Case Digests for Civil Procedure

CASE DIGEST: ABC Davao Auto Supply Inc vs Court of Appeals

G.R. No. 113296. January 16, 1998
ABC DAVAO AUTO SUPPLY, INC., petitioner vs. COURT OF APPEALS, ABUNDIO T.
MERCED, doing business under the name and style of SOUTHERN ENGINEERING WORKS,
respondents.
FACTS:
On October 6, 1980, a complaint for a sum of money, attorney’s fees and damages1 was filed by
petitioner before the CFI of Davao City which was raffled to Branch XVI. The case was
proceedings were conducted by several judges until cross examination on August 28, 1985 and
the presentation of the parties’ rebuttal and sur-rebuttal evidences were heard by Judge Roque
Agton, having assumed office on August 1, 1985. When the judiciary was reorganized under the
Aquino administration, Judge Agton was transferred to another branch of the RTC but within the
same Judicial Region. Meanwhile, Judge Romeo Marasigan, who assumed office on February 3,
1987, was assigned to Branch XVI.
Sometime on May 1987, Judge Marasigan acted on private respondent’s motion for extension of
time to file memorandum. On June 9, 1987 a decision penned by Judge Agton was rendered in
favor of petitioner. Private respondent moved to reconsider said decision, but the same was
denied in an order dated March 1, 1988, issued by Judge Marasigan. Private respondent appealed
to the Court of Appeals (CA) which nullified Judge Agton’s decision on the ground that at the
time he rendered the judgment, he was neither the judge de jure nor the judge de facto of RTC
Branch XVI, and correspondingly remanded the case to the lower court.
ISSUE:
Whether or not the decision of Judge Agton is valid
RULING:
Branches of the trial court are not distinct and separate tribunals from each other; Jurisdiction
does not attach to the judge but to the court.—Moreover, for a judgment to be binding, it must be
duly signed and promulgated during the incumbency of the judge whose signature appears
thereon. This is in line with the Court’s En Banc Resolution of February 10, 1983 implementing
B.P. 129 which “merely requires that the judge who pens the decision is still an incumbent judge,
i.e., in this case, a judge of the same court, albeit now assigned to a different branch, at the time
the decision is promulgated.” Branches of the trial court are not distinct and separate tribunals
from each other. Hence, contrary to private respondent’s allegation, Judge Agton could not have
possibly lost jurisdiction over the case, because jurisdiction does not attach to the judge but to
the court. The continuity of a court and the efficacy of its proceedings are not affected by the
death, resignation, or cessation from the service of the judge presiding over it. To remand a
validly decided case to the incumbent Presiding Judge of Branch XVI, as what the CA suggests,
would only prolong this rather simple collection suit and would run counter to the avowed policy
of the Court to accord a just, speedy and inexpensive disposition for every action
LEONARDO ACABAL, et al. v. VILLANER ACABAL, et al.
454 SCRA 555 (2005)
Mere inadequacy of the price per se will not rule out the transaction as one of sale.
Alejandro Acabal and Felicidad Balasbas executed a Deed of Absolute Sale over a parcel of land
in favor of their son, respondent Villaner Acabal (Villaner). Villaner was then married to
Justiniana Lipajan. When he became a widower, he executed a deed conveying the same parcel
of land in favor of petitioner Leonardo Acabal (Leonardo).
However, Villaner later claims that the document he signed was a document captioned ―Lease
Contract,‖ wherein he leased for the property for 3 years to Leonardo. Villaner filed a complaint
with the Regional Trial Court (RTC) against Leonardo and Ramon Nicolas to whom Leonardo in
turn conveyed the property for annulment of the deeds of sale.
The RTC ruled in favor of Acabal and dismissed the complaint. The Court of Appeals (CA)
however reversed the decision of RTC and held that the Deed of Absolute Sale executed by
Villaner in favor of Leonardo was simulated and fictitious.
ISSUE:
Whether or not the deed executed by respondent Villaner in favor of petitioner Leonardo is a
Deed of Absolute Sale.
HELD:
It bears noting, however, that Villaner failed to present evidence on the fair market value of the
property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of
the fair market value of a land as of the time of its sale, it cannot be concluded that the price at
which it was sold was inadequate. Inadequacy of price must be proven because mere speculation
or conjecture has no place in our judicial system.
Even, however, on the assumption that the price of P10,000.00 was below the fair market value
of the property in 1990, mere inadequacy of the price per se will not rule out the transaction as
one of sale. For the price must be grossly inadequate or shocking to the conscience such that the
mind revolts at it and such that a reasonable man would neither directly nor indirectly be likely
to consent to it.
Acosta v. COMELEC G.R. No. 131488, August 3, 1998
293 SCRA 579
PETITION for certiorari to review a resolution of the Commission on Elections
Petitioner: Espirita Acosta
Respondents: COMELEC, MCTC Judge Genoveva Coching-Maramba, Raymundo I. Rivera
FACTS: Acosta and Rivera were candidates for the position of Punong Barangay in Bgy. Sobol,
San Fabian, Pangasinan, during the May 12, 1997, barangay election. Petitioner was proclaimed
as the duly elected Punong Barangay with a winning margin of four votes. Rivera filed an
election protest with the Municipal Circuit Trial Court of San Fabian-San Jacinto with prayer for
a recount of the votes.
May 19, 1997 – Acosta filed a Motion for Time to File Answer which was denied by the court on
the ground that the election protest was sufficient in form and substance.
May 21, 1997 – The MCTC ordered the COMELEC Election Registrar and/or the Municipal
Treasurer of San Fabian to bring to court the ballot boxes of Bgy. Sobol, together with their keys,
list of voters with voting records, book of voters and other election documents.
May 29, 1997 – petitioner filed with the COMELEC a petition for certiorari and prohibition with
prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction,
questioning the May 21, 1997, order of the MCTC. This was docketed as SPR No. 13-97.
May 30, 1997 – The lower court rendered a decision nullifying petitioner’s proclamation and
declaring Rivera as the duly elected Punong Barangay of Bgy. Sobol after finding that Rivera
garnered three votes more than Acosta’s 405.
June 11, 1997 – Petitioner filed a notice of appeal which was granted by the judge.
December 2, 1997 – the COMELEC issued an en banc Resolution in SPR No. 13-97 dismissing
the petition for lack of merit, and affirming the assailed order dated May 21, 1997, as well as the
trial court’s decision dated May 30, 1997.
ISSUE: Whether or not COMELEC has gravely abuse its discretion amounting to excess of
jurisdiction when it resolved the issue on the propriety of the lower court’s order dated May 21,
1997 in the same resolution affirming the trial court’s decision dated May 30, 1997.
RULING: The Court held that the COMELEC exceeded its authority when it affirmed the trial
court’s decision when said judgment was not the subject of a special civil action assailing an
interlocutory order of the same lower court. Even if the decision was eventually elevated to the
COMELEC on appeal, it does not cure the defect since said appeal was not consolidated with
SPR No. 13-97.
Moreover, the COMELEC has again exceeded its authority when it issued the assailed
resolution in en banc. Under Article IX-C, Section 3 of the Constitution, the COMELEC must
hear and decide election cases “in division, provided that motions for reconsideration of decision
shall be decided by the Commission en banc.” This Constitutional mandate was clearly violated
by the COMELEC
Petition for certiorari is GRANTED.
Notes: Due process dictates that before any decision can be validly rendered in a case, the
following safeguards must be met: (a) the court or tribunal must be clothed with judicial
authority to hear and determine the matter before it; (b) it must have jurisdiction over the person
of the party or over the property subject of the controversy; (c) the parties thereto must have been
given an opportunity to adduce evidence in their behalf, and (d) such evidence must be
considered by the tribunal in deciding the case.
ADEZ REALTY, INCORPORATED, vs. HONORABLE COURT OF APPEALS G.R. No.
100643 October 30, 1992
FACTS:
In a resolution of the Supreme Court, Atty Dacanay was required to show cause why he should
not be disciplinary dealt with by intercalating a material fact in the quoted judgment of the Court
of Appeals, inserting “without notice to the actual occupants of the property, Adez Realty” when
in fact it did not make such finding.
ISSUE:
Whether or not Atty Dacanay, by inserting phrase which is in fact not true, should be disbarred.
RULING:
YES. In the case at bar, the Supreme Court held that the inserted phase “without notice to the
actual occupants of the property, Adez Realty,” was just the right phrase intercalated at the right
place, making it highly improbable to be unintentionally, making it appear that respondent Court
of Appeals found that no notice was given to the occupants of subject property –– when in fact it
did not make such a finding –– is a clear indication not merely of carelessness in lifting a portion
of the assailed decision but a malicious attempt to gain undue advantage in the sporting arena of
fair play and, more importantly, to deceive and misguide this Court, which is the final arbiter of
litigations.
