Saturday, December 21, 2013

Nature of a Preliminary Injunction

A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency, or a person to refrain from a particular act or acts. It may also require the performance of a particular act or acts, in which case it shall be known as a preliminary mandatory injunction. (Section 1, Rule 58)

Preliminary injunction is a provisional remedy. The court may grant it at any time after the start of the case and before judgment, while the case is still being heard on the merits, when the court finds that the plaintiff is entitled to the relief demanded and only when his complaint shows facts entitling such reliefs. A writ of preliminary injunction is generally based solely on initial and incomplete evidence.  The opinion and findings of fact of a court when issuing a writ of preliminary injunction are interlocutory (given provisionally) in nature and made even before the trial on the merits is completed. (La Vista Association vs. Court of Appeals, G.R. No. 95252.  September 5, 1997)

Consequently there may be vital facts subsequently presented during the trial which were not obtaining when the writ of preliminary injunction was issued.  Hence, to equate the basis for the issuance of a preliminary injunction with that for the issuance of a final injunctive writ is erroneous.  And it does not necessarily mean that when a writ of preliminary injunction issues a final injunction follows. (Ibid)

Tuesday, December 17, 2013

13th Month Pay Below 30,000 Pesos is Exempted from Tax

BIR chief Kim Henares
(Photo from BIR website bir.gov.ph)
The Bureau of Internal Revenue is reminding government agencies and private companies that the 13th month pay, bonuses and benefits of their workers are exempted from tax within the amount not exceeding P30,000. This means any amount beyond the P30,000 cut-off  will be taxed, in accordance with Revenue Regulations No. 10-2008.
 
BIR Commissioner Kim Henares was quoted in the news explaining how the amount exceeding P30,000 will be taxed. She said that if for example an employee received P40,000 total 13th month pay and bonuses, P30,000 is tax-exempt and only P10,000 will be subjected to tax. The rule applies to all workers both in the private and public sectors.
 
Under Presidential Decree No. 851 (as amended), a Marcos-era law passed in December 22, 1975, all employers are required to pay their employees a 13th month pay not later than December 24 of every year. The law states that the "Christmas season is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and New Year."

There is a proposal from Senator Ralph Recto to increase the said tax exemption on the 13th month pay and other benefits to the amount P75,000.
 
The 13th month pay is equivalent to the total basic salary earned during the year divided by 12 months.

Saturday, December 14, 2013

Selected/Landmark Cases (1908-Present)

Selected Cases on Commercial Documents and Chattels

Selected Cases in Provisional Remedies

Selected Cases in Special Civil Actions

Selected Cases in Special Civil Actions

IN GENERAL

Marantao v. CA, January 16, 2001

In cases of appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of other parties. In such case, prior to the transmittal of the original record or record on appeal, the court may only issue orders for the protection and preservation of the rights of the parties which do not involve any matter litigated by the appeal, approve compromises, permit appeals of indigent litigants, order execution pending appeal In accordance with section 2 of Rule 39, and allow withdrawal of the appeal.

Generally, the special civil action for certiorari will not lie unless the aggrieved party has no other plain, speedy and adequate remedy in the ordinary course of law, such as a timely filed motion for reconsideration, so as to allow the lower court to correct the alleged error. However, there are several exceptions where the special civil action for certiorari will lie even without the filing of a motion for reconsideration, namely:

a. where the order is a patent nullity, as where the court a quo has no jurisdiction;
b. where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court;
c. where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the government or the petitioner or the subject matter of the action is perishable;
d. where, under the circumstances, a motion for reconsideration would be useless;
e. where petitioner was deprived of due process and there is extreme urgency for relief;
f. where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable;
g. where the proceedings in the lower court are a nullity for lack of due process;
h. where the proceedings was ex parte or in which the petitioner had no opportunity to object; and
i. where the issue raised is one purely of law or where public interest is involved.


INTERPLEADER

Ocampo vs. Tirona, G.R. No. 147812, April 6, 2005

An action for interpleader is proper when the lessee does not know the person to whom to pay rentals due to conflicting claims on the property. The remedy is afforded not to protect a person against a double liability but to protect him against a double vexation in respect of one liability. When the court orders that the claimants litigate among themselves, there arises in reality a new action and the former are styled interpleaders, and in such a case the pleading which initiates the action is called a complaint of interpleader and not a cross-complaint.


RCBC vs. Metro, G.R. No. 127913, September 13, 2001


It should be remembered that an action of interpleader is afforded to protect a person not against double liability but against double vexation in respect of one liability. It requires, as an indispensable requisite, that "conflicting claims upon the same subject matter are or may be made against the plaintiff-in-interpleader who claims no interest whatever in the subject matter or an interest which in whole or in part is not disputed by the claimants."


DECLARATORY RELIEF

Mejia vs. Gabayan, G.R. No. 149765, April 12, 2005

The petitioner ought to exhaust all administrative remedies before seeking judicial recourse. Based on case law, an action for declaratory relief is proper only if adequate relief is not available through other existing forms of actions or proceedings. A petition for a declaratory relief cannot be made a substitute for all existing remedies and should be used with caution. Relief by declaratory judgment is sui generis and not strictly legal or equitable yet its historical affinity is equitable. The remedy is not designed to supplant existing remedies.

It may be reiterated that the action for declaratory relief which originated in the classical Roman law, had been used in Scotland for four centuries and adopted in England and other European countries. The remedy is purely statutory in nature and origin. The remedy is an extension of the ancient quia timet. A declaratory judgment does not create or change substantial rights or modify any relationship or alter the character of controversies.


Velarde vs. Social Justice Society, G.R. No. 159357, April 28, 2004

The essential requisites of the action for declaratory relief are as follows: (1) there is a justiciable controversy; (2) the controversy is between persons whose interests are adverse; (3) the party seeking the relief has a legal interest in the controversy; and (4) the issue is ripe for judicial determination.

A justiciable controversy refers to an existing case or controversy that is appropriate or ripe for judicial determination, not one that is conjectural or merely anticipatory.

… It merely sought an opinion of the trial court on whether the speculated acts of religious leaders endorsing elective candidates for political offices violated the constitutional principle on the separation of church and state. SJS did not ask for a declaration of its rights and duties; neither did it pray for the stoppage of any threatened violation of its declared rights. Courts, however, are proscribed from rendering an advisory opinion.

The failure of a complaint to state a cause of action is a ground for its outright dismissal. 30 However, in special civil actions for declaratory relief, the concept of a cause of action under ordinary civil actions does not strictly apply. The reason for this exception is that an action for declaratory relief presupposes that there has been no actual breach of the instruments involved or of rights arising thereunder. Nevertheless, a breach or violation should be impending, imminent or at least threatened.

… Not only is the presumed interest not personal in character; it is likewise too vague, highly speculative and uncertain. The Rules require that the interest must be material to the issue and affected by the questioned act or instrument, as distinguished from simple curiosity or incidental interest in the question raised.

Indeed, the Court finds in the Petition for Declaratory Relief no single allegation of fact upon which SJS could base a right of relief from the named respondents. In any event, even granting that it sufficiently asserted a legal right it sought to protect, there was nevertheless no certainty that such right would be invaded by the said respondents. Not even the alleged proximity of the elections to the time the Petition was filed below (January 28, 2003) would have provided the certainty that it had a legal right that would be jeopardized or violated by any of those respondents.


CERTIORARI, PROHIBITION AND MANDAMUS

Paradero vs. Abragan, et al., G.R. No. 158917, March 1, 2004

The Court is aware of the doctrine that the availability of the ordinary course of appeal does not constitute sufficient ground to prevent a party from making use of the extraordinary remedy of certiorari where the appeal is not an adequate remedy or equally beneficial, speedy and sufficient. Indeed, it is the inadequacy — not the mere absence — of all other legal remedies and the danger of failure of justice without the writ, that must usually determine the propriety of certiorari. This has been the consistent ruling of the Court in Jaca v. Davao Lumber Company, reiterated in the subsequent cases of Valencia v. Court of Appeals, 18 Echauz v. Court of Appeals, and International School v. Court of Appeals.

