the circumstances obtaining in this
case nevertheless distinctly call for a deviation from the general rule in order to further the ends of substantial
justice. A resort to this exception is warranted for it cannot be denied that the resolution of the controversy involving
the ownership of the subject lot has long been mired in numerous technical quandaries, despite the clarity of X's
ownership over said lot which she had already acquired through acquisitive prescription, and now transferred to her
heirs.

Although the first deed of donation executed by R’s father in X's favor is void for failure to comply with legal
formalities, X had already acquired ownership over the property at the time R filed his complaint in the Recovery
Case as well as at the time his OCT was issued. This is by virtue of her being in actual, open, public, and continuous
possession of the subject lot under a claim of ownership since 1938 (satisfying the 10-year period as required by
the law then in force).

Besides, even if one were to discount the foregoing, it also appears that Roberto's failure to disclose Rosario's
possession of the disputed lot in his application for registration of Lot 1519 as required under Sec. 15 of PD 1529,
amounted to actual fraud in the procurement of his title that warranted reconveyance of the subject portion back to
X and her successors-in-interest. By fraudulently including in his application for the registration of title over Lot 1519
the disputed portion, i.e., Lot 1519-A, in his name, R holds the title to said portion in trust for the benefit of X as the
true owner. Indeed, registration does not vest title but merely confirms or records title already existing and vested.
Thus, not being the owner of the subject portion, R could not have transferred ownership thereof to his children.
The donation to the R’s children, however, remains to be valid insofar as it involves that portion excluding the subject
lot. (Dy v. Yu, G.R. No. 202632, July 8, 2015)

Q: X, as owner of the subject property, transferred the same to her daughter B, married to D, Sr., and F, Sr.
to assist them in procuring a loan from the GSIS. In view thereof, a new TCT was issued in the latter’s
names. Upon X's death, the B Family, X's other heirs who have long been occupying the subject property,
caused the annotation of their adverse claim over the same on the TCT. Subsequently, however, the said
annotation was cancelled, and the next day, the Heirs of F, Sr. executed an Extrajudicial Settlement of his
estate and caused its annotation on said title. A new TCT was issued in the names of B, et al. Finally, by
virtue of a Deed of Sale, the subject property was sold to W and P, in whose names a new TCT was issued.
Months later, the complaint for reconveyance and damages was instituted.

RTC ruled that there was an implied trust between X and B and F, Sr. but held that reconveyance can no
longer be effected since the subject property had already been transferred to W and P, whom it found to be
purchasers in good faith. CA upheld the finding that there was an implied trust but ruled that W and P are
not in good faith. Are W and P buyers in good faith?

A: No. In his testimony, before the RTC, W claimed to have verified the validity of the title covering the subject
property before the ROD. However, he also admitted that 2 months had lapsed before the sale could be
consummated because his lawyer advised him to request B, one of the sellers, to cancel the encumbrance
annotated on the title of the subject property (i.e., adverse claim of the B family). He also claimed that he had no
knowledge about the details of such annotation, and that he was aware that individuals other than the sellers were
in possession of the subject property.

Such knowledge of the existence of an annotation on the title covering the subject property and of the occupation
thereof by individuals other than the sellers negates any presumption of good faith on the part of W and P when
they purchased the subject property. A person who deliberately ignores a significant fact which would create
suspicion in an otherwise reasonable man is not an innocent purchaser, as in this case.

In ruling that there was an express trust (not merely an implied one) established between X and B, D, and F, Sr.,
the SC noted that B attempts to thwart the express trust established in this case by heavily relying on the fact that
the title covering the subject property was in their name as owners. It discussed thus that the mere issuance of the
certificate of title in the name of any person does not foreclose the possibility that the real property may be under
co-ownership with persons not named in the certificate or that the registrant may only be a trustee or that other
parties may have acquired interest subsequent to the issuance of the certificate of title," as in this case. Registration
does not vest title; it is merely the evidence of such title. (Go v. Estate of De Buenaventura, G.R. Nos. 211972 &
212045, July 22, 2015)
Civil Law Digests
Q: Corp A mortgaged 19 parcels of land in favor of Bank A to secure a loan. Corp A defaulted, prompting
Bank B to extra-judicially foreclose the mortgaged properties, and later emerged as the highest bidder.
Corp A likewise failed to redeem it which led to the cancellation of the TCTs and the issuance of new ones
in the name of Bank B. The latter applied for a writ of possession which the RTC granted. The writ was
issued and served together with the Notice to Vacate to Corp B which occupied the subject properties at
the time. Corp B however opposed on the ground that its possession was adverse to that of Corp A and
stemmed from a 10 year contract of lease with Corp C, which had bought the subject property from the
registered owner. Corp C, on the other hand, opposed the implementation of the writ on the ground that its
right over the subject property was derived from a Contract to Sell executed by the registered owner.
Whether or not writ of possession may be implemented against Corp B & Corp C?

A: Yes. A writ of possession is an order by which the sheriff is commanded to place a person in possession of a
real or personal property. The general rule is that after the lapse of the redemption period, the purchaser in a
foreclosure sale becomes the absolute owner of the property purchased who is entitled to the possession of the
said property. Upon ex parte petition, it is ministerial upon the trial court to issue the writ of possession in his favor.
The exception, however, under the ROC is when a third party is actually holding the property adversely to the
judgment debtor. For the exception to apply, however, it must be held by the third party adversely to the judgment
obligor - such as that of a co-owner, agricultural tenant or usufructuary, who possess the property in their own right
and not merely the successor or transferee of the right of possession of, or privy to, the judgment obligor. Here,
Corp B’s claim of right of possession over the subject properties is not considered adverse to judgement obligor,
Corp A, as Corp C’s claimed ownership is based on a mere Contract to Sell, which is legally insufficient to transfer
title in its favor absent a deed of conveyance executed by the vendor. Second, there are no records showing that
at the time Bank A consolidated its title over the foreclosed properties, any adverse claim based on the contract to
Sell had been registered. Corollarily, the enforcement of the writ of possession cannot be stayed in favor of Corp B
which merely derived its possession from Corp C through an unregistered contract of lease. This is because in civil
law, lease is a mere personal right. It partakes of the nature of a real right when it is recorded on the title of the
lessor only in the sense that it is binding even as against third persons without actual notice of the transaction in
accordance with the Land Registration Decree provision stating that, "no deed, mortgage, lease or other voluntary
instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the
land" until its registration. Hence, Corp B’s unregistered lease with Corp C is, not binding on Bank A. (AQA Global
Construction, Inc. v. Planters Development Bank, G.R. Nos. 211649 & 211742, August 12, 2015)

Q: Y filed before the RTC an action to recover the ownership and possession of the subject property from
X, seeking as well the payment of damages. They alleged that the subject property was owned by their
predecessor-in-interest, Z, and while the decree was lost during the war, its existence could still be shown
by an LRA certification, and a certified copy from the daybook of cadastral lots issued by the RD. They
further alleged that in 1989, they discovered that the property was already in the possession of the X and
some of her children already constructed houses thereon. X countered however that they inherited the
property from their predecessors-in-interest and that a certificate of title was issued but was lost, and that
they had declared the property for taxation purposes and correspondingly paid the corresponding taxes
due. Who has the better right over the property?

A: Y has a better right. The probative value of X's evidence, which consist of tax declarations and tax receipts, pales
in comparison to that of Y's evidence which consists of a decree of ownership, under the name of their predecessor-
in-interest, Z. While the actual copy of the said decree was lost, the existence of the said decree was actually proven
by the LRA certification and the daybook entry. Likewise, the RTC observed that the the subject property has been
issued a decree, for which an original certificate of title was issued to Z. It is an elemental rule that a decree of
registration bars all claims and rights which arose or may have existed prior to the decree of registration. By the
issuance of the decree, the land is bound and title thereto quieted, subject only to certain exceptions under the
property registration decree. Besides, tax declarations and tax receipts may only become the basis of a claim for
ownership when they are coupled with proof of actual possession of the property. Here, records are bereft of any
showing that X, or any of their predecessors-in-interest, have been in actual possession of the subject property
prior to 1989 as they claim. (Heirs of Delfin v. Rabadon, G.R. No. 165014, July 31, 2013)

Q: X filed a petition seeking that (1) his landholding over the subject property be exempted from the
coverage of the government’s Operation Land Transfer program under PD 27 (2) and Y’s emancipation
patent over said property be revoked and cancelled. X alleged that he purchased the property from its
previous owner, Z, as evidenced by a deed of sale. He later learned that an emancipation patent was issued
in Y’s favor without any notice to him. Whether or not the sale between X and Z is void?
Civil Law Digests

A: The sale is void. PD 27 prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21,
1972, except only in favor of the actual tenant-tillers thereon. Records reveal that the subject landholding fell under
the coverage of PD 27 on October 21, 1972 and as such, could have been subsequently sold only to the tenant
thereof, i.e., Y. Furthermore, X is tied down to his initial theory that his claim of ownership over the subject property
was based on the 1982 deed of sale. As Z sold the property in 1982 to the X who is evidently not the tenant-
beneficiary of the same, the said transaction is null and void for being contrary to law. In consequence, X cannot
assert any right over the subject landholding, such as his present claim for landholding exemption, because his title
springs from a null and void source. (Borromeo v. Mina, G.R. No. 193747, June 5, 2013)

Q: Spouses X and Y were the original registered owners of a lot covered by an OCT. The property was
mortgaged to Bank A and upon default, it was foreclosed and ownership was consolidated in favor of Bank
A. Y, however, repurchased the same and a TCT was issued. Subsequently, Y allegedly mortgaged the
subject property to Z who immediately took possession of the land. Said transaction was however not
reduced into writing. When Y died, his heirs executed a Deed of Extrajudicial partition. The said property
was then subdivided and separate titles were issued in the names of the heirs. The heirs later on wanted to
redeem the mortgaged property from Z but the latter refused, claiming that the transaction between him
and Y was one of sale. Who has a better right over the subject property?

A: The heirs of Y have a better right. The heirs of Z failed to establish the existence and due execution of the subject
deed on which their claim of ownership was founded. The copy of the TCT shown by the heirs of Z bore no relation
at all to the OCT of spouses Y or the TCT issued to Y when he repurchased the property from Bank A. Thus, the
manifestation of the RD regarding the doubtful origin of TCT and regularity of titles of the Heirs of Y should be given
more weight. As held in previous cases, where two (2) transfer certificates of title have been issued on different
dates, the one who holds the earlier title may prevail only in the absence of any anomaly or irregularity in the process
of its registration. Furthermore, while the indefeasibility of a Torrens title cannot be collaterally attacked, it should
not be overlooked that Y filed a counterclaim against Z, claiming ownership over the land and seeking damages.
Hence, the court can rule on the question of the validity of TCT for the counterclaim can be considered a direct
attack on the same. Besides, the prohibition against collateral attack does not apply to spurious or non-existent
titles, which are not accorded indefeasibility. Lastly, the claim of the heirs of Z that since they have been in
possession of the subject land for 28 years then, the present action has prescribed is untenable. Settled is the rule
that no title in derogation of that of the registered owner can be acquired by prescription or adverse possession.
Moreover, even if acquisitive prescription can be appreciated in this case, the Heirs’ possession being in bad faith
is two years short of the requisite 30-year uninterrupted adverse possession required under Article 1137 of the Civil
Code. (Bangis v. Heirs of Adolfo, G.R. No. 190875, June 13, 2012)

Q: Sps. X were the previous owners of the subject lots. During that time, they mortgaged the properties in
favor of Y as security for a loan. Spouses X, however, defaulted, prompting Y to cause the extrajudicial
foreclosure of the said mortgage, and later emerged as the highest bidder. The spouses failed to redeem
the subject lots within the 1 year redemption period. Nonetheless, they continued with the possession and
cultivation of the aforesaid properties and sold it to their son, Z. While X was in possession of the lots, Y
was able to secure a Final Deed of Sale and was able to obtain the corresponding tax declarations in its
name. Subsequently, Y filed a petition for the issuance of a writ of possession which the RTC granted. Is Y
entitled to a writ of possession over the subject lots?

A: Yes, Y is entitled to the said writ. After consolidation of title in the purchaser’s name for failure of the mortgagor
to redeem the property, the purchaser’s right to possession ripens into the absolute right of a confirmed owner. At
that point, the issuance of a writ of possession, upon proper application and proof of title, to a purchaser in an
extrajudicial foreclosure sale becomes merely a ministerial function, unless it appears that the property is in
possession of a third party claiming a right adverse to that of the mortgagor. Here, Z acquired the subject lots from
his parents, Sps. X, in 1988 after they were purchased by Y and its Certificate of Sale at Public Auction was
registered with the RD in 1971. Thus, Z is a mere successor-in-interest of Sps. X. Consequently, he cannot be
deemed as a "third party who is actually holding the property adversely to the judgment obligor" under legal
contemplation. Hence, the RTC had the ministerial duty to issue — as it did issue — the said writ in Y's favor. (Rural
Bank of Sta. Barbara (Iloilo), Inc. v. Centeno, G.R. No. 200667, March 11, 2013)

Q: X filed a petition for Reconstitution of TCT. He alleged that he purchased the property through a Deed
of Sale, free from encumbrances, however, the original copy of the TCT was destroyed by the fire. Hence
the amended petition based on the owner’s duplicate copy of the TCT, which was in his possession. W/N
Civil Law Digests
the RTC and the CA erred in granting the petition despite of lack of publication, and the LRA’s report which
declared that the technical description of the subject property overlaps with other properties?

A: Yes, the CA, which affirmed the decision of the RTC, erred in granting the petition for reconstitution. The
requirement of publication set forth in Sec. 10 in relation to Sec. 9 of RA 26 is mandatory, therefore, the RTC did
not acquire jurisdiction of the case and in effect, rendered the entire proceedings before it null and void. Moreover,
it failed to give due consideration to the LRA’s report stating that the technical description of the subject property
overlaps with other properties. In light of the LRA’s finding, the RTC – in observance of diligence and prudence –
should have notified the adjoining lot owners of the proceedings or, at the very least, to order a resurvey of the
subject property, at the expense of X. The nature of reconstitution proceedings under RA 26 denotes a restoration
of the instrument, which is supposed to have been lost or destroyed, in its original form and condition. As such,
reconstitution must be granted only upon clear proof that the title sought to be restored had previously existed and
was issued to the X. (Republic v. De Asis, Jr., G.R. No. 193874, July 24, 2013)

Q: X filed a complaint for annulment of sale and partition claiming that Y intended to excluded her from
inheriting from the estate of her legally adoptive parents, by falsifying a deed of sale executed by her
deceased parents transferring two parcels of land registered in the names of their biological children. RTC
ruled against X. No appeal was filed in this case. Subsequently, X filed before the RTC an amendment of
the TCTs of the properties disputed herein, to include her name as registered owners to the extent of ⅓ of
the lands covered therein availing herself of the summary proceedings under Sec. 108 of PD 1529. However,
her petition was dismissed on the ground of res judicata. Is the dismissal of X’s petition proper?

A: Yes, but not based on the ground of res judicata as the causes of action of the two cases are different. More
importantly, X cannot avail of the summary proceedings under Section 108 of PD 1529 because the controversy
involves not the amendment of the certificates of title but the partition of the estate of the her deceased parents. As
held in previous cases, the proceedings under Section 108 of PD 1529 are summary in nature, contemplating
corrections or insertions of mistakes which are only clerical but certainly not controversial issues. Relief under said
legal provision can only be granted if there is unanimity among the parties, or where there is no adverse claim or
serious objection on the part of any party in interest. Hence, the dismissal of X’s petition is proper. (Bagayas v.
Bagayas, G.R. Nos. 187308 & 187517, September 18, 2013)

Q: X filed a complaint against Spouses Y alleging that he is the owner of a parcel of land and that he has
been paying real property taxes therefore since its acquisition. He further alleged that he is a resident of
the US and that during his vacation in the PH, he discovered that a new TCT was issued in the name of
spouses Y by virtue of a falsified deed of sale purportedly executed by him and his wife. Spouses Y however
alleged that they are innocent purchasers for value, having purchased it from Z, who possessed and
presented an SPA to sell the subject property. Was there a valid conveyance to the spouses y?

A: No. The general rule is that every person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the
condition of the property. However, a higher degree of prudence is required from one who buys from a person who
is not the registered owner, although the land object of the transaction is registered. In such a case, the buyer is
expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if
there are any flaws in the title of the transferor. Here, the defects and flaws on the SPA relied on by spouses Y is
readily apparent. It lacked X’s community tax certificate which is required by the LGC concerning notarial
acknowledgements, making the notarization of the SPA defective. Moreover, the deed of sale was found to be a
forgery. Since spouses Y claim over the property is based on forged documents, no valid title had been transferred
to them. In sum, since the due execution and authenticity of the subject SPA were not sufficiently established which
is essential for the conveyance to be valid, and the deed of sale being a forgery, the court ruled that there was no
valid conveyance. (Heirs of Sarili v. Lagrosa, G.R. No. 193517, January 15, 2014)

Q: In 1990, X filed a complaint to nullify the OCT issued in 1979 in favor of Y. X alleged that Y obtained the
title through fraud and deceit. X claimed that the land belonged to his late grandfather, and that Y was
merely the administrator and thus had no right over the property. During trial, X testified on how she came
about owning the land, presenting a titulo possessorio issued in 1893. Y, meanwhile, presented witnesses
who testified that Y had been in possession of the land as early as 1957.
Civil Law Digests
The RTC granted X’s complaint, while the CA reversed the same based on prescription. It held that the title
issued in 1979 already became indefeasible and incontrovertible after the lapse of 1 year from its issuance
in 1979.

Has the title become incontrovertible and indefeasible?

A: Yes. A Torrens certificate of title is not conclusive proof of ownership. A party may seek its annulment on the
basis of fraud or misrepresentation, but such action must be seasonably filed, else it would be barred. PD 1529
provides that petitions to reopen and review the decree of registration must be filed not later than one year from
and after the date of the entry of such decree of registration.

Here, the OCT was entered in 1979. The action should have been filed within 1 year from this point, but X filed his
action only in 1990 or 11 years after.

In any case, even if the prescriptive period is not considered, X’s complaint must still fail because he merely relied
on the titulo possessorio. According to PD 892, Spanish Titles can no longer be used as evidence of ownership
after six (6) months from the effectivity of the law, or starting August 16, 1976. (Paraguya v. Spouses Crucillo, G.R.
No. 200265, February 12, 2013)
Commercial Law Digests

Q: Corp A entered a three- way merger with Bank A and Corp B for purposes of rehabilitating Bank
A. However, Bank A continued to experience financial difficulties and that led the president and
chairman of Bank A to voluntarily turn over its full control to Bangko Sentral ng Pilipinas (BSP).
Subsequently, BSP placed Bank A under the receivership of Philippine Development Insurance
Corporation (PDIC). Thereafter, PDIC informed BSP that Bank A cannot be rehabilitated. Thus, the
Monetary Board passed a resolution and informed the board of directors of Bank A for the
liquidation of the latter. However, the stockholders contested that the Monetary Board should have
made its own independent factual determination of the bank’s viability before ordering its
liquidation. Did the Monetary Board committed grave abuse of discretion in ordering the liquidation
of Bank A pursuant to PDIC’s findings alone?

A: No. Section 30 of RA 7653 provides for the proceedings in the receivership and liquidation of banks and
quasi-banks. It provides that PDIC as a receiver shall immediately gather and take charge of all the assets
and liabilities of the institution, administer the same for the benefit of its creditors, and exercise the general
powers of a receiver under the Revised Rules of Court. If the receiver determines that the institution cannot
be rehabilitated or permitted to resume business, the Monetary Board shall notify in writing the board of
directors of its findings and direct the receiver to proceed with the liquidation of the institution. Thus, under
RA 7653, the Monetary Board is not required to make its own factual determination of the bank’s viability
and that the Board’s only responsibility is to inform the Bank A’s board of the directors. (Apex Bancrights
Holding, Inc. vs BSP, G.R. No. 214866, October 2, 2017.)

Q: Greenstone Medicated Oil was one of the medicines that were being manufactured by Corp A,
which was based in Hongkong and owned by Mr. X. This product is also exclusively imported and
distributed in the Philippines by Corp B, which was owned by Mrs. Y, the wife of Mr. X.
Subsequently, Mr. Z, the brother of Mrs. Y, bought Greenstone from a drugstore in Binondo which
was later on proved that said product was a counterfeit version of Greenstone. Thus, Spouses X
and Y filed a complaint against Mr. Z, the supplier of Greenstone to the said drugstore, for unfair
competition and trademark infringement. Is Mr. Z liable for unfair competition and trademark
infringement?

A: Yes, Mr. Z is liable for unfair competition but not for trademark infringement. Unfair competition is defined
as the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect of deceiving the public. This
takes place where the defendant gives his goods the general appearance of the goods of his competitor
with the intention of deceiving the public that the goods are those of his competitor. However, Mr. Z is not
liable for trademark infringement since the trademark of Greenstone was not yet registered in the
Philippines.

The distinctions between suits for trademark infringement and unfair competition are the following: (a) the
former is the unauthorized use of a trademark, whereas the latter is the passing off of one's goods as those
of another; (b) fraudulent intent is unnecessary in the former, while it is essential in the latter; and (c) in the
former, prior registration of the trademark is a pre-requisite to the action, while it is not necessary in the
latter. (Co v. Spouses Yeung, G.R. No. 212705, September 10, 2014)

Q: Sps X and Y entered into a Contract to Sell with Corp A for the purchase of 100-square meters
lot as part of the subdivision project of the latter. They agreed that Corp A would execute the final
deed of sale upon full payment of the Sps X and Y. However, Corp A failed to deliver the deed and
title of the land despite the full payment and repeated demands of the spouses. Thus, the spouses
filed a complaint for specific performance or rescission with damages against Corp A and the
members of its Board of Directors. Should the Board of Directors be held liable by the spouses?