He then violated Rule 10.02, Canon 10, Chapter III, of the Code of Professional Responsibility
which directs that “[a] lawyer shall not knowingly misquote or misrepresent the contents of a
paper, the language or the argument of opposing counsel, or the text of a decision or authority, or
knowingly cite as a law a provision already rendered inoperative by repeal or amendment, or
assert as a fact that which has not been proved”

Assuming it was the carelessness of his secretary,it is the duty of lawyers to check, review and
recheck the allegation in their pleadings, more particularly the quoted portions, and ensure that
the statements therein are accurate and the reproductions faithful, down to the last word and even
punctuation mark. The legal profession demands that lawyers thoroughly go over pleadings,
motions and other documents dictated or prepared by them, type or transcribed by their
secretaries or clerks, before filing them with the court. If a client is bound by the acts of his
counsel, with more reason should counsel be bound the acts of his secretary who merely follow
his orders.
AGILENT VS. INTEGRATED SILICON
APRIL 26, 2012 ~ VBDIAZ
AGILENT TECHNOLOGIES SINGAPORE (PTE) LTD., vs. INTEGRATED SILICON
TECHNOLOGY PHILIPPINES CORP et al
G.R. No. 154618
April 14, 2004
FACTS: Petitioner Agilent is a foreign corporation, which, by its own admission, is not licensed
to do business in the Philippines. Respondent Integrated Silicon is a private domestic
corporation, 100% foreign owned, which is engaged in the business of manufacturing and
assembling electronics components.
The juridical relation among the various parties in this case can be traced to a 5-year Value
Added Assembly Services Agreement (VAASA), between Integrated Silicon and HP-Singapore.
Under the terms of the VAASA, Integrated Silicon was to locally manufacture and assemble
fiber optics for export to HP-Singapore. HP-Singapore, for its part, was to consign raw materials
to Integrated Silicon. The VAASA had a five-year term with a provision for annual renewal by
mutual written consent. Later, with the consent of Integrated Silicon, HP-Singapore assigned all
its rights and obligations in the VAASA to Agilent.
Later, Integrated Silicon filed a complaint for “Specific Performance and Damages” against
Agilent and its officers. It alleged that Agilent breached the parties’ oral agreement to extend the
VAASA. Agilent filed a separate complaint against Integrated Silicon for “Specific Performance,
Recovery of Possession, and Sum of Money with Replevin, Preliminary Mandatory Injunction,
and Damages”.
Respondents filed a MTD in the 2nd case, on the grounds of lack of Agilent’s legal capacity to
sue; litis pendentia; forum shopping; and failure to state a cause of action.
The trial court denied the MTD and granted petitioner Agilent’s application for a writ of
replevin. Without filing a MR, respondents filed a petition for certiorari with the CA. The CA
granted respondents’ petition for certiorari, set aside the assailed Order of the trial court (denying
the MTD) and ordered the dismissal of the 2nd case. Hence, the instant petition.
ISSUE: WON an unlicensed foreign corporation not doing business in the Philippines lacks the
legal capacity to file suit.
HELD: The petition is GRANTED. The Decision of the CA which dismissed the 2nd case is
REVERSED and SET ASIDE. The Order denying the MTD is REINSTATED. Agilent’s
application for a Writ of Replevin is GRANTED.
NO
A foreign corporation without a license is not ipso facto incapacitated from bringing an action in
Philippine courts. A license is necessary only if a foreign corporation is “transacting” or “doing
business” in the country. The Corporation Code provides:
Sec. 133. Doing business without a license. — No foreign corporation transacting business in the
Philippines without a license, or its successors or assigns, shall be permitted to maintain or
intervene in any action, suit or proceeding in any court or administrative agency of the
Philippines; but such corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under Philippine laws.
The aforementioned provision prevents an unlicensed foreign corporation “doing business” in
the Philippines from accessing our courts.
[In a number of cases, however, we have held that an unlicensed foreign corporation doing
business in the Philippines may bring suit in Philippine courts against a Philippine citizen or
entity who had contracted with and benefited from said corporation. Such a suit is premised on
the doctrine of estoppel. A party is estopped from challenging the personality of a corporation
after having acknowledged the same by entering into a contract with it. This doctrine of estoppel
to deny corporate existence and capacity applies to foreign as well as domestic corporations. The
application of this principle prevents a person contracting with a foreign corporation from later
taking advantage of its noncompliance with the statutes chiefly in cases where such person has
received the benefits of the contract.]
The principles regarding the right of a foreign corporation to bring suit in Philippine courts may
thus be condensed in four statements:
if a foreign corporation does business in the Philippines without a license, it cannot sue before
the Philippine courts;
if a foreign corporation is not doing business in the Philippines, it needs no license to sue before
Philippine courts on an isolated transaction or on a cause of action entirely independent of any
business transaction;
if a foreign corporation does business in the Philippines without a license, a Philippine citizen or
entity which has contracted with said corporation may be estopped from challenging the foreign
corporation’s corporate personality in a suit brought before Philippine courts; and
if a foreign corporation does business in the Philippines with the required license, it can sue
before Philippine courts on any transaction.
**
The challenge to Agilent’s legal capacity to file suit hinges on whether or not it is doing business
in the Philippines. However, there is no definitive rule on what constitutes “doing”, “engaging
in”, or “transacting” business in the Philippines. The Corporation Code itself is silent as to what
acts constitute doing or transacting business in the Philippines.
[Jurisprudence has it, however, that the term “implies a continuity of commercial dealings and
arrangements, and contemplates, to that extent, the performance of acts or works or the exercise
of some of the functions normally incident to or in progressive prosecution of the purpose and
subject of its organization.”
In the Mentholatum case this Court discoursed on the two general tests to determine whether or
not a foreign corporation can be considered as “doing business” in the Philippines. The first of
these is the substance test, thus:
The true test [for doing business], however, seems to be whether the foreign corporation is
continuing the body of the business or enterprise for which it was organized or whether it has
substantially retired from it and turned it over to another.
The second test is the continuity test, expressed thus:
The term [doing business] implies a continuity of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or works or the exercise of some of the
functions normally incident to, and in the progressive prosecution of, the purpose and object of
its organization.]
**
The Foreign Investments Act of 1991 (the “FIA”; Republic Act No. 7042, as amended), defines
“doing business” as follows:
Sec. 3, par. (d). The phrase “doing business” shall include soliciting orders, service contracts,
opening offices, whether called “liaison” offices or branches; appointing representatives or
distributors domiciled in the Philippines or who in any calendar year stay in the country for a
period or periods totaling one hundred eighty (180) days or more; participating in the
management, supervision or control of any domestic business, firm, entity, or corporation in the
Philippines; and any other act or acts that imply a continuity of commercial dealings or
arrangements, and contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in the progressive prosecution of, commercial
gain or of the purpose and object of the business organization.
An analysis of the relevant case law, in conjunction with Sec 1 of the IRR of the FIA (as
amended by RA 8179), would demonstrate that the acts enumerated in the VAASA do not
constitute “doing business” in the Philippines. The said provision provides that the following
shall not be deemed “doing business”:
(1) Mere investment as a shareholder by a foreign entity in domestic corporations duly registered
to do business, and/or the exercise of rights as such investor;
(2) Having a nominee director or officer to represent its interest in such corporation;
(3) Appointing a representative or distributor domiciled in the Philippines which transacts
business in the representative’s or distributor’s own name and account;
(4) The publication of a general advertisement through any print or broadcast media;
(5) Maintaining a stock of goods in the Philippines solely for the purpose of having the same
processed by another entity in the Philippines;
(6) Consignment by a foreign entity of equipment with a local company to be used in the
processing of products for export;
(7) Collecting information in the Philippines; and
(8) Performing services auxiliary to an existing isolated contract of sale which are not on a
continuing basis, such as installing in the Philippines machinery it has manufactured or exported
to the Philippines, servicing the same, training domestic workers to operate it, and similar
incidental services.
By and large, to constitute “doing business”, the activity to be undertaken in the Philippines is
one that is for profit-making.
By the clear terms of the VAASA, Agilent’s activities in the Philippines were confined to (1)
maintaining a stock of goods in the Philippines solely for the purpose of having the same
processed by Integrated Silicon; and (2) consignment of equipment with Integrated Silicon to be
used in the processing of products for export. As such, we hold that, based on the evidence
presented thus far, Agilent cannot be deemed to be “doing business” in the Philippines.
Respondents’ contention that Agilent lacks the legal capacity to file suit is therefore devoid of
merit. As a foreign corporation not doing business in the Philippines, it needed no license before
it can sue before our courts.
Pastor Ago vs CA
Facts:
Pastor Ago bought saw mill machineries and equipment from Grace Park Engineering, executing
a chattel mortgage to pay for the unpaid balance
The parties arrived at a compromise agreement after Ago defaulted in his payment. With both
parties in attendance, Judge Montano Ortiz dictated a decision in open court.
Ago defaulted in his payment anew. Grace Park motioned for execution and was later granted a
writ of execution.
