CHAPTER 6 ANALYTICAL REASONING

First Philippine Industrial Corp. vs. CA

Facts: Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January
1995, petitioner applied for mayor’s permit in Batangas. However, the Treasurer required petitioner to
pay a local tax based on gross receipts amounting to P956,076.04. In order not to hamper its operations,
petitioner paid the taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On January
20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt from local tax
since it is engaged in transportation business. The respondent City Treasurer denied the protest, thus,
petitioner filed a complaint before the Regional Trial Court of Batangas for tax refund. Respondents
assert that pipelines are not included in the term “common carrier” which refers solely to ordinary carriers
or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court of
Appeals.
Issue: Whether a pipeline business is included in the term “common carrier” so as to entitle the petitioner
to the exemption
Held: Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or
association 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."
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must
hold himself out as ready to engage in the transportation of goods for person generally as a business and
not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his established
roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It
is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public
employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to
employ its services, and transports the goods by land and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition of a common carrier.

Republic of the Philippines vs Gomez

Facts: The present Petition seeks to reverse the decision of the Court of Appeals (CA) promulgated on 24
July 2009. The Decision affirmed the order for the registration of a 430-square meter property situated in
Barangay Andagao, Kalibo, Aklan in the name of herein respondent. Lot No. 2872, Csd 06-005822, Psc.
24, Kalibo, Cadastre was alleged to have been originally possessed by Gabriel Gomez. In 1936, his
nephew Emilio Gomez, who was the father of respondent herein, bought the lot in a public auction and
declared it under the name of the heirs of Gabriel Gomez. In 1945, the lot was declared for taxation
purposes and was issued Tax Declaration (TD) No. 2234. In 1955, Emilio declared part of Lot No.
2872 under his name. When he died in 1969, his surviving spouse and children allegedly took continuous
possession and occupancy of the lot, for which they paid real property tax. On 29 December 1986, the lot
was allegedly partitioned by Emilio’s heirs when they executed a Deed of Adjudication with
Consolidation and Extrajudicial Partition, by which Lot No. 2872-I was allegedly partitioned to
petitioner.
Meanwhile, herein petitioner filed its Opposition to the Application on the following grounds:
1. That neither the respondent nor her predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto.
2. That the muniments of title and/or the tax declaration/s and tax payment/s receipts of respondent does
(sic) not constitute competent and sufficient evidence of bona fide acquisition of lands applied for; or her
open, continuous, exclusive and notorious possession and occupation thereof, in the concept of owner,
since June 12, 1945 or prior thereto. The alleged tax declarations adverted to in the petition do not appear
to be genuine and the tax declaration/s and/or tax payment receipt/s indicate the pretended possession of
applicant/s to be recent vintage.
3. That the claim of ownership in fee simple on the basis of Spanish title or grant can no longer be availed
of by the applicant/s who have failed to file an appropriate application for registration within the period of
six (6) months from February 16, 1976 as required by P.D. No. 892. From the records, it appears that the
instant application was filed on April 21, 1998.
4. That the parcel/s applied for is/are portions of the public domain belonging to the Republic of the
Philippines not subject to private appropriation.
Issue: Whether or not the CA erred in ruling that respondent was able to sufficiently prove that the land
was alienable and disposable; and that she had possessed the subject lot in the manner and for the
duration required by law.
Held: Yes. In Republic v. Doldol, we said that the Public Land Act requires that the applicant must prove
(a) that the land is alienable public land; and (b) that the open, continuous, exclusive and notorious
possession and occupation of the land must have been either since time immemorial or for the period
prescribed in the Public Land Act.

In resolving the case at bar, we find Republic of the Philippines v. T.A.N. Properties, Inc. is on all fours
with the present case. In 1999, T.A.N. Properties sought the registration of a property for which it
presented a Certification from the CENRO. Thus, we held that this Certification was inadequate to prove
that the land was alienable and disposable, to wit:
The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably
belong to the State. The onus to overturn, by incontrovertible evidence, the presumption that the land
subject of an application for registration is alienable and disposable rests with the applicant.

In this case, respondent submitted two certifications issued by the Department of Environment and
Natural Resources (DENR). The 3 June 1997 Certification by the Community Environment and Natural
Resources Offices (CENRO), Batangas City, certified that “lot 10705, Cad-424, Sto. Tomas Cadastre
situated at Barangay San Bartolome, Sto. Tomas, Batangas with an area of 596,116 square meters falls
within the ALIENABLE AND DISPOSABLE ZONE under Project No. 30, Land Classification Map No.
582 certified on 31 December 1925.” The second certification in the form of a memorandum to the trial
court, which was issued by the Regional Technical Director, Forest Management Services of the DENR
(FMS-DENR), stated “that the subject area falls within an alienable and disposable land, Project No. 30
of Sto. Tomas, Batangas certified on Dec. 31, 1925 per LC No. 582.”

The certifications are not sufficient. DENR Administrative Order (DAO) No. 20, 18 dated 30 May 1988,
delineated the functions and authorities of the offices within the DENR. Under DAO No. 20, series of
1988, the CENRO issues certificates of land classification status for areas below 50 hectares. The
Provincial Environment and Natural Resources Offices (PENRO) issues certificate of land classification
status for lands covering over 50 hectares. DAO No. 38, dated 19 April 1990, amended DAO No. 20,
series of 1988. DAO No. 38, series of 1990 retained the authority of the CENRO to issue certificates of
land classification status for areas below 50 hectares, as well as the authority of the PENRO to issue
certificates of land classification status for lands covering over 50 hectares. In this case, respondent
applied for registration of Lot 10705-B. The area covered by Lot 10705-B is over 50 hectares (564,007
square meters). The CENRO certificate covered the entire Lot 10705 with an area of 596,116 square
meters which, as per DAO No. 38, series of 1990, is beyond the authority of the CENRO to certify as
alienable and disposable.

Fenequito vs Vergara Jr.

Fact: Respondent filed a case against the petitioner for falsification of public document, the City
Prosecutor filed the information to the MeTC. The Petitioner filed a Motion to Dismiss the Case Based on
Absence of Probable Cause. The MeTC dismissed the case on the ground of lack of probable cause.
Respondent appealed to the RTC. RTC granted the appeal and ordered the MeTC to proceed with the
trial. Petitioner petitioned to the CA to review the RTC decision. CA affirmed the RTC ruling. Petitioner
when to the SC to petition the review of the decision of the CA. Hence this case.
Issue: Whether the PNP Crime Laboratory Questioned Document Report submitted as evidence by
respondent to the prosecutor’s office, showed that the findings therein are not conclusive and, thus,
insufficient to support a finding of probable cause.
Held: No, A finding of probable cause needs only to rest on evidence showing that, more likely than not,
a crime has been committed by the suspects. It need not be based on clear and convincing evidence of
guilt, not on evidence establishing guilt beyond reasonable doubt, and definitely not on evidence
establishing absolute certainty of guilt. In determining probable cause, the average man weighs facts and
circumstances without resorting to the calibrations of the rules of evidence of which he has no technical
knowledge. He relies on common sense. What is determined is whether there is sufficient ground to
engender a well-founded belief that a crime has been committed, and that the accused is probably guilty
thereof and should be held for trial. It does not require an inquiry as to whether there is sufficient
evidence to secure a conviction.

Nazareno vs Maersk Filipinas Crewing Inc.