A: No. Settled is the rule that in the absence of malice and bad faith, as in this case, officers of the
corporation cannot be made personally liable for liabilities of the corporation which, by legal fiction, has a
Commercial Law Digests

personality separate and distinct from its officers, stockholders, and member. (Gotesco Properties, Inc. v.
Spouses Fajardo, G.R. No. 201167, February 27, 2013)

Q: Corp A shipped 165,200 bags of cement from China to Manila on board the vessel owned by B.
The bags of cement are to be discharged and delivered to Consignee C. The shipment was insured
by Insurance Corp. D and Insurance Corp. E. B chartered the vessel to Corp. G G entered into a
charter contract party with H . H further chartered it to I . It was I who dealt with Consignee C and
issued the Clean Bill of Lading. The shipment arrived and was inspected by C and J. J is A’s agent.
J is obliged to inform C of the arrival of the vessel in order for C to take possession of the goods.
C and J discovered it was discovered that 43,000 bags were in bad condition. A and I paid Consignee
C the amount of sustained damages. They were then subrogated to the rights and causes of action
of C. Insurance Corporations D and E then filed a complaint for damages against I, G, and J. For its
part, J claimed that it was not a real party in interest because it is not privy to the bill of lading.
Moreover, J claimed that liability cannot attach to it due to the fact that he is a mere agent. D and E,
however, argued that J is a ship agent. Thus, he can be made liable. Is J a ship agent?

A: NO. Under Article 586 of the Code of Commerce, a ship agent is understood to be the person entrusted
with the provisioning of the vessel of a vessel, or who represents her in the port in which she may be found.
Since J’s obligation was to simply assure responsibility over the cargo when they were unloaded to the
vessel, it cannot be considered as a ship agent within the meaning of Article 586. (Ace Navigation Co., Inc.
v. FGU Insurance Corporation, G.R. No. 171591, June 25, 2012)

Q: Corp A has been using the term “St. Francis” for 20 years to identify its numerous property
development projects along St. Francis Street and St. Francis Avenue at Ortigas Center. These
projects include St. Francis Commercial Center, St. Francis Square, and St. Francis Towers. Corp
A filed an intellectual property violation case for unfair competition against Corp B. This stemmed
from Corp B’s application for the registration of the mark “St. Francis Shangri-La Place.” Corp B
maintained that Corp A is barred from claiming ownership of the term “St. Francis” because it is
geographically descriptive of the goods or services for which it is intended to be used. Can Corp A
claim ownership over the term “St. Francis”?

A: NO. Generally, geographically descriptive terms are in the public domain. Hence, it cannot be
appropriated except if it acquires secondary meaning. Under the IP Code, the requisites for a geographically
descriptive mark to acquire secondary meaning are:
a) The secondary meaning must have arisen as a result of substantial commercial use of a mark in the
Philippines;
b) Such use must have resulted in the distinctiveness of the mark insofar as the goods or the products
are concerned;
c) Proof of substantially exclusive and commercial use in the Philippines for 5 years before the date on
which the claim of distinctiveness is made.

Even though the Corp A has been using the term for 20 years already, its use is merely confined to its
projects within a specific area. Since its mark is limited to a certain locality, it failed the first requisite since
cannot be said that there is substantial commercial use of the same which is recognized throughout the
country. Also, Corp A failed to comply with the 2nd requisite because it failed to show proof of any association
between the realty projects as the good and it as the developer of said good. (Shang Property Realty
Corporation v. St. Francis Development Corporation, G.R. No. 190706, July 21, 2014)

Q: X sold securities to Y. Y then discovered that the securities sold to him were not registered with
the Securities and Exchange Commission. Moreover, the terms and conditions covering the
subscription to the securities were likewise not submitted to the SEC for approval. Asserting that X
violated the Securities Regulation Commission, Y filed a complaint to declare the nullification of the
Commercial Law Digests

contract and damags before the Regional Trial Court. X filed a motion to dismiss, alleging that the
complaint must be first filed to the SEC. Should the complaint be first filed to the SEC?

A: NO. The complained acts of X fall under Section 57 of the SRC. Section 63 of the SRC provides that
cases falling under Section 57 of the SRC, which pertains to civil liabilities arising from the violation of the
requirements for offers to sell or sale of securities, shall be exclusively brought before RTC. This is different
from criminal suits under the SRC where SEC exercises primary jurisdiction over them. (Pua v. Citibank,
G.R. No. 180064, September 16, 2013)

Q: Corporation A is the registered owner of the trademark “Z”. Two months later, Corporation B
filed an application to register the same trademark “Z” under its own name. This clash prompted
Corporation B, to file an action to cancel Corporation A’s trademark registration on the ground that
Corporation A failed to use its mark because it had no hotel or establishment in the Philippines
rendering the services covered by its registration. Corporation A asserted its right over the
trademark “Z” and argued that it operates an interactive website to accommodate its potential
clients across the world. The website allows Filipino citizens to make reservations and bookings
online – clearly showing the use of the trademark in the Philippines. Is Corporation A deemed to be
using the trademark “Z”, which it registered under its name?

A: YES. According to the case of W. Land Holdings v. Starworld Hotels, the use of a registered mark
representing the owner's goods or services by means of an interactive website may constitute proof of
actual use that is sufficient to maintain the registration of the same. The use of the mark on an interactive
website, for instance, may be said to target local customers when they contain specific details regarding or
pertaining to the target State, sufficiently showing an intent towards realizing a within-State commercial
activity or interaction. (W. Land Holdings v. Starworld Hotels, G.R. No. 222366, December 4, 2017).

Q: Corporation A, a domestic corporation engaged in the business of developing a “satellite city”


obtained loans from different banks to finance the full operation of its business. Seeing that it’s
impossible to meet its debts and obligations to its creditors, Corporation A filed a Petition for
Suspension of Payments and Rehabilitation. It attributed its financial difficulties the denial of the
Philippine Stock Exchange of the public listing of its shares or stocks, among others. The RTC
granted its Petition. However the Court of Appeals reversed the RTC’s decision on the ground that
PALI’s inability to pay its debts were not alleged in the petition with sufficient particularity as to
have allowed the RTC to properly evaluate whether or not to issue a Stay Order and eventually
approve its rehabilitation. Should Corporation A’s Petition for Suspension of Payments and
Rehabilitation be granted?

A: YES. The Interim Rules on Corporate Rehabilitation, which provides for means of execution of the
rehabilitation plan, should be construed liberally in favor of the corporation. The interpretation of the Interim
Rules on Corporate Rehabilitation must be in accord with Sections 5(d), 6(c), and 6(d) of Presidential
Decree No. 902-A whose objectives are to effect a feasible and viable rehabilitation and to give enough
breathing space for the management committee or rehabilitation receiver to make the business viable anew.
(Puerto Azul Land, Inc. v. Pacific Wide Realty Development Corp., G.R. No. 184000, September 17, 2014).

Q: On behalf of Corporation A, Mr. X, its President applied for commercial letters of credit from Bank
B to finance the purchase of 2,500 glass containers from Corporation C. Bank B granted the
application and issued Letters of Credit. After Mr. X received the goods, he executed for and in
behalf of Corporation A the corresponding trust receipt agreements in favor of Bank B.
Subsequently, Bank B charged Mr. X for violation of P.D. No. 115 in relation to Article 315 1(b) of
the RPC for his purported failure to turn-over the goods or the proceeds from the sale thereof,
despite repeated demands. The lower courts acquitted him of the criminal of the charge for violation
of the Trust Receipts Law in relation to Article 315 1(b) of the RPC, but still held him liable civilly.
Should Mr. C be held civilly liable notwithstanding that he was acquitted of the criminal offense?
Commercial Law Digests

A: YES. Section 13 of the Trust Receipts Law explicitly provides that if the violation or offense is committed
by a corporation, the penalty provided for under the law shall be imposed upon the directors, officers,
employees or other officials or person responsible for the offense, without prejudice to the civil liabilities
arising from the criminal offense. However, since Mr. A was acquitted of the criminal charge, it follows that
he is relieved of the corporate criminal liability as well as the corresponding civil liability arising therefrom.
(Ildefonso S. Crisologo v. People of the Philippines, G.R. No. 199481, December 3, 2012)

Q: X was chairman and owned 70.82% shares of stock of Company A. X died intestate and without
issue and was survived by her husband Y. Believing that he is already the controlling stockholder
of Company A, Y by virtue of such self-adjudication called for a Special Stockholders' and Re-
Organizational Meeting. Meanwhile Z , in his then-capacity as corporate secretary, sent a Notice of
an Emergency Meeting to Company A’s remaining stockholders for the purpose of electing a new
president and vice-president. Are the two meetings legal and valid? Should a Management
Committee be appointed or constituted to take over the corporate and business affairs Company
A?

A: At the time Y called for a meeting, he was already the owner of 74.98% shares of stock of Company A
as a result of his inheritance of X’s ownership thereof. However, records are bereft of any showing that the
transfer of X’s shares of stock to Y had been registered in the Stock and Transfer Book when he made
such. As there was no showing that he was able to remedy the situation by the time the meeting was held,
the conduct of such meeting should all be declared null and void. In the other meeting conducted by Z,
such meeting shall also be rendered null and void as it was conducted without a quorum as only two Board
members attended the same and that it exceeded the number of Directors explicitly stated in the FSVCI
Articles of Incorporation.

On the issue on appointing a Management Committee the a corporation may be placed under the care of
a Management Committee specifically created by a court and, thus, under the latter's control and
supervision, for the purpose of preserving properties and protecting the rights of the parties. However, the
creation and appointment of a management committee is an extraordinary to be exercised with care and
caution and only when the requirements under the Interim Rules are shown. In this case, there was no
actual evidence from the records showing such imminent damage and the lower court’s findings have no
legal or factual basis to support the appointment/constitution of a Management Committee for FSVCI. (F &
S Velasco Company, Inc., Irwin J. Seva, Rosina B. Velasco-Scribner, Mercedezsunico, and Jose Saturnino
O. Velasco v. Dr. Rommel L. Madrid, Peterpaul L. Danao, Manuel L. Arimado, And Maureen R. Labalan,
G.R. No. 208844, November 10, 2015)

Q: Company A obtained a loan from Bank B in order to finance the construction of a hotel building.
The loan was secured by real estate mortgages over several parcels of land owned by Company A
and a comprehensive surety agreement was signed by its stockholders. By virtue of a merger,
Bank C assumed all of Bank B’s rights against Company A. Company A incurred cash flow
problems and it therafter filed a Petition for Corporate Rehabilitation before the RTC as it foresaw
the impossibility to meet its maturing obligations to its creditors. RTC approved Company A’s
rehabilitation plan with interest rate at 6.75%.
Bank C opposed saying that the cost of funds was at a 10% p.a. threshold. Is Company A’s
rehabilitation plan feasible?

A: Yes, the rules on corporate rehabilitation have been crafted in order to give companies leeway to deal
with debilitating financial predicaments in the hope of reaching a sustainable operating form if only to best
accommodate the various interests of all its stakeholders. Section 23, Rule 4 of the Interim Rules of
Procedure on Corporate Rehabilitation or the “cram-down” provision is necessary to curb the majority
creditors’ natural tendency to dictate their own terms and conditions to the rehabilitation, absent due regard
to the greater long-term benefit of all stakeholders.
Commercial Law Digests

In this case, the Court finds Company C’s opposition on the approved interest rate to be manifestly
unreasonable considering that: (a) the 6.75% p.a. interest rate already constitutes a reasonable rate of
interest which is concordant with Company A’s projected rehabilitation; and (b) on the contrary, Company
C’s proposed escalating interest rates remain hinged on the theoretical assumption of future fluctuations in
the market, this notwithstanding the fact that its interests as a secured creditor remain well-preserved.
It must be pointed out that oppositions which push for high interests rates are generally frowned upon in
rehabilitation proceedings given that the inherent purpose of a rehabilitation is to find ways and means to
minimize the expenses of the distressed corporation during the rehabilitation period. (Bank of the
Philippine Islands v. Sarabia Manor Hotel Corporation, July 29, 2013)

Q: Spouses X and Y are the owners and sole proprietors of St. Michael Diagnostic and Skin Care
Laboratory Services and Hospital (St. Michael Hospital), a 5-storey secondary level hospital. With a
vision to upgrade St. Michael Hospital into a modern, well-equipped and full service tertiary 11-
storey hospital, Sps. X and Y purchased two (2) parcels of land adjoining their existing property and
incorporated A, with which entity they planned to eventually consolidate St. Michael Hospital's
operations. To finance the costs of construction, A applied for a loan with petitioner B which gave
a credit line of up to P35,000,000.00, secured by a Real Estate Mortgage belonging to Sps. X and Y,
on a portion of which stands the hospital building being constructed. However, after the
construction, A was still neither operational nor earning revenues. Hence, it was only able to pay
the interest on its loan, over a two-year period, from the income of St. Michael Hospital. B demanded
immediate payment of the entire loan obligation and, soon after, filed a petition for extrajudicial
foreclosure of the real properties covered by the mortgage and there was an auction sale. A filed a
Petition for Corporate Rehabilitation (Rehabilitation Petition), before the RTC, with prayer for the
issuance of a Stay Order as it foresaw the impossibility of meeting its obligation to B, its purported
sole creditor. Is it proper for the courts to approve A’s Rehabilitation Plan?

A: No. Rehabilitation assumes that the corporation has been operational but for some reasons like
economic crisis or mismanagement had become distressed or insolvent. Thus, the basic issues in
rehabilitation proceedings concern the viability and desirability of continuing the business operations of the
distressed corporation, all with a view of effectively restoring it to a state of solvency or to its former healthy
financial condition through the adoption of a rehabilitation plan. In this case, it cannot be said that the
petitioning corporation, A, had been in a position of successful operation and solvency at the time the
Rehabilitation Petition was filed. While it had indeed "commenced business" through the preparatory act of
opening a credit line with B to finance the construction of a new hospital building for its future operations,
A itself admits that it has not formally operated nor earned any income since its incorporation. This simply
means that there exists no viable business concern to be restored. Perforce, the remedy of corporate
rehabilitation is improper, thus rendering the dispositions of the courts a quo infirm. (BPI Family Savings
Bank V. St. Michael Medical Center, GR No. 205469, 2015-03-25)

Q: A, a corporation duly organized and existing under the laws of Germany, applied for various
trademark registrations before the IPO. However, registration proceedings of the subject
applications were suspended in view of an existing registration of the mark "BIRKENSTOCK AND
DEVICE" in the name of Shoe Town International and Industrial Corporation, the predecessor-in-
interest of respondent Philippine Shoe Expo Marketing Corporation. A filed a petition for
cancellation of the said registration on the ground that it is the lawful and rightful owner of the
Birkenstock marks. During its pendency, however, B and/or its predecessor-in-interest failed to file
the required 10th Year Declaration of Actual Use (10th Year DAU), thereby resulting in the
cancellation of such mark. Accordingly, the cancellation case was dismissed for being moot and
academic. The aforesaid cancellation of Registration No. 56334 paved the way for the publication
of the subject applications. In response, B filed three (3) separate verified notices of oppositions to
the subject applications claiming among others it has been using Birkenstock marks in the
Philippines for more than 16 years through the mark "BIRKENSTOCK AND DEVICE”. Should the
subject marks be allowed registration in the name of A?
Commercial Law Digests

A: Yes. B admitted that it failed to the file the 10 (tenth) year DAU within the requisite period. As a
consequence, it was deemed to have abandoned or withdrawn any right or interest over the mark
“BIRKENSTOCK”. It must be emphasized that registration of a trademark, by itself, is not a mode of
acquiring ownership. If the applicant is not the owner of the trademark, he has no right to apply for its
registration. Registration merely creates a prima facie presumption of the validity of the registration. Such
presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and
must give way to evidence to the contrary. Besides, A has duly established its true and lawful ownership of
the mark “BIRKENSTOCK”. It submitted evidence relating to the origin and history of “BIRKENSTOCK” and
it use in commerce long before respondent was able to register the same here in the Philippines. A also
submitted various certificates of registration of the mark “BIRKENSTOCK” in various countries and that it
has used such mark in different countries worldwide, including the Philippines. (Birkenstock Orthopaedie
Gmbh V. Philippine Shoe Expo Marketing Corporation, Gr No. 194307, 2013-11-20)

Q: Corp A is a domestic corporation. It increased its authorized capital stock. All preferred shares
of A from this increase were subscribed by Corp B, an American corporation. The Board of Directors
of Corp A authorized the redemption of the preferred shares from Corp B. The redemption price
was higher than the subscription price, so Corp B received gains from the redemption. Corp A
subsequently filed for relief from double taxation before the ITAD, to confirm whether the
transaction was not subject to Philippine income tax pursuant to the PH-US Tax Treaty. Even so,
Corp A withheld and remitted a sum from the redemption to BIR, as final withholding tax. Corp A
then claimed a refund, arguing that the redemption were in fact not subject to Final Withholding
Tax, as the redemption is not a taxable distribution of dividends under the Tax Code. Is the gain
derived by B from the redemption is subject to 15% Final Withholding Tax?

A: No. Sec. 28 (B) (5) (B) of the Tax Code imposes a 15% Final Withholding Tax on intercorporate dividends
received by a foreign corporation from a domestic corporation. B is a non-resident foreign corporation,
organized under US Laws. The US has an existing tax treaty with the Philippines, so such treaty must be
followed. Under the PH-US Tax Treaty, the term dividends should be interpreted according to the laws of
the taxing state. The Tax Code defines dividends as “any distribution made by a corporation to its
shareholders out of its profits and earnings”. This being the case, the redemption is not a taxable distribution
of dividends. The amount received by Corp B did not represent a periodic distribution of dividends, but
rather as payment for redemption. Furthermore, Corp A could not release dividends since it was apparent
from A’s financial statement that it had no unrestricted retained earnings. Absent such unrestricted retained
earnings, A cannot lawfully release dividends (CIR v Goodyear Philippines, G.R. No. 216130, August 3,
2016).

Q: Corp A, a domestic corporation, owned a bus that was being driven by Mr. X, an employee. Mr.
X attempted to overtake a jeepney while he was rounding a blind curve, but soon hit a truck owned
by Mr. Y, which resulted in damage to both the bus and truck, and the subsequent death of Mr. Z,
the truck driver. Mr. Y, and the heirs of Mr. Z filed a complaint for quasi-delict and damages against
Corp A and Mr. X. The heirs accused Mr. X of driving with gross negligence. Corp A denied liability,
arguing that the bus had a mechanical error which cannot have been reasonably foreseen, and that
Mr. Z had the last clear chance to avoid the collision. Are Corp A and Mr. X liable?

A: Yes. Gross negligence as "one that is characterized by the want of even slight care, acting or omitting
to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a
conscious indifference to consequences insofar as other persons may be affected. In this case, Mr. X knew
he was rounding a blind curve, and thus it would have been prudent for him to stay in his lane. However,
he instead encroached the opposite lane while he was trying to overtake the jeepney. Mr. X was clearly
remiss in his duty to determine that the road was clear and not to proceed if he could not do in safety. Since
gross negligence was duly established, Corp A and Mr. X are solidarily liable to Mr. C and the heirs of Mr.
Z. (Bano vs Bachleor Express, G.R. No. 191703, March 12,2012).
Commercial Law Digests

Q: Corp A, a French partnership, filed an trademark application for “Le Cordon Bleu”, alleging that
it has been using the mark in France since 1895. Corp B, a domestic corporation, opposed such
application, arguing that it has been using “Le Cordon Bleu” in its restaurant business in the
Philippines since 1948. Thus, according to Corp B, it has a better right to the mark than Corp A.
Does Corp A have the right to the trademark?

A: Yes. Both the Philippines and France are signatories to the Paris Convention, which affords protection
to foreign marks. Under the Paris Convention, the Philippines is obligated to assure nationals of the
signatory-countries that they are afforded an effective protection against violation of their intellectual
property rights in the Philippines in the same way that their own countries are obligated to accord similar
protection to Philippine nationals. In this case, it was duly established that Corp A has been using “Le
Cordon Bleu” in France since 1895- well before Corp B’s use in 1948. Furthermore, the directress of Corp
B studied in Corp A’s institute, so she should have been aware of Corp A’s prior use over the mark (Ecole
de Cuisine Manille vs Renauil Cointreau, G.R. No. 185830, June 5, 2013).
Criminal Law Digests
CRIMINAL LAW 1

Q: X was convicted of murder. The Court declared the finality of the Resolution affirming the conviction of
X and issued an Entry of Judgment. Subsequently, X died. What is the effect of such death on the criminal
action and civil action?

A: The criminal action, as well as the civil action for the recovery of the civil liability ex delicto, is ipso facto
extinguished. Article 89(1) of the RPC provides that the criminal liability is totally extinguished by the death of the
accused. X’s civil liability based on sources other than the subject delict survives and the victim may file a separate
civil action. (People of the Philippines v. Agapito Dimaala y Arela, G.R. No. 225054, July 17,2017)

Q: X was found guilty for Qualified Rape, considering: (1) the state of mental retardation of victim AAA was
completely established on account of the testimony and psychiatric evaluation of a psychiatrist; and (2) X
failed to dispute AAA’s mental retardation during trial. The psychiatrist revealed that AAA was suffering
from a mild mental retardation with an IQ equivalent to a 9-year old child. Should the conviction be upheld?

A: No. Knowledge of the offender of the mental disability of the victim during the commission of the crime of rape is
a special qualifying circumstance. However, such must be sufficiently alleged in the indictment and proved during
trial to be properly appreciated. Moreover, mere relationship by affinity between X and AAA does not sufficiently
create moral certainty that the former knew of the latter’s disability. (People of the Philippines v. Rico Niebres y
Reginaldo, G.R. No. 230975, December 4, 2017)

Q: X was found guilty for Simple Rape for raping AAA, a 16 year-old who is the sister of his wife. Upon
examination, the psychiatrist revealed that AAA was suffering from a mild mental retardation with an IQ
equivalent to a 9-year old child. Is X guilty of simple rape under Article 266-A (1)(d)?

