April 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

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

Dismissal; breach of trust and confidence. Petitioner was employed as Assistant Vice-President of the Jewelry Department in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence. Jurisprudence provides for two requisites for dismissal on the ground of loss of trust and confidence; (1) the employee concerned must be holding a position of trust and confidence, and (2) there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Furthermore, the burden of establishing facts as bases for an employer’s loss of confidence is on the employer. The court held that the termination of petitioner was without just cause and therefore illegal.  Although the first requisite was present, the respondent failed to satisfy the second requisite.  Respondent bank was not able to show any concrete proof that petitioner had participated in the approval of the questioned accounts. The invocation by respondent of the loss of trust and confidence as ground for petitioner’s termination has therefore no basis at all. James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564. April 6, 2011.

Breach of Trust and Confidence; duties of employee. Petitioner was employed as Assistant Vice-President in respondent bank. His employment was terminated on the ground of willful breach of trust and confidence for endorsing VISA card applicants who later turned out to be impostors resulting in financial losses to respondent bank. The court held that petitioner was illegally dismissed. As provided in Article 282 of the Labor Code, an employer may terminate an employee’s employment for fraud or willful breach of trust reposed in him. However, in order to constitute a just cause for dismissal, the act complained of must be ‘work-related’ such as would show the employee concerned to be unfit to continue working for the employer. The act of betrayal of trust, if any, must have been committed by the employee in connection with the performance of his function or position. The court found that the element of ‘work-connection’ was not present in this case since petitioner was assigned under the Jewelry department, and therefore had nothing to do with the approval of VISA Cards, which was under a different department altogether. James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564. April 6, 2011.

April 2011 Philippine Supreme Court Decisions on Political Law

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

Constitutional Law

Cityhood Laws; Equal protection. The petitioners in this case reiterate their position that the Cityhood Laws violate Section 6 and Section 10 of Article X of the Constitution, the Equal Protection Clause, and the right of local governments to a just share in the national taxes. This was denied by the Supreme Court. Congress clearly intended that the local government units covered by the Cityhood Laws be exempted from the coverage of R.A. No. 9009 (the Cityhood Law). The House of Representatives adopted Joint Resolution No. 29, entitled Joint Resolution to Exempt Certain Municipalities Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of Republic Act No. 9009.  However, the Senate failed to act on Joint Resolution No. 29. Even so, the House of Representatives readopted Joint Resolution No. 29 as Joint Resolution No. 1 during the 12th Congress, and forwarded Joint Resolution No. 1 to the Senate for approval. Again, the Senate failed to approve Joint Resolution No. 1.  Thereafter, the conversion bills of the respondents were individually filed in the House of Representatives, and were all unanimously and favorably voted upon by the Members of the House of Representatives. The bills, when forwarded to the Senate, were likewise unanimously approved by the Senate. The acts of both Chambers of Congress show that the exemption clauses ultimately incorporated in the Cityhood Laws are but the express articulations of the clear legislative intent to exempt the respondents, without exception, from the coverage of R.A. No. 9009.  Thereby, R.A. No. 9009, and, by necessity, the LGC, were amended, not by repeal but by way of the express exemptions being embodied in the exemption clauses. League of Cities of the Philippines etc., et al. v. COMELEC, et al./League of Cities of the Philippines etc., et al. v. COMELEC, et al./League of Cities of the Philippines etc., et al. v. COMELEC, et al., G.R. No. 176951/G.R. No. 177499/G.R. No. 178056. April 12, 2011.

