FIRST DIVISION

[ G.R. No. 212734. December 05, 2018 ]

MABUHAY HOLDINGS CORPORATION, PETITIONER, VS. SEMBCORP
LOGISTICS LIMITED, RESPONDENT.

DECISION

TIJAM, J.:

This is an appeal from the Decision[1] dated November 19, 2013 and the Resolution[2] dated June 3,
2014 of the Court of Appeals (CA) in CA-G.R. CV No. 92296, reversing and setting aside the
Decision of the Regional Trial Court (RTC)[3] of Makati City, Branch 149, in SP Proc. No. M-6064.

Facts of the Case

Petitioner Mabuhay Holdings Corporation (Mabuhay) and Infrastructure Development & Holdings,
Inc. (IDHI) are corporations duly organized and existing under the Philippine Laws.[4]

Respondent Sembcorp Logistics Limited (Sembcorp), formerly known as Sembawang Maritime

Limited, is a company incorporated in the Republic of Singapore.[5]

On January 23, 1996, Mabuhay and IDHI incorporated Water Jet Shipping Corporation (WJSC) in
the Philippines to engage in the venture of carrying passengers on a common carriage by inter-
island fast ferry. On February 5, 1996, they also incorporated Water Jet Netherlands Antilles, N.Y.
(WJNA) in Curasao, Netherlands.[6] Their respective shareholding percentage are as follows:[7]
WJSC WJNA
Mabuhay 70% 70%
IDHI 30% 30%
On September 16, 1996, Mabuhay, IDHI, and Sembcorp entered into a Shareholders'
Agreement[8] (Agreement) setting out the terms and conditions governing their relationship in
connection with a planned business expansion of WJSC and WJNA. Sembcorp decided to invest in
the said corporations. As a result of Sembcorp's acquisition of shares, Mabuhay and IDHI's
shareholding percentage in the said corporations were reduced, as follows:[9]
WJSC WJNA
Mabuhay 45.5% 45.5%
IDHI 19.5% 19.5%
Sembcorp 35.0% 35.0%
Pursuant to Article 13 of the Agreement, Mabuhay and IDHI voluntarily agreed to jointly guarantee
that Sembcorp would receive a minimum accounting return of US$929,875.50 (Guaranteed Return)
at the end of the 24th month following the full disbursement of the Sembcorp's equity investment in
WJNA and WJSC. They further agreed that the Guaranteed Return shall be paid three (3) months
from the completion of the special audits of WJSC and WJNA as per Article 13.3 of the Agreement.
[10]

The Agreement included an arbitration clause, viz:

Article XIX. APPLICABLE LAW; ARBITRATION

19.1 This Agreement and the validity and performance thereof shall be governed by the laws of the
Republic of the Philippines.

19.2 Any dispute, controversy or claim arising out of or relating to this Agreement, or a breach
thereof, other than intra-corporate controversies, shall be finally settled by arbitration in accordance
with the rules of conciliation and arbitration of the International Chamber of Commerce by one
arbitrator with expertise in the matter at issue appointed in accordance with said rules. The
arbitration proceeding including the rendering of the award shall take place in Singapore and shall
be conducted in the English Language. This arbitration shall survive termination of this Agreement.
Judgment upon the award rendered may be entered in any court having jurisdiction or application
may be made to such court for a judicial acceptance of the award and an order of enforcement, as
the case may be.[11]
On December 6, 1996, Sembcorp effected full payment of its equity investment. Special audits of
WJNA and WJSC were then carried out and completed on January 8, 1999. Said audits revealed
that WJSC and WJNA both incurred losses.[12]

On November 26, 1999, Sembcorp requested for the payment of its Guaranteed Return from
Mabuhay and IDID. Mabuhay admitted its liability but asserted that since the obligation is joint, it is
only liable for fifty percent (50%) of the claim or US$464,937.75.[13]

On February 24, 2000, Sembcorp sent a Final Demand to Mabuhay to pay the Guaranteed Return.
Mabuhay requested for three (3) months to raise the necessary funds but still failed to pay any
amount after the lapse of the said period.[14]

On December 4, 2000, Sembcorp filed a Request for Arbitration before the International Court of
Arbitration of the International Chamber of Commerce (ICC) in accordance with the Agreement and
sought the following reliefs:
(1) payment of the sum of US$929,875.50;

(2) alternatively, damages;

(3) interest on the above sum at such rate as the Arbitral Tribunal deems fit and just;

(4) cost of the arbitration; and

(5) Such further and/or other relief as the Arbitral Tribunal deems fit and just.[15]
On April 20, 2004, a Final Award[16] was rendered by Dr. Anan Chantara-Opakom (Dr. Chantara-
Opakorn), the Sole Arbitrator appointed by the ICC. The dispositive portion of the award reads:
The Sole Arbitrator hereby decides that the Sole Arbitrator has jurisdiction over the parties' dispute
and directs [Mabuhay] to make the following payments to [Sembcorp]:

1. Half of the Guaranteed Return or an amount of US$464,937.75 (Four Hundred Sixty Four
Thousand Nine Hundred Thirty Seven and Point Seventy Five US Dollars);

2. Interest at the rate of 12% per annum on the said amount of US$464,937.75 calculated from the
date of this Final Award until the said amount of US$464,937.75 is actually and completely paid by
[Mabuhay] to [Sembcorp]; and

3. A reimbursement of half of the costs of arbitration fixed by the ICC Court at US$57,000 or the
aggregate half of which amount to US$28,500 together with an interest at the rate of 12% per
annum calculated from the date of this Final Award until the said amount is actually and completely
paid by [Mabuhay] to [Sembcorp].[17]
Consequently, on April 14, 2005, Sembcorp filed a Petition for Recognition and Enforcement of a
Foreign Arbitral Award[18] before the RTC ofMakati City, Branch 149.[19]

Mabuhay filed an Opposition citing the following grounds for non-enforcement under Article V of
the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York
Convention): (1) the award deals with a conflict not falling within the terms of the submission to
arbitration; (2) the composition of the arbitral authority was not in accordance with the agreement of
the parties; and (3) recognition or enforcement of the award would be contrary to the public policy
of the Philippines.[20]

Mabuhay argued that the dispute is an intra-corporate controversy, hence, excluded from the scope
of the arbitration clause in the Agreement. It alleged that on March 13, 1997, Sembcorp became the
controlling stockholder of IDHI by acquiring substantial shares of stocks through its nominee, Mr.
Pablo N. Sare (Sare). Mabuhay thus claimed that it has already been released from the joint
obligation with IDHI as Sembcorp assumed the risk of loss when it acquired absolute ownership
over the aforesaid shares. Moreover, Mabuhay argued that the appointment of Dr. Chantara-
Opakorn was not in accordance with the arbitral clause as he did not have the expertise in the matter
at issue, which involved application of Philippine law. Finally, Mabuhay argued that the imposition
of twelve percent (12%) interest from the date of the Final Award was contrary to the Philippine law
and jurisprudence.[21]

Ruling of the RTC

In a Decision[22] dated May 23, 2008, the RTC dismissed the petition and ruled that the Final Award
could not be enforced.

The RTC ruled that the "simple contractual payment obligation" of Mabuhay and IDHI to Sembcorp
had been rescinded and modified by the merger or confusion of the person of IDHI into the person
of Sembcorp. As a result, said obligation was converted into an intra-corporate matter.[23]

The RTC also ruled on the issue of the lack of expertise of the Sole Arbitrator. Thus, the dispositive
portion of its Decision reads:
WHEREFORE, premises considered, this court finds in favor of the defendant Mabuhay Holdings
Corporation, hence it hereby DISMISSED the petition for the recognition and enforcement of the
subject Arbitral Award for the simple reason that it was issued in violation of the agreement.
Moreover, this court cannot recognize the Arbitral Award because it was not the work of an expert
as required under the agreement. Finally, the payment obligation in interest of 12% per annum on
the US Dollar Amounts ($464,937.75 and $28,500) as ordered by the Sole Arbitrator is contrary to
law and existing jurisprudence, hence void. Thus, it cannot be enforced by this Court.

Cost de oficio.

SO ORDERED.[24]
Aggrieved, Sembcorp appealed to the CA via a Notice of Appeal under Rule 41 of the Rules of
Court.[25]

Ruling of the CA

On November 19, 2013, the CA promulgated its Decision[26] reversing and setting aside the RTC
Decision.
The CA noted that the Final Award already settled the factual issue on whether Sembcorp acquired
the adverted shares of stock in IDHI. Thus, RTC's contrary findings constituted an attack on the
merits of the Final Award. In sum, the CA held that the court shall not disturb the arbitral tribunal's
determination of facts and/or interpretation of the law. It recognized the Final Award and remanded
the case to the RTC for proper execution.[27]

Undaunted, Mabuhay moved for the reconsideration of the CA Decision but the same was denied in
a Resolution[28] dated June 3, 2014.

Hence, this petition.

Issue

The core issue for resolution is whether the RTC correctly refused to enforce the Final Award.
Stated differently, was Mabuhay able to establish a ground for refusing the enforcement of the Final
Award under our applicable laws and jurisprudence on arbitration?

Our Ruling

We deny the petition.

I. Governing Laws

An assiduous analysis of the present case requires a prefatory determination of the rules and other
legal authorities that would govern the subject arbitration proceedings and award.

