UNIVERSITY OF MINDANAO, INC. vs. BANGKO SENTRAL NG PILIPINAS, ET AL.

G.R. No. 194964-65, January 11, 2016

Leonen, J. Second Division

Topic: Delay; Demand; Unenforceable contract

Nature: Appeal from a Decision of the CA

FACTS:

The University of Mindanao is an Educational Institution. It was chaired by Sps. Torres in the year 1982. Before then, the Sps. Torres incorporated and operated 2 thrift banks, FISLAI and DSLAI. In 1982, BSP issued standby emergency credit for FISLAI and DSLAI. This credit was evidenced by 3 promissory notes (PNs). The University of Mindanao executed a deed of real estate mortgage over its property which served as security for the thrift banks' credit. The mortgage was signed by the Vice President of the university who presented a secretary's certificate showing that he was authorized to enter into the mortgages. FISLAI and DSLAI eventually had to enter rehabilitation and were merged into Mindanao Savings and Loan Association (MSLAI). MSLAI failed to recover and was liquidated. BSP thus informed the University of Mindanao that it would foreclose the mortgaged properties.

Thus, petitioner university filed two complaints for nullification and cancellation of mortgage: one at the RTC of Iligan and another at Davao. The petitioner claims that they never received the proceeds of any loan from BSP and that it never authorized the VP to mortgage any property. Both courts ruled in favor of Petitioner and declared the Real Estate Mortgage void. On appeal, the CA consolidated both cases and ruled in favor of respondent. The CA held that Petitioner was estopped from denying the authority of its VP, that the annotations on the titles of Petitioner’s property served as constructive notice and that there was implied ratification and that since the secretary’s certificates were notarized, they enjoyed a presumption of regularity. Hence this petition for review.

ISSUE:

1. Whether or not the action had prescribed.

2. Whether or not the petitioner had validly delegated the power to mortgage to its VP Petalcorin.

3. Whether or not the act of mortgaging the property was ratified by petitioner.

HELD:

1. NO, the action had not yet prescribed.

Prescription is the mode of acquiring or losing rights through the lapse of time. Its purpose is “to protect the diligent and vigilant, not those who sleep on their rights.” The prescriptive period for actions on mortgages is ten (10) years from the day they may be brought. Actions on mortgages may be brought not upon the execution of the mortgage contract but upon default in payment of the obligation secured by the mortgage.

A debtor is considered in default when he or she fails to pay the obligation on due date and, subject to exceptions, after demands for payment were made by the creditor. Article 1169 of the Civil Code provides:

ART. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.

Article 1193 of the Civil Code provides that an obligation is demandable only upon due date. In other words, as a general rule, a person defaults and prescriptive period for action runs when (1) the obligation becomes due and demandable; and (2) demand for payment has been made. The prescriptive period neither runs from the date of the execution of a contract nor does the prescriptive period necessarily run on the date when the loan becomes due and demandable. Prescriptive period runs from the date of demand, subject to certain exceptions.

In this case, the running of the prescriptive period for respondent’s action on the mortgages did not start when it executed the mortgage contracts with Petitioner in 1982. In view of the termination of the existence of one of the corporations, demand was rendered unnecessary, thus prescription would start to run in 1990, the due date of the contract. Therefore, respondent had until 2000 in order to institute an action on the mortgage contract. However, under Article 1155, respondent actually interrupted, the running of the prescriptive period when it sent its demand letter to petitioner on June 18, 1999.

2. NO. The relationship between a corporation and its representatives is governed by the general principles of agency. Article 1317 of the Civil Code provides that there must be authority from the principal before anyone can act in his or her name. Hence, without delegation by the board of directors or trustees, acts of a person—including those of the corporation’s directors, trustees, shareholders, or officers—executed on behalf of the corporation are generally not binding on the corporation. The effect of a lack of authority is that under Art. 1317 and 1403, the contract becomes unenforceable.

In this case, the trial courts found that the Secretary’s Certificate and board resolution were either non-existent or fictitious and that a board meeting giving the powers never occurred. The court is bound by the findings of fact of the trial courts.

3. NO. Ratification converts an agents unauthorized act, into an act of the principal. It is a voluntary and deliberate confirmation or adoption of a previously unauthorized act. No act by petitioner can be interpreted as anything close to ratification. It was not shown that it issued a resolution ratifying the execution of the mortgage contracts. It was not shown that it received proceeds of the loans secured by the mortgage contracts. There was also no showing that it received any consideration for the execution of the mortgage contracts. It even appears that petitioner was unaware of the mortgage contracts until respondent notified it of its desire to foreclose the mortgaged properties.

WHEREFORE, the Petition is GRANTED. The Court of Appeals' Decision dated December 17, 2009 is REVERSED and SET ASIDE. The Regional Trial Courts' Decisions of November 23, 2001 and December 7, 2001 are REINSTATED.

SPOUSES JAIME AND MATILDE POON v. PRIME SAVINGS BANK REPRESENTED BY THE PHILIPPINE DEPOSIT INSURANCE CORPORATION AS STATUTORY LIQUIDATOR

G.R. No. 183794; June 13, 2016

Sereno. J., First Division

Topic: Contracts with a penal clause; Fortuitous Event

Nature: Appeal from a decision of the CA

FACTS:

The petitioners owned a commercial building. They executed a 10-year contract of lease over building with respondent Prime Savings Bank for the latter to use it as a branch office. They agreed to a fixed monthly rental with an advance payment. The contract also provided:

Should the lease[d] premises be closed, deserted or vacated by the LESSEE, the LESSOR shall have the right to terminate the lease ...

x x x

The LESSOR shall thereupon have the right to enter into a new contract with another party. All advanced rentals shall be forfeited in favor of the LESSOR.

