June 2014 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are select June 2014 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Attorney; Disbarment; Effect of withdrawal. A disbarment case was filed by Quiachon against her lawyer Atty. Ramos who represented her in a labor case before NLRC and a special proceeding case before the RTC. During the pendency of the proceedings, complainant withdrew the disbarment case. The Supreme Court held that the withdrawal of a disbarment case against a lawyer does not terminate or abate the jurisdiction of the IBP and of this Court to continue an administrative proceeding against a lawyer-respondent as a member of the Philippine Bar. The complainant in a disbarment case is not a direct party to the case, but a witness who brought the matter to the attention of the Court. In this case, Atty. Ramos violated Canon Rules 18.03 and 18.04 of the Code of Professional Responsibility. Thus, the appropriate penalty should be imposed despite the desistance of complainant or the withdrawal of the charges. Adelia V. Quiachon v. Atty. Joseph Ador A. Ramos, A.C. No. 9317, June 4, 2014.

Attorney; Quantum of proof in administrative cases. An administrative complaint for dishonesty was filed against Atty. Molina for having advised his clients to enforce a contract on complainant’s client who was never a party to the agreement. The Supreme Court in dismissing the complaint held that when it comes to administrative cases against lawyers, two things are to be considered: quantum of proof, which requires clearly preponderant evidence; and burden of proof, which is on the complainant. Here, the complaint was without factual basis. The allegation of giving legal advice was not substantiated in this case, either in the complaint or in the corresponding hearings. Bare allegations are not proof. Even if Atty. Molina did provide his clients legal advice, he still cannot be held administratively liable without any showing that his act was attended with bad faith or malice. The default rule is presumption of good faith. Atty. Alan F. Paguia v. Atty. Manuel T. Molina, A.C. No. 9881, June 4, 2014.

Court personnel; Dishonesty. Ampong was dismissed from the Civil Service Commission for dishonesty, however, remained employed in the RTC. The Supreme Court has already held in its August 26, 2008 Decision that Ampong was administratively liable for dishonesty in impersonating and taking the November 1991 Civil Service Eligibility Examination for Teachers on behalf of one Decir. Under section 58(a) of the Uniform Rules on Administrative Cases in the Civil Service (URACCS), the penalty of dismissal carries with it the following administrative disabilities: (a) cancellation of civil service eligibility; (b) forfeiture of retirement benefits; and (c) perpetual disqualification from re-employment in any government agency or instrumentality, including any government-owned and controlled corporation or government financial institution. Ampong should be made to similarly suffer the same. Every employee of the Judiciary should be an example of integrity, uprightness, and honesty. Court personnel are enjoined to adhere to the exacting standards of morality and decency in their professional and private conduct in order to preserve the good name and integrity of the courts of justice. Here, Ampong failed to meet these stringent standards set for a judicial employee and does not, therefore, deserve to remain with the Judiciary. Office of the Court Administrator v. Sarah P. Ampong, etc., A.M. No. P-13-3132, June 4, 2014.

April 2014 Philippine Supreme Court Decisions on Commercial Law

Here are select April 2014 rulings of the Supreme Court of the Philippines on commercial law:

Corporate officers; liability. On  the  issue  of  the  solidary  obligation  of  the  corporate officers impleaded vis-à-vis the corporation for Mapua’s illegal dismissal, “[i]t is hornbook principle that personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of the corporation,  or  when  they  are  guilty  of  bad  faith  or  gross  negligence  in directing  its  affairs,  or  when  there  is  a  conflict  of  interest resulting  in damages  to  the  corporation,  its  stockholders  or  other  persons; (b)  they consent to the issuance of watered down stocks or when, having knowledge of  such  issuance,  do  not  forthwith  file  with  the  corporate  secretary  their written objection; (c) they agree to hold themselves personally and solidarily liable with the corporation; or (d) they are made by specific provision of law personally answerable fortheir corporate action.SPI Technologies, Inc., et al. v. Victoria K. Mapua,G.R. No. 199022, April 7, 2014.