Facts: On February 16, 2001, petitioner Ramon G. Nazareno was hired by Maersk Filipinas Crewing Inc.
(MCI) as Chief Officer for and in behalf of its foreign principal Elite Shipping A/S (Elite) on board its
vessel M/V ArtkisHope for a period of six (6) months with a basic salary of US$1,129.00.
On March 25, 2001, the vessel was docked at Port Belem, Brazil to load timber. While petitioner was
checking the last bundle of timber to be loaded, he suddenly lost his balance and fell at a height of two (2)
meters. He landed on the timber and injured his right shoulder. Due to the pain he felt in his right
shoulder, he was later examined at Philadelphia, U.S.A. and was considered not fit for work. It was
recommended that petitioner should be confined for thorough evaluation and further tests, such as MRI.
Petitioner was also advised to see an Orthopedic Surgeon and/or a Neurologist. However, petitioner was
not permitted to disembark as there was no one available to replace him.
On August 8, 2001, at Ulsan, South Korea, petitioner was brought at the Ulsan Hyundai Hospital where
he was treated and given medication for his "frozen right shoulder." He was also advised to undergo
physical therapy. Consequently, petitioner was declared unfit to work and was recommended to be signed
off from duty.
On August 10, 2001, petitioner was repatriated to Manila. He then reported to MCI which referred him to
the Medical Center Manila (MCM) where he underwent a physical therapy program and was considered
fit for work as of October 21, 2001.
However, after almost two (2) months of therapy, petitioner did not notice any improvement. He
informed Dr.Periquet that when he was in Philadelphia, U.S.A., he was advised to consult a neurologist
and undergo MRI. When Dr. Periquet ignored him, he consulted another doctor. After a series of
examinations, it was concluded that petitioner will no longer be able to function as in his previous
disease-free state and that his condition would hamper him from operating as chief officer of a ship.
On the basis of the findings of his doctors, petitioner sought payment of his disability benefits and
medical allowance from respondents, but was refused. Petitioner therefore instituted the present
Complaint against the respondents.
On February 24, 2003, after the parties submitted their respective pleadings, the Labor Arbiter (LA)
rendered a Decision in favor of petitioner and ordered respondents to pay the former his disability claims,
sickness allowance, and attorney fees.
Aggrieved, respondents appealed to the National Labor Relations Commission (NLRC). On April 15,
2004, the NLRC, Third Division, rendered a Decision affirming with modification the decision of the LA.
Respondents sought recourse before the CA alleging grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the NLRC. On April 27, 2005, the CA rendered a Decision granting
the petition. The CA set aside the decision and resolution of the NLRC and dismissed petitioner
complaint.
Issue: Whether or not the Court of Appeals committed grave error in reversing and setting aside the
decisions of both the Labor Arbiter and the NLRC in finding petitioner already unfit to work as a result of
the injury he sustained during the accident on board the respondent vessel and therefore entitled to
disability benefits.
Held: Yes. In the case at bar, the CA relied on the provisions of Section 20 (B) of the 1996 POEA-SEC
and the ruling of this Court in German Marine Agencies, Inc. v NLRC, in concluding that the disability of
a seafarer can only be determined by a company-designated physician and not the seafarer own doctors.
Respecting the findings of the CA that it is the 1996 POEA-SEC which is applicable, nonetheless the case
of Abante v. KJGS Fleet Management Manila is instructive and worthy of note. In the said case, the CA
similarly held that the contract of the parties therein was also governed by Memo Circular No. 55, series
of 1996.Thus, the CA ruled that it is the assessment of the company-designated physician which is
deemed controlling in the determination of a seafarer entitlement to disability benefits and not the opinion
of another doctor. Nevertheless, that conclusion of the CA was reversed by this Court. Instead, the Court
upheld the findings of the independent physician as to the claimant disability.
Verily, in the case of Seagull Maritime Corporation v. Dee, this Court held that nowhere in the case of
German Marine Agencies, Inc. v NLRC was it held that the company-designated physician assessment of
the nature and extent of a seaman's disability is final and conclusive on the employer company and the
seafarer-claimant. While it is the company designated physician who must declare that the seaman
suffered a permanent disability during employment, it does not deprive the seafarer of his right to seek a
second opinion.
In the recent case of Daniel M. Ison v. Crewserve, Inc., et al., although ruling against the claimant therein,
the Court upheld the above cited view and evaluated the findings of the seafarer doctors vis--vis the
findings of the company-designated physician. A seafarer is, thus, not precluded from consulting a
physician of his choice. Consequently, the findings of petitioner own physician can be the basis in
determining whether he is entitled to his disability claims.
Verily, the courts should be vigilant in their time-honored duty to protect labor, especially in cases of
disability or ailment. When applied to Filipino seamen, the perilous nature of their work is considered in
determining the proper benefits to be awarded. These benefits, at the very least, should approximate the
risks they brave on board the vessel every single day.
Accordingly, if serious doubt exists on the company-designated physician's declaration of the nature of a
seaman's injury and its corresponding impediment grade, resort to prognosis of other competent medical
professionals should be made. In doing so, a seaman should be given the opportunity to assert his claim
after proving the nature of his injury. These pieces of evidence will in turn be used to determine the
benefits rightfully accruing to him.
Herein petitioner, timely questioned the competence of the company-designated physician by
immediately consulting two independent doctors. Neither did he sign nor execute any document agreeing
with the findings of the company physician that he is already fit for work.
In any case, the bottom-line is this: the certification of the company designated physician would defeat
petitioner claim while the opinion of the independent physicians would uphold such claim. In such a
situation, the Court adopts the findings favorable to petitioner. The law looks tenderly on the laborer.
Where the evidence may be reasonably interpreted in two divergent ways, one prejudicial and the other
favorable to him, the balance must be tilted in his favor consistent with the principle of social justice.
Lasoy vs. Zenarosa
Facts: Lasoy and Banisa were charged before the RTC with violation of Dangerous Drugs Act of 1972 for
transporting and selling 42.41 grams of marijuana fruiting tops. Both pleaded guilty on arraignment and
were later on sentenced to suffer a jail term of 6 months and 1 day. Both accused applied for probation.
Subsequently, the prosecutor filed two separate motions: (1) to admit amended Information, and (2) to set
aside the arraignment of the accused. The prosecutor intended to amend the filed information because for
some reason, Lasoy and Banisa were charged of selling 42.41 grams instead of 42.41 kilograms of
marijuana.
The motions were granted. Thus the information now states “kilograms” instead of “grams". Both
accused filed a motion to quash.
Judge Zenarosa denied the motion to quash and scheduled the arraignment of the accused under the
amended information. Lasoy and Banisa raises a petition for certiorari on the ground of double jeopardy.
In response, respondent claims that the trial based on the first information was a sham and that the
petitioners participated in tampering the information.
Issue: Whether or not double jeopardy attaches
Held: Yes. To invoke the defense of double jeopardy, the following requisites must be present: (1) a valid
complaint or information; (2) the court has jurisdiction to try the case; (3) the accused has pleaded to the
charge; and (4) he has been convicted or acquitted or the case against him dismissed or otherwise
terminated without his express consent.
The issue boils down to whether or not the first information is valid.
An information is valid as long as it distinctly states the statutory designation of the offense and the acts
or omissions constitutive thereof.
In other words, if the offense is stated in such a way that a person of ordinary intelligence may
immediately know what is meant, and the court can decide the matter according to law, the inevitable
conclusion is that the information is valid. It is not necessary to follow the language of the statute in the
information. The information will be sufficient if it describes the crime defined by law.
Applying the foregoing, the inescapable conclusion is that the first information is valid inasmuch as it
sufficiently alleges the manner by which the crime was committed. Verily the purpose of the law, that is,
to apprise the accused of the nature of the charge against them, is reasonably complied with.
With respect specifically to the trial courts point of view that the accused cannot claim their right against
double jeopardy because they participated/acquiesced to the tampering, we hold that while this may not
be far-fetched, there is actually no hard evidence thereof. Worse, we cannot overlook the fact that accused
were arraigned, entered a plea of guilty and convicted under the first information. Granting that
alteration/tampering took place and the accused had a hand in it, this does not justify the setting aside of
the decision dated 16 July 1996. The alleged tampering/alteration allegedly participated in by the accused
may well be the subject of another inquiry.
In San vicente v. People, this Court held that given the far-reaching scope of an accused’s right against
double jeopardy, even an appeal based on an alleged mis-appreciation of evidence will not lie. The only
instance when double jeopardy will not attach is when the trial court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction, such as where the prosecution was denied the opportunity to
present its case or where the trial was a sham.
The Constitution is very explicit. Article III, Section 21, mandates that no person shall be twice put in
jeopardy of punishment for the same offense. In this case, the accused had been arraigned and convicted.
In fact, they were already in the stage where they were applying for probation. It is too late in the day for
the prosecution to ask for the amendment of the information and seek to try again accused for the same
offense without violating procedural rules and their rights guaranteed under the Constitution.
Galman vs Sandiganbayan
Facts: Assassination of former Senator Benigno "Ninoy" Aquino, Jr. He was killed from his plane that
had just landed at the Manila International Airport. His brain was smashed by a bullet fired point-blank
into the back of his head by an assassin. The military investigators reported within a span of three hours
that the man who shot Aquino (whose identity was then supposed to be unknown and was revealed only
days later as Rolando Galman) was a communist-hired gunman, and that the military escorts gunned him
down in turn.
President was constrained to create a Fact Finding Board to investigate due to large masses of people who
joined in the ten-day period of national mourning yearning for the truth, justice and freedom.
The fact is that both majority and minority reports were one in rejecting the military version stating that
"the evidence shows to the contrary that Rolando Galman had no subversive affiliations. Only the soldiers
in the staircase with Sen. Aquino could have shot him; that Ninoy's assassination was the product of a
military conspiracy, not a communist plot. Only difference between the two reports is that the majority
report found all the twenty-six private respondents above-named in the title of the case involved in the
military conspiracy; " while the chairman's minority report would exclude nineteen of them.
Then Pres. Marcos stated that evidence shows that Galman was the killer.
Petitioners pray for issuance of a TRO enjoining respondent court from rendering a decision in the two
criminal cases before it, the Court resolved by nine-to-two votes 11 to issue the restraining order prayed
for. The Court also granted petitioners a five-day period to file a reply to respondents' separate comments
and respondent Tanodbayan a three-day period to submit a copy of his 84-page memorandum for the
prosecution.
But ten days later, the Court by the same nine-to-two-vote ratio in reverse, resolved to dismiss the petition
and to lift the TRO issued ten days earlier enjoining the Sandiganbayan from rendering its decision. The
same Court majority denied petitioners' motion for a new 5-day period counted from receipt of respondent
Tanodbayan's memorandum for the prosecution (which apparently was not served on them).
Thus, petitioners filed a motion for reconsideration, alleging that the dismissal did not indicate the legal
ground for such action and urging that the case be set for a full hearing on the merits that the people are
entitled to due process.
However, respondent Sandiganbayan issued its decision acquitting all the accused of the crime charged,
declaring them innocent and totally absolving them of any civil liability. Respondents submitted that with
the Sandiganbayan's verdict of acquittal, the instant case had become moot and academic. Thereafter,
same Court majority denied petitioners' motion for reconsideration for lack of merit.
Hence, petitioners filed their motion to admit their second motion for reconsideration alleging that
respondents committed serious irregularities constituting mistrial and resulting in miscarriage of justice
and gross violation of the constitutional rights of the petitioners and the sovereign people of the
Philippines to due process of law.
Issues:
(1) Whether or not petitioner was deprived of his rights as an accused.
(2) Whether or not there was a violation of the double jeopardy clause.
Held: Petitioners' second motion for reconsideration is granted and ordering a re-trial of the said cases
which should be conducted with deliberate dispatch and with careful regard for the requirements of due
process.
Deputy Tanodbayan Manuel Herrera (made his expose 15 months later when former Pres. was no longer
around) affirmed the allegations in the second motion for reconsideration that he revealed that the
Sandiganbayan Justices and Tanodbayan prosecutors were ordered by Marcos to whitewash the Aquino-
Galman murder case. Malacañang wanted dismissal to the extent that a prepared resolution was sent to
the Investigating Panel. Malacañang Conference planned a scenario of trial where the former President
ordered then that the resolution be revised by categorizing the participation of each respondent; decided
that the presiding justice, Justice Pamaran, (First Division) would personally handle the trial. A
conference was held in an inner room of the Palace. Only the First Lady and Presidential Legal Assistant
Justice Lazaro were with the President. The conferees were told to take the back door in going to the
room where the meeting was held, presumably to escape notice by the visitors in the reception hall
waiting to see the President. During the conference, and after an agreement was reached, Pres. Marcos
told them 'Okay, mag moro-moro na lamang kayo;' and that on their way out of the room Pres. Marcos
expressed his thanks to the group and uttered 'I know how to reciprocate'.
The Court then said that the then President (code-named Olympus) had stage-managed in and from
Malacañang Palace "a scripted and predetermined manner of handling and disposing of the Aquino-
Galman murder case;" and that "the prosecution in the Aquino-Galman case and the Justices who tried
and decided the same acted under the compulsion of some pressure which proved to be beyond their
capacity to resist. Also predetermined the final outcome of the case" of total absolution of the twenty-six
respondents-accused of all criminal and civil liability. Pres. Marcos came up with a public statement aired
over television that Senator Aquino was killed not by his military escorts, but by a communist hired gun.
It was, therefore, not a source of wonder that President Marcos would want the case disposed of in a
manner consistent with his announced theory thereof which, at the same time, would clear his name and
his administration of any suspected guilty participation in the assassination. such a procedure would be a
better arrangement because, if the accused are charged in court and subsequently acquitted, they may
claim the benefit of the doctrine of double jeopardy and thereby avoid another prosecution if some other
witnesses shall appear when President Marcos is no longer in office.
More so was there suppression of vital evidence and harassment of witnesses. The disappearance of
witnesses two weeks after Ninoy's assassination. According to J. Herrera, "nobody was looking for these
persons because they said Marcos was in power. The assignment of the case to Presiding Justice Pamaran;
no evidence at all that the assignment was indeed by virtue of a regular raffle, except the uncorroborated
testimony of Justice Pamaran himself. The custody of the accused and their confinement in a military
camp, instead of in a civilian jail. The monitoring of proceedings and developments from Malacañang and
by Malacañang personnel. The partiality of Sandiganbayan betrayed by its decision: That President
Marcos had wanted all of the twenty-six accused to be acquitted may not be denied. In rendering its
decision, the Sandiganbayan overdid itself in favoring the presidential directive. Its bias and partiality in
favor of the accused was clearly obvious. The evidence presented by the prosecution was totally ignored
and disregarded.
The record shows that the then President misused the overwhelming resources of the government and his
authoritarian powers to corrupt and make a mockery of the judicial process in the Aquino-Galman murder
cases. "This is the evil of one-man rule at its very worst." Our Penal Code penalizes "any executive
officer who shall address any order or suggestion to any judicial authority with respect to any case or
business coming within the exclusive jurisdiction of the courts of justice."
Impartial court is the very essence of due process of law. This criminal collusion as to the handling and
treatment of the cases by public respondents at the secret Malacañang conference (and revealed only after
fifteen months by Justice Manuel Herrera) completely disqualified respondent Sandiganbayan and voided
ab initio its verdict. The courts would have no reason to exist if they were allowed to be used as mere
tools of injustice, deception and duplicity to subvert and suppress the truth. More so, in the case at bar
where the people and the world are entitled to know the truth, and the integrity of our judicial system is at
stake.
There was no double jeopardy. Courts' Resolution of acquittal was a void judgment for having been
issued without jurisdiction. No double jeopardy attaches, therefore. A void judgment is, in legal effect, no
judgment at all. By it no rights are divested. It neither binds nor bars anyone. All acts and all claims
flowing out of it are void.
Motion to Disqualify/Inhibit should have been resolved ahead. In this case, petitioners' motion for
reconsideration of the abrupt dismissal of their petition and lifting of the TRO enjoining the
Sandiganbayan from rendering its decision had been taken cognizance of by the Court which had required
the respondents', including the Sandiganbayan's, comments. Although no restraining order was issued
anew, respondent Sandiganbayan should not have precipitately issued its decision of total absolution of
all the accused pending the final action of this Court. All of the acts of the respondent judge manifest
grave abuse of discretion on his part amounting to lack of jurisdiction which substantively prejudiced the
petitioner.
With the declaration of nullity of the proceedings, the cases must now be tried before an impartial court
with an unbiased prosecutor. Respondents accused must now face trial for the crimes charged against
them before an impartial court with an unbiased prosecutor with all due process.
The function of the appointing authority with the mandate of the people, under our system of government,
is to fill the public posts. Justices and judges must ever realize that they have no constituency, serve no
majority nor minority but serve only the public interest as they see it in accordance with their oath of
office, guided only the Constitution and their own conscience and honor.
Bigornia vs Court of Appeals
Facts: Private respondent Melchor Aroma filed an action for replevin with damages against petitioners
before the Regional Trial Court (RTC) of Lanao del Norte. Petitioners allegedly detained Aroma's fishing
vessel for 14 days after it was seized in a seaborne patrol.
On August 28, 2001, the RTC rendered a Decision3 in favor of respondent. It ordered petitioners to pay
jointly and severally the sums of P350,000 by way of actual and compensatory damages; P100,000 as
moral and exemplary damages; attorney's fees of P20,000; and the costs of suit.
Petitioners appealed. On January 19, 2004, the office of Atty. Arthur L. Abundiente, counsel for
petitioners, received notice requiring petitioners to file an appellants' brief within 45 days or until March
4, 2004. Petitioners however, filed their brief only on March 18, 2004, 14 days beyond the deadline. On
July 22, 2004, the Court of Appeals issued the challenged Resolution. Its fallo states:
Having been unjustifiably filed out of time, the Appellant[s'] Brief is ordered expunged from/stricken off
the records. This instant appeal is accordingly DISMISSED pursuant to Section 1(e), Rule 50 of the 1997
Rules on Civil Procedure for appellants' failure to file their Brief within the time provided for under the
Rules.
Issue: Whether or not the 23rd division of the court of appeals acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in not admitting the appellants' brief, and in ordering that the
same be expunged from the record.
Held: Technically, the Court of Appeals may dismiss an appeal for failure of the appellant to file the
appellants' brief on time. But, the dismissal is directory, not mandatory. Hence, the court has discretion to
dismiss or not to dismiss the appeal. It is a power conferred on the court, not a duty. The discretion,
however, must be a sound one, to be exercised in accordance with the tenets of justice and fair play,
having in mind the circumstances obtaining in each case.
Petitioners had 45 days or until March 4, 2004 to file an appellants' brief. Unfortunately, petitioners could
not be located as some of them retired while the rest were assigned to other places. It was their counsel
who took the liberty of filing a brief in their behalf, but 14 days late and without a motion for leave of
court for its admission. Nonetheless, the more pressing consideration of substantial justice compels this
Court to heed the plea of petitioners. The amount of damages involved in this case is relatively
substantial. Petitioners are police officers, and government employees who receive meager salaries for
risking life and limb. It is but fair that they be heard on the merits of their case before being made to pay
damages, for what could be, a faithful performance of duty.
The circulars of this Court prescribing technical and other procedural requirements are meant to promptly
dispose of unmeritorious petitions that clog the docket and waste the time of the courts. These technical
and procedural rules, however, are intended to ensure, not suppress, substantial justice. A deviation from
their rigid enforcement may thus be allowed to attain their prime objective for, after all, the dispensation
of justice is the core reason for the existence of courts. Thus, in a considerable number of cases, the Court
has deemed it fit to suspend its own rules or to exempt a particular case from its strict operation where the
appellant failed to perfect his appeal within the reglementary period, resulting in the appellate court's
failure to obtain jurisdiction over the case. With more reason, there should be wider latitude in exempting
a case from the strictures of procedural rules when the appellate court has already obtained jurisdiction
over the appealed case and, as in this case, petitioners failed to file the appellants' brief on time.

