December 2009 Philippine Supreme Court Decisions on Remedial Law

Here are selected December 2009 rulings of the Supreme Court of the Philippines on remedial law:

Civil Procedure

Appeal;  certiorari. The proper remedy of a party aggrieved by a decision of the Court of Appeals is a petition for review under Rule 45, which is not similar to a petition for certiorari under Rule 65 of the Rules of Court. As provided in Rule 45 of the Rules of Court, decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. On the other hand, a special civil action under Rule 65 is an independent action based on the specific grounds therein provided and, as a general rule, cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45.  Santiago Cua, Jr., et al. vs. Miguel Ocampo Tan, et al./Santiago Cua,  Sr., et al. vs. Court of Appeals, et  al.G.R. No. 181455-56/G.R. No. 182008, December 4, 2009.

Appeal; decision of RTC acting in exercise of its appellate jurisdiction. In the case at bar, it is clear that when the case was appealed to the RTC, the latter took cognizance of the case in the exercise of its appellate jurisdiction, not its original jurisdiction. Hence, any further appeal from the RTC Decision must conform to the provisions of the Rules of Court dealing with said matter. It is apparent that petitioner has availed itself of the wrong remedy. Since the RTC tried the case in the exercise of its appellate jurisdiction, petitioner should have filed a petition for review under Rule 42 of the Rules of Court, instead of an ordinary appeal under Rule 41. The law is clear in this respect. Barangay Sangalang, represented by its Chairman Dante C.  Marcellana vs. Barangay Maguihan, represented by its Chairman Arnulfo VillarezG.R. No. 159792, December 23, 2009.

Appeal;  failure to pay docket fees. The Order denying petitioner’s motion for reconsideration was silent as to the issue of the non-payment of docket fees; however, this Court deems that the RTC must have accepted the explanation given by respondent, otherwise, said court would have dismissed the appeal and reconsidered its decision. The failure to pay docket fees does not automatically result in the dismissal of an appeal, it being discretionary on the part of the appellate court to give it due course or not. This Court will then not interfere with matters addressed to the sound discretion of the RTC in the absence of proof that the exercise of such discretion was tainted with bias or prejudice, or made without due circumspection of the attendant circumstances of the case. Barangay Sangalang, represented by its Chairman Dante C.  Marcellana vs. Barangay Maguihan, represented by its Chairman Arnulfo VillarezG.R. No. 159792, December 23, 2009.

Appeal; findings of fact. As a rule, the findings of fact of the trial court when affirmed by the CA are final and conclusive on, and cannot be reviewed on appeal by, this Court as long as they are borne out by the records or are based on substantial evidence. The Court is not a trier of facts, its jurisdiction being limited to reviewing only errors of law that may have been committed by the lower courts. Republic of the Philippines vs. Ignacio Leonor and Catalino RazonG.R. No. 161424, December 23, 2009.

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How to choose a corporate name

Prior to the incorporation of a corporation, the incorporators need to choose the corporate name.  The incorporators may generally choose and use any name they see fit but there are limitations to the use of a corporate name.  The SEC has the power to disapprove the use of a proposed corporate name (see Corporation Code, sec. 18;  SEC Memorandum Circular No. 5, series of 2008, as amended).

Here are some basic guidelines:

1.    Do not choose a corporate name that is identical or deceptively or confusingly similar to that of any existing corporation, partnership, or registered sole proprietorship, or to any other name already protected by law, or one that is patently deceptive, confusing or contrary to existing laws.

