Janet Lim Napoles v. Sandiganbayan (Third Division) G.R. No. 224162 November 7, 2017

Facts:

On September 16, 2013, the Office of the Ombudsman received the report of the National Bureau of Investigation (NBI), regarding its investigation on several persons, including Napoles, former Senator Juan Ponce Enrile and his former Chief of Staff, Atty. Jessica Lucila Reyes. In its report, the NBI recommended to prosecute Napoles, former Senator Enrile, Reyes, and several other named individuals for the crime of plunder, defined and penalized under Section 2 of Republic Act No. 7080, as amended, for essentially misappropriating former Senator Enrile’s Priority Development Assistance Fund (PDAF) through non-governmental organizations (NGOs) that were selected without the required bidding procedure.

The Office of the Ombudsman received a Complaint from its Field Investigation Office (FIO), criminally charging former Senator Enrile, Reyes, Napoles, and fifty-two (52) other individuals with violations of RA No 7080 and Section 3(e) of RA No 3019.

In a Joint Resolution, the Ombudsman Special Panel of Investigators found probable cause to indict Napoles, among others, with one (1) count of plunder and fifteen (15) counts of violating Section 3(e) of RA 3019.

Some of the accused, including Napoles, filed their respective motions for reconsideration. The Special Panel of Investigators denied these motions in its Joint Order but dropped Ruby Chan Tuason as a respondent, in light of her admission as a State witness and her corresponding immunity from criminal prosecution.

In an Information dated June 5, 2014, Napoles, together with former Senator Enrile, Reyes, Ronald John Lim and John Raymund De Asis, were charged with plunder in a criminal case filed with the Sandiganbayan.

On July 7, 2014, Napoles filed her Petition for Bail, arguing that the evidence of the prosecution is insufficient to prove her guilt beyond reasonable doubt. Citing the res inter alios acta rule, Napoles submitted that the testimonies of the whistleblowers are inadmissible against her as mere hearsay.

The Sandiganbayan conducted bail hearings. The prosecution presented witnesses and the supposed beneficiaries of former Senator Enrile’s PDF projects. After the conclusion of the prosecution’s presentation of evidence, Napoles manifested that she is not presenting any evidence for her bail application.

The Sandiganbayan denied her Petition for Bail for lack of merit.

Issue:

Whether or not the Sandiganbayan gravely abused its discretion, amounting to lack or excess of jurisdiction, in denying her bail application

Ruling:

The petition is dismissed. The Petition for Bail of Napoles was correctly denied.

The Court found that the Sandiganbayan did not gravely abuse its discretion amounting to lack or excess of jurisdiction. It merely discharged its judicial duty in Napoles’ bail application in a manner consistent with the applicable laws and jurisprudence, and evidence on record.

The prosecution bears the burden of proving that the evidence of Napoles’ guilt for the crime of Plunder is strong. Despite the arrest of the accused or his/her voluntary surrender, the accused may be granted provisional liberty as guaranteed in the Bill of Rights with the right to bail. However, the accused cannot avail of this right if he is charged with a capital offense. While bail may generally be granted as a matter of right prior to the conviction of the accused, those charged with a capital offense is granted bail only when the evidence of guilt is not strong. A bail application may also be denied by the trial court when the accused is a flight risk, notwithstanding the prosecution’s evidence on the guilt of the accused.

In Cortes v. Catral, the Court laid down the duties of the trial court in cases of an application for bail namely: (1) in all cases, whether bail is a matter of right or of discretion, notify the prosecutor of the hearing of the application for bail or require him to submit his recommendation (Section 18, Rule 114 of the Rules of Court as amended); (2) where bail is a matter of discretion, conduct a hearing of the application for bail regardless of whether or not the prosecution refuses to present evidence to show that the guilt of the accused is strong for the purpose of enabling the court to exercise its sound discretion; (3) decide whether the guilt of the accused is strong based on the summary of evidence of the prosecution; and (4) if the guilt of the accused is not strong, discharge the accused upon the approval of the bailbond. Otherwise the petition should be denied.

Since Napoles was charged with the crime of plunder, which carries an imposable penalty of reclusion perpetua, she cannot be admitted to bail when the evidence of her guilt is strong. As a trial court, the Sandiganbayan possessed the jurisdiction to hear and weigh the evidence of the prosecution and the defense.

Office of the Ombudsman v. Antonio Z. De Guzman - G.R. No. 197886 - October 4, 2017

Facts:

In 2001, the Philippine Postal Corporation entered into a contract with Aboitiz Air Transport Corporation (Aboitiz Air) for the carriage of mail at a rate of PHP 5.00 per kilogram which would expire on December 31, 2002.

In October 2003 or after the expiry of its contract with Aboitiz Air, the Philippine Postal Corporation purchased 40 vehicles for mail deliveries in Luzon and hired 25 drivers for these vehicles on a contractual basis. A study conducted by the Central Mail Exchange Center of the Philippine Postal Corporation found that the expenses for the salaries and maintenance of its vehicles for Luzon deliveries were higher than its previous system of outsourcing its deliveries to Aboitiz Air.

On April 2004, the Board of Directors of the Philippine Postal Corporation held a Special Board Meeting where De Guzman, the Officer-in-Charge, endorsed for approval the Central Mail Exchange Center’s recommendation to outsource mail delivery in Luzon.

On May 2004, De Guzman sent a letter to Aboitiz Air, noe Aboitiz One, Inc. (Aboitiz One), stating that the latter may now re-assume to undertake the carriage of mail from and to Regions 1, 2, 5, and CAR starting May 2004 until further notice. Accordingly, the terms and conditions shall be the same as stipulated in the previous contract except for the schedule and the rate which shall be PHP 8.00 per kilogram.

Aboitiz One accepted the proposal and commenced its delivery operations in Luzon on May 20, 2004. When Postmaster General Diomedo P. Villanueva resumed work, the Aboitiz One contract had already been fully implemented. Thus, the Postmaster General approved payments made to Aboitiz One for services rendered.

On October 2005, Atty. Sim Oresca Mata, Jr. filed an administrative complaint with the Office of the Ombudsman against De Guzman and alleged that the Aboitiz One contract renewal was done without public bidding and that the rate per kilogram was unilaterally increased without the Philippine Postal Corporation Board of Directors’ approval.

Consequently, the Office of the Ombudsman found De Guzman guilty of grave misconduct and dishonesty. Meanwhile, the Court of Appeals rendered its Decision annulling the Decision and Order of the Office of the Ombudsman. The Court of Appeals found that according to the Minutes of the April 29, 2004 Special Board Meeting,  the engagement of Aboitiz’s services was approved by the Board of Directors.

Issues:

1. Whether or not Antonio Z. De Guzman committed grave misconduct and dishonesty in (a) engaging the services of Aboitiz One, Inc. allegedly without the approval of the Philippine Postal Corporation Board of Directors, and (b) in procuring Aboitiz One, Inc.’s services through negotiated procurement; and
2. Whether or not the Court of Appeals erred in absolving De Guzman of his administrative offenses

Ruling:

The petition is partially granted. Antonio Z. De Guzman is found guilty of gross neglect of duty. Accordingly, the Postmaster General may only execute contracts for procurement of services with the Board of Directors’ approval. However, this lack of authority may be ratified through the Board of Directors’ silence or acquiescence. If the contract is executed without complying with the laws of procurement, the erring public official may be held administratively liable.

Respondent was designated Officer-in-Charge when the contract between the Philippine Postal Corporation and Aboitiz One was effected, since the Postmaster General had taken a leave of absence. Thus, he is considered to have been exercising the functions of the Postmaster General during this period. Under Republic Act No. 7354, the powers of the Philippine Postal Corporation are exercised by the Board of Directors, with the President appointing all seven (7) members and with the Postmaster General as one of the members to represent the government shareholdings.

The Postmaster General manages the Philippine Postal Corporation and has the power to sign contracts on behalf of the corporation as authorized and approved by the Board of Directors. Unfortunately, in this case, there is no board resolution authorizing respondent to enter into a contract with Aboitiz One for the outsourcing of mail deliveries in Luzon. There are also no Minutes of the April 29, 2004 Special Board Meeting.

In Brias v. Hord, it was held that while the minutes of a board meeting are not equivalent to a board resolution, they may be examined to determine what actually took place during the meeting. Accordingly, the minutes of the transactions of a board, once approved by the board, is prima facie evidence of what actually took place during that meeting.

