June 2010

SC Junks Yuchengco Internet Libel Case – Remedial Law

By Jay B. Rempillo

The Supreme Court has ordered the Makati City Regional Trial Court (RTC) to dismiss
the libel complaint filed by the advertising arm of the Yuchengco Group of Companies
(YGC) against a group of parents who put up an Internet web site for similarly situated
individuals affected by the collapse of Pacific Plans, Inc. (PPI), a pre-need company that
is a wholly owned subsidiary of the YGC-owned Great Pacific Life Assurance Corp..

In a 14-page resolution penned by Justice Conchita Carpio Morales, the Court set aside
the order of April 22, 2008, finding the amended information to be sufficient in form, and
the Joint Resolution of August 12, 2008, denying the motion for reconsideration, of the
Makati City RTC, Br. 149. The RTC was directed to quash the amended information and
dismiss the internet libel case.

The Court held that venue is jurisdictional in criminal actions such that the place where
the crime was committed determines not only the venue of the action but constitutes an
essential element of jurisdiction. This principle acquires even greater import in libel
cases, given that Art. 360, as amended, specifically provides for the possible venues for
the institution of the criminal and civil aspects of such cases. The insufficiency of the
allegations in the amended information to vest jurisdiction in Makati becomes
pronounced upon an examination of the rationale for the amendment to Art. 360 by RA
4363, the Court stressed.

The Court ruled that to credit private complainant’s premise of equating his first access to
the defamatory article on the petitioners’ website in Makati with “printing and
publication” would spawn the very ills that the amendment to Art. 360 of the RPC sought
to discourage and prevent. The Court noted that it hardly requires imagination to see the
chaos that would ensue in situations where the website’s author or writer, a blogger, or
anyone who posts messages therein could be sued for libel anywhere in the country that
the private complainant may have allegedly accessed the offending website.

“Clearly, the evil sought to be prevented by the amendment to Art. 360 was the
indiscriminate or arbitrary laying of the venue in libel cases in distant, isolated or far-
flung areas, meant to accomplish nothing more than harass or intimidate an accused. The
disparity or unevenness of the situation becomes even more acute where the offended
party is a person of sufficient means or possesses influence, and is motivated by spite or
the need for revenge,” the Court ruled.

Jessie John P. Gimenez, President of the YGC’s advertising arm Philippine Integrated
Advertising Agency, Inc. (PIAA), filed 13 counts of libel on behalf of the Yuchengco
Family, particularly Ambassador Alfonso Yuchengco and Helen Y. Dee, and of the
Malayan Insurance Co. Inc. against the trustees of the Parents Enabling Parents Coalition,
Inc. (PEPCI). PEPCI, apparently formed by a large group of affected plan holders, put up
www.pepcoalition.com where allegedly libelous articles against the Yuchengco Family,
YCG, and Malayan Insurance Co., Inc. were published.

The website became a forum for plan holders to seek redress against PPI which had failed
to honor its obligations under the pre-need educational plans. PPI, due to liquidity
concerns, filed for corporate rehabilitation with prayer for suspension of payments before
the Makati RTC.

The Makati City Prosecutor’s Office, found probable cause to indict. Upon appeal, the
Secretary of Justice, in 2007, issued a resolution reversing the finding of probable cause
and directed the withdrawal of the informations, saying that the crime of “internet libel”
was non-existent.

Petitioners Wonina M. Bonifacio, et al. subsequently filed a motion to quash the libel
information on grounds that it failed to vest jurisdiction on the Makati RTC. The Makati
RTC quashed the information, but on appeal granted the Gimenez’s motion for
reconsideration and ordered the public prosecutor to amend the information to cure the
defect of want of venue.

The amended information this time indicated that the said website was “accessible in
Makati City” and that the “injurious and defamatory article…was first published and
accessed by the private complainant in Makati City.” (GR No. 184800, Bonifacio v. RTC
of Makati, May 5, 2010)

SC Affirms HLURB Jurisdiction over Real Estate Cases – Remedial Law

By Anna Katrina M. Martinez

The jurisdiction of the Housing and Land Use Regulatory Board (HLURB) is broad
enough to include jurisdiction over complaints for annulment of foreclosure sale,
mortgage, and the grant of incidental reliefs such as a Cease and Desist Order (CDO).