The arbitration proceedings between the parties herein were conducted in Singapore and the
resulting Final Award was also rendered therein. As such, the Final Award is a "foreign arbitral
award" or an award made in a country other than the Philippines.[29]

The Philippines is among the first signatories of the 1958 Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York Convention) and acceded to the same as early
as 1967.[30] Singapore, on the other hand, became a Contracting State in 1986.[31] The New York
Convention aims to provide common legislative standards for the recognition of arbitration
agreements and court recognition and enforcement of foreign and non-domestic arbitral awards.
Thus, the New York Convention primarily governs the recognition and enforcement of foreign
arbitral awards by our courts.[32]

In addition, as a member of the United Nations Commission in International Trade Law

(UNCITRAL), the Philippines also adopted the UNCITRAL Model Law[33] (Model Law) as the
governing law on international commercial arbitrations. Hence, when the Congress enacted
Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004[34] (ADR Act), it
incorporated the Model Law in its entirety.

Sections 19 and 42 of the ADR Act expressly provided for the applicability of the New York
Convention and the Model Law in our jurisdiction, viz:
SEC. 19. Adoption of the Model Law on International Commercial Arbitration. - International
commercial arbitration shall be governed by the Model Law on International Commercial
Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade
Law on June 21, 1985 (United Nations Document A/40/17) and recommended approved on
December 11, 1985, copy of which is hereto attached as Appendix "N'.
xxxx

SEC. 42. Application of the New York Convention. - The New York Convention shall govern the
recognition and enforcement of arbitral awards covered by the said Convention.
The recognition and enforcement of such arbitral awards shall be filled (sic) with regional trial
court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said
procedural rules shall provide that the party relying on the award or applying for its enforcement
shall file with the court the original or authenticated copy of the award and the arbitration
agreement. If the award or agreement is not made in any of the official languages, the party shall
supply a duly certified translation thereof into any of such languages.

The applicant shall establish that the country in which foreign arbitration award was made is a party
to the New York Convention.

x x x x (Emphasis ours)
Five years after the enactment of the ADR Act, the Department of Justice issued the ADR Act's
Implementing Rules and Regulations (IRR)[35], and the Supreme Court issued the Special Rules of
Court on Alternative Dispute Resolution[36] (Special ADR Rules). These two rules, in addition to the
ADR Act incorporating the New York Convention and the Model Law, are our arbitration laws.

In addition to our arbitration laws, our courts, in recognizing or enforcing a foreign arbitral award,
shall also take into consideration the laws applied by the arbitral tribunal. These may comprise the
substantive law of the contract and the procedural rules or the rules governing the conduct of
arbitration proceedings.

As agreed upon by the parties herein under the arbitral clause in their Agreement, the substantive
law of the contract is the Philippine law and the procedural rules are the ICC Rules. During the
filing of the request for Arbitration, the ICC Rules in effect was the ICC Rules of Arbitration
1998[37] Considering that the essence of arbitration is party autonomy, the Court shall refer to the
said Rules for purposes of examining the procedural infirmities raised by the parties to the
arbitration.

II. Jurisdiction

Mabuhay argues that the CA seriously erred in not dismissing outright the appeal of Sembcorp as it
had no jurisdiction to act on the appeal. Mabuhay's argument hinges on Rule 19.12 of the Special
ADR Rules, as follows:
Rule 19.12. Appeal to the Court of Appeals. - An appeal to the Court of Appeals through a petition
for review under this Special Rule shall only be allowed from the following final orders of the
Regional Trial Court:

xxxx

k. Refusing recognition and/or enforcement of a foreign arbitral award; (Emphasis supplied)

xxxx
Mabuhay thus contends that filing a petition for review and not a notice of appeal is the proper
remedy to contest the RTC's refusal to enforce the Final Award.

The Court notes, however, that the Special ADR Rules took effect in 2009. Sembcorp's notice of
appeal was filed only in 2008. The ADR Act, which was already in effect at that time, did not
specify the proper remedy of appeal from the RTC to the CA. It merely provides that "a decision of
the regional trial court confirming, vacating, setting aside, modifying or correcting an arbitral award
may be appealed to the CA in accordance with the rules of procedure to be promulgated by the
Supreme Court."[38]

The Special ADR Rules shall retroactively apply to all pending cases provided that no vested rights
are impaired or prejudiced.[39] In this case, Sembcorp filed a notice of appeal in accordance with
Section 2 of Rule 41[40] as it is the only applicable rule existing at that time. Sembcorp had a vested
right to due process in relying on the said rule. Consequently, the CA had jurisdiction to act on
Sembcorp's appeal.

We now discuss the Court's jurisdiction to entertain the instant petition. The Court's review of a CA
Decision is discretionary and limited to specific grounds provided under the Special ADR Rules.
Thus:
Rule 19.36. Review discretionary. - A review by the Supreme Court is not a matter of right, but of
sound judicial discretion, which will be granted only for serious and compelling reasons resulting
in grave prejudice to the aggrieved party. The following, while neither controlling nor fully
measuring the court's discretion, indicate the serious and compelling, and necessarily, restrictive
nature of the grounds that will warrant the exercise of the Supreme Court's discretionary powers,
when the Court of Appeals:
a. Failed to apply the applicable standard or test for judicial review prescribed in these
Special ADR Rules in arriving at its decision resulting in substantial prejudice to the
aggrieved party;

b. Erred in upholding a final order or decision despite the lack of jurisdiction of the court that
rendered such final order or decision;

c. Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules
resulting in substantial prejudice to the aggrieved party; and

d. Committed an error so egregious and harmful to a party as to amount to an undeniable excess of

jurisdiction.
The mere fact that the petitioner disagrees with the Court of Appeals' determination of questions of
fact, of law or both questions of fact and law, shall not warrant the exercise of the Supreme Court's
discretionary power. The error imputed to the Court of Appeals must be grounded upon any of the
above prescribed grounds for review or be closely analogous thereto.

A mere general allegation that the Court of Appeals has committed serious and substantial error or
that it has acted with grave abuse of discretion resulting in substantial prejudice to the petitioner
without indicating with specificity the nature of such error or abuse of discretion and the serious
prejudice suffered by the petitioner on account thereof, shall constitute sufficient ground for the
Supreme Court to dismiss outright the petition. (Emphasis ours)
In relation to the applicable standard or test for judicial review by the CA in arriving at its decision,
the Special ADR Rules further provide:
Rule 19.20. Due course. - If upon the filing of a comment or such other pleading or documents as
may be required or allowed by the Court of Appeals or upon the expiration of the period for the
filing thereof, and on the basis of the petition or the records, the Court of Appeals finds prima
facie that the Regional Trial Court has committed an error that would warrant reversal or
modification of the judgment, final order, or resolution sought to be reviewed, it may give due
course to the petition; otherwise, it shall dismiss the same.
xxxx

Rule 19.24. Subject of appeal restricted in certain instance. - If the decision of the Regional Trial
Court refusing to recognize and/or enforce, vacating and/or setting aside an arbitral award is
premised on a finding of fact, the Court of Appeals may inquire only into such fact to determine
the existence or non-existence of the specific ground under the arbitration laws of the
Philippines relied upon by the Regional Trial Court to refuse to recognize and/or enforce,
vacate and/or set aside an award. Any such inquiry into a question of fact shall not be resorted to for
the purpose of substituting the court's judgment for that of the arbitral tribunal as regards the latter's
ruling on the merits of the controversy. (Emphasis ours)
Here, Mabuhay did not specifically raise any of the grounds under Rule 19.36 above in its petition
before this Court. Nonetheless, considering the dearth of jurisprudence on enforcement of foreign
arbitral awards and the fact that the CA reversed the RTC decision, the Court exercises its discretion
to review the CA decision solely for purposes of determining whether the CA applied the aforecited
standard of judicial review.

III. Grounds for Refusing Enforcement or Recognition

We now delve into the core of the issue - whether there is a ground for the RTC to refuse
recognition and enforcement of the Final Award in favor of Sembcorp.

Our jurisdiction adopts a policy in favor of arbitration.[41] The ADR Act and the Special ADR Rules
both declare as a policy that the State shall encourage and actively promote the use of alternative
dispute resolution, such as arbitration, as an important means to achieve speedy and impartial justice
and declog court dockets.[42] This pro-arbitration policy is further evidenced by the rule on
presumption in favor of enforcement of a foreign arbitral award under the Special ADR Rules, viz:
Rule 13.11. Court action. - It is presumed that a foreign arbitral award was made and released
in due course of arbitration and is subject to enforcement by the court.

The court shall recognize and enforce a foreign arbitral award unless a ground to refuse recognition
or enforcement of the foreign arbitral award under this rule is fully established.

The decision of the court recognizing and enforcing a foreign arbitral award is immediately
executory.

In resolving the petition for recognition and enforcement of a foreign arbitral award in accordance
with these Special ADR Rules, the court shall either [a] recognize and/or enforce or [b] refuse to
recognize and enforce the arbitral award. The court shall not disturb the arbitral tribunal's
determination of facts and/or interpretation of law. (Emphasis ours)
Under Article V of the New York Convention, the grounds for refusing enforcement and
recognition of a foreign arbitral award are:
1. Recognition and enforcement of the award may be refused, at the request of the party against
whom it is invoked, only if that party furnishes to the competent authority where the recognition and
enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them,
under some incapacity, or the said agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereon, under the law of the country where the award was
made; or

(b) The party against whom the award is invoked was not given proper notice of the appointment of
the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or

(c) The award deals with a difference not contemplated by or not falling within the terms of
the submission to arbitration, or it contains decisions on matters beyond the scope of the
submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, that part of the award which contains decisions on matters
submitted to arbitration may be recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral procedure was not in accordance
with the agreement of the parties, or, failing such agreement, was not in accordance with the law
of the country where the arbitration took place; or

(e) The award has not yet become binding on the parties, or has been set aside or suspended by a
competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority
in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of
that country; or

(b) The recognition or enforcement of the award would be contrary to the public policy of that
country. (Emphasis ours)
The aforecited grounds are essentially the same grounds enumerated under Section 36[43] of the
Model Law. The list is exclusive. Thus, Section 45 of the ADR Act provides:
SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration proceeding may
oppose an application for recognition and enforcement of the arbitral award in accordance with the
procedural rules to be promulgated by the Supreme Court only on those grounds enumerated
under Article V of the New York Convention. Any other ground raised shall be disregarded
by the regional trial court. (Emphasis ours)
In Our jurisdiction, We have incorporated the grounds enumerated under the New York Convention
in our arbitration laws. Article 4.36, Rule 6[44] of the IRR and Rule 13.4[45] of the Special ADR Rules
reiterated the exact same exclusive list of grounds.

