FACTS: The defendant who was charged with libel because knowingly, willfully, unlawfully, and

criminally and with the intent to defame edited a newspaper article to attack the good name, credit, and
reputation of a lawyer.

Upon pleading guilty to the crime of libel and after the case was close and about to enter judgment, the
counsel for the defendant presented a motion requesting that a client be permitted to withdraw the
plea of guilty to that of not guilty.

ISSUE: Was the motion allowed?

HELD: Yes, the motion may be allowed but upon the court’s discretion. Section 25 of General Orders,
No. 58 pointed that “A plea of guilty can be put in only by the defendant himself in the open court. The
court may at any time before judgment upon a plea of guilty, permit it to be withdrawn and a plea of
not guilty substituted”. In the case of US vs Molo, it held that “Under the provisions of this section (25),
after the defendants has interposed one plea, either guilty or not guilty, his right to change his plea is
within the discretion of the trial court”.

As the court found it that the defendant was indeed guilty of the crime libel, the decision was affirmed.
FACTS:

The applicant in this case sought to be admitted to the bar without taking the prescribed
examination on the ground that he held the office of provincial fiscal for the province of Batanes and
upon relying to the provision of Section 2 of Act No. 1597 which stated that “…a provincial fiscal…may
be licensed to practice law in the courts of the Philippine Islands without an examination, upon motion
before the Supreme Court and establishing such fact to the satisfaction of said court”.

ISSUE:

Was the word “may” be interpreted as mandatory in its effect in this case?

HELD:

No, it will not be interpreted as mandatory in its effect in this case but that of permission.

Prior to the passage of Act No. 1597, the Supreme Court and the Courts of First Instance shall
have the power and jurisdiction in relation to the admission of candidates to the bar of the Philippine
Islands as fixed by the provisions of the Organic Act (No. 136) and the Code of Civil Procedure (Act No.
190) and that shall have been vested with authority and charged with a duty to pass upon the “moral
character” and the “qualifications and ability” of all candidates for admission to the bar.

Subsequently, the provisions of the Act of Congress enacted July 1, 1902 confirmed and secured
the court’s jurisdiction to change the practice and method of procedure. Moreover, still based from the
previous act, any Act of the Commission to be in conflict with the Act of Congress and to any other
lawful Acts of its creator defining, prescribing or limiting its authority is void and invalid. Therefore, the
Commission though authorized to modify the provision requiring the holding of examinations under
general rules had no authority to deprive the Court of its power to deny admission to any candidate who
fails to satisfy it that he possessed the necessary qualifications for admission to the bar of the Philippine
Islands.

After considering the merits of the applicant, the Court found out that he never had been a
practicing attorney in this or any other jurisdiction prior to the date of his appointment as provincial
fiscal, and it further affirmed that he was deficient in the required qualifications at the time when he last
applied for admission to the bar.

Thus, his application for license to practice in the courts of the Philippines was denied. However,
when he would seek be retained as fiscal in a government office, he had to prove his satisfactory
evidence of his proficiency in a special examination provided by the court.
 Gonzales vs La Previsora Filipina

G.R. No. 48699. MARCH 30, 1943

OZAETA, J. :

FACTS:

The respondent applied to La Previsora Filipina, a Mutual Building and Loan Association, for a
loan of Php 9,000 to be invested in the construction of a house of strong materials and other
improvements on his lot. As the loan value of said lot together with the proposed improvements was
appraised by the said building and loan association at Php 5,200 only, he was required to put up an
additional security to cover the deficiency of Php 3,800. To meet that requirement, the respondent
approached his friend who was the petitioner who consented to mortgage his land and building as
collateral security for the loan applied for by the respondent. Interpreting the contract of loan and
mortgage signed by the parties in relation to the following: (a) the use throughout the whole document
of the singular term “accionista prestatario”, (b) the inclusion of the petitioner’s property in the said
contract as a mere collateral security, and (c) the stipulation that once the indebtedness was reduced to
Php 5,200 the liability may (shall) be released.

Due to the insufficiency of the respondent to pay monthly installment stated in the contract, La
Previsora Filipina foreclosed the properties of the respondent and the petitioner as payment of the
unpaid obligation. Upon learning the sale of petitioner’s property, he offered to pay La Previsora Filipina
in the amount of Php 3,800 which the latter refused to accept.

The petitioner filed a case in the trial court to (a) annul and set aside the extrajudicial sale of his
property, (b) declare that his property should only respond for the sum of Php 3,800, and (c) order the
defendant’s corporation to receive the said sum. The court’s decision favored that of the petitioner and
declared the extrajudicial sale administered by the defendant’s corporation as null and void.