A contract entered into by corporate officers who exceed their authority generally does not bind the corporation except when the contract is ratified by the Board of Directors. Considering that the Board of Directors remained silent and the Postmaster General continued to approve the payments to Aboitiz One, they are presumed to have substantially ratified respondent’s unauthorized acts. Therefore, respondent’s action is not considered ultra vires.

However, the ratification of respondent’s unauthorized acts does not necessarily mean that the May 2004 contract with Aboitiz One was validly executed. To determine if respondent committed grave misconduct when he entered into this contract, it must first be determined if public bidding was necessary.

As a general rule, all government procurement must undergo competitive bidding. However, the government entity may, subject to certain conditions, resort to alternative methods of procurement, namely: (1) limited source bidding, (2) direct contracting, (3) repeat order, (4) shopping, and (5) negotiated procurement. The procuring entity must secure that in any of these methods, it secures the most advantageous price for the government.

Apex Bancrights Holdings, Inc., Lead Bancfund Holdings, Inc., Asia Wide Refreshments Corporation, Medco Asia Investment Corporation, Zest-o Corporation, Harmony Bancshares Holdings, Inc., Excalibur Holdings, Inc., and Alfredo M. Yao v. Bangko Sentral ng Pilipinas and Philippine Deposit Insurance Corporation - G.R. No. 214866 - October 2, 2017

Facts:

In July 2001, Export and Industry Bank (EIB) entered into a three-way merger with Urban Bank, Inc. (UBI) and Urbancorp Investments, Inc. (UII) in an attempt to rehabilitate UBI which was under receivership.

In September 2001, following the said merger, EIB encountered financial difficulties which prompted respondent PDIC to extend financial assistance to it. Since EIB still failed to overcome its financial problems, respondent released additional financial assistance to it in May 2005, conditioned upon the infusion by EIB stockholders of additional capital whenever EIB’s adjusted Risk Based Capital Adequacy Ratio falls below 12.5%. EIB failed to meet this capital requirement which led to EIB’s stockholders to commence the process of selling the bank.

On April 2012, EIB’s president and chairman voluntarily turned over the full control of EIB to BSP, and informed the latter that the former will declare a bank holiday on April 27, 2012.

On April 26, 2012, the BSP, through the Monetary Board, issued Resolution No. 686 prohibiting EIB from doing business in the Philippines and placing it under the receivership of PDIC, in accordance with Section 30 of Republic Act No. 7653 or “The New Central Bank Act.” Accordingly, PDIC took over EIB.

PDIC then submitted its initial receivership report to the Monetary Board which contained its finding that EIB can be rehabilitated provided that a bidding for its rehabilitation would be conducted, and that the following conditions would be met: (a) there are qualified interested banks that will comply with the parameters for rehabilitation of a closed bank, capital strengthening, liquidity, sustainability and viability of operations, and strengthening of bank governance; and (b) all parties agree to the rehabilitation and the revised payment terms and conditions of outstanding liabilities.

As no bids were submitted, on April 2013, PDIC informed BSP that EIB can hardly be rehabilitated. The Monetary Board then passed Resolution No. 571 directing PDIC to proceed with the liquidation of EIB.

On April 29, 2013, petitioners, who are stockholders representing the majority stock of EIB, filed a petition for certiorari before the CA challenging Resolution No. 571.

The CA dismissed the petition and held that there is nothing in Section 30 of RA 7653 that requires the Monetary Board to make its own independent factual determination on the bank’s viability before ordering its liquidation.

Issue:

Whether or not the Court of Appeals correctly ruled that the Monetary Board did not gravely abuse its discretion in issuing Resolution No. 571 which directed the PDIC to proceed with the liquidation of EIB

Ruling:

The petition is denied.

Section 30 of RA 7653 provides for the proceedings in the receivership and liquidation of banks and quasi-banks. It is settled that the power and authority of the Monetary Board to close banks and liquidate them thereafter when public interest so requires is an exercise of the police power of the State. Police power, however, is subject to judicial inquiry.

The actions of the Monetary Board shall be final and executory and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. There is grave abuse of discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law as when the judgment rendered is not based on law and evidence but on caprice, whim and despotism.

The CA correctly held that there is nothing in Section 30 of RA 7653 that requires the BSP, through the Monetary Board, to make an independent determination of whether a bank may still be rehabilitated or not. As expressly stated in the said provision, once the receiver determines that rehabilitation is no longer feasible, the Monetary Board is simply obligated to: (a) notify in writing the bank’s board of directors of the same; and (b) direct the PDIC to proceed with liquidation.

Dohle Philman Manning Agency, Inc., Dohle (IOM) Limited and/or Capt. Manolo T. Gacutan v. Julius Rey Quinal Doble - G.R. No. 223730 - October 4, 2017

Facts:

Respondent Doble is a Filipino seafarer, who signed a Contract of Employment for the position of Ordinary Seaman with petitioner DOHLE (IOM) Ltd., through its manning agent in the Philippines, DOHLE Philman Manning Agency, Inc. The duration of the contract was for nine months, with a basic monthly salary of USD 350.00 for a 44-hour work week with overtime and vacation leave with pay.

On August 2012, the respondent departed the Philippines on board the vessel “MVTS JAKARTA.”

According to the respondent, on December 2012, he twisted his right foot and immediately fell on the floor while the vessel was approaching the port of Hong Kong. A few months later, while the vessel was docked at the port of Karachi, Pakistan, respondent accidentally got his hands pulled which hit the bitts boliard.

On April 2013, he was repatriated to the Philippines. The following day, medical tests were conducted upon the respondent who was diagnosed with “Right ankle sprain; carpal tunnel syndrome, bilateral; and osteochondral defect femoral trochlea, right knee.”

Meanwhile, the company-designated physician issued an interim disability grade in relation to the respondents’ “carpal tunnel syndrome” of both hands, which is “2x(30% of Grade 10) due to ankylosed wrist in normal position.” On November 2013, the same physician issued a medical report that respondent is already fit to work in relation to his “carpal tunnel syndrome” and ankle sprain.

Respondent asked for a second opinion on his condition and consulted another physician who issued a medical report stating that respondent “has lost his [pre-injury] capacity and is no longer capable of working on his previous occupation because of the injuries sustained and the permanent sequelae of said injury,” and thus, he “is now permanently disabled and is therefore now permanently unfit in any capacity to resume his usual sea duties.”

Respondent insisted on his disability benefits, including expenses for medical treatment and transportation as petitioners have already terminated his treatment. The latter refused.

The Labor Arbiter rendered his Decision in favour of respondent. Meanwhile, the NLRC affirmed the Labor Arbiter’s decision. The Court of Appeals also found in favour of respondent.

Issues:

1. Whether or not the respondent is fit to work, and thus, entitled to the disability benefits claimed;
2. Whether or not the basis of the award of damages should be the CBA and not the POEA-SEC; and
3. Whether or not the respondent is entitled to attorney’s fees

Ruling:

The petition is granted.

According to Andrada v. Agemar Manning Agency, Inc. et al., factual findings of administrative or quasi-judicial bodies, including labor tribunals, are accorded much respect by the Court especially in labor cases as questions of fact in these cases are for the labor tribunals to resolve.

In exceptional cases, however, the Court may be urged to probe and resolve factual issues. The relaxation of the rule is made permissible by the Court whenever any of the following circumstances is present: (1) when the findings are grounded entirely on speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to that of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition, as well as in the petitioner’s main and reply briefs, are not disputed by the respondent; (10) when the findings of fact are premised on the suppose absence of evidence and contradicted by the evidence on record; or (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.

With regards to the first issue, the Court finds that the CA issued the assailed decision with grave abuse of discretion as (1) it failed to consider the mandatory procedure of referring conflicting medical assessments to a third doctor; and (2) it relied on the 120-day rule and not on the findings of the company-designated physician in declaring respondent’s permanent and total disability.

As upheld by the Court in Andrada, the issue of whether the petitioner can legally demand and claim disability benefits from the respondents for an illness suffered is best addressed by the provisions of the POEA-SEC which incorporated the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. Secion 20 [B] thereof provides that if a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.

The seminal case of Philippine Hammonia Ship Agency, et al. Inc. v. Dumadag elaborates further the method of dispute resolution between two competing opinions of medical experts. In this case, the Court looked into the POEA-SEC and the Collecting Bargaining Agreement (CBA) of the parties as the binding documents which govern the employment relationship between them.

In Formerly INC Shipmanagement, Inc. v. Rosales, the Court further clarified the ruling in Philippine Hammonia Ship Agency, Inc. by categorically saying that the referral to a third doctor is mandatory, and should the seafarer fail to abide by this method, he/she would be in breach of the POEA-SEC, and the assessment of the company-designated physician shall be final and binding.