After a careful review of the case, We find that Mabuhay failed to establish any of the grounds for
refusing enforcement and recognition of a foreign arbitral award. We discuss the grounds raised by
Mabuhay in seriatim:

A. The arbitral authority, composed of Dr. Chatara-Opakorn as the sole arbitrator, was constituted
in accordance with the arbitration agreement.

The first ground raised by Mabuhay is Article V(l)(d) of the New York Convention, i.e., that the
composition of the arbitral authority was not in accordance with the agreement of the parties.
Mabuhay and Sembcorp stipulated in their Agreement that the sole arbitrator must have "expertise
in the matter at issue". Since they also agreed that the validity and the performance of the
Agreement shall be governed by the Philippine law, Mabuhay argues that the phrase "expertise in
the matter at issue" necessarily means expertise in the Philippine law. Dr. Chatara-Opakom, a Thai
national, does not possess any educational degree or training in Philippine law.

The Agreement provides, however, that the arbitrator with expertise in the matter at issue shall be
appointed in accordance with the ICC Rules. The ICC, thus, is the appointing authority agreed upon
by the parties. The "appointing authority" is the person or institution named in the arbitration
agreement as the appointing authority; or the regular arbitration institution under whose rule the
arbitration is agreed to be conducted.[46] Where the parties have agreed to submit their dispute to
institutional arbitration rules, and unless they have agreed to a different procedure, they shall be
deemed to have agreed to procedure under such arbitration rules for the selection and appointment
of arbitrators.[47]

The pertinent rules in the ICC Arbitration Rules of 1998 provide:

Article 9 - Appointment and Confirmation of the Arbitrators

xxxx

3. Where the Court is to appoint a sole arbitrator or the chairman of an Arbitral Tribunal, it shall
make the appointment upon a proposal of a National Committee of the ICC that it considers to be
appropriate. If the Court does not accept the proposal made, or if the National Committee fails to
make the proposal requested within the time limit fixed by the Court, the Court may repeat its
request or may request a proposal from another National Committee that it considers to be
appropriate.

xxxx

5. The sole arbitrator or the chairman of the Arbitral Tribunal shall be of a nationality other than
those of the parties. However, in suitable circumstances and provided that neither of the parties
objects within the time limit fixed by the Court, the sole arbitrator or the chairman of the Arbitral
Tribunal may be chosen from a country of which any of the parties is a national. (Emphasis ours)
In accordance with the aforecited rules, Dr. Chantara-Opakom was appointed upon the proposal of
the Thai National Committee.

It bears stressing that the pro-arbitration policy of the State includes its policy to respect party
autonomy. Thus, Rule 2.3 of the Special ADR Rules provides that "the parties are free to agree on
the procedure to be followed in the conduct of arbitral proceedings." The procedure to be followed
on the appointment of arbitrator are among the procedural rules that may be agreed upon by the
parties.

Moreover, under Rule 7.2 of the Special ADR Rules, a challenge to the appointment of an arbitrator
may be raised in court only when the appointing authority fails or refuses to act on the challenge
within such period as may be allowed under the applicable rule or in the absence thereof, within
thirty (30) days from receipt of the request, that the aggrieved party may renew the challenge in
court. This is clearly not the case for Mabuhay as it was able to challenge the appointment of Dr.
Chantara-Opakom in accordance with Article 11 of the ICC Rules, but the ICC Court rejected the
same.[48] As such, the Court shall not entertain any challenge to the appointment of arbitrator
disguised as a ground for refusing enforcement of an award.

At any rate, Mabuhay's contention that the sole arbitrator must have the expertise on Philippine law
fails to persuade. If the intent of the parties is to exclude foreign arbitrators due to the substantive
law of the contract, they could have specified the same considering that the ICC Rules provide for
appointment of a sole arbitrator whose nationality is other than those of the parties.

B. The dispute is not an intra corporate controversy, hence, included in the scope of disputes
submitted to arbitration.

Under Article V(l)(c) of the New York Convention, the court may refuse enforcement of a foreign
arbitral award when the award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration. Mabuhay argues that the dispute is an intracorporate
controversy which is expressly excluded from the scope of disputes submitted to arbitration under
the Agreement. In essence, Mabuhay attacks the jurisdiction of the arbitral tribunal to hear the
dispute as it did not fall within the terms of submission to arbitration.

The CA correctly applied the Kompetenz-Kompetenz principle expressly recognized under Rule 2.2
of the Special ADR Rules, viz:
The Special ADR Rules recognize the principle of competence competence, which means that the
arbitral tribunal may initially rule on its own jurisdiction, including any objections with respect to
the existence or validity of the arbitration agreement or any condition precedent to the filing of a
request for arbitration.
The Special ADR Rules expounded on the implementation of the said principle:
Rule 2.4. Policy implementing competence-competence principle. The arbitral tribunal shall be
accorded the first opportunity or competence to rule on the issue of whether or not it has the
competence or jurisdiction to decide a dispute submitted to it for decision, including any objection
with respect to the existence or validity of the arbitration agreement. When a court is asked to rule
upon issue/s affecting the competence or jurisdiction of an arbitral tribunal in a dispute brought
before it, either before or after the arbitral tribunal is constituted, the court must exercise judicial
restraint and defer to the competence or jurisdiction of the arbitral tribunal by allowing the
arbitral tribunal the first opportunity to rule upon such issues. (Emphasis ours)
To recall, the Agreement provides that "(a)ny dispute, controversy or claim arising out of or relating
to this Agreement, or breach thereof, other than intra-corporate controversies, shall be finally
settled by arbitration..."

Among the issues settled in the Final Award is whether the dispute is an intra-corporate
controversy. Dr. Chantara-Opakom ruled in the negative. The pertinent portion of the Final Award
is reproduced as follows:
x x x Indeed, during the cross-examination of Mr. Chay, he admitted that there was no transfer of
shares from IDHI to the Claimant [p. 130 of Transcript of Proceedings]:

xxxx

During the re-examination of Mr. Chay by the Respondent's counsel, he again admitted that the
transfer of the shares from IDHI to the Claimant has not taken effect [p. 155 of Transcript of
Proceedings]:

xxxx

It is clear that the Claimant's claim is neither premised on allegations of mismanagement of WJNA
and WJSC, nor on who manages or controls or who has the right to manage or control WJNA and
WJSC, nor is it a claim to effect the transfer of the share, nor an action for registration of the shares
transfer [sic] already transferred from IDHI to the Claimant in the books of WJNA and WJSC. The
nature of the Claimant's claim is not intrinsically connected with the regulation of the corporation.
The Claimant's claim in this arbitration is straightforward: that the Respondent agreed, under a
contract, to make payment of certain amount of money to the Claimant upon the occurrence of a
specified event; that the said event occurred but the Respondent refused to pay such amount of
money to the Claimant; that the Claimant filed the Request in order to enforce the payment.
Accordingly, the Sole Arbitrator is of the opinion that the dispute in this arbitration is not an
intra-corporate controversy, and, hence, it is not excluded from arbitration under Article 19.2
of the Shareholders' Agreement.[49] (Emphasis ours)
Again, the Special ADR Rules specifically provides that in resolving the petition for recognition and
enforcement of a foreign arbitral award, the court shall not disturb the arbitral tribunal's
determination of facts and/or interpretation of law.[50]

Yet, the RTC, in its decision dismissing the petition of Sembcorp, declared that "it is undisputed that
the shares of stocks of IDHI in WJNA and WJSC were actually owned by [Sembcorp] before the
filing of the request for arbitration"[51] without providing any factual basis for such conclusion which
directly contradicts the arbitral tribunal's findings.

Even granting that the court may rule on the issue of whether the dispute is an intra-corporate
controversy, Mabuhay's argument is premised on the factual issue of whether Sembcorp indeed
acquired the shares of IDHI. Mabuhay failed to establish such fact before the arbitral tribunal. The
RTC, on the other hand, concluded that Sembcorp acquired the subject shares but failed to explain
the basis for such conclusion. In the absence of sufficient evidence that Sembcorp acquired the
shares of IDHI, the Court finds no cogent reason to disturb the arbitral tribunal's ruling in favor of
the latter's jurisdiction over the dispute.

