January 2014 Philippine Supreme Court Rulings on Remedial Law

Here are select January 2014 rulings of the Supreme Court of the Philippines on remedial law:

Civil Procedure

Action to annul judgment or final order; jurisdiction. In 1981, the Legislature enacted Batas Pambansa Blg.129 (Judiciary Reorganization Act of 1980). Among several innovations of this legislative enactment was the formal establishment of the annulment of a judgment or final order as an action independent from the generic classification of litigations in which the subject matter was not capable of pecuniary estimation, and expressly vested the exclusive original jurisdiction over such action in the CA. The action in which the subject of the litigation was incapable of pecuniary estimation continued to be under the exclusive original jurisdiction of the RTC, which replaced the CFI as the court of general jurisdiction. Since then, the RTC no longer had jurisdiction over an action to annul the judgment of the RTC, eliminating all concerns about judicial stability. To implement this change, the Court introduced a new  procedure to govern the action to annul the judgment of the RTC in the 1997 revision of the Rules of Court under Rule 47, directing in Section 2 thereof that “[t]he annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.” Pinausukan Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of the Philippine Islands, et al., G.R. No. 159926, January 20, 2014.

Action to annul judgment or final order; lack of jurisdiction; types. Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner. The former is a matter of substantive law because statutory law defines the jurisdiction of the courts over the subject matter or nature of the action. The latter is a matter of procedural law, for it involves the service of summons or other process on the petitioner. A judgment or final order issued by the trial court without jurisdiction over the subject matter or nature of the action is always void, and, in the words of Justice Street in Banco Español-Filipino v. Palanca (37 Phil 949 [1918]), “in this sense it may be said to be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.” But the defect of lack of jurisdiction over the person, being a matter of procedural law, may be waived by the party concerned either expressly or impliedly. Pinausukan Seafood House-Roxas Blvd., Inc. v. Far East Bank and Trust Cp., now Bank of the Philippine Islands, et al., G.R. No. 159926, January 20, 2014.

January 2014 Philippine Supreme Court Rulings on Political Law

Here are select January 2014 rulings of the Supreme Court of the Philippines on political law:

Absence of motion of reconsideration; effect of. The omission of the filing of a motion for reconsideration poses no obstacle for the Court’s review of its ruling on the whole case since a serious constitutional question has been raised and is one of the underlying bases for the validity or invalidity of the presidential action. If the President does not have any constitutional authority to discipline a Deputy Ombudsman and/or a Special Prosecutor in the first place, then any ruling on the legal correctness of the OP’s decision on the merits will be an empty one. In other words, since the validity of the OP’s decision on the merits of the dismissal is inextricably anchored on the final and correct ruling on the constitutional issue, the whole case – including the constitutional issue – remains alive for the Court’s consideration on motion for reconsideration. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.

Congress; power to determine modes of removal from office of public officers; must be consistent with the core constitutional principle of independence of the Office of the Ombudsman. The intent of the framers of the Constitution in providing that “all other public officers and employees may be removed from office as provided by law, but not by impeachment” in the second sentence of Section 2, Article XI is to prevent Congress from extending the more stringent rule of “removal only by impeachment” to favoured public officers. Contrary to the implied view of the minority, in no way can this provision be regarded as blanket authority for Congress to provide for any ground of removal it deems fit. While the manner and cause of removal are left to congressional determination, this must still be consistent with constitutional guarantees and principles, namely: the right to procedural and substantive due process; the constitutional guarantee of security of tenure; the principle of separation of powers; and the principle of checks and balances. The authority granted by the Constitution to Congress to provide for the manner and cause of removal of all other public officers and employees does not mean that Congress can ignore the basic principles and precepts established by the       Constitution. Emilio A. Gonzales III v. Office of the President, etc., et al./Wendell Bareras-Sulit v. Atty. Paquito N. Ochoa, Jr., et al., G.R. No. 196231/G.R. No. 196232, January 28, 2014.

December 2013 Philippine Supreme Court Decisions on Tax Law

National Internal Revenue Code; value-added tax; claim for input value-added tax refund; prescriptive period. Taxpayer filed its monthly and quarterly value-added tax (VAT) returns for the period beginning January 1, 2003 and ending on June 30, 2003. On August 9, 2004, it filed a claim for refund for its unutilized input VAT attributable to its zero-rated sales. Due to the failure of the Commissioner of Internal Revenue (CIR) to act on the claim, the taxpayer filed a petition for review with the Court of Tax Appeals (CTA) on May 5, 2005. The CIR argued that the period within which to file the petition for review had prescribed based on Section 112(D) (now 112 (C)) of the National Internal Revenue Code (NIRC). The taxpayer, on the other hand, argued that the period had not yet prescribed based on Section 229 of the NIRC.The Court ruled that Section 112(D) (now 112 (C)) of the NIRC is the applicable provision. Section 229 applies only to erroneously or excessively collected taxes and input VAT is not an erroneously or excessively collected tax.  Therefore, Section 112(D) (now 112 (C))  prevails. In accordance with the case of  Commissioner of Internal Revenue vs. San Roque Power Corporation, the taxpayer’s judicial claim for refund must be denied for having been filed late. Although taxpayer filed its administrative claim with the Bureau of Internal Revenue before the expiration of the two-year period in Section 112 (A) of the NIRC, it failed to comply with the 120 + 30 day period in Section 112 (D) (now 112 (C)) which requires that upon the inaction of the CIR for 120 days after the submission of the documents in support of the claim, the taxpayer has to file its judicial claim within 30 days from the lapse of the said period. In this case, the 120 days granted to the CIR to decide the case ended on December 7, 2004. Thus, taxpayer had 30 days therefrom, or until January 6, 2005 to file a petition for review with the CTA. Unfortunately, taxpayer only sought judicial relief on May 5, 2005 when it belatedly filed its petition to the CTA. Thus, CTA did not properly acquire jurisdiction over the claim. Commissioner of Internal Revenue vs. Dash Engineering Philippines, Inc., G.R.No. 184145, December 11,2013. 