However, the trial court’s decision was appealed by the defendant’s corporation to the Court of
Appeals which reversed the decision of the trial court.

From that judgment, the petitioner appealed to the Supreme Court by certiorari.

ISSUE:

Was the petitioner bound as co-stockholder and co-borrower with the respondent?

HELD:

No, the petitioner was not bound as co-stockholder and co-borrower with the respondent. He
merely agreed to put up his own property as a collateral security for the payment of Mendoza’s
obligation to the extent of Php 3,800.
 It did not clearly appear in the contract that the petitioner was a co-borrower of the respondent
nor there was any expressed stipulation that the respondent and the petitioner were jointly and
severely liable for the entire amount of the loan. It was true that the petitioner signed the loan
application as well as the contract of mortgage together with the respondent without stating that he
was a mere guarantor of surety of the latter but the respondent’s corporation was allowed by law to
grant loans only to its stockholders in order “to encourage industry, frugality, and home building among
its stockholders and the loan in question was applied for and granted expressly for the purpose of
constructing a house and other improvements on the land belonging exclusively to the defendant. Thus,
it seemed clear that there was only one stockholder-borrower stipulated in the contract because the
land belonged exclusively to the respondent where the building was constructed with the borrowed
money and he was alone made payments on account of said loan.

The Court of Appeals did not follow as it should have followed the provisions of articles 1137,
1138, 1281, 1282 and, 1288 of the Civil Code as it was being undisputed that the contract in question
was prepared by the respondent and that the use of the words “accionista prestatario” and the inclusion
of the property of the petitioner as mere collateral security to be released once the liability was reduced
to Php 5,200 which made the contract obscure as to binding it to the complainant as a co-borrower and
co-stockholder of the association.

The Supreme Court modified the judgment of the Court of Appeals awarding the defendant’s
association the sum of Php 3,800 to be deposited by the petitioner and no further obligation would be
charged against the complainant. Further, the SC ordered the defendant’s corporation to issue a new
certificate of title to the petitioner.
 LUNA vs ABAYA

G.R. No. L-3443. MAY 26, 1950

BENGZON, J.:

FACTS:

Mr. Olvina brought sought against Mr. Luna, alleging that he was owner of a house and lot in
Caloocan, Rizal. According to Mr. Olvina, he borrowed money from Mr. Luna and mortgaged the
property that through deceit the former signed a deed of pacto de retro instead of mortgage and that
through ejectment proceeding, the latter possessed the property. Mr. Olvina then filed for declaration
of dominion and other allied remedies.

Mr. Luna pleaded that the contract was a conditional sale. An intervenor, Mr. Domingo filed res
judicata. According to Mr. Domingo, he purchased the property from Mr. Olvina who reserved the right
to repurchase it within a year but failed to do so and that Mr. Luna knew this sale when he purchased
the realty. Mr. Domingo filed for the declaration of ownership and other consequent relief against both
parties.

The court admitted the complaint in intervention. Then, the intervenor submitted a motion
asking Mr. Olvina and Mr. Luna be declared in default for failure “to file their answer to intervenor’s
complaint of intervention” within ten days “under Section 5, Rule 13 of the Rules of Court. The court
issued an order holding Mr. Olvina and Mr. Luna in default and permitted the intervenor to present his
evidence and rendered a decision in favor of the intervenor.

Mr. Luna petitioned that the judgment be set aside and the case be reinstated alleging that he
had just been notified of the decision and he had a good defense of the case. However, the motion was
denied for three times. Thus, Mr. Luna filed for petition for certiorari.

ISSUE:

Was the order of default may be annulled and set aside?

HELD:

Yes, the judgment by default can be annulled and set aside.

“A default judgment may be set aside where it was entered by the clerk without any authority
therefor, as where default was improperly entered for failure of plaintiff to answer a cross complaint
which under the circumstances was unnecessary. Also, a judgment entered contrary to the course of the
court by inadvertence, improvidence, mistake, or the like may be set aside. A judgment may be set aside
whether there was a total lack of authority to enter any judgment or only lack of authority to enter a
particular judgment, when the entry of such a judgment was premature, as where it was entered before
expiration of the time for the filing of an answer, before expiration of a continuance granted by the trial
judge, pending an application for a change of venue, prior to the day of which the cause was docketed
for trial, or prior to the date reserved for decision on a demurred. A default judgment erroneously
rendered where defendant was not in default may be vacated.”(49 C.J.S, pp. 617-618.)

In the case at hand, there was clearly a judgment of default by interpreting Section 5, Rule 13
erroneously. The ten-day period is fixed for the intervenor who may either present a complaint or an
answer after his position for intervention has been granted. The 10-day period was not meant for the
plaintiff nor the defendant.

The petition was granted.