C. Enforcement of the award would not be contrary to public policy of the Philippines.

Under Article V(2)(b) of the New York Convention, a court may refuse to enforce an award if doing
so would be contrary to the public policy of the State in which enforcement is sought. Neither the
New York Convention nor the mirroring provisions on public policy in the Model Law and Our
arbitration laws provide a definition of "public policy" or a standard for determining what is
contrary to public policy. Due to divergent approaches in defining public policy in the realm of
international arbitration, public policy has become one of the most controversial bases for refusing
enforcement of foreign arbitral awards.[52]

Most arbitral jurisdictions adopt a narrow and restrictive approach in defining public policy
pursuant to the pro-enforcement policy of the New York Convention. The public policy exception,
thus, is "a safety valve to be used in those exceptional circumstances when it would be impossible
for a legal system to recognize an award and enforce it without abandoning the very fundaments on
which it is based."[53] An example of a narrow approach adopted by several jurisdictions[54] is that the
public policy defense may only be invoked "where enforcement [of the award] would violate the
forum state's most basic notions of morality and justice."[55] Thus, in Hong Kong, an award obtained
by fraud was denied enforcement by the court on the ground that fraud is contrary to Hong Kong's
"fundamental notions of morality and justice."[56] In Singapore, also a Model Law country, the
public policy ground is entertained by courts only in instances where upholding the award is
"clearly injurious to the public good or... wholly offensive to the ordinary reasonable and fully
informed member of the public."[57]

In Our jurisdiction, the Court has yet to define public policy and what is deemed contrary to public
policy in an arbitration case. However, in an old case, the Court, through Justice Laurel, elucidated
on the term "public policy" for purposes of declaring a contract void:
x x x At any rate, courts should not rashly extend the rule which holds that a contract is void as
against public policy. The term "public policy" is vague and uncertain in meaning, floating and
changeable in connotation. It may be said, however, that, in general, a contract which is neither
prohibited by law nor condemned by judicial decision, nor contrary to public morals, contravenes
no public policy. In the absence of express legislation or constitutional prohibition, a court, in order
to declare a contract void as against public policy, must find that the contract as to the consideration
or thing to be done, has a tendency to injure the public, is against the public good, or
contravenes some established interests of society, or is inconsistent with sound policy and good
morals, or tends clearly to undermine the security of individual rights, whether of personal
liability or of private property.[58] (Emphasis ours)
An older case, Ferrazzini v. Gsell[59], defined public policy for purposes of determining whether that
part of the contract under consideration is against public policy:
By "public policy," as defined by the courts in the United States and England, is intended that
principle of the law which holds that no subject or citizen can lawfully do that which has a
tendency to be injurious to the public or against the public good, which may be termed the
"policy of the law," or "public policy in relation to the administration of the law." Public policy is
the principle under which freedom of contract or private dealing is restricted by law for the good of
the public. In determining whether a contract is contrary to public policy the nature of the subject
matter determines the source from which such question is to be solved. (Emphasis ours and citation
omitted)
In light of the foregoing and pursuant to the State's policy in favor of arbitration and enforcement of
arbitral awards, the Court adopts the majority and narrow approach in determining whether
enforcement of an award is contrary to Our public policy. Mere errors in the interpretation of the
law or factual findings would not suffice to warrant refusal of enforcement under the public policy
ground. The illegality or immorality of the award must reach a certain threshold such that,
enforcement of the same would be against Our State's fundamental tenets of justice and morality, or
would blatantly be injurious to the public, or the interests of the society.

We now discuss the pertinent claims of Mabuhay in relation to public policy.

i. Violation of partnership law

Mabuhay contends that it entered into a joint venture, which is akin to a particular partnership, with
Sembcorp. Applying the laws on partnership, the payment of the Guaranteed Return to Sembcorp is
a violation of Article 1799[60] of the Civil Code, as it shields the latter from sharing in the losses of
the partnership. Ergo, enforcement of the Final Award would be contrary to public policy as it
upholds a void stipulation.

The restrictive approach to public policy necessarily implies that not all violations of the law may be
deemed contrary to public policy. It is not uncommon for the courts in Contracting States of the
New York Convention to enforce awards which does not conform to their domestic laws.[61]

At any rate, Mabuhay's contention is bereft of merit. The joint venture between Mabuhay, IDHI, and
Sembcorp was pursued under the Joint Venture Corporations, WJSC and WJNA. By choosing to
adopt a corporate entity as the medium to pursue the joint venture enterprise, the parties to the joint
venture are bound by corporate law principles under which the entity must operate.[62] Among these
principles is the limited liability doctrine. The use of a joint venture corporation allows the co-
venturers to take full advantage of the limited liability feature of the corporate vehicle which is not
present in a formal partnership arrangement.[63] In fine, Mabuhay's application of Article 1799 is
erroneous.

ii. Imposition of interest

Mabuhay argues that the twelve percent (12%) annual interest from the date of the Final Award is
also contrary to the Philippine law and jurisprudence. To reiterate, the only ground for refusing
enforcement of a foreign arbitral award is when enforcement of the same would be contrary to
public policy.

Mere incompatibility of a foreign arbitral award with domestic mandatory rules on interest rates
does not amount to a breach of public policy. However, some jurisdictions refused to recognize and
enforce awards, or the part of the award which was considered to be contrary to public policy,
where they considered that the awarded interest was unreasonably high.[64] In this case, the twelve
percent (12%) interest rate imposed under the Final Award is not unreasonably high or
unconscionable such that it violates our fundamental notions of justice.

IV. Attorney's Fees

Mabuhay avers that the dispositive portion of the CA Decision failed to include its finding that
Mabuhay is not liable for attorney's fees and exemplary damages. The pertinent portion of the CA
Decision is reproduced as follows:
Turning now to Sembcorp's prayer for the award of attorney's fees and exemplary damages, We find
the same bereft of legal and factual bases. Article 2208 of the Civil Code allows attorney's fees to be
awarded if the claimant is compelled to litigate with third persons or to incur expenses to protect his
interest by reason of an unjustified act or omission of the party from whom it is sought, there must
be a showing that the losing party acted willfully or in bad faith and practically compelled the
claimant to litigate and incur litigation expenses. Meanwhile, in order to obtain exemplary damages
under Article 2232 of the Civil Code, the claimant must prove that the assailed actions of the
defendant are not just wrongful, but also wanton, fraudulent, reckless, oppressive or malevolent.

Indeed, Sembcorp was compelled to file the instant appeal. However, such fact alone is insufficient
to justify an award of attorney's fees and exemplary damages when there is no sufficient showing of
MHC's [Mabuhay] bad faith in refusing to abide by the provisions of the Final Award. To Us,
MHC's [Mabuhay] persistent acts in rejecting Sembcorp's claim proceed from an erroneous
conviction in the righteousness of its cause.[65]
We affirm the aforecited findings of the CA. However, We find no conflict between the fallo and
the ratio decidendi of the CA Decision. The fallo of the CA Decision includes "[n]o pronouncement
as to cost." The CA also reversed and set aside the RTC Decision in its entirety. As such, even the
pronouncement of the RTC as to costs is set aside. Accordingly, We find no merit in Mabuhay's
prayer for a statement in the dispositive portion expressly stating that it is not liable for attorney's
fees and exemplary damages.

On a final note, We implore the lower courts to apply the ADR Act and the Special ADR Rules
accordingly. Arbitration, as a mode of alternative dispute resolution, is undeniably one of the viable
solutions to the longstanding problem of clogged court dockets. International arbitration, as the
preferred mode of dispute resolution for foreign companies, would also attract foreign investors to
do business in the country that would ultimately boost Our economy. In this light, We uphold the
policies of the State favoring arbitration and enforcement of arbitral awards, and have due regard to
the said policies in the interpretation of Our arbitration laws.

WHEREFORE, the Petition is hereby DENIED. The November 19, 2013 Decision and the June 3,
2014 Resolution of the Court of Appeals in CA-G.R. CV No. 92296 are AFFIRMED.

SO ORDERED
 SECOND DIVISION
[ G.R. No. 224307. August 06, 2018 ]

THE MISSIONARY SISTERS OF OUR LADY OF FATIMA (PEACH SISTERS OF

LAGUNA), REPRESENTED BY REV. MOTHER MA. CONCEPCION R. REALON, ET
AL., PETITIONERS, VS. AMANDO V. ALZONA, ET AL., RESPONDENTS.

DECISION

REYES, JR., J:

Before this Court is a petition for review on certiorari[1] under Rule 45 of the Rules of Court seeking
to annul and set aside the Decision[2] dated January 7, 2016 of the Court of Appeals (CA) in CA-G.R.
CV No. 101944, and its Resolution[3] dated April 19, 2016, denying the motion for reconsideration
thereof. The assailed decision partly granted the respondents' appeal and set aside the
Decision[4] dated August 14, 2013 of the Regional Trial Court (RTC) of Calamba City, Branch 92 in
Civil Case No. 3250-02-C.

The Antecedent Facts

The Missionary Sisters of Our Lady of Fatima (petitioner), otherwise known as the Peach Sisters of
Laguna, is a religious and charitable group established under the patronage of the Roman Catholic
Bishop of San Pablo on May 30, 1989. Its primary mission is to take care of the abandoned and
neglected elderly persons. The petitioner came into being as a corporation by virtue of a Certificate
issued by the Securities and Exchange Commission (SEC) on August 31, 2001. [5] Mother Ma.
Concepcion R. Realon (Mother Concepcion) is the petitioner's Superior General.

The respondents, on the other hand, are the legal heirs of the late Purificacion Y. Alzona
(Purificacion).