Corporate officers; liability. A corporation has a personality separate and distinct from its officers and board of directors who may only be held personally liable for damages if it is proven that they acted with malice or bad faith in the dismissal of an employee. Absent any evidence on record that petitioner Bautista acted maliciously or in bad faith in effecting the termination of respondent, plus the apparent lack of allegation in the pleadings of respondent that petitioner Bautistaacted in such manner, the doctrine of corporate fiction dictates that only petitioner corporation should be held liable for the illegal dismissal of respondent. Mirant (Philippines) Corporation, et al. v. Joselito A. Caro,G.R. No. 181490, April 23, 2014.

Corporations; merger; concept. Merger is a re-organization of two or more corporations that results in their consolidating into a single corpor ation, which is one of the constituent corporations, one disappearing or dissolving and the other surviving.  To put it another way, merger is the absorption of one or more corporations by another existing corporation, which retains its identity and takes over the rights, privileges, franchises, properties, claims, liabilities and obligations of the absorbed corporation(s).  The absorbing corporation continues its existence while the life or lives of the other corporation(s) is or are terminated. Bank of Commerce v. Radio Philippines Network, Inc., et al.,G.R. No. 195615, April 21, 2014.

March 2014 Philippine Supreme Court Decisions on Tax Law

Here are select March 2014 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; value-added tax; zero-rated or effectively zero-rated sales; unutilized input value-added tax; claims for tax credit or refund; period to file appeal with the Court of Tax Appeals. Section 112 (D) of the National Internal Revenue Code provides the Commissioner of Internal Revenue a 120-day period from submission of complete documents in support of the administrative claim within which to act on claims for refund/applications for issuance of the tax credit certificate. Upon denial of the claim or application, or upon expiration of the 120-day period, the taxpayer only has 30 days within which to appeal said adverse decision or unacted claim before the CTA, otherwise, said judicial claim shall be considered as filed out of time. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

National Internal Revenue Code; value-added tax; unutilized input VAT; claims for tax credit or refund; prescriptive periods.  (1) An administrative claim must be filed with the Commissioner of Internal Revenue (CIR) within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. (2) The  CIR  has  120  days  from  the  date  of  submission  of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate.  The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period.  If the 120-day period expires without any decision from the CIR, then the administrative claim may be considered to be denied by inaction. (3) A judicial claim must be filed with the Court of Tax Appeals (CTA) within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR. (4) All taxpayers can rely on Bureau of Internal Revenue Ruling No. DA-489-03 from the time of its issuance on December 10, 2003 up to its reversal by the Court in the Aichi case on October 6, 2010, as an exception to the mandatory and jurisdictional 120+30 day periods. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

March 2014 Philippine Supreme Court Decisions on Criminal law and Procedure

Here are select March 2014 rulings of the Supreme Court of the Philippines on criminal law and procedure:

1. REVISED PENAL CODE

Conspiracy; liability of conspirators. Assuming that the prosecution witnesses failed to identify exactly who inflicted the fatal wounds on Joey during the commotion, Erwin’s liability is not diminished since he and the others with him acted with concert in beating up and ultimately killing Joey. Conspiracy makes all the assailants equally liable as co-principals by direct participation. Since about 15 men, including accused Erwin, pounced on their one helpless victim, relentlessly bludgeoned him on the head, and stabbed him on the stomach until he was dead, there is no question that the accused took advantage of their superior strength. The Supreme Court thus affirmed the decision of the lower courts finding accused Erwin guilty of murder. People of the Philippines v. Erwin Tamayo y Bautisa, G.R. No. 196960, March 12, 2014.