United Feature Syndicate Inc vs Munsingwear Creation Manufacturing Company

Facts: This case arose from petition filed by petitioner for the cancellation of the registration of trademark
CHARLIE BROWN in the name of respondent MUNSINGWEAR in Inter Partes Case No. 1350 entitled
"United Feature Syndicate, Inc. v. Munsingwear Creation Mfg. Co.", with the Philippine Patent Office
alleging that petitioner is damaged by the registration of the trademark CHARLIE BROWN of T-Shirts
under Class 25 with the Registration No. SR-4224 dated September 12, 1979 in the name of
Munsingwear Creation Manufacturing Co., Inc., on the following grounds: (1) that respondent was not
entitled to the registration of the mark CHARLIE BROWN, & DEVICE at the time of application for
registration; (2) that CHARLIE BROWN is a character creation or a pictorial illustration, the copyright to
which is exclusively owned worldwide by the petitioner; (3) that as the owner of the pictorial illustration
CHARLIE BROWN, petitioner has since 1950 and continuously up to the present, used and reproduced
the same to the exclusion of others; (4) that the respondent-registrant has no bona fide use of the
trademark in commerce in the Philippines prior to its application for registration.
On October 2, 1984 the Director of the Philippine Patent Office rendered a decision in this case holding
that a copyright registration like that of the name and likeness of CHARLIE BROWN may not provide a
cause of action for the cancellation of a trademark registration.
Petitioner filed a motion for reconsideration of the decision rendered by the Philippine Patent Office
which was denied by the Director of said office on the ground that the Decision No. 84-83 was already
final and executory.
Issue:
(1) Whether the respondent court of appeals acted in excess of jurisdiction and/or committed grave
abuse of discretion when it based its resolution in dismissing its appeal on strict technical rules of
procedure as enunciated in rule 15 of the rules of court instead of relying on the policy of the
Philippine patent office as stressed in rule 169.
(2) Whether the respondent court of appeals committed grave abuse of discretion amounting to
excess of jurisdiction when by dismissing the appeal to it from the decision of the director of
patents, it knowingly disregarded its own decision in ac-gr. Sp. No. 0342, which was affirmed by
this honorable supreme court to the effect that a copyrighted character may not be appropriated as
a trademark by another under presidential decree no. 49.
Held: Petitioner's contention that the purpose of a notice of hearing to the adverse party is to afford him
an opportunity to resist the motion, more particularly the motion for reconsideration filed by its company
is well taken. Said purpose was served when Musingwear filed its opposition thereto on November 20,
1984 and cured the technical defect of lack of notice of hearing complained of. Otherwise stated such
shortcomings of petitioner as to compliance with procedural requirements in taking its appeal cannot be
deemed sufficient to deprive it of a chance to secure a review by this court in order to obtain substantial
justice; more so where liberality accorded to the petitioner becomes compelling because of the ostensible
merit of petitioner's case.
Moreover, in Siguenza v. Court of Appeals, (137 SCRA 570 [1985]) the Court stressed that the right to
appeal should not be lightly disregarded by a stringent application of rules of procedure especially where
the appeal is on its face meritorious and the interest of substantial justice would be served by permitting
the appeal.
"An appeal is an essential part of our judicial system. We have advised the courts to proceed with caution
so as not to deprive a part of the right to appeal and instructed that every party-litigant should be afforded
the amplest opportunity for the proper and just disposition of his cause, freed from the constraints of
technicalities.”
"The rules of procedure are not to be applied in a very rigid and technical sense. The rules of procedure
are used only to help secure not override substantial justice therefore, we ruled in Republic v. Court of
Appeals (83 SCRA 453) that a six-day delay in the perfection of the appeal does not warrant its dismissal.
And again in Ramos v. Bagaso, 96 SCRA 395, this Court held that the delay of four (4) days in filling a
notice of appeal and a motion for extension of time to file a record on appeal can be excused on the basis
of equity."

