December 2011 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are selected December 2011 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Affidavit of Desistance; no effect on disciplinary proceeding.  It bears to stress that a case of suspension or disbarment is sui generis and not meant to grant relief to a complainant in a civil case but is intended to cleanse the ranks of the legal profession or its undesirable members in order to protect the public and the courts.  It is not an investigation into the acts of respondent as a husband but on his conduct as an officer of the Court and his fitness to continue as a member of the Bar.  Hence, the Affidavit dated March 15, 1995, which is akin to an affidavit of desistance, cannot have the effect of abating the instant proceedings. Elpidio P. Tiong vs. Atty. George M. Florendo. A.C. No. 4428. December 12, 2011

Attorney; gross immorality. Possession of good moral character is not only a condition for admission to the Bar but is a continuing requirement to maintain one’s good standing in the legal profession. It is the bounden duty of law practitioners to observe the highest degree of morality in order to safeguard the integrity of the Bar. Consequently, any errant behavior on the part of a lawyer, be it in his public or private activities, which tends to show him deficient in moral character, honesty, probity or good demeanor, is sufficient to warrant his suspension or disbarment. Respondent’s act of having an affair with his client’s wife manifested his disrespect for the laws on the sanctity of marriage and his own marital vow of fidelity. It showed his utmost moral depravity and low regard for his profession. He also violated the trust and confidence reposed on him by the complainant, which in itself is prohibited under Canon 17 of the Code of Professional Responsibility.  Elpidio P. Tiong vs. Atty. George M. Florendo. A.C. No. 4428. December 12, 2011

December 2011 Philippine Supreme Court Decisions on Criminal Law and Procedure

Here are selected December 2011 rulings of the Supreme Court of the Philippines on criminal law and procedure:

1.         REVISED PENAL CODE

Aggravating circumstances; treachery. There is treachery when the offender commits any of the crimes against the person, employing means, methods or forms in the execution thereof which tend directly and specially to insure its execution, without risk to himself arising from any defense which the offended party might make. Two conditions must concur for treachery to be appreciated.  First, is the employment of means of execution that gives the person attacked no opportunity to defend himself or to retaliate.  Second, the means of execution was deliberate or consciously adopted. People of the Philippines v. Florencio Agacer, et al, G.R. No. 177751, December 14, 2011.

Aggravating circumstances; treachery.  The essence of treachery is the sudden attack by an aggressor without the slightest provocation on the part of the victim, depriving the latter of any real chance to defend himself, thereby ensuring the commission of the crime without risk to the aggressor. On appeal, the Supreme Court debunked appellants’ contention that the trial and appellate courts erred in ruling that treachery qualified the killing of Cesario to murder since the attack on Cesario was frontal, therefore no element of surprise on the victim or suddenness of the assault that characterizes treachery. In this case, treachery is evident. From the facts, Cesario could not have been aware that he would be surrounded, attacked and killed by the appellants who were all related to him.  He could not have also been aware that Eddie had a shotgun concealed in a sack because if he was, he would not have casually approached Florencio when the latter summoned him.  Unfortunately, while Cesario was advancing towards Florencio, Eddie shot him at close range without any warning whatsoever.  Evidently, the crime was committed in a manner that there was no opportunity for Cesario to defend himself.  Also, the mode of attack did not spring from the unexpected turn of events but was clearly thought of by the appellants.  Hence, it no longer matters that the assault was frontal since its swiftness and unexpectedness deprived Cesario of a chance to repel it or offer any resistance in defense of his person. People of the Philippines v. Florencio Agacer, et al, G.R. No. 177751, December 14, 2011.

December 2011 Philippine Supreme Court Decisions on Commercial Law

Here are selected December 2011 rulings of the Supreme Court of the Philippines on commercial law:

Corporation; contracts before incorporation. With respect to petitioners’ contention that the Management Contract executed between respondent and petitioner Lucila has no binding effect on petitioner corporation for having been executed way before its incorporation, this Court finds the same meritorious.