Three years later, the BSP placed respondent under receivership of the PDIC and eventually ordered its litigation. The respondent vacated petitioner’s building and PDIC then demanded return of the advance rentals. Petitioners refused to return the advanced rentals. Thus respondent commenced this case for rescission of contract and recovery of sum of money.

The RTC ruled in favor of Petitioners and ordered the partial rescission of the contract insofar as the advance payment was forfeited. It held that the PDIC’s closure of their business was a fortuitous event. The CA affirmed but applied Art. 1229 instead.

ISSUE:

1. Whether or not respondent may avail of the remedy of rescission.

2. Whether or not the closure of respondent’s business is a fortuitous event.

3. Whether or not the forfeiture of the advance rentals was a penal clause.

4. Whether or not the penalty may be equitably reduced.

HELD:

1. YES. Respondents are entitled to rescission. The legal remedy of rescission is by no means limited to the situations covered in Arts. 1381 and 1382. The New Civil Code actually uses the term “rescission” in two different contexts. The first refers to breach of contract under Art. 1191, also known as the remedy of “resolution”; the second is rescission by reason of lesion or economic prejudice under Art. 1381. The first is a principal action based on breach of a party, while the second is a subsidiary action. From the allegations of the complaint, it is clear that respondent’s right of action rests on the alleged abuse of petitioner’s right under the contract on the theory that petitioner tenaciously enforced their right to forfeit the advanced rentals which was in bad faith since they knew that respondent was already insolvent. IN other words, respondents are seeking rescission under Art. 1191.

2. NO. The closure of respondent’s business was neither a fortuitous or unforeseen event. In this case, for it to be considered a fortuitous event, there has to be bad faith or arbitrariness on the part of the BSP. Instead, its decision to place respondent under receivership and liquidation was pursuant to R.A. No. 7653, moreover, respondent was partially accountable for closure of its banking business. Neither is this case, a case of unforeseen event under Art. 1267. After all, parties to a contract are presumed to have assumed the risks of unfavorable developments. It is only in absolutely exceptional changes of circumstance therefore that equity demands assistance for the debtor. In Tagaytay Realty vs. Gacutan the requisites for the application of Art. 1267 are:

1. The event could not have been foreseen at the time of the execution of the contract.

2. It makes performance of the contract extremely difficult but not impossible.

3. It must not be due to the act of any of the parties.

4. The contract is for a future prestation.

The case explains that mere inconvenience, unexpected impediments, increased expenses or even pecuniary inability to fulfill an engagement will not relieve the obligor from an undertaking that it has knowingly and freely contracted. In this case, the first and third requisites are lacking. Since the lease was for 10 years, the parties should have considered the possibility of closure of business.

3. YES. The forfeiture clause in the contract is penal in nature. A provision is a penal clause if it calls for the forfeiture of any remaining deposit still in the possession of the lessor without prejudice to any other obligation still owing, in the event of the termination or cancellation of the agreement by reason of the lessee’s violation of any of the terms and conditions thereof. This kind of agreement may be validly entered into the by the parties. In this case, it is evident that the stipulation on the forfeiture of advance rentals is a penal in the sense that it provides for liquidated damages. The penalty for the premature termination of the contract works both ways. The penalty was to compel respondent to complete the 10-year term of the lease. Petitioners, too were similarly obliged to ensure the peaceful use of the building by respondent for the duration of the lease under paid of losing the remaining advance rentals paid by the respondent.

4. YES. A reduction of the penalty agreed upon by the parties is warranted under Article 1229 of the New Civil Code.

The general rule is that courts have no power to ease the burden of obligations voluntarily assumed by parties, just because things did not turn out as expected at the inception of the contract. It must be noted that this case was initiated by the PDIC in furtherance of its statutory role as the fiduciary of Prime Savings Bank. As the state-appointed receiver and liquidator, the PDIC is mandated to recover and conserve the assets of the foreclosed bank on behalf of the latter's depositors and creditors. In other words, at stake in this case are not just the rights of petitioners and the correlative liabilities of respondent lessee. Over and above those rights and liabilities is the interest of innocent debtors and creditors of a delinquent bank establishment. These overriding considerations justify the 50% reduction of the penalty agreed upon by petitioners and respondent lessee in keeping with Article 1229 of the Civil Code, which provides for an equitable reduction of the penalty in some cases.

Under the circumstances, it is neither fair nor reasonable to deprive depositors and creditors of what could be their last chance to recoup whatever bank assets or receivables the PDIC can still legally recover. Strict adherence to the doctrine of freedom of contracts, at the expense of the rights of innocent creditors and investors, will only work injustice rather than promote justice in this case.

WHEREFORE, premises considered, the Petition for Review on Certiorari is DENIED. The Court of Appeals Decision dated 29 November 2007 and its Resolution dated 10 July 2008 in CA-G.R. CV No. 75349 are hereby MODIFIED in that legal interest at the rate of 6% per annum is imposed on the monetary award computed from the finality of this Decision until full payment.