The facts giving rise to the instant controversy follow:

Purificacion, a spinster, is the registered owner of parcels of land covered by Transfer Certificate of
Title (TCT) Nos. T-57820* and T-162375; and a co-owner of another property covered by TCT No. T-
162380, all of which are located in Calamba City, Laguna.[6]

In 1996, Purificacion, impelled by her unmaterialized desire to be nun, decided to devote the rest
of her life in helping others. In the same year, she then became a benefactor of the petitioner by
giving support to the community and its works.[7]

In 1997, during a doctor's appointment, Purificacion then accompanied by Mother Concepcion,

discovered that she has been suffering from lung cancer. Considering the restrictions in her
movement, Purificacion requested Mother Concepcion to take care of her in her house, to which
the latter agreed.[8]

In October 1999, Purificacion called Mother Concepcion and handed her a handwritten letter dated
October 1999. Therein, Purificacion stated that she is donating her house and lot at F. Mercado
Street and Riceland at Banlic, both at Calamba, Laguna, to the petitioner through Mother
Concepcion. On the same occasion, Purificacion introduced Mother Concepcion to her nephew,
Francisco Del Mundo (Francisco), and niece, Ma. Lourdes Alzona Aguto-Africa (Lourdes).
Purificacion, instructed Francisco to give a share of the harvest to Mother Concepcion, and
informed Lourdes that she had given her house to Mother Concepcion. [9]

Sometime in August 2001, at the request of Purificacion, Mother Concepcion went to see Atty.
Nonato Arcillas (Atty. Arcillas) in Los Baños, Laguna. During their meeting, Atty. Arcillas asked
Mother Concepcion whether their group is registered with the SEC, to which the latter replied in
the negative. Acting on the advice given by Atty. Arcillas, Mother Concepcion went to SEC and filed
the corresponding registration application on August 28, 2001. [10]

On August 29, 2001, Purificacion executed a Deed of Donation Inter Vivos (Deed) in favor of the
petitioner, conveying her properties covered by TCT Nos. T-67820 and T-162375, and her undivided
share in the property covered by TCT No. T-162380. The Deed was notarized by Atty. Arcillas and
witnessed by Purificacion's nephews Francisco and Diosdado Alzona, and grandnephew, Atty.
Fernando M. Alonzo. The donation was accepted on even date by Mother Concepcion for and in
behalf of the petitioner.[11]

Thereafter, Mother Concepcion filed an application before the Bureau of Internal Revenue (BIR)
that the petitioner be exempted from donor's tax as a religious organization. The application was
granted by the BIR through a letter dated January 14, 2002 of Acting Assistant Commissioner, Legal
Service, Milagros Regalado.[12]

Subsequently, the Deed, together with the owner's duplicate copies of TCT Nos. T-57820, T-162375,
and T-162380, and the exemption letter from the BIR was presented for registration. The Register
of Deeds, however, denied the registration on account of the Affidavit of Adverse Claim dated
September 26, 2001 filed by the brother of Purificacion, respondent Amando Y. Alzona (Amando).
[13]

On October 30, 2001, Purificacion died without any issue, and survived only by her brother of full
blood, Amando, who nonetheless died during the pendency of this case and is now represented
and substituted by his legal heirs, joined as herein respondents.[14]

On April 9, 2002, Amando filed a Complaint before the RTC, seeking to annul the Deed executed
between Purificacion and the petitioner, on the ground that at the time the donation was made,
the latter was not registered with the SEC and therefore has no juridical personality and cannot
legally accept the donation.[15]

After trial, on August 14, 2013, the RTC rendered its Decision [16] finding no merit in the complaint,
thus ruling:

WHEREFORE, the instant case is hereby DISMISSED with costs against the [respondents]. The
Compulsory counterclaim of the [petitioner] is likewise dismissed for lack of evidence.

SO ORDERED.[17]

In its decision, the RTC held that all the essential elements of a donation are present. The RTC set
aside the allegation by the respondents relating to the incapacity of the parties to enter into a
donation.[18]

In the case of Purificacion, the RTC held that apart from the self-serving allegations by the
respondents, the records are bereft of evidence to prove that she did not possess the proper
mental faculty in making the donation; as such the presumption that every person is of sound mind
stands.[19]

On the capacity of the donee, the RTC held that at the time of the execution of the Deed, the
petitioner was a de facto corporation and as such has the personality to be a beneficiary and has
the power to acquire and possess property. Further then, the petitioner's incapacity cannot be
questioned or assailed in the instant case as it constitutes a collateral attack which is prohibited by
the Corporation Code of the Philippines.[20] In this regard, the RTC found that the recognition by the
petitioner of Mother Concepcion's authority is sufficient to vest the latter of the capacity to accept
the donation.[21]

Acting on the appeal filed by the respondents, the CA rendered the herein assailed Decision [22] on
January 7, 2016, the dispositive portion of which reads:

WHEREFORE, the appeal is PARTLY GRANTED. The assailed August 14, 2013 Decision of the RTC,
Branch 92, Calamba City in Civil Case No. 3250-02 is SET ASIDE by declaring as VOID the deed of
Donation dated August 14, 2013. [The respondents'] prayer for the award of moral and exemplary
damages as well as attorney's fees is nevertheless DENIED.

SO ORDERED.[23]

In so ruling, the CA, citing the case of Seventh Day Adventist Conference Church of Southern Phils.,
Inc. v. Northeastern Mindanao Mission of Seventh Day Adventist, Inc.,[24] held that the petitioner
cannot be considered as a de facto corporation considering that at the time of the donation, there
was no bona fide attempt on its part to incorporate.[25] As an unregistered corporation, the CA
concluded that the petitioner cannot exercise the powers, rights, and privileges expressly granted
by the Corporation Code. Ultimately, bereft of juridical personality, the CA ruled that the petitioner
cannot enter into a contract of Donation with Purificacion.[26]

Finally, the CA denied the respondents' claim for actual damages and attorney's fees for failure to
substantiate the same.[27]

The petitioner sought a reconsideration of the Decision dated January 7, 2016, but the CA denied it
in its Resolution[28] dated April 19, 2016.

In the instant petition, the petitioner submits the following arguments in support of its position:

a. The Donation Inter Vivos is valid and binding against the parties therein [Purificacion] and
the [petitioner] and their respective successors in interest:

1.) The [petitioner] has the requisite legal personality to accept donations as a religious institution under
the Roman Catholic Bishop of San Pablo authorized to receive donations;
2.) The [petitioner] has the requisite legal capacity to accept the donation as it may be considered a de
 facto corporation.
3.) Regardless of the absence of the Certificate of Registration of [petitioner] at the time of the execution
of the Deed of Donation, the same is still valid and binding having been accepted by a representative
of the [petitioner] while the latter was still waiting for the issuance of the Certificate of Registration
and which acceptance of the donation was duly ratified by the corporation.
4.) The intestate estate of Purificacion is estopped from questioning the legal personality of [the
petitioner].

b.
c. The Respondents lack the requisite legal capacity to question the legality of the deed of
donation.[29]

In sum, the issue to be resolved by this Court in the instant case is whether or not the Deed
executed by Purificacion in favor of the petitioner is valid and binding. In relation to this, the Court
is called upon to determine the legal capacity of the petitioner, as donee, to accept the donation,
and the authority Mother Concepcion to act on behalf of the petitioner in accepting the donation.

Ruling of the Court

The petition is meritorious.

The petitioner argues that it has the requisite legal personality to accept the donation as a religious
institution organized under the Roman Catholic Bishop of San Pablo, a corporation sole. [30]

Regardless, the petitioner contends that it is a de facto corporation and therefore possessed of the
requisite personality to enter into a contract of donation.

Assuming further that it cannot be considered as a de facto corporation, the petitioner submits
that the acceptance by Mother Concepcion while the religious organization is still in the process of
incorporation is valid as it then takes the form of a pre-incorporation contract governed by the
rules on agency. The petitioner argues that their subsequent incorporation and acceptance
perfected the subject contract of donation.[31]

Ultimately, the petitioner argues that the intestate estate of Purificacion is estopped from
questioning its legal personality considering the record is replete of evidence to prove that
Purificacion at the time of the donation is fully aware of its status and yet was still resolved into
giving her property.[32]

In response, the respondents submit that juridical personality to enter into a contract of donation
is vested only upon the issuance of a Certificate of Incorporation from SEC.[33] Further, the
respondents posit that the petitioner cannot even be considered as a de facto corporation
considering that for more than 20 years, there was never any attempt on its part to incorporate,
which decision came only after Atty. Arcillas, suggestion.[34]

In order that a donation of an immovable property be valid, the following elements must be
present: (a) the essential reduction of the patrimony of the donor; (b) the increase in the
patrimony of the donee; (c) the intent to do an act of liberality or animus donandi; (d) the donation
must be contained in a public document; and e) that the acceptance thereof be made in the same
deed or in a separate public instrument; if acceptance is made in a separate instrument, the donor
must be notified thereof in an authentic form, to be noted in both instruments. [35]

There is no question that the true intent of Purificacion, the donor and the owner of the properties
in question, was to give, out of liberality the subject house and lot, which she owned, to the
petitioner. This act, was then contained in a public document, the deed having been acknowledged
before Atty. Arcillas, a Notary Public.[36] The acceptance of the donation is made on the same date
that the donation was made and contained in the same instrument as manifested by Mother
Concepcion's signature.[37] In fine, the remaining issue to be resolved is the capacity of the
petitioner as donee to accept the donation, and the authority of Mother Concepcion to act on its
behalf for this purpose.

Under Article 737 of the Civil Code, "[t]he donor's capacity shall be determined as of the time of
the making of the donation." By analogy, the legal capacity or the personality of the donee, or the
authority of the latter's representative, in certain cases, is determined at the time of acceptance of
the donation.

Article 738, in relation to Article 745, of the Civil Code provides that all those who are not
specifically disqualified by law may accept donations either personally or through an authorized
representative with a special power of attorney for the purpose or with a general and sufficient
power.

The Court finds that for the purpose of accepting the donation, the petitioner is deemed vested
with personality to accept, and Mother Concepcion is clothed with authority to act on the latter's
behalf.

At the outset, it must be stated that as correctly pointed out by the CA, the RTC erred in holding
that the petitioner is a de facto corporation.