Thus held the Supreme Court, in a decision penned by Justice Conchita Carpio Morales,
as it dismissed a petition filed by the Government Service Insurance System (GSIS)
questioning HLURB’s jurisdiction over mortgages and foreclosed properties. The GSIS
also argued that the HLURB Revised Rules of Procedure did not vest authority in the
Board’s Second Division to entertain appeals.

The Court noted that even PD 957, The Subdivision and Condominium Buyers Protective
Decree, authorizes the HLURB, as successor of the National Housing Authority, to issue
CDOs in relevant cases.

Named respondents in the petition of the GSIS were the Board of Commissioners of the
HLURB Second Division, the Board of Commissioners of the HLURB National Capital
Region Field Office, spouses Marcelino H. De los Reyes and Alma T. De los Reyes, and
developer New San Jose Builders Inc.
In 1997, New San Jose Builders, Inc. (NSJBI) mortgaged to GSIS three parcels of land
with existing improvements, 366 lots with low-cost houses, and 102 condominium units
located in Quezon City to secure the payment of a PhP600 million loan. Among the
mortgaged properties was a condominium unit which was later sold by NSJBI to the
spouses De Los Reyes without delivering the Condominium Certificate covering the said
unit.

In 2003, GSIS foreclosed the mortgage and purchased the properties covered by the said
mortgage after NSJBI defaulted in its loan obligation. The spouses De los Reyes
discovered the foreclosure and eventual sale of their condominium to GSIS, prompting
them to file a complaint against NSJBI with the HLURB, praying that the GSIS be
restrained from consolidating its title to the condominium unit. The HLURB granted the
motion of the spouses De los Reyes and issued a Cease and Desist Order against the
GSIS, barring it from consolidating ownership of the unit.

On appeal, both the HLURB Second Division and the HLURB en banc ruled that the
mortgage and the acquisition by the GSIS of the unit were void. The Court of Appeals
upheld the HLURB’s ruling and ordered the HLURB Arbiter to proceed with dispatch in
the disposition of the spouses De los Reyes’ complaint. (GR No. 180062, GSIS v. Board
of Commissioners [2nd Division] HLURB, May 5, 2010)

Widening the Avenues of Justice 1,137 Courts Now to Hear Small Claims
Cases - Remedial Law
By Jay B. Rempillo

All 1,137 first-level courts nationwide, except Shari’a courts, are now hearing small
claims cases thus widening the avenues of justice of our people. Previously, small claims
were heard only by 44 designated-first- level courts.

Effective last March 18, the 82 Metropolitan Trial Courts (MeTC), 212 Municipal Trial
Courts in Cities (MTCC), 376 Municipal Trial Courts (MTC), and 467 Municipal Circuit
Trial Courts (MCTC) have been authorized by the Supreme Court to hear small claims
cases.

Under the High Court’s small claims project, ordinary Filipinos are empowered to litigate
on their own money claims of PhP100,000 or less by providing them an inexpensive,
informal, and simple procedure.

Dubbed as the “People’s Courts,” the procedure for small claims case relaxes or
dispenses with ordinary rules of civil procedure and evidence such as strict pleading
requirements and formal discovery measures. Disputes are resolved quickly and
inexpensively particularly because lawyers are not allowed during hearings. Most of all,
these courts are tasked to decide cases only at the first hearing.

The Supreme Court has been continuously training first-level courts judges and clerks of
courts to familiarize them with the technicalities of the small claims procedure. Two
Seminar-Workshops on the Amended Rule of Procedure for Small Claims Cases were
held last week for the National Capital Judicial Region (NCJR).

Meanwhile, the Supreme Court Technical Working Group, composed of various SC

officials, select justices, and a representative of the Integrated Bar of the Philippines, and
the American Bar Association Rule of Law Initiative (ABA) has provided a handbook on
the small claims process for small claims judges and clerks of court. The handbook
provides in a straightforward manner the duties of the judge and clerk of court, as well as
covers a range of topics such as determining the eligibility of a claim, docketing and
raffling of a case, service of summons and notice of hearing, settlement of a case hearing
proper, and promulgation of the decision, among others.

Clerks of court and branch clerks of court are tasked to explain the Rule on Small Claims
to interested litigants, as well as occasionally help them out in filling up the Statement of
Claim and Response Forms. Process servers and sheriffs may also provide information to
the parties about the Rule when they serve summons and notice of hearing.