In the recent case of Jebsens Maritime, Inc. v. Rapiz, the Court discussed that the company-designated physician is given an additional 120 days, or a total of 240 days from repatriation, to give the seafarer further treatment and , thereafter, make a declaration as to the nature of the latter’s disability. A temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability.

In line with the issue at hand, the company-designated physician complied with the requirements of the law when the respondent’s medical status was assessed with finality prior to the expiration of the 240-day rule; and the 240-day rule applies only to the assessment provided by the company-designated physician, and not to the assessment of the seafarer’s personal physician.

Spouses Erwin C. Santiago and Marinella A. Santiago; Spouses Gaudencio A. Manimtim, Jr. and Editha P. Manimtim; Spouses Ramiro C. Albaran and Elva C. Albaran; and Cesar F. Odan v. Northbay Knitting, Inc. - G.R. No. 217296 - October 11, 2017

Facts:

Respondent Northbay Knitting, Inc. (NKI) filed a Complaint for Ejectment before the Metropolitan Trial Court (MeTC) of Navotas City against petitioners spouses Ramiro and Elva Albaran who were doing business under the name REA General Marine Services, spouses Gaudencio and Editha Manimtim, who were doing business under the name Junedith Brokerage Corporation, spouses Edwin and Marinela Santiago, who were doing business under the name Quick Care Cargo Handler, and Cesar Odan who was doing business under the name Transment Freight Forwarder.

NKI alleged that it owns the subject property wherein petitioners were allowed to occupy the said property but they were not paying any rent. Sometime in March 2009, NKI sent demand letters to petitioners asking them to vacate the said property within five (5) days from receipt and to pay rent in the event that they refuse to vacate within the grace period given. But despite receipt of the demand letter, petitioner refused to vacate or pay the rent. On April 2009, NKI filed an ejectment complaint against petitioners.

Petitioners allege that NKI only became the registered owner of the property on June 2008, while petitioners came into possession of said property through their predecessor-in-interest, Hermeginildo Odan, and have been continuously in possession since 1970. Odan leased the property from the family of the late Francisco Felipe Gonzales. He later subleased the property to the petitioners. The government expropriated the subject property and declared it as an Area for Priority Development or Urban Land Reform Zone under Proclamation No. 3384. Accordingly, a Conditional Contract of Sale was entered into between NKI and National Housing Authority (NHA). However, NKI violated the terms of the said contract. Sometime in 2008, the NHA sold the property to NKI without giving petitioners, as the actual occupants, the right of first refusal granted under the law. Petitioners contended that this case on the issue of their right of first refusal is a prejudicial question that must be resolved first before the MeTC can take cognizance of the ejectment case.

The MeTC rendered a Decision in favour of NKI while the RTC set aside the MeTC Decision for lack of jurisdiction since NKI failed to show a case of Unlawful Detainer. The Court of Appeals reinstated the Decision of the MeTC.

Issue:

Whether the collateral attack on NKI's title is permissible in court

Ruling:

The petition is denied.

Jurisdiction over the subject matter is conferred by law and is determined by the material allegations of the complaint. It cannot be acquired through, or waived by, any act or omission of the parties, neither can it be cured by their silence, acquiescence, or even express consent. In ejectment cases, the complaint should embody such statement of facts as to bring the party clearly within the class of cases for which the statuses provide a remedy, as these proceedings are summary in nature. The complaint must show enough on its face to give the court jurisdiction without resort to parol evidence.

A complaint sufficiently alleges a cause of action for unlawful detainer if it states the following: (1) possession of property by the defendant was initially by contract or by tolerance of the plaintiff; (2) eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the latter’s right of possession; (3) thereafter, the defendant remained in possession of the property and deprived the plaintiff of enjoyment of the same; and (4) within one (1) year from the last demand on defendant to vacate the property, the plaintiff instituted the complaint for ejectment.
The statements in the complaint that petitioners’ possession of the property in question was by mere tolerance of NKI clearly make out a case for unlawful detainer.

Unlawful detainer involves a person’s withholding from another of the possession of the real property to which the latter is entitled, after the expiration or termination of the former’s right to hold possession under the contract, wither expressed or implied. A requisite for a valid cause of action in an unlawful detainer case is that possession must be originally lawful, and such possession must have turned unlawful only upon the expiration of the right to possess. It must be shown that the possession was initially lawful; hence, the basis of such lawful possession must be established. If the claim is that such possession is by mere tolerance of the plaintiff, the acts of tolerance must be proved.

From the time when the title to the disputed property was registered in NKI’s name on June 2008 until the time when it sent the demand letters to vacate on March 2009, petitioners’ possession had been one upon mere tolerance of the owner. NKI’s right to possess the property had then become absolute and undeniable. And when NKI demanded that they leave the premises and petitioners refused to do so, their possession had already become lawful.

A collateral attack on a title is not allowed in a lawful detainer case. A certificate of title cannot be subject to a collateral attack and can be altered, modified, or cancelled only in a direct proceeding in accordance with the law.

It had been held that the only issue for resolution in an unlawful detainer case is physical or material possession of the premises, independent of any claim of ownership by any of the party litigants. Possession refers to possession de facto, and not possession de jure. Where the parties to an ejectment case raise the issue of ownership, the courts may pass upon that issue to determine who between the parties has the better right to possess the property. However, where the issue of ownership is inseparably linked to that of possession, as in the instant case, adjudication of the ownership issue is not final and binding, but merely for the purpose of resolving the issue of possession. The adjudication of the issue of ownership is only provisional, and not a bar to an action between the same parties involving title to the property.

An ejectment suit is summary in nature and is not susceptible to circumvention by the simple expedient of asserting ownership over the property. In forcible entry and unlawful detainer cases, even if the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the lower courts and the CA have the undoubted incompetence to provisionally resolve the issue of ownership for the sole purpose of determining the issue of possession. Such decision does not bind the title or affect the ownership of the land nor is conclusive of the facts found in said case between the same parties but upon a separate cause of action involving possession.

Abbott Laboratories (Philippines), Inc. and Stephane Langevin v. Manuel F. Torralba, Roselle P. Almazar, and Redel Ulysses M. Navarro - G.R. No. 229746 - October 11, 2017

Facts:

Respondent Roselle P. Almazar was employed by Abbott as the National Sales Manager of its PediaSure Division, while respondents Redel Ulysses M. Navarro and Manuel F. Torralba were Regional Sales Managers of the same department.

In November 2012, Abbott decided to integrate into one sales unit its Pediasure Division and its Medical Nutrition Division, both under the Specialty Nutrition Group. The decision was made after a 2013 Study revealed that both departments have similar business models and sales execution methods As a result of the merger, respondents’ positions were declared redundant.

Abbott subsequently informed both the Department of Labor and Employment (DOLE) and respondents of the latter’s termination effective March 2013 due to redundancy. The company then offered respondents the District Sales Manager positions, with a lower job rate with duties and responsibilities different from that of a National or Regional Sales Manager.

Respondents rejected the offer and signed their respective Deeds of Waiver, Release, and Quitclaim (Deeds) after receiving their separation pay and last pay.

On September 2013, respondents filed a complaint for illegal dismissal on the ground that Abbott allegedly did not observe the criteria of preference of status, efficiency, and seniority in determining who among its redundant employees are to be retained.

The Labor Arbiter ruled that the respondents were illegally dismissed. Accordingly, Abbott found wanting the evidence presented to establish that Abbott followed the required preference criteria of status, efficiency, and proficiency in determining who among the employees are going to be retained.

Meanwhile, the NLRC reversed the decision of the Labor Arbiter and ruled that the Deeds precluded them from claiming that they were illegally dismissed.

The Court of Appeals reinstated the decision of the Labor Arbtier. The appellate court noted that there was no valid redundancy program because Abbott failed to prove one of its requisites – that it used a fair and reasonable criteria in the selection of the employees who will be dismissed.

Issues:

1. Whether the Court of Appeals erred in affirming the finding of the Labor Arbiter and the NLRC that the redundancy implemented by petitioners was invalid;
2. Whether the Court of Appeals erred in reversing the NLRC’s finding that private respondents validly executed quitclaims after they were redundated;
3. Whether the Court of Appeals erred in affirming the Labor Arbiter’s award of full backwages to private respondents; and
4. Whether the Court of Appeals erred in affirming the Labor Arbiter’s award of damages to private respondents

Ruling:

The petition is denied.