Candijay vs Court of Appeals

Facts: The municipality of Candijay petitioned the RTC of Tagbilaran, Bohol, claiming that its boundary
line actually covered barrio Pagahat, since the municipality of Alicia claims to have current territorial
jurisdiction over said barrio. The RTC awarded Pagahat to Candijay Alicia appealed to the Court of
Appeals. The CA ruled in favor of Alicia on the grounds that 1) applying the rule of equiponderance of
evidence (a principle in Civil Procedure) with Candijay as plaintiff and Alicia as defendant in the lower
court, the court must rule in favor of the defendant. The equiponderance of evidence rule states: “Where
the scale shall stand upon equipoise and there is nothing in the evidence which shall incline it to one side
or the other, the court will find for the defendant. Under said principle, the plaintiff must rely on the
strength of his evidence and not on the weakness of defendant’s claim. Even if the evidence of the
plaintiff may be stronger than that of the defendant, there is no preponderance of evidence on his side if
such evidence is insufficient in itself to establish his cause of action. ”In this case, both municipalities
failed to satisfactorily back their claims that they owned barrio Pagahat: and 2) if Candijay’s boundary
line claim was true, then not only would they claim Pagahat but also other certain barrios as well, which
would as a result, certainly expand Candijay’s territory far beyond than what the law allows her, Candijay
petitioned is review on certiorari with the SC, claiming that 1) the CA misapplied the equiponderance of
evidence rule and 2) the municipality of Alicia had no juridical personality, having been created under
avoid E.O. ( E.O. No.265) since Sec. 68 of the RAC of 1917 from which the said E.O. derived its
authority, was declared unconstitutional in Pelaez v. Auditor General.
Issue: Whether or not the respondent lacked juridical personality as a result of having been created under
a void executive order
Held: No. Petitioners theory might perhaps be a point to consider had the case been seasonably brought.
EO 353’s validity was only contested after almost 34 years from its issuance. Granting that the EO was a
complete nullity for being the result of an unconstitutional delegation of legislative power, peculiar
circumstances obtaining this case hardly could offer a choice other than to consider the Municipality of
San Andres to have at least attained a status uniquely of its own closely approximating if not in fact
attaining that of a de facto municipal corporation. Equally significant is section 442 (d) of the Local
Government Code to the effect that municipal districts; organized pursuant to the presidential issuances or
executive orders and which have their respective sets of elective officials holding office at the time of the
effectivity of the Code shall henceforth be considered as regular municipalities. The de jure status of the
Municipality must now be conceded.

Pelaez vs Auditor General

Facts: The President of the Philippines, purporting to act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three
(33) municipalities enumerated in the margin. Petitioner Emmanuel Pelaez, as Vice President of the
Philippines and as taxpayer, instituted the present special civil action, for a writ of prohibition with
preliminary injunction, against the Auditor General, to restrain him, as well as his representatives and
agents, from passing in audit any expenditure of public funds in implementation of said executive orders
and/or any disbursement by said municipalities.
Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has
been impliedly repealed by Republic Act No. 2370 effective January 1, 1960 and constitutes an undue
delegation of legislative power. The third paragraph of Section 3 of Republic Act No. 2370, reads:
“Barrios shall not be created or their boundaries altered nor their names changed except under the
provisions of this Act or by Act of Congress.”
Issue: Whether or not Section 68 of Revised Administrative Code constitutes an undue delegation of
legislative power
Held: Section 10 (1) of Article VII of our fundamental law ordains: The President shall have control of all
the executive departments, bureaus, or offices, exercise general supervision over all local governments as
may be provided by law, and take care that the laws be faithfully executed.
The power of control under this provision implies the right of the President to interfere in the exercise of
such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices
of the national government, as well as to act in lieu of such officers. This power is denied by the
Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the
fundamental law permits him to wield no more authority than that of checking whether said local
governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the
President cannot interfere with local governments, so long as the same or its officers act within the scope
of their authority.

Municipality of San Narciso, Quezon vs Mendez Sr

Facts: On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630
of the Revised Administrative Code, as amended, Executive Order No. 353 creating the municipal district
of San Andres, Quezon, by segregating from the municipality of San Narciso of the same province, the
barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora and Tala along with their respective sitios.
EO No. 353 was issued upon the request, addressed to the President and coursed through the Provincial
Board of Quezon, of the municipal council of San Narciso, Quezon
By virtue of EO No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, the municipal
district of San Andres was later officially recognized to have gained the status of a fifth class municipality
beginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive order added
that “(t)he conversion of this municipal district into (a) municipality as proposed in House Bill No. 4864
was approved by the House of Representatives.”
Petitioner Municipality of San Narciso: filed a petition for quo warranto with RTC which petition sought
the declaration of nullity of EO No. 353 Invoking the ruling of this Court in Pelaez v. Auditor General.
Respondent San Andres: San Narciso is estopped from questioning the creation of the new municipality
and that the case had become moot and academic with the enactment of Republic Act No. 7160 (Sec. 442.
Requisites for Creation. — . . .(d) Municipalities existing as of the date of the effectivity of this Code
shall continue to exist and operate as such.)
Petitioner: The above provision of law was inapplicable to the Municipality of San Andres since the
enactment referred to legally existing municipalities and not to those whose mode of creation had been
void ab initio.
Issue: Whether or not the Municipality of San Andres is a de jure or de facto municipal corporation.
Held: Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August
1959 but it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San
Narciso finally decided to challenge the legality of the executive order.
Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutional
delegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a
choice other than to consider the Municipality of San Andres to have at least attained a status uniquely of
its own closely approximating, if not in fact attaining, that of a de facto municipal corporation.
Conventional wisdom cannot allow it to be otherwise. Created in 1959 by virtue of Executive Order No.
353, the Municipality of San Andres had been in existence for more than six years when, on 24 December
1965, Pelaez v. Auditor General was promulgated. The ruling could have sounded the call for a similar
declaration of the unconstitutionality of Executive Order No. 353 but it was not to be the case. On the
contrary, certain governmental acts all pointed to the State’s recognition of the continued existence of the
Municipality of San Andres. Thus, after more than five years as a municipal district, Executive Order No.
174 classified the Municipality of San Andres as a fifth class municipality after having surpassed the
income requirement laid out in Republic Act No. 1515.
At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the
Ordinance (adopted on 15 October 1986) apportioning the seats of the House of Representatives,
appended to the 1987 Constitution, the Municipality of San Andres has been considered to be one of the
twelve (12) municipalities composing the Third District of the province of Quezon. Equally significant is
Section 442(d) of the Local Government Code to the effect that municipal districts “organized pursuant to
presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as
regular municipalities.”
All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now
be conceded.
CHAPTER 10 AUTHORITIES
COMMISSIONER OF INTERNAL REVENUE VS COURT OF APPEALS
Facts: Fortune Tobacco Corporation is engaged in the manufacture of different brands of cigarettes.
On various dates, the Philippine Patent Office issued to the corporation separate certificates of trademark
registration over "Champion," "Hope," and "More" cigarettes. 

The CIR initially classified 'Champion,' 'Hope,' and 'More' as foreign brands since they were listed in the
World Tobacco Directory as belonging to foreign companies. However, Fortune changed the names of
'Hope' to Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands from the foreign
brand category. Fortune also submitted proof the BIR that 'Champion' was an original register and
therefore a local brand. Ad Valorem taxes were imposed on these brands.  

RA 7654 was passed in it was provided that 55% ad valorem tax will be imposed on local brands carrying
a foreign name. Two days before the effectivity of RA 7654, the BIR issued Revenue Memorandum
Circular No. 37-93,  in which Fortune was to be imposed 55% ad valorem tax on the three brands
classifying them as local brands carrying a foreign name.

Fortune filed a petition with the CTA which was granted finding the RMC as defective. The CIR filed a
motion for reconsideration with the CTA which was denied, then to the CA, an appeal, which was also
denied.

Issue: Whether the RMC was valid.

Held: NO. The RMC was made to place the three brands as locally made cigarettes bearing foreign
brands and to thereby have them covered by RA 7654. Specifically, the new law would have its
amendatory provisions applied to locally manufactured cigarettes which at the time of its effectivity were
not so classified as bearing foreign brands. Prior to the issuance of the RMC, the brands were subjected to
45% ad valorem tax. In so doing, the BIR not simply interpreted the law but it legislated under its quasi-
legislative authority. The due observance of the requirements of notice, of hearing, and of publication
should not have been then ignored.

The Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and effective
administrative issuance.

Government Service Insurance System vs Cadiz

Facts: respondent Leo L. Cadiz was appointed as a Provincial Guard of Negros Oriental on July 1, 1968.
On March 16, 1974, he entered the police service and was promoted to several ranks until he became a
Police Major. In 1991, he was absorbed by the Philippine National Police (PNP), with a rank of Police
Chief Inspector. On July 17, 1992, respondents rank was adjusted to Police Chief Superintendent, the
position he held until his retirement on March 19, 1999 at the age of 55.