A: Yes. Sexual intercourse with a woman who is a mental retardate, with a mental age below 12 years old, constitute
statutory rape. If the victim is a mentally-retarded or intellectually-disabled person whose mental age is less than
12 years, the rape is considered committed under paragraph 1 (d) (when the offended party is under 12 years of
age) and not paragraph 1 (b) (when the offended party is deprived or reason or is otherwise unconscious) of Article
266-A of the RPC. The person’s capacity to decide whether to give consent or to express resistance to an adult
activity is determined not by his or her chronological age but by his or her mental age.

In determining whether a person is “twelve years of age,” under Article 266-A(1)(d), the interpretation should be in
accordance with either the chronological age of the child if he or she is not suffering from intellectual disability, or
the mental age if intellectual disability is established. (People of the Philippines v. Rico Niebres y Reginaldo, G.R.
No. 230975, December 4, 2017)

Q: X suddenly pulled a knife from the right side of his back, held the victim’s shirt with his left hand, and
stabbed the victim with a knife using his right hand. X was able to stab the victim once before the latter
managed to run away. X ran after the victim and thereafter held the latter’s shirt again, pulled him to the
ground, and stabbed him repeatedly, resulting in the latter’s death. Are the circumstances of treachery and
evident premeditation attendant here to properly qualify the crime to murder?

A: Treachery is present in the commission of the crime. The essence of treachery is that the attack is deliberate
and without warning, done in a swift and unexpected way, affording the hapless, unarmed, and unsuspecting victim
no chance to resist or escape. The attack of X was sudden, deliberate and unexpected. The victim was completely
unaware of any threat to his life as he was merely walking with X. However, evident premeditation cannot be
appreciated because there is no evidence that X had previously planned the killing of the victim. (People v. Crisanto
Cirbeto y Giray, G.R. No. 231359, February 7, 2018)

Q: One of the accused died pending appeal and before promulgation of the final judgment. Is the personal
liability extinguished both as to criminal liability and civil liability?

A: Yes, the personal liability both as criminal and civil liability are both extinguished since the death occurred before
final judgment. The death of the accused pending appeal of his conviction extinguishes his criminal liability as well
as his civil liability ex delicto. Accordingly, the criminal case against should be dismissed. (People of the Philippines
vs. Alvin Cenido y Picones and Remedios Contreras y Cruz, G.R. No. 210801, July 18, 2016)
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The effects of the death of an accused pending appeal on his liabilities are as follows:
(1) the death of the accused prior to final judgment terminates his criminal liability and only the civil liability
directly arising from and based solely on the offense committed;
(2) the claim for civil liability survives notwithstanding the death of accused, if the same may also be
predicated on a source of obligation other than delict (i.e. laws, contracts, quasi-contracts, quasi-delicts);
(3) where the civil liability survives, an action for recovery may be pursued but only by way of filing a
separate civil action enforced either against the executor/administrator or the estate of the accused; and
(4) the statute of limitations on the civil liability is deemed interrupted during the pendency of the criminal
case, to avoid apprehension on a possible privation of right by prescription.
(People v. Layag, G.R. No. 214875, October 17, 2016)

Q: X suddenly entered into the person’s house and began attacking the residents thereof, resulting to the
death of one person who is a minor. X then entered another house nearby, where his 15-year old nephew
was sleeping, and delivered hacking blows towards the latter, stopping only when the victim (who was
pretending to be dead) was leaning on the wall, blood-stained. Was there treachery in this case?

A: (1) Yes. Treachery was attendant in the killing of the two minors. The essence of treachery is the sudden and
unexpected attack on an unsuspecting victim without the slightest provocation on his part. This is even more true if
the assailant is an adult and the victim is a minor. Minor children, who by reason of their tender years, cannot be
expected to put up a defense. Thus, when an adult person illegally attacks a minor, treachery exists. (People v.
Umawid, G.R. No. 208719, June 09, 2014)

Q: A dropped his brother B in a gym. Minutes after, B was forcibly abducted by three persons. A received
a text message, instructing A to pay a sum of money for B’s safety. A complied, but the abductors did not
release B. Later, through the help of the police, B’s dead body was found. An employee of the gym testified
that he participated in the plan to abduct B and that he was the one who tipped the abductors on the
condition that he will get a share of the money. Was the commission of the crime attended by conspiracy?

A: Yes. To establish conspiracy, direct proof is not essential as it can be presumed from and proven by the acts of
the accused pointing to a joint purpose, design, concerted action, and community of interests. In this case, the gym
employee testified that prior to abduction, he, together with the abductors, hatched a plan to abduct B with the sole
purpose of extorting money from B’s brother. The gym employee and abductors committed the abduction with the
joint purpose, design, concerted action, and community of interest to obtain money from the victim’s relative. Thus,
the commission of the crime was attended by conspiracy. (People v. Dionaldo et al, G.R. No. 207949, July 23,
2014.)

Q: X went to a taho factory looking for a certain person but failed to locate the latter. Frustrated, X stuck a
knife into a taho pail. A who saw this, confronted X, and invited X to a fistfight on the condition that he put
the knife down. X complied and they engaged in a fistfight. In the middle of the fight, X reached for the knife
and stabbed A. A ran away and attempted to escape. B attempted to help A with a bamboo stick.
Unfortunately, B slipped and fell face flat. X stabbed B, resulting to the death of B. X was charged for the
murder of B as attended by treachery, and the attempted homicide of A. X counters that with respect to A,
X only acted to defend himself. (1) Did X act in self-defense? (2) Was the commission of the crime attended
by treachery?

A: (1) No. X did not act in self- defense. A did not exhibit unlawful aggression to justify X’s actions as X was the
aggressor. Assuming arguendo that A exhibited unlawful aggression when he participated in the fistfight with X, the
moment he ran away from the fight, the unlawful aggression ceased to exist. Thus, X did not act in self-defense.
(2) No. To appreciate treachery, it must be shown that: (a) the means of execution employed gives the victim no
opportunity to defend himself or retaliate; (b) the methods of execution were deliberately or consciously adopted.
Applied in this case, there is no treachery. Before engaging X, B knew that A and X were in a fight. B was aware of
the existence of danger, thereby negating the first element of giving the victim no opportunity to defend himself.
Moreover, X lacked deliberation of killing A, negating the second element. The act of killing was immediate as X did
not expect B to interfere. Absent these elements, treachery cannot be appreciated. (People v. Casas, G.R. No.
212565, February 25, 2015)

Q: A came from a meeting and was on his way home. X, who had issues to be settled with A, confronted
the latter. A tried to walk away from the confrontation, but X punched him in the face. X then took out his
gun and shot A. X was charged with the murder of A as attended by treachery. X claimed he was acting in
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defense of his person, as A supposedly attempted to take a gun out first. (1) Is treachery present? (2) Did
X act in self-defense?

A: (1) Yes. There is treachery when the offender commits any of the crimes against the person, employing means,
methods, or forms in the execution thereof, which tend directly and specially to ensure its execution, without risk to
himself arising from the defense which the offended party might make. Here, treachery is present. X is shown to
have deliberately adopted the means based from the fact that X had issues to be settled with A and X confronted
A with a loaded gun. More so, X’s act of punching and shooting A was sudden and unexpected, leaving A without
recourse to defend himself. Thus, treachery is present.
(2) No. The existence of treachery negates the claim of self-defense. (People v. Matibag, G.R. No. 206381, March
25, 2015)

Q: X was having a drinking spree with his friends in a carinderia. Sometime thereafter, the victim crossed
the street going to the carinderia, where he encountered X who suddenly poked him with an iron pipe,
which turned out to be a homemade firearm or sumpak. While the victim was on his way to the hospital, he
died as a result of the gunshot wound and traumatic head injuries. X was then charged with Murder with
qualifying circumstance of Treachery, among others. However, X claims that he did it out of self-defense,
claiming that it was the victim who approached and threatened to kill him. 1.) Was self-defense present in
this case? 2.) Was Treachery correctly appreciated?

A: 1.) No, the act of X was not out of self-defense. Unlawful aggression from the victim is patently absent. The life
of X was not in danger during the encounter.
2.) Yes, treachery is correctly appreciated. Treachery is present when the offender commits any of the crimes
against persons, employing means, methods or forms in the execution, which tend directly and specially to insure
its execution, without risk to the offender arising from the defense which the offended party might make. In this
case, X suddenly fired a sumpak against the victim, leaving him unable to defend himself or evade the attack.
(People of the Philippines v. Ernie Inciong y Orense, G.R. No. 213383, June 22, 2015)
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CRIMINAL LAW 2

Acts of Lasciviousness - Article 336

Q: In two occasions, X, a 35-year-old man, ordered Y, who was then 11 years old, to hold his penis and
masturbate him. Was CA correct in convicting X for violation of Section 5(b), Article III, of RA 7610,
otherwise known as the "Special Protection of Children Against Abuse, Exploitation and Discrimination
Act"?

A: NO. In instances where the child subjected to sexual abuse through lascivious conduct is below twelve years of
age, the offender should be prosecuted under Acts of Lasciviousness under Article 336 of the RPC, but suffer the
higher penalty of reclusion temporal in its medium period in accordance with Section 5 (b), Article III of RA 7610.
Before an accused can be convicted of child abuse through lascivious conduct on a minor below 12 years of age,
the requisites for Acts of Lasciviousness under Article 336 of the RPC must be met in addition to the requisites for
sexual abuse. (Fianza v. People, G.R. No. 218592, August 2, 2017)

Q: What are the elements of Acts of Lasciviousness under Article 336 of the RPC?

A: The elements are:


(a) the offender commits any act of lasciviousness or lewdness;
(b) the lascivious act is done under any of the following circumstances:
(i) by using force or intimidation;
(ii) when the offended party is deprived of reason or otherwise unconscious; or
(iii) when the offended party is under twelve (12) years of age; and
(c) the offended party is another person of either sex. (Fianza v. People, G.R. No. 218592. August 2, 2017)

Q: What are the elements of Sexual Abuse as defined under Section 5 (b), Article III of RA 7610?

A: The elements are:


(a) the accused commits an act of sexual intercourse or lascivious conduct;
(b) the said act is performed with a child exploited in prostitution or subjected to other sexual abuse; and
(c) the child is below eighteen (18) years old. (Fianza v. People, G.R. No. 218592. August 2, 2017)

Q: In two occasions, X, a 35-year-old man, ordered Y, who was then 11 years old, to hold his penis and
masturbate him. Is Y considered a “child exploited in prostitution or subjected to other sexual abuse”?

A: YES. A child is deemed subjected to other sexual abuse when the child indulges in lascivious conduct under the
coercion or intimidation, or influence of any adult. Lascivious conduct under the coercion or influence of any adult
exists when there is some form of compulsion equivalent to intimidation which subdues the free exercise of the
offended party's free will. Case law states that a child is presumed to be incapable of giving rational consent to any
lascivious act. In this case, the age disparity between the parties clearly placed X in a stronger position over Y which
enabled him to wield his will on the latter. (Fianza v. People, G.R. No. 218592. August 2, 2017)

Q: It is alleged that Respondent X guilty of “Acts of Lasciviousness” for squeezing the genitalia of private
complainant. The RTC ruled that the prosecution failed to establish the element of lewdness, and that the
overt act of squeezing does not show that X intended to gratify his sexual desires. The RTC held that X was
guilty of Unjust Vexation. Is this ruling correct?

A: No. The SC overturned this ruling, holding that he should instead be charged with Acts of Lasciviousness. The
Court found that the mere fact of “squeezing” the private part of a child only 12 years of age could have signified
only an indecent intention. “Lewd” is defined as obscene and lustful, signifying the form of immorality that has
relation to moral impurity. (People v. Ladra, G.R. No. 221443, July 17, 2017)

Rape

Q: X was on her way home when Y arrived and offered to take her home. However, Y took X to a motel and
allegedly raped her. Y then dropped her off at a public market where X proceeded to buy groceries before
going home. Y was then charged with Rape. In his defense, Y claimed that they were sweethearts and that
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the sexual act was consensual. Witnesses, including two of X’s friends, supported the claim that the two
were in a relationship. Can Y be convicted of Rape?

A: NO. To be convicted of Rape under Article 266-A of the RPC, the prosecution must prove the following elements
beyond reasonable doubt: (a) offender had carnal knowledge of the victim; and (b) such act was accomplished
through force, threat, or intimidation. In rape cases, the victim's sole testimony must still stand the test of credibility.
In this case, Y’s allegation of relationship with X was overwhelmingly corroborated by his other witnesses. The
finding of a then subsisting relationship between the parties raises suspicions on the truthfulness of X’s testimony,
wherein she vehemently denied having a relationship with the accused. Furthermore, the conduct of X immediately
following the alleged sexual assault is significant in establishing the truth or falsity of the charge of rape. The value
of a witness's testimony should be compatible with human knowledge, observation, and common experience, such
that whatever is repugnant to these standards becomes incredible and must lie outside judicial cognizance.
Considering the totality of the evidence presented in this case, there is doubt whether Y employed force or
intimidation upon X during their sexual encounter. Thus, Y should be acquitted for failure of proving guilt beyond
reasonable doubt. (People v. Rubillar Jr. y Gaberon, G.R. No. 224631, August 23, 2017)

Q: One evening, AAA, who was sleeping beside her brother BBB, suddenly woke up with X, her father,
already on top of her, and the latter's penis already inside her vagina. Startled by the pain she felt in her
vagina, AAA pushed X and scampered away from him in order to move closer to BBB. This left X with no
choice but to leave the room. The incident was repeated twice. After the 3rd incident, AAA finally had the
courage to report the foregoing incidents to the police. AAA was then examined by a physician who found
her to have sustained lacerations in her hymen which could have been caused by the penetration of a hard
object, such as an erect penis. X interposed the defenses of denial and alibi. What is the criminal liability
of X?

X is guilty beyond reasonable doubt of two (2) counts of Qualified Rape and one (1) count of Attempted Qualified
Rape. The elements of Rape under Article 266-A (1) (a) are: (1) The offender had carnal knowledge of a woman;
and (2) aid carnal knowledge was accomplished through force, threat or intimidation. The gravamen of Rape is
sexual intercourse with a woman against her will. Statutory Rape under Article 266-A (1) (d) is committed by having
sexual intercourse with a woman below twelve (12) years of age regardless of her consent, or lack of it, to the
sexual act. Proof of force, threat, or intimidation, or consent of the offended party is unnecessary as these are not
elements of statutory rape, considering that the absence of free consent is conclusively presumed when the victim
is below the age of twelve (12). The law presumes that the offended party does not possess discernment and is
incapable of giving intelligent consent to the sexual act. Thus, to sustain a conviction for statutory rape, the
prosecution must establish the following: (1) the age of the complainant; (2) the identity of the accused; and (3) the
sexual intercourse between the accused and the complainant.

The foregoing acts of Rape shall be qualified pursuant to Article 266-B (1) of the RPC if: (1) the victim is under
eighteen (18) years of age; and (2) the offender is a parent, ascendant, step-parent, guardian, relative by
consanguinity or affinity within the third civil degree, or the common-law spouse of the parent of the victim.

In the case at bar, the Court agrees with the finding of the courts a quo that the prosecution was able to prove that
X: (a) had carnal knowledge of her without her consent on two (2) separate occasions, the first occurring sometime
in 2006 and the second in February 2008; and (b) attempted to have carnal knowledge of her on May 17, 2009, but
was stopped by a reason other than his own desistance, i.e., BBB's intervention. Suffice it to say that X's flimsy
defense of denial and alibi cannot prevail over the positive and categorical testimony of AAA identifying him as the
perpetrator of the crimes. (People of the Philippines v. Godofredo Comboy y Cronico, G.R. No. 218399, March 2,
2016)

Q: AAA, her mother and sister, and her sister's common-law spouse, X, lived at the same house. One
afternoon, AAA was in the house of a neighbor, when suddenly, X, who was drunk at the time, pulled her
into their house while AAA's mother and sister were not around. Once inside, X ordered AAA to take off her
clothes, covered her mouth, and then proceeded to have carnal knowledge of her. Later that day, AAA's
mother noticed that AAA was pale, bruised, limping, and her dress soiled, making her suspect that X had
something to do with AAA's disheveled appearance. Such suspicion was later confirmed when AAA
admitted to her sister that X raped her, prompting AAA's mother and sister to bring her to the hospital for
medical examination. They also went to the police station to report the matter. During the trial, a psychiatric
consultant testified that: (a) while AAA is already 20 years old, she has a mild to moderate mental
retardation, with a mental age of 6-7 years old; (b) children of this mental age can recall and narrate events
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if coupled with subtle prodding; and (c) AAA has difficulty in answering questions and can only respond in
phrases; (d) AAA had no overtures or distortions in her perceptions or memory; and (e) AAA was not
suffering from psychosis, which meant that she was in touch with reality and not hallucinating strangely.
What is the criminal liability of X?

A: X is guilty beyond reasonable doubt of the crime of Rape as defined and penalized under Art. 266-A(1) of the
RPC. For a charge of Rape by sexual intercourse under Article 266-A (1) of the RPC to prosper, the prosecution
must prove that: (1) the offender had carnal knowledge of a woman; and (2) he accomplished this act through force,
threat or intimidation, when the victim was deprived of reason or otherwise unconscious, by means of fraudulent
machination or grave abuse of authority, or when the victim is under 12 years of age or is demented. The gravamen
of Rape is sexual intercourse with a woman against her will. The Court agrees with the findings of both the RTC
and the CA that the prosecution established, among others, that: (a) on May 1, 2006, AAA was in her neighbor's
house when X pulled her into their own house; (b) once inside, X covered her mouth then had carnal knowledge of
her; (c) AAA confessed to her sister that X took advantage of her; and (d) a medical examination confirmed that
AAA was indeed raped.

AAA's mental retardation cannot be taken into account. It must be stressed that in all criminal prosecutions, the
accused shall be informed of the nature and cause of the accusation against him to ensure that his due process
rights are observed. Thus, every indictment must embody the essential elements of the crime charged with
reasonable particularity as to the name of the accused, the time and place of commission of the offense, and the
circumstances thereof. In this case, suffice it to say that AAA's mental retardation, while proven during trial, cannot
be considered in view of the fact that it was not specifically alleged in the Information charging X of Rape. (People
of the Philippines v. Mario Galia Bagamano, G.R. No. 222658, August 17, 2016)

Q: Accused-appellants Arguta and Cahipe intercepted AAA, threatened her with a bladed weapon, dragged
her to a cottage at a nearby beach resort, and bound her hands and feet. Thereafter, they removed her
clothes and placed her on the floor. Arguta then mounted AAA and inserted his penis into her vagina. After
A satisfied his lust, C took over and raped her. Thereafter, accused-appellants left AAA at the cottage. An
hour later, C returned and dragged AAA to a store owned by a certain Lino Ostero (Ostero). There C
undressed her again, mounted her, and inserted his penis into her vagina. Afterwards, AAA was returned
to the cottage. The next day, AAA's father found her crying at the cottage. The RTC found accused
appellants guilty beyond reasonable doubt of the crime of rape which was affirmed by the CA. Accused-
appellants appealed. Does the presence of either circumstance - "use of a deadly weapon" or "by two or
more persons" - qualify the crime?

A: Given that the rape occurred during the effectivity of the old rape provision, it shall be controlling in the case.
Under Art 335, “Rape is committed by having carnal knowledge of a woman under any of the following
circumstances: 1. By using force or intimidation; 2. When the woman is deprived of reason or otherwise
unconscious; and 3. When the woman is under twelve years of age or is demented. either circumstance is
qualifying”. When the two circumstances are present, there is no legal basis to consider the remaining circumstance
as a generic aggravating circumstance for either is not considered as such under Article 14 of the Revised Penal
Code enumerating what are aggravating circumstances. (People of the Philippines v. Arugta, G.R. No. 213216,
April 20, 2015)

Q: Must the force employed in the commission of the crime of rape be irresistible?

A: No. In this case, records reveal that accused-appellants threatened AAA with a bladed instrument and tied her
up before having carnal knowledge of her without her consent. Jurisprudence holds that force or intimidation, as an
element of Rape, need not be irresistible; as long as the assailant's objective is accomplished, any question of
whether the force employed was irresistible or not becomes irrelevant. Intimidation must be viewed from the lens
of the victim's perception and judgment and it is enough that the victim fears that something will happen to her
should she resist her assailant's advances. In this regard, case law provides that the act of holding a bladed
instrument, by itself, is strongly suggestive of force or, at least, intimidation, and threatening the victim with the
same is sufficient to bring her into submission. (People of the Philippines v. Arugta, G.R. No. 213216, April 20,
2015)

Q: AAA (14 y/o) had just returned home from school and since B (AAA’s father) did not want her to leave
the house, she decided to just take an afternoon nap. At that time, B asked AAA's siblings to leave the
house and thereafter, approached AAA who was lying in bed, removed her shorts and underwear, and
Criminal Law Digests
threatened to spank her if she told anybody about this incident. B then removed his shorts and underwear,
mounted AAA, restrained her hands, and inserted his penis into her vagina. AAA resisted and even told Ba
that she was having her menstruation, but B simply told her to keep quiet and that it was better as she will
not get pregnant. While B was ravishing AAA, the latter's sister sought the help of their neighbor, who then
peeped through a hole, interrupting Balcueva in his dastardly act. Thereafter, AAA's sister and their
neighbor reported the incident to the barangay hall, which led to B’s apprehension. The RTC found B to be
guilty of Qualified Rape. The CA affirmed the ruling of the RTC. Should B’s conviction be upheld?