No fair and reasonable criteria was utilized in determining who among the employees are to be redundated. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise. For a valid implementation of a redundancy program, the employer must comply with the following requisites: (1) written notice served on both the employee and the DOLE at least one month prior to the intended date of termination; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant position; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant.

As held in Golden Thread Knitting Industries, Inc. v. NLRC, in selecting the redundant employees to be dismissed, a fair and reasonable criteria must be used, such as but not limited to: (a) less preferred status, (b) efficiency, and (c) seniority.

The data presented in the 2013 Study, by itself, does not satisfy the evidentiary requirement to prove that respondents’ positions should be redundated. Absent substantial evidence tending to prove that the employees that would have been affected by the merger of these two departments were measured against specific criteria, the termination of the redundated employees cannot be sustained.

Bad faith was present in implementing the redundancy program and the consequence thereof. The Court has held that the employer’s subsequent act of hiring additional employees is inconsistent with the termination on the ground of redundancy. In this case, the fact that the affected employees were offered newly-created District Sales Manager positions was, to the Court, a mere subterfuge to circumvent respondents’ right to security of tenure.

The Deeds signed by the respondents could not be deemed valid as they were premised on an invalid termination. The quitclaims are deemed illegal as the employees’ consent had been vitiated by mistake or fraud. In the case of Philippine Carpet Manufacturing Corporation v. Tagyamon, the Court listed three specific instances wherein a waiver cannot estop a terminated employee from questioning the validity of his or her dismissal: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.

Respondents are entitled to monetary awards. As upheld by the Court in previous cases, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision.

Velia J. Cruz v. Spouses Maximo and Susan Christensen - G.R. No. 205539 - October 4, 2017

Facts:

Petitioner Cruz alleged that she was the owner of a parcel of land located at A. Santos Street, Balong Bato, San Juan City, which she acquired through inheritance from her late mother, Ruperta D. Javier. She further alleged that Susan Christensen had been occupying the property during Javier’s lifetime, as they had a verbal lease agreement.

Cruz claimed that she tolerated Susan’s occupancy of the property but due to the latter’s failure and refusal to pay rentals of PHP 1,000.00 per month, she was constrained to demand that Susan vacate the property and pay all unpaid rentals.

On August 5, 2008, Cruz, through counsel, sent Susan a final demand letter, demanding that she pay the unpaid rentals and vacate the property within 15 days from receipt. She then filed a Complaint for unlawful detainer on April 27, 2009.

Meanwhile, Susan admitted that she occupied a portion of the property since 1969 on a month-to-month lease agreement. However, she denied that she failed to pay her rentals since 1989 or that she refused to pay them, attaching receipts of her rental payments as evidence.

The Metropolitan Trial Court of San Juan City dismissed Cruz’s Complaint. It found that for the registry receipts and registry return cards to serve as proof that the demand letter was received, it must first be authenticated through an affidavit of service by the person mailing the letter.

On the other hand, the Regional Trial Court rendered a Decision reversing the MeTC decision. It found that the bare denial of receipt would not prevail over the registry return card showing actual receipt of the demand letter.

The Court of Appeals rendered a Decision reversing the Regional Trial Court Decision and reinstating the Metropolitan Trial Court Decision. According to the appellate court, the filing of a memorandum of appeal within 15 days from the receipt of order is mandatory under Rule 40, Section 7(b) of the Rules of Court and the failure to comply will result in the dismissal of the appeal. It likewise concurred with the MeTC’s finding that registry receipts and return cards are insufficient proof of receipt.

Issues:

1. Whether or not the Regional Trial Court should have dismissed the appeal considering that petitioner Velia J. Cruz’s Memorandum of Appeal was not filed within the required period;
2. Whether or not a demand was necessary considering that Maximo and Susan Christensen had a month-to-month lease on the property; and
3. Whether or not petitioner Velia J. Cruz was able to prove Spouses Maximo and Susan Christensen’s receipt of her demand letter before filing her Complaint for unlawful detainer

Ruling:

The petition is granted. Respondents were ordered to immediately vacate the property and to pay petitioner PHP 1,000.00 as monthly rental plus the interest rate of six percent (6%) per annum, to be computed from the date of judicial demand until the finality of this Decision.

Rule 40, Section 7 of the Rules of Court states the procedure of appeal before the Regional Trial Court. It states that within fifteen (15) days from such notice, it shall be the duty of the appellant to submit a memorandum which shall briefly discuss the errors imputed to the lower court, a copy of which shall be furnished by him to the adverse party. Failure of the appellant to file a memorandum shall be a ground for dismissal of the appeal. The rule requiring the filing of the memorandum within the period provided is mandatory. Failure to comply will result in the dismissal of the appeal.

In addition, Rule 40, Section 7 is jurisdictional since the Regional Trial Court can only resolve errors that are specifically assigned and properly argued in the memorandum. Dismissals based on this rule are premised on the non-filing of the memorandum. A trial court does not acquire jurisdiction over an appeal where the errors have not been specifically assigned.

However, procedural defects should not be relied on to defeat the substantive rights of litigants. As ruled in Ginete v. Court of Appeals, the courts may also consider: (1) the existence of special or compelling circumstances; (2) the merits of the case; (3) a cause not entirely attributable to the fault or negligence of the party favoured by the suspension of the rules; (4) a lack of any showing that the review sought is merely frivolous and dilatory; and that (5) the other party will not be unjustly prejudiced thereby.

Prior demand is a jurisdictional requirement before an action for forcible entry or lawful detainer may be instituted. Possession of a property belonging to another may be tolerated or permitted, even without a prior contract between the parties, as long as there is an implied promise that the occupant will vacate upon demand. Refusal to vacate despite demand will give rise to an action for summary ejectment.

Under Rule 70, Section 1 of the Rules of Civil Procedure, an action for unlawful detainer may be brought against a possessor of a property who unlawfully withholds possession after the termination or expiration of the right to hold possession. Meanwhile, Rule 70, Section 2 of the Rules of Civil Procedure requires that there must first be a prior demand to pay or comply with the conditions of the lease and to vacate before an action can be filed.

The jurisdictional requirement of prior demand is unnecessary if the action is premised on the termination of lease due to expiration of the terms of contract.

In this case, as early as 2002, petitioner, as the lessor, already refused to renew respondents’ month-to-month verbal lease. Therefore, respondents’ lease had already long before petitioner sent her demand letters. Respondents cannot also feign ignorance of petitioner’s demand to vacate since the matter was brought to barangay conciliation proceedings in 2005. The demand letter would have been unnecessary since respondents’ continued refusal to vacate despite the expiration of their verbal lease was sufficient ground to bring the action.

Since 1969, or for 48 years, respondents have continued to occupy the subject property on a mere verbal month-to-month lease agreement. They failed to formalize their agreement in order to protect their right of possession. Their continued occupation of the property despite the withdrawal of the property owner’s consent and tolerance deprived the property owner of her right to use and enjoy the property as she sees fit.

San Fernando Coca-Cola Rank-and-File Union (SACORU), represented by its President, Alfredo R. Maranon v. Coca-Cola Bottlers Philippines, Inc. (CCBPI) - G.R. No. 200499 -October 4, 2017

Facts:

On May 29, 2009, private respondent Coca-Cola Bottlers Philippines, Inc. (CCBPI) issued notices of termination to twenty-seven (27) rank-and-file regular employees and members of the San Fernando Rank-and-File Union (SACORU), collectively referred to as “union members”, on the ground of redundancy due to the ceding out of two selling and distribution systems, the Conventional Route System (“CRS”) and Mini Bodega System (“MB”) to the Market Execution Partners (“MEPS”), better known as “Dealership System”.

The termination of employment was made effective on June 30, 2009, but the union members were no longer required to report for work as they were put on leave of absence with pay until the effectivity date of their termination. The union members were also granted individual separation packages, which twenty-two (22) of them accepted, but under protest.

To SACORU, the new, reorganized selling and distribution systems adopted and implemented by CCBPI would result in the diminution of the union membership amounting to union busting and to a violation of the Collective Bargaining Agreement (CBA) provision against contracting out of services or outsourcing of regular positions; hence, they filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on June 3, 2009 on the ground of unfair labor practice.

On the other hand, CCBPI contends that the new business scheme is basically a management prerogative designed to improve the system of selling and distributing products in order to reach more consumers at a lesser cost with fewer manpower complement, but resulting in greater returns of investment.