Forum-shopping is present when in the two or more cases pending there is identity of parties, rights or causes of action and reliefs sought. While there is an identity of parties in the appeal and in the petition for review on certiorari filed before this Court, it is clear that the causes of action and reliefs sought are unidentical, although petitioner ISM may have mentioned in its appeal the impropriety of the writ of execution pending appeal under the circumstances obtaining in the case at bar. Clearly, there can be no forum-shopping where in one petition a party questions the order granting the motion for execution pending appeal, as in the case at bar, and, in a regular appeal before the appellate court, the party questions the decision on the merits which finds the party guilty of negligence and holds the same liable for damages therefor. After all, the merits of the main case are not to be determined in a petition questioning execution pending appeal and vice versa. Hence, reliance on the principle of forum-shopping is misplaced. [International School v. Court of Appeals]

Moreover, even assuming that petitioner’s recourse to certiorari is correct, the same is still dismissible for disregarding the hierarchy of courts. While we have concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue writs of certiorari, this concurrence is not to be taken as an unrestrained freedom of choice as to which court the application for the writ will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A direct invocation of the Supreme Court’s original jurisdiction to issue these extraordinary writs is allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. Petitioner failed to show that such special and important reasons obtain in this case.


Asian Transmission Corp. vs. CA, G.R. No. 144664, March 15, 2004

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy.


Republic vs. Sandiganbayan, G.R. No. 152154, July 15, 2003

At the outset, we would like to stress that we are treating this case as an exception to the general rule governing petitions for certiorari. Normally, decisions of the Sandiganbayan are brought before this Court under Rule 45, not Rule 65. But where the case is undeniably ingrained with immense public interest, public policy and deep historical repercussions, certiorari is allowed notwithstanding the existence and availability of the remedy of appeal.


PCGG vs. Desierto, January 19, 2001

As regards the manifestation of the Office of the Ombudsman of its willingness to have the case remanded for preliminary investigation, in PCGG vs. Desierto, the Court has also enunciated the rule that when the merits of the complaint have evidently and thoroughly been examined by the Ombudsman, it would not be right to yet subject respondents to an unnecessary and prolonged anguish. The Court finds no cogent reason to divert in the instant case from making that same pronouncement.


ELPI vs. CA, G.R. No. 129184, February 28, 2001

The general rule is that the denial of a motion to dismiss a complaint is an interlocutory order and, hence, cannot be appealed or questioned via a special civil action of certiorari until a final judgment on the merits of the case is rendered.

The remedy of the aggrieved party is to file an answer to the complaint and to interpose as defenses the objections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, to elevate the entire case by appeal in due course. However, the rule is not ironclad. Under certain situations, recourse to certiorari or mandamus is considered appropriate, that is, (a) when the trial court issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or, (c) appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly relieve a defendant from the injurious effects of the patently mistaken order maintaining the plaintiff's baseless action and compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by another futile case."


Santos, v. CA, GR 141947, July 5, 2001

The requirement of setting forth the three (3) dates in a petition for certiorari under Rule 65 is for the purpose of determining its timeliness. Such a petition is required to be filed not later than sixty (60) days from notice of the judgment, order or Resolution sought to be assailed. Therefore, that the petition for certiorari was filed forty-one (41) days from receipt of the denial of the motion for reconsideration is hardly relevant. The Court of Appeals was not in any position to determine when this period commenced to run and whether the motion for reconsideration itself was filed on time since the material dates were not stated. It should not be assumed that in no event would the motion be filed later than fifteen (15) days. Technical rules of procedure are not designed to frustrate the ends of justice. These are provided to effect the proper and orderly disposition of cases and thus effectively prevent the clogging of court dockets. Utter disregard of the Rules cannot justly be rationalized by harking on the policy of liberal construction.


Indiana Aerospace University vs. CHED, G.R. No. 139371, April 4, 2001


We hold that respondent's Petition for Certiorari was seasonably filed. In computing its timeliness, what should have been considered was not the Order of August 14, 1998, but the date when respondent received the December 9, 1998 Order declaring it in default. Since it received this Order only on January 13, 1999, and filed its Petition for Certiorari on February 23, 1999, it obviously complied with the sixty-day reglementary period stated in Section 4, Rule 65 of the 1997 Rules of Court. Moreover, the August 14, 1998 Order was not a proper subject of certiorari or appeal, since it was merely an interlocutory order.

Petitioner also contends that certiorari cannot prosper in this case, because respondent did not file a motion for reconsideration before filing its Petition for Certiorari with the CA. Respondent counters that reconsideration should be dispensed with, because the December 9, 1998 Order is a patent nullity.

The general rule is that, in order to give the lower court the opportunity to correct itself, a motion for reconsideration is a prerequisite to certiorari. It is also basic that a petitioner must exhaust all other available remedies before resorting to certiorari. This rule, however, is subject to certain exceptions such as any of the following: (1) the issues raised are purely legal in nature, (2) public interest is involved, (3) extreme urgency is obvious or (4) special circumstances warrant immediate or more direct action. It is patently clear that the regulation or administration of educational institutions, especially on the tertiary level, is invested with public interest. Hence, the haste with which the solicitor general raised these issues before the appellate court is understandable. For the reason mentioned, we rule that respondent's Petition for Certiorari did not require prior resort to a motion for reconsideration.


Olan vs. CA, G.R. No. 116109, September 14, 1999

Finally, it must be pointed out that the writ of mandamus is not the proper remedy to compel a court to grant a new trial on the ground of "newly discovered evidence". Mandamus is employed to compel the performance, when refused, of a ministerial duty, this being its chief use and not a discretionary duty. It is nonetheless likewise available to compel action, when refused, in matters involving judgment and discretion, but not to direct the exercise of judgment or discretion in a particular way or the retraction or reversal of an action already taken in the exercise of either.


Liga v. City Mayor of Manila, G.R. No. 154599, January 21, 2004

Elsewise stated, for a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.

A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties.

Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc., of public administrative officers or bodies . . . required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature."

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties.

The respondents do not fall within the ambit of tribunal, board, or officer exercising judicial or quasi-judicial functions. As correctly pointed out by the respondents, the enactment by the City Council of Manila of the assailed ordinance and the issuance by respondent Mayor of the questioned executive order were done in the exercise of legislative and executive functions, respectively, and not of judicial or quasi-judicial functions. On this score alone, certiorari will not lie.

Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction.


DBP vs. Pingol, G.R. No. 145908, January 22, 2004

Basic is the doctrine that the denial of a motion to dismiss or to quash, being interlocutory, cannot be questioned by certiorari; it cannot be the subject of appeal, until final judgment or order is rendered. But this rule is not absolute.

Indeed, where the questioned order is a patent nullity, or where it was issued in excess or without jurisdiction, resort to certiorari may be allowed. Here, the violation of the rule on forum shopping is obvious. Disregarding such fact constituted grave abuse of discretion on the part of the trial court, amounting to lack or excess of jurisdiction. The remedy of certiorari is therefore proper to assail the patently null order of the Naga court which denied petitioner's motion to dismiss.


Perez vs. Ombudsman, May 27, 2004

As the present controversy pertained to a criminal case, the petitioners were correct in availing of the remedy of petition for certiorari under Rule 65 but they erred in filing it in the Court of Appeals. The procedure set out in Kuizon vs. Ombudsman and Mendoza-Arce vs. Ombudsman, requiring that petitions for certiorari questioning the Ombudsman's orders or decisions in criminal cases should be filed in the Supreme Court and not the Court of Appeals, is still the prevailing rule.

But even if the petition for certiorari had been filed in this Court, we would have dismissed it just the same. First, petitioners should have filed a motion for reconsideration of the Ombudsman resolution as it was the plain, speedy and adequate remedy in the ordinary course of law, not filing a petition for certiorari directly in the Supreme Court. Second, the Office of the Ombudsman did not act without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Ombudsman resolution.
Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction. In other words, the exercise of power is in an arbitrary or despotic manner by reason of passion or personal hostility. It must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.


La Bugal-B'laan vs. Ramos, January 27, 2004

We now agree that the Court must recognize the exceptional character of the situation and the paramount public interest involved, as well as the necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected communities as a result of doubts cast upon the constitutionality and validity of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity of suits. Paraphrasing Gonzales v. Commission on Elections, it is evident that strong reasons of public policy demand that the constitutionality issue be resolved now.