A: The elements of Qualified Rape under the foregoing provisions are as follows: (a) the victim is a female over 12
years but under 18 years of age; (b) the offender is a parent, ascendant, step-parent, guardian, relative by
consanguinity or affinity within the third civil degree, or the common-law spouse of the parent of the victim; and (c)
the offender has carnal knowledge of the victim either through force, threat or intimidation; or when she is deprived
of reason or is otherwise unconscious; or by means of fraudulent machinations or grave abuse of authority. A young
girl would not concoct a sordid tale of a crime as serious as rape at the hands of her very own father, allow the
examination of her private part, and subject herself to the stigma and embarrassment of a public trial, if her motive
was other than a fervent desire to seek justice. (People v. Balcueva, G.R. No. 214466, July 1, 2015)

Q: December 26, 1996 and December 27, 1996, and June 2000, accused C, by means of force, violence and
intimidation, did then and there willfully, unlawfully and feloniously have sexual intercourse with his
common-law-wife’s daughter, [AAA], a minor who was then about 8 years and 5 months old and with whom
accused has moral ascendancy as she considered him as her father and carries his surname although she
is not his daughter but a daughter of another man having previous relationship with his common-law-wife,
which sexual act was against the will and consent of said [AAA]. The first two (2) rape incidents occurred
prior to the passage of Republic Act No. (RA) 8353, otherwise known as the "Anti-Rape Law of 1997," hence,
C was charged under the old rape provision, i.e., Article 335 of the Revised Penal Code (RPC). On the other
hand, the third rape incident occurred in June 2000, or after the passage of RA 8353, hence, the accused
was charged under the amended rape provision, i.e., Article 266-A of the RPC, as amended. The RTC
convicted C of three (3) counts of statutory rape and noted the qualifying circumstance of relationship. The
CA affirmed the RTC’s ruling. Were all the elements of statutory rape present?

A: Statutory rape is committed by sexual intercourse with a woman below 12 years of age regardless of her consent,
or the lack of it, to the sexual act. Proof of force, intimidation or consent is unnecessary as they are not elements of
statutory rape, considering that the absence of free consent is conclusively presumed when the victim is below the
age of 12. At that age, the law presumes that the victim does not possess discernment and is incapable of giving
intelligent consent to the sexual act. Thus, to convict an accused of the crime of statutory rape, the prosecution
carries the burden of proving: (a) the age of the complainant; (b) the identity of the accused; and (c) the sexual
intercourse between the accused and the complainant. The elements of statutory rape were present. First, the
presentation of AAA’s Certificate of Live Birth showing that she was born on July 25, 1998 has proven that she was
below 12 years of age when the three (3) rape incidents happened on December 26 and 27, 1996, and in June
2000, respectively. Second , the prosecution proved that C indeed had carnal knowledge of AAA on three (3)
separate occasions through the latter’s positive, categorical, and spontaneous testimony, as corroborated by the
medico-legal report. (People v. Cadano, G.R. No. 207819, March 12, 2014)

Q: What is the weight given to testimonies of child-victims?

A: Testimonies of child-victims are normally given full weight and credit, since when a girl, particularly if she is a
minor, says that she has been raped, she says in effect all that is necessary to show that rape has in fact been
committed. When the offended party is of tender age and immature, courts are inclined to give credit to her account
of what transpired, considering not only her relative vulnerability but also the shame to which she would be exposed
if the matter to which she testified is not true. Youth and immaturity are generally badges of truth and sincerity. A
young girl’s revelation that she had been raped, coupled with her voluntary submission to medical examination and
willingness to undergo public trial where she could be compelled to give out the details of an assault on her dignity,
cannot be so easily dismissed as mere concoction." (People v. Cadano, G.R. No. 207819, March 12, 2014)

Q: AAA was playing with C, her cousin and the daughter of her uncle, herein appellant, at the second floor
of the latter’s house. At the time, appellant ,M, happened to also be at the second floor of the house. When
C went to the ground floor to urinate, M approached AAA and began to remove his shorts. Thereafter, he
laid AAA, raised her skirt and pulled down her underwear. Then, appellant inserted his penis into her vagina,
causing AAA to feel pain and to shout for help from C. When appellant realized that his daughter Charissa
Criminal Law Digests
might be returning anytime, he let AAA go. AAA did not recount her ordeal to anyone until she complained
to her mother, CCC, of the pain in her vagina. AAA then confessed that her uncle, appellant herein, inserted
his penis into her vagina.

(BBB) While M’s other niece, BBB, was with him in his house, he inserted his penis into her mouth and
threatened her not to tell anyone what he had done. BBB did not report the incident immediately because
she feared M. M was convicted for Simple Rape and for Rape by Sexual Assault. RTC gave full weight and
credence to the testimonies of the private complainants, which it found to be straightforward, candid, and
bearing the earmarks of truth and sincerity. It considered as inconsequential the finding of the doctor that
there was "[n]o laceration nor discharge" on AAA’s hymen, explaining that the slightest penetration of the
woman’s private organ is considered as rape. Should the testimonies of AAA and BBB be given weight?

A: Testimonies of child-victims are normally given full weight and credit, since when a girl, particularly if she is a
minor, says that she has been raped, she says in effect all that is necessary to show that rape has in fact been
committed. When the offended party is of tender age and immature, courts are inclined to give credit to her account
of what transpired, considering not only her relative vulnerability but also the shame to which she would be exposed
if the matter to which she testified is not true. Youth and immaturity are generally badges of truth and sincerity. A
young girl’s revelation that she had been raped, coupled with her voluntary submission to medical examination and
willingness to undergo public trial where she could be compelled to give out the details of an assault on her dignity,
cannot be so easily dismissed as mere concoction.”

In proving the age of victims, there must be independent evidence proving the age of the victim, other than the
testimonies of prosecution witnesses and the absence of denial by the accused." Documents such as her original
or duly certified birth certificate, baptismal certificate or school records would suffice as competent evidence of her
age. (Here, there was nothing on record to prove the minority of "AAA" other than her testimony, appellant’s absence
of denial, and their pre-trial stipulation. The prosecution also failed to establish that the documents referred to above
were lost, destroyed, unavailable or otherwise totally absent.) (People v. Mendoza, G.R. No. 205382, April 2, 2014)

Qualified Rape

Q: X, the husband of Y’s sister, raped Y (a 16-year-old girl) on two occasions. After complaining to her
mother about abdominal pains, Y was brought to the doctor who discovered that she was 5 to 6 months
pregnant. The doctor also declared that she was suffering from a mild mental retardation with an
intelligence quotient equivalent to a nine-year-old child. RTC ruled that X is guilty of Simple Rape as the
qualifying circumstance of relationship by affinity was not alleged in the information. CA ruled that Niebres
should be convicted for Qualified Rape as (a) the state of mental retardation of Y was completely
established on the account of the testimony and psychiatric evaluation of the doctor and (b) X failed to
dispute the mental retardation of Y during trial. Should the qualifying circumstance be considered?

A: NO, X shall only be convicted for Simple Rape. The CA erred in appreciating the qualifying circumstance of X
knowledge of Y’s mental disability at the time of the commission of the crime, there being no sufficient and
competent evidence to substantiate the same. Such qualifying circumstance, however, must be sufficiently alleged
in the indictment and proved during trial to be properly appreciated by the trial court. It must be proved with equal
certainty and clearness as the crime itself; otherwise, there can be no conviction of the crime in its qualified form.
The fact that X did not dispute Y's mental retardation during trial is insufficient to qualify the crime of rape, since it
does not necessarily create moral certainty that he knew of her disability at the time of its commission. It is settled
that the evidence for the prosecution must stand or fall on its own merits and cannot be allowed to draw strength
from the weakness of the evidence for the defense. Additionally, mere relationship by affinity between X and Y does
not sufficiently create moral certainty that the former knew of the latter's disability. (People v. Niebres, G.R. No.
230975, December 4, 2017)

Q: What are the elements of the crime of Qualified Rape?

A: Article 266-A (1) of the RPC states that, rape is committed by a man who shall have carnal knowledge of a
woman under any of the following circumstances:
A. Through force, threat, or intimidation;
B. When the offended party is deprived of reason or is otherwise unconscious;
C. By means of fraudulent machination or grave abuse of authority;
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D. When the offended party is under twelve (12) years of age or is demented, even though none of the
circumstances mentioned above be present
(People v. Niebres, G.R. No. 230975, December 4, 2017)

Q: What are the requisites to be proven beyond reasonable doubt to convict one with the crime of
Qualified Rape?

A: For a successful prosecution of the crime of Rape by sexual intercourse under Article 266-A (1) of the RPC, it
is necessary that the elements thereof are proven beyond reasonable doubt, to wit: (a) the offender had carnal
knowledge of a woman; and (b) he accomplished this act through force, threat or intimidation, when the victim
was deprived of reason or otherwise unconscious, by means of fraudulent machination or grave abuse of
authority, or when the victim is under 12 years of age or is demented. Moreover, case law states that sexual
intercourse with a woman who is a mental retardate, with a mental age below 12 years old, constitutes statutory
rape. In People v. Deniega, the Court clarified that if a mentally-retarded or intellectually-disabled person whose
mental age is less than 12 years is raped, the rape is considered committed under paragraph 1 (d) and not
paragraph 1 (b), Article 266-A of the RPC. (People v. Niebres, G.R. No. 230975. December 4, 2017)
Rape with homicide

Q: One evening, AAA joined her co-worker for a vacation in the province of Nueva Ecija as they were both
laid off from work, and they stayed at the one-storey house of the latter's 62-year old mother, BBB. Thereat,
AAA would sleep at the papag while BBB slept on a mattress on the floor. At around 2:30 in the morning of
January 5, 1996, AAA awoke to the sound of BBB's pleas for mercy. Aided by the kerosene lamp placed on
the floor, AAA saw BBB being mauled and stabbed to death by X and Y. Thereafter, X approached AAA and
restrained her arms, while Y pulled AAA's pants and underwear down and started having carnal knowledge
of her. After Y was done, he switched places with X and the latter took his turn ravishing AAA. As AAA was
able to fight back by scratching X's back, X punched her on the left side of her face while Y hit her left jaw
with a piece of wood. AAA then lost consciousness and woke up in a hospital, while BBB succumbed to
her injuries. What is the criminal liability of X and Y?

A: X should be convicted of one (1) count of Qualified Rape and one (1) count of Homicide. This will no longer
affect Y as he had already withdrawn his appeal prior to the promulgation of this decision. To successfully prosecute
the crime of homicide, the following elements must be proved beyond reasonable doubt: (1) that a person was
killed; (2) that the accused killed that person without any justifying circumstance; (3) that the accused had the
intention to kill, which is presumed; and (4) that the killing was not attended by any of the qualifying circumstances
of murder, or by that of parricide or infanticide. Moreover, the offender is said to have performed all the acts of
execution if the wound inflicted on the victim is mortal and could cause the death of the victim without medical
intervention or attendance.

On the other hand, under Art. 335 of the RPC, the elements of Rape are:(1) the offender had carnal knowledge of
the victim; and (2) said carnal knowledge was accomplished through the use of force or intimidation; or the victim
was deprived of reason or otherwise unconscious; or when the victim was under twelve (12) years of age or
demented. The provision also states that if the act is committed either with the use of a deadly weapon or by two
(2) or more persons, the crime will be Qualified Rape, necessitating the imposition of a higher penalty.

The Court deems it proper to upgrade the conviction in said case from Simple Rape to Qualified Rape. Article 335
of the RPC states that if the rape is committed under certain circumstances, such as when it was committed by two
(2) or more persons, the crime will be Qualified Rape, as in this instance. (People of the Philippines v. Alberto
Alejandro y Rigor and Joel Angeles y De Jesus, G.R. No. 225608, March 13, 2017.)

Acts of Lasciviousness, Rape

Q: Y was charged with the crimes of Acts of Lasciviousness for touching the private organ of AAA, a
fourteen (14) year-old girl, in three separate instances and Qualified Rape when he forced his penis inside
the private organ of BBB, a sixteen (16) year-old girl, while she was sleeping. RTC convicted Y for 3 counts
of Acts of Lasciviousness and Rape. Two minors gave their testimony to Y’s alleged crimes, which the RTC
gave full faith and credence to. The CA affirmed the rulings of the RTC. Is the conviction of the RTC as
affirmed by the CA correct?
Criminal Law Digests
A: Recital of the facts in the information constitute violations of Acts of Lasciviousness under Article 336 of the RPC
in relation to Section 5 (b) of RA 7610.The elements for Acts of Lasciviousness under Article 336 are: (1) that the
offender commits any act of lasciviousness or lewdness; (2) that it is done (a) by using force or intimidation, or (b)
when the offended party is deprived of reason or otherwise unconscious, or (c) when the offended party is under
twelve (12) years of age; and (3) that the offended party is another person of either sex. The elements under Section
5 (b) of RA 7610 are: (1) the accused commits the act of sexual intercourse or lascivious conduct; (2) the said act
is performed with a child exploited in prostitution or subjected to other sexual abuse; and (3) the child, whether male
or female, is below 18 years of age. Common to both legal provisions is the element of lascivious conduct or
lewdness. The term "lewd" is commonly defined as something indecent or obscene. It is characterized by or
intended to excite crude sexual desire. That an accused is entertaining a lewd or unchaste design is a mental
process that can be inferred by overt acts carrying out such intention, i.e., by conduct that can only be interpreted
as lewd or Lascivious.

The crime should be qualified rape. The elements of Qualified Rape under these provisions are: (a) the victim is a
female over twelve (12) years but under eighteen (18) years of age; (b ) the offender is a parent, ascendant, step-
parent, guardian, relative by consanguinity or affinity within the third civil degree, or the common-law spouse of the
parent of the victim; and (c) the offender has carnal knowledge of the victim either through force, threat, or
intimidation. A perusal of the records reveals that all these elements are present. Both the RTC and the CA found
credible BBB's categorical testimony that on November 18, 2003, Y had carnal knowledge of her without her
consent; that she was sixteen (16) years old at that time; and that Monroyo is her uncle, being the husband of her
mother's half-sister. (People v. Monroyo y Mahaguay, G.R. No. 223708, June 28, 2017)

Kidnapping for Ransom - Article 267

Q: X was forcibly taken from her house by a group of men. For several days, X was kept in a house where
she was guarded by several men. The kidnappers demanded ransom money from X’s family. On the day of
the pay-off, the kidnappers were able to take the bag containing the ransom but were subsequently
arrested. Can they be convicted with Kidnapping for Ransom under Article 267 of the RPC?

A: YES. The elements of the crime are as follows: (a) the offender is a private individual; (b) he kidnaps or detains
another, or in any manner deprives the latter of his liberty; (c) the act of detention or kidnapping must be illegal; and
(d) in the commission of the offense any of the following circumstances is present: i) the kidnapping or detention
lasts for more than three days; ii) it is committed by simulating public authority; iii) any serious physical injuries are
inflicted upon the person kidnapped or detained or threats to kill him are made; or iv) the person kidnapped or
detained is a minor, female, or a public officer. Notably, the duration of detention is immaterial if the victim is a
minor, or if the purpose of the kidnapping is to extort ransom. There must be a purposeful or knowing action by the
accused to forcibly restrain the victim coupled with intent. In this case, the kidnappers illegally detained the X against
her will for the purpose of extorting ransom from her family. Thus, they are guilty of Kidnapping for ransom. (People
v. Lidasan, G.R. No. 227425. September 4, 2017)

Estafa - Article 315

Q: X was neither licensed nor authorized to recruit workers for employment abroad. X then offered an
employment opportunity abroad to Y. X asked Y to provide documents and pay placement fees to process
the visa. However, Y never received the visa, and when he went to look for X, could no longer find the latter.
Is X guilty of Estafa?

A: YES. Estafa by means of deceit is committed when these elements concur: (a) the accused used fictitious name
or false pretense that he possesses power, influence, qualifications, property, credit, agency, business or imaginary
transactions, or other similar deceits; (b) he used such deceitful means prior to or simultaneous with the commission
of the fraud; (c) the offended party relied on such deceitful means to part with his money or property; and (d) the
offended party suffered damage. In this case, X defrauded Y by representing that he can provide them with jobs
abroad even though he had no license to recruit workers. He even collected irrelevant documents and placement
fees. Furthermore, Y could no longer locate X to recover the amounts paid. Thus, X is guilty of Estafa.

Case law holds that the same pieces of evidence that establish liability for illegal recruitment in large scale confirm
culpability for estafa. It is well-established in jurisprudence that a person may be charged and convicted for both
illegal recruitment and estafa. The reason therefor is not hard to discern: illegal recruitment is malum prohibitum,
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while estafa is mala in se. In the first, the criminal intent of the accused is not necessary for conviction. In the
second, such intent is imperative. (People v. Racho y Somera, G.R. No. 227505, October 2, 2017)

Q: X and Y entered into an agreement whereby X shall deliver pieces of jewelry to Y for the latter to sell
on commission basis. After one month, Y is obliged to either: (a) remit the proceeds of the sold jewelry; or
(b) return the unsold jewelry to the former. On different dates, X delivered various sets of jewelry to Y. Upon
the delivery of last batch of jewelry, Y issued a check as full security for the first two deliveries and as
partial security for the last. When Y failed to remit the proceeds or to return the unsold jewelry on due date,
X presented the check to the bank for encashment, but was dishonored due to insufficient funds. Upon
assurance of Y, X re- deposited the check, but again, the same was dishonored because the drawee account
had been closed. X then decided to confront Y, who then uttered "Akala mo, babayaran pa kita?" Thus, X
was constrained to file three (3) separate Informations charging Y of the crime of Estafa defined and
penalized under Art. 315(1)(b) of the RPC. Is Y guilty of three counts of Estafa?

A: Yes. The elements of Estafa are: (1) The offender's receipt of money, goods, or other personal property in trust,
or on commission, or for administration, or under any other obligation involving the duty to deliver, or to return, the
same; (2) Misappropriation or conversion by the offender of the money or property received, or denial of receipt of
the money or property; (3) The misappropriation, conversion or denial is to the prejudice of another; and (4)Demand
by the offended party that the offender return the money or property received.

The essence of this kind of estafa is the appropriation or conversion of money or property received to the prejudice
of the entity to whom a return should be made. The words "convert" and "misappropriate" connote the act of using
or disposing of another's property as if it were one's own, or of devoting it to a purpose or use different from that
agreed upon. In proving the element of conversion or misappropriation, a legal presumption of misappropriation
arises when the accused fails to deliver the proceeds of the sale or to return the items to be sold and fails to give
an account of their whereabouts.Hence, Y is guilty of Estafa defined and penalized under Art. 315(1)(b). (Paz Cheng
Y Chu v. People of the Philippines, G.R. No. 174113, January 13, 2016)

Estafa, Article 315 (1)(b)

Q: X received several pieces of jewelry for sale on consignment from Y under the obligation that X will remit
the proceeds of the sale or if not sold, to return them to Y after seven (7) days from receipt of the same.
However, X willfully and unlawfully misappropriated the benefits to her own personal use. When X failed to
return the proceeds and the jewelry, Y demanded for the same. X failed to do so and further argued that her
liability only civil and not criminal. RTC found X guilty beyond reasonable doubt of the crime of estafa
defined and penalized under Article 315 (1)(b) of RPC. Should X be convicted of Estafa?

A: YES, X is guilty of Estafa. The facts clearly show the existence of all the elements of the crime charged,
considering that: (a) X received various pieces of jewelry from Y on a sale-on-consignment basis, as evidenced by
the consignment document; (b) X was under the obligation to either remit the proceeds of the sale or return the
jewelry after the period of seven (7) days from receipt of the same; (c) X failed to perform her obligation, prompting
Y to demand compliance therewith; and (d) X failed to heed such demand, thereby causing prejudice to Y. (Rivac
v. People, G.R. No. 224673, January 22, 2018)

Q: What are the elements of Estafa?

A: The elements of Estafa under Article 315 (1) (b) of the RPC are as follows:
(a) the offender's receipt of money, goods, or other personal property in trust or on commission, or for
administration, or under any other obligation involving the duty to deliver or to return the same;
(b) misappropriation or conversion by the offender of the money or property received, or denial of receipt
of the money or property;
(c) the misappropriation, conversion or denial is to the prejudice of another; and
(d) demand by the offended party that the offender return the money or property received.
(Rivac v. People, G.R. No. 224673, January 22, 2018)

Q: X contracted the services of Y, a broker, for the sale of a share of stock. Y later introduced Z and they
entered into a Deed of Absolute Sale. However, such such sale was later annulled by the court. Thus, X
returned to Z the sum of money which the latter paid for the share, plus interest, and applied with the Bureau
of Internal Revenue (BIR) for the refund of the taxes paid for the annulled sale. Meanwhile, X requested Y
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for an accounting of the sum she received on behalf of X. In response, Y faxed documents. Examining the
documents, X noticed a discrepancy in the faxed Capital Gains Tax Return: while the typewritten portion of
the Return indicated P1,480,000.00 as the capital gains tax paid, the machine validation imprint reflected
only P80,000.00 as the amount paid. To clarify the discrepancy, X secured a certified true copy of the Capital
Gains Tax Return from the BIR that reflected only P80,000.00 as the capital gains tax paid for the sale of
the share. As a result, X demanded Y to properly account for the P2,800,000.00 allegedly given to her for
the payment of taxes and broker's fees, but to no avail. This led to the filing of an Information for the crime
of Estafa under Article 315, paragraph (1) (b) of the Revised Penal Code (RPC) against Y before the RTC.
The RTC and CA failed to establish that the elements of Estafa are present. The question is whether Y can
still be held liable for civil liability ex delicto?