The NLRC dismissed the complaint for unfair labor practice and declared as valid the dismissal of the employees due to redundancy. Upon appeal, the Court of Appeals found that the NLRC did not commit grave abuse of discretion.

Issues:

1. Whether CCBPI validly implemented its redundancy program;
2. Whether CCBPI’s implementation of the redundancy program was an unfair labor practice; and
3. Whether CCBPI should have enjoined the effectivity of the termination of the employment of the 27 affected union members when the DOLE Secretary assumed jurisdiction over their labor dispute.

Ruling:

The petition is partly granted.

The Court cannot evaluate the evidence that the parties presented to the NLRC and CA. Following the ruling in Montoya v. Transmed Manila Corp., only questions of law may be raised against the CA decision and that the CA decision will be examined only using the prism of whether it correctly determined the existence of grave abuse of discretion.

Grave abuse of discretion may arise when a lower court or tribunal violates or contravenes the Constitution, the law or existing jurisprudence. As held in Banal III v. Panganiban, grave abuse of discretion means such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.

The CA only had to determine the existence of grave abuse of discretion. As held in Soriano, Jr. v. NLRC, as a general rule, in certiorari proceedings under Rule 65 of the Rules of Court, the appellate court does not assess and weigh the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their conclusion.

The Court finds that the CA was correct in its determination that the NLRC did not commit grave abuse of discretion.

CCBPI’s redundancy program is valid. For there to be a valid implementation of a redundancy program, the following requisites should be present: (1) written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

CCBPI did not commit an unfair labor practice. In Zambrano v. Philippine Carpet Manufacturing Corp., the Court stated that unfair labor practice refers to acts that violate the workers’ right to organize. To prove the existence of unfair labor practice, substantial evidence has to be presented.

CCBPI violated the return-to-work order. As characterized by the Court in Manggagawa ng Komunikasyon sa Pilipinas v. Philippine Long Distance Telephone Co., Inc., a return-to-work order is interlocutory in nature, and is merely meant to maintain status quo while the main issue is being threshed out in the proper forum. This is to avoid any disruption to the economy and to the industry of the employer while the DOLE Secretary or the NLRC is resolving the dispute.

Bicol Medical Center, represented by Dr. Efren SJ. Nerva, and the Department of Health, represented by Health Secretary Enrique T. Ona v. Noe B. Botor, Celjun F. Yap, Ismael A. Albao, Augusto S. Quilon, Edgar F. Edplana II, and Josefina F. Esplana - G.R. No. 214073 - October 4, 2017

Facts:

Sometime in 1982, the Camarines Sur Provincial Government donated about five (5) heactares of land to the Ministry of Health, now the Department of Health, as evidenced by Transfer Certificate of Title No. 13693. The Bicol Regional Training and Teaching Hospital and Road Lot No. 3, a service road which leads to the Provincial Hospital, were included in said donation.

The Training and Teaching Hospital became the Bicol Medical Center (BMC) in 1995.

In 2009, BMC constructed a steel gate along J. Miranda Avenue to control the flow of vehicles and pedestrian traffic entering the hospital premises. In 2012, Dr. Efren SJ. Nerva issued Hospital Memorandum No. 310 which ordered the rerouting of traffic inside the BMC Compound. This rerouting scheme closed the steel gate for vehicles and pedestrians along J. Miranda Avenue, relocating it from the eastern side of the hospital to the western side effective April 1, 2012.

On May 19, 2012, Atty. Noe Botor wrote to Naga City Mayor John Bongat asking for the reopening or dismantling of the gate for being a public nuisance. The Sangguniang Panlungsod of Naga City passed a resolution authorizing Mayor Bongat to dismantle the gate. However, instead of dismantling it, Mayor Bongat filed a Verified Petition with Prayer for a Writ of Preliminary Injunction against BMC.

On December 21, 2012, the Regional Trial Court denied Naga City’s application for injunctive relief, ruling that Naga City failed to prove a clear and unmistakable right to the writ prayed for.

Meanwhile, the Court of Appeals concluded that Naga City and the respondents were able to present prima facie evidence of their right to the writ. The appellate court also gave due weight to the 1970s Revised Assessor’s Tax Mapping Control Roll and its Identification Map, which support the respondents’ assertion of the public nature of Road Lot No. 3. However, the Court of Appeals pointed out that whether or not the Revised Assessor’s Tax Mapping Control Roll should prevail over BMC’s title over the property is a factual matter that should be threshed out in the trial court.

Issue:

Whether or not the Court of Appeals erred in directing the Regional Trial Court to issue a writ of preliminary injunction on the closure of Road Lot No. 3

Ruling:

The petition is granted. Prima facie evidence is evidence that is not rebutted or contradicted, making it good and sufficient on its face to establish a fact constituting a party’s claim or defense.

In the case of Department of Public Works and Highways v. City Advertising Ventures Corp., a writ of preliminary injunction is defined as an ancillary and interlocutory order issued as a result of an impartial determination of the context of both parties. It entails a procedure for the judge to assess whether the reliefs prayed for by the complainant will be rendered moot simply as a result of the parties’ having to go through the full requirements of a case being fully heard on its merits. Although a trial court judge is given a latitude of discretion, he or she cannot grant a writ of injunction if there is no clear legal right materially and substantially breached from a prima facie evaluation of evidence of the complainant. Even if this is present, the trial court must satisfy itself that the injury to be suffered is irreparable.

A writ of preliminary injunction is issue to preserve the status quo ante, upon the applicant’s showing of two important requisite conditions, namely: (1) the right to be protected exists prima facie, and (2) the acts sought to be enjoined are violative of that right. It must be proven that the violation sought to be prevented would cause an irreparable injustice.

Rule 58, Section 3 of the Rules of Court provides the instances when a writ of preliminary injunction may be issued namely: (a) that the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) that the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) that a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.

Jurisprudence has established the following requisites that must be proven first before a writ of preliminary injunction, whether mandatory or prohibitory, may be issued: (1) the applicant must have a clear and unmistakable right to be protected, that is a right in esse; (2) there is a material and substantial invasion of such right; (3) there is an urgent need for the writ to prevent irreparable injury to the applicant; and (4) no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury.

In satisfying these requisites, the applicant for the writ need not substantiate his or her claim with complete and conclusive evidence since only prima facie evidence or a sampling is required to give the court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. A writ of preliminary injunction is generally based solely on initial or incomplete evidence (Spouses Nisce v. Equitable PCI Bank).

Respondents failed to establish prima facie proof of their clear legal right to utilize Road Lot No.3. Whatever right they sought to establish by proving the public nature of Road Lot No. 3 was rebutted by the Department of Health’s certificate of title and the City Engineer’s categorical statement that the road from Panganiban Drive up to the entrance and exit gate of BMC was not included in the inventory list of city roads under Naga City’s control. Respondents cannot rely on the supposed customary use of Road Lot No. 3 by the public to support their claimed right of unfettered access to the road because customary use if not one (1) of the sources of legal obligation; hence, it does not ripen into right.

In the case of Miriam College Foundation, Inc. v. Court of Appeals, the difference between preliminary injunction and a restraining order was explained. Preliminary injunction is an order ranted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency, or person to perform to refrain from performing a particular act or acts. As an extraordinary remedy, injunction is calculated to preserve or maintain the status quo of things and is generally availed of to prevent actual or threatened acts, until the merits of the case can be heard. A preliminary injunction persists until it is dissolved or until the termination of the action without the court issuing a final injunction.

Meanwhile, the basic purpose of a restraining order is to preserve the status quo until the hearing of the application for preliminary injunction. As amended by B.P. Blg. 224, a judge may issue a temporary restraining order with a limited life of twenty days from date of issue. If before the expiration of the 20-day period the application for preliminary injunction is denied, the temporary order would thereby be deemed automatically vacated. If no action is taken by the judge on the application for preliminary injunction within the said 20 days, the temporary restraining order would automatically expire on the 20th day by the sheer force of law, no judicial declaration to that effect being necessary.

The Court of Appeals misappreciated the nature of a writ of preliminary injunction. A preliminary injunction is an ancillary remedy issued after due hearing where both parties are given the opportunity to present their respective evidence. Thus, both their evidence should be considered.

Republic of the Philippines v. Metro Cebu Pacific Savings Bank and Cordova Trading Post, Inc. - G.R. No. 205665 - October 4, 2017

Facts:

Respondents Metro Cebu Pacific Savings Bank (Metro Cebu) and Cordova Trading Post, Inc. (Cordova Trading) filled with the Municipal Circuit Trial Court (MCTC) of Consolacion-Cordova, Cebu separate applications for original registration of two parcels of land situated in Poblacion, Cordova, Cebu. Metro Cebu applied for the original registration of Lot No. 325-A, while Cordova Trading applied for Lot No. 325-B. Subject properties are both covered by the Cordova Cad. 670 and contains an area of 933 and 531 square meters, respectively.