Through OCA Circular No. 35-2010, Court Administrator Jose Midas P. Marquez has
already directed the raffling of the small claims filed in multiple sala court stations
among its branches. The 44 pilot courts for small claims cases, however, shall not be
included in the raffle until the small claims cases are equitably distributed to all courts.

Apart from lectures on the Amended Rule, small claims judges and clerks of court were
also given skills training on mediation-conflict management. The seminar-workshops
were a joint-initiative by the Supreme Court of the Philippines, the Philippine Judicial
Academy (PHILJA) and the Office of the Court Administrator (OCA) in partnership with
the United States Agency for International Development (USAID) and the American Bar
Association Rule of Law Initiative (ABA).

The small claims courts resolve cases of the poor at the quickest time, cut their cost of
litigation, and widen their access to the courts (SC En Banc Resolutions dated October
27, 2009 and February 16, 2010 in A.M. No. 08-8-7-SC).

SC: GSIS Not Exempt from Legal Fees – Remedial Law

By Arcie M. Sercado
The Government Service Insurance System (GSIS) is not exempt from payment of legal
fees imposed under the Rules of Court.

Thus the Supreme Court held when it denied the petition of the GSIS seeking exemption
from the payment of legal fees imposed on government-owned or controlled corporations
under Rule 141, sec. 22 of the Rules of Court. The GSIS anchored its petition on sec. 39
of its charter, RA 8271, the GSIS Act of 1997, which states that the GSIS is exempt from
“all taxes, assessments, fees, charges, or duties of all kinds.”

The Court En Banc, through a 19-page resolution penned by Justice Renato C.

Corona,however, held that the Constitution and jurisprudence do not sanction the view of
the GSIS. The Court held that since the payment of legal fees is a vital component of the
rules promulgated by it concerning pleading, practice and procedure, it cannot be validly
annulled, changed, or modified by Congress. It also stressed that the doctrine of
separation of powers makes such rule-making power within its sole province. Thus, the
claim of a legislative grant of exemption from the payment of legal fees through RA 8271
necessarily fails, the Court ruled.

The Court added that Congress could not have carved out an exemption for the GSIS
without transgressing the Court’s fiscal autonomy. Considering that legal fees fuel the
Judiciary Development Fund (JDF) and the Special Allowance for the Judiciary Fund
(SAJF) which guarantee the independence of the Judiciary, legal fees do not only
constitute a vital source of the Court’s financial resources but also comprise an essential
element of the Court’s fiscal independence, the Court explained. (AM No. 08-2-01-0,
Re: Petition for Recognition of the Exemption of the GSIS from Payment of Legal Fees,
February 11, 2010

SC Upholds Memo Circular Barring Appeals from DOJ to the OP Save in

Reclusion Perpetua Cases – Remedial Law
By Gleo Sp. Guerra

The Supreme Court recently upheld Memorandum Circular No. 58, promulgated by the
Office of the President on June 30, 1993, which bars an appeal or a petition for review to
the Office of the President of decisions/orders/resolutions of the Secretary of Justice
except those involving offenses punishable by reclusion perpetua or death.

In a 16-page decision penned by Justice Diosdado M. Peralta, the Court held that
“Memorandum Circular No. 58 was promulgated by the Office of the President and it is
settled that the acts of the secretaries of such departments, performed and promulgated in
the regular course of business are, unless disapproved or reprobated by the Chief
Executive, presumptively the acts of the Chief Executive.” On the basis of the foregoing,
among others, the Court affirmed the dismissal by the Court of Appeals of the petition for
review filed by herein petitioner Judge Adoracion G. Angeles assailing in turn the
dismissal by the Office of the President of her petition for review of resolutions by the
Department of Justice dismissing the charges filed by her against Michael Vistan for
violation of RA 7160, penalizing child abuse, and PD 1829, penalizing obstruction of
apprehension and prosecution of criminal offenders.

The Court found “absurd” petitioner’s argument that Memorandum Circular No. 58 is
invalid because it diminishes the power of control of the President by bestowing upon the
Secretary of Justice, a subordinate officer, almost unfettered power. It held that “The
President’s act of delegating authority to the Secretary of Justice by virtue of said
Memorandum Circular is well within the purview of the doctrine of qualified political
agency” under which doctrine, “all executive administrative organizations are adjuncts of
the executive department; the heads of various executive departments are assistants and
agents of the Chief Executive; and, except in cases where the Chief Executive is required
by the Constitution or law to act in person or the exigencies of the situation demand that
he act personally, the multifarious executive and administrative functions of the Chief
Executive are performed by and through the executive departments, and the acts of the
secretaries of such departments, performed and promulgated in the regular course of
business, are, unless disapproved or reprobated by the Chief Executive, presumptively the
acts of the Chief Executive.”