The medical records of respondent revealed that on October 11, 1996, he suffered a heart attack and was
hospitalized at the San Carlos Planters Hospital, San Carlos City. He was transferred to the Siliman
University Medical Center where he was diagnosed to be suffering from AF with CHF Class 1-E T/A
Sec. to Cardio embolic Sec. to AF, Chronic CAD,4 a heart ailment. Thereafter, respondent was also
admitted at the Negros Oriental Provincial Hospital for chest pain, palpitation and abnormal beats HP...,
AF, CHF Class I; Hypercholesterolemia.5 Consequently, he applied for early retirement due to an ailment
causing [paralysis of the] left hand and [slurred] speech rendering him unfit to discharge further his duties
and responsibilities as a police officer.6 Dr. Silahis Rosario, a cardiologist and attending physician of
respondent, testified before the National Police Commission that the latters ailment is unstable angina and
chronic atriol fibrillation, which means a chronic irregularity of the heart causing a congestive heart
failure.7 After its own examination of respondent, the Medical and Dental Service, PNP, declared him
UNFIT FOR POLICE SERVICE. Hence, on March 19, 1999, he was retired from service and granted
permanent total disability benefits.
Subsequently, respondent filed a disability claim with the GSIS, attaching to his application his service
record and PNP General Order No. 641, stating that respondent retired from the PNP due to a permanent
total disability.10 On November 25, 1999, Dr. Gervillana B. Estrada, Medical Officer of GSIS,
Dumaguete City, approved the claim and granted respondent permanent total disability benefits starting
March 19, 1999, and temporary total disability benefits from October 12, 1996 to November 22, 1996.
The Medical Service Group of GSIS, Pasay City, however, directed Dr. Estrada to revise her
recommendation, thus [k]indly revise your medical recommendation based on our criteria for granting of
disability. Based on your physical examination (8/23/99) done the degree of claimant’s disability, does
not satisfy the criteria for PTD. We are returning these claim for re-evaluation under PD 626.
On January 29, 2000, Dr. Estrada modified her recommendation by retaining respondent’s temporary
total disability benefits from October 12, 1996 to November 22, 1996, but downgrading the permanent
total disability benefits to compensation equivalent to 8 months permanent partial disability benefits from
March 19, 1999.13 Respondent moved for reconsideration of the evaluation but the same was denied.
Issue: Whether the respondent is entitled to permanent disability benefits
Held: Yes. In the case at bar, respondents entitlement to permanent total disability was established by his
medical records and by the investigation of the very agency he worked for, the PNP, which found him
UNFIT FOR POLICE SERVICE.18 Even the initial findings of Dr. Gervillana B. Estrada, Medical
Officer of the GSIS, Dumaguete City evinced that respondent is really qualified for permanent total
disability benefits. Most of all, the decision of the PNP to retire him at the age of 55 for being unfit for
police service is a clear indication that his heart ailment rendered him incapable of effectively and
competently performing his job as a Police Chief Superintendent without serious discomfort or pain and
without material injury or danger to his life.19 In a number of cases, 20 it was ruled that the early
retirement of an employee due to a work-related ailment, as in the case at bar, proves that he was really
disabled totally to further perform his assigned task, and to deny permanent total disability benefits when
he was forced to retire would render inutile and meaningless the social justice precept guaranteed by the
Constitution.

COMMISSIONER OF INTERNAL REVENUE vs SOLIDBANK CORPORATION

Facts: Solidbank filed its Quarterly Percentage Tax Returns reflecting gross receipts amounting to
P1,474,693.44. It alleged that the total included P350,807,875.15 representing gross receipts from passive
income which was already subjected to 20% final withholding tax (FWT). The Court of Tax Appeals
(CTA) held in Asian Ban Corp. v Commissioner, that the 20% FWT should not form part of its taxable
gross receipts for purposes of computing the tax. Solidbank, relying on the strength of this decision, filed
with the BIR a letter-request for the refund or tax credit. It also filed a petition for review with the CTA
where the it ordered the refund. The CA ruling, however, stated that the 20% FWT did not form part of
the taxable gross receipts because the FWT was not actually received by the bank but was directly
remitted to the government. The Commissioner claims that although the FWT was not actually received
by Solidbank, the fact that the amount redounded to the bank’s benefit makes it part of the taxable gross
receipts in computing the Gross Receipts Tax. Solidbank says the CA ruling is correct.
Issue: Whether or not the FWT forms part of the gross receipts tax.
Held: Yes. In a withholding tax system, the payee is the taxpayer, the person on whom the tax is
imposed. The payor, a separate entity, acts as no more than an agent of the government for the collection
of tax in order to ensure its payment. This amount that is used to settle the tax liability is sourced from the
proceeds constitutive of the tax base. These proceeds are either actual or constructive. Both parties agree
that there is no actual receipt by the bank. What needs to be determined is if there is constructive receipt.
Since the payee is the real taxpayer, the rule on constructive receipt can be rationalized.
The Court applied provisions of the Civil Code on actual and constructive possession. Article 531 of the
Civil Code clearly provides that the acquisition of the right of possession is through the proper acts and
legal formalities established. The withholding process is one such act. There may not be actual receipt of
the income withheld; however, as provided for in Article 532, possession by any person without any
power shall be considered as acquired when ratified by the person in whose name the act of possession is
executed.
In our withholding tax system, possession is acquired by the payor as the withholding agent of the
government, because the taxpayer ratifies the very act of possession for the government. There is thus
constructive receipt. The processes of bookkeeping and accounting for interest on deposits and yield on
deposit substitutes that are subjected to FWT are tantamount to delivery, receipt or remittance. Besides,
Solidbank admits that its income is subjected to a tax burden immediately upon “receipt”, although it
claims that it derives no pecuniary benefit or advantage through the withholding process.
There being constructive receipt, part of which is withheld, that income is included as part of the tax base
on which the gross receipts tax is imposed.

BANAS vs COURT OF APPEALS

Facts: Petitioner, Bibiano V. Bañas Jr. sold to AYALA, 128,265 square meters of land located at
Bayanan, Muntinlupa, for P2,308,770.00. The Deed of Sale provided that upon the signing of the contract
AYALA shall pay P461,754.00 The balance of (P1,847,016.00... was to be paid in four equal...
consecutive annual installments, with 12%... interest per annum on the outstanding balance. AYALA
issued one promissory note covering four equal annual installments. Each periodic payment of
P461,754.00 pesos shall be payable starting on February 20, 1977, and... every year thereafter, or until
February 20, 1980 The same day, petitioner discounted the promissory note with AYALA, for its face
value of P1,847,016.00, evidenced by a Deed of Assignment signed by the petitioner and AYALA.
AYALA issued nine (9) checks to petitioner, all dated February 20, 1976, drawn against Bank of the
Philippine Islands with the uniform amount of P205,224.00. In his 1976 Income Tax Return, petitioner
reported the P461,754 initial payment as income from disposition of capital asset.In the succeeding years,
until 1979, petitioner reported a uniform income of P230,877.00... as gain from sale of capital asset. In his
1980 income tax amnesty return, petitioner also reported... the same amount of P230,877.00 as the
realized gain on disposition of capital asset for the year.
On April 11, 1978, then Revenue Director Mauro Calaguio authorized tax examiners, Rodolfo Tuazon
and Procopio Talon to examine the books and records of petitioner for the year 1976. They discovered
that petitioner had no outstanding receivable from the 1976 land sale to AYALA... and concluded that the
sale was cash and the entire profit should have been taxable in 1976 since the income was wholly derived
in 1976. Tuazon and Talon filed their audit report and declared a discrepancy of P2,095,915.00... in
petitioner's 1976 net income. They recommended deficiency tax assessment for P2,473,673.00.
Meantime, Aquilino Larin succeeded Calaguio as Regional Director of Manila Region IV-A. After
reviewing the examiners' report, Larin directed the revision of the audit report, with instruction to
consider the land as capital asset. The tax due was only 50%... of the... total gain from sale of the property
held by the taxpayer beyond twelve months pursuant to Section 34[5] of the 1977 NIRC The deficiency
tax assessment was reduced to P936,598.50, inclusive of surcharges and penalties for the year 1976. On
June 27, 1980, respondent Larin sent a letter to petitioner informing him of the income tax deficiency that
must be settled immediately. On September 26, 1980, petitioner acknowledged receipt of the letter but
insisted that the sale of his land to AYALA was on installment. On June 8, 1981, the matter was endorsed
to the Acting Chief of the Legal Branch of the National Office of the BIR. The Chief of the Tax Fraud
Unit recommended the prosecution of a criminal case for conspiring to file false and fraudulent returns, in
violation of Section 51 of... the Tax Code against petitioner and his accountants, Andres P. Alejandre and
Conrado Bañas.
Issues: Whether respondent court erred in finding that petitioner's income from the sale of land in 1976
should be declared as a cash transaction in his tax return for the same year
Ruling: As a general rule, the whole profit accruing from a sale of property is taxable as income in the
year the sale is made. But, if not all of the sale price is received during such year, and a statute provides
that income shall be taxable in the year in which it is "received," the... profit from an installment sale is to
be apportioned between or among the years in which such installments are paid and received.
Section 43 and Sec. 175 says that among the entities who may use the above-mentioned installment
method is a seller of real property who disposes his property on installment, provided that the initial
payment does not exceed 25% of the selling price. They also state what may be... regarded as installment
payment and what constitutes initial payment. Initial payment means the payment received in cash or
property excluding evidences of indebtedness due and payable in subsequent years, like promissory notes
or mortgages, given of the purchaser during the... taxable year of sale. Initial payment does not include
amounts received by the vendor in the year of sale from the disposition to a third person of notes given by
the vendee as part of the purchase price which are due and payable in subsequent years.[14] Such
disposition or discounting of receivable is material only as to the computation of the initial payment. If
the initial payment is within 25% of total contract price, exclusive of the proceeds of discounted notes, the
sale qualifies as an installment sale otherwise it is a deferred sale.
Although the proceed of a discounted promissory note is not considered part of the initial payment, it is
still taxable income for the year it was converted into cash. The subsequent payments or liquidation of
certificates of indebtedness is reported using the installment method... in computing the proportionate
income[16] to be returned, during the respective year it was realized. Non-dealer sales of real or personal
property may be reported as income under the installment method provided that the obligation is still
outstanding at... the close of that year. If the seller disposes the entire installment obligation by
discounting the bill or the promissory note, he necessarily must report the balance of the income from the
discounting not only income from the initial installment payment.
Where an installment obligation is discounted at a bank or finance company, a taxable disposition results,
even if the seller guarantees its payment, continues to collect on the installment obligation, or handles
repossession of merchandise in case of default.
Although the proceeds of a discounted promissory note is not considered... initial payment, still it must be
included as taxable income on the year it was converted to cash. When petitioner had the promissory
notes covering the succeeding installment payments of the land issued by AYALA, discounted by
AYALA itself, on the same day of the sale, he lost... entitlement to report the sale as a sale on installment
since, a taxable disposition resulted and petitioner was required by law to report in his returns the income
derived from the discounting. What petitioner did is tantamount to an attempt to circumvent the rule on
payment of... income taxes gained from the sale of the land to AYALA for the year 1976.