Cordova Trading claimed that it acquired Lot No. 325-B from Benthel Development Corporation (Benthel) through an exchange of properties and by sale. Benthel asserted that it bought the said parcels of land from Clodualdo Dalumpines.

Meanwhile, Metro Cebu averred that the same Dalumpines attached the subject properties as security for his loan and was mortgaged in the former’s favor. Such mortgage was subsequently foreclosed in favour of Metro Cebu as evidenced by an Affidavit of Consolidation of Ownership.

The MCTC rendered a decision ordering the issuance of the decree of registration to be issued in favour of respondents. The Court of Appeals affirmed the trial court’s ruling.

Issue:

Whether or not the Court of Appeals erred in granting the respondent’s Application for Original Registration of the subject properties

Ruling:

The petition was granted.

The lower courts should have denied the respondent’s applications for original registration of the subject properties since they miserably failed to prove their entitlement over the subject properties.

Section 14 of P.D. No. 1529 enumerated those who may apply for original registration of title to land namely: (1) those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier; (2) those who have acquired ownership of private lands by prescription under the provision of existing laws; (3) those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing laws; and (4) those who have acquired ownership of land in any other manner provided by law.

It is settled that the applicant must present proof of specific acts of ownership to substantiate the claim and cannot just offer general statements, which are mere conclusions of law rather than factual evidence of possession. Actual possession consists in the manifestation of acts of dominion over it of such a nature as a party would actually exercise over his own property.

Claims of ownership of the subject properties based on the tax declarations presented will not prosper. It is only when these tax declarations are coupled with proof of actual possession of the property that they may become the basis of a claim of ownership.

The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably belong to the State. The applicant for land registration must prove that the Department of Environment and Natural Resources (DENR) Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the Provincial Environment and Natural Resources Office (PENRO) or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records.

In Vallao v. Republic, the Court declared that there must be a positive act declaring land of the public domain as alienable and disposable. The applicant must establish the existence of a positive act of the government, such as a presidential proclamation or an executive order; and administrative action, investigation reports of Bureau of Lands investigators; and a legislative act or a statute.

Oriental Assurance Corporation v. Manuel Ong, doing business under the business name of Western Pacific Transport Services and/or Asian Terminals, Inc. - G.R. No. 189524 - October 11, 2017

Facts:

JEA Steel Industries, Inc. (JEA Steel) imported from South Korea 72 aluminum-zinc-alloy-coated steel sheets in coils. These steel sheets were transported to Manila on board the vessel M/V Dooyang Glory as evidenced by Bill of Lading No. HDMUBSOML-214s011. Upon arrival of the shipment in Manila, these coils were stored under the custody of Asian Terminals, Inc. and were thereafter loaded on the trucks of Manuel Ong. The coils were delivered to JEA Steel’s plant in Cavite where it was found that eleven of the 72 coils were in damaged condition, dented and deformed.

JEA Steel filed a claim with Oriental for the value of the 11 damaged coils pursuant to Marine Insurance Policy No. OAC/M-12292. Oriental paid JEA Steel the sum of PHP 521,530.16 and subsequently demanded indemnity from Ong and Asian Terminals, but the latter refused to pay.

Oriental filed a complaint for sum of money against the respondents.

Ong countered that the 11 coils were already damages when they were loaded on board his trucks and transported to the consignee. Meanwhile, Asian Terminals claimed that it exercised due diligence in handling the cargo. It further alleged that Oriental’s claim was barred for the latter’s failure to file a notice of claim within the 15-day period provided in the Gate Pass and in Article VII, Section 7.01 of the Contact for Cargo Handling Services (Management Contract) between the Philippine Ports Authority and Asian Terminals. Such Gate Pass was signed by the consignee’s representative to acknowledge the delivery and receipt of the shipment. In addition, Asian Terminals contended that its liability, if any, should not exceed PHP 5,000.00, pursuant to Section 7.01.

The trial court dismissed the complaint. The Court of Appeals dismissed Oriental’s appeal on the ground that it had already prescribed. The appellate court held that Asian Terminals was bound to observe the same degree of care required of common carriers.

Issues:

1. Whether or not the Court of Appeals gravely erred in passing upon the issue of prescription even though it was not an assigned error in the appeal;
2. Whether or not the claim against Asian Terminals, Inc. is barred by prescription; and
3. Whether or not the Court of Appeals gravely erred in ruling that Manuel Ong is not liable for the damage of the cargo

Ruling:

The petition was granted. The consignee’s claim latter that was received by the arrastre operator two (2) days after complete delivery of the cargo constitutes substantial compliance with the time limitation for filing claims under the Gate Pass and the Management Contract. However, the arrastre operator’s liability for damage to the cargo is limited to PHP 5,000.00 per package in accordance with the Management Contract.

The Court of Appeals properly passed upon the issue of prescription. An assignment of error is generally required for appellate review. Rule 51, Section 8 of the Rules of Court provides that only errors which have been stated in the assignment of errors and properly argued in the brief will be considered by the appellate court. The exceptions to this rule are errors affecting jurisdiction over the subject matter as well as plain and clerical errors.

However, as ruled in Mendoza v. Bautista, an appellate court is clothed with ample authority to review rulings even if they are not assigned as errors in the appeal in the following instances: (a) grounds not assigned as errors but affecting jurisdiction over the subject matter; (b) matters not assigned as errors on appeal but are evidently plain or clerical errors within contemplation of law; (c) matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just decision and complete resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice; (d) matters not specifically assigned as errors on appeal but raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (e) matters not assigned as errors on appeal but closely related to an error assigned; and (f) matters not assigned as errors on appeal but upon which the determination of a question property assigned, is dependent. Exceptions (d) and (e) apply in this case.

The provisions of the Management Contract and the Gate Pass are binding on Oriental as insurer-subrogee and successor-in-interest of the consignee. In Government Service Insurance System v. Manila Railroad Company, it was held that the provisions of a gate pass or of an arrastre management contract are binding on an insurer-subrogee even if the latter is not a party to it. Accordingly, by availing the services of an arrastre operator and taking delivery in pursuance of a permit and a pass issued by the latter, which were “subject to all the terms and conditions” of said management contract, including the requirement thereof that “a c alim is filed with the Company within 15 days from the date of arrival of the goods”, the consignee - together with the insurer or plaintiff herein, as successor to the rights of the consignee – became bound by the provisions of said contract.

This doctrine was also reiterated in the case of Summa Insurance Corporation v. Court of Appeals which stated that a management contract, which is a sort of a stipulation pour autrui within the meaning of Article 1311 of the Civil Code, is also binding on a consignee because it is incorporated in the gate pass and delivery receipt which must be presented by the consignee before delivery can be effected to it.

The fact that Oriental is not a party to the Gate Pass and the Management Contract does not mean that it cannot be bound by their provisions. Oriental is subrogated to the rights of the consignee upon its payment of the insurance claim.

According to Article 2207 of the Civil Code, if the plaintiff’s property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. This article is founded on the well-settled principle of subrogation. The Court held that payment by the insurer to the assured operates as an equitable assignment to the former of all remedies which the latter may have against the third party whose negligence or wrongful act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon written assignment of claim. It accrues simply upon payment of the insurance claim by the insurer.

The issuance of a certificate of loss is not an indispensable condition for the 15-day limit to run. The Court has ruled that the purpose of the time limitation for filing claims is “to apprise the arrastre operator of the existence of a claim and enable it to check on the validity of the claimant’s demand while the facts are still fresh for recollection of the persons who took part in the undertaking and the pertinent papers are still available.” In addition, the Court has liberally construed the requirement for filing a formal claim and  allowed claims filed even beyond the 15-day prescriptive period after finding that the request for bad order survey o the provisional claim filed by the consignee had sufficiently served the purpose of a formal claim (New Zealand Insurance Co., Ltd. v. Navarro).

It is well-settled in jurisprudence that substantial compliance with the 15-day  time limitation is allowed provided that the consignee has made a provisional claim thru a request for bad order survey or examination report.

However, the facts of this case do not show that a provisional claim or a request for bad order survey was made by the consignee. Even so, the Court adopts a reasonable interpretation of the stipulations in the Management Contract and hold that petitioner’s complaint is not time-barred. The consignee’s claim letter is regarded as substantial compliance with the condition precedent set forth in the Management Contract to hold the arrastre operator liable.