Provincial Sheriff of Siargao acted on the Writ of Execution, levied upon and ordered the sale of
machineries and equipment in question
Machineries and equipment were now owned by Golden Pacific Sawmill after Ago sold it to
them, a day after court decision but before levying of property)
Issues:
WoN the decision made in open court constitutes a notice of final judgment
WoN the sale of the Provincial Sheriff was valid without prior publication
Ruling:
Issue #1: No, it does not constitute a notice of final judgment.
Section 1 of Rule 35 states:
How judgment rendered. — All judgments determining the merits of cases shall be in writing
personally and directly prepared by the judge, and signed by him, stating clearly and distinctly
the facts and the law on which it is based, filed with the clerk of the court.
Section 7 of Rule 27 states:
Service of final orders or judgments. — Final orders or judgments shall be served either
personally or by registered mail.
Issue #2: No, it is not valid.
Requisites of a valid publication as provided by Section 16 of Rule 39 of the Rules of Court:
Posted for 20 days
Displayed in 3 public places where property is situated and sold
If property is > Php 400, publish a copy of the notice once a week, in some newspaper of general
circulation in the province.
Machineries and equipment became necessary parts of the building or real estate.
Ago assigned the machinery and equipment to Golden Pacific Sawmill after acquiring it from
Grace Park
Golden installed the machinery and equipment on the property they owned
Art. 415 makes machinery and equipment real property because it was installed by the owner of
the property and it is essential to the industry.
Agro Conglomerates Inc. V. CA (2000)
G.R. No. 117660 December 18, 2000
Lessons Applicable: Consideration and Accommodation Party (Negotiable Instruments Law)
FACTS:
July 17, 1982: Agro Conglomerates, Inc. (Agro) sold 2 parcels of land to Wonderland Food
Industries, Inc (Wonderland) for P 5M under terms and conditions:
P 1M Pesos shall be paid in cash upon the signing of the agreement
P 2M Pesos worth of common shares of stock of the Wonderland Food Industries, Inc.
Balance of P2,000,000.00 shall be paid in 4 equal installments, the first installment falling due,
180 days after the signing of the agreement and every six months thereafter, with an interest rate
of 18% per annum, to be advanced by the vendee upon the signing of the agreement
July 19, 1982: Agro, Wonderland and Regent Savings & Loan Bank (Regent) (formerly Summa
Savings & Loan Association) amended the arrangement resulting to a revision - addedum was
not notarized
Agro would secure a loan in the name of Agro Conglomerates Inc. for the total amount of the
initial payments, while the settlement of loan would be assumed by Wonderland
Mario Soriano (of Agro) signed as maker several promissory notes, payable to Regent in favor of
Wonderland
subsidiary contract of suretyship had taken effect since Agro signed the promissory notes as
maker and accommodation party for the benefit of Wonderland
bank released the proceeds of the loan to Agro who failed to meet their obligations as they fell
due
bank, experiencing financial turmoil, gave Agro opportunity to settle their account by extending
payment due dates
Mario Soriano manifested his intention to re-structure the loan, yet did not show up nor submit
his formal written request
Regent filed 3 separate complaints before the RTC for Collection of sums of money
CA affirmed Trial court: held Agro liable
ISSUE: W/N Agro should be liable because there was no accomodation or surety
HELD: YES. CA affirmed.
First, there was no contract of sale that materialized. The original agreement was that
Wonderland would pay cash and Agro would deliver possession of the farmlands. But
this was changed through an addendum, that Agro would instead secure a loan and the
settlement
of the same would be shouldered by Wonderland.
contract of surety between Woodland and petitioner was extinguished by the rescission of the
contract of sale of the farmland
With the rescission, there was confusion in the persons of the principal debtor and surety.
The addendum thereon likewise lost its efficacy
accommodation party - NOT in this case because of recission
person who has signed the instrument as:
maker
acceptor
indorser
without receiving value therefor
for the purpose of lending his name to some other person
is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking
the instrument knew (the signatory) to be an accommodation party
has the right, after paying the holder, to obtain reimbursement from the party accommodated,
since the relation between them has in effect become one of principal and surety, the
accommodation party being the surety.
Suretyship
relation which exists where:
1 person has undertaken an obligation
another person is also under the obligation or other duty to the obligee, who is entitled to but one
performance
The surety’s liability to the creditor or promisee is directly and equally bound with the principal
and the creditor may proceed against any one of the solidary debtors
Novation - NOT in this case
extinguishment of an obligation by the substitution or change of the obligation by a subsequent
one which extinguishes or modifies the first, either by changing the object or principal
conditions, or by substituting another in place of the debtor, or by subrogating a third person in
the rights of the creditor
never presumed and it must be clearly and unequivocally shown
requisites:
There must be a previous valid obligation - lacking
There must be an agreement of the parties concerned to a new contract
There must be the extinguishment of the old contract; and
There must be the validity of the new contract
Sec. 22 of the Civil Code provides:
Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him.
Agro had no legal or just ground to retain the proceeds of the loan at the expense of Wonderland.
Neither could Agro excuse themselves and hold Wonderland still liable to pay the loan upon the
rescission of their sales contract - surety no effect because of the rescission
If Agro sustained damages as a result of the rescission, they should have impleaded Wonderland
and asked damages
The non-inclusion of a necessary party does not prevent the court from proceeding in the action,
and the judgment rendered therein shall be without prejudice to the rights of such necessary party
But respondent appellate court did not err in holding that Agro are duty-bound under the law to
pay the claims of Regent from whom they had obtained the loan proceeds
ATTY. EMMANUEL AGUSTIN, ET AL. v. ALEJANDRO CRUZ-HERRERA
September 30, 2015
ATTY. EMMANUEL AGUSTIN, ET AL. v. ALEJANDRO CRUZ-HERRERA
FACTS:
Respondent Herrera is the President of Podden, the company in which petitioners are employed.
Petitioners alleged that they were illegally dismissed by Respondent, thus, they enagged the
services of petitioner lawyer, Atty. Agustin, upon the verbal agreement that he will be paid on a
contingency basis at the rate if 10 % of the final monetary award.
The Labor Arbiter (LA) ruled in favor of the petitioners. No appeal was posed by respondent on
such judgement, hence, a motion for execution was filed by petitioners. However, respondent
moved to deny the motion and invoked that he and the employees-petitioners already executed a
compromise agreement and settled their dispute. Agustin opposed.
In resolving the conflict, LA reversed its previous decision and dismissed the case. On appeal to
the NLRC, the latter reversed the LA’s decision. Then, respondent appealed to the Court of
Appeals (CA). The appellate court ruled in favor of respondent and dismissed the complaint.
Hence, this present case.
ISSUE: Whether or not the CA erred in its decision to dismiss the case on the ground of the
compromise agreement which is with no knowledge of Agustin?
RULING: The Court held no.
The court stressed that Atty. Agustin should be reminded that his professional relation with his
clients is one of agency, hence, “the acts of an agent are deemed acts of the principal only if the
agent acts within the scope of his authority”.
But under the present case, Atty. Agustin was clearly to have been acting beyond the scope of his
authority in questioning the compromise agreement between his clients and Herrera.
The court also emphasized that it is a settled rule that parties may enter into a compromise
agreement without the intervention of a lawyer. Hence, although without knowledge of Agustin,
the compromise agreement was valid.
Air France vs. Carrascoso
Fact
The plaintiff, Rafael Carrascoso, paid for and was issued a “First class” ticket by Air France
from Manila to Rome. During a stopover in Bangkok, the manager of Air France asked the
plaintiff to vacate his seat because a white man has a “better right” than him. At first, the plaintiff
protested, but, as things got heated up, he was asked by the other Filipinos on board to give up
his seat and transfer in the tourist class. After the trip, Carrascoso sued Air France for the
embarrassment and inconvenience he suffered. The trail court awarded damages to the plaintiff
which was affirmed by the Court of Appeals. Air France assailed the decision. According to
them, the issuance of a first class ticket does not guarantee Carrascoso a seat in the first Class.
Issue: Whether or not Air France is liable for the damages to Carrascoso and on what basis
Decision:
Yes. Air France is liable based on culpa contractual and culpa aquiliana. Culpa Contractual
There exists a contract of carriage between Air France and Carrascoso. There was a contract to
furnish Carrasocoso a first class passage; Second, That said contract was breached when Air
France failed to furnish first class transportation at Bangkok; and Third, that there was bad faith
when Air France’s employee compelled Carrascoso to leave his first class accommodation berth
“after he was already, seated” and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish,
serious anxiety, wounded feelings and social humiliation, resulting in moral damages. The
Supreme Court did not give credence to Air France’s claim that the issuance of a first class ticket
to a passenger is not an assurance that he will be given a first classes at. Such claim is simply
incredible. Culpa Aquiliana
Here, the SC ruled, even though there is a contract of carriage between Air Franceand
Carrascoso, there is also a tortuous act based on culpa aquiliana. Passengers do not contract
merely for transportation. They have a right to be treated by the carrier’s employees with
kindness, respect, courtesy and due consideration. They are entitled to be protected against
personal misconduct, injurious language, indignitie sand abuses from such employees. So it is,
that any rule or discourteous conduct onthe part of employees towards a passenger gives the
latter an action for damages against the carrier. Air France’s contract with Carrascoso is one
attended with public duty. The stress of Carrascoso’s action is placed upon his wrongful
expulsion. This is a violation of public duty by the Air France — a case of quasi-delict. Damages
are proper.