Logically, there is no corporation to speak of prior to an entity’s incorporation.  And no contract entered into before incorporation can bind the corporation.  March II Marketing, Inc. and Lucila V. Joson vs. Alfredo M. Joson, G.R. No. 171993, December 12, 2011.

Corporation; corporate officers. In the context of Presidential Decree No. 902-A, corporate officers are those officers of a corporation who are given that character either by the Corporation Code or by the corporation’s by-laws.  Section 25 of the Corporation Code specifically enumerated who are these corporate officers, to wit: (1) president; (2) secretary; (3) treasurer; and (4) such other officers as may be provided for in the by-laws.

With the given circumstances and in conformity with Matling Industrial and Commercial Corporation v. Coros, this Court rules that respondent was not a corporate officer of petitioner corporation because his position as General Manager was not specifically mentioned in the roster of corporate officers in its corporate by-laws.  The enabling clause in petitioner corporation’s by-laws empowering its Board of Directors to create additional officers, i.e., General Manager, and the alleged subsequent passage of a board resolution to that effect cannot make such position a corporate office.  Matling clearly enunciated that the board of directors has no power to create other corporate offices without first amending the corporate by-laws so as to include therein the newly created corporate office.  Though the board of directors may create appointive positions other than the positions of corporate officers, the persons occupying such positions cannot be viewed as corporate officers under Section 25 of the Corporation Code.  In view thereof, this Court holds that unless and until petitioner corporation’s by-laws is amended for the inclusion of General Manager in the list of its corporate officers, such position cannot be considered as a corporate office within the realm of Section 25 of the Corporation Code.  March II Marketing, Inc. and Lucila V. Joson vs. Alfredo M. Joson, G.R. No. 171993, December 12, 2011.

(Hector thanks Mary Caroline A. Tan for her assistance to Lexoterica.)

November 2011 Philippine Supreme Court Decisions on Political Law

Here are selected November 2011 rulings of the Supreme Court of the Philippines on political law.

Constitutional Law

Agrarian reform; control over agricultural lands.  Upon review of the facts and circumstances, the Court concluded that the farm worker beneficiaries (FWBs) will never have control over the agricultural lands as long as they remain as stockholders of HLI.  Since control over agricultural lands must always be in the hands of the farmers, the Court reconsidered its earlier ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control given the present proportion of shareholdings in HLI.  A revisit of HLI’s Proposal for Stock Distribution under CARP and the Stock Distribution Option Agreement upon which the proposal was based reveals that the total assets of HLI is PhP590,554,220, while the value of the 4,915.7466 hectares is PhP196,630,000.  Consequently, the share of the farmer-beneficiaries in the HLI capital stock is 33.296% (196,630,000 divided by 590,554.220); 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the 118,391,976.85 HLI shares unanimously vote to remain as HLI stockholders, which is unlikely, control will never be placed in the hands of the farmer-beneficiaries.  Control, of course, means the majority of 50% plus at least one share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 divided by 2 plus one HLI share).  The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control of HLI.  Hence, control can never be attained by the FWBs.  There is even no assurance that 100% of the 118,391,976.85 shares issued to the FWBs will all be voted in favor of staying in HLI, taking into account the previous referendum among the farmers where said shares were not voted unanimously in favor of retaining the SDP.  In light of the foregoing consideration, the option to remain in HLI granted to the individual FWBs will have to be recalled and revoked.  Moreover, bearing in mind that with the revocation of the approval of the SDP, HLI will no longer be operating under SDP and will only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as ordinary stockholders and will no longer be under the protective mantle of RA 6657.  Hacienda Luisita Incorporated vs. Presidential Agrarian Reform Council, et al., G.R. No. 171101. November 22, 2011.