PHILIPPINE HEALTH CARE PROVIDERS INC vs COMMISSIONER OF INTERNAL

REVENUE
Facts: The petitioner, a prepaid health-care organization offering benefits to its members. The CIR found
that the organization had a deficiency in the payment of the DST under Section 185 of the 1997 Tax Code
which stipulated its implementation:
“On all policies of insurance or bonds or obligations of the nature of indemnity for loss, damage, or
liability made or renewed by any person, association or company or corporation transacting the business
of accident, fidelity, employer's liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler,
or other branch of insurance (except life, marine, inland, and fire insurance)”
The CIR sent a demand for the payment of deficiency taxes, including surcharges and interest, for 1996-
1997 in the total amount of P224,702,641.18. The petitioner protested to the CIR, but it didn’t act on the
appeal. Hence, the company had to go to the CTA. The latter declared judgment against them and reduced
the taxes. It ordered them to pay 22 million pesos for deficiency VAT for 1997 and 31 million deficiency
VAT for 1996. CA denied the company’s appeal an d increased taxes to 55 and 68 million for 1996 to
1997.
Issues: WON a health care agreement in the nature of an insurance contract and therefore subject to the
documentary stamp tax (DST) imposed under Section 185 of Republic Act 8424 (Tax Code of 1997)
Held: Yes. Petition dismissed. The DST is levied on the exercise by persons of certain privileges
conferred by law for the creation, revision, or termination of specific legal relationships through the
execution of specific instruments. The DST is an excise upon the privilege, opportunity, or facility
offered at exchanges for the transaction of the business. In particular, the DST under Section 185 of the
1997 Tax Code is imposed on the privilege of making or renewing any policy of insurance (except life,
marine, inland and fire insurance), bond or obligation in the nature of indemnity for loss, damage, or
liability.
Petitioner's health care agreement is primarily a contract of indemnity. And in the recent case of Blue
Cross Healthcare, Inc. v. Olivares, this Court ruled that a health care agreement is in the nature of a non-
life insurance policy. Its health care agreement is not a contract for the provision of medical services.
Petitioner does not actually provide medical or hospital services but merely arranges for the same It is
also incorrect to say that the health care agreement is not based on loss or damage because, under the said
agreement, petitioner assumes the liability and indemnifies its member for hospital, medical and related
expenses (such as professional fees of physicians). The term "loss or damage" is broad enough to cover
the monetary expense or liability a member will incur in case of illness or injury. Philamcare Health
Systems, Inc. v. CA.- The health care agreement was in the nature of non-life insurance, which is
primarily a contract of indemnity. Similarly, the insurable interest of every member of petitioner's health
care program in obtaining the health care agreement is his own health. Under the agreement, petitioner is
bound to indemnify any member who incurs hospital, medical or any other expense arising from sickness,
injury or other stipulated contingency to the extent agreed upon under the contract.

SANDERS vs VERIDIANO II
FACTS: Petitioner Dale Sanders was the special services of the US Naval Station (NAVSTA) in
Olongapo city. Private respondents Anthony Rossi and Ralph Wyers are American citizens permanently
residing in the Philippines and who were employed as game room attendants in the special services
department of NAVSTA. On October 3, 1975, the respondents were advised that their employment had
been converted from permanent full-time to permanent part-time. In a letter addressed to petitioner
Moreau, Sanders disagreed with the hearing officer’s report of the reinstatement of private respondents to
permanent full-time status plus back wages. Respondents allege that the letters contained libelous
imputations which caused them to be ridiculed and thus filed for damages against petitioners.
ISSUE:
1) Were the petitioners acting officially or only in their private capacities when they did the acts for
which the private respondents sued them for damages?
2) Does the court have jurisdiction over the case?
HELD: It is abundantly clear in the present case that the acts for which the petitioner are being called to
account were performed by them in the discharge of their official duties. Given the official character of
the letters, the petitioners were, legally speaking, being sued as officers of the United States government.
As such, the complaint cannot prosper unless the government sought to be held ultimately liable has given
its consent to be sued. The private respondents must pursue their claim against the petitioners in
accordance with the laws of the United States of which they are all citizens and under whose jurisdiction
the alleged offenses were committed for the Philippine courts have no jurisdiction over the case.

CENTRAL BANK EMPLOYEES ASSOCIATION vs BANGKO SENTRAL NG PILIPINAS

FACTS: The Central Bank (now BSP) Employees Association Inc, filed a Petition for Prohibition against
BSP and the Executive Secretary of the Office of the President, to restrain respondents from further
implementing the last provisio in Section 15 (c), Article II of RA No 7653, on the ground that it is
unconstitutional. July 3, 1993, RA No 7653 (The New Central Bank Act) took effect. It abolished the old
Central Bank of the Philippines and created a new BSP. Article II, Section 15 (c) RA 7653: A
compensation structure based on job evaluation studies and wage surveys and subject to the Boards
approval, shall be instituted as an integral component of the Bank Sentrals human resource development
program. Provided that the Monetary Board shall make its own system conform as closely as possible
with the principles provided for under RA No 6758 (Salary Standardization Act). Provided, however, that
compensation and wage structure of employees whose positions fall under salary grade 19 and below
shall be in accordance with the rates prescribed under RA No 6758.
7 Subsequent Laws were enacted exempting all other rank-and-file employees of Government Financial
Institutions from the SSL. These are: RA No 7907 (1995) – LBP, RA No 8282 (1997) – SSS, RA No
8289 (1997) – SBGFC, RA No 8291 – GSIS, RA No 8523 (1998) – DBP, RA No 8763 (2000) – HGC,
and RA No 9302 (2004) – PDIC.

ISSUE: Whether or not the last paragraph of Section 15 (c), Article II of RA No 7653, runs afoul of the
constitutional mandate that “No person shall be … denied equal protection of the laws”

HELD: The last paragraph of Section 15 (c), Article II of RA No 7653, is unconstitutional. With the
passage of the subsequent laws amending the charter of the other government financial institutions
(GFIs), the continued operation of the last provisio of Sec 15 (c), Art II of RA No 7653, constitutes
invidious discrimination on the 2,994 rank-and-file employees of Banko Sentral ng Pilipinas. The prior
view on the constitutionality of RA 7653 was confined to an evaluation of its classification between the
rank-and-file and the officers of the BSP, found reasonable because there were substantial distinction that
made real differences between the 2 classes. The subsequent enactments, however, constitute significant
changes in circumstance that considerably alter the reasonability of the continued operation of the last
provisio of Sec 15 (c), Art II of RA No 7653. This relates to the constitutionality of classifications
between the rank-and-file of the BSP and the 7 other GFIs. The classification must not only be
reasonable, but must also apply equally to all members of the class. The provisio may be fair on its face
and impartial in appearance but it cannot be grossly discriminatory in its operation, so as practically to
make unjust distinctions between persons who are without differences.

The inequality of treatment cannot be justified on the mere assertion that each exemption rests on the
policy determination by the legislature. The policy determination argument may support the inequality of
treatment between the rank-and-file and the officers of the BSP, but it cannot justify the inequality of
treatment between the rank-and-file of the BSP and the 7 other GFIs who are similarly situated.

The issue is not the declared policy of the law per se, but the oppressive results of Congress inconsistent
and unequal policy towards the rank-and-file of the BSP and the 7 other GFIs. The challenge to the
constitutionality of Sec 15 (c), Art II of RA No 7653 is premised precisely on the irrational discriminatory
policy adopted by Congress in its treatment of persons similarly situated. In the field of equal protection,
the guarantee that “no person shall be denied the equal protection of the laws” includes the prohibition
against enacting laws that allow invidious discrimination, directly or indirectly. The equal protection
clause does not demand absolute equality but it requires that all persons shall be treated alike, under like
circumstances and conditions both as to priveleges conferred and liabilities enforced. Favoritism and
undue preference cannot be allowed. For the principles is that equal protection and security shall be given
to every person under circumstance which, if not identical are analogous.

SERRANO vs GALLANT MARITIME SERVICES

FACTS: For Antonio Serrano, a Filipino seafarer, the last clause in the 5th paragraph of Section 10,
Republic Act (R.A.) No. 8042, does not magnify the contributions of OFWs to national development, but
exacerbates the hardships borne by them by unduly limiting their entitlement in case of illegal dismissal
to their lump-sum salary either for the unexpired portion of their employment contract “or for three
months for every year of the unexpired term, whichever is less” (subject clause). Petitioner claims that
the last clause violates the OFWs’ constitutional rights in that it impairs the terms of their contract,
deprives them of equal protection and denies them due process.
ISSUE: Does the 5th paragraph of Section 10, RA 8042 violate the non-impairment of contract clause of
the Constitution?
HELD: NO. The prohibition is aligned with the general principle that laws newly enacted have only a
prospective operation, and cannot affect acts or contracts already perfected; however, as to laws already
in existence, their provisions are read into contracts and deemed a part thereof. Thus, the non-impairment
clause under Section 10, Article II is limited in application to laws about to be enacted that would in any
way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the
intention of the parties thereto.
As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the
employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A.
No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when
the parties executed their 1998 employment contract, they were deemed to have incorporated into it all
the provisions of R.A. No. 8042.