Air Philippines Corp vs Pennswell INC.
Facts:
Pennswell sold and delivered to Air Philippines Corporation industrial chemicals, solvents, and
special lubricants amounting to P450,000.00. When Air Philippines refused to pay the obligation,
Pensswell filed a collection case before RTC Makati. In its Answer, Air Philippines alleged that:
it refused to pay because it was defrauded in the amount of P600,000.00 by Pennswell for its
previous sale of 4 items; said items were misrepresented by Pennswell as belonging to a new
line, but were in truth and in fact, identical with products it had previously purchased from
Pennswell; and, Pennswell merely altered the names and labels of such goods. During the trial,
Air Philippines filed a motion to compel Pennswell to give a detailed list of the chemical
components and the ingredients used for the products that were sold. Pennswell opposed the
motion for production, contending that the requested information was a trade secret that it could
not be forced to disclose.
Issue:
May Pennswell be compelled to disclose the chemical components and the ingredients used for
its products through a motion for production?
Held:
No. Rule 27 of the Rules of Court provides:
Sec. 1. Motion for production or inspection order. Upon motion of any party showing good cause
therefore, the court in which an action is pending may (a) order any party to produce and permit
the inspection and copying or photographing, by or on behalf of the moving party, of any
designated documents, papers, books, accounts, letters, photographs, objects or tangible things,
not privileged, which constitute or contain evidence material to any matter involved in the action
and which are in his possession, custody or control; or (b) order any party to permit entry upon
designated land or other property in his possession or control for the purpose of inspecting,
measuring, surveying, or photographing the property or any designated relevant object or
operation thereon. The order shall specify the time, place and manner of making the inspection
and taking copies and photographs, and may prescribe such terms and conditions as are just.
Rule 27 sets an unequivocal proviso that the documents, papers, books, accounts, letters,
photographs, objects or tangible things that may be produced and inspected should not be
privileged. Section 24 of Rule 130 draws the types of disqualification by reason of privileged
communication, to wit: (a) communication between husband and wife; (b) communication
between attorney and client; (c) communication between physician and patient; (d)
communication between priest and penitent; and (e) public officers and public interest. There
are, however, other privileged matters that are not mentioned by Rule 130. Among them are the
following: (a) editors may not be compelled to disclose the source of published news; (b) voters
may not be compelled to disclose for whom they voted; (c) trade secrets; (d) information
contained in tax census returns; and (d) bank deposits.
A trade secret is defined as a plan or process, tool, mechanism or compound known only to its
owner and those of his employees to whom it is necessary to confide it. The definition also
extends to a secret formula or process not patented, but known only to certain individuals using it
in compounding some article of trade having a commercial value. American jurisprudence has
utilized the following factors to determine if an information is a trade secret, to wit:
(1) the extent to which the information is known outside of the employer’s business;
(2) the extent to which the information is known by employees and others involved in the
business;
(3) the extent of measures taken by the employer to guard the secrecy of the information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in developing the information; and
(6) the extent to which the information could be easily or readily obtained through an
independent source.
The chemical composition, formulation, and ingredients of respondents special lubricants are
trade secrets within the contemplation of the law. Respondent was established to engage in the
business of general manufacturing and selling of, and to deal in, distribute, sell or otherwise
dispose of goods, wares, merchandise, products, including but not limited to industrial
chemicals, solvents, lubricants, acids, alkalies, salts, paints, oils, varnishes, colors, pigments and
similar preparations, among others. It is unmistakable to our minds that the manufacture and
production of respondents products proceed from a formulation of a secret list of ingredients. In
the creation of its lubricants, respondent expended efforts, skills, research, and resources. What it
had achieved by virtue of its investments may not be wrested from respondent on the mere
pretext that it is necessary for petitioners defense against a collection for a sum of money. By and
large, the value of the information to respondent is crystal clear. The ingredients constitute the
very fabric of respondents production and business. No doubt, the information is also valuable to
respondents competitors. To compel its disclosure is to cripple respondents business, and to
place it at an undue disadvantage. If the chemical composition of respondents lubricants are
opened to public scrutiny, it will stand to lose the backbone on which its business is founded.
This would result in nothing less than the probable demise of respondents business. Respondents
proprietary interest over the ingredients which it had developed and expended money and effort
on is incontrovertible.
The chemical composition, formulation, and ingredients of special lubricants requested by Air
Philippines formed part of the trade secrets of Pennswell. Because of public policy, trade secrets
are privileged and the rules providing for the production and inspection of books and papers do
not authorize their production in a court of law. (Air Philippines Corporation vs. Pennswell, Inc.,
G.R. No. 172835, December 13, 2007)
ALABAN VS. COURT OF APPEALS G.R. No. 156021 September 23, 2005
Posted on JUNE 29, 2016
FACTS:
Petitioners maintain that they were not made parties to the case in which the decision sought to
be annulled was rendered and, thus, they could not have availed of the ordinary remedies of new
trial, appeal, petition for relief from judgment and other appropriate remedies, contrary to the
ruling of the CA.
ISSUE:
W/N Petitioners were made parties in the proceedings
HELD:
Petitioners in this case are mistaken in asserting that they are not or have not become parties to
the probate proceedings.
Thus, it has been held that a proceeding for the probate of a will is one in rem, such that with the
corresponding publication of the petition the court’s jurisdiction extends to all persons interested
in said will or in the settlement of the estate of the decedent.
Thus, even though petitioners were not mentioned in the petition for probate, they eventually
became parties thereto as a consequence of the publication of the notice of hearing.
On the other hand, according to the Rules, notice is required to be personally given to known
heirs, legatees, and devisees of the testator.
Petitioners, as nephews and nieces of the decedent, are neither compulsory nor testate heirs who
are entitled to be notified of the probate proceedings under the Rules. Respondent had no legal
obligation to mention petitioners in the petition for probate, or to personally notify them of the
same.
Besides, assuming arguendo that petitioners are entitled to be so notified, the purported infirmity
is cured by the publication of the notice.
Sunday, June 10, 2018
CASE DIGEST: HEIRS OF VALIENTES VS. RAMAS
G.R. No. 157852: December 15, 2010
HEIRS OF DOMINGO VALIENTES, Petitioners, v. Hon. ReInerio (Abraham) B. Ramas,
Acting Presiding Judge, RTC, Branch 29, 9th Judicial Region, San Miguel, Zamboanga del
Sur and Vilma V. Minor, Respondents.
LEONARDO-DE CASTRO, J.:
FACTS:
Petitioners claim that they are the heirs of Valientes who, before his death, was the owner of a
parcel of land in Zamboanga delSur. In 1939, Valientes mortgaged the subject property to secure
his loan to the spouses Belen. In the 1950s, the Valientes family purportedly attempted, but
failed, to retrieve the subject property from the spouses Belen. Through an allegedly forged
document captioned VENTA DEFINITIVA purporting to be a deed of sale of the subject
property between Valientes and the spouses Belen, the latter obtained title over the land. On
February 28, 1970, the legitimate children of the late Valientes, had their Affidavit of Adverse
Claim. Upon the death of the spouses Belen, their surviving heirs executed an extra-judicial
settlement with partition and sale in favor of private respondent Minor, the present possessor of
the subject property. On June 20, 1979, Minor filed with the then CFI a "PETITION FOR
CANCELLATION OF MEMORANDUM OF ENCUMBRANCE APPEARING IN THE TITLE
IN HER POSSESSION" which the RTC granted. On the other hand, petitioners filed a complaint
for the cancellation of the title in Minors possession and its reconveyanceto them. On this
complaint, Minor filed an Omnibus Motion to Dismiss on the ground of forum shopping and litis
pendentia, which the RTC dismissed. Undeterred, Minor filed a Motion for Reconsideration
which was granted. Petitioners filed a Motion for Reconsideration based on this decision which
was denied. They appealed it to the CA, which although found that there was no forum shopping
nor litis pendentia, dismissed the case on the ground of prescription and laches.
ISSUE:
Whether or not prescription or laches has already set in to bar the filing of the case at hand.
HELD: Petition for Certiorari is DISMISSED
CIVIL CODE; PRESCRIPTION
When the plaintiff is in possession of the subject property, the action, being in effect that of
quieting of title to the property, does not prescribe. In the case at bar, petitioners are not in
possession of the subject property. In this case, if it were to be considered as that of enforcing an
implied trust, should have therefore been filed within ten years from the issuance of TCT to
spouses Belen.But, the case was instituted beyond the prescriptive period.
As to the alternative defense of petitioners, applying Arts. 1141, 1134 and 1137 of the Civil
Code, thus entitling them to a 30 year period to assail the title, the Court ruled that the applicable
law in this instant case is Presidential Decree No. 1529, otherwise known as the Property
Registration Decree (since it is more specific that the general rules of the above mentioned
articles of the Civil Code). Under the Torrens System as enshrined in P.D. No. 1529, the decree
of registration and the certificate of title issued become incontrovertible upon the expiration of
one year from the date of entry of the decree of registration, without prejudice to an action for
damages against the applicant or any person responsible for the fraud.