The rational for the above guideline is clear – if any corporation can adopt at pleasure the name of another entity, the practice would cause confusion and unfair/fraudulent competition, open the door to fraud to the public, promote the evasion of legal obligation and duties, and result in difficulties in the administration and supervision of corporations.  (Corporation Code Annotated, p. 177 [2006])

In one case, the Supreme Court held that the name “Universal Mills Corporation” is confusingly and deceptively similar to “Universal Textile Mills, Inc.”, particularly where the former is engaged the manufacture, dyeing and selling of fabrics, which are activities that the latter is engaged in (see Universal Mills Corporation vs. Textile Millls, Inc., G.R. No. L-28351, July 28, 1977).  In another case, the Supreme Court held that “Industrial Refractories Corp. of the Phils.” is patently similar to “Refractories Corp of the Phils.”, especially considering that both cater to the same clientele (i.e., the steel industry). (see Industrial Refractories Corporation vs. Court of Appeals, 390 SCRA 252, 260 [2002]).

2.    Put words that identify the entity as a corporation.

The name of a corporation must end with the word “Inc.” or “Incorporated” or “Corp.” or “Corporation”.  On the other hand, partnerships use the word “Company” or “Co.” and if a limited partnership, the words “Limited” or “Ltd.”;  hence, names such as “ABC Power Company Limited”  or “X & Company Limited Partnership” indicate that the entity involved is a limited partnership.  The corporate name of a foundation must use the word “Foundation”.)

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How to form a corporation

One of the most common vehicles for conducting business is through a corporation.  The advantages of using a corporation in conducting business include the following:

1.      distinct personality – the corporation has legal capacity to act and contract in its own name as it deemed a “person” separate and distinct from its shareholders;

2.      limited liability – the shareholders cannot generally be held liable for the debts and liabilities of the corporation;

3.       continuity of existence – the corporation continues to exist notwithstanding the death or withdrawal of one of its shareholders;

4.       free transferability of shares – in general, shareholders can freely transfer their shares in the corporation (see Corporation Code of the Philippines Annotated, p. 52 [2006]).

A corporation cannot come into existence by mere agreement of the parties.  It is a creation of law;  its creation requires the consent of the State.  In the Philippines, the formation of a private corporation is governed by the Corporation Code and the consent of the State is given through the Securities and Exchange Commission (SEC).

The major steps involved in the formation of a corporation are:

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December 2009 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected December 2009 rulings of the Supreme Court of the Philippines on labor law and procedure:

Labor Law

Attorney’s fees;  actions for indemnity under employer liability laws. The claim for attorney’s fees is granted following Article 2208 of the New Civil Code which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer’s liability laws. The same fees are also recoverable when the defendant’s act or omission has compelled the plaintiff to incur expenses to protect his interest as in the present case following the refusal by the employer to settle the employee’s claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorney’s fees of ten percent (10%) of the monetary award. Leopoldo Abante vs. KJGS Fleet Management Manila and/or Guy Domingo A. Macapayag, Kristian Gerhard Jebsens Skipsrenderi A/S, G.R. No. 182430, December 4, 2009.

Compensability of death; requirements. To be entitled to compensation, a claimant must show that the sickness is either: (1) a result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation under the conditions Annex “A” sets forth; or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions.

Based on Francisco’s death certificate, the immediate cause of his death was cardiac arrest; the antecedent cause was acute massive hemorrhage, and the underlying cause was bleeding peptic ulcer disease.

In determining the compensability of an illness, the worker’s employment need not be the sole factor in the growth, development, or acceleration of a claimant’s illness to entitle him to the benefits provided for. It is enough that his employment contributed, even if only in a small degree, to the development of the disease.

P.D. 626 is a social legislation whose primordial purpose is to provide meaningful protection to the working class against the hazards of disability, illness, and other contingencies resulting in loss of income. In employee compensation, persons charged by law to carry out the Constitution’s social justice objectives should adopt a liberal attitude in deciding compensability claims and should not hesitate to grant compensability where a reasonable measure of work-connection can be inferred. Only this kind of interpretation can give meaning and substance to the law’s compassionate spirit as expressed in Article 4 of the Labor Code – that all doubts in the implementation and interpretation of the provisions of the Labor Code, including their implementing rules and regulations, should be resolved in favor of labor. Government Service Insurance System vs. Jean E. Raoet, G.R. No. 157038, December 23, 2009.