SOUTHERN CROSS CEMENT CORPORATION vs CEMENT MANUFACTURERS

ASSOCIATION OF THE PHILIPIINES
Facts: Republic Act No. 8800, the Safeguard Measures Act (SMA), which was one of the laws enacted
by Congress soon after the Philippines ratified the General Agreement on Tariff and Trade (GATT) and
the World Trade Organization (WTO) Agreement. The SMA provides the structure and mechanics for the
imposition of emergency measures, including tariffs, to protect domestic industries and producers from
increased imports which inflict or could inflict serious injury on them.
Petitioner Southern Cross Cement Corporation (Southern Cross) is a domestic corporation engaged in the
business of cement manufacturing, production, importation and exportation. Its principal stockholders are
Taiheiyo Cement Corporation and Tokuyama Corporation, purportedly the largest cement manufacturers
in Japan.
Private respondent Philippine Cement Manufacturers Corporation (Philcemcor) is an association of
domestic cement manufacturers. It has eighteen (18) members, per Record. While Philcemcor heralds
itself to be an association of domestic cement manufacturers, it appears that considerable equity holdings,
if not controlling interests in at least twelve (12) of its member-corporations, were acquired by the three
largest cement manufacturers in the world, namely Financiere Lafarge S.A. of France, Cemex S.A. de
C.V. of Mexico, and Holcim Ltd. of Switzerland (formerly Holderbank Financiere Glaris, Ltd., then
Holderfin B.V.).
the DTIs disagreement with the conclusions of the Tariff Commission, but at the same time, ultimately
denying Philcemcors application for safeguard measures on the ground that the he was bound to do so in
light of the Tariff Commissions negative findings.
Philcemcor challenged this Decision of the DTI Secretary by filing with the Court of Appeals a Petition
for Certiorari, Prohibition and Mandamus seeking to set aside the DTI Decision, as well as the Tariff
Commissions Report. The Court of Appeals Twelfth Division, in a Decision penned by Court of Appeals
Associate Justice Elvi John Asuncion, partially granted Philcemcors petition.
On 23 June 2003, Southern Cross filed the present petition, arguing that the Court of Appeals has no
jurisdiction over Philcemcors petition, as the proper remedy is a petition for review with the CTA
conformably with the SMA, and; that the factual findings of the Tariff Commission on the existence or
non-existence of conditions warranting the imposition of general safeguard measures are binding upon the
DTI Secretary. Despite the fact that the Court of Appeals Decision had not yet become final, its binding
force was cited by the DTI Secretary when he issued a new Decision on 25 June 2003, wherein he ruled
that that in light of the appellate courts Decision, there was no longer any legal impediment to his
deciding Philcemcors application for definitive safeguard measures.
The Court of Appeals had held that based on the foregoing premises, petitioner’s prayer to set aside the
findings of the Tariff Commission in its assailed Report dated March 13, 2002 is DENIED. On the other
hand, the assailed April 5, 2002 Decision of the Secretary of the Department of Trade and Industry is
hereby SET ASIDE. Consequently, the case is REMANDED to the public respondent Secretary of
Department of Trade and Industry for a final decision in accordance with RA 8800 and its Implementing
Rules and Regulations. Hence, the appeal.
Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time that that in light of the
appellate courts Decision there was no longer any legal impediment to his deciding Philcemcors
application for definitive safeguard measures. He made a determination that, contrary to the findings of
the Tariff Commission, the local cement industry had suffered serious injury as a result of the import
surges. Accordingly, he imposed a definitive safeguard measure on the importation of gray Portland
cement, in the form of a definitive safeguard duty in the amount of P20.60/40 kg. bag for three years on
imported gray Portland Cement. Hence, the appeal.
Issue: Whether or not the decision of DTI Secretary, to impose safeguard measures is valid.
Held: NO, due to the nature of this case, the Court found that the DTI should follow the regulations
prescribed by SMA. The Court held that he assailed Decision of the Court of Appeals is DECLARED
NULL AND VOID and SET ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also
DECLARED NULL AND VOID and SET ASIDE. No Costs.
Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time that that in light of the
appellate courts Decision there was no longer any legal impediment to his deciding Philcemcors
application for definitive safeguard measures. He made a determination that, contrary to the findings of
the Tariff Commission, the local cement industry had suffered serious injury as a result of the import
surges. Accordingly, he imposed a definitive safeguard measure on the importation of gray Portland
cement, in the form of a definitive safeguard duty in the amount of P20.60/40 kg. bag for three years on
imported gray Portland Cement.

PROVINCE OF NORTH COTABATO vs GOVERNMENT OF THE REPUBLIC OF THE

PHILIPPINE PEACE PANEL ON ANCESTRAL DOMAIN
FACTS: President Gloria Macapagal-Arroyo, in line with the government‘s policy of pursuing peace
negotiations with the Moro Islamic Liberation Front (MILF), asked Prime Minister Mahathir Mohammad
to convince the MILF to continue negotiating with the government. MILF, thereafter, convened its
Central Committee and decided to meet with the Government of the Republic of the Philippines (GRP).
Formal peace talks were held in Libya which resulted to the crafting of the GRP-MILF Tripoli Agreement
on Peace (Tripoli Agreement 2001) which consists of three (3) aspects: a.) security aspect; b.)
rehabilitation aspect; and c.) ancestral domain aspect. Various negotiations were held which led to the
finalization of the Memorandum of Agreement on the Ancestral Domain (MOA-AD). The said
memorandum was set to be signed last August 5, 2008. In its body, it grants ―the authority and
jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro to the Bangsamoro
Juridical Entity (BJE). The latter, in addition, has the freedom to enter into any economic cooperation and
trade relation with foreign countries. ―The sharing between the Central Government and the BJE of total
production pertaining to natural resources is to be 75:25 in favor of the BJE. The MOA-AD further
provides for the extent of the territory of the Bangsamoro. It describes it as ―the land mass as well as the
maritime, terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space
above it, embracing the Mindanao-Sulu-Palawan geographic region. With regard to governance, on the
other hand, a shared responsibility and authority between the Central Government and BJE was provided.
The relationship was described as ―associative. With the formulation of the MOA-AD, petitioners aver
that the negotiation and finalization of the MOA-AD violates constitutional and statutory provisions on
public consultation, as mandated by Executive Order No. 3, and right to information. They further
contend that it violates the Constitution and laws. Hence, the filing of the petition.

ISSUES: 1) Whether or not the MOA-AD violates constitutional and statutory provisions on public
consultation and right to information 2) Whether or not the MOA-AD violates the Constitution and the
laws.

HELD: The MOA-AD subject of the present cases is of public concern, involving as it does the
sovereignty and territorial integrity of the State, which directly affects the lives of the public at large.
Intended as a ―splendid symmetry to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution which provides that subject to
reasonable conditions prescribed by law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest. Moreover, the policy of full public disclosure
enunciated in above-quoted Section 28 complements the right of access to information on matters of
public concern found in the Bill of Rights. The right to information guarantees the right of the people to
demand information, while Section 28 recognizes the duty of officialdom to give information even if
nobody demands. The policy of public disclosure establishes a concrete ethical principle for the conduct
of public affairs in a genuinely open democracy, with the people‘s right to know as the centerpiece. It is a
mandate of the State to be accountable by following such policy. These provisions are vital to the exercise
of the freedom of expression and essential to hold public officials at all times accountable to the people.
Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As
Congress cannot revoke this principle, it is merely directed to provide for ―reasonable safeguards. The
complete and effective exercise of the right to information necessitates that its complementary provision
on public disclosure derive the same self-executory nature. Since both provisions go hand-in-hand, it is
absurd to say that the broader right to information on matters of public concern is already enforceable
while the correlative duty of the State to disclose its transactions involving public interest is not
enforceable until there is an enabling law. Respondents cannot thus point to the absence of an
implementing legislation as an excuse in not effecting such policy. An essential element of these
freedoms is to keep open a continuing dialogue or process of communication between the government
and the people. It is in the interest of the State that the channels for free political discussion be maintained
to the end that the government may perceive and be responsive to the people‘s will. Envisioned to be
corollary to the twin rights to information and disclosure is the design for feedback mechanisms. The
imperative of a public consultation, as a species of the right to information, is evident in the ―marching
orders‖ to respondents. The mechanics for the duty to disclose information and to conduct public
consultation regarding the peace agenda and process is manifestly provided by E.O. No. 3. The
preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the contribution of
civil society to the comprehensive peace process by institutionalizing the people‘s participation. One of
the three underlying principles of the comprehensive peace process is that it ―should be community-
based, reflecting the sentiments, values and principles important to all Filipinos and ―shall be defined
not by the government alone, nor by the different contending groups only, but by all Filipinos as one
community. Included as a component of the comprehensive peace process is consensus-building and
empowerment for peace, which includes ―continuing consultations on both national and local levels to
build consensus for a peace agenda and process, and the mobilization and facilitation of people‘s
participation in the peace process. Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to
effectuate “continuing” consultations, contrary to respondents’ position that plebiscite is “more than
sufficient consultation. Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP,
one of which is to ―conduct regular dialogues with the National Peace Forum (NPF) and other peace
partners to seek relevant information, comments, recommendations as well as to render appropriate and
timely reports on the progress of the comprehensive peace process. E.O. No. 3 mandates the
establishment of the NPF to be ―the principal forum for the Presidential Adviser on Peace Progress
(PAPP) to consult with and seek advice from the peace advocates, peace partners and concerned sectors
of society on both national and local levels, on the implementation of the comprehensive peace process,
as well as for government civil society dialogue and consensus-building on peace agenda and initiatives.
In fine, E.O. No. 3 establishes petitioners’ right to be consulted on the peace agenda, as a corollary to the
constitutional right to information and disclosure. In general, the objections against the MOA-AD center
on the extent of the powers conceded therein to the BJE. Petitioners assert that the powers granted to the
BJE exceed those granted to any local government under present laws, and even go beyond those of the
present ARMM. Before assessing some of the specific powers that would have been vested in the BJE,
however, it would be useful to turn first to a general idea that serves as a unifying link to the different
provisions of the MOA-AD, namely, the international law concept of association. Significantly, the
MOA-AD explicitly alludes to this concept, indicating that the Parties actually framed its provisions with
it in mind. Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES,
and paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD
most clearly uses it to describe the envisioned relationship between the BJE and the Central Government.
is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name
as it meets the criteria of a state laid down in the Montevideo Convention, namely, a permanent
population, a defined territory, a government, and a capacity to enter into relations with other states.
The defining concept underlying the relationship between the national government and the BJE being
itself contrary to the present Constitution, it is not surprising that many of the specific provisions of the M
OA-AD on the formation and powers of the BJE are in conflict with the Constitution and the laws. Article
X, Section 18 of the Constitution provides that ―[t]he creation of the autonomous region shall be
effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for
the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite
shall be included in the autonomous region.
The BJE is more of a state than an autonomous region. But even assuming that it is covered by the term
―autonomous region in the constitutional provision just quoted, the MOA-AD would still be in conflict
with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic area of
the ARMM and, in addition, the municipalities of Lanao del Norte which voted for inclusion in the
ARMM during the 2001 plebiscite – Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal – are
automatically part of the BJE without need of another plebiscite, in contrast to the areas under Categories
A and B mentioned earlier in the overview. That the present components of the ARMM and the above-
mentioned municipalities voted for inclusion therein in 2001, however, does not render another plebiscite
unnecessary under the Constitution, precisely because what these areas voted for then was their inclusion
in the ARMM, not the BJE.
Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD
is to be effected. That constitutional provision states: ―The State recognizes and promotes the rights of
indigenous cultural communities within the framework of national unity and development. An associative
arrangement does not uphold national unity. While there may be a semblance of unity because of the
associative ties between the BJE and the national government, the act of placing a portion of Philippine
territory in a status which, in international practice, has generally been a preparation for independence, is
certainly not conducive to national unity.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned between
the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state
and implies that the same is on its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present
legal framework will not be effective until that framework is amended, the same does not cure its defect.
The inclusion of provisions in the MOA-AD establishing an associative relationship between the BJE and
the Central Government is, itself, a violation of the Memorandum of Instructions from the President dated
March 1, 2001, addressed to the government peace panel. Moreover, as the clause is worded, it virtually
guarantees that the necessary amendments to the Constitution and the laws will eventually be put in place.
Neither the GRP Peace Panel nor the President herself is authorized to make such a guarantee. Upholding
such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress,
a Constitutional Convention, or the people themselves through the process of initiative, for the only way
that the Executive can ensure the outcome of the amendment process is through an undue influence or
interference with that process.