GREAT PACIFIC LIFE CORPORATION vs. COURT OF APPEALS

G.R. No. L-31845; April 30, 1979

FACTS:

On March 14, 1957, the private respondent Ngo Hing (Hing) filed an application with Great Pacific Life (Pacific Life) for a twenty year endowment policy on the life of his one-year old daughter. Hing gave the amount of the annual premium to the Branch Manager of Pacific Life, petitioner Mondragon. A binding deposit receipt was thereafter issued to Hing, likewise the Mondragon handwrote at the bottom of the page of his insurance application a strong recommendation for approval. Then on April 30, 1957, Mondragon received a letter from Pacific Life informing him of the disapproval of the application stating that the policy is not available to persons below 7 years old and instead recommended a different policy for the approval of Hing.

Mondragon did not communicate the disapproval to Hing and instead wrote back to Pacific Life strongly recommending the approval of the policy. It was then that Hing’s daughter died because of influenza. Hing tried to collect the proceeds of the insurance, which Pacific Life refused to pay.

The CFI ruled in favor of the suit for recovery of money filed by Hing and ordered the payment of the insurance proceeds.

ISSUES:

1. Whether or not the binding deposit receipt constituted a temporary contract of life insurance;

2. Whether or not Hing concealed the state of health and physical condition of his daughter.

HELD:

1. NO. The fine print at the back of the binding deposit receipt provides that it only constitutes a temporary contract only when the company is satisfied that the applicant is insurable according to the standard rates or upon offer and acceptance of a different policy. Said binding deposit receipt does not bind the company if the application was eventually rejected. It is merely conditional and does not insure outright. In this case, since Pacific Life eventually disapproved the application, the binding deposit receipt in question had never become in force at any time.

As held in earlier cases, “a contract of insurance, … must be assented to by both parties either in person or by their agents….”

2. YES. The facts show that when Hing supplied the data for the insurance application, he was fully aware that his one-year old daughter was a mongoloid child—a congenital defect which could not be hidden or disguised. Nevertheless, Hing withheld such material fact from the company, which he knows he had the responsibility to disclose. The contract of insurance is one of perfect good faith (uberrima fides) meaning good faith; absolute and perfect candor or openness and honesty; the absence of any concealment or deception however slight. Concealment is the neglect to communicate that which a party knows and ought to communicate. The concealment entitles the insurer to rescind the contract of insurance.

Wherefore, the Court held that no insurance contract was perfected between the parties.

Technorati Tags: Life Insurance,Insurance,Case Digest

ENRIQUEZ VS. SUN LIFE INSURANCE OF CANADA

G.R. No. L-15895; November 29, 1920

FACTS:

This is an action made by the adminstrator of the estate of Joaquin Herrer of P6,000.00 paid by the deceased for a life annuity on the ground that the contract for a life annuity had not been perfected.

Joaquin Herrer made an application with Sun Life for a life annuity. He paid the amount of P6,000.00 to the Manila manager who gave him a "provisional" receipt "subject to medical examination and approval of the Company's Central Office." The application was forwarded to the head office in Canada and the policy was issued on December 4, 1917 in Canada. Meanwhile, on December 18, 1917, Herrer's attorney wrote to the Manila Office stating that Herrer wanted to withdraw his application to which the office wrote a letter dated November 26, 1917 stating that the policy had already been issued. The letter was received by the attorney on December 21, 1917. Herrer had died a day earlier on December 20, 1920.

The trial court ruled that the contract had been perfected, hence this appeal.

ISSUES:

1. Whether or not the policyholder had received notice of the acceptance of his policy;

2. Whether or not the contract of life annuity was perfected.

HELD:

1. NO. The facts clearly show that Herrer was not informed of the acceptance of the policy before his death.

2. NO. The contract was not perfected. Art. 1262 provides that acceptance by letter does not bind the person making the offer except from the time it came to his knowledge. The pertinent fact is that according to the provisional receipt, the insurance company had to: 1) conduct a medical examination; 2) had to obtain the head office's approval; and 3) somehow communicate such approval. It is true that the letter notifying acceptance was deposited in the post office, but the fact of notification is a rebuttable presumption and the facts clearly show that Herrer never received the notice of the acceptance before his death.

Technorati Tags: Insurance,Life Annuity

HYATT ELEVATORS AND ESCALATORS CORPORATION vs. GOLDSTAR ELEVATORS, PHILS., INC.

G.R. No. 161026; October 24, 2005

Ponente:  Panganiban, J.,

 

FACTS:

Petitioner and Respondent are both engaged in the business of importing, installing and maintaining elevators and escalators. Hyatt filed an unfair competition case against LG and Goldstar alleging that it was appointed as the sole distributor of LG elevators and escalators.

Goldstar moved to dismiss the case alleging that venue was improperly laid as neither the Hyatt, LG or Goldstar itself resided in Mandaluyong city where the case was originally filed. The RTC denied the motion. The CA dismissed the case and held that Makati was the principal place of business of both respondent and petitioner, as stated in the latter’s Articles of Incorporation, that place was controlling for purposes of determining the proper venue.

ISSUE:

Whether or not the “residence” of the corporation is the same one as stated in the AOI.

HELD:

Yes. Although the Rules of Court do not provide that when the plaintiff is a corporation, the complaint should be filed in the location of its principal office as indicated in its articles of incorporation, jurisprudence has, however, settled that the place where the principal office of a corporation is located, as stated in the articles, indeed establishes its residence. This ruling is important in determining the venue of an action by or against a corporation, as in the present case.

BERNARDO vs. NLRC and FAR EAST BANK

GR No. 122917; July 12, 1999

 

FACTS:

Far East Bank (Respondent) entered into employment contracts with deaf-mutes, who were hired as money sorters under uniform “Employment Contracts for Handicapped Workers.” Every 6 months, these workers renewed their employment contracts. The complainants here complain that they were regular employees and that they have been illegally dismissed.