It took petitioners 28 before filing this case. This period is unreasonably long for a party seeking
to enforce its right to file the appropriate case. Thus, petitioners claim that they had not slept on
their rights is patently unconvincing.
The Decision of the CA and the Resolution are AFFIRMED.
HEMEDES vs CA
316 SCRA 347
FACTS: Jose Hemedes executed a document entitled “Donation Inter Vivos With Resolutory
Conditions” conveying ownership a parcel of land, together with all its improvements, in favor
of his third wife, Justa Kauapin, subject to the resolutory condition that upon the latter’s death or
remarriage, the title to the property donated shall revert to any of the children, or heirs, of the
DONOR expressly designated by the DONEE.
Pursuant to said condition, Justa Kausapin executed a “Deed of Conveyance of Unregistered
Real Property by Reversion” conveying to Maxima Hemedes the subject property.
Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the
subject property in favor of R & B Insurance to serve as security for a loan which they obtained.
R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay
the loan even. The land was sold at a public auction with R & B Insurance as the highest bidder.
A new title was subsequently issued in favor the R&B. The annotation of usufruct in favor of
Justa Kausapin was maintained in the new title.
Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin
executed a “Kasunduan” whereby she transferred the same land to her stepson Enrique D.
Hemedes, pursuant to the resolutory condition in the deed of donation executed in her favor by
her late husband Jose Hemedes. Enrique D. Hemedes obtained two declarations of real property,
when the assessed value of the property was raised. Also, he has been paying the realty taxes on
the property from the time Justa Kausapin conveyed the property to him. In the cadastral survey,
the property was assigned in the name of Enrique Hemedes. Enrique Hemedes is also the named
owner of the property in the records of the Ministry of Agrarian Reform office at Calamba,
Laguna.
Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation
(Dominium).
Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who
made constructions therein. Upon learning of Asia Brewery’s constructions, R & B Insurance
sent it a letter informing the former of its ownership of the property. A conference was held
between R & B Insurance and Asia Brewery but they failed to arrive at an amicable settlement.
Maxima Hemedes also wrote a letter addressed to Asia Brewery asserting that she is the rightful
owner of the subject property and denying the execution of any real estate mortgage in favor of
R&B.

Dominium and Enrique D. Hemedes filed a complaint with the CFI for the annulment of TCT
issued in favor of R & B Insurance and/or the reconveyance to Dominium of the subject property
alleging that Dominion was the absolute owner of the land.
The trial court ruled in favor of Dominium and Enrique Hemedes.
ISSUE: W/N the donation in favor of Enrique Hemedes was valid?
HELD: NO. Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over
the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had
earlier transferred to Maxima Hemedes – the ownership of the subject property pursuant to the
first condition stipulated in the deed of donation executed by her husband. Thus, the donation in
favor of Enrique D. Hemedes is null and void for the purported object thereof did not exist at the
time of the transfer, having already been transferred to his sister. Similarly, the sale of the subject
property by Enrique D. Hemedes to Dominium is also a nullity for the latter cannot acquire more
rights than its predecessor-in-interest and is definitely not an innocent purchaser for value since
Enrique D. Hemedes did not present any certificate of title upon which it relied.
The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his
being designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna
and in the records of the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a
certificate of title, which is an absolute and indefeasible evidence of ownership of the property in
favor of the person whose name appears therein. Particularly, with regard to tax declarations and
tax receipts, this Court has held on several occasions that the same do not by themselves
conclusively prove title to land.
Hernandez v DBP (Civil Procedure)
Jose M. Hernandez v. DBP and CFI of Batangas
Facts:
· Petitioner was an employee of defendant in its Legal Department for 21 years until his
retirement due to illness;
· Petitioner was awarded a lot (810 sq-m, type E) in respondent’s Housing Project in Quezon
City;
· However, more than a week thereafter, the Chief Accountant and Comptroller of the private
respondent returned to the petitioner the checks he has paid pursuant to such award and informed
him that the private respondent, through its Committee on Organization, Personnel and Facilities,
had cancelled the award of the lot and hour previously awarded on the ground that:
(a) He has already retired;
(b) He has only an option to purchase said house and lot;
(c) There are a big number of employees who have no houses or lots;
(d) He has been given his retirement gratuity; that the awarding of the aforementioned house
and lot in his favor would subserve the purpose;
· Petitioner protested the cancellation and so filed a complaint in the CFI of Batangas,
seeking annulment of the cancellation of the award of the lot and house in his favor and the
restoration of all his rights thereto;
· He contends that it is illegal and unwarranted because he has already a vested right thereto
because of the award;
· Private respondent filed a motion to dismiss based on improper venue, contending that
since the petitioner’s action affects the title to a house and lot in Quezon city, the same should
have been commenced in the CFI of Quezon City where the real property is located.
Lower court ruling:
CFI of Batangas: sustained the motion to dismiss based on improper venue.
*Case immediately elevated to the SC
Issue: WON the action of petitioner was improperly laid in the CFI of Batangas
Ruling: No, the case was not improperly filed in the CFI of Batangas.
The venue of actions or, more appropriately, the county where the action is triable depends to a
great extent on the nature of the action to be filed, whether it is real or personal.
Real action is one brought for the specific recovery of land, tenements, or hereditaments. A
personal action is one brought for recovery of personal property, for the enforcement of some
contract or recovery of damages for its breach, or for the recovery of damages for the
commission of an injury to the person or property.
The court agrees that petitioner’s action is not a real but a personal action. As correctly insisted
by petitioner, his action is one to declare null and void the cancellation of the lot and house in his
favor which does not involve title and ownership over said properties but seeks to compel
respondent to recognize that the award is a valid and subsisting one which cannot arbitrarily and
unilaterally cancel and accordingly to accept the proffered payment in full which it had rejected
and returned to petitioner.
Such an action is a personal action which may be properly brought by petitioner in his residence.
The dismissal is overturned and the suit is remanded for further proceedings.
HACIENDA BINO/HORTENCIA STARKE, INC. vs CUENCA et.al.
FACTS: The 76 individual respondents were part of the workforce of Hacienda Bino consisting
of 220 workers, performing various works, such as cultivation, planting of cane points,
fertilization, watering, weeding, harvesting, and loading of harvested sugarcanes to cargo trucks.
On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice
which stated, thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in favor of CARP are expressing their desire to get
out of employment on their own volition.
Wherefore, beginning today, July 18, only those who did not sign for CARP will be given
employment by Hda. Bino.
(Sgd.) Hortencia Starke
The respondents regarded such notice as a termination of their employment. As a consequence,
they filed a complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and
premium pay for holiday, service incentive leave pay, and moral and exemplary damages with
the NLRC-RAB.
The respondents alleged that they are regular and permanent workers of the hacienda and that
they were dismissed without just and lawful cause. They further alleged that they were dismissed
because they applied as beneficiaries under the Comprehensive Agrarian Reform Program
(CARP) over the land owned by petitioner Starke.
For her part, petitioner Starke recounted that the company’s Board of Directors petitioned the
Sangguniang Bayan of Kabankalan for authority to re-classify, from agricultural to industrial,
commercial and residential, the whole of Hacienda Bino, except the portion earmarked for the
CARP. She asserted that half of the workers supported the re-classification but the others, which
included the herein respondents, opted to become beneficiaries of the land under the CARP.
Petitioner Starke alleged that in July 1996, there was little work in the plantation as it was off-
season; and so, on account of the seasonal nature of the work, she issued the order giving
preference to those who supported the re-classification. She pointed out that when the milling
season began in October 1996, the work was plentiful again and she issued notices to all
workers, including the respondents, informing them of the availability of work. However, the
respondents refused to report back to work. With respect to the respondents’ money claims,
petitioner Starke submitted payrolls evidencing payment thereof.
ISSUE: Whether or not respondents are seasonal employees.
HELD: The SC held that the primary standard for determining regular employment is the
reasonable connection between the particular activity performed by the employee in Relation to
the usual trade o business of the employer. There is no doubt that the respondents were
performing work necessary and desirable in the usual trade or business of an employer. For
respondents to be excluded from those classified as regular employees, it is not enough that they
perform work or services that are seasonal in nature. They must have been employed only for the
duration of one (1) season. While the records sufficiently show that the respondents’ work in the
hacienda was seasonal in nature, there was, however, no proof that they were hired for the
duration of one season. In fact, the payrolls submitted by the petitioners, show that they availed
the services of the respondents since 1991. Absent any proof to the contrary, the general rule of
regular employment should, therefore, stand. It bears stressing that the employer has the burden
of proving the lawfulness of his employees’ dismissal.
Petition is denied.
HYATT ELEVATORS AND ESCALATORS CORPORATION vs. GOLDSTAR
ELEVATORS, PHILS., INC.