Since the Cargo Gate Passes issued by Asian Terminals do not indicate the value of the cargo, the liability of the latter should be limited to the maximum recoverable value of PHP 5,000.00 per package or coil, totalling PHP 55,000.00 for the 11 damaged coils. This amount shall earn a legal interest rate of 6% per annum from the date of finality of this judgment until its full satisfaction as per Nacar v. Gallery Frames.

Bernardo S. Zamora v. Emmanuel Z. Quinan, Jr., Emmanuel J. Quinan, Sr., Efrem Z. Quinan and Emma Rose Q. Quimbo - G.R. No. 216139 - November 29, 2017

Facts:

On June 19, 2006, petitioner filed a Complaint for Reconveyance of Title of Real Properties fraudulently obtained with the Regional Trial Court of Cebu City, Branch 19 and docketed as Civil Case No. CEB-32448 claiming that he is in possession of the original of the Transfer Certificate of Title, against respondents, who earlier filed a Petition for the Issuance of New Duplicate Certificate of Title, which was granted by the Regional Trial Court of Cebu City, Branch 9 in a Resolution dated April 11, 2006.

Pending the resolution of petitioner’s complaint, he commenced another action before the Court of Appeals on November 4, 2008 for the Annulment of Judgment of the RTC of Cebu City, Branch 9, which was dismissed based on technicalities in a Resolution dated April 22, 2009.

On June 5, 2009, petitioner commenced another civil action before the CA for the Annulment of Judgment of the RTC of Cebu City, Branch 9. Meanwhile, on September 1, 2010, the RTC of Cebu City, Branch 19 dismissed Civil Case no. CEB-32448 on the ground of forum shopping.

The CA ruled that petitioner committed forum shopping because there is identity of causes of action, parties and reliefs sought in the action filed by him for reconveyance of real properties instituted before the RTC and the petition for annulment of judgment instituted before the CA.

Issues:

1. Whether or not the Court of Appeals erred in dismissing the annulment of judgment of the trial court on mere technicalities that impeded the cause of justice and the parties’ right to an opportunity to be heard; and
2. Whether or not the court a quo erred in ignoring and disregarding the jurisprudential ruling in Camitan v. Fidelity Investment Corporation which states that if an owner’s duplicate copy of a certificate of title has not been lost but in fact in the possession of another person, the reconstituted title is void, as the court rendering the decision never acquired jurisdiction

Ruling:

The petition was denied.

The rule against forum shopping is embodied in Rule 7, Section 5 of the Revised Rules of Court. There is identity of causes of action, parties and reliefs sought in the action he filed for the reconveyance of properties before the RTC and the petition for annulment of judgment filed before the CA.

Forum shopping is committed by a party who institutes two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same or related causes or to grant the same or substantially the same reliefs, on the supposition that one or the other court would make a favourable disposition or increase a party’s chances of obtaining a favourable decision or action.

Black’s Law Dictionary says that forum-shopping “occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favourable judgment or verdict.” Hence, according to Words and Phrases, “a litigant is open to the charge of “forum shopping” whenever he chooses a forum with slight connection to factual circumstances surrounding his suit, and litigants should be encouraged to attempt to settle their differences without imposing undue expense and vexatious situations on the courts.”

A violation of this rule shall constitute contempt of court and shall be a cause for the summary dismissal of both petitions, without prejudice to the taking of appropriate action against the counsel or party concerned.

Presently, Rule 7, Section 5 of the 1997 Rules of Civil Procedure requires that a Certification against Forum Shopping be appended to every complaint or initiatory pleading asserting a claim for relief.

As held in Korea Exchange Bank v. Gonzales, the general rule is that compliance with the certificate of forum shopping is separate from and independent of the avoidance of the act of forum shopping itself. Forum shopping is a ground for summary dismissal of both initiatory pleadings without prejudice to the taking of appropriate action against the counsel or party concerned.

It was also held in Top Rate Construction that forum shopping is an act of malpractice for it trifles with the courts, abuses their processes, degrades the administration of justice and adds to the already congested court dockets. What is critical is the vexation brought upon the courts and the litigants by a party who asks different courts to rule on the same or related causes and grant the same or substantially the same reliefs and in the process creates the possibility of conflicting decisions being rendered by the different for a upon the same issues, regardless of whether the court in which one of the suits was brought has no jurisdiction over the action.

Jurisprudence has recognized that forum shopping can be committed in several ways namely: (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet; (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having been finally resolved; and (3) filing multiple cases based on the same cause of action but with different prayers (splitting of causes of action, where the ground for dismissal is also either litis pendentia or res judicata). It was also held that forum shopping exists where a party attempts to obtain a preliminary injunction I another court after failing to obtain the same from the original court.

In Yap v. Chua, et. al., it was held that to determine whether a party violated the rule against forum shopping, the most important factor to ask is whether the elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in another; otherwise stated, the test for determining forum shopping is whether in the two (or more) cases pending, there is identity of parties, rights or causes of action, and reliefs sought.

Litis pendentia refers to that situation wherein another action is pending between the same parties for the same cause of action, such that the second action becomes unnecessary and vexatious. For litis pendentia to exist, three (3) requisites must concur: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that judgment in one regardless of which party is successful, would amount to res judicata in the other.

Res judicata or prior judgment, on the other hand, bars a subsequent case when the following requisites are satisfied: (1) the former judgment is final; (2) it is rendered by a court having jurisdiction over the subject matter and the parties; (3) it is a judgment or an order on the merits; (4) there is – between the first and second actions – identity of parties, of subject matter, and of causes of action.

SC Circular No. 28-91 states that the deliberate filing of multiple complaints by any party and his counsel to obtain favourable action constitutes forum shopping and shall be a ground for summary dismissal thereof and shall constitute direct contempt of court, without prejudice to disciplinary proceeding against the counsel and the filing of a criminal action against the guilty party. In Spouses Arevalo v. Planters Development Bank, the Court further reiterated that once there is a finding of forum shopping, the penalty is summary dismissal not only of the petition pending before this Court, but also of the other case that is pending in a lower court.

Veterans Federation of the Philippines v. Eduardo L. Montenejo, Mylene M. Bonifacio, Evangeline E. Valverde, Deana N. Pagal, and VFP Management Development Corporation - G.R. No. 184819 - November 29, 2017

Facts:

On January 4, 1991, VFP entered into a management agreement with VMDC. Under the said agreement, VMDC was to assume management and operation of the Veterans Federation of the Philippines Industrial Area (VFPIA) in exchange for forty percent (40%) of the lease rentals generated from the area.

VDMC hired its own personnel and employees for the management of said area, among of which were respondents Montenejo, Bonifacio, Valverde and Pagal. The management agreement between VFP and VMDC had a term of five (5) years which was renewable for another five (5) years.

On November 1999, the VFP board passed a resolution terminating the management agreement effective December 31, 1999. VMDC conceded to the termination. On January 3, 2000, the President of VMDC issued a memorandum informing the company’s employees of the termination of their services effective at the close of office hours on January 31, 2000 in view of the termination of the management agreement. On the said date, VMDC dismissed all of its employees and paid them their respective separation pay.

Monetenejo, et. al. filed before the Labor Arbiter a complaint for illegal dismissal, money claims, and damages. VMDC posited that the dismissals of respondents were valid due to an authorized cause which was the cessation or closure of its business. VFP also asserted that it could not be held liable under the complaint because it is not the employer of Montenejo, et. al.

The Labor Arbiter dismissed the complaint for illegal dismissal. Meanwhile, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter. The Court affirmed the decision of the NLRC.

Issues:

1. Whether or not Montenejo, et. al. had been illegally dismissed; and
2. Whether or not VFP may be solidarily held liable with VDMC for any monetary award that may be adjudged in favour of Montenejo, et al.

Ruling:

The petition was granted. The Court ruled that VMDC’s closure was established; the closure was bona fide; and the dismissals of Montenejo,et. al. are based on an authorized cause.

Montenejo, et. al. were dismissed as a result of the closure of VMDC. Said closure qualifies as a bona fide cessation of operations or business as contemplated under Articles 298 of the Labor Code. The dismissals of Montenejo, et. al. were, therefore, premised on an authorized cause. Respondents were only entitled to nominal damages on top of the separation pay under Article 298 of the Labor Code.