Respondent argued that complainants were not regular employees, but a special class of workers who were hired because of political and civic accommodation. And that the Bank’s corporate philosophy does not allow the hiring and regularizing handicapped workers unless it was on a special arrangement basis. The Labor Arbiter ruled in favor of respondent bank workers. NLRC affirmed.

ISSUE:

Whether or not petitioner workers are regular employees.

HELD:

YES, petitioners are regular employees. The fact that after the expiry of their 6 month contract, respondent bank renewed their contracts shows that these workers were qualified to perform the responsibilities of their positions. 

The Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms of employment as a qualified able-bodied person.  This being so, petitioners are thus covered by Art. 286 of the Labor Code which defines regular employment to be that the employee has been engaged to perform activities usually necessary or desirable in the usual business or trade of the employer.  The task of counting and sorting bills is necessary to the business of respondent bank.  Except for sixteen of them, the petitioners performed these tasks for more than six months.  Therefore, the 27 petitioners should be deemed regular employees entitled to security of tenure.  Their services may only be terminated for a just and authorized cause.  Because respondents failed to show such cause, these 27 petitioners are deemed illegally dismissed and hence entitled to backwages and separation pay.

ORDA vs. COURT OF APPEALS

G.R. No. 92625; December 26, 1990

FACTS:

Private Respondent Gil Galang (Gil) filed a case with the Trial court of San Pablo City in order to regain custody of his minor daughter who was staying with her maternal grandparents, petitioner’s herein. Her mother had already died when the case was initiated. The Trial Court dismissed the case for lack of jurisdiction because the petitioners, Orda, had moved to Bataan, hence the court lost jurisdiction. Subsequently, Gil commenced an original action for habeas corpus with the Court of Appeals over his minor daughter. The Court of Appeals, finding that based of the arguments presented by both parties, a full blown trial is required, accordingly, the CA issued the assailed order remanding the case to the RTC of San Pablo City. The Court of appeals later clarified the order as a “referral” of the case to the RTC because it was an original case submitted to it.

ISSUE:

Whether or not the Court of Appeals may refer a petition for habeas corpus originally filed with it to the Regional Trial Court for a full-blown trial due to conflicting facts presented by the parties.

HELD:

NO. While the case requires a full-blown trial of the facts, the same should be done in the context of the special proceedings for custody of minors under Rule 99 of the Rules of Court, and not a remand or referral of the original action for a writ of habeas corpus filed with the respondent court. Parenthetically, the proper venue in this action is the place where the petitioner therein resides.

WHEREFORE, the petition for certiorari is hereby GRANTED. The assailed decision and resolutions of the respondent Court of Appeals are SET ASIDE and a new one is rendered DISMISSING the petition for habeas corpus WITHOUT PREJUDICE to the filing by private respondent of the appropriate special proceedings to gain custody of his minor child.

BARTOLOME vs. SSS and SCANMAR MARITIME SERVICES

 

Citation: G.R. No. 192531; November 12, 2014

Ponente: Velasco; THIRD DIVISION

Doctrine:

Repeal of laws

Relative; definition

Reversion of parental authority; death of adoptive parent

FACTS:

Petitioner Bernardina Bartolome (Bartolome) was the biological mother of John Colcol (John). John was a seaman and he died due to an accident while on duty. Bartolome sought to claim death benefits from the SSS as she was the sole heir and beneficiary of John.

Her request was denied. The SSS explained that she is “no longer considered the parent of JOHN as he was legally adopted by CORNELIO COLCOL based on the documents you submitted to us.

Cornelio Colcol was John's great grandfather. The decree of adoption attained finality in February of 1985 while john was just 2 years old.

Based on these facts, the SSS claimed that Bartolome is no longer the legitimate parent of John and is thus not entitled to Employees compensation. That the legitimate parent is now Cornelio Colcol.

Respondents cite the Amended Rules on Employee Compensation which states:

RULE XV – BENEFICIARIES

SECTION 1. Definition. (a) Beneficiaries shall be either primary or secondary, and determined at the time of employee’s death.

(b) The following beneficiaries shall be considered primary:

(1) The legitimate spouse living with the employee at the time of the employee’s death until he remarries; and

(2) Legitimate, legitimated, legally adopted or acknowledged natural children, who are unmarried not gainfully employed, not over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self - support due to physical or mental defect which is congenital or acquired during minority; Provided, further, that a dependent acknowledged natural child shall be considered as a primary beneficiary only when there are no other dependent children who are qualified and eligible for monthly income benefit; provided finally, that if there are two or more acknowledged natural children, they shall be counted from the youngest and without substitution, but not exceeding five.

(c) The following beneficiaries shall be considered secondary:

(1) The legitimate parents wholly dependent upon the employee for regular support;

(2) The legitimate descendants and illegitimate children who are unmarried, not gainfully employed, and not over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self - support due to physical or mental defect which is congenital or acquired during minority.

ISSUES:

1. Whether or not the interpretation of the ECC stating that only legitimate parents may benefit from compensation is correct.

2. Whether or not Petitioner qualifies as a dependent parent notwithstanding her son's adoption by someone else.

HELD:

1. No. The interpretation is incorrect. Art. 167 (j) of the Labor Code on employee's compensation provides that beneficiaries are the “dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the secondary beneficiaries; Provided; that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit.” The ECC on the other hand, interpreted this provision to state that only “legitimate parents wholly dependent upon the employee for regular support.”