Lopez vs. Ombudsman, September 6, 2001

This Court has held that, "while as a general rule, the performance of an official act or duty, which necessarily involves the exercise of discretion or judgment, cannot be compelled by mandamus, this rule does not apply in cases where there is gross abuse of discretion, manifest injustice, or palpable excess of authority."


G & S Transport vs. CA, May 28, 2002

It is a settled rule that mandamus will lie only to compel the performance of a ministerial duty but does not lie to require anyone to fulfill contractual obligations. Only such duties as are clearly and peremptorily enjoined by law or by reason of official station are to be enforced by the writ. Whether MIAA will enter into a contract for the provision of a coupon taxi service at the international airport is entirely and exclusively within its corporate discretion. It does not involve a duty the performance of which is enjoined by law and thus this Court cannot direct the exercise of this prerogative. Indeed the determination of the winning bidders should be left to the sound judgment of the MIAA which is the agency in the best position to evaluate the proposals and to decide which bid would most complement the NAIA's services.


FORECLOSURE OF MORTGAGE

DBP vs. Aguirre, September 7, 2001

However, although the notice of foreclosure sale was duly published, the sale did not take place as scheduled on September 25, 1985. Instead, it was held more than two months after the published date of the sale or on January 7, 1986. This renders the sale void. It is settled doctrine that failure to publish the notice of auction sale as required by the statute constitutes a jurisdictional defect which invalidates the sale. Although the lack of republication of the notice of sale has not been raised in this case, this Court is possessed of ample power to look into a relevant issue, such as the lack of jurisdiction to hold the foreclosure sale.


Metrobank v. Wong, June 26, 2001

It is bad enough that the mortgagor has no choice but to yield his property in a foreclosure proceeding. It is infinitely worse, if prior thereto, he was denied of his basic right to be informed of the impending loss of his property. This is another instance when law and morals echo the same sentiment.

The Act only requires (1) the posting of notices of sale in three public places, and (2) the publication of the same in a newspaper of general circulation. Personal notice to the mortgagor is not necessary. Nevertheless, the parties to the mortgage contract are not precluded from exacting additional requirements. Precisely, the purpose of a stipulation in the contract for an additional requirement is to apprise respondent of any action which petitioner might take on the subject property, thus according him the opportunity to safeguard his rights. When petitioner failed to send the notice of foreclosure sale to respondent, he committed a contractual breach sufficient to render the foreclosure sale on November 23, 1981 null and void.

Unlike in Olizon where there was a valid publication of the notice of foreclosure sale, the publication in the case at bar was defective. Not only did it fail to conform with the requirement that the notice must be published once a week for at least three consecutive weeks in a newspaper of general circulation, but also, there were substantial errors in the notice of sale published in the Pagadian Times as found by the scrutinizing eyes of the trial court.


PARTITION

Figuracion-Gerilla vs. Vda. De Figuracion, August 22, 2006

There are two ways by which partition can take place under Rule 69: by agreement under Section 2 and through commissioners when such agreement cannot be reached, under Sections 3 to 6.

Neither method specifies a procedure for determining expenses chargeable to the decedent’s estate. While Section 8 of Rule 69 provides that there shall be an accounting of the real property's income (rentals and profits) in the course of an action for partition, there is no provision for the accounting of expenses for which property belonging to the decedent's estate may be answerable, such as funeral expenses, inheritance taxes and similar expenses enumerated under Section 1, Rule 90 of the Rules of Court.

In a situation where there remains an issue as to the expenses chargeable to the estate, partition is inappropriate. While petitioner points out that the estate is allegedly without any debt and she and respondents are Leandro Figuracion's only legal heirs, she does not dispute the finding of the CA that "certain expenses" including those related to her father's final illness and burial have not been properly settled. Thus, the heirs (petitioner and respondents) have to submit their father's estate to settlement because the determination of these expenses cannot be done in an action for partition.


FORCIBLE ENTRY AND UNLAWFUL DETAINER

Varona vs. CA, May 20, 2004

It is settled that a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful without necessarily employing the terminology of the law.


Lopez vs. David, March 30, 2004

Under Section 1 of Rule 70, the one-year period within which a complaint for unlawful detainer can be filed should be counted from the date of demand, because only upon the lapse of that period does the possession become unlawful. In the present case, it is undisputed that petitioners’ Complaint was filed beyond one year from the time that respondents’ possession allegedly became unlawful.

We have ruled that “forcible entry and unlawful detainer are quieting processes and the one-year time bar to the suit is in pursuance of the summary nature of the action.” Thus, we have nullified proceedings in the MeTC when it improperly assumed jurisdiction of a case in which the unlawful deprivation or withholding of possession had exceeded one year.


Del Rosario vs. Sps. Manuel, January 16, 2004

As found by the trial court, petitioner's possession of the land was by mere tolerance of the respondents. We have held in a number of cases that one whose stay is merely tolerated becomes a deforciant occupant the moment he is required to leave. He is bound by his implied promise, in the absence of a contract, that he will vacate upon demand.


Sunflower Neighborhood Association vs. CA, September 3, 2003

It is well-settled that, although an ejectment suit is an action in personam wherein the judgment is binding only upon the parties properly impleaded and given an opportunity to be heard, the judgment becomes binding on anyone who has not been impleaded if he or she is: (a) a trespasser, squatter or agent of the defendant fraudulently occupying the property to frustrate the judgment; (b) a guest or occupant of the premises with the permission of the defendant; (c) a transferee pendente lite; (d) a sublessee; (e) a co-lessee or (f) a member of the family, relative or privy of the defendant.


Sps. Tirona v. Alejo, October 10, 2001

A reading of the allegations in the complaints leads us to conclude that petitioners' action was one for forcible entry, not unlawful detainer. The distinctions between the two actions are: (1) In an action for forcible entry, the plaintiff must allege and prove that he was in prior physical possession of the premises until deprived thereof, while in illegal detainer, the plaintiff need not have been in prior physical possession; and (2) in forcible entry, the possession by the defendant is unlawful ab initio because he acquires possession by force, intimidation, threat, strategy, or stealth, while in unlawful detainer, possession is originally lawful but becomes illegal by reason of the termination of his right of possession under his contract with the plaintiff. In pleadings filed in courts of special jurisdiction, the special facts giving the court jurisdiction must be specially alleged and set out. Otherwise, the complaint is demurrable.

Hence, in actions for forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction: First, the plaintiff must allege his prior physical possession of the property. Second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court, namely: force, intimidation, threats, strategy, and stealth. Recall that the complaints in Civil Cases Nos. 6632 and 6633 failed to allege prior physical possession of the property on the part of petitioners. All that is alleged is unlawful deprivation of their possession by private respondents. The deficiency is fatal to petitioners' actions before the Metropolitan Trial Court of Valenzuela. Such bare allegation is insufficient for the MeTC to acquire jurisdiction. No reversible error was, therefore, committed by the RTC when it held that the Metropolitan Trial Court acquired no jurisdiction over Civil Cases Nos. 6632 and 6633 for failure of the complaints to aver prior physical possession by petitioners.


Uy v. Santiago, July 31, 2000

Private respondents' argument that execution pending appeal would deprive them of their right to due process of law as it would render moot and academic their Petition for Review before the Court of Appeals deserves scant consideration. We must stress that what is in issue is only the propriety of issuing a writ of execution pending appeal. It is not conclusive on the right of possession of the land and shall not have any effect on the merits of the ejectment suit still on appeal. Moreover, it must be remembered that ejectment cases are summary in nature for they involve perturbation of social order which must be restored as promptly as possible.

Finding the issuance of the writ of execution pending appeal a clear duty of respondent Judge under the law, mandamus can and should lie against him. Indeed, mandamus will lie to compel a judge or other public official to perform a duty specifically enjoined by law once it is shown that the judge or public official has unlawfully neglected the performance thereof.


Cansino vs. CA, August 21, 2003

It is fundamental that complainants in an ejectment case must allege and prove that they had prior physical possession of the property before they were unlawfully deprived thereof by defendants. Respondents, being the complainants before the lower court, had the burden of proving their claim of prior possession.


