Gancayco vs.Collector

Gancyaco files his income tax return for the year 1949.  Respondent issued a warrant of distraint and levy against the properties of Gancayco for the satisfaction of his deficiency income tax liability, and accordingly, the municipal treasurer issued a notice of sale of said property at public auction. Gancayco filed a petition to cancel the sale and direct that the same be re-advertised at a future date

ISSUE: Whether the sum of PhP 16,860.31 is due from Gancayco as deficiency income tax for 1949 hinges on the validity of his claim for deduction:
                                       a) farming expense PhP 27,459
                                       b) representation expenses PhP 8,933.45

HELD:
a)Farming Expenses - no evidence has been presnted as to the nature of the said farming expenses other than the care statement of petitioner that they were spent for the development and cultivation of his property.

No specification has been made as to the actual amount spent for purchase of tools, equipment or materials or the amount spent for improvement.

b) Representation expense
PhP 22, 820 is allowed
PhP 8,993.45 is disallowed because of the absence of recipt, invoices or vouchers of the expenditures in question, petitioner could not sspecify the items constituting the same when or on whom or on what they were incurred.

PLDT VS. CIR

Petitioner PLDT claiming that it terminated in 1995 the employment of several rank and file, supervisory and executive employees dues to redundancy.  In compliance with labor law requirements, it paid those separated employees separation pay and other benefits, and that as employer and withholding agent, it deducted from the separation pay withholding taxes which was remitted to BIR.

Petitioner filed with BIR a claim of tax credit or refund invoking sec. 28(b)(7)(B) of NIRC which excluded from gross income any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from service of the employer due to death, sickness or other physical ability or for any cause beyond the control of the said official or employer.

CTA denied PLDT claim on the ground that it failed to sufficiently prove that the terminated employees received separation pay and that taxes were withheld therefrom or remitted to the BIR.

ISSUE: WON the withholding taxes, which petitioner remitted to the BIR, should be refunded for having been erroneously withheld and paid to the later?

HELD:
PLDT failed to establish that the redundant employees actually received separation ay and it withheld taxes therefrom and remitted the same to the BIR.

A taxpayer must do two (2) things to be able to be able to successfully make a claim for the tax refund:
1.  Declare the income payment it received as part of its gross income.
2.  Establish the fact of withholding.

On this score, the relevant revenue regulations provides as follows:
Sec. 10. Claims for tax credit or refund -  claims for tax credit or refund of income tax deducted and withheld on income payments shall be given due course only when it is shown on the return that the income payment received was declared as part of the gross income and the fact of withholding is established by a copy of the statement duly issued by the payer to the payee showing the amount paid and the amount of tax withheld therefrom.

A Daddy Wrote A Letter To His Daughter About Her Future Husband

See Original Post here

HENDERSON VS. CIR

The spouses Arthur Henderson and Marie Henderson filed with BIR returns of annual net income for the years 1948-1952.  Henderson's received notice of assessment from BIR, subsequently, paid the assessment.  BIR reassessed the taxpayers income for the year 1948-1952 and demanded payment of the deficiency taxes.

In the assessments, BIR considered as part of their taxable income the taxpayers-husband allowances for rental, residential expenses, subsistence, water, electricity and telephone; bonus paid to him; withholding tax and entrance fee to Marikina Gun and Country Club paid by his employer for his account; and travelling allowance of his wife.

Taxpayer claim that taxpayer-husband allowances for the rental and utilities did not receive the money but that they lived in the said apartment furnished and paid by his employer for its convenience.  As to the entrance fee to the Marikina Gun and Country Club paid by his employer and should not be considered as part of their income as with the wife-taxpayer travelling allowance.

ISSUE: WON the allowance for rental of the apartment furnished by the husband-taxpayers employer-corporation, including utilities and the allowance for travel expenses given by his employer-corporation to his wife in 1952 part of the taxable income?

HELD:
Bills for rentals and utilities were paid directly by the employer-corporation to the creditors.  CTA held that taxpayers are entitled only to ratable value of the allowance in question, and the reasonable amount they would have spend for house rentals and utilities such as light, water, telephone should be the amount subject to tax and the excess considered as expense of the corporation.

The taxpayer claim is supported by evidence.  Loberiza ( Head of Accounting department of the American Int'l underwriters...)  testified that rentals, utilities, water, phone, and electric bills of executive of the corporation were entered in the books of account as 'subsistence allowance and expenses; that there was a separate account for salaries and wages of employees.

The manager's residential expenses in 1948 should be treated as rentals for apartments and utilities and should not form part of the ratable value subject to tax.