This is unauthorized administrative legislation. Article 7 of the New Civil Code states that:

Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse, or custom or practice to the contrary.

When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern.

Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.

Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.

Guided by this doctrine, We find that the Amended Rules on Employees’ Compensation is patently a wayward restriction of and a substantial deviation from Article 167 (j) of the Labor Code when it interpreted the phrase “dependent parents” to refer to “legitimate parents.”

2. YES. The Supreme Court also noted that three years after the adoption decree, Cornelio died while John was still a minor. John's minority at the time of his adopter's death is a significant factor because under such circumstance, parental authority must be deemed to have reverted back to the biological parent. Adoption is a personal relationship and that there are no collateral relatives by virtue of adoption—who was then left to care for the adopted minor child if the adopter passed away?

Moreover, this ruling finds support on the fact that even though parental authority is severed by virtue of adoption, the ties between the adoptee and the biological parents are not entirely eliminated. To demonstrate, the biological parents, in some instances, are able to inherit from the adopted, as can be gleaned from Art. 190 of the Family Code:

Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the following rules:

xxx

(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted concur with the adopter, they shall divide the entire estate, one-half to be inherited by the parents or ascendants and the other half, by the adopters;

xxx

(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or intestate succession shall apply.

The Supreme Court thus ordered the ECC to release the benefits to petitioner Bartolome.

JALOSJOS vs. COMELEC and ERASMO

G.R. No. 191970; April 24, 2012

Ponente:  Abad

Doctrine: Proof required to establish domicile of a reinstated Filipino citizen running for governor of a province

FACTS:

Petitioner Rommel Jalosjos was born in Quezon City.  He migrated to Australia when he was eight years old and acquired Australian citizenship.  In 2008, he returned to the Philippines and lived in Zamboanga, he took an oath of allegiance to the Philippines and was issued a certificate of reacquisition of citizenship by the Bureau of Immigration and he renounced his Australian citizenship. 

Jalosjos applied for registration as a voter in Ipil, Zamboanga Sibugay, but Private Respondent Erasmo, the barangay captain, opposed the registration.  COMELEC approved the application and included Jalosjos in the voter's list.  This decision was affirmed at the MCTC and at the RTC.

Jalosjos then filed a certificate of candidacy (COC) for Governor of Zamboanga Sibugay for the 2010 elections.  Erasmo filed a petition to cancel the COC on the ground of failure to comply with the one year residency requirement of the Local Government Code (LGC).

COMELEC held that Jalosjos failed to present ample proof of a bona fide intention to establish a domicile in Ipil, Zamboanga Sibugay. It held that when he first moved back to the Philippines, he was merely a guest or transient at his brother's house in Ipil, and for this reason, he cannot claim Ipil as his domicile.  Meanwhile, Jalosjos won the elections.

ISSUE:

Whether or not the COMELEC is correct in holding that petitioner did not present ample proof of a bona fide intention to establish domicile at Ipil, Zamboanga Sibugay.

HELD:

NO.  The COMELEC is incorrect.  Jalosjos has successfully proven by his acts of renouncing his Australian citizenship and by living in Ipil, that he has changed his domicile to Zamboanga Sibugay.

The LGC requires that a gubernatorial candidate be a resident of the province for at least one year before the elections.  For the purposes of election laws, the requirement of residence is synonymous with domicile:  i.e. he must have an intention to reside in a particulaar place, but must also have personal presence coupled with conduct indicative of such intention.

The question of residence is a question of intention.  To determine compliance with the residency/domicile requirement, jurisprudence has laid down the following guidelines:

   (a)               every person has a domicile or residence somewhere;

(b)               where once established, that domicile remains until he acquires a new one; and

(c)               a person can have but one domicile at a time.

The facts show that Jalosjos' domicile of origin was Quezon city.  When he acquired Australian citizenship, Australia became his domicile by operation of law and by choice.  On the other hand, when he came to the Philippines in November 2008 to live with his brother in Zamboanga Sibugay, it is evident that Jalosjos did so with intent to change his domicile for good. He left Australia, gave up his Australian citizenship, and renounced his allegiance to that country and reacquired his old citizenship by taking an oath of allegiance to the Philippines.  By his acts, Jalosjos forfeited his legal right to live in Australia, clearly proving that he gave up his domicile there. And he has since lived nowhere else except in Ipil, Zamboanga Sibugay.

To hold that Jalosjos has not established a new domicile in Zamboanga Sibugay despite the loss of his domicile of origin (Quezon City) and his domicile of choice and by operation of law (Australia) would violate the settled maxim that a man must have a domicile or residence somewhere.

Neither can COMELEC conclude that Jalosjos did not come to settle his domicile in Ipil since he has merely been staying at his brother's house.  A candidate is not required to have a house in order to establish his residence or domicile in that place.  It is enough that he should live there even if it be in a rented house or in the house of a friend or relative.  To insist that the candidate own the house where he lives would make property a qualification for public office.  What matters is that Jalosjos has proved two things: actual physical presence in Ipil and an intention of making it his domicile.

As evidence, Jalosjos presented his next-door neighbors who testified that he was physically present in Ipil, he presented correspondence with political leaders and local and national party mates, furthermore, he is a registered voter by final judgement of the RTC.  The court also noted that Jalosjos has since acquired a lot in Ipil and a fish pond in San Isidro, Naga, Zamboanga Sibugay.  This, without a doubt is sufficient to establish his intent to set his domicile in Ipil, Zamboanga Sibugay.