Lariosa vs. Bandala, August 15, 2003

Ejectment cases are summary in nature for they involve perturbation of social order which must be addressed as promptly as possible. Respondent Judge has acted within the bounds of his authority in issuing the orders for the alias writ of execution and the alias writ of demolition.


Bustos vs. CA, January 24, 2001

Admittedly, the decision in the ejectment case is final and executory. However, the ministerial duty of the court to order execution of a final and executory judgment admits of exceptions. In Lipana vs. Development Bank of Rizal, the Supreme Court reiterated the rule "once a decision becomes final and executory, it is the ministerial duty of the court to order its execution, admits of certain exceptions as in cases of special and exceptional nature where it becomes imperative in the higher interest of justice to direct the suspension of its execution (Vecine v. Geronimo, 59 O.G. 579); whenever it is necessary to accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164); or when certain facts and circumstances transpired after the judgment became final which could render the execution of the judgment unjust (Cabrias v. Adil, 135 SCRA 354)."

In the present case, the stay of execution is warranted by the fact that petitioners are now legal owners of the land in question and are occupants thereof. To execute the judgment by ejecting petitioners from the land that they owned would certainly result in grave injustice. Besides, the issue of possession was rendered moot when the court adjudicated ownership to the spouses Bustos by virtue of a valid deed of sale.


Laurora vs. Sterling, April 9, 2003

We stress that the issue of ownership in ejectment cases is to be resolved only when it is intimately intertwined with the issue of possession, to such an extent that the question of who had prior possession cannot be determined without ruling on the question of who the owner of the land is. No such intertwinement has been shown in the case before us. Since respondents' claim of ownership is not being made in order to prove prior possession, the ejectment court cannot intrude or dwell upon the issue of ownership.

Notwithstanding the actual condition of the title to the property, a person in possession cannot be ejected by force, violence or terror — not even by the owners. If such illegal manner of ejectment is employed, as it was in the present case, the party who proves prior possession — in this case, petitioners — can recover possession even from the owners themselves.

Granting arguendo that petitioners illegally entered into and occupied the property in question, respondents had no right to take the law into their own hands and summarily or forcibly eject the occupants therefrom.

The availment of the aforementioned remedies is the legal alternative to prevent breaches of peace and criminal disorder resulting from the use of force by claimants out to gain possession. The rule of law does not allow the mighty and the privileged to take the law into their own hands to enforce their alleged rights. They should go to court and seek judicial vindication.


CONTEMPT


Macrohon vs. Ibay, November 30, 2006

Those who don the judicial robe have been reminded time and again that besides the basic equipment of possessing the requisite learning in the law, a magistrate must exhibit that hallmark judicial temperament of utmost sobriety and self-restraint which are indispensable qualities of every judge. It has repeatedly been stressed that the role of a judge in relation to those who appear before his court must be one of temperance, patience and courtesy. A judge who is commanded at all times to be mindful of his high calling and his mission as a dispassionate and impartial arbiter of Justice is expected to be "a cerebral man who deliberately holds in check the tug and pull of purely personal preferences and prejudices which he shares with the rest of his fellow mortals."


Bugaring vs. Español, January 19, 2001

The power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the enforcement of judgments, orders, and mandates of the court, and consequently, to the due administration of justice. Direct contempt is committed in the presence of or so near a court or judge, as in the case at bar, and can be punished summarily without hearing. Hence, petitioner cannot claim that there was irregularity in the actuation of respondent judge in issuing the contempt order inside her chamber without giving the petitioner the opportunity to defend himself or make an immediate reconsideration.


De Leon vs. CA, February 5, 2004

The general rule is that a corporation and its officers and agents may be held liable for contempt. A corporation and those who are officially responsible for the conduct of its affairs may be punished for contempt in disobeying judgments, decrees, or orders of a court made in a case within its jurisdiction.


Espinosa vs. CA, May 28, 2004

Unlike in cases of direct contempt, which can be summarily adjudged and punished by a fine, a finding of guilt for indirect contempt must be preceded by a charge in writing, an opportunity given to the respondent to comment thereon and to be heard by himself or by counsel in a hearing. The Court of Appeals erred in summarily punishing Espinosa and his counsel, considering that the charge against them only constitutes indirect contempt. In cases of indirect contempt, no matter how palpable the errant's bad faith might appear to the court, due process as laid down in the rules of procedure must be observed before the penalty is imposed.


Land Bank vs. Listana, August 5, 2003

Evidently, quasi-judicial agencies that have the power to cite persons for indirect contempt pursuant to Rule 71 of the Rules of Court can only do so by initiating them in the proper Regional Trial Court. It is not within their jurisdiction and competence to decide the indirect contempt cases. These matters are still within the province of the Regional Trial Courts. In the present case, the indirect contempt charge was filed, not with the Regional Trial Court, but with the PARAD, and it was the PARAD that cited Mr. Lorayes with indirect contempt.

Hence, the contempt proceedings initiated through an unverified "Motion for Contempt" filed by the respondent with the PARAD were invalid for the following reasons: First, the Rules of Court clearly require the filing of a verified petition with the Regional Trial Court, which was not complied with in this case. The charge was not initiated by the PARAD motu proprio; rather, it was by a motion filed by respondent. Second, neither the PARAD nor the DARAB have jurisdiction to decide the contempt charge filed by the respondent. The issuance of a warrant of arrest was beyond the power of the PARAD and the DARAB.

Selected Cases in Provisional Remedies

PRELIMINARY ATTACHMENT

Sta. Ines vs. Macaraeg, December 2, 1998

Specifically, attachment is a juridical institution intended to secure the outcome of the trial. xxx The overriding purpose of attachment is to secure a contingent lien on defendant's property until plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its satisfaction, or to make provision for unsecured debts in cases where the means of satisfaction thereof are liable to be removed beyond the jurisdiction or improperly disposed of or concealed, or otherwise placed beyond the reach of creditors. xxx Indeed attachment is primarily in aid of creditors. As used in the rules, however, the term, "creditors", should not be construed in its strict, technical sense. Rather, it should be given a broad construction as to embrace not only a creditor established as such by a contractual relation alleged in the complaint but also all parties who put in suit demands, accounts, interests or causes of action, for which they might recover in the suit any debt or damages.


Chuidian vs. Sandiganbayan, January 19, 2001

The rule contemplates that the defect must be in the very issuance of the attachment writ. Supervening events which may or may not justify the discharge of the writ are not within the purview of this particular rule.

When the preliminary attachment is issued upon a ground. which is at the same time the applicant's cause of action, the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiff's application and affidavits on which the writ was based, the reason being that the hearing on such a motion for dissolution of the writ would be tantamount to a trial of the merits of the action. Thus, this Court has time and again ruled that the merits of the action in which a writ of preliminary attachment has been issued are not triable on a motion for dissolution of the attachment, otherwise an applicant for the lifting of the writ could force a trial of the merits of the case on a mere motion.

Moreover, we have held that when the writ of attachment is issued upon a ground which is at the same time the applicant's cause of action, the only other way the writ can be lifted or dissolved is by a counterbond, in accordance with Section 12 of the same rule.

To reiterate, there are only two ways of quashing a writ of attachment: (a) by filing a counterbond immediately; or (b) by moving to quash on the ground of improper and irregular issuance. These grounds for the dissolution of an attachment are fixed in Rule 57 of the Rules of Court and the power of the Court to dissolve an attachment is circumscribed by the grounds specified therein.


PBC vs. CA, February 23, 2001

The petitioner's prayer for a writ of preliminary attachment hinges on the allegations which are couched in general terms devoid of particulars of time, persons and places to support such a serious assertion that "defendants are disposing of their properties in fraud of creditors." There is thus the necessity of giving to the private respondents an opportunity to ventilate their side in a hearing, in accordance with due process, in order to determine the truthfulness of the allegations. But no hearing was afforded to the private respondents the writ having been issued ex parte. A writ of attachment can only be granted on concrete and specific grounds and not on general averments merely quoting the words of the rules.

Time and again, we have held that the rules on the issuance of a writ of attachment must be construed strictly against the applicants. This stringency is required because the remedy of attachment is harsh, extraordinary and summary in nature. If all the requisites for the granting of the writ are not present, then the court which issues it acts in excess of its jurisdiction.