G.R. No. 161026; October 24, 2005
Ponente: Panganiban, J.,
FACTS:
Petitioner and Respondent are both engaged in the business of importing, installing and
maintaining elevators and escalators. Hyatt filed an unfair competition case against LG and
Goldstar alleging that it was appointed as the sole distributor of LG elevators and escalators.
Goldstar moved to dismiss the case alleging that venue was improperly laid as neither the Hyatt,
LG or Goldstar itself resided in Mandaluyong city where the case was originally filed. The RTC
denied the motion. The CA dismissed the case and held that Makati was the principal place of
business of both respondent and petitioner, as stated in the latter’s Articles of Incorporation, that
place was controlling for purposes of determining the proper venue.
ISSUE:
Whether or not the “residence” of the corporation is the same one as stated in the AOI.
HELD:
Yes. Although the Rules of Court do not provide that when the plaintiff is a corporation, the
complaint should be filed in the location of its principal office as indicated in its articles of
incorporation, jurisprudence has, however, settled that the place where the principal office of a
corporation is located, as stated in the articles, indeed establishes its residence. This ruling is
important in determining the venue of an action by or against a corporation, as in the present
case.
EVANGELINE D. IMANI, Petitioner v. METROPOLITAN BANK & TRUST COMPANY,
Respondent
Nachura, J.:
FACTS:
Imani signed a Continuing Suretyship Agreement in favour of Metrobank with 6 other co-
sureties binding themselves to pay whatever indebtedness C.P. Dazo Tannery, Inc. (CPDTI)
incurs, but not exceeding 6 Million php. CPDTI incurred an indebtednessaround 164,000 php to
which it defaulted in paying Metrobank. This prompted Metrobank to file a collection suit
against CPDTI and its sureties. Metrobank won, and the sheriff levied a property owned by
Imani and filed to consolidate the title to its name.
Imani opposed, stating that it is part of her conjugal property. The RTC ruled in favour of Imani,
reasoning that the loan proceeds never redounded to the benefit of the family of Imani. RTC
annulled the sale and levy. Metrobank appealed, and the CA reversed the decision of the RTC.
Thus, petitioner appeals to the Supreme Court.
ISSUES:
1. Whether or not the CA erred in reversing the decision of the RTC.
2. Whether the property was subject to execution, it being a road right of way under PD 1529.
HELD:
No.
Civil Law: Conjugal Property
All property of the marriage is presumed to be conjugal. However, for this presumption to apply,
the party who invokes it must first prove that the property was acquired during the
marriage.Proof of acquisition during the coverture is a conditionsine qua nonto the operation of
the presumption in favor of the conjugal partnership.Thus, the time when the property was
acquired is material.
As aptly ruled by the CA, the fact that the land was registered in the name ofEvangelina Dazo-
Imani married to Sina Imaniis no proof that the property was acquired during the spouses
coverture. Acquisition of title and registration thereof are two different acts. It is well settled that
registration does not confer title but merely confirms one already existing. Indubitably, petitioner
utterly failed to substantiate her claim that the property belongs to the conjugal partnership.Thus,
it cannot be rightfully said that the CA reversed the RTC ruling without valid basis
Remedial Law: Appeals
The argument regarding the road right of way must be rejected because it was raised for the first
time in this petition.In the trial court and the CA, petitioners arguments zeroed in on the alleged
conjugal nature of the property.It is well settled that issues raised for the first time on appeal and
not raised in the proceedings in the lower court are barred by estoppel. Points of law, theories,
issues, and arguments not brought to the attention of the trial court ought not to be considered by
a reviewing court, as these cannot be raised for the first time on appeal.To consider the alleged
facts and arguments raised belatedly would amount to trampling on the basic principles of fair
play, justice, and due process.
Denied.
In Re: Estate of Johnson G.R. No. 12767. November 16, 1918
Facts: On February 4, 1916, Emil H. Johnson, a native of Sweden and a naturalized citizen of the
United States, died in the city of Manila. He left a will disposing an estate with an estimated
amount of P231,800. The will was written in the testator’s own handwriting, and is signed by
himself and two witnesses only, instead of three witnesses required by section 618 of the Code of
Civil Procedure. This will, therefore, was not executed in conformity with the provisions of law
generally applicable to wills executed by inhabitants of these Islands, and hence could not have
been proved under section 618. On February 9, 1916, however, a petition was presented in the
Court of First Instance of the city of Manila for the probate of this will, on the ground that 1)
Johnson was, at the time of his death, a citizen of the State of Illinois, United States of America;
2) that the will was duly executed in accordance with the laws of that State; and hence could
properly be probated here pursuant to section 636 of the Code of Civil Procedure. Petitioner
alleged that the law is inapplicable to his father’s will
Issue: Whether or not there was deprivation of due process on the part of the petition
Held: No.
Ratio: Due publication was made pursuant to this order of the court through the three-week
publication of the notice in Manila Daily Bulletin. The Supreme Court also asserted that in view
of the statute concerned which reads as “A will made within the Philippine Islands by a citizen or
subject of another state or country, which is executed in accordance with the law of the state or
country of which he is a citizen or subject, and which might be proved and allowed by the law of
his own state or country, may be proved, allowed, and recorded in the Philippine Islands, and
shall have the same effect as if executed according to the laws of these Islands” the “state”, being
not capitalized, does not mean that United States is excluded from the phrase (because during
this time, Philippines was still a territory of the US).
INDOYON, JR. v. CA Petition for Review under Rule 45 v. Special Civil Action under
Rule 65
MAY 11, 2019
FACTS
Petitioner Ebrencio F. Indoyon, Jr., was the municipal treasurer of Lingig, Surigao del Sur, with
Salary Grade 24.
In 2005, it was discovered that petitioner had incurred a cash shortage in the amount of
₱1,222,648.42.
In a letter, State Auditor Bautista of COA demanded the immediate production of the missing
funds and the submission of a written explanation of the shortage.
Petitioner admitted that he had personally used the amount of ₱652,000 to put up a project to
supplement his income, and that he had allowed other municipal officials and employees to use
as cash advances his collections as municipal treasurer.
Petitioner was formally charged before the Bureau of Local Government Finance, Department of
Finance (BLGF-DOF), and a letter-complaint was sent by the Regional Legal and Adjudication-
Commission on Audit to the Ombudsman, recommending the filing of a criminal case for
malversation and an administrative case for dishonesty and grave misconduct against petitioner.
The BLGF-DOF found petitioner guilty of “simple neglect of duty”, and imposed the penalty of
six (6) months suspension from the service without pay.
Meanwhile, the Ombudsman rendered a Decision finding petitioner guilty of serious dishonesty
and grave misconduct and imposing upon him the penalty of dismissal from the service.
Petitioner filed an MR of the Decision, alleging that the jurisdiction over the same administrative
Complaint filed before the Ombudsman had first been acquired by the BLGF-DOF. The OMB
denied petitioner’s MR.
To enjoin the implementation of the Ombudsman’s Decision, petitioner filed a Petition for
Review on Certiorari under Rule 43 with Prayer for the Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction before the CA.
The Petition was dismissed and the MR was denied.
Hence this Petition.
ISSUE
Whether the CA committed grave abuse of discretion in dismissing petitioner’s Rule 43 Petition
for Review on Certiorari.
RULING:
The Petition is dismissed for being devoid of merit.
This Petition invokes the liberality of the Court and considerations of substantial justice in
seeking to overturn the Resolutions of the CA. For noncompliance with the Rules of Court and
SC circulars, the Petition filed by petitioner with the CA was properly dismissed. And yet, in the
instant Petition, he once again ignores the Rules of Court and a circular issued by this Court.
Under Section 1, Rule 45 of the Rules of Court, the proper remedy to question the CA’s
judgment, final order or resolution, as in the present case, is a petition for review on certiorari.
The petition must be filed within 15 days from notice of the judgment, final order or resolution
appealed from; or of the denial of petitioner’s motion for reconsideration filed in due time after
notice of the judgment.
By filing a special civil action for certiorari under Rule 65, petitioner therefore clearly availed
himself of the wrong remedy. Under Supreme Court Circular 2-90,19 an appeal taken to this
Court or to the CA by a wrong or an inappropriate mode merits outright dismissal.
On this score alone, the instant Petition may be dismissed.
Paragraph 4(e) of Supreme Court Circular 2-90 specifically warns litigants’ counsels to follow to
the letter the requisites prescribed by law on appeals.
We reiterate that under Supreme Court Circular 2-90, the filing of an improper remedy of special
civil action for certiorari under Rule 65, when the proper remedy should have been to file a
petition for review on certiorari under Rule 45, merits the outright dismissal of a Petition such as
this one.
We remind petitioner, as we have consistently reminded countless other litigants, that the
invocation of substantial justice is not a magic potion that will automatically compel this Court
to set aside technical rules.
We emphasize that an appeal is not a matter of right, but of sound judicial discretion.
Thus, an appeal may be availed of only in the manner provided by law and the rules.