Rape; rape victim with a mental disability either deprived of reason or demented. Article 266-A, paragraph 1 of the Revised Penal Code, as amended, provides for two circumstances when having carnal knowledge of a woman with a mental disability is considered rape, to wit: paragraph 1(b) – when the offended party is deprived of reason; and paragraph 1(d) – when the offended party is demented. Under paragraph 1(d), the term demented refers to a person who has dementia, which is a condition of deteriorated mentality, characterized by marked decline from the individual’s former intellectual level and often by emotional apathy, madness, or insanity. On the other hand, under paragraph 1(b), the phrase deprived of reason has been interpreted to include those suffering from mental abnormality, deficiency, or retardation. People of the Philippines v. Ernesto Ventura Sr., G.R. No. 205230, March 12, 2014.

March 2014 Philippine Supreme Court Decisions on Commercial Law

Here are select March 2104 rulings of the Supreme Court of the Philippines on commercial law:

Corporations; piercing the corporate veil. It has  long  been  settled  that  the  law  vests  a  corporation  with a personality distinct and separate from its stockholders or members.  In the same vein, a corporation, by legal fiction and convenience, is an entity shielded by a protective mantle and imbued by law with a character alien to the  persons  comprising  it.  Nonetheless,  the  shield  is  not  at  all  times impenetrable and cannot be extended to a point beyond its reason and policy.  Circumstances  might  deny  a  claim  for  corporate  personality,  under  the “doctrine of piercing the veil of corporate fiction.”

Piercing the  veil  of  corporate  fiction  is  an  equitable  doctrine developed to address situations where the separate corporate personality of a corporation is abused or used for wrongful purposes. Under the doctrine, the corporate existence may be disregarded where the entity is formed or used for non-legitimate purposes, such as to evade a just and due obligation, or to justify a wrong, to shield or perpetrate fraud or to carry out similar or inequitable considerations, other unjustifiable aims or intentions, in which case, the fiction will be disregarded and the individuals composing it and the two corporations will be treated as identical.

In the present case, we see an indubitable link between CBB’s closure and Binswanger’s incorporation. CBB ceased to exist only in name; it re-emerged in the person of Binswanger for an urgent purpose — to avoid payment by CBB of the last two installments of its monetary obligation to Livesey, as well as its other financial liabilities.  Freed of CBB’s  liabilities,  especially  that  owing  to  Livesey,  Binswanger can continue, as it did continue, CBB’s real estate brokerage business. Eric Godfrey Stanley Livesey v. Binswanger Philippines, Inc. and Keith Elliot, G.R. No. 177493, March 19, 2014.

March 2014 Philippine Supreme Court Decisions on Civil Law

Here are select March 2014 rulings of the Supreme Court of the Philippines on civil law:

CIVIL CODE

Action for quieting of title; trial court had no jurisdiction to determine who among the parties have better right over the disputed property which is admittedly still part of the public domain. Having established that the disputed property is public land, the trial court was therefore correct in dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to determine who among the parties have better right over the disputed property which is admittedly still part of the public domain. As held in Dajunos v. Tandayag (G.R. Nos. L-32651-52, 31 August 1971, 40 SCRA 449):

x x x The Tarucs’ action was for “quieting of title” and necessitated determination of the respective rights of the litigants, both claimants to a free patent title, over a piece of property, admittedly public land. The law, administration, disposition and alienation of public lands with the Director of Lands subject, of course, to the control of the Secretary of Agriculture and Natural Resources.

In sum, the decision rendered in Civil Case No. 1218 on October 28, 1968 is a patent nullity. The lower court did not have power to determine who (the Firmalos or the Tarucs) were entitled to an award of free patent title over that piece of property that yet belonged to the public domain. Neither did it have power to adjudge the Tarucs as entitled to the “true equitable ownership” thereof, the latter’s effect being the same: the exclusion of the Firmalos in favor of the Tarucs. Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19, 2014.

Action for quieting of title. In an action for quieting of title, the complainant is seeking for “an adjudication that a claim of title or interest in property adverse to the claimant is invalid, to free him from the danger of hostile claim, and to remove a cloud upon or quiet title to land where stale or unenforceable claims or demands exist.” Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19, 2014.