Jurisprudence settled that "[t]he filing of articles of incorporation and the issuance of the
certificate of incorporation are essential for the existence of a de facto corporation."[38] In fine, it is
the act of registration with SEC through the issuance of a certificate of incorporation that marks the
beginning of an entity's corporate existence.[39]

Petitioner filed its Articles of Incorporation and by-laws on August 28, 2001. However, the SEC
issued the corresponding Certificate of Incorporation only on August 31, 2001, two (2) days after
Purificacion executed a Deed of Donation on August 29, 2001. Clearly, at the time the donation was
made, the Petitioner cannot be considered a corporation de facto. [40]

Rather, a review of the attendant circumstances reveals that it calls for the application of the
doctrine of corporation by estoppel as provided for under Section 21 of the Corporation Code, viz.:

Sec. 21. Corporation by estoppel. - All persons who assume to act as a corporation knowing it to be
without authority to do so shall be liable as general partners for all debts, liabilities and damages
incurred or arising as a result thereof: Provided, however, That when any such ostensible
corporation is sued on any transaction entered by it as a corporation or on any tort committed by it
as such, it shall not be allowed to use as a defense its lack of corporate personality.

One who assumes an obligation to an ostensible corporation as such, cannot resist performance
thereof on the ground that there was in fact no corporation. (Emphasis Ours)

The doctrine of corporation by estoppel is founded on principles of equity and is designed to

prevent injustice and unfairness. It applies when a non-existent corporation enters into contracts
or dealings with third persons.[41] In which case, the person who has contracted or otherwise dealt
with the non-existent corporation is estopped to deny the latter's legal existence in any action
leading out of or involving such contract or dealing. While the doctrine is generally applied to
protect the sanctity of dealings with the public,[42] nothing prevents its application in the reverse, in
fact the very wording of the law which sets forth the doctrine of corporation by estoppel permits
such interpretation. Such that a person who has assumed an obligation in favor of a non-existent
corporation, having transacted with the latter as if it was duly incorporated, is prevented from
denying the existence of the latter to avoid the enforcement of the contract.

Jurisprudence dictates that the doctrine of corporation by estoppel applies for as long as there is
no fraud and when the existence of the association is attacked for causes attendant at the time the
contract or dealing sought to be enforced was entered into, and not thereafter.[43]

In this controversy, Purificacion dealt with the petitioner as if it were a corporation. This is evident
from the fact that Purificacion executed two (2) documents conveying her properties in favor of the
petitioner – first, on October 11, 1999 via handwritten letter, and second, on August 29, 2001
through a Deed; the latter having been executed the day after the petitioner filed its application for
registration with the SEC.[44]

The doctrine of corporation by estoppel rests on the idea that if the Court were to disregard the
existence of an entity which entered into a transaction with a third party, unjust enrichment would
result as some form of benefit have already accrued on the part of one of the parties. Thus, in that
instance, the Court affords upon the unorganized entity corporate fiction and juridical personality
for the sole purpose of upholding the contract or transaction.

In this case, while the underlying contract which is sought to be enforced is that of a donation, and
thus rooted on liberality, it cannot be said that Purificacion, as the donor failed to acquire any
benefit therefrom so as to prevent the application of the doctrine of corporation by estoppel. [45] To
recall, the subject properties were given by Purificacion, as a token of appreciation for the services
rendered to her during her illness.[46] In fine, the subject deed partakes of the nature of a
remuneratory or compensatory donation, having been made "for the purpose of rewarding the
donee for past services, which services do not amount to a demandable debt." [47]

As elucidated by the Court in Pirovano, et al. v. De La Rama Steamship Co.:[48]

In donations made to a person for services rendered to the donor, the donor's will is moved by acts
which directly benefit him. The motivating cause is gratitude, acknowledgment of a favor, a desire
to compensate. A donation made to one who saved the donor's life, or a lawyer who renounced his
fees for services rendered to the donor, would fall under this class of donations. [49]
Therefore, under the premises, past services constitutes consideration, which in tum can be
regarded as "benefit" on the part of the donor, consequently, there exists no obstacle to the
application of the doctrine of corporation by estoppel; although strictly speaking, the petitioner did
not perform these services on the expectation of something in return.

Precisely, the existence of the petitioner as a corporate entity is upheld in this case for the purpose
of validating the Deed to ensure that the primary objective for which the donation was intended is
achieved, that is, to convey the property for the purpose of aiding the petitioner in the pursuit of
its charitable objectives.

Further, apart from the foregoing, the subsequent act by Purificacion of re-conveying the property
in favor of the petitioner is a ratification by conduct of the otherwise defective donation.[50]

Express or implied ratification is recognized by law as a means to validate a defective contract.

[51]
Ratification cleanses or purges the contract from its defects from constitution or establishment,
retroactive to the day of its creation. By ratification, the infirmity of the act is obliterated thereby
making it perfectly valid and enforceable.[52]

The principle and essence of implied ratification require that the principal has full knowledge at the
time of ratification of all the material facts and circumstances relating to the act sought to be
ratified or validated.[53] Also, it is important that the act constituting the ratification is unequivocal
in that it is performed without the slightest hint of objection or protest from the donor or the
donee, thus producing the inevitable conclusion that the donation and its acceptance were in fact
confirmed and ratified by the donor and the donee.[54]

In this controversy, while the initial conveyance is defective, the genuine intent of Purificacion to
donate the subject properties in favor of the petitioner is indubitable. Also, while the petitioner is
yet to be incorporated, it cannot be said that the initial conveyance was tainted with fraud or
misrepresentation. Contrarily, Purificacion acted with full knowledge of circumstances of the
Petitioner. This is evident from Purificacion's act of referring Mother Concepcion to Atty. Arcillas,
who, in turn, advised the petitioner to apply for registration. Further, with the execution of two (2)
documents of conveyance in favor of the petitioner, it is clear that what Purificacion intended was
for the sisters comprising the petitioner to have ownership of her properties to aid them in the
pursuit of their charitable activities, as a token of appreciation for the services they rendered to her
during her illness.[55] To put it differently, the reference to the petitioner was merely a descriptive
term used to refer to the sisters comprising the congregation collectively. Accordingly, the
acceptance of Mother Concepcion for the sisters comprising the congregation is sufficient to
perfect the donation and transfer title to the property to the petitioner. Ultimately, the subsequent
incorporation of the petitioner and its affirmation of Mother Concepcion's authority to accept on
its behalf cured whatever defect that may have attended the acceptance of the donation.

The Deed sought to be enforced having been validly entered into by Purificacion, the respondents'
predecessor-in-interest, binds the respondents who succeed the latter as heirs. [56] Simply, as they
claim interest in their capacity as Purificacion's heirs, the respondents are considered as "privies"
to the subject Deed; or are "those between whom an action is binding although they are not
literally parties to the said action."[57] As discussed in Constantino, et al. v. Heirs of Pedro
Constantino, Jr.:[58]

[p]rivity in estate denotes the privity between assignor and assignee, donor and donee, grantor
and grantee, joint tenant for life and remainderman or reversioner and their respective assignees,
vendor by deed of warranty and a remote vendee or assignee. A privy in estate is one, it has been
said, who derives his title to the property in question by purchase; one who takes by conveyance.
In fine, respondents, as successors-in-interest, derive their right from and are in the same position
as their predecessor in whose shoes they now stand.[59] (Citation omitted)

Anent the authority of Mother Concepcion to act as representative for and in behalf of the
petitioner, the Court similarly upholds the same. Foremost, the authority of Mother Concepcion
was never questioned by the petitioner. In fact, the latter affirms and supports the authority of
Mother Concepcion to accept the donation on their behalf; as she is, after all the congregation's
Superior General.[60] Furthermore, the petitioner's avowal of Mother Concepcion's authority after
their SEC registration is a ratification of the latter's authority to accept the subject donation as the
petitioner's representative.[61]

In closing, it must be emphasized that the Court is both of law and of justice. Thus, the Court's
mission and purpose is to apply the law with justice.[62]

Donation is an expression of our social conscience, an act rooted purely on the goodness of one's
heart and intent to contribute.

Purificacion, the donor is worthy of praise for her works of charity. Likewise, the petitioner is
worthy of admiration for with or without the promise of reward or consideration, the Court is
certain that it is impelled by sincere desire to help the petitioner in overcoming her illness.

It is unfortunate that the will of a person moved by the desire to reciprocate the goodness shown
to her during the lowest and culminating points of her life is questioned and herein sought to be
nullified on strict legality, when the intent of the donor to give is beyond question.

The promotion of charitable works is a laudable objective. While not mentioned in the
Constitution, the Court recognizes benevolent giving as an important social fabric that eliminates
inequality. As such, charitable giving must be encouraged through support from society and the
Court.

WHEREFORE, in consideration of the foregoing disquisitions, the instant petition for review
on certiorari is GRANTED. Accordingly, the Decision dated January 7, 2016 and Resolution dated
April 19, 2016 of the Court of Appeals in CA-G.R. CV No. 101944, are hereby REVERSED and SET
ASIDE.

SO ORDERED.
COMMISSIONER OF INTERNAL REVENUE vs. THE COURT OF APPEALS, COURT OF TAX APPEALS
and A. SORIANO CORP.
G.R. No. 108576. January 20, 1999.
FACTS:
Don Andres Soriano, a citizen and resident of the USA formed in the 1930's the corporation "A Soriano
Y Cia," predecessor of ANSCOR. On December 30, 1964 Don Andres died.
A day after Don Andres died, ANSCOR increased its capital stock to P20M and in 1966 further
increased it to P30M. In the same year, stock dividends worth 46,290 and 46,287 shares were
respectively received by the Don Andres estate and Doñ a Carmen from ANSCOR. Hence, increasing
their accumulated shareholdings to 138,867 and 138,864 common shares each.
On June 30, 1968, pursuant to a Board Resolution, ANSCOR redeemed 28,000 common shares from
Don Andres' estate. By November 1968, the Board further increased ANSCOR's capital stock to P75M
divided into 150,000 preferred shares and 600,000 common shares. About a year later ANSCOR again
redeemed 80,000 common shares from Don Andres' estate, further reducing the latter's common
shareholdings.
ANSCOR's business purpose for both redemptions of stock is to partially retire said stocks as treasury
shares in order to reduce the company's foreign exchange remittances in case cash dividends are
declared. In 1973, after examining ANSCOR's books of account and records Revenue Examiners issued
a report proposing that ANSCOR be assessed for deficiency withholding tax-at-source, pursuant to
Secs 53 and 54 of the 1939 Revenue Code for the year 1968 and the second quarter of 1969 based on
the transactions of exchange and redemption of stocks.
Subsequently, ANSCOR filed a petition for review with the CTA assailing the tax assessments on the
redemptions and exchange of stocks. In its decision, the CTA reversed the BIR's ruling after finding
sufficient evidence to overcome the prima facie correctness of the questioned assessments. In a
petition for review, the CA affirmed the ruling of the CTA.

