June 2013 Philippine Supreme Court Decisions on Legal and Judicial Ethics

Here are select June 2013 rulings of the Supreme Court of the Philippines on legal and judicial ethics:

Attorney; the failure to file a brief resulting in the dismissal of an appeal constitutes inexcusable negligence. In Dalisay Capili v. Atty. Alfredo L. Bentulan, the Court held that the failure to file a brief resulting in the dismissal of an appeal constitutes inexcusable negligence.  In this case, the Court cannot accept as an excuse the alleged lapse committed by his client in failing to provide him a copy of the case records.

In the first place, securing a copy of the case records was within Atty. San Juan’s control and is a task that the lawyer undertakes.

Second, Atty. San Juan, unlike his client, knows or should have known, that filing an appellant’s brief within the reglementary period is critical in the perfection of an appeal. The preparation and the filing of the appellant’s brief are matters of procedure that fully fell within the exclusive control and responsibility of Atty. San Juan. It was incumbent upon him to execute all acts and procedures necessary and incidental to the perfection of his client’s appeal.

Third, Atty. San Juan lacked candor in dealing with his client. He omitted to inform Tomas of the progress of his appeal with the Court of Appeals. Worse, he did not disclose to Tomas the real reason for the Court of Appeal’s dismissal of the appeal. Neither did Atty. San Juan file a motion for reconsideration, or otherwise resort to available legal remedies that might have protected his client’s interest.

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Dissension in the Court: June 2013

By a vote of seven justices, with three inhibiting, one absent, and four dissenting, the Supreme Court – in a decision penned by J. Perez and promulgated last June 25, 2013 – dismissed this petition for certiorari assailing the earlier Resolutions of public respondent COMELEC which ordered the cancellation of petitioner’s Certificate of Candidacy (CoC) for the position of Representative of the lone district of Marinduque.

This case stemmed from a petition to deny due course or to cancel petitioner Reyes’s CoC filed on October 2012 by private respondent Tan with the COMELEC alleging that Reyes misrepresented in her CoC that (a) she is single and a resident of Marinduque, when she is married to Rep. Mandanas of Bauan, Batangas and a resident of that town (and also of Quezon City as admitted in the Directory of Congressional Spouses of the House of Representatives), and (b) she is a Filipino citizen and not a permanent resident of another country, when she is an American citizen and a permanent resident of the United States.

In her answer, Reyes averred that (a) she is not legally married to Rep. Mandanas, thus his residence cannot be attributed to her, and (b) the evidence presented by Tan does not support the allegation that she is a permanent resident or citizen of the United States.

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June 2013 Philippine Supreme Court Decisions on Civil Law

Here are select June 2013 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Contract; contract of carriage; definition; common carrier; definition; breach of contract of carriage; entitlement to damages; contract of services; standard of care required; damages; when recoverable; quasi-delict; solidary liability of joint tortfeasors. A contract of carriage is defined as one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price. On its face, the airplane ticket is a valid written contract of carriage. This Court has held that when an airline issues a ticket to a passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and the passenger has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carriage.

Under Article 1732 of the Civil Code, this “persons, corporations, firms, or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public” is called a common carrier.

In contrast, the contractual relation between Sampaguita Travel and respondents is a contract for services. … Since the contract between the parties is an ordinary one or services, the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. The test to determine whether negligence attended the performance of an obligation is: did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence.

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Modernizing the Bureau of Corrections for the Benefit of Inmates

After a long wait, modernization of the Bureau of Corrections (BuCor) will soon be under way.  Now, there is hope that the rights and general welfare of inmates will be better protected.

President Aquino has recently signed RA 10575 or “The Bureau of Corrections Act of 2013,” last May 24, 2013. This law seeks to promote the general welfare and safeguard the basic rights of every prisoner incarcerated in our national penitentiary. It also recognizes the responsibility of the State to strengthen government capability aimed towards the institutionalization of highly efficient and competent correctional services.


The Bureau of Corrections is an agency of the Department of Justice tasked with the rehabilitation and reformation of prisoners.

“Bureau of Prisons” was the old name of this agency before the Administrative Code of 1987 and Proclamation No. 495, issued on November 22, 1989, changed the agency’s name to the current “Bureau of Corrections.”

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June 2013 Philippine Supreme Court Decisions on Tax Law

Here are select June 2013 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; Certificate of Tax Clearance under Section 52(C); liquidation under the New Central Bank Act. A tax clearance is not a prerequisite to the approval of the project of distribution of the assets of a bank under liquidation by the Philippine Deposit Insurance Corporation (PDIC) for the following reasons:

(1)   Section 52(C) of the National Internal Revenue Code of 1997 pertains only to a regulation of the relationship between the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR) with respect to corporations contemplating dissolution or reorganization. On the other hand, banks under liquidation by the PDIC as ordered by the Monetary Board constitute a special case governed by the special rules and procedures provided under Section 30 of the New Central Bank Act, which does not require that a tax clearance be secured from the BIR.

(2)   Only a final tax return is required to satisfy the interest of the BIR in the liquidation of a closed bank, which is the determination of the tax liabilities of a bank under liquidation by the PDIC. In view of the timeline of the liquidation proceedings under Section 30 of the New Central Bank Act, it is unreasonable for the liquidation court to require that a tax clearance be first secured as a condition for the approval of project of distribution of a bank under liquidation.

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June 2013 Philippine Supreme Court Decisions on Commercial Law

Here are select June 2013 rulings of the Supreme Court of the Philippines on commercial law:

Corporation; derivative suit. A derivative suit is an action brought by a stockholder on behalf  of  the  corporation  to  enforce  corporate  rights  against  the corporation’s directors, officers or other insiders. Under Sections 23 and 36 of the Corporation Code, the directors or officers, as provided under the by-laws, have the right to decide whether or not a corporation should sue. Since these directors or officers will never be willing to sue themselves, or impugn their wrongful or fraudulent decisions, stockholders are permitted by law to bring an action in the name of the corporation to hold these directors and officers accountable. In derivative suits, the real party in interest is the corporation, while the stockholder is a mere nominal party.  Juanito Ang, for and in behalf of Sunrise Marketing (Bacolod), Inc. v. Sps. Roberto and Rachel Ang, G.R. No. 201675, June 19, 2013.

Corporation; shares of stock. In a sale of shares of stock, physical delivery of a stock certificate is one of the essential requisites for the transfer of ownership of the stocks purchased.

Here, FEGDI clearly failed to deliver the stock certificates, representing the shares of stock purchased by Vertex, within  a reasonable time from the point the shares should have been delivered.  This was a substantial breach of their contract that entitles Vertex the right to rescind the sale under Article 1191 of the Civil Code.  It is not entirely  correct to say that a sale had already been consummated as Vertex already  enjoyed the rights a shareholder can exercise.  The enjoyment of these rights cannot suffice where the law, by its express terms, requires a specific form to transfer ownership.  Fil-Estate Gold and Development, Inc., et al. v. Vertex Sales and Trading, Inc., G.R. No. 202079, June 10, 2013.

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