Failure to follow procedural rules merits the dismissal of the case, especially when the rules
themselves expressly say so, as in the instant case.
Industrial Timber Corporation v. Ababon (G.R. No. 164518)
Facts:
Petitioner Industrial Timber Corporation (ITC) was leased a plywood plant located at Butuan
City for a period of 5 years by Industrial Plywood Group Corporation (IPGC). Thereafter, ITC
commenced operation of the plywood plant and hired 387 workers. Sometime after, ITC notified
DOLE and its workers of the plant’s shutdown due to the non-renewal of the anti-pollution
permit and the alleged lack of logs for milling constrained ITC to lay off all its workers until
further notice. A final notice of closure or cessation of business operations followed advising the
workers to collect the benefits due them under the law and CBA. Later, IPGC took over the
plywood plant and was issued a permit to operate coincidentally the same day the ITC ceased
operation of the plant. This prompted respondents to file a complaint for illegal dismissal and
unfair labor practice alleging that the cessation of ITC’s operation was intended to bust the union
and that both corporations are one and the same entity. LA dismissed the complaint. On appeal,
NLRC first ordered the reinstatement of employees but later on, ruled to dismiss herein
respondent’s complaints. CA set aside the decision.
Issue:
Whether respondents were illegally dismissed due to the closure of ITC’s business.
Ruling: NO.
The right to close the operation of an establishment or undertaking is one of the authorized
causes in terminating employment of workers, the only limitation being that the closure must not
be for the purpose of circumventing the provisions on termination of employment embodied in
the Labor Code. Under Article 283 of the Labor Code, three requirements are necessary for a
valid cessation of business operations: (a) service of a written notice to the employees and to the
DOLE at least one month before the intended date thereof; (b) the cessation of business must be
bona fide in character; and (c) payment to the employees of termination pay amounting to one
month pay or at least one-half month pay for every year of service, whichever is higher.
We find that ITC’s closure or cessation of business was done in good faith and for valid reasons.
The records reveal that the decision to permanently close business operations was arrived at after
a suspension of operation for several months precipitated by lack of raw materials used for
milling operations, the expiration of the anti-pollution permit, and the termination of the lease
contract with IPGC over the plywood plant. Having established that ITC’s closure of the
plywood plant was done in good faith and that it was due to causes beyond its control, the
conclusion is inevitable that said closure is valid.
Although the closure was done in good faith and for valid reasons, we find that ITC did not
comply with the notice requirement. While an employer is under no obligation to conduct
hearings before effecting termination of employment due to authorized cause, however, the law
requires that it must notify the DOLE and its employees at least one month before the intended
date of closure.
In the case at bar, ITC notified its employees and the DOLE of the ‘no plant operation’ due to
lack of raw materials. This was followed by a ‘shut down’ notice due to the expiration of the
anti-pollution permit. However, this shutdown was only temporary as ITC assured its employees
that they could return to work once the renewal is acted upon by the DENR. Then, ITC sent its
employees a final notice of closure or cessation of business operations to take effect on the same
day it was released. We find that this falls short of the notice requirement for termination of
employment due to authorized cause considering that the DOLE was not furnished and the notice
should have been furnished both the employees and the DOLE at least one month before the
intended date of closure.
Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the
employer failed to comply with the notice requirement, the sanction should be stiff as the
dismissal process was initiated by the employer’s exercise of his management prerogative, as
opposed to a dismissal based on a just cause under Article 282 with the same procedural
infirmity where the sanction to be imposed upon the employer should be tempered as the
dismissal process was, in effect, initiated by an act imputable to the employee.
INTERLINING CORPORATION v. PHILIPPINE TRUST COMPANY, GR No. 144190, 2002-
03-06
Facts:
The records disclose that in April 1980, respondent Philippine Trust Company (Philtrust) granted
a P.5 million packing credit line and a P1.5 million domestic letter of credit and trust receipt to
petitioner Interlining Corporation for the importation of raw materials for its... business. A month
later, individual petitioners Pablo Gonzales, Sr., Elena Tan Chin Sui, Pablo Gonzales, Jr.,
Thomas Gonzales and Arsenio Gonzales executed an Undertaking of Suretyship agreement
binding themselves to guarantee, jointly and severally with petitioner... corporation, all such
amount as may be due to respondent Philtrust by virtue of the availment of its credit facilities.
On numerous occasions, petitioner corporation availed of respondent's credit facilities. Partial
payments were made by petitioner corporation but it failed to pay in full its obligations, which
amounted to over P2 million by June 1984, despite repeated demands.
In July 1984, respondent filed a complaint for collection of a sum of money[1] against petitioner
corporation and the individual petitioners before the Regional Trial Court of Manila. Pre-trial
hearings were duly conducted by the trial court.
On April 7, 1989, the trial court issued its Pre-Trial Conference Order,[2] stating in paragraph 5,
under the heading "Stipulations," the following:
"5. Under the first, second, third and fourth causes of action, defendants Pablo Gonzales, Sr.,
Elena Tan Chin Siu, Pablo Gonzales, Jr., Thomas Gonzales, and Arsenio Gonzales were relieved
from their obligations because there was arrangement made between the... plaintiff and the
defendant corporation."
On December 14, 1990, respondent's counsel Atty. Eulogio V. Reyes and petitioners' counsel
Atty. Servando S. Timbol, Jr. submitted to the trial court a Joint Stipulation of Facts and Motion
for Summary Judgment[3] stating therein two (2) issues for... consideration by the trial court,
viz:
"a) whether or not defendants (petitioners herein) can be made jointly or severally liable to the
plaintiff (respondent herein) in the amount claimed in the complaint;... b) whether or not there is
novation which had released the individual defendants from their obligations as sureties under
the Deed of Undertaking of Suretyship."
On April 8, 1991, the trial court issued its 1st Supplemental Pre-Trial Order.[4] It stated in
paragraph III that, as per stipulation of the parties, the same two (2) issues were submitted for
resolution.
On July 9, 1982, the trial court issued its Decision finding for the respondent. However, it
ordered petitioner corporation to answer solely for its obligation. The trial court absolved the
individual petitioners from their joint and solidary liability for the debt of... petitioner
corporation although there was no novation of the loan contract between the parties. It held that
the total liability for the obligation was assumed by the petitioner corporation as per the parties'
stipulation during the April 8, 1991 Pre-Trial
Conference, particularly paragraph 5 thereof.
We shall discuss the issues jointly.
Petitioners insist that as per the records, respondent's counsel agreed in the stipulation of facts
contained in the Pre-Trial Conference Order, dated March 6, 1989, particularly paragraph 5
thereof, that the individual petitioners would be relieved from their solidary... obligations.
Petitioners also charge that the contents of this Pre-Trial Conference Order were confirmed by
respondent's counsel during the April 8, 1991 pre-trial hearing of the case.[6] Hence, petitioners
contend that respondent should be held as bound by... said agreement and the Court of Appeals
erred in disregarding this stipulation. Petitioners likewise point out that from the date of the
issuance of the pre-trial order on March 6, 1989 until the promulgation of the trial court's
decision on July 9, 1992,... respondent's counsel did not controvert the stipulation they agreed
upon and should be considered estopped from attacking the assailed stipulation.
Respondent, on the other hand, contends that petitioners anchor their appeal on the alleged Pre-
Trial Conference Order, dated March 6, 1989, where it was allegedly agreed upon by the parties'
counsels that the individual petitioners shall be relieved of their solidary... obligation. However,
respondent argues that petitioners conveniently ignored subsequent proceedings and pleadings
where both parties submitted the issue of solidary liability for resolution by the trial court.
"a) whether or not defendants (petitioners herein) can be made jointly or severally liable to the
plaintiff (respondent herein) in the amount claimed in the complaint;... b) whether or not there is
novation which had released the individual defendants from their obligations as sureties under
the Deed of Undertaking of Suretyship."
Issues:
"a) whether or not defendants (petitioners herein) can be made jointly or severally liable to the
plaintiff (respondent herein) in the amount claimed in the complaint;... b) whether or not there is
novation which had released the individual defendants from their obligations as sureties under
the Deed of Undertaking of Suretyship."
"a) whether or not defendants (petitioners herein) can be made jointly or severally liable to the
plaintiff (respondent herein) in the amount claimed in the complaint;... b) whether or not there is
novation which had released the individual defendants from their obligations as sureties under
the Deed of Undertaking of Suretyship."
Ruling:
In its Decision,[5] dated May 12, 2000, the Court of Appeals found for the respondent. It held
that the Deed of Undertaking of Suretyship was not abrogated and remained in full force and
effect. It also found that as the respondent did not... stipulate on the exclusion of the solidary
liability issue, the individual petitioners should be held solidarily liable with petitioner
corporation for the amount adjudged by the trial court.
IN VIEW WHEREOF, the petition is DISMISSED and the assailed Decision of the Court of
Appeals, dated May 12, 2000, is affirmed in toto. Costs against petitioners.