Cityhood Laws; Just share in national taxes. The share of local government units is a matter of percentage under Section 285 of the Local Government Code (LGC), not a specific amount.  Specifically, the share of the cities is 23%, determined on the basis of population (50%), land area (25%), and equal sharing (25%). This share is also dependent on the number of existing cities, such that when the number of cities increases, then more will divide and share the allocation for cities. However, the Supreme Court noted that the allocation by the National Government is not a constant, and can either increase or decrease. With every newly converted city becoming entitled to share the allocation for cities, the percentage of internal revenue allotment (IRA) entitlement of each city will decrease, although the actual amount received may be more than that received in the preceding year. That is a necessary consequence of Section 285 and Section 286 of the LGC. In this case, since the conversion by the Cityhood Laws is not violative of the Constitution and the LGC, the respondents are thus also entitled to their just share in the IRA allocation for cities. League of Cities of the Philippines etc., et al. v. COMELEC, et al./League of Cities of the Philippines etc., et al. v. COMELEC, et al./League of Cities of the Philippines etc., et al. v. COMELEC, et al., G.R. No. 176951/G.R. No. 177499/G.R. No. 178056. April 12, 2011.

April 2011 Philippine Supreme Court Decisions on Civil Law

Here are selected April 2011 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Conjugal partnership property; mortgage; consent of spouse. The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the wife. Should the husband do so, then the contract is voidable. Article 173 of the Civil Code allows Aguete to question Ros’ encumbrance of the subject property. However, the same article does not guarantee that the courts will declare the annulment of the contract. Annulment will be declared only upon a finding that the wife did not give her consent. In the present case, we follow the conclusion of the appellate court and rule that Aguete gave her consent to Ros’ encumbrance of the subject property.

The application for loan shows that the loan would be used exclusively “for additional working [capital] of buy & sell of garlic & virginia tobacco.” In her testimony, Aguete confirmed that Ros engaged in such business, but claimed to be unaware whether it prospered. Aguete was also aware of loans contracted by Ros, but did not know where he “wasted the money.” Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes to the support of the family cannot be deemed to be his exclusive and private debts. Joe A. Ros and Estrella Aguete v. Philippine National Bank, Laoag Branch, G.R. No. 170166. April 6, 2011.

Contract; determinacy of object. That the kasunduan did not specify the technical boundaries of the property did not render the sale a nullity. The requirement that a sale must have for its object a determinate thing is satisfied as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties.  As portion of the kasunduan shows, there is no doubt that the object of the sale is determinate. Domingo Carabeo v. Spouses Dingco, G.R. No. 190823, April 4, 2011.

April 2011 Philippine Supreme Court Decisions on Criminal Law and Procedure

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

1.     Revised Penal Code

Conspiracy; liability of conspirators. When conspiracy is established, the responsibility of the conspirators is collective, not individual. This renders all of them equally liable regardless of the extent of their respective participations, the act of one being deemed to be the act of the other or the others, in the commission of the felony. . People of the Philippines v. Dima Montanir, Ronald Norva and Eduardo Chua, G.R. No. 187534, April 4, 2011.

Conspiracy; liability of conspirators. Each conspirator is responsible for everything done by his confederates which follows incidentally in the execution of a common design as one of its probable and natural consequences even though it was not intended as part of the original design. Responsibility of a conspirator is not confined to the accomplishment of a particular purpose of conspiracy but extends to collateral acts and offenses incident to and growing out of the purpose intended. Conspirators are held to have intended the consequences of their acts and by purposely engaging in conspiracy which necessarily and directly produces a prohibited result, they are, in contemplation of law, chargeable with intending that result. Conspirators are necessarily liable for the acts of another conspirator unless such act differs radically and substantively from that which they intended to commit. People of the Philippines v. Dima Montanir, Ronald Norva and Eduardo Chua, G.R. No. 187534, April 4, 2011.

Damages; indemnity for death. Consistent with prevailing jurisprudence, the heirs of Haide is granted P75,000.00 as death indemnity, P75,000.00 as moral damages, and P30,000.00 as exemplary damages. Damages in such amounts are to be granted whenever the accused are adjudged guilty of a crime covered by R.A. 7659, like the murder charged and proved herein. Indeed, the principal consideration for the award of damages is the penalty provided by law or imposable for the offense because of its heinousness, not the public penalty actually imposed on the offender.  In other words, the litmus test in the determination of the civil indemnity is the heinous character of the crime committed, which would have warranted the imposition of the death penalty, regardless of whether the penalty actually imposed is reduced to reclusion perpetua. People of the Philippines v. Gilberto Villarico Sr. aka “Berting”, Gilberto Villarico Jr., Jerry Ramentos, and Ricky Villarico, G.R. No. 158362, April 4, 2011.