CESAR SULIT VS. CA G.R NO. 119247, FEB. 17, 1997

Iluminada Cayco executed a Real Estate Mortgage (REM) over lot in favor of Cesar Sulit to secure a loan of PhP 4 Million.  Upon petitioner's failure to pay, Sulit caused the foreclosure of the mortgage.  hence, in a public auction the lot was sold to the mortgagee, with a winning bid of PhP 7Million.  He then petitioned the court for the issuance of a writ of possession in his favor, the same was granted.  Later, Iluminada filed a petition to set aside the auction sale and to deter the issuance of the writ of possession contending that the surplus proceeds of the sale was not paid by Sulit.  The same was denied.  On appeal the CA reversed the decision.

ISSUE:  WON purchaser in an extrajudicial foreclosure sale is entitled to the issuance of a writ of possession over the mortgaged property despite his failure to pay the surplus proceeds of the sale of the mortgagor?

WON mere inadequacy of price would invalidate the sale or the person entitled thereto?

HELD:
The law authorizes the purchaser in a foreclosure sale to apply for a writ of possession and no discretion appears to be left to the court.  Any question regarding the regularity and validity of the sale, as well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding and it cannot be raised as a justification for opposing the issuance of the writ of "unless a third party is actually holding the property adversely to the judgment debtor."  As it was held in Barican vs. IAC, the obligation of the court to issue a writ of possession ceases to be ministerial if it was no longer the judgment debtor who was in possession of the property.

As to the second issue, the mere inadequacy of the price obtained at the sheriff's sale, unless shocking to the conscience, is insufficient to set aside a sale.  this is because no disadvantage is caused to the mortgagor.  On the contrary, a mortgagor stands to gain with a reduced price because he possesses the right of redemption.  When there is the right to redeem, inadequacy of price becomes immaterial since the judgement debtor may reacquire the property or sell his right to redeem, and thus recover the loss he claims to have suffered by reason of the price obtained at the auction sale.

The case at bar is quite the reverse, in the sense that instead of an inadequacy in price, there is due in favor of private respondent, as mortgagor, a surplus from the proceeds of the sale equivalent to approximately 40% of the total mortgage debt, which excess is indisputably a substantial amount.  Nevertheless, equitable considerations demand that a writ of possession should also not issue in this case pursuant to the provision of the Rules of Court particularly on the disposition of the proceeds of the sale.

Where there is a balance or residue after payment of the mortgage, the same shall be paid to the mortgagor.  The better rule is that if the mortgagee is retaining more of the proceeds of the sale than he is entitled to, this fact alone will not affect the validity of the sale but simply gives the mortgagor a cause of action to recover such surplus.

Filipinas Marble Corportaion vs. Intermediate Appellate Court, 142 SCRA 180

In its desire to develop the full potentials of its mining claims and deposits, Filipinas Marbles Corporation (FMC) applied and was granted a loan in the amount of $5,000,000 by respondent Development Bank of the Philippines (DBP) on the conditions that the management contract will be handled by Bancom System Control and the DBP. and the loan shall be secured by a final mortgage on the assets of petitioner with a total approved vale of PhP 48,630,756.  The chattel mortgage was not registered pursuant to Article 2125 of the Civil Code.

ISSUE: WON the non-registration of the mortgage will nullify the contract between the parties, considering that a mortgage contract is an accessory contract?

HELD:
The SC have to say this, we agree with the petitioner that a mortgage is a mere accessory contract, and, thus its validity would depend on the validity of the loan secured by it.  We, however, reject the petitioner's argument that since the chattel mortgage involved was not registered, the same is null and void.  Article 2125 of the Civil Code clearly provides that non-registration of the mortgage does not affect the immediate parties.  The petitioner cannot invoke the mentioned provision to nullify the mortgage (chattel).

Jose B. Tiongco vs. Philippine Veterans Bank, GR No. 82782 August 5, 1992

Alicia Arnaldo mortgaged to the Philippine Veterans Bank (PVB) three (3) lots to secure the loan amounting to PhP 290,000.  Upon default, the mortgaged was foreclosed and said lots were sold at public auction, with Tiongco as the highest bidder.  When the property was not redeemed, Tiongco requested PVB for the delivery of the owner's duplicate copy, having been unheeded, petitioner filed with the RTC a petition to require PVB to surrender such document.  PVB denied the allegations in the petition, averred that it was not served with a notice of the auction sale, it then set up the defense that the sale of the property was irregular and that the right of petitioner over the property as a purchaser may be respected only upon the release of the mortgage and that the property was sold for a scandalously low amount and thus, it is shocking to the corresponds to the delinquent taxes to be recovered; considering that there is a subsisting mortgage obligation of PhP 290,000 plus interest, annotated on the title, the auction sale was the product of an illicit machination and actionable collusion between city officials and the purchaser.

ISSUE: WON inadequancy of price would invalidate the sale?