No, Y cannot be held liable for civil liability ex delicto. When the element of misappropriation or conversion is absent,
there can be no Estafa and concomitantly, the civil liability ex delicto does not exist. In estafa under Art. 315 (1)(b),
the fraud which the law considers as criminal is the act of misappropriation or conversion. When the element of
misappropriation or conversion is missing, there can be no estafa. In such case, applying the foregoing discussions
on civil liability ex delicto, there can be no civil liability as there is no act or omission from which any civil liability
may be sourced. However, when an accused is acquitted because a reasonable doubt exists as to the existence of
misappropriation or conversion, then civil liability may still be awarded. This means that, while there is evidence to
prove fraud, such evidence does not suffice to convince the court to the point of moral certainty that the act of fraud
amounts to estafa. As the act was nevertheless proven, albeit without sufficient proof justifying the imposition of
any criminal penalty, civil liability exists. (Estate of Honorio Poblador, Jr., Represented By Rafael A. Poblador v.
Rosario L. Manzano, G.R. No. 192391, June 19, 2017)

Q: A was the Loans Bookkeeper of the Bank and she was authorized to collect and/or accept loan payments
of the Bank’s clients and issue receipts therefor, and remit payments to her supervisor. The Bank
discovered that fraud and certain irregularities attended the same since there was non-remittance of some
loan payments. The Bank demanded an explanation and to return the unremitted money involved. Is A
guilty of Estafa through misappropriation?

A: NO. The elements of Estafa through misappropriation (Art 315 par. 1) are: a) the offender's receipt of money,
goods, or other personal property in trust, or on commission, or for administration, or under any other obligation
involving the duty to deliver, or to return, the same; (b) misappropriation or conversion by the offender of the money
or property received, or denial of receipt of the money or property; (c) the misappropriation, conversion or denial is
to the prejudice of another; and (d) demand by the offended party that the offender return the money or property
received.
Under the first element, there must also be juridical possession, which means a possession which gives the
transferee a right over the thing which the transferee may set up even against the owner.

In this case, A was merely a collector of loan payments from the Bank’s clients. The money merely passes into her
hands and she takes custody thereof only for the duration of the banking day. The sum of money received by A, is
considered to be only in her material possession, not juridical possession. Hence, conversion of personal property
in the case of an employee having mere material possession of the said property constitutes theft, whereas in the
case of an agent to whom both material and juridical possession have been transferred, misappropriation of the
same property constitutes Estafa. Lacking the first element of the crime, A cannot be convicted of the crime Estafa.
(Benabaye v. People, G.R. No. 203466, February 25, 2015.)

Syndicated Estafa

Q: Company X is an open-end investment company registered with SEC. SEC found that Company X was
selling securities to the public without a registration statement in violation of “The Securities Regulation
Code”. This led to the filing of multiple cases for Syndicated Estafa against A and B, along with 5 other
incorporators and directors of the same company. The private complainants alleged that they were enticed
to invest with the company due to the offer of high interest rates as well as the assurance that they will
recover their investments. They were also given post-dated checks however it was dishonored as the
account of Company X was already closed. The employees of the company gave acknowledgement receipts
and reassured that their investments as well as the interests would be paid. However, the office of Company
X closed without the complainants having been paid. The defense of A and B was that they were neither an
incorporator nor a director of Company X. Are they guilty of the crime Syndicated Estafa?
Criminal Law Digests
A: YES. The elements of Syndicated Estafa are: (a) Estafa or other forms of swindling, as defined in Art. 315 and
316 of the RPC, is committed; (b) the Estafa or swindling is committed by a syndicate of 5 or more persons; and (c)
defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)," or farmers' associations, or of funds solicited by corporations/associations from
the general public.

All the elements of Syndicated Estafa, committed through a Ponzi scheme, are present in this case, considering
that: (a) the incorporators/directors of Company X comprising more than 5 people, including herein accused A and
B made false pretenses and representations to the investing public — in this case, the private complainants —
regarding a supposed lucrative investment opportunity with Company X in order to solicit money from them; (b) the
said false pretenses and representations were made prior to or simultaneous with the commission of fraud; (c)
relying on the same, private complainants invested their hard earned money into Company X; and (d) the
incorporators/directors of Company X ended up running away with the private complainants' investments, to the
latter's prejudice. (People v. Tibayan, G.R. Nos. 209655-60, January 14, 2015.)

Grave Oral Defamation - Article 358

Q: X and Y got into a quarrel in front of Y’s house, which led to X uttering, “Vulva of your mother, prostitute,
illiterate, you built a very big house, it overshadows my house”. However, no evidence was presented to
show that X started the fight, as Y is alleging. Is X guilty of Grave Oral Defamation?

A: NO, X is guilty only of Simple Oral Defamation. Oral Defamation or Slander is libel committed by spoken means.
It is defined as "the speaking of base and defamatory words which tend to prejudice another in his reputation, office,
trade, business or means of livelihood." An allegation is considered defamatory if it ascribes to a person the
commission of a crime, the possession of a vice or defect, real or imaginary or any act, omission, condition, status
or circumstance which tends to dishonor or discredit or put him in contempt or which tends to blacken the memory
of one who is dead. Whether the offense committed is serious or slight oral defamation, depends not only upon the
sense and grammatical meaning of the utterances but also upon the special circumstances, like the social standing
or the advanced age of the offended party. In particular, it is a rule that uttering defamatory words in the heat of
anger, with some provocation on the part of the offended party constitutes only a light felony. (Ramos v. People,
G.R. No. 226454, November 20, 2017)

Q: What are the elements of Oral Defamation?

A: The elements of oral defamation are:


(1) there must be an imputation of a crime, or of a vice or defect, real or imaginary, or any act, omission,
status or circumstances;
(2) made orally;
(3) publicly;
(4) and maliciously;
(5) directed to a natural or juridical person, or one who is dead;
(6) which tends to cause dishonor, discredit or contempt of the person defamed.
(Ramos v. People, G.R. No. 226454, November 20, 2017)

Proof beyond reasonable doubt / falsification

Q: X submitted a photocopy of a Deed of Sale to the PNP Crime Laboratory for examination of the signatures
found thereon. The Document Examiner confirmed that the subject deed was falsified. However, under the
Document Report submitted, it was said that no definite conclusion can be rendered due to the fact the
questioned signatures are photocopies wherein minute details are not clearly manifested. Y is then charged
with the crime of Falsification of Public Documents under Article 172(1) of the RPC. Can Y be convicted of
the crime?

A: NO. In every criminal case, the accused is entitled to acquittal unless his guilt is shown beyond reasonable doubt.
Proof beyond reasonable doubt does not mean absolute certainty; only moral certainty is required, or that degree
of proof which produces conviction in an unprejudiced mind. The prosecution must establish the fact of falsification
or forgery by clear, positive, and convincing evidence, as the same is never presumed. In this case, the genuineness
and due execution of a photocopy could not be competently established without a copy of the original. The
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declaration of the Document Examiner is unreliable and inconsistent. Thus, it cannot support a finding of guilt
beyond reasonable doubt against Y.

Circumstantial evidence consists of proof of collateral facts and circumstances from which the main fact in issue
may be inferred based on reason and common experience.

Elements of Circumstantial Evidence


It is sufficient for conviction if:
(a) there is more than one circumstance;
(b) the facts from which the inferences are derived are proven; and
(c) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.

While it is true that the courts can rely on circumstantial evidence in order to establish the guilt of the accused, the
circumstantial evidence which the courts a quo relied upon in this case did not sufficiently create moral certainty,
since they appear to be too insignificant and unconvincing. Firstly, the Notarial Law does not require the parties to
have the subject deed notarized in the place of their residence. Secondly , the issue on the date when the supposed
witnesses signed the subject deed is immaterial. In fact, Section 30, Rule 132 of the Rules of Court provides that
an instrument, such as a notarized document, may be presented in evidence without further proof, the certificate of
acknowledgment being prima facie evidence of the execution of the instrument or document involved. Thirdly ,
having the subject deed registered with the RD after an unreasonable length of time from its execution and
notarization does not necessarily imply that the subject deed was actually forged. Lastly, the supposed belated
payment of the corresponding capital gains and documentary stamp taxes has no relevance at all with the supposed
act of falsification. By and large, the prosecution presented no adequate circumstantial evidence which would
warrant Y’s conviction for the crime of Falsification of Public Document. (Lamsen v. People, G.R. No. 227069,
November 22, 2017)

Qualified Theft - Article 310

Q: X was the President and Chairman of the Board of Trustees of Company A. X allowed his son Y to tap
into the electricity and water supply of Company A. When X died, Z succeeded him as President and filed
a criminal complaint against Y for qualified theft, attended by the qualifying circumstance of grave abuse
of confidence. Y argues that he was explicitly allowed by X to use such electricity and water supply and no
opposition was aired by anyone. Can Y be convicted with qualified theft?

A: NO. The elements of lack of owner's consent and intent to gain are evidently absent in this case. First, Y was
permitted by X to tap into the electricity and water supply. As such, Y had no criminal intent to appropriate the
personal property as he acted on the faith of his father's authority, on behalf of Company A. There is no theft where
the taker honestly and in good faith believes the property is his own or that of another, and that he has a right to
take possession of it for himself or for another". His bona fide belief that he had authority from the real owner of the
electricity and water supply will not make him culpable of the crime of qualified theft because he was acting with a
color of authority or a semblance of right to do such act. Second, The Board of Trustees clothed X with such
apparent authority to act on behalf of Company A. By giving X apparent authority, the Board of Trustees cannot
now deny and repudiate the legal effect of X’s consent to use the electricity and water supply. The element of lack
of owner's consent is thus absent in this case. Thus, the case should be dismissed. (People v. Delos Santos, G.R.
No. 220685, November 29, 2017)

Malversation of Public Funds through Falsification of Public Documents

Q: Six separate Informations have been filed against X, a government employee entrusted with the
collection of parking fees from various establishments and its remittance of such with receipt to the City
Treasurer of Manila, for forging Official Receipts with intent to defraud and gravely abuse the trust and
confidence granted to him. Is he guilty of the crime of Malversation of Public Funds through Falsification
of Public Documents?

A: The Court was able to prove all the elements of the crime charged, given that: (a) X, being Clerk II and then
Special Collecting Officer, was a public officer; (b) the funds involved are public funds for which he was
accountable as they were due to and paid to the City of Manila; (c) he has custody and control over the said funds
by reason of his office, since he was officially designated to collect the monthly parking fees from various
Criminal Law Digests
establishments; and (d) he has appropriated, taken, or misappropriated the said public funds when he failed to
discharge his duty of remitting the same in full. (Dizon v. People, G.R. No. 227577, January 24, 2018)

Q: What are the elements of Malversation?

A: Article 217: Malversation of public funds or property — presumption of malversation, states that the elements
are:
1. Offender is a public officer
2. He had the custody or control of funds or property by reason of the duties of his office
3. Those funds or property were public funds for which he was accountable
4. He appropriated, took, misappropriated or consented or through abandonment or negligence, permitted
another person to take them
(Dizon v. People, G.R. No. 227577, January 24, 2018)

Q: What are the elements of Falsification by a Public Officer?

A: Under Article 171: Falsification by public officer, employee or notary or ecclesiastical minister, the elements
are:
1. That the offender is a public officer, employee, or notary public
2. That he takes advantage of his official position
3. That he falsifies a document by committing any of the following acts:
a. Counterfeiting or imitating any handwriting, signature or rubric
b. Causing it to appear that persons have participated in any act or proceeding when they did not
in fact so participate
c. Attributing to persons who have participated in an act or proceeding statements other than
those in fact made by them
d. Making untruthful statements in a narration of facts
e. Altering true dates
f. Making any alteration or intercalation in a genuine document which changes its meaning
g. Issuing in authenticated form a document purporting to be a copy of an original document
when no such original exists, or including such copy a statement contrary to, or different from that
of the original
h. Intercalating any instrument or note relative to the issuance thereof in a protocol, registry, or
official book
4. In case the offender is an ecclesiastical minister, the act of falsification is committed with respect to any
record or document of such character that its falsification may affect the civil status of persons

Murder with Evident Premeditation

Q: X was walking with Y towards the mall, when suddenly X stabbed Y repeatedly until the latter died. X
tried to flee but was caught by the police and was charged with the crime of Murder. Z, a witness, testified
against X. X denied the allegations by saying that he did not know Y and that he was assisting a car
parked in the area where he was arrested. RTC convicted him of Murder with qualifying circumstance of
evident premeditation, which it inferred from the act of X in bringing with him a knife and waiting for the
perfect moment to consummate the plan to kill Y. CA sustained the findings along with the qualifying
circumstance of treachery, as Y was caught off-guard and had no way of defending himself, and thus, the
mode of attack was deliberately and consciously adopted by X to insure the execution of the crime
without risk to himself. Is CA correct to affirm the conviction of Murder?

A: To successfully prosecute the crime of Murder, the following elements must be established: (1) that a person
was killed; (2) that the accused killed him or her; (3) that the killing was attended by any of the qualifying
circumstances mentioned in Article 248 of the RPC; and (4) that the killing is not parricide or infanticide. In this
case, and as correctly found by the courts a quo, the prosecution was able to establish a confluence of the
foregoing elements, considering the following: (1) Y was killed; (2) X was positively identified as the one who
killed him; (3) Y’s killing was attended by treachery, a qualifying circumstance; and (4) the killing is neither
parricide nor infanticide. However, there is no evident premeditation as there has been nothing offered to
establish when and how he planned and prepared for the same, nor was there a showing that suffcient time had
lapsed between his determination and execution. (People v. Cirbeto y Giray, G.R. No. 231359, February 7, 2018)
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Q: What is treachery?

A: Treachery is the direct employment of means, methods, or forms in the execution of the crime against persons
which tends directly and specially to insure its execution, without risk to the offender arising from the defense
which the offended party might make. The essence of treachery is that the attack is deliberate and without
warning, done in a swift and unexpected way, affording the hapless, unarmed, and unsuspecting victim no chance
to resist or escape. In order for treachery to be properly appreciated, two elements must be present: (1) at the
time of the attack, the victim was not in a position to defend himself; and (2) the accused consciously and
deliberately adopted the particular means, methods, or forms of attack employed by him. (People v. Cirbeto y
Giray, G.R. No. 231359. February 7, 2018)

Q: What are the elements of evident premeditation?

A: For evident premeditation to be considered as a qualifying or an aggravating circumstance, the prosecution


must prove: (a) the time when the offender determined to commit the crime; (b) an act manifestly indicating that
the culprit has clung to his determination; and (c) a sufficient lapse of time between the determination and
execution, to allow him to reflect upon the consequences of his act and to allow his conscience to overcome the
resolution of his will. (People v. Cirbeto y Giray, G.R. No. 231359. February 7, 2018)

Murder

Q: X, who was seated beside a vendor, suddenly shot Y at the back of his head as the latter was helping
his daughter disembark from a motorcycle. X fled but was chased by Z, a security guard of the nearby
school. X boarded a jeepney and pointed a gun at Z so the latter seeked cover and eventually lost sight of
X. X was caught by the police the next day and was subjected to a paraffin test, where X was positive for
gun residue. X denied the allegations and said that he was sleeping in his house all morning and that a
police officer offered him to test his gun, and after firing the gun, he was invited to the police station as
suspect. RTC convicted X with murder, saying that X failed to present his wife or his brother to
corroborate his testimony and to show that it was physically impossible for him to be at the place of the
incident. In fact, the short distance of 100 meters between the crime scene and X’s house, where he said
he was, did not foreclose the possibility of his presence at the crime scene since it would only take
around 20 minutes to get to the place. CA affirmed. Is X correctly convicted for Murder?

A: YES. In order to convict a person charged with the crime of Murder, the prosecution must establish the
following elements beyond reasonable doubt:(a) that a person was killed; (b) the accused killed him or her; (c) the
killing was attended by any of the qualifying circumstances mentioned in Article 248 of the RPC; and (d) the killing
does not constitute Parricide or Infanticide. One of the circumstances which qualifies the killing to Murder is the
existence of treachery. There is treachery when the offender commits any of the crimes against persons,
employing means, methods, or forms in the execution thereof which tend directly and specially to insure its
execution, without risk to himself arising from the defense which the offended party might make. In this case, the
prosecution was able to prove that X’s attack on Y was so sudden and executed in such a manner that Y was
caught off-guard on what X intended to do. (People v. Parba y Solon, G.R. No. 214506 (Resolution). October 19,
2015)

Q: An eyewitness testified that X fired four (4) gunshots towards Y, resulting to the latter's death. To ensure
Y's demise, X approached X and shot him again. Thereafter, accused-appellants fled the scene. The next
day, Y's body was found near the duhat tree, prompting police officers to conduct an investigation from
which were gathered the following evidence and information: (a) a piece of bamboo was recovered three
(3) meters away from Y's corpse; (b) Y purportedly had a previous misunderstanding with X sometime in
1997, yet the same was settled before the barangay; and (c) Y allegedly had a drinking spree with his friends
at the time of the incident. An autopsy was likewise conducted on Y's body, revealing that there were four
(4) incised wounds on his left hand, a stab wound on his left chest, and five (5) gunshot wounds on his
body; that based on the nature and sizes of his wounds, it was possible that the firearm used was of the
same caliber; and that his injuries could not have been inflicted by a single person. RTC and CA convicted
the accused with the crime of Murder with the Use of an Unlicensed Firearm. Are the lower courts correct?

A: No. The accused should only be held liable for simple Murder, and not Murder with the Use of an Unlicensed
Firearm. To successfully prosecute the crime of Murder, the following elements must be established: (1) that a
person was killed; (2) the accused killed him or her; (3) the killing was attended by any of the qualifying
Criminal Law Digests
circumstances mentioned in Article 248 of the Revised Penal Code; and (4) the killing is not parricide or infanticide.
The prosecution, through the testimony of an eyewitness had established beyond reasonable doubt that: the X
chased, ganged up, and eventually, killed Y, and likewise, it was shown that they deliberately used weapons (i.e.,
gun and bamboo stick), which rendered Y defenseless from their fatal attacks. Killing was attended with the
qualifying circumstance of abuse of superior strength, which perforce warrants Y's conviction for Murder.

[SPL] Under Section 1 of RA 8294, "[i]f homicide or murder is committed with the use of an unlicensed firearm, such
use of an unlicensed firearm shall be considered as an aggravating circumstance." There are two (2) requisites to
establish such circumstance, namely: (1) the existence of the subject firearm; and (2) the fact that the accused
who owned or possessed the gun did not have the corresponding license or permit to carry it outside his residence.
The onus probandi of establishing these elements as alleged in the Information lies with the prosecution.

It is undisputed that Y sustained five (5) gunshot wounds which led to his demise, it is unclear from the records: (a)
whether or not the police officers were able to recover the firearm used as a murder weapon; and (b) assuming
arguendo that such firearm was recovered, whether or not such firearm was licensed. The Court notes that the
disquisitions of the courts a quo were silent regarding this matter. Having failed in this respect, the Court cannot
simply appreciate the use of an unlicensed firearm as an aggravating circumstance. (Manny Ramos, Roberto
Salonga and Servillano Nacional v. People of the Philippines, G.R. No. 218466, January 23, 2017)

Falsification of Private Documents

Q: X, a VP of a company, instructed Y to withdraw money from her account via ATM. As the ATMs were
offline, Y got the amount through the petty cash custodian of the company instead. The company’s finance
manager Z informed X of the situation and the petty cash report and X immediately rectified the situation.
Z instructed the petty cash custodian to reverse the report but informed the president of the company of
the situation. Z then instructed the petty cash custodian to retrieve the report, print it on a scratch paper,
and make it look old. X was administratively charged for using office funds for personal use on the basis
of such report. X sued Z and the petty cash custodian for Falsification of Private Documents. The petty
cash custodian argued that she was just following Z’s instructions. MeTC, RTC, and CA convicted the latter
for the crime but appreciated the mitigating circumstance of acting under the impulse of uncontrollable
fear. Is the petty cash custodian guilty of Falsification of Private Documents?

A: YES. The elements of Falsification of Private Documents under Article 172 (2) of the RPC are: (a) that the
offender committed any of the acts of falsification, except those in Article 171 (7) of the same Code; (b) that the
falsification was committed in any private document; and (c) that the falsification caused damage to a third party or
at least the falsification was committed with intent to cause such damage. On the other hand the elements of
Falsification under Article 171 (4) of the RPC are as follows: (a) the offender makes in a public document untruthful
statements in a narration of facts; (b) he has a legal obligation to disclose the truth of the facts narrated by him; and
(c) the facts narrated by him are absolutely false. In the instant case, the MeTC, RTC, and CA all correctly found
Manansala guilty beyond reasonable doubt of the aforesaid crime, considering that: (a) as UMC's Petty Cash
Custodian, she is legally obligated to disclose only truthful statements in the documents she prepares in connection
with her work, such as the subject report; (b) she knew all along that Siy never made any cash advance nor utilized
the proceeds thereof for her personal use; (c) despite such knowledge, she still proceeded in revising the subject
report by inserting therein a statement that Siy made such a cash advance; and (d) she caused great prejudice to
Siy as the latter was terminated from her job on account of the falsified report that she prepared. (Manansala v.
People, G.R. No. 215424, December 9, 2015)

Q: Was it correct to appreciate the “mitigating circumstance” of acting under an impulse of uncontrollable
fear?

A: NO. "Acting under an impulse of uncontrollable fear" is not among the mitigating circumstances enumerated in
Article 13 of the RPC, but is an exempting circumstance provided under Article 12 (6) of the same Code. Moreover,
for such a circumstance to be appreciated in favor of an accused, the following elements must concur: (a) the
existence of an uncontrollable fear; (b) that the fear must be real and imminent; and (c) the fear of an injury is
greater than, or at least equal to, that committed. For such defense to prosper, the duress, force, fear or intimidation
must be present, imminent and impending, and of such nature as to induce a well-grounded apprehension of death
or serious bodily harm if the act be done. A threat of future injury is not enough. (Manansala v. People, G.R. No.
215424. December 9, 2015)
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Slander by Deed and False Certification

Q: X filed a case Y and others, accusing them, as public officers, of the crimes of Falsification of Public
Documents, False Certification, and Slander by Deed. X alleged that their statements in 2 separate blotter
entries were false, and made to dishonor/discredit him. The Office of the Provincial Prosecutor (OPP)
dismissed both the complaint and the MR, and the Office of the Regional State Prosecutor (ORSP) did the
same. X later filed a petition for review before the CA, who dismissed it holding the ORSP is not the final
authority in the hierarchy of the National Prosecution Service. Is the dismissal of the CA proper?