Compensable injury; requirement. Section 20(B) of the POEA Standard Employment Contract provides for the liabilities of the employer only when the seafarer suffers from a work-related injury or illness during the term of his employment.

Petitioner claims to have reported his illness to an officer once on board the vessel during the course of his employment. The records are bereft, however, of any documentary proof that he had indeed referred his illness to a nurse or doctor in order to avail of proper treatment. It thus becomes apparent that he was repatriated to the Philippines, not on account of any illness or injury, but in view of the completion of his contract.

But even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the company-designated doctor in accordance with the post-employment medical examination requirement under the above-quoted paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure to comply with this requirement which is a sine qua non bars the filing of a claim for disability benefits. Dionisio M. Musnit vs. Sea Star Shipping Corporation and Sea Star Shipping Corporation, Ltd., G.R. No. 182623, December 4, 2009.

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December 2009 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are selected December 2009 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Legal Ethics

Abuse of court processes and legal procedure; forum shopping  The successive filings of a petition for certiorari, petition for annulment of judgment, two petitions for annulment of the complainant’s certificate of title, and a petition for declaratory relief, all containing a prayer for injunctive relief, reveal the respondent’s persistence in preventing and avoiding the execution of the final decisions of the lower courts against his client.  Under the circumstances, the respondent lawyer’s repeated attempts go beyond the legitimate means allowed by professional ethical rules in defending the interests of his client.  These are already uncalled for measures to avoid the enforcement of the final judgment of the lower courts.  The respondent violated Rule 10.03, Canon 10 of the Code of Professional Responsibility.

The respondent also violated Rule 12.02 and Rule 12.04, Canon 12 of the Code of Professional Responsibility, as well as the rule against forum shopping, both of which are directed against the filing of multiple actions to attain the same objective.  Conrado Que v. Atty. Anastacio Revilla, Jr.A.C. No. 7054, December 4, 2009.

Gross negligence.  A lawyer, when he undertakes a client’s cause, makes a covenant that he will exert all efforts for its prosecution until its final conclusion.  He should undertake the task with dedication and care, and he should do no less, otherwise, he is not true to his lawyer’s oath.  Respondent was woefully remiss in his duty to display utmost diligence and competence in protecting the interests of his clients.  Petitioners lost the civil case in the trial court because they were barred from presenting their evidence as a result of their being declared in default as a consequence of respondent’s failure to submit a pre-trial brief and to attend the pre-trial conference.  Petitioners’ appeal to the Court of Appeals from the adverse default judgment of the trial court was dismissed on account of respondent’s failure to file an appeal brief.  Respondent is guilty of gross negligence and misconduct in violation of Canon 17, and Rules 18.02 and 18.03, Canon 18 of the Code of Professional Responsibility.  Cesar Talento and Modesta Herrera Talento v. Atty. Agustin Paneda, A.C. No. 7433, December 23, 2009.

Judicial ethics 

Bad faith defined; absence of proof.   Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of a sworn duty through some motive or intent or ill-will; it partakes of the nature of fraud.  It contemplates a state of mind affirmatively operating with furtive design or some motive or self-interest or ill-will for ulterior purposes.  Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage.  In issuing, ex parte, an order which was effectively a Temporary Restraining Order with an indefinite term, the respondent judge was found to have violated Rule 58, Section 5 of the Rules of Court.  However, the charge of bad faith and manifest partiality was rejected by the Supreme Court.  No evidence was adduced to prove that the issuance of the assailed order was motivated by bad faith.  Further, the Supreme Court found that in issuing the assailed order, respondent judge was not at all motivated by bad faith, dishonesty, hatred and some other motive; rather, he took into account the circumstances obtaining between the parties.   Mayor Hadji Amer R. Sampiano, et al. v. Judge Cader P. Indar,  A.M. RTJ-05-1953, December 21, 2009.