HELD:

It is well-settled that "while in ordinary sales for reasons of equity  a transaction may be invalidated on the ground of inadequacy of price, or when such inadequacy shocks one's conscience as to justify the court to interfere, such does not follow when the law gives to the owner the right to redeem, as when a sale is made at public auction, upon the theory that the lesser the price the easier it is for the owner to effect redemption."

Then too, petitioner purchased the property fully cognizant of the risk that he could eventually lose it in a foreclosure sale conducted to satisfy the mortgage, unless he was prepared to pay PhP 290,000 more, with interest due them, as well as the other charges and penalties which the contract of mortgage or the promissory note secured by it has stipulated, without any hope of seeking reimbursement from the mortgagor.

Republic Act No. 876

AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE APPOINTMENT OF ARBITRATORS AND THE PROCEDURE FOR ARBITRATION IN CIVIL CONTROVERSIES, AND FOR OTHER PURPOSES

Section 1. Short Title. - This Act shall be known as "The Arbitration Law."

Section 2. Persons and matters subject to arbitration. - Two or more persons or parties may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action, or the parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract.

Such submission or contract may include question arising out of valuations, appraisals or other controversies which may be collateral, incidental, precedent or subsequent to any issue between the parties.

A controversy cannot be arbitrated where one of the parties to the controversy is an infant, or a person judicially declared to be incompetent, unless the appropriate court having jurisdiction approve a petition for permission to submit such controversy to arbitration made by the general guardian or guardian ad litem of the infant or of the incompetent.

But where a person capable of entering into a submission or contract has knowingly entered into the same with a person incapable of so doing, the objection on the ground of incapacity can be taken only in behalf of the person so incapacitated.

Section 3. Controversies or cases not subject to the provisions of this Act. - This Act shall not apply to controversies and to cases which are subject to the jurisdiction of the Court of Industrial Relations or which have been submitted to it as provided by Commonwealth Act Numbered One hundred and three, as amended.

Section 4. Form of arbitration agreement. - A contract to arbitrate a controversy thereafter arising between the parties, as well as a submission to arbitrate an existing controversy shall be in writing and subscribed by the party sought to be charged, or by his lawful agent.

The making of a contract or submission for arbitration described in section two hereof, providing for arbitration of any controversy, shall be deemed a consent of the parties to the jurisdiction of the Court of First Instance of the province or city where any of the parties resides, to enforce such contract or submission.

Section 5. Preliminary procedure. - An arbitration shall be instituted by:

(a) In the case of a contract to arbitrate future controversies by the service by either party upon the other of a demand for arbitration in accordance with the contract. Such demand shall be set forth the nature of the controversy, the amount involved, if any, and the relief sought, together with a true copy of the contract providing for arbitration. The demand shall be served upon any party either in person or by registered mail. In the event that the contract between the parties provides for the appointment of a single arbitrator, the demand shall be set forth a specific time within which the parties shall agree upon such arbitrator. If the contract between the parties provides for the appointment of three arbitrators, one to be selected by each party, the demand shall name the arbitrator appointed by the party making the demand; and shall require that the party upon whom the demand is made shall within fifteen days after receipt thereof advise in writing the party making such demand of the name of the person appointed by the second party; such notice shall require that the two arbitrators so appointed must agree upon the third arbitrator within ten days from the date of such notice.

(b) In the event that one party defaults in answering the demand, the aggrieved party may file with the Clerk of the Court of First Instance having jurisdiction over the parties, a copy of the demand for arbitration under the contract to arbitrate, with a notice that the original demand was sent by registered mail or delivered in person to the party against whom the claim is asserted. Such demand shall set forth the nature of the controversy, the amount involved, if any, and the relief sought, and shall be accompanied by a true copy of the contract providing for arbitration.

(c) In the case of the submission of an existing controversy by the filing with the Clerk of the Court of First Instance having jurisdiction, of the submission agreement, setting forth the nature of the controversy, and the amount involved, if any. Such submission may be filed by any party and shall be duly executed by both parties.

(d) In the event that one party neglects, fails or refuses to arbitrate under a submission agreement, the aggrieved party shall follow the procedure prescribed in subparagraphs (a) and (b) of this section.

Section 6. Hearing by court. - A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in writing providing for arbitration may petition the court for an order directing that such arbitration proceed in the manner provided for in such agreement. Five days notice in writing of the hearing of such application shall be served either personally or by registered mail upon the party in default. The court shall hear the parties, and upon being satisfied that the making of the agreement or such failure to comply therewith is not in issue, shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the agreement or default be in issue the court shall proceed to summarily hear such issue. If the finding be that no agreement in writing providing for arbitration was made, or that there is no default in the proceeding thereunder, the proceeding shall be dismissed. If the finding be that a written provision for arbitration was made and there is a default in proceeding thereunder, an order shall be made summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

The court shall decide all motions, petitions or applications filed under the provisions of this Act, within ten days after such motions, petitions, or applications have been heard by it.