DISPOSITIVE

WHEREFORE, the Court GRANTS the petition and SETS ASIDE the Resolution of the COMELEC Second Division dated February 11, 2010 and the Resolution of the COMELEC En Banc dated May 4, 2010 that disqualified petitioner Rommel Jalosjos from seeking election as Governor of Zamboanga Sibugay.

ROMUALDEZ-MARCOS vs. COMELEC and MONTEJO

G.R. No. 119976; September 18, 1995

Ponente:  Kapunan

FACTS:

Petitioner Imelda Marcos filed a Certificate of Candidacy (COC) in the First district of Leyte in order that she will be able to run for Congress of that district in the 1995 elections.  Her COC stated that she was a resident of Leyte for seven months.  Private Respondent Montejo, a rival candidate filed a petition to cancel the COC and to disqualify Marcos on the ground that she did not meet the one year residency requirement as provided for in the Constitution.  In response, Marcos amended her COC changing the entry "seven" months to "since childhood".  Marcos claimed that "she has always maintained Tacloban City as her domicile or residence." She further claimed that she is entitled to the correction of her COC on the ground that her original entry of "seven months" was the result of an "honest misinterpretation or honest mistake". 

The COMELEC granted the petition to cancel the COC and to disqualify Marcos.  It held that the animus revertendi of Marcos was not Tacloban, but San Juan, Manila, because that where she chose to live after she went back to the Philippines after her well-publicized exile in the US.  It explained that while Petitioner grew up in Tacloban, after her graduation, however, she moved to Manila where she became a registered voter, became a member of the Batasang Pambansa as a representative of Manila and eventually became Governor of Manila.  This, according to the COMELEC debunks her claim that she was a resident of Leyte 1st District "since childhood".

ISSUE:

1.  Whether or not Petitioner is a resident of Leyte for election purposes.

2.  Whether or not Petitioner lost her domicile after she married and lived with her husband in Ilocos Norte and in San Juan.

HELD: 

1.  YES.

The Supreme Court declared in this case that for purposes of election law, residence is synonymous with domicile.  The decision of the COMELEC however, shows that they confused the concept of "Domicile" with "actual residence".

                Domicile versus Residence

Article 50 of the Civil Code decrees that "[f]or the exercise of civil rights and the fulfillment of civil obligations, the domicile of natural persons is their place of habitual residence."  In a past case, the Court took the concept of domicile to mean an individual's "permanent home", "a place to which, whenever absent for business or for pleasure, one intends to return, and depends on facts and circumstances in the sense that they disclose intent."  Thus, domicile is composed of the two elements of:

1.  The fact of residing/physical presence in a fixed place; and

2.  Animus manendi - the intention of returning permanently

               

Residence on the other hand merely refers to the factual relationship of an individual to a certain place.  It is mere physical presence.  Residence involves the intent to leave when the purpose for which the resident has taken up his abode ends.  If a person's intent be to remain, it becomes his domicile; if his intent is to leave as soon as his purpose is established it is residence.  Domicile is residence coupled with the intention to remain for an unlimited time.

A person can have different residences in various places, but he can only have a single domicile. Note however, that a person may abandon a domicile in favor of another.

                Domicile of Petitioner is in Tacloban

Petitioner Marcos' domicile is in Tacloban, Leyte.  The fact that she has a residence in Manila does not mean that she has lost her domicile in that province.  The absence from legal residence or domicile to pursue a profession, to study or to do other things of a temporary or semi-permanent nature does not constitute loss of residence.  Applying this doctrine to the case of petitioner, the fact that she has registered to vote and resided in Ilocos Norte and in San Juan do not unequivocally point to an intention to abandon her domicile in Tacloban.  Even while residing in various places, petitioner kept close ties to her domicile of origin by establishing residences in Tacloban, celebrating her birthdays and other important personal milestones in her home province, instituting well-publicized projects for the benefit of her province and hometown, and establishing a political power base where her siblings and close relatives held positions of power either through the ballot or by appointment, always with either her influence or consent. These well-publicized ties to her domicile of origin are part of the history and lore of the quarter century of Marcos power in our country. Either they were entirely ignored in the COMELEC'S Resolutions, or the majority of the COMELEC did not know what the rest of the country always knew: the fact of petitioner's domicile in Tacloban, Leyte.

2.  NO

                The domicile of origin

Note further that when petitioner Imelda Marcos was born, her domicile followed that of her parents.  Hence, her domicile of origin was Tacloban.  Once acquired, domicile is retained until a new one is gained.  The domicile of origin is not easily lost.  To effect a change of domicile, one must demonstrate:

1.  An actual removal or an actual change of domicile;

2.  A bona fide intention of abandoning the former place of residence and establishing a new one; and

3.  Acts which correspond with the purpose.

                               

In the absence of clear and positive proof based on these criteria, the residence of origin should be deemed to continue. 

                Effect of marriage as to the domicile of origin

Article 110 of the New Civil Code provides:

Art. 110. — The husband shall fix the residence of the family. But the court may exempt the wife from living with the husband if he should live abroad unless in the service of the Republic.

A survey of jurisprudence relating to this article or to the concepts of domicile or residence does not suggest that the female spouse automatically loses her domicile of origin in favor of the husband upon marriage.  This article clearly refers to actual residence and not domicile and merely establishes the default rule in fulfilling the obligation of the spouses "to live together" in article immediately preceding Art. 110.