A: Partly. X’s direct recourse to the CA, instead of first appealing the ORSP’s decision to the Secretary of Justice,
violated the principle of exhaustion of administrative remedies. The prevailing appeals process in the National
Prosecution Service depends on two factors: where the complaint was filed; and which court has original jurisdiction
over the case. For the ORSP’s ruling to have finality the complaint must be filed outside NCR and must be
cognizable by the MTCs/MeTCs/MCTCs. For the SOJ’s ruling to have finality the complaint may be filed within or
outside the NCR, but it must not be cognizable by the MTCs/MeTCs/MCTCs. In the case at bar, X filed the complaint
before the OPP in Pangasinan. Of the crimes charged, only False Certification and Slander by Deed are cognizable
by the MTCs/MeTCs/MCTCs, while Falsification of Public Documents is cognizable by the RTCs. Applying the
prevailing rule, only the crimes of False Certification and Slander by Deed may be elevated to the Courts. Thus, the
CA should have resolved X’s petition on the merits of those two crimes. (Cariaga v. Sapigao, G.R. No. 223844,
June 28, 2017)

Q. Whether or not there was probable cause for the crimes of Slander by deed and False Certification?
There is no probable cause for crimes of Slander by Deed and False Certification. As aptly found by the ORSP,
there was no improper motive on the part of respondents in making the blotter entries as they were made in good
faith; in the performance of their official duties as barangay officials; and without any intention to malign, dishonor,
or defame Cariaga. Moreover, the statements contained in the blotter entries were confirmed by disinterested
parties who likewise witnessed the incidents recorded therein. On the other hand, Cariaga's insistence that the
blotter entries were completely false essentially rests on mere self-serving assertions that deserve no weight in law.
43 Thus, respondents cannot be said to have committed the crime of Slander by Deed. Furthermore, suffice it to
say that the mere act of authenticating photocopies of the blotter entries cannot be equated to committing the crime
of False Certification under the law. (Cariaga v. Sapigao, G.R. No. 223844, June 28, 2017)

Qualified Theft

Q: Company V ordered diesel fuel from Company U, owned by L. C is a truck driver employed by L and was
dispatched to deliver such diesel fuel to Company V. Later that day, it was found that Company V never
received their order. The NBI agents found the abandoned lorry truck emptied of the diesel fuel. Under the
foregoing premises, L filed a complaint against C for Qualified Theft. Is C guilty of the crime Qualified Theft?

A: YES. There is a confluence of all the following elements of Qualified Theft: a) taking of personal property; b) said
property belongs to another; c) the said taking be done with intent to gain; d) it be done without the owner’s consent;
e) it be accomplished without the use of violence or intimidation against persons, nor of force upon things; and f) it
be done under any of the circumstances enumerated in Art. 310 of the PRC, i.e. with grave abuse of confidence.

It was sufficiently established that the diesel fuel loaded into the truck driven by C for delivery to Company V was
taken by him, without the authority and consent of L, the owner of the diesel fuel, and that C abused the confidence
reposed upon him by L, as his employer. (Candelaria v. People, G.R. No. 209386, December 8, 2014)

Reckless Imprudence Resulting to Homicide with Double Serious Physical Injuries and Damage to Property

Q: A was driving a motorcycle, with his 2 children, on an ascending curving road, on their proper lane. B
was driving a car, swiftly descending on the same lane from the opposite direction. A blew the horn to
signal B to return to its proper lane but he remained in the same lane. In order to avoid collision, A tried to
swerve but B suddenly swerved towards the same direction and collided head-on with the motorcycle. As
a result, they were thrown off the motorcycle. A was pinned beneath the car and his children’s legs were
injured. The victims were brought to the hospital, A died and his children were confined. Is B guilty of the
crime Reckless Imprudence Resulting to Homicide with Double Serious Physical Injuries and Damage to
Property?
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A: YES. Reckless imprudence, as defined in Art. 365 of the RPC, consists in voluntarily, but without malice, doing
or failing to do an act from which material damage results by reason of inexcusable lack of precaution on the part
of the person performing or failing to perform such act, taking into consideration his employment or occupation,
degree of intelligence, physical condition and other circumstances regarding persons, time and place. Reckless
Imprudence Resulting to Homicide with Double Serious Physical Injuries and Damage to Property is a complex
crime. Art. 48 of the RPC provides that when a single act constitutes two or more grave or less grave felonies, or
when an offense is a necessary means for committing the other, the penalty for the most serious crime (Reckless
Imprudence Resulting to Homicide) must be imposed.

In order to establish B’s liability for the negligent operation of a vehicle, it must be shown that there was a direct
causal connection between such negligence and the injuries or damages complained of. It is B’s act of driving very
fast on the wrong side of the road was the proximate cause of the collision, resulting to the death of A and serious
physical injuries to his children. Excessive speed, combined with other circumstances such as the occurrence of
the accident on or near a curve, as in this case, constitutes negligence. B acted recklessly and imprudently in driving
at a fast speed on the wrong side of the road while approaching the curve where the incident happened, thereby
rendering him criminally liable. It is the inexcusable lack of precaution or conscious indifference to the consequences
of the conduct which supplies the criminal intent and brings an act of mere negligence and imprudence under the
operation of the penal law, without regard to whether the private offended party may himself be considered likewise
at fault. (Gonzaga v. People, G.R. No. 195671, January 21, 2015.)

Robbery with Homicide

Q: A and his family were inside their car, stuck in traffic. B suddenly appeared at the side of the car, poking
a gun at him, asking for his phone. B then shot him after getting the phone. Despite medical intervention,
A died. Is the RTC and the CA correct in finding B guilty of Robbery with Homicide?

A: YES. The special complex crime of robbery with homicide takes place when a homicide is committed either by
reason, or on the occasion, of the robbery. To sustain a conviction for robbery with homicide, it must be proven that
there was: (1) the taking of personal property belonging to another; (2) with intent to gain; (3) with the use of violence
or intimidation against a person; and (4) on the occasion or by reason of the robbery, the crime of homicide, as
used in its generic sense, was committed.
Furthermore, Homicide is said to have been committed by reason or on occasion of robbery if it was committed: (a)
to facilitate the robbery or the escape of the culprit; (b) to preserve the possession by the culprit of the loot; (c) to
prevent discovery of the commission of the robbery; or (d) to eliminate witnesses in the commission of the crime.
Thus, the intent to rob must precede the taking of human life but the killing may occur before, during or after the
robbery.

It was established that B poked his gun at A, took the latter’s phone, and thereafter, shot him, resulting his death.
(People v. Balute y Villanueva, G.R. No. 212932, January 21, 2015)

Q: Respondents planned to rob the house of A. They used a knife to get through the fence, destroyed the
knob of the kitchen door and gained entry, where they took valuable items of A. When A woke up, he was
assaulted and stabbed by one of the respondents, which led to his death. Are the respondents guilty of the
crime of Robbery with Homicide?

A: YES. The elements for the crime of robbery with homicide are: (a) the taking of personal property is committed
with violence or intimidation against persons; (b) the property belongs to another; (c) the taking is animo lucrandi or
with intent to gain; and (d) on the occasion or by reason of the robbery, homicide was committed. A conviction
requires that the robbery is the main purpose and the killing is merely incidental to the robbery. The intent to rob
must precede the taking of human life, but the killing may occur before, during or after the robbery.

It was established that the respondents were all armed with knives when they broke into the house of A, took
personal properties, and in the course thereof, stabbed A, resulting to his death. (People v. Palma y Varcas, G.R.
No. 212151, February 18, 2015)

Q: One evening, several other people were sitting outside F’s house in when R arrived and looking for a
certain N. When A replied that N wasn't there, R approached A and cocked a gun at him. At that point,
accused-appellant S arrived and, without any warning, shot G in the chest. G was able to run away, and as
S was chasing him, F heard another gunshot. Moments later, S returned alone and left together with R. F
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tried to contact G and when the latter did not respond, F went to look for him. Eventually, G was found dead
in a kangkong swamp. RTC found S guilty and appreciated treachery as a qualifying circumstance since
the attack was so sudden and unexpected, without warning on the victim and, thus, made it impossible for
him to defend himself even if the attack was frontal. The CA affirmed the ruling and agreed with the findings
of the RTC that the killing of G was attended with treachery. The accused-appellant S claimed that such
were acts of self-defense. With the foregoing facts, was treachery present?

A: Yes. Among the qualifying circumstances found in Article 248 of the RPC is treachery. Under Article 14 of the
same Code, there is treachery when the offender commits any of the crimes against the person, employing means,
methods, or forms in the execution thereof which tend directly and specially to insure its execution, without risk to
himself arising from the defense which the offended party might make. In People v. Tan, the Court held that the
essence of treachery is the sudden and unexpected attack, without the slightest provocation on the part of the
person attacked. In this case, the prosecution was able to prove that Eugene's attack on Gabriel was so swift and
sudden, and without any warning. Eyewitnesses testified that immediately upon his arrival and without any
exchange of words, S pulled out his gun and shot G. As the RTC and CA aptly pointed out, although the attack was
frontal, it was so sudden and unexpected which made it impossible for G to defend himself. The gunshot wound on
G’s chest caused massive bleeding which led to his death not long after. Thus, in view of the long-standing principle
that factual findings of the trial court, especially when affirmed by the CA, deserve great weight and respect, the
Court concludes that treachery was correctly appreciated. (People v. Samuya, G.R. No. 213214, April 20, 2015)

Q: (CRIM 1) Should the claim of self-defense pass?

A: No. The existence of unlawful aggression is the basic requirement in a plea of self-defense, either to justify the
commission of a crime or to mitigate the imposable penalty. It is settled that without unlawful aggression, there can
be no self-defense, whether complete or incomplete. For unlawful aggression to justify or mitigate a crime, the same
must be an actual, sdden, unexpected attack or imminent danger thereof, and not merely threatening and
intimidating attitude, towards the one claiming self-defense. S claims that he saw G rushing towards his direction,
armed with a knife. Fearing that G was going to attack him, he pulled his own gun and shot the victim. E's plea of
self-defense - whether as a justifying or as a mitigating circumstance - should fail. (People v. Samuya, G.R. No.
213214, April 20, 2015)

Q: Z who slept at B’s residence heard 4 successive gunshots. Z looked through the open door of B’s house
and saw two (2) men armed with .38 caliber revolvers standing a meter away from B. He saw P deliver the
fourth shot to B, but he could not identify the other shooter. Thereafter, the two (2) assailants fled on a
motorcycle. Z brought B to a Hospital. On the way to the hospital, B told Z that it was P who shot him. At
around 11 o’clock in the morning of even date, B died due to gunshot wounds on his head and trunk. RTC
convicted P of the crime of murder and opined that it was attended with treachery. The RTC, however did
not appreciate evident premeditation. The CA affirmed the ruling of the RTC. Was the murder attended with
treachery? (Yes)

A: There is treachery when the offender commits any of the crimes against a person, employing means, methods
or forms in the execution thereof which tend directly and specially to insure its execution, without risk to himself
arising from the defense which the offended party might make. There are two (2) conditions therefore that must be
met for treachery to be appreciated: (a) the employment of means of execution that gives the person attacked no
opportunity to defend himself or to retaliate; and (b) the means of execution was deliberately or consciously adopted.
The essence of treachery is that the attack comes without warning in a swift, deliberate, and unexpected manner,
granting the victim no chance to resist or escape. The attack must be sudden and unexpected rendering the victim
unable and unprepared to put up a defense. The Court agreed with the findings of the RTC and the CA that P killed
B, and that the qualifying circumstance of treachery attended the same. The records show that B was outside when
two (2) assailants shot him. During the attack, B had no opportunity to raise any meaningful defense against his
assailants; and consequently, he suffered multiple gunshot wounds on his head and trunk, causing his death.
(People v. Palanas, G.R. No. 214453, June 17, 2015)

Q: A commotion ensued at an establishment. W kick A’s stomach twice, after which, W picked up a rock
to throw at A but was restrained from doing so. As A stood up, Q punched him on the stomach, causing
him to collapse and cry in pain. Thereafter, Aro was taken to the hospital. A was diagnosed to be suffering
from "blunt abdominal trauma with injury to the jejunum" and was set for operation. It was then discovered
that he sustained a perforation on his ileum, i.e., the point where the small and large intestines meet, that
caused intestinal bleeding, and that his entire abdominal peritoneum was filled with air and fluid contents
Criminal Law Digests
from the bile. A suffered cardiac arrest during the operation, and while he was revived through
cardiopulmonary resuscitation, he lapsed into a coma after the operation.Due to financial constraints, A
was taken out of the hospital against the doctor's orders and eventually, died the next day. While A 's death
certificate indicated that the cause of his death was "cardiopulmonary arrest antecedent to a perforated
ileum and generalized peritonitis secondary to mauling," an autopsy performed on his remains revealed
that the cause of his death was "rupture of the aorta secondary to blunt traumatic injuries. The RTC found
W and Q guilty beyond reasonable doubt of the crime of Death Caused in a Tumultuous Affray. The CA
modified W and Q’s conviction to that of Homicide under Article 249 of the RPC with the mitigating
circumstance of lack of intent to commit so grave a wrong. With the attending facts, are Q and C guilty of
Homicide or Tumultuous Affray?

A: The SC agreed with the modification of the CA. The elements of Death Caused in a Tumultuous Affray are as
follows: (a) that there be several persons; (b) that they did not compose groups organized for the common purpose
of assaulting and attacking each other reciprocally; (c) that these several persons quarreled and assaulted one
another in a confused and tumultuous manner; (d) that someone was killed in the course of the affray; (e) that it
cannot be ascertained who actually killed the deceased; and (j) that the person or persons who inflicted serious
physical injuries or who used violence can be identified. Based on case law, a tumultuous affray takes place when
a quarrel occurs between several persons and they engage in a confused and tumultuous affray, in the course of
which some person is killed or wounded and the author thereof cannot be ascertained.

In the instant case, there was no tumultuous affray between groups of persons in the course of which A died. On
the contrary, the evidence clearly established that there were only two (2) persons, W and Q, who picked on one
defenseless individual, A, and attacked him repeatedly, taking turns in inflicting punches and kicks on the poor
victim. There was no confusion and tumultuous quarrel or affray, nor was there a reciprocal aggression in that fateful
incident. Since W and Q were even identified as the ones who assaulted , the latter's death cannot be said to have
been caused in a tumultuous affray. Therefore, W and Q’ s act of mauling Aro was the proximate cause of the
latter's death; and as such, they must be held criminally liable therefore, specifically for the crime of Homicide.
(Wacoy y Bitol v. People, G.R. No. 213792, June 22, 2015)
Criminal Law Digests
SPECIAL PENAL LAWS

RA 7610 - Anti - Child Abuse Act

Q: AAA is a 14 year old female third year high school student. BBB, Her ROTC Commandant told her if she
wanted to become an ROTC officer, he would have to initiate her. BBB told her to follow him to is house,
where he confessed he has a crush on her, pulled her onto his lap, told her to kiss him on the cheek and
lips, lifted her shirt and underwear and suckled her breast for 2 minutes. S was frightened and couldn’t
complain, until a year later when other students also complained that BBB molested them as well. Later,
AAA filed a case against him for lascivious conduct in relation to RA 7610 Sec. 5(b), and BBB was convicted
by the RTC. BBB raised in his appeal that force and intimidation were not established by the prosecution.
Was BBB properly convicted of lascivious conduct under RA 7610?

A: Yes, the conviction was proper. At the time, AAA was a minor, thus the provisions of RA 7610 come into play.
The requisites for sexual abuse under RA 7610 Sec. 5(b) are (1) the accused commits the act of sexual intercourse
or lascivious conduct; (2) the act is performed with a child exploited in prostitution or subjected to other sexual
abuse; and (3) the child, whether male or female, is below 18 years of age. The IRR of RA 7610 provides that
lascivious conduct includes the intentional touching, either directly or through clothing, the breast of any person
whether of the same or opposite sex, with an intent to humiliate, abuse, harass, degrade, arouse, or gratify the
sexual desire of any person.

Force and intimidation were proven. BBB was AAA’s ROTC commander and teacher, thus BBB had moral
ascendancy and influence over her when he did the acts in question. Force and intimidation are subsumed by
coercion and influence, and that lascivious conduct under the coercion or influence of any adult exists when there
is some form of compulsion equivalent to intimidation which subdues the exercise of free will by the other party.
Influence means the improper use of power or trust in any way that deprives a person of free will and substitutes
another’s objective. Coercion is the improper use of power to compel another to submit to the wishes of one who
wields it. Clearly, in this case, BBB used his influence over AAA by telling her that only by acceding to his lewd
requests would she gain rank in the ROTC. (Orsos v. People, G.R. No. 214673, November 20, 2017)

Q: X, a 17 year old high school student, met Y, a 23 year old college student, and they became sweethearts.
Y convinced X to have sexual intercourse several times by saying she wouldn’t get pregnant since he would
use the withdrawal method, and that he would marry X. Later, X became pregnant and they were forced to
break up. Y was charged with violation of Sec. 5(b) of RA 7610, and convicted by the court. On his appeal
he argued that his promise to marry or to use the withdrawal method are not equivalent to the elements of
persuasion or inducement that would lead to his conviction of the offense, since the sex was consensual.
Were the elements of the crime of lascivious conduct properly established?

A: Yes. The elements of Sec. 5(b) of RA 7610 are (1) the accused commits the act of sexual intercourse or lascivious
conduct; (2) the act is performed with a child exploited in prostitution or subjected to other sexual abuse; and (3)
the child, whether male or female, is below 18 years of age. The first and third elements are clearly present, since
X and Y repeatedly had sexual relations while X was a minor. The second element is also present, since a child is
deemed subjected to other sexual abuse when the child indulges in lascivious conduct under the coercion or
influence of any adult, which exists when there is some form of compulsion equivalent to intimidation which subdues
the free exercise of the party’s free will. The court considered the fact that X was a minor, Y was 6 years older, Y
gave all sorts of assurances like marriage and the withdrawal method, and Y pressured X several times until she
gave in to his requests. (Caballo v. People, G.R. No. 198732, June 10, 2013)

Q: 13-year-old A was raped by B. Because of this, B was convicted for rape under RA 7610 (Anti-Child
Abuse Law). However, B is saying that he should be convicted for rape under the RPC. Should he be
convicted for rape under the RPC?

A: No, if the victim of sexual abuse is below 12 years of age, the offender prosecuted for statutory rape under Article
266-A(1)(d) of the RPC. On the other hand, if the victim is 12 years or older, the offender should be charged with
either sexual abuse under Section 5(b) of RA 7610 or rape under Article 266-A (except paragraph 1[d]) of the RPC.
Here, since A was 13 years old, B can be prosecuted either under Art 3 Sec. 5(b) of RA 7610 for sexual abuse, or
under Article 266-A of the RPC, except for rape under paragraph 1(d). So, his conviction under RA 7610 is proper.
(People v. Matias y Dela Fuente, G.R. No. 186469, June 13, 2012)
Criminal Law Digests
RA 9262 - VAWC

Q: X and Y have a common child together but are not married. X cheated on Y, so they broke up. X was
charged and convicted of a violation of the VAWC law on economic abuse, Sec.5(e) of RA 9262, since he
was not complying with the order of the court to give support to his illegitimate son with Y. X says that
since the information alleged that the acts complained of caused metnal or emotional anguish, public
ridicule, or humiliation to Y and the son, the conviction is improper since those are elements to be alleged
in relation to Sec. 5(i) instead. Is the conviction correct?

A: Yes, the conviction under Sec. 5(e) of the VAWC Law is proper. Economic abuse may include the deprivation of
support of a common child of the man-accused and woman-victim, whether the common child is legitimate or not.
The deprivation of financial support is considered the act of violence against women and children. The act of denying
support to a child is a continuing offense.

Under Sec. 5(i), a form of psychological violence, punishes the act of causing mental or emotional anguish, public
ridicule, or humiliation to the woman and her child including emotional and verbal abuse as well as the denial of
financial support. The prosecution showed that X deprived Y and the child of support, no evidence was adduced to
show the deprivation caused either of them any mental or emotional anguish. Conviction under Sec. 5(e) is proper
since the deprivation or denial of support by itself, without the element of psychological violence, is already
specifically penalized therein. (Melgar v. People, G.R. No. 223477, February 14, 2018)

RA 9208 - Anti-Trafficking in Persons Act

Q: Members of the Regional Anti-Human Trafficking Task Force (RAHTTF) conducted surveillance on
establishment X since its customers would come in and pay for sexual inercourse with X’s Guest Relations
Officers (GROs). They conduct an entrapment operation which results in multiple arrests and the rescue of
women and minors. Later on, 6 of these women execute affidavits identifying A and B as the owner of X.
Thereafter, A and B were charged with violating the Anti-Trafficking in Persons law. The RTC, however,
dismissed the case against A and B for lack of probable cause. They said the affidavits of the women
together with those of the RAHTTF members failed to show that A and B knew of the illegal operations of
X, and that the Deed of Assignment by A and B showed that X was no longer owned by them. Was the RTC
correct in dismissing the case?

A: No, a judge may only dismiss a case for lack of probable cause if records readily show uncontroverted and
established facts which unmistakably negate the existence of the elements of the crime charged. Here, the
prosecution was able to establish a prima facie case for the violation of the Anti-Trafficking in Persons law (RA
9208). Also, the defense of A and B that they are no longer the owner of X is evidentiary in nature, so it is best
threshed out in a full-blown trial. Thus, the proper course of action on the part of the RTC was not to dismiss the
case but to proceed to trial. (Young v. People, G.R. No. 213910, February 03, 2016)

RA 3019 - Anti-Graft and Corrupt Practices Act

Q: X, as mayor, heard rumors all the port chandlers in Port A that Y were engaged in illegal smuggling and
drug trading. Because of this, he refused to renew the business license of Y thus halting her operations for
a year and causing the loss of her perishables. But, Y’s other businesses were given permits and she had
complied with all the requisites to renew her business license. Eventually, X renewed the license but Y filed
a case against him for the violation of Sec 3(e) of the Anti-Graft and Corrupt Practices. Will the case
prosper?