Principles:
Neither could respondent be faulted for failing to question paragraph 5 of the first pre-trial Order,
dated March 6, 1989, stating therein the release of the individual petitioners from liability, as the
proceedings and pleadings subsequent thereto, filed by both parties,... clearly included the issue
of solidary liability for resolution of the trial court. Thus, it came as a surprise for the respondent
that the decision rendered by the trial court excluded the individual petitioners from liability,
citing as ground therefor the alleged... stipulation made by by the respondent in March 1989.
International Corporate Bank, Inc. vs. Court of Appeals and Philippine National Bank
G.R. No. 129910, September 5, 2006
501 SCRA 20
FACTS: The Ministry of Education and Culture issued 15 checks drawn against Philippine
National Bank (PNB). Petitioner International Corporate Bank, Inc. (ICB) accepted the checks
for deposit on various dates.
After 24 hours from submission of the checks to PNB for clearing, ICB paid the value of the
checks and allowed the withdrawals of the deposits. However, on 14 October 1981, PNB
returned all the checks to petitioner without clearing them because the serial number of the
checks were materially altered. Thus, ICB instituted an action for collection of sums of money
against PNB to recover the value of the checks.
RTC Ruling: ICB is not entitled to recover the value of the checks from PNB because the ICB
failed to inquire on the status of the checks before paying their value. PNB cannot be faulted for
the delay in clearing the checks considering the ingenuity in which the alterations were effected.
CA Ruling on its 10 October 1991 Decision: It reversed the trial court’s decision. Applying
Section 4(c) of Central Bank Circular No. 580, series of 1977, it held that checks that have been
materially altered shall be returned within 24 hours after discovery of the alteration. However, it
ruled that even if the drawee bank returns a check with material alterations after discovery of the
alteration, the return would not relieve the drawee bank from any liability for its failure to return
the checks within the 24-hour clearing period.
Respondent filed a Motion for Reconsideration on 6 November 1991 but the Registry Return
Receipt shows that counsel for respondent or his agent received a copy of the 10 October 1991
Decision on 16 October 1991. The motion was filed late.
Despite its late filing, the Court of Appeals resolved to admit the motion for reconsideration “in
the interest of substantial justice.” In its 9 August 1994 Amended Decision, the Court of Appeals
reversed itself and affirmed the Decision of the trial court dismissing the complaint. The CA held
that its 10 October 1991 Decision failed to appreciate that the rule on the return of altered checks
within 24 hours from the discovery of the alteration had been duly passed by the Central Bank
and accepted by the members of the banking system. Until the rule is repealed or amended, the
rule has to be applied.
In its 16 July 1997 Resolution, the Court of Appeals denied the Motion for Reconsideration of
ICB for lack of merit so the latter filed the petition before the Supreme Court under both Rules
45 and 65.
ISSUES:
1. Whether or not the checks were materially altered.
2. Whether or not the motion for reconsideration filed by respondent was out of time thus
making the 10 October 1991 Decision final and executory.
3. Whether or not the filing of the petition under both Rules 45 and 65 is proper.
RULING:
1. An alteration on the serial number of a check is not a material alteration. The Court held that
since there were no material alterations on the checks, respondent Philippine National Bank is
liable to petitioner International Corporate Bank, Inc. for the value of the checks amounting to
P1,447,920, with legal interest from 16 March 1982 until full payment.
In Philippine National Bank v. Court of Appeals, it already ruled that the alteration on the serial
number of a check is not a material alteration. Thus, an alteration is said to be material if it alters
the effect of the instrument. It means an unauthorized change in an instrument that purports to
modify in any respect the obligation of a party or an unauthorized addition of words or numbers
or other change to an incomplete instrument relating to the obligation of a party. In other words,
a material alteration is one which changes the items which are required to be stated under Section
1 of the Negotiable Instruments Law.
2. With regard to the timeliness of filing of respondent’s Motion for Reconsideration, the Court
reiterated that there are instances when rules of procedure are relaxed in the interest of justice.
However, in this case, PNB did not proffer any explanation for the late filing of the motion for
reconsideration. Instead, there was a deliberate attempt to deceive the Court of Appeals by
claiming that the copy of the 10 October 1991 Decision was received on 22 October 1991 instead
of on 16 October 1991. The Court of Appeals admission of the motion for reconsideration is not
justified. Thus, the late filing of the motion for reconsideration rendered the 10 October 1991
Decision final and executory.
3. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive.
However, the Court found the petition to be meritorious so it resolved the issue and set aside
technicality for this justifiable reason. Additionally, the petition was filed on time both under
Rules 45 and 65. Hence, in accordance with the liberal spirit which pervades the Rules of Court
and in the interest of justice, it treated the petition as having been filed under Rule 45.
INTERNATIONAL HOTEL CORPORATION v. FRANCISCO B. JOAQUIN, GR No.
158361, 2013-04-10
Facts:
On February 1, 1969, respondent Francisco B. Joaquin, Jr. submitted a proposal to
International Hotel Corporation (IHC) for him to render technical assistance in securing a foreign
loan for the construction of a hotel, to be guaranteed by the
Development Bank of the Philippines (DBP).
The proposal encompassed nine phases, namely: (1) the preparation of a new project study; (2)
the settlement of the unregistered mortgage prior to the submission of the application for
guaranty for... processing by DBP; (3) the preparation of papers necessary to the application for
guaranty; (4) the securing of a foreign financier for the project; (5) the securing of the approval
of the DBP Board of Governors; (6) the actual follow up of the application with DBP[3]; (7) the
overall coordination in implementing the projections of the project study; (8) the preparation of
the staff for actual hotel operations; and (9) the actual hotel operations.
On July 11, 1969, shortly after submitting the application to DBP, Joaquin wrote to IHC to
request the payment of his fees in the amount of P500,000.00 for the services that he had
provided and would be providing to IHC in relation to the hotel project that were outside the...
scope of the technical proposal.
On July 11, 1969, the stockholders of IHC met and granted Joaquin's request, allowing the
payment for both Joaquin and Rafael Suarez for their services in implementing the proposal.
On June 20, 1970, Joaquin presented to the IHC... the results of his negotiations with potential
foreign financiers.
Recommended... consider
Materials Handling Corporation based on the more beneficial terms it had offered. His
recommendation was accepted.
Negotiations with Materials Handling Corporation and, later on, with its principal, Barnes
International (Barnes), ensued.
While the negotiations with Barnes were ongoing, Joaquin and Jose Valero, the Executive
Director of IHC, met with another financier, the Weston
International Corporation (Weston), to explore possible financing.[11] When Barnes failed to
deliver the needed loan, IHC informed DBP that it would submit Weston for DBP's
consideration.[12] As a result, DBP cancelled its previous... guaranty through a letter dated
December 6, 1971.
Due to Joaquin's failure to secure the needed loan, IHC,... canceled the 17,000 shares of stock
previously issued to Joaquin and Suarez as payment for their services. The latter requested a
reconsideration of the cancellation, but their request was... rejected.
The complaint alleged that the cancellation of the shares had been illegal, and had deprived them
of... their right to participate in the meetings and elections held by IHC; that Barnes had been
recommended by IHC President Bautista, not by Joaquin; that they had failed to meet their
obligation because President Bautista and his son had intervened and negotiated with Barnes...
instead of Weston; that DBP had canceled the guaranty because Barnes had failed to release the
loan; and that IHC had agreed to compensate their services with 17,000 shares of the common
stock plus cash of P1,000,000.00.
IHC... the RTC held IHC liable pursuant to the second paragraph of Article 1284 of the Civil
Code
The RTC found that Joaquin and Suarez had failed to meet their obligations when IHC had
chosen to negotiate with Barnes rather than with Weston, the financier that Joaquin had
recommended... on November 8, 2002, the CA concurred with the RTC, upholding IHC's
liability under Article 1186 of the Civil Code. It ruled that in the context of Article 1234 of the
Civil Code, Joaquin had substantially performed his... obligations and had become entitled to be
paid for his services; and that the issuance of the shares of stock was ultra vires for having been
issued as consideration for future services.
Issues:
Article 1186 and Article 1234 of the Civil Code cannot... be the source of IHC's obligation to
pay respondents
Ruling:
IHC's argument is meritorious.
Article 1186 of the Civil Code reads:
Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its
fulfillment.
This provision refers to the constructive fulfillment of a suspensive condition,[32] whose
application calls for two requisites, namely: (a) the intent of the obligor to prevent the fulfillment
of the condition, and (b) the actual prevention... of the fulfillment. Mere intention of the debtor to
prevent the happening of the condition, or to place ineffective obstacles to its compliance,
without actually preventing the fulfillment, is insufficient.
Article 1234. If the obligation has been substantially performed in good faith, the obligor may
recover as though there had been a strict and complete fulfillment, less damages suffered by the
obligee.
It is well to note that Article 1234 applies only when an obligor admits breaching the contract
[35] after honestly and faithfully performing all the material elements thereof except for some
technical aspects that cause no serious harm to the... obligee.[36] IHC correctly submits that the
provision refers to an omission or deviation that is slight, or technical and unimportant, and does
not affect the real purpose of the contract.