ISSUE:
Whether ANSCOR's redemption of stocks from its stockholders as well as the exchange of common
shares can be considered as equivalent to the distribution of taxable dividend making the proceeds
thereof taxable under the provisions Section 83 (B) of the 1939 Revenue Act.

HELD:
The Supreme Court modified the decision of the Court of Appeals in that ANSCOR'S redemption of
82,752.5 stock dividends is herein considered as essentially equivalent to a distribution of taxable
dividends for which it is liable for the withholding tax-at-source. While the Board Resolutions
authorizing the redemptions state only one purpose — reduction of foreign exchange remittances in
case cash dividends are declared. Said purpose was not given credence by the court in case at bar.
Records show that despite the existence of enormous corporate profits no cash dividends were ever
declared by ANSCOR from 1945 until the BIR started making assessments in the early 1970's.
Although a corporation under certain exceptions, has the prerogative when to issue dividends, yet
when no cash dividends are issued for about three decades, this circumstance negate the legitimacy of
ANSCOR's alleged purposes. With regard to the exchange of shares, the Court ruled that the exchange
of common with preferred shares is not taxable because it produces no realized income to the
subscriber but only a modification of the subscriber's rights and privileges which is not a flow of
wealth for tax purposes.

Both the Tax Court and the CA found that ANSCOR reclassified its shares into common and preferred,
and that parts of the common shares of the Don Andres estate and all of Doñ a Carmen's shares were
exchanged for the whole 150,000 preferred shares. Thereafter, both the Don Andres estate and Doñ a
Carmen remained as corporate subscribers except that their subscriptions now include preferred
shares. There was no change in their proportional interest after the exchange. There was no cash flow.
Both stocks had the same par value. Under the facts herein, any difference in their market value would
be immaterial at the time of exchange because no income is yet realized — it was a mere corporate
paper transaction. It would have been different, if the exchange transaction resulted into a flow of
wealth, in which case income tax may be imposed. Reclassification of shares does not always bring
any substantial alteration in the subscriber's proportional interest. But the exchange is different —
there would be a shifting of the balance of stock features, like priority in dividend declarations or
absence of voting rights. Yet neither the reclassification nor exchange per se, yields realize income for
tax purposes. A common stock represents the residual ownership interest in the corporation. It is a
basic class of stock ordinarily and usually issued without extraordinary rights or privileges and
entitles the shareholder to a pro rata division of profits. Preferred stocks are those which entitle the
shareholder to some priority on dividends and asset distribution. Both shares are part of the
corporation's capital stock. Both stockholders are no different from ordinary investors who take on
the same investment risks. Preferred and common shareholders participate in the same venture,
willing to share in the profits and losses of the enterprise. Moreover, under the doctrine of equality of
shares — all stocks issued by the corporation are presumed equal with the same privileges and
liabilities, provided that the Articles of Incorporation is silent on such differences. In this case, the
exchange of shares, without more, produces no realized income to the subscriber. There is only a
modification of the subscriber's rights and privileges — which is not a flow of wealth for tax purposes.
The issue of taxable dividend may arise only once a subscriber disposes of his entire interest and not
when there is still maintenance of proprietary interest.
Delpher Trades Corp. vs. Intermediate Appellate Court, 157 SCRA 349, No. L-69259 January 26, 1988

Facts:

In 1974, Delfin Pacheco and his sister, Pelagia Pacheco, were the owners of 27,169 square meters of real
estate in the Municipality of Polo (now Valenzuela), Province of Bulacan (now Metro Manila) The said co-
owners leased to Construction Components International Inc. the same property and providing that during
the existence or after the term of this lease the lessor should he decide to sell the property leased shall first
offer the same to the lessee and the letter has the priority to buy under similar conditions. On August 3,
1974, lessee Construction Components International, Inc. assigned its rights and obligations under the
contract of lease in favor of Hydro Pipes Philippines, Inc. with the signed conformity and consent of lessors
Delfin Pacheco and Pelagia Pacheco. On January 3, 1976, a deed of exchange was executed between lessors
Delfin and Pelagia Pacheco and defendant Delpher Trades Corporation whereby the former conveyed to the
latter the leased property together with another parcel of land also located in Malinta Estate, Valenzuela,
Metro Manila for 2,500 shares of stock of defendant corporation with a total value of P1,500,000.00

Issue:

Whether or not the “Deed of Exchange” of the properties executed by the Pachecos on the one hand and the
Delpher Trades Corporation on the other was meant to be a contract of sale.

Held:

We rule for the petitioners. In the case at bar, in exchange for their properties, the Pachecos acquired 2,500
original unissued no par value shares of stocks of the Delpher Trades Corporation. Consequently, the
Pachecos became stockholders of the corporation by subscription. “The essence of the stock subscription is
an agreement to take and pay for original unissued shares of a corporation, formed or to be formed.”

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The records do not point to anything wrong or objectionable about this “estate planning” scheme resorted to
by the Pachecos. “The legal right of a taxpayer to decrease the amount of what otherwise could be his taxes
or altogether avoid them, by means which the law permits, cannot be doubted.” (Liddell & Co., Inc. v. The
Collector of Internal Revenue, 2 SCRA 632 citing Gregory v. Halvering, 293 U.S. 465, 7 L. ed. 596)
Delpher Trades Corp. vs. Intermediate Appellate Court, 157 SCRA 349, No. L-69259 January 26, 1988

The “Deed of Exchange” of property between the Pachecos and Delpher Trades Corporation cannot be
considered a contract of sale. There was no transfer of actual ownership interests by the Pachecos to a third
party. The Pacheco family merely changed their ownership from one form to another. The ownership
remained in the same hands. Hence, the private respondent has no basis for its claim of a light of first refusal
under the lease contract.
G.R. Nos. 177857-58. January 24, 2012

En Banc Decision; Justice Velasco

Constitutional Law; Bill of Rights; Rights of the Accused; Right to be Heard; Right
to Speedy Trial;
Facts:

In 1971, R.A. 6260 was enacted creating the Coconut Investment Company to
administer the Coconut Investment Fund. The declaration of martial law in
September 1972 saw the issuance of several presidential decrees purportedly
designed to improve the coconut industry through the collection and use of
the coconut levy fund. In G.R. Nos. 177857-58, class action petitioners
COCOFED and a group of purported coconut farmers and COCOFED members,
hereinafter “COCOFED et al.” collectively seek the reversal of the judgments
and resolutions of the anti-graft court insofar as these issuances are adverse to
their interests. As a procedural issue, COCOFED, et al. and Ursua contends that
in the course of almost 20 years that the cases have been with the anti-graft
court, they have repeatedly sought leave to adduce evidence (prior to
respondent’s complete presentation of evidence) to prove the coco farmers’
actual and beneficial ownership of the sequestered shares. The Sandiganbayan,
however, had repeatedly and continuously disallowed such requests, thus
depriving them of their constitutional right to be heard.

Issues:

(1) Whether or not petitioners COCOFED et al. were not deprived of their right
to be heard;
(2) Whether or not the right to speedy trial was violated.

Ruling:

(1) No, petitioner COCOFED’s right to be heard had not been violated by the
mere issuance of PSJ-A and PSJ-F before they can adduce their evidence. As it
were, petitioners COCOFED et al. were able to present documentary evidence
in conjunction with its “Class Action Omnibus Motion” dated February 23, 2001
where they appended around four hundred (400) documents including
affidavits of alleged farmers. These petitioners manifested that said documents
comprise their evidence to prove the farmers’ ownership of the UCPB shares,
which were distributed in accordance with valid and existing laws. Lastly,
COCOFED et al. even filed their own Motion for Separate Summary Judgment,
an event reflective of their admission that there are no more factual issues left
to be determined at the level of the Sandiganbayan. This act of filing a motion
for summary judgment is a judicial admission against COCOFED under Section
26, Rule 130 which declares that the “act, declaration or omission of a party as
to a relevant fact may be given in evidence against him.”
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(2) No. As a matter of settled jurisprudence, but subject to equally settled

exception, an issue not raised before the trial court cannot be raised for the
first time on appeal. The sporting idea forbidding one from pulling surprises
underpins this rule. For these reasons, the instant case cannot be dismissed for
the alleged violation of petitioners’ right to a speedy disposition of the case. It
must be clarified right off that the right to a speedy disposition of case and the
accused’s right to a speedy trial are distinct, albeit kindred, guarantees, the
most obvious difference being that a speedy disposition of cases, as provided
in Article III, Section 16 of the Constitution. In fine, the right to a speedy trial is
available only to an accused and is a peculiarly criminal law concept, while the
broader right to a speedy disposition of cases may be tapped in any
proceedings conducted by state agencies.
DE LA SALLE MONTESSORI V. DE LA SALLE
BROTHERS (CASE DIGEST. G.R. NO. 205548)
CASE DIGEST: [ G.R. No. 205548, February 07, 2018 ] DE LA SALLE
MONTESSORI INTERNATIONAL OF MALOLOS, INC., PETITIONER,
VS. DE LA SALLE BROTHERS, INC., DE LA SALLE UNIVERSITY,
INC., LA SALLE ACADEMY, INC., DE LA SALLE-SANTIAGO ZOBEL
SCHOOL, INC. (FORMERLY NAMED DE LA SALLE-SOUTH INC.), DE
LA SALLE CANLUBANG, INC. (FORMERLY NAMED DE LA SALLE
UNIVERSITY-CANLUBANG, INC.), RESPONDENTS. JARDELEZA, J.:

FACTS: Petitioner De La Salle Montessori International of Malolos, Inc. was

asked by respondents De La Salle Brothers, Inc., De La Salle University, Inc., La
Salle Academy, Inc., De La Salle-Santiago Zobel School, Inc. (formerly De La
Salle-South, Inc.), and De La Salle Canlubang, Inc. (formerly De La Salle
University-Canlubang, Inc.) to change its corporate name. Alleged misleading or
confusingly similar.
SEC OGC ordered petitioner to change corporate name. Said "La Salle" is not
descriptive. Said there is priority registration in favor of respondents. Said the
Lyceum ruling does not apply. Said there is confusion because of the name and
business model.