PRELIMINARY INJUNCTION

Dadizon vs. Asis, January 15, 2004

Issuance of said writ is entirely within the discretion of the trial court. The only limitation is that this discretion should be exercised based upon the grounds and in the manner provided by law. The requisites for injunctive relief are (1) there must be a right in esse or the existence of a right to be protected; and (2) the act against which the injunction is to be directed is a violation of such right.


Tayag vs. Lacson, March 25, 2004

The only issue before the appellate court was whether or not the trial court committed a grave abuse of discretion amounting to excess or lack of jurisdiction in denying the respondents’ motion to deny or dismiss the petitioner’s plea for a writ of preliminary injunction. Not one of the parties prayed to permanently enjoin the trial court from further proceeding with the case or to dismiss the complaint. By permanently enjoining the trial court from proceeding with the case, the appellate court acted arbitrarily and effectively dismissed the complaint motu proprio, including the counterclaims of the respondents and that of the defendants-tenants. The defendants-tenants were even deprived of their right to prove their special and affirmative defenses.


Land Bank vs. Listana, August 5, 2003

Clearly, the grant of a writ of preliminary injunction is in the nature of an interlocutory order, hence, unappealable. The proper remedy of a party aggrieved by such an order is to bring an ordinary appeal from an adverse judgment in the main case, citing therein the grounds for assailing the interlocutory order. However, the party concerned may file a petition for certiorari where the assailed order is patently erroneous and appeal would not afford adequate and expeditious relief. Therefore, respondent's special civil action for certiorari before the Court of Appeals was the correct remedy under the circumstances.


Savellano v. CA, January 30, 2001

In fine, petitioner has not made out a clear case, free from any taint of doubt or dispute, to warrant the issuance of a prohibitory mandatory injunction. It is true that he possesses certificates of title in his name covering several parcels of land located in San Mateo, Rizal. But inasmuch as it relates solely to the issuance of a writ of injunction, the issue is not one of ownership but, as correctly noted by the appellate court, "whether or not the titles of (petitioner) cover the premises being occupied by the (private respondents)."

Private respondents vigorously maintain that the property being occupied by them lies outside of the property covered by petitioner's certificates of title. While it may have been desirable for them to produce certificates of title over the property which they occupy, the absence thereof for purposes of the issuance of the writ does not militate against them. And if the defense interposed by them is successfully established at the trial, the complaint will have to be dismissed.

The effect of the preliminary prohibitory and mandatory injunctions issued by the lower court is to dispose of the main case without trial. Private respondents will have to be hurled off into the streets, their houses built on the premises demolished and their plantings destroyed without affording them the opportunity to prove their right of possession in court. In view of the rights to be affected through the issuance of injunctions, courts should at best be reminded that "(t)here is no power the exercise of which is more delicate which requires greater caution, deliberation and sound discretion, or which is more dangerous in a doubtful case, than the issuing of an injunction."


Shin vs. CA, February 6, 2001

Before a writ of preliminary injunction may be issued, there must be a clear showing by the complaint that there exists a right to be protected and that the acts against which the writ is to be directed are violative of the said right. As the facts reveal, petitioners are in effect sublessees, having leased the land from a lessee of the property. "A sublessee can invoke no right superior to that of his sublessor. The sublessees' right, if any, is to demand reparation for damages from his sublessor, should the latter be at fault. The sublessees can only assert such right of possession as could have been granted them by their sublessor, their right of possession depending entirely upon that of the latter. Considering that the lessor and real owner of the property manifested objections to the improvements introduced by petitioners and the subsequent termination of the lease contract between the lessor-owner and the lessee-sublessor, petitioners, being mere sublessees, are not in a position to assert any right to remain on the land. Therefore, the Court of Appeals did not err in setting aside the writ of preliminary injunction that the trial court issued.


Spouses Crystal v. Cebu International School, April 4, 2001

A writ of preliminary injunction is issued only upon proof of the following: (1) a clear legal right of the complainant, (2) a violation of that right, and (3) a permanent and urgent necessity for the writ to prevent serious damage. Unlike an ordinary preliminary injunction which is a preservative remedy, a writ of preliminary mandatory injunction requires the performance of a particular act that tends to go beyond maintaining the status quo and is thus more cautiously regarded. Hence, the applicant must prove the existence of a right that is "clear and unmistakable."

Even assuming that petitioners have a clear and unmistakable legal right, they are still not entitled to a writ of preliminary mandatory injunction. They have not shown any urgent and permanent necessity for it, considering that Monica Claire and Frances Lorraine are already enrolled at the Colegio de Immaculada Concepcion. In other words, there is no more need for the issuance of a writ of mandatory injunction to compel the school to admit them.


Valencia vs. CA, February 19, 2001

On the prayer for a writ of preliminary injunction, there are three requisites for the grant of the same: 1) The invasion of the right is material and substantial; 2) The right of complainant is clear and unmistakable; 3) There is an urgent and paramount necessity for the writ to prevent serious damage. Petitioner merely alleged the presence of these elements, but did not substantiate the same with convincing evidence. Consequently, we find no meritorious reason for the issuance of said writ.


Gonzales vs. State Properties, January 25, 2001

Nonetheless, the 1997 rule barring the raffle of these cases without effecting the service of summons is not absolute. As earlier noted, the second paragraph of Section 4 (c) of Rule 58 clearly provides that the service of summons may be dispensed with "where the summons could not be served personally or by substituted service despite diligent efforts." Furthermore, even Justice Feria opines that the exceptions to the rule are the same as those in Section 5 of Rule 57, the second paragraph of which reads thus: "The requirement of prior or contemporaneous service of summons shall not apply where the summons could not be served personally or by substituted service despite diligent efforts, or the defendant is a resident of the Philippines temporarily absent therefrom, or the defendant is a non-resident of the Philippines, or the action is one in rem or quasi in rem."

In the present case, respondent was able to show that the whereabouts of the other defendants were unknown, and that summons could not be served personally or by substituted service. Hence, it cannot be required to serve such summons prior to or contemporaneous with the notice of raffle. The raffle, therefore, may proceed even without notice to and the presence of the said adverse parties.


Manansala vs. CA, January 20, 2000

Generally, injunction is a preservative remedy for the protection of one's substantive right or interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. It is resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard compensation. The application of the injunctive writ rests upon the existence of an emergency or of a special reason before the main case can be regularly heard. The essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction and that on the entire showing from the contending parties, the injunction is reasonably necessary to protect the legal rights of the plaintiff pending the litigation. Two requisites are necessary if a preliminary injunction is to issue, namely, the existence of a right to be protected and the facts against which the injunction is to be directed are violative of said right. In particular, for a writ of preliminary injunction to issue, the existence of the right and the violation must appear in the allegation of the complaint and a preliminary injunction is proper only when the plaintiff (private respondent herein) appears to be entitled to the relief demanded in his complaint.


Unionbank vs. CA, August 5, 1999

There is, moreover, nothing erroneous with the denial of private respondents’ application for preliminary prohibitory injunction. The acts complained of have already been consummated. It is impossible to restrain the performance of consummated acts through the issuance of prohibitory injunction. When the act sought to be prevented had long been consummated, the remedy of injunction could no longer be entertained, hearing the application for preliminary injunction would just be an exercise in futility.


Gateway vs. Land Bank, July 30, 2003

A writ of mandatory injunction requires the performance of a particular act and is granted only upon a showing of the following requisites — (1) the invasion of the right is material and substantial; (2) the right of a complainant is clear and unmistakable; and (3) there is an urgent and permanent necessity for the writ to prevent serious damage. Since it commands the performance of an act, a mandatory injunction does not preserve the status quo and is thus more cautiously regarded than a mere prohibitive injunction. Accordingly, the issuance of the former is justified only in a clear case, free from doubt and dispute.


Marohombsar vs. Adiong, January 22, 2004

A TRO is generally granted without notice to the opposite party and is intended only as a restraint on him until the propriety of granting a temporary injunction can be determined. It goes no further than to preserve the status quo until that determination. Respondent judge was justified in issuing the TRO ex parte due to his assessment of the urgency of the relief sought.