A: Yes, a violation of 3(e) of RA 3019 are (a) that the accused must be a public officer discharging administrative,
judicial, or official functions (or a private individual acting in conspiracy with such public officers); (b) that he acted
with manifest partiality, evident bad faith, or inexcusable negligence; and (c) that his action caused any undue injury
to any party, including the government, or giving any private party unwarranted benefits, advantage, or preference
in the discharge of his functions.

For the 1st element, X is a mayor so he is a public officer.

For the 2nd element, X had both manifest partiality and bad faith. There is "manifest partiality" when there is a clear,
notorious, or plain inclination or predilection to favor one side or person rather than another. Meanwhile, there is
Criminal Law Digests
"evident bad faith" if there is bad judgment, and palpably and patently fraudulent and dishonest purpose to do moral
obliquity or conscious wrongdoing for some perverse motive or ill will.

Manifest partiality is shown by the fact that only Y’s license was not renewed despite the rumors saying all the ship
chandlers of Port A were engaged in illegal activities, and that Y’s other businesses were given permits. There was
also bad faith since Y had already done the requirements to renew her license. X denied her the permit based on
rumors without giving Y the chance to rebut them, thus denying her due process.

For the 3rd element, the act of X caused the loss of Y’s perishables and her opportunity to do business. (Fuentes
v. People, G.R. No. 186421, April 17, 2017)

PD 1866 – ILLEGAL POSSESSION OF FIREARMS

Q: Accused Z was charged with illegal possession of firearms under PD 1866. Police officers were informed
that there was a man firing a gun at the back of the PLDT Building in Dagupan City. Upon arrival, the police
saw two (2) men, one of whom is the Z, holding a gun and a knife. Upon seeing the police officers, the men
became uneasy, prompting the police to swoop in. The police recovered from the men a caliber .45 pistol
and a knife. Paraffin and gun powder residue test were later done in the precinct. Z denied having a firearm
with him, much less illegally discharging the same, when he was flagged down by police officers. He
claimed that they were merely framed up and questioned the validity of the warrantless arrest. The lower
courts found Z guilty of the crime charged. Did the lower courts err in finding Z guilty of the illegal
possession of firearms?

A: NO, because the prosecution successfully proved the existence of the firearm which was seized from the accused
which was properly admitted as evidence at trial, and that Z possessed the same when he does not have the license
or permit to possess it.

The Court finds no reason to deviate from the factual findings of the trial court, as affirmed by the CA, as there is
no indication that it overlooked, misunderstood or misapplied the surrounding facts and circumstances of the case.
Also, the Court held that the warrantless arrest done by the police was valid. Clearly, the police conducted a valid
in flagrante delicto warrantless arrest on Z, thus, making the consequent search incidental thereto valid as well. It
should be noted that the offense of illegal possession of firearms is malum prohibitum punished by special law and,
in order that one may be found guilty of a violation of the decree, it is sufficient that the accused had no authority or
license to possess a firearm, and that he intended to possess the same, even if such possession was made in good
faith and without criminal intent. (Peralta y Zareno v. People, G.R. No. 221991, August 30, 2017)

Q: While patrolling an area, police officers X and Y allege, and later on testify in court, that they saw A
coming out of an alley holding a fan knife. They arrest him pursuant to RA 7166 which prohibits the bearing
of deadly weapons during election season. In the information charged against him, A was accused of
possessing a kitchen knife to violate the law. Will the case prosper?

A: No, the information filed alleged that he was holding a kitchen knife. Meanwhile, X and Y allege that they saw A
holding a fan knife when they testified in court. Since possession of the deadly weapon in a public place was not
established beyond reasonable doubt, the case cannot prosper. (Gonzalez y Dolendo v. People, G.R. No. 225709,
February 14, 2018)

RA 9165 - Comprehensive Dangerous Drugs Act

Q: Accused-appellants are charged with violations of Sections 5 and 11 of RA 9165. According to the
prosecution, a police team planned a buy-bust operation in a motel after an informant notified them that
accused Z was engaged in the sale of shabu. Acting as a poseur-buyer, the informant called Z and ordered
shabu for delivery to the former’s room. When Z arrived, Z handed over the shabu to the informant. The
informant executed the pre-arranged signal, prompting the police to arrest Z. When the police searched Z,
they found more sachets containing shabu. These were seized and properly marked by the Special
Investigator (SI). When SI was about to prepare the inventory of the items, Z voluntarily informed the
policemen that accused Y was his source of contraband, and agreed to cooperate for Y’s arrest. The police
then arranged another operation to arrest Y. Due to these developments, the conduct of inventory by SI
was suspended, and he retained custody of the seized items from Z. After the successful operation to arrest
Y, SI conducted a formal inventory of the items seized from Z and Y, in the presence of representatives
Criminal Law Digests
from the media, DOJ and barangay. Another Special Investigator took photographs of the seized items.
Seized items were personally delivered by the SI to the custody of the Crime Laboratory. The examination
revealed that the sachets indeed contained shabu. Are the accused-appellants guilty of violations of
Sections 5 and 11 of RA 9165?

A: YES, all the elements of Illegal Delivery and Possession Drugs are proven in this case.

For Illegal Delivery of Dangerous Drugs, it must be proven that the accused passed on possession of a dangerous
drug to another, personally or otherwise, and by any means; that such delivery is not authorized by law; and that
the accused knowingly made the delivery. On the other hand, in the crime of Illegal Possession of Dangerous Drugs,
the prosecution must prove that the accused is in possession of an item or object, which is identified as a prohibited
drug; that such possession is not authorized by law; and that the accused freely and consciously possessed the
drug.

In this case, the lower courts correctly found that all the elements of the above-mentioned crimes were clearly
established: (a) Z himself delivered the plastic sachet of shabu to the informant during a legitimate buy-bust
operation; and (b) upon his arrest, the arresting officers searched Z and found more sachets of shabu. Both courts
also properly found that there was no break in the chain of custody of the sachets from Z as SI had sole possession
of the sachets from Z’s arrest until the SI turned them over to the laboratory for examination. (People v. Jao y
Calonia, G.R. No. 225634, June 7, 2017)

Delivery to the PNP Crime Laboratory was made beyond the 24-hour period

Q: On June 9 2003, Police Superintendent A formed a buy-bust team in order to arrest X. The buy-bust
operation turned out to be a success, and X was arrested for possessing and selling shabu. Sachets of
shabu were found in his person and in his residence where he fled. The sachets of shabu were sealed,
labeled, and brought to the police office where Police Superintendent A signed the Receipts for Property
Seized in the presence of X and the required representatives under the law.
On July 9, 2003, Police Superintendent A delivered the drug specimens to the PDEA office where it was
received and acknowledged by Police Officer B. Police Officer B turned over the items in the same day to
the PNP Crime Lab and were received by Forensic Chemist C for examination. Forensic Chemist C
confirmed that the substance in the sachets are indeed shabu. X was then charged, and convicted, for
violations of Sections 5 and 11 of RA 9165. Is the chain of custody satisfied?

A: NO. RA 9165 requires that the seized items must be turned over to the PNP Crime Laboratory within 24 hours
from confiscation. In this case, the drugs were seized during June 9. However, those were turned over to the PNP
Crime Lab only 10 days later. (People v. Ching, G.R. No. 223556, October 9, 2017)

Failure to turn over drugs to an investigating officer

Q: Due to a successful buy-bust operation, Police Officer A arrested Z and seized the sachet of shabu
subject of the operation. A made an inventory of the drugs and marked all sachets with his initials. This
was done in the presence of Z and the required representatives under the law. After the marking, A left the
confiscated sachet in the crime laboratory and immediately proceeded to the police station to charge Z of
the crime of illegal sale of dangerous drugs. Forensic Officer D confirmed that the substance in the sachet
was indeed shabu. Z was charged and convicted for violating Section 5 of RA 9165. Is the chain of custody
satisfied?

A: NO. RA 9165 requires that the apprehending officer must turn over the confiscated drug to an investigating officer
for further investigation. Then, the investigating officer must turn over the same confiscated item to the forensic
chemist in the crime laboratory for further examination. A clearly violated these requirements under the law since
he immediately went to the crime laboratory after he marked the sachet of drug. He did not turn it over to an
investigating officer. He also did not turn the sachet of drug over directly to the forensic chemist, as he just left it in
the crime laboratory. (People v. Calibod, G.R. No. 230230, November 20, 2017)

Discrepancies in the label of the seized items, the request for laboratory examination was not delivered by a police
officer
Criminal Law Digests
Q: A successful buy-bust operation resulted in the arrest of N and O. Special Operations Officer D
confiscated 2 sachets of shabu from N and O. D immediately marked the sachets of shabu with “JSJR”
“JSJR-1”. He also prepared and inventory of the seized items which were signed in the presence of the
accused and the required witnessed under the law. N and O were brought to the Special Operations Office.
The seized items were turned over to the investigator, Police Officer E. E prepared a request for laboratory
examination and turned over the drugs to the PNP Crime Laboratory which were received by Police Senior
Inspector F. Police Senior Inspector F received sachets of shabu marked with “JSJRND” and “JSJR-1”. F
examined these sachets and found that it is indeed shabu. N and O were charged and convicted for violating
Section 5 of RA 9165. Is the chain of custody satisfied?

A: NO. In order to secure a conviction for the foregoing crimes, it remains essential that the identity of the confiscated
drugs be established beyond reasonable doubt, considering that the prohibited drug form an integral part of the
corpus delicti of the crime. The prosecution has to show an unbroken chain of custody over the dangerous drugs.
In this case, Special Ops Officer D marked the sachets of shabu seized from the accused as “JSJR” and “JSJR-1”.
However, the sachets that were given in the PNP Crime Laboratory are marked with “JSJRND” and “JSJR-1”. This
discrepancy casts doubt as to whether the sachets of drugs actually seized from the accused and the sachets of
drugs examined in the Crime Laboratory are indeed one and the same. (People v. Alvaro y de Leon, G.R. No.
225596, January 10, 2018)

Discrepancy of the weight of the seized items

Q: A successful buy-bust operation resulted in the arrest of W. He was brought to the police station where
the PDEA operatives conducted the inventory and photography of the seized items in the presence of W
and the required witnessed under the law. During the initial inventory, the combined weight of the seized
specimens was initially 0.2934 gram. The sachets of drugs were turned over to Investigating Officer D. D
then brought the seized items to the PDEA Crime Laboratory within the day. During this re-examination,
the combined weight of the specimens decreased to 0.2406 gram. The contents of the sachets were
confirmed to be shabu. Is the chain of custody satisfied?

A: NO. In order to secure a conviction for the foregoing crimes, it remains essential that the identity of the confiscated
drugs be established beyond reasonable doubt, considering that the prohibited drug form an integral part of the
corpus delicti of the crime. The prosecution has to show an unbroken chain of custody over the dangerous drugs.
In this case, The combined weight of the seized drugs during the initial inventory conducted by the PDEA operatives
amounts to 0.294 grams. However, the same sample of seized drugs had a different combined weight when it is
the turn of the PDEA Crime Laboratory to examine the same. This discrepancy as to the weight casts doubt as to
whether the specimens of drugs subjected to PDEA’s inventory and the specimen of drugs subject to the PDEA
Crime Laboratory’s examination are one and the same. (People v. Ramos y Cabanatan, G.R. No. 233744, February
28, 2018)

Discrepancies in the number of the sachets shown in the photographs taken and the number of sachets for which
the accused is charged

Q: A buy-bust operation was organized and conducted in order to arrest S for peddling drugs. The police
operatives conducted a search on the person of S which led to the discovery of 18 sachets of shabu. The
police operatives then went to the house of S and confiscated all drug-related paraphernalia found inside.
Shortly after, Police Officer D conducted the requisite inventory and photography of the seized items in the
presence of S and all required witnesses under the law. After the operation, Police Officer D delivered the
items to Investigating Officer E. E prepared a request for laboratory examination. Subsequently, Police
Officer D brought the request to the PNP Crime Laboratory together with only 11 sachets of shabu. Police
Chief Inspector F received the request and sachets. Police Chief Inspector F examined and confirmed that
the same contained shabu. S was charged and convicted with violations of Sections 11 and 12 are RA 9165.
The informations and the judgment is based on the 11 sachets of shabu Police Chief Inspector F examined.
Is the chain of custody satisfied.

A: NO. In order to secure a conviction for the foregoing crimes, it remains essential that the identity of the confiscated
drugs and/or drug paraphernalia be established beyond reasonable doubt, considering that the prohibited drug
and/or drug paraphernalia form an integral part of the corpus delicti of the crime/s. The prosecution has to show an
unbroken chain of custody over the dangerous drugs and/or drug paraphernalia. In this case, the initial inventory
and the photographs show that there are a total of 18 sachets discovered in the person of S. However, the PNP
Criminal Law Digests
Crime Laboratory only examined 11 sachets of shabu. These same 11 sachets of shabu are also the basis of the
information which formed the basis of the conviction of S. This discrepancy renders the evidentiary value and
integrity of the seized drugs suspect because not only would it be difficult to determine the actual identity of drugs
for which the accused are charged. (People v. Lumaya, G.R. No. 231983, March 7, 2018)

Absence of elected public official, absence of DOJ representative or the media

Q: The members of the PDEA and the PNP conducted a buy-bust operation in order to arrest T who was
alleged to engage in illegal drug trade. The buy-bust team searched T and found 3 sachets of shabu. The
buy-bust team conducted the markings, inventory, and photography on-site before proceeding to the office
for documentation proceedings. The team were met with a DOJ representatives from the Department of
Justice and the media. These people signed the Certificate of Inventory. The seized sachets were delivered
to Investigating Officer A, then to the Crime Laboratory where it was confirmed that the substance in the
sachets are indeed shabu. T was charged and convicted with the crimes of illegal possession and illegal
sale of dangerous drugs. Is the chain of custody satisfied?

A: NO. RA 9165 provides that the apprehending team shall, immediately after seizure and confiscation, conduct a
physical inventory and photograph the seized items in the presence of the accused or his representative, a
representative from the media and the DOJ, and any elected public official. In this case, an inventory and
photography of the seized items is actually conducted. However, this was not the inventory and photography
contemplated under the law because the required witnesses are made to sign the Certificate of Inventory only when
the buy-bust team arrived at the office. The inventory and photography were therefore not made in the presence of
all required witnesses. Moreover, the said procedures were conducted without the presence of any elected public
official. (People v. Sanchez y Licudine, G.R. No. 231383, March 7, 2018)

No physical inventory of the items taken, no photographs of the seized items were taken

Q: A successful buy-bust operation resulted in the arrest of S. Three sachets of shabu were confiscated,
which were marked as “LBM-CA BUY BUST,” “LBM-CA POSS I,” “LBM-CA POSS II.” Thereafter, the police
officers brought T to the police station where they made a request for laboratory examination of the seized
items. After securing the letter-request, Police Officer A delivered the seized items to the PNP Crime
Laboratory where they were examined by a Forensic Chemical Officer B. The sachets were confirmed to
contain shabu. S was charged and convicted for violating Sections 5 and 11 of RA 9165. Is the chain of
custody satisfied?

A: NO. RA 9165 provides that the apprehending team shall, immediately after seizure and confiscation, conduct a
physical inventory and photograph the seized items in the presence of the accused or his representative, a
representative from the media and the DOJ, and any elected public official. In this case, the police officers committed
numerous violations from what is provided under the law. First, the marking of the items were not established to be
done in the presence of the required witnesses. Also, no physical inventory and photography of the seized items
were taken. (People v. Mercader, G.R. No. 233480, June 20, 2018)

Illegal Recruitment in a Large Scale

Q: A, B, C, D, E, and F heard from numerous radio advertisements and word of mouth about an employment
opportunity linked to Z. All of them went to Z on separate dates. Z briefed them about the available positions
for them and the corresponding compensation. Z asked them to provide documents, fill out-bio-forms, and
pay fees. A, B, C, D, E, and F complied. They all then left the Philippines to go to East Timor. They stayed
in East Timor for a little bit to wait for their working visas. However, their working visas did not materialize.
They all went back to the Philippines to find Z, but they failed. They subsequently found out that Z was
neither licensed nor authorized to recruit workers for employment abroad. This fact was certified by the
POEA. A, B, C, D, E, and F charged Z with Illegal Recruitment in a Large Scale. Is Z criminally liable?

A: YES. The elements of Illegal Recruitment in a Large Scale are:


1. The offender has no valid license or authority to enable him/her to lawfully engage in recruitment and
placement of workers;
2. He/she undertakes any of the activities within the meaning of ”recruitment and placement” under Article 13
of the Labor Code or any prohibited practices under Article 34 of the Labor Code; and
3. He/she commits the same against three or more persons, individually or as a group.
Criminal Law Digests

In this case, all elements are present. The POEA Certification established that Z is neither licensed nor authorized
to recruit workers for overseas employment. Her act of offering or promising employment overseas for a fee is
included in the definition of “recruitment and placement” under Article 13 of the Labor Code. Lastly, Z extended her
offers and promises to 6 people. (People v. Racho y Somera, G.R. No. 227505, October 2, 2017)
Remedial Law Digests

Q: X filed an intra-corporate dispute complaint with the Clerk of Court in the RTC of Muntinlupa City,
which is the official station of the designated Special Commercial Court. The commercial case
however was wrongly raffled to a regular branch due to X’s irregular caption which stated that his
complaint was a civil case for damages. The regular branch then dismissed the commercial case
for lack of jurisdiction over the subject matter. Can a commercial case properly filed in the
designated Special Commercial Court but later wrongly assigned by raffle to a regular branch be
dismissed by the regular branch?

A: No. It is from the time of filing that the RTC acquires jurisdiction over the subject matter of the action.
The erroneous raffling to a regular branch instead of to a Special Commercial Court is only a matter of
procedure — that is, an incident related to the exercise of jurisdiction — and, thus, should not negate the
jurisdiction which the RTC of Muntinlupa City had already acquired. The proper course of action was not
for the commercial case to be dismissed; instead, the regular branch should have first referred the case to
the Executive Judge for re-docketing as a commercial case. (Gonzales v. GJH Land, Inc., G.R. No. 202664,
November 10, 2015)

Q: X filed a case for annulment of Deed of Sale in favor of Y. X argues, but provides no evidence,
that Y forged the Deed of Sale. The RTC and CA ruled in favor of X and annulled the Deed of Sale.
Y now files a petition for review on certiorari with the SC under Rule 45, but asking the court to
review the factual evidence. Is the SC precluded from re-examining factual findings under Rule 45
at all times?

A: No. The rule admits of exceptions. One of which is when the inference made is manifestly mistaken,
absurd or impossible. The RTC and CA’s inference is manifestly mistaken, absurd, or impossible because
as a rule, forgery cannot be presumed and must be proved by clear, positive and convincing evidence, and
the burden of proof lies on the party alleging forgery. One who alleges forgery has the burden to establish
his case by a preponderance of evidence, or evidence which is of greater weight or more convincing than
that which is offered in opposition to it. The fact of forgery can only be established by a comparison between
the alleged forged signature and the authentic and genuine signature of the person whose signature is
theorized to have been forged. Hence, the SC in this case can re-examine the factual findings of the lower
courts. (Ambray v. Tsourous, G.R. No. 209264, July 5, 2016)

Q: X filed a petition for correction of the area of his lot. As formal evidence, X offered (1) a
certification by an Engineer from the Land Management Services of the DENR; (2) the technical
description certified by the Chief of the Surveys Division; and (3) an approved subdivision plan
certified by the Geodetic Engineer, Chief of the Regional Surveys Division, and the OIC of the Land
Management Services. The officers however never testified in court to prove the facts stated in the
documents. Are these certifications public documents under the first sentence of Section 23, Rule
132 and hence prima facie evidence of the facts stated therein?

A: No. Under Section23, Rule 132, “Documents consisting of entries in public records made in the
performance of a duty by a public officer are prima facie evidence of the facts stated therein. All other public
documents are evidence, even against a third person, of the fact which gave rise to their execution and of
the date of the latter.” The certifications do not reflect "entries in public records made in the performance of
a duty by a public officer," such as entries made by the Civil Registrar in the books of registries, or by a
ship captain in the ship's logbook. The certifications are not the certified copies or authenticated
reproductions of original official records in the legal custody of a government office. The certifications are
not even records of public documents. At best, they may be considered only as prima facie evidence of
their due execution and date of issuance but do not constitute prima facie evidence of the facts stated
therein. (Republic v. Galeno, G.R. No. 215009, January 23, 2017.)

Q: X filed a case against Y. Y then presented hearsay evidence in the trial court which was
erroneously admitted by the latter. The public prosecutor who represents X, interposed no objection
Remedial Law Digests

to the admission of the hearsay evidence. Can the hearsay evidence presented in the lower court
and not objected to be accorded probative value?

A: No. The general rule is that hearsay evidence is not admissible. However, the lack of objection to hearsay
testimony may result in its being admitted as evidence. But one should not be misled into thinking that such
declarations are thereby impressed with probative value. Admissibility of evidence should not be equated
with weight of evidence. Hearsay evidence whether objected to or not cannot be given credence for it has
no probative value. Hearsay evidence, whether objected to or not, has no probative value unless the
proponent can show that the evidence falls within the exceptions to the hearsay evidence rule. (Republic
v. Galeno, G.R. No. 215009, January 23, 2017.)

Q: X was convicted by the RTC under RA 9165. X argues now that the identity of the dangerous
drug was not established with moral certainty, as the prosecution was not able to account for each
link of the chain of custody from the moment the drugs are seized up to their presentation in court
as evidence. Apparently, when the inventory and photography was done, there was no
representative from the media. X’s conviction was prior to the amendment of RA 9165 by RA 10640,
hence presence of the media was still required. Is compliance with the chain of custody a mere
technicality procedure which may be waived?