One of the authorized causes for dismissal recognized under the Labor Code is the bona fide cessation of business or operations by the employer. Article 298 of the Labor Code explicitly sanctions terminations due to he employer’s cessation of business or operations as long as the cessation is bona fide or is not made for the purpose of circumventing the employees’ right to security of tenure.

It is well-settled in jurisprudence that what can be considered as an invalid cessation of business or operations can be: (1) a company that supposedly closed due to financial losses but was discovered to have revived its operations barely a month after it closed; (2) a company which apparently closed one of its departments; (3) closure of the high school department in a school prompted by a deadlock in the Collective Bargaining Agreement negotiations between a school and its faculty union but was reopened its high school department; and (4) closure of one of its departments by allegedly transferring its operations to a concessionaire. All of the preceding examples have a common characteristic of not genuine closures or cessations of businesses. They are mere simulations which made it appear that the employer intended to close its business or operations when the latter, in truth, had no such intention.

To unmask the true intent of an employer when effecting a closure of business, it is important to consider not only the measures adopted by the employer prior to the purported closure but also the actions taken by the latter after the fact.

The closure of VMDC was duly proven and can be inferred from other facts that were established by the records and were not refuted by the parties such as: (1) the fact that VMDC had turned over possession of all buildings, equipment, and other properties necessary to the operation of the VFPIA to VFP; and (2) the fact that on January 31, 2000, VMDC had dismissed all of its officials and employees.

The decision of VMDC to cease its operations after the termination of the management agreement is, under the law, a lawful exercise by the company’s leadership of its management prerogative that must perforce be upheld where, as in this case, there is an absence of showing that the cessation was made for prohibited purposes. The dismissals cannot be regarded as illegal because they were predicated upon an authorized cause recognized by law.

Montenejo, et. al. are not entitled to monetary awards adjudged in their favour by the NLRC but only to separation pay under Article 298 of the Labor Code. The awards for full backwages and separation pay in lieu of reinstatement cannot be sustained as these awards are reserved by law and jurisprudence for employees who were illegally dismissed.

The ruling in Agabon v. NLRC states that when a dismissal is based on a just cause but is implemented without observance of the statutory notice requirements, the dismissal should be upheld as valid but the employer must thereby pay an indemnity to the employee in the amount of PHP 30,000.

Meanwhile, the ruling in Jaka Food Processing Corporation v Pacot increased the amount of indemnity payable by the employer in cases where the dismissals are based on authorized causes but have been effected without observance of the notice requirements. In this scenario, the indemnity was increased to PHP 50,000.

The doctrine of piercing the veil of corporate fiction does not apply to this case. The doctrine of piercing the veil of corporate fiction is a legal precept that allows a corporation’s separate personality to be disregarded under certain circumstances, so that a corporation and its stockholders or members, or a corporation and another related corporation could be treated as a single entity. This doctrine will apply only in cases where the separate corporate personality of a corporation is being abused or being used for wrongful purposes.

As laid down in Concept Builders, Inc. v. NLRC, the test to determine when it would be proper to apply the doctrine of piercing the veil of corporate fiction would be:
1. Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff’s legal rights; and
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.

The absence of any one of these elements prevents piercing the corporate veil. As also laid down in Rufina Luy Lim v. CA, mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities. To disregard the separate juridical personality of a corporation, the wrong-doing must be clearly and convincingly established. It cannot be presumed.

In fine, the exclusive liability for nominal damages rests on VMDC.

Pilipinas Makro, Inc. v. Coco Charcoal Philippines, Inc. and Lim Kim San - G.R. No. 196419 - October 4, 2017

Facts:

Pilipinas Makro, Inc. is a duly registered domestic corporation. It bought a parcel of land from Coco Charcoal and executed a Deed of Absolute Sale wherein the latter would sell its parcel of land with a total area of 1,000 square meters for the consideration of PHP 8,500,000. On the same day, Makro entered into a notarized Deed of Absolute Sale with Lim Kim San for the sale of the latter’s land with a total area of 1,000 square meters for the same consideration of PHP 8,500,000.

Coco and Lim’s parcels of land are contiguous and parallel to each other. Aside from the technical descriptions of the properties, both deeds of sale contained identical provisions, similar terms, conditions, and warranties.

In December 1999, a resurvey was conducted by a geodetic engineer engaged by Makro which reported that 131 square meters of the lot purchased from Coco had been encroached upon by the DPWH for its road widening project. On the other hand, 130 square meters of the land bought from Lim was also encroached by the said DPWH project.

Makro informed the representatives of Coco and Lim about the supposed encroachment on the parcels of land. Initially, Makro asked for a refund amounting to 75% of the value of the encroached properties.

Since no refund was made, Makro sent a final demand letter to collect the refund of PHP 1,113,500 from Coco and PHP 1,105,000 from Lim corresponding to the area encroached upon by the DPWH project.

The Regional Trial Court granted Makro’s complaint and ordered respondents to refund the amount corresponding to the value of the encroached area.

On the other hand, the Court of Appeals reversed the trial court’s decision and noted that Makro was not entitled to the refund. Accordingly, the warranty expressed in Section 4(i) of the deeds of sale is similar to the warranty against eviction set forth under Article 1548 of the New Civil Code. It also posited that only a buyer in good faith may sue to a breach of warranty against eviction. Further, it noted Makro’s actual knowledge of the encroachment before the execution of the sale constitutes its recognition that Coco and Lim’s warranty against liens, easements, and encumbrances does not include the respective 131 and 130 square meters affected by the DPWH project, but covers only the remainder of the property.

Issues:

1. Whether the Court of Appeals erred in denying Makro’s motion for extension to file a motion for reconsideration;
2. Whether the Court of Appeals erred in denying Makro a refund on the ground of bad faith

Ruling:

The petition was granted. Makro is entitled to the refund of PHP 1,113,500 from Coco and PHP 1,105,000 from Lim, respectively.

Procedural rules are set not to frustrate the ends of substantial justice, but are tools to expedite the resolution of cases on their merits. The Court found a cogent reason exists to justify the relaxation of the rules regarding the filing of motion for extension to file a motion for reconsideration.

A warranty is a collateral undertaking in a sale of either real or personal property, express or implied, that if the property sold does not possess certain incidents or qualities, the purchaser may either consider the sale void or claim damages for breach of warranty. Thus, a warranty may either be express or implied.

An express warranty pertains to any affirmation of fact or any promise by the seller relating to the things, the natural tendency of which is to induce the buyer to purchase the same. It includes all warranties derived from the language of the contract, so long as the language is express – it may take the form of an application, a promise or a representation.

Meanwhile, an implied warranty is one which the law derives by appreciation or inference from the nature of transactions of the relative situation or circumstances of the parties, irrespective of any intention of the seller to create it. Simply put, express warranty is found in the very language of the contract while implied warranty is by operation of law.

Thus, the Court of Appeals erred in treating Sec. 4(i) of the deeds of sale as akin to an implied warranty against eviction. First, the deeds of sale categorically state that the sellers assure that the properties sold were free from any encumbrances which may prevent Makro from fully and absolutely possessing the properties in question. Second, in order for the implied warranty against eviction to be enforceable, the following requisites must concur: (a) there must be a final judgment; (b) the purchaser has been deprived of the whole or part of the thing sold; (c) said deprivation was by virtue of a prior right to the sale made by the vendor; and (d) the vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee. Notably, there was no final judgment and no opportunity for the vendors to have been summoned as no judicial action was instituted.

The Regional Trial Court erred in ordering respondents to pay PHP 1,500,000 each to Makro. Under Sec. 2 of the deeds of sale, the purchase price shall be adjusted in case of increase or decrease in the land area at the rate of PHP 8,500 per square meter. Applying the formula set under the deeds of sale, Makro should be entitled to receive PHP 1,113,500 from Coco Charcoal and PHP 1,105,000 from Lim.

Exemplary damages and attorney’s fees may be awarded only for cause provided by law. It is settled that the fact that a party was compelled to litigate his cause does not necessarily warrant the award of attorney’s fees.

The general rule is that attorney’s fees cannot be rewarded as part of damages because of the policy that no premium should be placed on the right to litigate. Even when a claimant is compelled to litigate with third persons to incur expenses to protect his rights, still, attorney’s fees may not be awarded where no sufficient showing of bad faith could be reflected in a party’s persistence in a case other than an erroneous conviction of the righteousness of his cause.

Exemplary damages may be awarded if the defendant had acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

Bad faith involves a state of mind dominated by ill will or motive implying a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.

There being no showing that respondents had acted in bad faith in refusing Makro’s demand for refund, the damages and attorney’s fees awarded should be deleted.