November 2011 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are selected November 2011 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Attorney; aiding illegal practice of law.  It has been established that Dela Rosa who is not a member of the Bar misrepresented herself as respondent’s collaborating counsel.  There was also sufficient evidence to prove that respondent allowed Dela Rosa to illegally practice law, appear in court, and give legal assistance to respondent’s client.  This is in violation of Canon 9 of the Code of Professional Responsibility which states that “[a] lawyer shall not, directly or indirectly, assist in the unauthorized practice of law.”  The term “practice of law” implies customarily or habitually holding oneself out to the public as a lawyer for compensation as a source of livelihood or in consideration of his services.  Holding one’s self out as a lawyer may be shown by acts indicative of that purpose, such as identifying oneself as attorney, appearing in court in representation of a client, or associating oneself as a partner of a law office for the general practice of law.  Atty. Edita Noe-Lacsamana v. Atty. Yolando F. Busmente.  A.C. No. 7269.  November 23, 2011.

Attorney; competence and diligence required.  Respondent attorneys were engaged to represent complainant and his son in in a civil case for forcible entry and damages.  However, respondents failed to file an answer within the 10-day period required by the summons and the Rules of Court.  Respondents claimed that, to their mind, the civil case was actually for possession, notwithstanding that its title is for forcible entry, and that they mistakenly assumed that the court would first issue an order stating that the case falls under the rules on summary procedure before requiring their clients to answer. They further claimed that  when no such order was issued by the court, they again incorrectly assumed that the regular rules of procedure will apply and that they have fifteen days to answer.  All these, without seeking a clarification from the court or ascertaining exactly when the answer should be filed and despite the summons issued and served stating a ten day period to file an answer.  The Supreme Court did not find respondents’ defenses acceptable as it betrayed a lack of necessary competence and diligence.  The respondents had in fact been negligent, or worse, had failed to exercise the required competence and diligence in filing the answer to the complaint.    Pursuant to Rule 18.03 of the Code of Professional Responsibility, a lawyer is expected to be acquainted with the rudiments of law and legal procedure, and a client who deals with him has the right to expect not just a good amount of professional learning and competence but also a whole-hearted fealty to the client’s cause.  Rogelio F. Estavillo v. Attys. Gemmo G. Guillermo and Erme S. Labayog.  A.C. No. 6899. November 16, 2011.

November 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected November 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Award of attorney’s fees; concepts.  There are two commonly accepted concepts of attorney’s fees – the ordinary and extraordinary.  In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be assessed.  In its extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party.  This is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the award shall accrue to the lawyer as additional or part of his compensation.  Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of attorney’s fees.  Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages.  Thus the SC concluded that the CA erred in ruling that a finding of the employer’s malice or bad faith in withholding wages must precede an award of attorney’s fees under Article 111 of the Labor Code.  To reiterate, a plain showing that the lawful wages were not paid without justification is sufficient.  Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc., G.R. No. 174179. November 16, 2011.

Award of attorney’s fees; Article 111.  One of the issues of this case involved the effect of the Memorandum of Agreement provision that attorney’s fees shall be deducted from the amelioration allowance (AA) and CBA receivables.  In this regard, the CA held that the additional grant of 10% attorney’s fees by the NLRC violates Article 111 of the Labor Code, considering that the MOA between the parties already ensured the payment of 10% attorney’s fees deductible from the AA and CBA receivables of the Union’s members.  In the present case, the Union bound itself to pay 10% attorney’s fees to its counsel under the MOA and also gave up the attorney’s fees awarded to the Union’s members in favor of their counsel.  The award by the NLRC cannot be taken to mean an additional grant of attorney’s fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal obligation than the one contracted under the MOA.  Simply stated, the attorney’s fees contracted under the MOA do not refer to the amount of attorney’s fees awarded by the NLRC; the MOA provision on attorney’s fees does not have any bearing at all to the attorney’s fees awarded by the NLRC under Article 111 of the Labor Code.  Based on these considerations, it is clear that the CA erred in ruling that the LA’s award of attorney’s fees violated the maximum limit of ten percent (10%) fixed by Article 111 of the Labor Code.  Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc., G.R. No. 174179. November 16, 2011.