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December 2009 Philippine Supreme Court Decisions on Criminal Law and Procedure

Here are selected December 2009 rulings of the Supreme Court of the Philippines on criminal law and procedure:

Criminal Law

1.     Revised Penal Code

Rape; defense.  Accused’s reliance on the “sweetheart” theory to bolster his defense failed to inspire belief. This much-abused affirmative defense must be established with convincing evidence – by some documentary and/or other evidence like mementos, love letters, notes, pictures and the like. Considering that the sweetheart theory is effectively an admission of carnal knowledge of the victim and consequently places on the accused the burden of proving the supposed relationship by substantial evidence, it must be supported by documentary, testimonial and other defense to be worthy of judicial acceptance.  People of the Philippines vs. Ricardo Grande, G.R. No. 170476,  December 23, 2009.

Rape;  defense.  The Court rejected the accused’s claim that it was impossible for him to rape his daughter in a 3 x 4 meter house, in the presence of other people. The Court noted that the close physical proximity of other relatives at the scene of the rape does not negate the commission of the crime. Rape can be committed even in places where people congregate, in parks, along the roadside, within school premises, inside a house where there are other occupants, and even in the same room where other members of the family are also sleeping. It is not impossible or incredible for the members of the victim’s family to be in deep slumber and not to be awakened while a sexual assault is being committed. Lust is no respecter of time and place, and is not deterred by age nor relationship.   The People of the Philippines vs. Quirino Cabral y Valencia, G.R. No. 179946, December 23, 2009.

Rape;  elements.  In statutory rape, time is not an essential element except to prove that the victim was a minor below twelve years of age at the time of the commission of the offense. Given that the victim’s date of birth was established (on July 21, 1983), she was definitely below 12 years under the allegations of the information and on the basis of the evidence adduced.  The People of the Philippines vs. Romar Teodoro y Vallejo, G.R. No. 172372, December 4, 2009.

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December 2009 Philippine Supreme Court Decisions on Political Law

Here are selected December 2009 rulings of the Supreme Court of the Philippines on political law and related laws:

Constitutional Law

Bill of rights;  eminent domain.  Expropriation is not limited to the acquisition of real property with a corresponding transfer of title or possession. The right-of-way easement resulting in a restriction or limitation on property rights over the land traversed by transmission lines also falls within the ambit of the term expropriation.  National Power Corporation vs. Hon. Amer Ibrahim, etc., et al., G.R. No. 183297, December 23, 2009.

Bill of Rights; eminent domain. In computing for the value of the land subject to acquisition, the formula provided in DAO No. 6, Series of 1992, as amended, requires that figures pertaining to the Capitalized Net Income (CNI) and Market Value (MV) of the property be used as inputs in arriving at the correct land valuation. Thus, the applicable formula, as correctly used by the LBP in its valuation, is LV (Land Value) = (CNI x 0.9) + (MV x 0.1).

To arrive at the figure for the CNI of lands planted to a combination of crops, Item II B.5 of the said administrative order provides that the same should be computed based on the combination of actual crops produced on the covered land.  Land Bank of the Philippines vs. Kumassie Plantation Company Incorporated/Kumassie Plantation Company Incorporated vs. Land Bank of the Philippines, et al.  G.R. No. 177404/G.R. No. 178097. December 4, 2009.

Bill of rights; eminent domain; interest. The taking of property under CARL is an exercise by the State of the power of eminent domain. A basic limitation on the State’s power of eminent domain is the constitutional directive that private property shall not be taken for public use without just compensation. Just compensation refers to the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair value of the property as between one who receives and one who desires to sell. It is fixed at the time of the actual taking by the State. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value, to be computed from the time the property is taken up to the time when compensation is actually paid or deposited with the court.  National Power Corporation vs. Hon. Amer Ibrahim, etc., et al., G.R. No. 183297, December 23, 2009.

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