(Caren thanks Carlos P. Garcia for assisting in the preparation of this post.)

December 2013 Philippine Supreme Court Decisions on Criminal Law and Procedure

Here are select December 2013 rulings of the Supreme Court of the Philippines on criminal law and procedure:

1. REVISED PENAL CODE

Falsification of public documents; falsification of local budget preparation forms. To warrant the suspension of a public officer under section 13 of R.A. 3019, he must be charged with an offense (1) under R.A. 3019, or (2) under Title Seven, Book II of the RPC, or (3) involving fraud upon government or public funds or property. Admittedly, petitioner in this case was not charged under R.A. 3019. Neither was he charged under Title Seven, Book II of the RPC as the crime of falsification of public documents under Article 171 of the RPC is covered by Title Four, Book II thereof. The relevant question now is whether falsification of public documents is considered as fraud upon government or public funds or property. To address the issue, the Supreme Court (SC) cited Bustillo v. Sandiganbayan. Petitioner therein was charged with falsifying municipal vouchers which, as used in government, are official documents. He asserted the said offense does not involve “fraud or property”; hence, his suspension finds no basis in section 13 of R.A. 3019. In construing the term “fraud” as used in section 13 of R.A. 3019, the SC held in said case that the same is understood in its general sense, that is, referring to “an instance or an act of trickery or deceit especially when involving misrepresentation.” And since vouchers are official documents signifying a cash outflow from government coffers, falsification thereof invariably involves fraud upon public funds. In the same vein, the act imputed against petitioner constitutes fraud upon government or public funds. Hadjim Hashim Abdul v. Sandiganbayan (Fifth Division) and People of the Philippines, G.R. No. 184496, December 2, 2013.

Kidnapping for ransom; elements. In proving the crime of kidnapping for ransom, the prosecution has to show that: (a) the accused was a private person; (b) he kidnapped or detained or in any manner deprived another of his or her liberty; (c) the kidnapping or detention was illegal; and (d) the victim was kidnapped or detained for ransom. All these were proven in the criminal case on review. The testimony of Alejandro and Marvelous sufficiently established the commission of the crime and the accused-appellants’ culpability. Maca was positively identified by Marvelous as one of the men who collared her, Marelie and Mae by the bedroom, tied them up and brought them to the mountains of Bagyangon. He was also identified as the one who left the group when they were on the mountains to buy food after Con-ui refused. Con-ui, on the other hand, was identified by Alejandro as the one who was addressed by one of the abductors with the statement, “why did it take you so long in coming back? We were already tired of waiting for you.” Con-ui was also identified by Marvelous as the one who took the key to the drawer, opened it and took the money in it. Their testimony also established the fact that they were deprived of their liberty when they were all hogtied and forcibly brought out of the house and into the mountains. That the deprivation of their liberty was for the purpose of extorting ransom was confirmed by Alejandro who testified that the abductors asked him for money and even let him off so he can come up with the P300,000.00 ransom. People of the Philippines v. Jonathan Con-U and Ramil Maca, G.R. No. 205442, December 11, 2013.

December 2013 Philippine Supreme Court Decisions on Labor Law

Here are select December 2013 rulings of the Supreme Court of the Philippines on labor law:

Appeal; NLRC; accredited bonding company; revocation of authority is prospective in application. The respondents filed a surety bond issued by Security Pacific Assurance Corporation (Security Pacific) on June 28, 2002. At that time, Security Pacific was still an accredited bonding company. However, the NLRC revoked its accreditation on February 16, 2003.  This subsequent revocation should not prejudice the respondents who relied in good faith on the then subsisting accreditation of Security Pacific. In Del Rosario v. Philippine Journalists, Inc. (G.R. No. 181516, August 19, 2009), it was held that a bonding company’s revocation of authority is prospective in application. Nonetheless, the respondents should post a new bond issued by an accredited bonding company in compliance with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure, which states that “[a] cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated or the award satisfied.” Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Appeal; NLRC; bond; jurisdictional. Paragraph 2, Article 223 of the Labor Code provides that “[i]n case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC in the amount equivalent to the monetary award in the judgment appealed from.”  Contrary to the respondents’ claim, the issue of the appeal bond’s validity may be raised for the first time on appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the employees’ just and lawful claims. It is intended to assure the workers that they will receive the money judgment in their favor if the employer’s appeal is dismissed. Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

December 2013 Philippine Supreme Court Decisions on Civil Law

Here are seclect December 2013 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Contracts; concept of contracts. A contract is what the law defines it to be, taking into consideration its essential elements, and not what the contracting parties call it. The real nature of a contract may be determined from the express terms of the written agreement and from the contemporaneous and subsequent acts of the contracting parties. However, in the construction or interpretation of an instrument, the intention of the parties is primordial and is to be pursued. The denomination or title given by the parties in their contract is not conclusive of the nature of its contents. ACE Foods, Inc. v. Micro Pacific Technologies Co., Ltd., G.R. No. 200602,  December 11, 2013.

Contracts; contract of loan; interest stipulated; reduced for being iniquitous and unconscionable. Parties to a loan contract have wide latitude to stipulate on any interest rate in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling on interest effective January 1, 1983. It is, however, worth stressing that interest rates whenever unconscionable may still be declared illegal. There is nothing in the circular which grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.In Menchavez v. Bermudez, the interest rate of 5% per month, which when summed up would reach 60% per annum, is null and void for being excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law. Florpina Benvidez v. Nestor Salvador, G.R. No. 173331, December 11, 2013.