Merontos vs. Zerna, August 9, 2001

A temporary restraining order (TRO) may be issued ex parte by an executive judge in matters of extreme emergency, in order to prevent grave injustice and irreparable injury. Because such issuance of a TRO shall be effective only for seventy-two hours therefrom, as provided under Administrative Circular No. 20-95, the ex-parte issuance of a 20-day TRO is unauthorized and may make the judge administratively liable.

The Circular aims to restrict the ex parte issuance of a TRO only to cases of extreme urgency, in order to avoid grave injustice and irreparable injury. Such TRO shall be issued only by the executive judge and shall take effect only for seventy-two (72) hours from its issuance. Furthermore, within the said period, a summary hearing shall be conducted to determine whether the Order can be extended for another period until a hearing on the pending application for preliminary injunction can be conducted. Untenable is respondent judge's contention that the Circular allows an executive judge, in case of extreme urgency, to issue an ex parte TRO effective for twenty days.


RECEIVERSHIP

Commodities vs. CA, June 19, 1997

A petition for receivership under Section 1 (b) of Rule 59 requires that the property or fund which is the subject of the action must be in danger of loss, removal or material injury which necessitates protection or preservation. The guiding principle is the prevention of imminent danger to the property. If an action by its nature, does not require such protection or preservation, said remedy cannot be applied for and granted.


SUPPORT

Lam vs. Chua, March 18, 2004

Thus, there is no merit to the claim of Jose that the compromise agreement between him and Adriana, as approved by the Makati RTC and embodied in its decision dated February 28, 1994 in the case for voluntary dissolution of conjugal partnership of gains, is a bar to any further award of support in favor of their child John Paul. The provision for a common fund for the benefit of their child John Paul, as embodied in the compromise agreement between herein parties which had been approved by the Makati RTC, cannot be considered final and res judicata since any judgment for support is always subject to modification, depending upon the needs of the child and the capabilities of the parents to give support.

Selected Cases on Commercial Documents and Chattels

WAREHOUSE RECEIPTS LAW

Martinez vs PNB (1953)

Where a warehouse receipt or quedan is transferred or endorsed to a creditor only to secure the payment of a loan or debt, the transferee or endorsee does not automatically become the owner of the goods covered by the warehouse receipt or quedan but he merely retains the right to keep, and with the consent of the owner to sell, them so as to satisfy the obligation from the proceeds of the sale, this for the simple reason that the transaction involved is not a sale but only a mortgage or pledge, and if the property covered by the quedans or warehouse receipts is lost later without the fault or negligence of the mortgagee or pledgee or the transferee or endorsee of the warehouse receipt or quedan, then said goods are to be regarded as lost on account of the real owner, mortgagor or pledgor.


Estrada vs CAR (1961)


(No surrender needed if ordered by court) The SC ordered the manager of Moncada Bonded Warehouse to release shares in palay without the necessity of producing and surrendering the original of the warehouse receipts issued. The SC stated “our order must be carried out in the meantime that this cases have not been finally decided in order to ameliorate the precarious situation in which said petitioners find themselves.”


PNB vs. Se (1996)

While the PNB is entitled to the stocks of sugar as the endorsee of the quedans, delivery to it shall be effected only upon payment of the storage fees. Imperative is the right of the warehouseman to demand payment of his lien at this juncture, because in accordance with Section 29 of the Warehouse Receipts Law, the warehouseman loses his lien upon goods by surrendering possession thereof. In other words, the lien may be lost where the warehouseman surrenders the possession of the goods without requiring payment of his lien, because a warehouseman's lien is possessory in nature.

But the warehouseman cannot refuse to deliver the goods because of an adverse claim of ownership [PNB vs. Sayo, 292 SCRA 202 (1998)]


GENERAL BONDED WAREHOUSE LAW

Purpose:

1. An act to regulate the business of receiving commodities for storage, giving the director of Commerce and Industry the duty to enforce if, providing penalties for violation of the provisions, exempting cooperative marketing associations of commodity producers from application thereof.

2. To protect depositors by giving them a direct recourse against the bond filed by the warehouseman in case of the latter’s insolvency.

3. To encourage the establishment of more warehouses.


Limjoco vs Director of Commerce (1965)


Any contract or transaction wherein the palay delivered is to be milled for and on account of the owner shall be deemed included in the business of receiving rice for storage. In other words, it is enough that the palay is delivered, even if only to have it milled. In this case it is a fact that palay is delivered to appellant and sometimes piled inside her "camalig" in appreciable quantities, to wait for its turn in the milling process. This is precisely the situation covered by the statute. The main intention of the law-maker is to give protection to the owner of the commodity against possible abuses (and we might add negligence) of the person to whom the physical control of his properties is delivered.


LETTERS OF CREDIT

Purpose:

1. To satisfy the seemingly irreconcilable interests of a seller, who refuses to part with his goods before he is paid, and a buyer, who wants to have control of the goods before paying. (Bank of America vs. CA, 1993)

2. The primary purpose of the LoC is to substitute for and support the agreement of the buyer/importer to pay money under a contract or other arrangement. It creates in the seller/exporter a secure expectation of payment.


Bank of America vs. CA (1993)

If there is no provision in the Code of Commerce, follow Uniform Customs and Practice or generally observed usages and customs

Rule of Strict Conformity/Compliance: Documents tendered must strictly conform to the terms of the LoC. The tender of documents by the beneficiary (seller) must include all documents required by the letter. A correspondent bank which departs from what has been stipulated under the letter of credit, as when it accepts a faulty tender, acts on its own risks and it may not thereafter be able to recover from the buyer or the issuing bank, as the case may be, the money thus paid to the beneficiary


Feati Bank vs CA (1991)

An advising or notifying bank does not incur any obligation by the notification. Its only obligation is to check the apparent authenticity of the Letter of Credit.

Negotiating bank has a right of recourse against the issuer bank. Until the negotiating bank is reimbursed, drawer of the draft is still contingently liable.

Relationship between the seller and the negotiating bank is like that between drawer and purchaser of drafts, ie. the involved bank deals only with documents and not on the goods described in the documents.

Independence Principle: Negotiating bank has no duty to verify if what is described in the LoC or shipping documents actually tallies with that loaded aboard a ship. Banks do not deal with the property to be exported or shipped to the importer, but deal only with documents. International custom negates any duty on the part of a bank to verify whether what has been described in letters of credits or drafts or shipping documents actually tallies with what was loaded aboard ship


BPI vs De Reny Fabrics (1970)

A Letter of Credit is a primary obligation of the bank. It is separate from the underlying contract it may support, and is not merely an accessory contract.


TRUST RECEIPTS LAW

Landl & Co. (Phil) Inc. vs Metropolitan Bank (2004)

A trust receipt agreement is merely a collateral agreement, the purpose of which is to serve as
security for a loan.


Allied Banking vs Ordonez (1990)


(Capital goods are covered.)

Applies even to goods not destined for sale or manufacture, and would include items obtained to repair and maintain equipment used in business.


Colinares vs CA (2000)

(Loan vs trust receipts transaction)

This situation belies what normally obtains in a pure trust receipt transaction where goods are
owned by the bank and only released to the importer in trust subsequent to the grant of the loan. The bank acquires a “security interest” in the goods. The ownership of the merchandise continues to be vested in the person who had advanced payment until he has been paid in full, or if the merchandise has already been sold, the proceeds of the sale should be turned over to him. The bank takes full title to the goods and continues to hold that as his indispensable security until the goods are sold and the vendee is called upon to pay for them. Trust receipts partake of the nature of a conditional sale where the importer becomes absolute owner of the imported merchandise as soon as he has paid its price.


Consolidated Bank vs CA (2001)

(Simple loan vs trust receipt transaction)

The delivery to Corporation of the goods subject of the trust receipt occurred long before the trust receipt itself was executed. This situation is inconsistent with what normally obtains in a pure trust receipt transaction, wherein the goods belong in ownership to the bank and are only released to the importer in trust after the loan is granted.

Robles vs CA (1991)

(Bipartite transactions are covered).