When Petitioner was married to then Congressman Marcos, in 1954, petitioner was obliged—by virtue of Article 110 of the Civil Code—to follow her husband's actual place of residence fixed by him. Mr. Marcos had several places of residence at the time:  San Juan and Ilocos Norte.  Assuming that Mr. Marcos had fixed any of these places as the conjugal residence, what petitioner gained upon marriage was actual residence.  She did not lose her domicile of origin.

This rule has changed with the advent of the Family code with the introduction of the common law concept of "matrimonial domicile".  This underscores the difference between the intentions of the Civil Code and the Family Code drafters, the term residence has been supplanted by the term domicile in an entirely new provision (Art. 69) distinctly different in meaning and spirit from that found in Article 110. The provision recognizes revolutionary changes in the concept of women's rights in the intervening years by making the choice of domicile a product of mutual agreement between the spouses.

Even assuming that Petitioner's domicile was lost, her acts unequivocally show an intent to reestablish a domicile in Tacloban, Leyte because Petitioner, as early as in 1992, already obtained her residence certificate in Tacloban.

DISPOSITIVE PORTION:

WHEREFORE, having determined that petitioner possesses the necessary residence qualifications to run for a seat in the House of Representatives in the First District of Leyte, the COMELEC's questioned Resolutions dated April 24, May 7, May 11, and May 25, 1995 are hereby SET ASIDE. Respondent COMELEC is hereby directed to order the Provincial Board of Canvassers to proclaim petitioner as the duly elected Representative of the First District of Leyte.

PHILIPPINE CONSUMERS FOUNDATION vs. NTC and PLDT

G.R. No. L-63318; August 18, 1984

Ponente: Makasiar

Topic:  Statutory interpretation

Doctrine:  The word used in the law must be given its ordinary meaning, unless a contrary intent is manifest in the law itself.

FACTS:

Respondent NTC promulgated a decision (NTC decision) dated November 22, 1982 which approved a revised schedule of rates (translation: phone bills went up) which was within the limits of P.D. No. 217, the law which regulated the telephone industry.  Petitioner, Philippine Consumer Foundation (PCF) filed this petition seeking to annul this decision. 

On November 25, 1983, the Supreme Court promulgated a decision annulling the NTC decision.  This decision interpreted the following phraseology of Section 2 of P.D. No. 217 as mandatory:

“The Department of Public Works, Transportation and Communications, through its Board of Communications and/or appropriate agency shall see to it that the herein declared policies for the telephone industry are immediately implemented and for this purpose, pertinent rules and regulations may be promulgated” (italics supplied).

ISSUE: 

Whether or not Section 2 of P.D. No. 217 is mandatory.

HELD:

The basic canon of Statutory Construction is that the word used in the law must be given its ordinary meaning, unless the contrary intent is manifested.  The phrase “may be promulgated” cannot be construed to mean “shall” or “must”.  Section 2 must therefore be interpreted in its ordinary sense as permissive or discretionary and not mandatory on the part of the delegate, NTC.

What is mandatory however, is the immediate implementation of the policies declared in P.D. No. 217.

Note that both words “shall” and “may be” are used in the same section which demonstrates that the ordinary, usual or normal distinction between these words is preserved.

It must be emphasized that P.D. No. 217 [which is a special law] only repeals pertinent portions of Act 3436 and the Public Service Act [which is a general law regulating all manner of public franchises] and that the Board of Communications, the immediate predecessor of the NTC was adequately served by their own rules of procedure.  This meant that the acts complained of by NCF, i.e. the fixing of provisional rates without public hearing (Section 16 of the public service act), was a valid act.

DECISION:

WHEREFORE, THE DECISION OF NOVEMBER 25, 1983 IS HEREBY RECONSIDERED AND SET ASIDE AND THE PETTION IS HEREBY DISMISSED.

PEOPLE v. QUIDATO

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BERNARDO QUIDATO, JR., accused-appellant.

Topic:  Disqualifications as a witness; when it applies.

FACTS:

Accused Bernardo Quidato Jr was accused of parricide.  He and two co-conspirators allegedly attacked with a bolo and iron bars hack and stab the victim, Bernardo Quidato Sr., appellant’s father and namesake, which caused the victim’s untimely demise. 

Among those presented as witness were accused’s wife and brother.  Also presented were the extrajudicial confessions of appellant’s two other co-accused.  Appellant’s wife testified that while the accused were drinking tuba she overheard them saying that they were planning to go to the victim’s house on the night of the incident in order to “get money” and that she had no idea of what later transpired. Appellant objected to his wife’s testimony as it was prohibited by the rule on marital disqualification.  Appellant likewise denies the allegations of his co-accused who in their extrajudicial confession pointed to the participation of appellant.

ISSUES:

1. Whether or not the extrajudicial confessions should be given credence as they were obtained in violation of the constitutional right of appellant to confront witnesses.

2. Whether or not the testimony of appellant’s wife is disqualified.

HELD:

1. NO. They should not be given credence, and indeed, appellant should be acquitted.  The prosecution relied heavily on appellant’s co-accused’s affidavits.  However, the failure to present the affiants in the witness stand gives these affidavits the character of hearsay.  It is hornbook doctrine that unless the affiants themselves take the witness stand to affirm the averments in their affidavits, the affidavits must be excluded from the judicial proceeding, being inadmissible hearsay. “The voluntary admissions of an accused made extrajudicially are not admissible in evidence against his co-accused when the latter had not been given an opportunity to hear him testify and cross-examine him.”

Section 30, Rule 130 is not applicable in this case because it refers to confessions made during the existence of the conspiracy.  In this case, the conspiracy had clearly ended by the time the confession was made.