The Court also affirmed the CA’s ruling that the failure to arrest Vistan makes the latter a
fugitive of justice and is not equivalent to the commission by him of the offense of
obstruction of justice. It also found that the CA did not err in upholding the dismissal by
the Provincial Prosecutor and the Secretary of Justice of petitioner’s complaint for
violation of RA 7610 against Vistan. It held that their reliance on the affidavit of the
alleged victim “to the effect that she found happiness and peace of mind away from the
complainant and in the company of her relatives, including her brother…Michael Vistan”
is not constitutive of grave abuse of discretion which warrants reversal by the Court. (GR
No. 165276, Angeles v. Gaite, November 25, 2009)

SC Grants MR of Former Mayor Olivarez, Voids Amended Informations

Against Him – Remedial Law
By Gleo Sp. Guerra

The Supreme Court recently voided the two amended informations for violation of sec.
261, par. a (vote-buying) in relation to par. b (conspiracy to bribe voters) of the Omnibus
Election Code filed by the Public Prosecutor of Parañaque against losing mayoralty
candidate Pablo Olivarez.

In an 18-page resolution penned by Justice Minita V. Chico-Nazario before her

retirement last December, the Court granted Olivarez’s motion for reconsideration of its
decision dated June 23, 2009 and set aside the same. It held that in filing the amended
informations for vote-buying despite the order by the Commission on Elections
(COMELEC) to hold the proceedings in abeyance until final resolution of Olivarez’s
appeal before it, the Office of the Prosecutor of Parañaque clearly exceeded its delegated
authority.

The Court also held that the trial court judge commited grave abuse of discretion
amounting to lack or excess of jurisdiction when he admitted the amended informations
despite full knowledge that the COMELEC had ordered the City Prosecutor of Parañaque
to suspend further implementation of the questioned resolution finding probable cause
against Olivarez until final resolution of the appeal before the COMELEC. It said that the
amended informations filed before the trial court are nothing but mere scraps of paper as
they were filed without the requisite authority and could not serve as basis for Olivarez’s
arrest and confiscation of his cash bond. (GR No. 170447, Diño v. Olivarez, December 4,
2009)

SC Upholds CSC’s Jurisdiction Over Cases Directly Filed With It – Political

and Remedial Law
By Arcie M. Sercado

The Civil Service Commission (CSC) can hear and decide disciplinary cases of civil
servants either instituted directly with it or brought to it on appeal.

Thus the Supreme Court reiterated when it ordered the CSC to proceed hearing an
administrative case against the human resources (HR) management department director
of the Polytechnic University of the Philippines (PUP) who was accused of abusing his
authority when he authorized himself to work for excessive overtime hours.

In a decision penned by Justice Antonio Eduardo B. Nachura, the Court set aside the
decision of the Court of Appeals (CA) and reinstated the resolutions of the CSC which
had formally charged PUP HR Director Larry M. Alfonso with grave misconduct and
conduct prejudicial to the best interest of the service, and imposed a 90-day preventive
suspension against him, respectively.

On petition for certiorari, Alfonso argued that the CSC had no jurisdiction to hear and
decide the administrative case against him. According to Alfonso, it is the PUP Board of
Regents that has the exclusive authority to appoint and remove PUP employees pursuant
to the provisions of RA No. 8292, Higher Education Modernization Act of 1997 in
relation to RA No. 4670, Magna Carta for Public School Teachers.

However, the Court ruled that even though the CSC has appellate jurisdiction over
disciplinary cases decided by government departments, agencies, and instrumentalities, a
complaint may be filed directly with the CSC, and the CSC has the authority to hear and
decide the case, although it may in its discretion opt to deputize a department or an
agency to conduct the investigation, as provided for in the Civil Service Law of 1975.
The Court also ruled that since the complaints were filed directly with the CSC and the
CSC had opted to assume jurisdiction over the complaint, the CSC’s exercise of
jurisdiction shall be to the exclusion of other tribunals exercising concurrent jurisdiction.
(GR No. 179452, CSC v. Alfonso, June 11, 2009)