A: No. As a general rule, compliance with the chain of custody procedure is strictly enjoined as the same
has been regarded "not merely as a procedural technicality but as a matter of substantive law."
Nonetheless, the Court has recognized that due to varying field conditions, strict compliance with the chain
of custody procedure may not always be possible. As such, the failure of the apprehending team to strictly
comply with the same would not ipso facto render the seizure and custody over the items as void and
invalid, provided that the prosecution satisfactorily proves that: (a) there is a justifiable ground for non-
compliance; and (b) the integrity and evidentiary value of the seized items are properly preserved.
Additionally, the prosecution must duly explain the reasons behind the procedural lapses, and that the
justifiable ground for non-compliance must be proven as a fact, because the Court cannot presume what
these grounds are or that they even exist. (People v. Dela Rosa y Empamano, G.R. No. 238338, October
1, 2018.)

Q: X was convicted by the RTC under RA 9165. X argues now that the identity of the dangerous
drug was not established with moral certainty, as the prosecution was not able to account for each
link of the chain of custody from the moment the drugs are seized up to their presentation in court
as evidence. Apparently, when the inventory and photography was done, there was no
representative from the media. X’s conviction was prior to the amendment of RA 9165 by RA 10640,
hence presence of the media was still required. Does the non-compliance with the required
witnesses rule under RA 9165 before the amendment of RA 10640 result to a dismissal of the case
at all times?

A: No. non-compliance may be permitted if the prosecution proves that the apprehending officers exerted
genuine and sufficient efforts to secure the presence of such witnesses, albeit they eventually failed to
appear. While the earnestness of these efforts must be examined on a case-to-case basis, the overarching
objective is for the Court to be convinced that the failure to comply was reasonable under the given
circumstances. Thus, mere statements of unavailability, absent actual serious attempts to contact the
required witnesses, are unacceptable as justified grounds for non-compliance. (People v. Dela Rosa y
Empamano, G.R. No. 238338, October 1, 2018.)

Q: X was the owner of a piece of land. X built a house in the land. X then migrated to Hawaii and
asked Y to become caretakers. Y then claimed ownership over the land. X then filed a case for
unlawful detainer against Y. Does X have a cause of action for unlawful detainer considering that
he does not anymore live in his land?
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A: Yes. It is not necessary that the owner of a parcel of land should himself occupy the property as someone
in his name may perform the act. In other words, the owner of real estate has possession, either when he
himself is physically in occupation of the property, or when another person who recognizes his rights as
owner is in such occupancy. (Piedad v. Spouses Gurieza, G.R. No. 207525, June 18, 2018.)

Q: X obtained a loan from Y. As security, X mortgaged his property. Upon failure of X to pay, Y filed
a Complaint for Judicial Foreclosure of Real Estate Mortgage in the RTC. While the latter case was
pending, Z—X’s son—agreed to pay X’s obligation to Y by executing a promissory note in favor of
Y. However, when Z learned of the foreclosure proceedings, Z stopped paying. Y then filed a
collection case against Z. Can a creditor-mortgagee file a complaint for foreclosure against the
debtor-mortgagee then file a complaint for collection against another debtor who contracted himself
to pay the same loan?

A: No. In loan contracts secured by a real estate mortgage, the rule is that the creditor-mortgagee has
a single cause of action against the debtor-mortgagor, i.e., to recover the debt, through the filing of a
personal action for collection of sum of money or the institution of a real action to foreclose on the
mortgage security. The two remedies are alternative, not cumulative or successive, and each remedy is
complete by itself. While the ensuing collection case was anchored on the promissory note executed by
respondent who was not the original debtor, the same does not constitute a separate and distinct
contract of loan which would have given rise to a separate cause of action upon breach. (Marilag v.
Martinez, G.R. No. 201892, July 22, 2015.)

Q: X filed a complaint in the RTC against Corporation A for cancellation of titles and reversion.
Corporation A then filed a motion to dismiss assailing the jurisdiction of the RTC over the complaint,
as X’s complaint was actually for annulment of judgment which the RTC does not have jurisdiction
over. The RTC denied Corporation A’s motion to dismiss. Corporation A then filed a petition for
certiorari in the CA The CA ruled that the reversion suit should be filed in the CA as the RTC cannot
nullify a decision rendered by a co-equal court. Can the RTC be ruled as without jurisdiction due to
a theory presented by the defendant in a motion to dismiss?

A: No. The nature of an action and whether the tribunal has jurisdiction over such action are to be
determined from the material allegations of the complaint, the law in force at the time the complaint is filed,
and the character of the relief sought irrespective of whether the plaintiff is entitled to all or some of the
claims averred. Jurisdiction is not affected by the pleas or the theories set up by defendant in an answer to
the complaint or a motion to dismiss the same. (Republic v. Roman Catholic Archbishop of Manila, G.R.
Nos. 192975 & 192994, November 12, 2012.)

Q: X filed a complaint for sum of money against Y. A receipt was presented by X which contained
the signatures of both parties, but with no reference as to the nature of the transaction which
necessitated the receipt. Y specifically denied her indebtedness to X, but not under oath. Y argues
that a receipt is not a promissory note and as such, its due execution and genuineness need not be
denied under oath. Does a mere acknowledgment of indebtedness on a document need to be
denied specifically under oath?

A: No. If the nature of the transaction for which the receipt was received and who between the parties is
the obligor and the oblige is not apparent in the document, and what is only apparent is a mere written and
signed acknowledgment that money was received, without terms and conditions from which a right or
obligation may be established, it cannot be considered an actionable document upon which an action or
defense may be founded. (Ogawa v. Menigishi, G.R. No. 193089, July 9, 2012.)

Q: X, undertook the construction of a building adjacent to an Inn, which is owned and operated by
University A. At that time, Y (X’s Father) was University A’s president and Chairman of the Board of
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Trustees. In Y’s capacity as such allowed X to tap into the Inn’s electricity and water supply.
Eventually, University A represented by the new president filed a complaint for qualified theft
against X before the Office of the City Prosecutor. The prosecutor found probable cause, hence the
information was filed before the RTC. X filed a motion for judicial determination of probable cause.
Finding that there was probable cause, RTC denied the motion. CA reversed stating that certain
elements of the crime were absent. Can a judge determine the absence/presence of probable
cause?

A: Yes. The REVISED RULES OF CRIMINAL PROCEDURE, Rule 112, §5, ¶a explicitly states that a judge, after
personally evaluating the resolution of the prosecutor and its supporting evidence, may immediately dismiss
a case if the evidence on record clearly fails to establish probable cause. However, the judge's dismissal
of a case under the authority of the aforesaid provision must be done only in clear-cut cases when the
evidence on record plainly fails to establish probable cause — that is when the records readily show
uncontroverted, and thus, established facts which unmistakably negate the existence of the elements of
the crime charged. Otherwise, he/she should not dismiss. In doubtful cases, however, the appropriate
course of action would be to order the presentation of additional evidence. It must be reiterated that while
probable cause should be determined summarily, it requires careful examination of the evidence to prevent
material damage to an accused's constitutional right to liberty and the guarantees of freedom and fair play,
and to protect the State from the burden of unnecessary expenses in prosecuting alleged offenses and
holding trials arising from false, fraudulent or groundless charges. (People of the Philippines v. Delos
Santos, G.R. No. 220685, November 29, 2017)

Q: X was being charged with illegal possession of drugs before the RTC. The prosecution alleged
that the PNP conducted surveillance operations on X’s drug trade. One morning, the PNP followed
X, who then met with Y. Around 5 to 10 meters away, the PNP allegedly saw Y handing a plastic
sachet to X. Suspecting that it was shabu, the PNP rushed to X and introduced themselves. When
X was ordered to empty his pocket, X brought out his wallet which allegedly contained a small
plastic sachet containing white crystalline substance. Thereafter, the PNP arrested him. The RTC
convicted X finding that the PNP conducted a valid in flagrante delicto warrantless arrest pursuant
to the Rules. CA affirmed the decision. Was there a valid warrantless arrest?
A: No. The REVISED RULES OF CRIMINAL PROCEDURE, Rule 113, §5 identifies three (3) instances when
warrantless arrests may be lawfully effected. These are: (a) an arrest of a suspect in flagrante delicto; (b)
an arrest of a suspect where, based on personal knowledge of the arresting officer, there is probable cause
that said suspect was the perpetrator of a crime which had just been committed; and (c) an arrest of a
prisoner who has escaped from custody serving final judgment or temporarily confined during the pendency
of his case or has escaped while being transferred from one confinement to another. Furthermore, in
warrantless arrests made pursuant to §5, ¶a, two (2) elements must concur, namely: (a) the person to be
arrested must execute an overt act indicating that he has just committed, is actually committing, or is
attempting to commit a crime; and (b) such overt act is done in the presence or within the view of the
arresting officer. On the other hand, §5, ¶b requires that at the time of the arrest, an offense had in fact just
been committed and the arresting officer had personal knowledge of facts indicating that the accused had
committed it. In both instances, the officer's personal knowledge of the fact of the commission of an offense
is essential. (Sindac v. People of the Philippines, G.R. No. 220732, September 6, 2016)

Q: President GMA issued E.O. 156, which banned importation of all types of used motor vehicles
subject to certain exceptions. Its constitutionality was questioned, and the SC held with finality in
the Southwing case that it was valid. Thereafter, President GMA issued E.O. 418, Section 2 of which
imposed a specific duty on top of the regular duty on used motor vehicles. Corporation A filed a
petition for declaratory relief and sought for the nullity of E.O. 418. With finality, the SC in the Fenix
case declared Section 2 of thereof unconstitutional. A writ of execution was issued. However, the
Bureau of Customs (BOC) disallowed Corporation A’s importation of used motor vehicles pursuant
to E.O. 156. Corporation A filed a petition for indirect contempt against BOC before the RTC.
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Considering the finality of the Southwing and Fenix cases, the RTC and CA dismissed the contempt
case for being barred by res judicata. Is the case barred by res judicata?
A: No. Res Judicata refers to the rule that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and matters
determined in the former suit. This principle is encapsulated in RULES OF COURT, Rule 39, §47, ¶a & ¶b
which provides for two (2) distinct concepts of res judicata: (a) bar by former judgment, and (b)
conclusiveness of judgment. The bar by prior judgment requires the following elements to be present for it
to operate: (a) a former final judgment that was rendered on the merits; (b) the court in the former judgment
had jurisdiction over the subject matter and the parties; and (c) identity of parties, subject matter and cause
of action between the first and second actions. In contrast, the elements of conclusiveness of judgment are
identity of: (a) parties; and (b) subject matter in the first and second cases. However, neither applies in this
case. While the Southwing and Fenix cases involve importers of used motor vehicles, the cases dealt with
difference issues and causes of action. (Fenix (CEZA) International, Inc. v. Executive Secretary, G.R. No.
235258, August 6, 2018)

Q: Corporation A filed a complaint for breach of contract with damages and prayer for a Writ of
Preliminary Injunction (WPI) and Temporary Restraining Order (TRO) against Corporation B. Upon
Corporation A’s posting of a ₱1,000,000 injunction bond issued by their surety, Corporation C, the
TRO was issued. Eventually, the TRO was converted to a WPI. Corporation B assailed the issuance
of the WPI before the CA. The CA ruled that the WPI was issued absent a clear right thereto. As a
consequence, Corporation B is entitled to recover damages against the injunction bond. Thereafter,
the RTC granted execution pending appeal as there exists good reasons to justify immediate
execution of the decision, because Corporation A is in imminent danger of insolvency. Was the
execution pending appeal proper?
A: Yes. As a general rule, only final judgements may be executed. However, this rule admits an exception,
execution of a judgment pending appeal is justified if there exists good reasons for its immediate execution
pursuant to RULES OF COURT, Rule 39, §2. The existence of "good reasons" for the immediate execution of
a judgment is an indispensable requirement as this is what confers discretionary power on a court to issue
a writ of execution pending appeal. Good reasons consist of compelling circumstances justifying immediate
execution, lest judgment becomes illusory, that is, the prevailing party's chances for recovery on execution
from the judgment debtor are altogether nullified. The "good reason" yardstick imports a superior
circumstance demanding urgency that will outweigh injury or damage to the adverse party and one such
"good reason" that has been held to justify discretionary execution is the imminent danger of insolvency of
the defeated party. Corporation B’s diminishing chances of recovery from the favorable decision is a good
reason to justify immediate execution; hence, it would be improper to set aside the order granting execution
pending appeal. (Centennial Guarantee Assurance Corp. v. Universal Motors Corp. G.R. No. 189358,
October 8, 2014)

Q: Corporation A (lessee) entered in to a lease contract with Corporation B (lessor). Corporation A


constructed a building thereon, and leased commercial spaces to various tenants. Corporation B
conducted redevelopment, and as part of the said plan, it undertook to close and board-up the
parking access road and driveway in front of Corporations A’s building. This greatly hampered
Corporation A’s operations and its customers and tenant were prejudiced. As a consequence,
Corporation A sued for damages against Corporation B. Eventually, both corporations arrived at a
compromise agreement which was approved by the RTC. It was agreed that the lease would cease
without any renewal, and that Corporation B surrender the possession of the leased premises to
Corporation A, subject to the former’s right to demolish and remove all improvement thereon not
later than a specified date. Corporation B filed a motion to fix the period for demolition. During the
hearing on the motion to fix, Corporation B manifested that it had already demolished the said
building. In response, Corporation A filed a motion for restitution, wherein it was prayed that the
salvageable materials be delivered or the value thereof be paid. Should the motions to fix and for
restitution prosper?
Remedial Law Digests

A: No. Although fixing of a period of demolition would have been incidental to the execution of the
compromise judgment, as it covered, among others, the demolition of the building, the parties' explicit
agreement on said period precluded the RTC from resolving Corporation A's motion to fix. To allow the
RTC to fix such period would allow it to amend a substantial part of the parties' agreement. Verily, judges
have the ministerial and mandatory duty to implement and enforce a compromise agreement. Absent any
appeal or motion to set aside the judgment, courts cannot modify, impose conditions different from the
terms of a compromise agreement, or set aside the compromises and reciprocal concessions made in good
faith by the parties without gravely abusing their discretion, as in this case.
As to the motion for restitution, as the Court sees it, the motion goes beyond the scope of the compromise
judgment as restitution in view of the building's supervening demolition was not even contemplated by the
parties in their compromise agreement. The RTC cannot extend the coverage of the execution proceedings
to deal with a supervening event that carries with it a new cause of action. Since a judgment on compromise
agreement is effectively a judgment on the case, proper remedies against ordinary judgments may be used
against judgments on a compromise agreement. Provided these are availed on time and the appropriate
grounds exist, remedies may include the following: (a) motion for reconsideration; (b) motion for new trial;
(c) appeal; (d) petition for relief from judgment; (e) petition for certiorari and (f) petition for annulment of
judgment. (The Plaza, Inc. v. Ayala Land, Inc., G.R. No. 209537, April 20, 2015)

Q: Spouses X were owners of a certain lots. Spouses A then mortgaged the lots to Bank A to secure
a loan. Spouses X failed to pay the loan, prompting Bank A to foreclose and auction the property.
Subject lots were sold to Bank A as the highest bidder. After the one year redemption period, the
spouses failed to redeem. Despite the foregoing, the spouses continued and possession and
cultivation of the properties. Y, the spouses’ son, purchased the said lots. Bank A filed a petition
for the issuance of a writ of possession of the subject lots. Should the petition prosper?
A: Yes. Pursuant to RULES OF COURT, Rule 39, §33 after consolidation of title in the purchaser's name for
failure of the mortgagor to redeem the property, the purchaser's right to possession ripens into the absolute
right of a confirmed owner. At this point, the issuance of a writ of possession, upon proper application and
proof of title, to a purchaser in an extrajudicial foreclosure sale becomes merely a ministerial function,
unless it appears that the property is in possession of a third party claiming a right adverse to that of the
mortgagor. The phrase "a third party who is actually holding the property adversely to the judgment obligor"
contemplates a situation in which a third party holds the property by adverse title or right, such as that of a
co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the property
in their own right, and they are not merely the successor or transferee of the right of possession of another
co-owner or the owner of the property. Notably, the property should not only be possessed by a third party,
but also held by the third party adversely to the judgment obligor. In this case, Y is merely a successor-in-
interest of Spouses X. (Rural Bank of Sta. Barbara (Iloilo), Inc. v. Centeno, G.R. No. 200667 (Resolution),
March 11, 2013)

Q: Corporation A filed a case against X et al. before the Securities and Exchange Commission (SEC).
However, when the SEC was reorganized the case was transferred to the RTC. X et al. filed a motion
to dismiss the complaint. However, the RTC denied the same. Y et al. intervened and sought the
dismissal of the case. However, the same was denied. Based on an alleged resolution of the
Corporation A’s Board of Trustees recommending the dismissal of the case, the RTC dismissed the
case. Was the dismissal proper?
A: No. In an ordinary civil action, a motion to dismiss must generally be filed within the time for but before
filing the answer to the complaint and on the grounds enumerated in RULES OF COURT, Rule 16, §1.
However, the rule is different with respect to intra-corporate controversies. Under the RULES OF PROCEDURE
FOR INTRA-CORPORATE CONTROVERSIES, Rule 1, §8, a motion to dismiss is a prohibited pleading. Since the
case involves an intra-corporate dispute, the motion to dismiss is undeniably a prohibited pleading. The
RTC should not have entertained, let alone have granted the subject motion to dismiss. (Aldersgate
College, Inc. v. Gauuan, G.R. No. 192951 (Resolution), November 14, 2012)
Remedial Law Digests

Q: Corporation A became the owner of the subject property after it bought the same from
Corporation B. Ever since it had been in actual, continuous and uninterrupted possession of the
subject property and had declared the same for taxation purposes. X et al. allegedly entered the
property by force, strategy and stealth on which they proceeded to cut down some coconut trees,
introduced improvements and fenced the area. After demands to vacate were ignored, Corporation
A filed a complaint for forcible entry with the MCTC. The MCTC ordered X et al. to vacate the property
and remove all improvements introduced therein. May X et al. be lawfully ejected from the subject
property?
A: Yes. RULES OF COURT, Rule 70, §1 provides that in an action for forcible entry, the plaintiff must prove
two things: (a) that he was in prior possession of the disputed property, and (b) that the defendant deprived
him of his possession by force, intimidation, threats, strategy, and stealth. Anent the first requirement,
possession in the eyes of the law does not mean that a man has to have his feet on every square meter of
the ground before he is deemed in possession. With regard the second requirement, based on
jurisprudence acts of unlawfully entering the disputed premises, erecting a structure thereon, and excluding
therefrom the prior possessor would necessarily imply the use of force, as in this case. Hence, the MCTC
properly adjudged Corporation A as the lawful possessor of the subject property. (Philippine Tourism
Authority v. Sabandal-Herzenstiel, G.R. No. 196741, July 17, 2013)

Q: Y instituted a suit for unlawful detainer against X before the MeTC of Caloocan. X failed to appear
during the preliminary conference, despite notice. Y moved for the rendition of judgment pursuant
to Section 6 in relation to Section 7 of the Rules on Summary Procedure, which the MeTC granted.
Instead of appealing, X filed a Motion for Reconsideration to Suspend the Proceedings and/or to
Dismiss the Case. On the other hand, Y filed a motion for execution of the MeTC decision, which
she claimed to have attained finality. X’s motion was denied, while Y’s motion was granted. X filed
a petition for certiorari under Rule 65 of the Rules of Court with the RTC, assailing that the MeTC
Decision was rendered with grave abuse of discretion. The RTC dismissed. On appeal, the CA ruled
that the filing of the certiorari was inappropriate as a substitute for an appeal. Was X correct in
resorting to the special civil action of certiorari under Rule 65 of the Rules of Court? Was X’s
attendance in the preliminary conference mandatory, such that his absence thereat would merit the
submission of the case for decision? Was the MeTC correct in ordering the execution of the
decision?

A: YES, X was correct in resorting to a petition for certiorari under Rule 65 because an order of execution
is not a final order or resolution within the contemplation of the rules, but is issued to carry out the
enforcement of a final judgment or order against the losing party. Hence, it is generally not appealable, and
is the proper subject of a petition for certiorari.
YES. According to Section 6 in relation to Section 7 of the Rules on Summary Procedure, X’s attendance
in the preliminary conference was mandatory, excusable only when the party offers a justifiable cause for
his failure to attend. Without any justifiable reason for her non-appearance, the court’s findings are
sustained.
YES. Rule 70, Section 19 of the Rules of Court provides for the immediate execution of judgment in favor
of the plaintiff in ejectment cases, which can only be stayed if the defendant perfects an appeal, files a
supersedeas bond, and makes a periodic deposit of rental or other reasonable compensation for the use
and occupancy of the premises during the appeal. These requirements are mandatory and concurrent. X
failed to interpose an appeal from the MeTC decision, rendering the same final and executory. (Mauleon v.
Porter, G.R. No. 203288, July 18, 2014)

Q: X filed a criminal complaint for estafa against Y, et al. X alleged that they entered into an on-
going settlement, and was given 10 days to submit the necessary motion and directed the
prosecution to furnish Y’s counsel a copy of the same for their comment, after which the case will
be submitted for resolution. Although a Compromise Agreement was reached, the prosecution
failed to furnish the RTC a copy of the same and file the necessary motion. The RTC dismissed the
case for failure of the prosecution to comply with the court’s directive, and take further steps to
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prosecute the case, in view of the accused’s constitutional right to speedy trial. More than 2 years
from the issuance of the dismissal order, X filed a motion for reconsideration claiming that he
believed in good faith that the case was merely archived in accordance with the Compromise
Agreement. RTC and CA denied the motion, holding that the dismissal grounded on failure to
prosecute, had long become final and executory. Were the RTC and CA correct in denying due
course to X’s notice of appeal?

A: NO. A dismissal grounded on the denial of the right of the accused to speedy trial has the effect of
acquittal that would bar the prosecution of the accused for the same offense. The