2. YES.  The testimony of appellant’s wife must be disregarded.  As correctly observed by the court a quo, the disqualification is between husband and wife, the law not precluding the wife from testifying when it involves other parties or accused, but not where the testimony will be used against the accused-husband directly or indirectly.

DECISION: 

Given the inadmissibility of accused’s wife’s testimony and the extrajudicial confession of co-accused, the appellant is hereby ACQUITTED.

PEOPLE vs. ACUÑA

ACUÑA, JESUS RAMOS and ANTONIO (TONY) DIONISIO, defendants.

Topic:  Qualification of adult witnesses.

FACTS: 

Defendants were charged with murder.  The complaint stated that they conspired together and assaulted the victim, Tranquilino Mariano, and while two of the accused were holding him, one was hitting him by a 2x2 piece of wood.  Then they stabbed him to death.  There were a number of witnesses who saw the beating and another who saw the accused dragging a dead body.

The RTC convicted the accused and hence this appeal.  The main issue in this appeal is the credibility of the witnesses.  Accused claim that they should have noticed the witnesses if they claim to have been there when the crime was happening, the fact that accused “did not notice the witnesses’ presence” makes their testimony incredible. The witnesses were also first cousins of the victims and they failed to report the incident immediately.

ISSUE:

Whether or not the witnesses’ testimony is incredible.

HELD:

NO.  First, where the issue is the credibility of the witness, the Supreme Court, as a general rule will not disturb the findings of the lower courts as regards to their findings of the witnesses’ credibility. 

As to the fact that accused “did not notice” the presence of the witnesses, it was correctly pointed out by the prosecution that the accused were probably too engrossed with their assault to have noticed the witnesses.  Besides, the area where the incident occurred was partly concealed by gumamela plants hence it was possible for the witnesses to see the incident without being seen.

It is also true that the witnesses were first cousins but “there is nothing in our laws that disqualifies relatives of a victim from testifying in a criminal case … so long as said relatives who were actually present at the scene of the crime, witnessed its execution.”  Furthermore, there was no showing of ill-motive.

The fact that they failed to report the incident immediately is also understandable. The accused were locally known troublemakers who would intimidate people once they fell under the influence of liquor.  The court also takes judicial notice that the witnesses were town mates and must have feared reprisals.  Such reticence has been declared as not affecting credibility.

The witness who saw the accused dragging the cadaver, likewise reported the incident 6 months after the incident.  The court held that this does not affect the credibility of the as it relates to a matter that occurred after the crime was committed and merely corroborates the testimony of two other credible witnesses (the cousins) who actually witnessed the incident.

DECISION: Guilty.

YRASUEGUI vs. PHILIPPINE AIRLINES

 

G.R. No. 168081, October 17, 2008

Topic:  Management Prerogatives; Imposition of weight requirement.

FACTS:

THIS case portrays the peculiar story of an international flight steward who was dismissed because of his failure to adhere to the weight standards of the airline company.

Petitioner, Armando Yrasuegui had problems with his weight.  According to the PAL flight manual, for a man his size, he needed to maintain an ideal weight of 166 pounds.  PAL sent him on an extended vacation so that he could deal with his weight problems but while he was removed from flight duty and the company physician visited him at his residence, he weighed in at 217 pounds, thus he agreed to regular weight checks.  When he failed to comply with regular weight checks the company charged him administratively.  And ultimately, on June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, and considering the utmost leniency extended to him which spanned a period covering a total of almost five (5) years, his services were considered terminated effective immediately.

Petitioner filed this case for illegal dismissal claiming that: (1) his dismissal does not fall under 282(e) of the Labor Code; (2) continuing adherence to the weight standards of the company is not a bona fide occupational qualification; and (3) he was discriminated against because other overweight employees were promoted instead of being disciplined.

The Labor Arbiter ruled in favor of petitioner, holding that while the weight requirement was lawful, the dismissal was illegal.  NLRC affirmed the Labor Arbiter’s decision.  It held that obesity is a “disease” and thus, petitioner was not intentionally violating the company’s order to lose weight.

The CA ruled in favor of PAL and dismissed the complaint for illegal dismissal.  It held that the weight standards of PAL are meant to be a continuing qualification for an employee’s position. The failure to adhere to the weight standards is an analogous cause for the dismissal of an employee under Article 282(e) of the Labor Code in relation to Article 282(a). The relevant question to ask therefor is whether or not the weight standard is reasonable and whether or not the employee qualifies or continues to qualify under this standard.

ISSUE:

Whether or not the weight standard is reasonable.

HELD:

YES, the standard is reasonable.

A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an employee in order to keep the job. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code.

In the case at bar, the evidence on record militates against petitioner’s claims that obesity is a disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to lose weight given the proper attitude, determination, and self-discipline. Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed that “[t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is yes. I can do it now.”

Petitioner has only himself to blame. He could have easily availed the assistance of the company physician.

The SC held that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it, “[v]oluntariness basically means that the just cause is solely attributable to the employee without any external force influencing or controlling his actions. This element runs through all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c), and (d).”

The dismissal of petitioner can be predicated on the bona fide occupational qualification defense. Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or national origin is an actual qualification for performing the job. The qualification is called a bona fide occupational qualification (BFOQ). In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. BFOQ is valid “provided it reflects an inherent quality reasonably necessary for satisfactory job performance.”

The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict norms of discipline upon its employees.

The primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety.

Separation pay, however, should be awarded in favor of the employee as an act of social justice or based on equity. This is so because his dismissal is not for serious misconduct. Neither is it reflective of his moral character.