ISSUES:

1. What are the requisites regarding the prohibition under Section 18 re

corporate name?
2. Who are the priority registrants and, therefore, those who have better right
over the name "De La Salle" or "La Salle"?
3. What is the test to say if there is "confusing similarity in corporate names"?
4. Do the four additional words "Montessori International of Malolos, Inc."
remove the confusion?
5. Is "De La Salle" a generic term?
6. Does the Lyceum ruling apply?

HELD: We DENY the petition and uphold the Decision of the CA.

ISSUE [1]: The policy underlying the prohibition in Section 18 against the
registration of a corporate name which is "identical or deceptively or confusingly
similar" to that of any existing corporation or which is "patently deceptive" or
"patently confusing" or "contrary to existing laws," is the avoidance of fraud upon
the public which would have occasion to deal with the entity concerned, the
evasion of legal obligations and duties, and the reduction of difficulties of
administration and supervision over corporations.[29]

In Philips Export B.V. v. Court of Appeals,[31] the Court held that to fall within
the prohibition of Section 18, two requisites must be proven, to wit: (1) that the
complainant corporation acquired a prior right over the use of such corporate
name; and (2) the proposed name is either: (a) identical, or (b) deceptively or
confusingly similar to that of any existing corporation or to any other name
already protected by law; or (c) patently deceptive, confusing or contrary to
existing law.[32]

With respect to the first requisite, the Court has held that the right to the
exclusive use of a corporate name with freedom from infringement by similarity
is determined by priority of adoption.[33]

ISSUE [2]: Respondents' corporate names were registered as early as October 9,

1961 and as late as August 5, 1998.[34]

On the other hand, petitioner was issued a Certificate of Registration only on July
5, 2007 under Company Registration No. CN200710647.[35] It being clear that
respondents are the prior registrants, they certainly have acquired the right to use
the words "De La Salle" or "La Salle" as part of their corporate names.

The second requisite is also satisfied since there is a confusing similarity between
petitioner's and respondents' corporate names. While these corporate names are
not identical, it is evident that the phrase "De La Salle" is the dominant phrase
used.

ISSUE [3]: In determining the existence of confusing similarity in corporate

names, the test is whether the similarity is such as to mislead a person using
ordinary care and discrimination. In so doing, the Court must look to the record
as well as the names themselves.[37]

ISSUE [4]: Petitioner's assertion that the words "Montessori International of

Malolos, Inc." are four distinctive words that are not found in respondents'
corporate names so that their corporate name is not identical, confusingly
similar, patently deceptive or contrary to existing laws,[38] does not avail. As
correctly held by the SEC OGC, all these words, when used with the name "De La
Salle," can reasonably mislead a person using ordinary care and discretion into
thinking that petitioner is an affiliate or a branch of, or is likewise founded by,
any or all of the respondents, thereby causing confusion.[39]

ISSUE [5]: Petitioner's argument that it obtained the words "De La Salle" from
the French word meaning "classroom," while respondents obtained it from the
French priest named Saint Jean Baptiste de La Salle,[40] similarly does not hold
water.

We affirm that the phrase "De La Salle" is not merely a generic term.
Respondents' use of the phrase being suggestive and may properly be regarded as
fanciful, arbitrary and whimsical, it is entitled to legal protection.[42] Petitioner's
use of the phrase "De La Salle" in its corporate name is patently similar to
that of respondents that even with reasonable care and observation,
confusion might arise. The Court notes not only the similarity in the parties'
names, but also the business they are engaged in. They are all private
educational institutions offering pre-elementary, elementary and secondary
courses.[43] As aptly observed by the SEC En Banc, petitioner's name gives the
impression that it is a branch or affiliate of respondents.[44] It is settled that
proof of actual confusion need not be shown. It suffices that confusion is probable
or likely to occur.[45]

ISSUE [6]: The Court's ruling in Lyceum of the Philippines[46] does not apply.

In that case, the Lyceum of the Philippines, Inc., an educational institution

registered with the SEC, commenced proceedings before the SEC to compel
therein private respondents who were all educational institutions, to delete the
word "Lyceum" from their corporate names and permanently enjoin them from
using the word as part of their respective names.

The Court there held that the word "Lyceum" today generally refers to a school or
institution of learning. It is as generic in character as the word "university." Since
"Lyceum" denotes a school or institution of learning, it is not unnatural to use
this word to designate an entity which is organized and operating as an
educational institution. Also, no evidence presented to prove confusion.[47]

There is thus no similarity between the Lyceum of the Philippines case and this
case that would call for a similar ruling.

CASE DIGEST ENDS HERE.

WHEREFORE, the Petition is DENIED. The assailed Decision of the CA dated

September 27, 2012 is AFFIRMED.

SO ORDERED
[Your Name] [Your Address] [City, State, Zip Code] [Email Address] [Phone Number] [Date]

[Principal's Name] [School Name] [School Address] [City, State, Zip Code]

Subject: Request for Dropping School Subjects

Dear [Principal's Name],

I hope this letter finds you well. I am writing to respectfully request the dropping of certain
subjects from my current academic schedule at University of Caloocan City, College of Law.
Unfortunately, due to my work schedule, I am finding it increasingly challenging to manage my
academic responsibilities effectively, and I believe that dropping certain subjects will allow me to
strike a better balance between work and studies.

The subjects I am seeking to drop are LAW 201 (PUBLIC INTERNATIONAL LAW and LAW 204
LABOR AND SOCIAL LEGISLATION. I understand the importance of a well-balanced education and
have carefully considered the consequences of dropping these subjects. To ensure that I maintain
a comprehensive understanding of the curriculum, I am committed to studying independently or
participating in extracurricular activities that align with my interests and will supplement my
learning.

I assure you that this request is not made lightly, and I am dedicated to maximizing my
educational experience at [School Name]. My objective is to focus on the subjects that I am most
passionate about and achieve excellence in those areas.

I kindly request a meeting to discuss this matter further and explore the options available to
accommodate this change in my academic schedule. I am open to any guidance or alternative
arrangements that the school administration may suggest.

Thank you for your understanding and consideration of my request. I look forward to a positive
response and the opportunity to discuss this matter in person.

Sincerely,

[Your Name]
August 4, 2023

ATTY. RODERICK P VERA

Dean – UCC College of Law
VP – Academic Affairs

Dear Dean Vera,

I hope this letter finds you well. I am writing to respectfully request the dropping of certain subjects from
my current academic schedule at University of Caloocan City, College of Law. Unfortunately, due to my
work schedule, I am finding it increasingly challenging to manage my academic responsibilities effectively,
and I believe that dropping certain subjects will allow me to strike a better balance between work and
studies.

While I value my education and the learning opportunities provided by UCC-College of Law my work
commitments have increased significantly, making it difficult for me to devote adequate time and attention
to all my subjects.

The subjects I am seeking to drop are LAW 201 (PUBLIC INTERNATIONAL LAW and LAW 204
LABOR AND SOCIAL LEGISLATION. Despite my best efforts, I have found it challenging to keep up
with the coursework and maintain satisfactory performance in these subjects due to the demands of my job.

I understand the importance of a well-rounded education, and I assure you that this request is not made
lightly. I have discussed this matter with my parents and my employer, and they also believe that this
adjustment in my academic schedule will be in my best interest. I am committed to my studies and eager to
excel in the subjects that I will continue to pursue. I plan to explore alternative ways of supplementing my
learning.

I genuinely appreciate the understanding and support of the school in this matter. I am determined to make
the most of my educational experience at UCC – College of Law while fulfilling my work responsibilities.

Thank you for considering my request. I look forward to a positive response and the opportunity to discuss
this matter in person.

Sincerely,

ZEN ALLAN A. ARINES

Student – JD 2C

I am writing to formally request a modification in my current work schedule to a staggered time

arrangement in consideration of my school related obligations. I am confident that implementing such
schedule will allow me to balance my work and academic responsibilities effectively and contribute
positively to both my professional and educational pursuit. Attached is a copy of my school registration
form and subject schedule.
 EMPLOYEE NAME OF STAGGERED PERIOD REASON
NO. EMPLOYEE TIME SCHEDULE COVERED
August 21, Academic
25636 ZEN ALLAN A. 7:00 AM TO 6:00 2023 until responsibilities
ARINES PM further notice

Thank you for your time and consideration. I look forward to your favorable response.

Respectfully yours,

ZEN ALLAN A. ARINES, RM, RN

Legislative Staff Officer II
Medical and Dental Service

Recommending Approval

LUIS JOSE M. BAUTISTA, MD, MHA

Director II
Medical and Dental Service