In deciding WON the delivery trust receipts covered a trial sale transaction or one that fell under the trust receipts law, the SC found that the requisites under Sec 4 were met: 1) Paramount retained ownership of the office equipment covered by the receipts; 2) possession of the goods was subject to a fiduciary obligation to return them within a specified period or to account for the proceeds thereof.


DBP vs. Pudential Bank, G.R. 143772, Nov. 22, 2005

The entrustee has NO authority to mortgage goods covered by trust receipt.


Prudential Bank vs NLRC (1995)

(Nature of interest of entruster in goods covered)

The security interest of the entruster is not merely an empty or idle title. To a certain extent, such interest becomes a "lien" on the goods because the entruster's advances will have to be settled first before the entrustee can consolidate his ownership over the goods. The law warrants the validity of petitioner's security interest as against all creditors of the trust receipt agreement. The only exception is when the properties are in the hands of an innocent purchaser for value and in good faith.


Prudential Bank vs NLRC (1995)

The goods covered by trust receipts cannot be levied upon by creditors of the entrustee. The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust or of the proceeds realized therefrom at any time upon default or failure of the entrustee to comply with any of the terms and conditions of the trust receipt or any other agreement between the entruster and the entrustee.

The entruster in possession of the goods, documents or instruments may, on or after default, give notice to the entrustee of the intention to sell, and may, not less than five days after serving or sending of such notice, sell the goods, documents or instruments at public or private sale, and the entruster may, at a public sale, become a purchaser.

The proceeds of any such sale, whether public or private, shall be applied:

• to the payment of the expenses thereof;
• to the payment of the expenses of retaking, keeping and storing the goods, documents or instruments;
• to the satisfaction of the entrustee's indebtedness to the entruster.

The entrustee shall receive any surplus but shall be liable to the entruster for any deficiency.


Lee vs Rodil (1989)

Acts involving the violation of trust receipt agreements occurring after 29 Jan 1973 would make the accused criminally liable for estafa under par1(b), Art 315 of the RPC, pursuant to the explicit provision in Sec. 13 of P.D. 115.


Allied vs. Ordoñez

The penal provisions of PD 115 encompasses any act violative of the obligation covered by the trust receipt. It is not limited to transactions in goods which are to be sold, reshipped or stored, but also applies to goods processed as a component of a product ultimately sold to the general public.


Sarmiento, Jr. vs. CA (2002)

The breach of obligation of a trust receipt agreement is separate and distinct from any criminal liability for “misuse and/or misappropriation of goods or proceeds realized from the sale of goods, documents or instruments released under trust receipts”, punishable under Sec. 13 of the Trust Receipts Law (PD 115) in relation to Article 315(1) (b) of the Revised Penal Code. Being based on an obligation ex contractu and not ex delicto, the civil action may proceed independently of the criminal proceedings instituted against petitioners regardless of the result of the latter.


People vs Nitafan (1992)

(Violation of PD 115 is an offense against public order, not property)

The Trust Receipts Law punishes the dishonesty and abuse of confidence in the handling of money or goods - it does not seek to enforce payment of the loan. Thus, there can be no violation of a right against imprisonment for non-payment of a debt. P.D. 115, like BP 22, punishes the act "not as an offense against property, but as an offense against public order.” Thus the law states that a breach of a trust receipt agreement makes one liable for estafa.


Philippines Bank vs Ong (2002)

The Supreme Court ruled that a Memorandum of Agreement entered into between the bank entruster and entrustee extinguished the obligation under the existing trust receipt because the agreement did not only reschedule the debts of the entrustee but it provided principal conditions which are incompatible with the trust agreement. Hence, the liability for breach of the Memorandum of Agreement would be purely civil in nature and no criminal liability under the Trust Receipt Law can be imposed.


Prudential Bank vs. NLRC (1995)

Entrustor can:
• cancel trust and take possession of the goods
• file a 3rd party claim or separate civil action at any time upon default or failure of entrustee to comply with terms and conditions of the trust agreement.


Tupaz VI, et. al. vs. CA and BPI, G.R. 145578, Nov. 18, 2005

Here, BPI chose not to file a separate civil action to recover payment under the trust receipts. Instead, respondent bank sought to recover payment in Criminal Case Nos. 8848 and 8849. Although the trial court acquitted petitioner Jose Tupaz, his acquittal did NOT extinguish his civil liability. His liability arose not from the criminal act of which he was acquitted (ex delicto) but from the trust receipt contract (ex contractu) of 30 September 1981. Petitioner Jose Tupaz signed the trust receipt of 30 September 1981 in his personal capacity. Acquittal in a criminal case for estafa does not extinguish civil liability arising from breach of trust receipt contract.

People of the Philippines vs. Alfredo Lazaro, Jr.

G.R. No. 186418, October 16, 2009

(Illegal Possession of Prohibited Drugs, Evidence, Chain of Custody, Republic Act 9165)

To secure a conviction for illegal sale of shabu, the following essential elements must be established: (1) the identity of the buyer and the seller, the object of the sale and the consideration; and (2) the delivery of the thing sold and the payment thereof. In prosecutions for illegal sale of shabu, what is material is the proof that the transaction or sale actually took place, coupled with the presentation in court of the corpus delicti as evidence. In the case at bar, the prosecution was able to establish, through testimonial, documentary and object evidence, the said elements.

xxx

The defenses of denial and frame-up have been invariably viewed by this Court with disfavor for it can easily be concocted and is a common and standard defense ploy in prosecutions for violation of Dangerous Drugs Act. In order to prosper, the defenses of denial and frame-up must be proved with strong and convincing evidence. In the cases before us, appellant failed to present sufficient evidence in support of his claims. Aside from his self-serving assertions, no plausible proof was presented to bolster his allegations.

xxx

For a discrepancy or inconsistency in the testimony of a witness to serve as basis for acquittal, it must refer to the significant facts vital to the guilt or innocence of the accused for the crime charged. An inconsistency which has nothing to do with the elements of the crime cannot be a ground for the acquittal of the accused.

The inconsistency cited by appellant refers to trivial matter and is clearly beyond the elements of illegal sale of shabu because it does not pertain to the actual buy-bust itself – that crucial moment when appellant was caught selling shabu. Such inconsistency is also irrelevant to the elements of illegal possession of shabu. Besides, the inconsistency even bolsters the credibility of the prosecution witnesses as it erased any suspicion of a rehearsed testimony.

xxx

Moreover, we have held in several cases that non-compliance with Section 21, Article II of Republic Act No. 9165 is not fatal and will not render an accused’s arrest illegal or the items seized/confiscated from him inadmissible. What is of utmost importance is the preservation of the integrity and the evidentiary value of the seized items, as the same would be utilized in the determination of the guilt or innocence of the accused. In the present case, the integrity of the drugs seized from appellant was preserved. The chain of custody of the drugs subject matter of the instant case was shown not to have been broken.

The fact that Forensic Analyst Albon and the persons who had possession or custody of the subject drugs were not presented as witnesses to corroborate SPO1 Indunan’s testimony is of no moment. The prosecution dispensed with the testimony of Forensic Analyst Albon because the defense had already agreed in the substance of her testimony to be given during trial, to wit: (1) that she examined the subject drugs; (2) that she found them to be positive for shabu; and (3) that she prepared and issued a chemistry report pertaining to the subject drugs.

Further, not all people who came into contact with the seized drugs are required to testify in court. There is nothing in Republic Act No. 9165 or in any rule implementing the same that imposes such a requirement. As long as the chain of custody of the seized drug was clearly established not to have been broken and that the prosecution did not fail to identify properly the drugs seized, it is not indispensable that each and every person who came into possession of the drugs should take the witness stand.

2009 Case Digests

Office of the Court Administrator vs. Alfredo Manasan
A.M. No. P-07-2415, October 19, 2009

People of the Philippines vs. Alfredo Lazaro, Jr.
G.R. No. 186418, October 16, 2009

Office of the Court Administrator vs. Alfredo Manasan

A.M. No. P-07-2415, October 19, 2009

(Legal Ethics)

An order or resolution of the Court is not to be construed as a mere request which could be complied with partially, inadequately or selectively. To do so shows disrespect to the Court.

Without the least delay, every court officer or employee is duty bound to obey the orders and processes of the Court and to exercise at all times a high degree of professionalism.