GANZON vs COURT OF APPEALS

FACTS: A series of administrative complaints, ten in number, were filed before the Department of Local
Government against petitioner Mayor Rodolfo T. Ganzon by various city officials sometime in 1988 on
various charges, among them, abuse of authority, oppression, grave misconduct, etc. Finding probable
grounds, the respondent Secretary of the Department of Local Government Luis T. Santos issued 3
successive 60- day suspensions. The petitioner then instituted an action for prohibition against the
secretary in the RTC of Iloilo City where he succeeded in obtaining a writ of preliminary injunction. He
also instituted actions for prohibition before the Court of Appeals but were both dismissed. Thus, this
petition for review with the argument that the respondent Secretary is devoid, in any event, of any
authority to suspend and remove local officials as the 1987 Constitution no longer allows the President to
exercise said power.
ISSUE: Whether or not the Secretary of Local Government (as the alter ego of the President) has the
authority to suspend and remove local officials.
HELD: The Constitution did nothing more, and insofar as existing legislation authorizes the President
(through the Secretary of Local Government) to proceed against local officials administratively, the
Constitution contains no prohibition. The Chief Executive is not banned from exercising acts of
disciplinary authority because she did not exercise control powers, but because no law allowed her to
exercise disciplinary authority.

In those case that this Court denied the President the power (to suspend/remove) it was not because that
the President cannot exercise it on account of his limited power, but because the law lodged the power
elsewhere. But in those cases in which the law gave him the power, the Court, as in Ganzon v. Kayanan,
found little difficulty in sustaining him. We reiterate that we are not precluding the President, through the
Secretary of Interior from exercising a legal power, yet we are of the opinion that the Secretary of interior
is exercising that power oppressively, and needless to say, with a grave abuse of discretion. As we
observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor Ganzon is to
all intents and purposes, to make him spend the rest of his term in inactivity. It is also to make, to all
intents and purposes, his suspension permanent.

SALITA vs MAGTOLIS
FACTS: Erwin Espinosa and Joselita Salita were married at the Roman Catholic Church in Ermita,
Manila. A year later, their union turned sour. They separated in fact. Subsequently, Erwin sued for
annulment on the ground of Joselita’s psychological incapacity which incapacity existed at the time of the
marriage although the same became manifest only thereafter. Dissatisfied with the allegation in the
petition, Joselita moved for a bill of particulars which the trial court granted. Subsequently, in his Bill of
Particulars, Edwin specified that at the time of their marriage, Joselita was psychologically incapacitated
to comply with the essential marital obligations of their marriage in that she was unable to understand and
accept the demands made by his profession — that of a newly qualified Doctor of Medicine — upon his
time and efforts so that she frequently complained of his lack of attention to her even to her mother,
whose intervention caused petitioner to lose his job.
Still petitioner was not contented with the Bill of Particulars. She insists that the allegations in the Bill of
Particulars constitute a legal conclusion, not an averment of ultimate facts, and fail to point out the
specific essential marital obligations she allegedly was not able to perform, and thus render the Bill of
Particulars insufficient if not irrelevant to her husband’s cause of action. She rationalizes that her
insistence on the specification of her particular conduct or behavior with the corresponding circumstances
of time, place and person does not call for information on evidentiary matters because without these
details she cannot adequately and intelligently prepare her answer to the petition.
ISSUE: Whether or not the allegations in the petition for annulment of marriage and the subsequent bill
of particulars filed in amplification of the petition is sufficient.
HELD: Ultimate facts are important and substantial facts which either directly from the basis of the
primary right and duty, or which directly make up the wrongful acts or omission of the defendant. It
refers to acts which the evidence on trial will prove, and not the evidence which will be required to prove
the existence of those facts. The Supreme Court ruled that on the basis of the allegations, it is evident that
petitioner can already prepare her responsive pleading or for trial. Private respondent has already alleged
that petitioner was unable to understand and accept the demands made by his profession. To demand for
more details would indeed be asking for information on evidentiary facts — facts necessary to prove
essential or ultimate facts. The additional facts called for by petitioner regarding her particular acts or
omissions would be evidentiary, and to obtain evidentiary matters is not the function of a motion for bill
of particulars.
WHEREFORE, there being no reversible error, the instant petition is DENIED and the questioned
Resolution of respondent Court of Appeals is AFFIRMED

REPUBLIC vs COURT OF APPEALS

FACTS: Respondent Morato filed a free patent application on a parcel of land, which was approved and
issued an original certificate of title. Both the free patent and title specifically mandate that the land shall
not be alienated nor encumbered within 5 years from the date of the issuance of the patent. The District
Land Officer, acting upon reports that Morato had encumbered the land and upon finding that the subject
land is submerged in water during high tide and low tide, filed a complaint for cancellation of the title and
reversion of the parcel of land to the public domain. RTC dismissed the complaint. CA affirmed.
ISSUE:
1. Whether or not respondent violated the free patent condition prohibiting encumbering the land within
the 5-year period?
2. Whether or not the land is of public domain?
HELD:
1. Yes. Public Land Act Sec. 18 provides that…lands acquired under free patent or homestead provisions
shall not be subject to encumbrance or alienation from the date of approval of the application and for a
term of 5 years from and after the date of issuance of the patent or grant…The contracts of lease and
mortgage executed by Morato constitute an encumbrance as contemplated by section 18 of the Public
Land Act because such contracts impair the use of the property.
2. Yes. Based from the facts, the land is clearly foreshore as it is subject to the ebb and flow of the tide.
When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore
land and passed to the realm of the public domain. In Government v. Cabangis, the Court annulled the
registration of land subject of cadastral proceedings when the parcel subsequently became foreshore land.
In another case, the Court voided the registration decree of a trial court and held that said court had no
jurisdiction to award foreshore land to any private person or entity. The subject land in this case, being
foreshore land should therefore be returned to the public domain.

ANTONIO vs REYES
FACTS: Leonilo Antonio and Marie Ivonne Reyes got married before a minister of the Gospel at the
Manila City Hall and subsequently got married at a church in Pasig on December 6, 1990. On March 8,
1993, petitioner filed a petition to have his marriage declared null and void on the ground of his wife’s
psychological incapacity as manifested by her persistent lying about herself and other things. The lower
court gave credence to the petitioner’s evidence but the appellate court reversed the decision, thus the
petition for certiorari
ISSUE: Can petitioner invoke Article 36 of the Family Code as a ground for the declaration of nullity of
his marriage?
HELD: The present case sufficiently satisfies the guidelines set in the Molina case. First, the petitioner
had sufficiently overcome his burden in proving the psychological incapacity of his spouse. Second, the
root cause of the respondent’s psychological incapacity has been medically identified, alleged in the
complaint, sufficiently proven by experts and clearly explained in the trial court’s decision. Third,
psychological incapacity was established to have already existed at the time of and even before the
celebration of marriage. Fourth, the gravity of respondent’s psychological incapacity is sufficient to prove
her disability to assume the essential obligations of marriage. Fifth, respondent is evidently unable to
comply with the essential marital obligations. Sixth, the Court of Appeals clearly erred when it failed to
take into consideration the fact that the marriage of the parties was annulled by the Catholic Church.
Seventh, although it was not clinically proven that the psychological incapacity is incurable, the fact that
the petitioner returned to his wife in hopes of fixing their marriage and yet the latter’s behavior remained
unchanged shows that the respondent’s condition is incurable. The Molina case is not set in stone and that
the interpretation of Article 36 relies heavily on a case-to-case perception. As such, strict enforcement of
the guidelines is not necessary thus, the petition is granted, the ruling of the RTC affirmed and of CA
reversed.