Investors await issuance of FIT rates

Several governments around the world have adopted policies aimed at promoting the development of renewable energy sources and reducing their dependence on traditional sources of energy (e.g., fossil fuels).  One of these policies is the adoption of a feed-in tariff (or FIT).

The Philippines is no exception.  The Philippine Renewable Energy Act (RE Act) provides for the establishment of a feed-in tariff (FIT) system.  Under the envisioned system, electricity produced from wind, solar, ocean, run-of-river hydroelectric and biomass energy resources, as well as RE components of hybrid systems, is entitled to priority connection to the Philippine electric grid and to priority purchase, transmission and payment at a fixed price.

The Philippine FIT system has been in the news several times over the past few months.  The specific FIT rates for each type of technology (e.g., for wind and solar) were supposed to have been issued on 31 March 2011.  However, the Department of Energy announced that they would need more time to complete a study on how to feed energy from the various RE technologies into the Philippines’ energy grid without creating problems.  In the meantime, alliances of interested investors in wind and solar technologies have been concentrating their efforts on having favorable rates approved.  The new rates are now targeted to be issued by 15 May 2011.

But how is the FIT system envisioned to work?

April 2011 Philippine Supreme Court Decisions on Commercial Law

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

Insurance;  presentation of policy as a condition for recovery by insurance company.  The presentation in evidence of the marine insurance policy is not indispensable before the insurer may recover from the common carrier the insured value of the lost cargo in the exercise of its subrogatory right. The subrogation receipt, by itself, is sufficient to establish the amount paid to settle the insurance claim. The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.  In International Container Terminal Services, Inc. v. FGU Insurance Corporation, the Supreme Court explained:

Indeed, jurisprudence has it that the marine insurance policy needs to be presented in evidence before the trial court or even belatedly before the appellate court. In Malayan Insurance Co., Inc. v. Regis Brokerage Corp.,  the Court stated that the presentation of the marine insurance policy was necessary, as the issues raised therein arose from the very existence of an insurance contract between Malayan Insurance and its consignee, ABB Koppel, even prior to the loss of the shipment. In Wallem Philippines Shipping, Inc. v. Prudential Guarantee and Assurance, Inc., the Court ruled that the insurance contract must be presented in evidence in order to determine the extent of the coverage. This was also the ruling of the Court in Home Insurance Corporation v. Court of Appeals.

However, as in every general rule, there are admitted exceptions. In Delsan Transport Lines, Inc. v. Court of Appeals, the Court stated that the presentation of the insurance policy was not fatal because the loss of the cargo undoubtedly occurred while on board the petitioner’s vessel, unlike in Home Insurance in which the cargo passed through several stages with different parties and it could not be determined when the damage to the cargo occurred, such that the insurer should be liable for it.

As in Delsan, there is no doubt that the loss of the cargo in the present case occurred while in petitioner’s custody. Moreover, there is no issue as regards the provisions of Marine Open Policy No. MOP-12763, such that the presentation of the contract itself is necessary for perusal, not to mention that its existence was already admitted by petitioner in open court.  And even though it was not offered in evidence, it still can be considered by the court as long as they have been properly identified by testimony duly recorded and they have themselves been incorporated in the records of the case.

Similarly, in this case, the presentation of the insurance contract or policy was not necessary.  Asian Terminals, Inc. v. Malayan Insurance, Co., Inc., G.R. No. 171406, April 4, 2011.

(Note:  this post will be updated after the other April 2011 cases become available.)

(Hector thanks Mowie Sison for his assistance to Lexoterica.)