Respondent, being a clerk of court, has the duty to immediately deposit the various funds he collects because he is not authorized to keep them in his custody. He failed in his duty, however.

Delay in depositing funds collected constitutes simple neglect of duty[18] which, under Section 52 (B) (1) of the Uniform Rules on Administrative Cases in the Civil Service, is penalized with suspension for one month and one day to six months on the first offense, and dismissal for the second offense. It appearing that this is respondent’s first offense for simple neglect of duty, he faces suspension for one month and one day.

People of the Philippines vs. Calexto Duque Fundales, Jr.

G.R. No. 184606, September 5, 2012

(Criminal Law, Illegal Drugs, Evidence, Chain of Custody, Republic Act 9165)


FACTS

Appellant was charged and convicted for illegal sale of dangerous drugs (shabu) and illegal possession of dangerous drugs. The prosecution said he was arrested by police in an entrapment operation where a policeman acted as poseur-buyer. Appellant's defense was that he was merely at home repairing a washing machine together with his other co-accused when police suddenly barged in and arrested them.

During the trial, the prosecution established the following: (1) identity of the buyer and the seller, (2) object of the transaction which is the five sachets of shabu, and that (3) payment was made in the amount of P500 marked money; but did not anymore present the forensic chemist. The defense argued that the laboratory report has no probative value because the forensic chemist was not presented to authenticate it, hence the corpus delicti was absent.

ISSUES

1.) Must the forensic chemist be presented to authenticate the laboratory report and establish the object of the illegal transaction?

2.) Were the drug items seized from the appellant properly handled by the police strictly according to the rules?

3. Must the police coordinate and report the buy-bust operation with the Philippine Drug Enforcement Agency (PDEA)?

4.) What should we believe, the version of the police or that of the appellant?

RULING

1.) No. The laboratory report by an official forensic chemist regarding a recovered prohibited drug enjoys the presumption of regularity in its preparation. (See also Section 44, Rule 130 of the Revised Rules of Court) The report is conclusive in the absence of contrary evidence. The important thing is that the integrity and evidentiary value of the seized drugs are properly preserved. Besides, during the trial both the prosecution and the defense agreed not to anymore present the forensic chemist.

2.) It's too late already to raise this issue on appeal. The allegation on improper handling of seized items should have been raised during the trial. Besides, slight infraction or nominal deviations in handling the seized items is not fatal to the conviction of the accused when it was shown that the seized drugs were inventoried and preserved.

3.) No. While the PDEA may be the lead agency in dangerous drugs cases, nothing in the law (RA 9165) suggests that it intends to make PDEA the exclusive agency to enforce it. (Section 86-A, RA 9165)

4.) The police. Their testimony carries a presumption of regularity in the performance of official functions. Also, a police officer's positive and categorical identification of the appellant made in a straightforward narration of the events, absent any ill motive, must be given credence over the appellant's self-serving and unsubstantiated denial.

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Anita Vianzon vs. Minople Macaraeg

G.R. No. 171107, September 5, 2012

(Comprehensive Agrarian Reform Law, Tenancy)


This case reiterates the basic principle that private ownership of land has limitations, for it comes with the social responsibility to make use of the land according to its productive capacity.

FACTS

The heir of the late Lucila Candelaria Gonzales, Anita C. Vianzon, and Minople Macaraeg are fighting over who can buy Lot No. 1222 from the government. Anita claimed Minople could not own the land because he was merely a hired farmworker therein by Lucila's father. Minople, on the other hand, said he has the right over the land under the Argrarian Reform Law, having worked there as a tenant, farming and sharing in its harvest.

ISSUES

1.) Who between Anita and Minople has a rightful claim to the land?

2.) Was Minople a mere hired farm worker, as Anita claimed, or a tenant entitled to the benefits of the agrarian reform law, as Minople claimed?

RULING

1.) Minople has a rightful claim to the land because he is its actual tiller and occupant and is therefore entitled to the land under the Constitution and R.A. 6657 or the Agrarian Reform Law.

2.) Minople was considered a tenant because he was not hired to work on just a branch of farming and paid a fixed wage, but was made to do all farm chores and paid 20 cavans of palay from the produce of every harvest.

(You may copy, distribute or modify this case digest in any medium provided you acknowledge barops.blogspot.com. Thank you.)

Friday, December 13, 2013

Quick Execution for North Korea's Number 2 Man Jang Song Thaek

Print screen grab from Yahoo News (news.yahoo.com)
Days after North Korea's number 2 man Jang Song Thaek was arrested for treason and other charges, the totalitarian regime executed Thaek following a quick trial. The North Korean state accused Jang Song Tahaek, uncle of North Korean leader Kim Jong Un, of trying to seize power from the state by fostering factionalism and undermining the rule of his nephew Kim Jong Un. The disgraced number 2 man of North Korea was also accused of gambling, womanizing and taking drugs.

Now, how is this related to Philippine law? The stunning quickness in the accusation, arrest and execution made me think about the concepts of due process and capital punishment in a democratic-republican state like the Philippines as compared to totalitarian regimes like North Korea. There are some similarities, and definitely, stark differences in the understanding and application of due process and capital punishment between the Philippines and North Korea.

In the Philippines, a person is accused of a serious crime by filing charges before a prosecutor who will determine if there is probable cause to elevate the charges before the court. The filing of the case before the prosecutor is done through a Complaint while the elevation of the charges in court is done through an Information. If convicted, the criminal can appeal his conviction to a higher court. In North Korea there is such a term as “anti-State crimes” which are treated as as political crimes. (http://en.wikipedia.org/wiki/Judiciary_of_North_Korea) The State Security Department investigates and preliminarily examines this type of crimes. In the case of Jang Song Tahaek, he was tried before a special military tribunal which apparently zapped through the entire legal process in just a few days culminating to his execution. One can say that the process is more political than legal.

Capital punishment or the death penalty is another matter that distinguishes the Philippine legal system from the North Korean legal system. There is no more capital punishment in the Philippines after it was suspended by Republic Act No. 9346, which was approved on June 24, 2006. Life imprisonment and reclusion perpetua, a 30-year minimum) sentence replaced the death penalty. It goes to say therefore that there was death penalty in the Philippines. However, the death penalty was only imposed on so-called heinous crimes like kidnap-for-ransom, murder and rape. In North Korea, the death penalty by firing squad may be imposed on varied offenses such as grand theft, murder, rape, drug smuggling, treason, espionage, political dissidence, defection, piracy, consumption of media not approved by the government, and proselytizing religious ideals that contradict practiced Juche ideology. (http://en.wikipedia.org/wiki/Capital_punishment_in_North_Korea) The Juche ideology is a political thesis formed by North Korea's founding father Kim Il-Sung that states that the masses of the Democratic People's Republic of Korea are the masters of the country's development. (http://en.wikipedia.org/wiki/Juche)

To sum up, the North Korean criminal legal process conforms to political ideology over constitutionalism while the Philippine criminal legal process adheres to constitutionalism over political ideology.

Wednesday, December 11, 2013

2012 Case Digests

Associated Marine Officers and Seamen's Union of the Philippines - PTGWO-ITF vs. Noriel Decena
October 28, 2012

Philippine National Bank vs. Lilian S. Soriano
October 3, 2012

Land Bank of the Philippines vs. Emiliano R. Santiago, Jr.
October 3, 2012

Town and Country Enterprises, Inc. vs. Hon. Norberto J. Quisumbing, and Town and Country Enterprises, Inc. vs. Metropolitan Bank and Trust Co.October 1, 2012

Government Service Insurance System vs. Heidi R. Chua
September 26, 2012

Tomas T. Teodoro et al. vs. Continental Cement Corporation
September 26, 2012

Living @ Sense, Inc. vs. Malayan Insurance Company, Inc.
September 26, 2012

Anita Vianzon vs. Minople Macaraeg
G.R. No. 171107, September 5, 2012

People of the Philippines vs. Calexto Duque Fundales, Jr.
G.R. No. 184606, September 5, 2012

CASE DIGESTS



2013

                2012

                                     2011

                                                          2010

                                                                                 2009

                                                                                                  2008

                    Selected/Landmark Cases (1908-present)

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