Section 7. Stay of civil action. - If any suit or proceeding be brought upon an issue arising out of an agreement providing for the arbitration thereof, the court in which such suit or proceeding is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall stay the action or proceeding until an arbitration has been had in accordance with the terms of the agreement: Provided, That the applicant, for the stay is not in default in proceeding with such arbitration.

Section 8. Appointment of arbitrators. - If, in the contract for arbitration or in the submission described in section two, provision is made for a method of naming or appointing an arbitrator or arbitrators, such method shall be followed; but if no method be provided therein the Court of First Instance shall designate an arbitrator or arbitrators.

The Court of First Instance shall appoint an arbitrator or arbitrators, as the case may be, in the following instances:

(a) If the parties to the contract or submission are unable to agree upon a single arbitrator; or

(b) If an arbitrator appointed by the parties is unwilling or unable to serve, and his successor has not been appointed in the manner in which he was appointed; or

(c) If either party to the contract fails or refuses to name his arbitrator within fifteen days after receipt of the demand for arbitration; or

(d) If the arbitrators appointed by each party to the contract, or appointed by one party to the contract and by the proper Court, shall fail to agree upon or to select the third arbitrator.

(e) The court shall, in its discretion appoint one or three arbitrators, according to the importance of the controversy involved in any of the preceding cases in which the agreement is silent as to the number of arbitrators.

(f) Arbitrators appointed under this section shall either accept or decline their appointments within seven days of the receipt of their appointments. In case of declination or the failure of an arbitrator or arbitrators to duly accept their appointments the parties or the court, as the case may be, shall proceed to appoint a substitute or substitutes for the arbitrator or arbitrators who decline or failed to accept his or their appointments.

Section 9. Appointment of additional arbitrators. - Where a submission or contract provides that two or more arbitrators therein designated or to be thereafter appointed by the parties, may select or appoint a person as an additional arbitrator, the selection or appointment must be in writing. Such additional arbitrator must sit with the original arbitrators upon the hearing.

Section 10. Qualifications of arbitrators. - Any person appointed to serve as an arbitrator must be of legal age, in full-enjoyment of his civil rights and know how to read and write. No person appointed to served as an arbitrator shall be related by blood or marriage within the sixth degree to either party to the controversy. No person shall serve as an arbitrator in any proceeding if he has or has had financial, fiduciary or other interest in the controversy or cause to be decided or in the result of the proceeding, or has any personal bias, which might prejudice the right of any party to a fair and impartial award.

No party shall select as an arbitrator any person to act as his champion or to advocate his cause.

If, after appointment but before or during hearing, a person appointed to serve as an arbitrator shall discover any circumstances likely to create a presumption of bias, or which he believes might disqualify him as an impartial arbitrator, the arbitrator shall immediately disclose such information to the parties. Thereafter the parties may agree in writing:

(a) to waive the presumptive disqualifying circumstances; or

(b) to declare the office of such arbitrator vacant. Any such vacancy shall be filled in the same manner as the original appointment was made.

Section 11. Challenge of arbitrators. - The arbitrators may be challenged only for the reasons mentioned in the preceding section which may have arisen after the arbitration agreement or were unknown at the time of arbitration.

The challenge shall be made before them.

If they do not yield to the challenge, the challenging party may renew the challenge before the Court of First Instance of the province or city in which the challenged arbitrator, or, any of them, if there be more than one, resides. While the challenging incident is discussed before the court, the hearing or arbitration shall be suspended, and it shall be continued immediately after the court has delivered an order on the challenging incident.

Section 12. Procedure by arbitrators. - Subject to the terms of the submission or contract, if any are specified therein, are arbitrators selected as prescribed herein must, within five days after appointment if the parties to the controversy reside within the same city or province, or within fifteen days after appointment if the parties reside in different provinces, set a time and place for the hearing of the matters submitted to them, and must cause notice thereof to be given to each of the parties. The hearing can be postponed or adjourned by the arbitrators only by agreement of the parties; otherwise, adjournment may be ordered by the arbitrators upon their own motion only at the hearing and for good and sufficient cause. No adjournment shall extend the hearing beyond the day fixed in the submission or contract for rendering the award, unless the time so fixed is extended by the written agreement of the parties to the submission or contract or their attorneys, or unless the parties have continued with the arbitration without objection to such adjournment.

The hearing may proceed in the absence of any party who, after due notice, fails to be present at such hearing or fails to obtain an adjournment thereof. An award shall not be made solely on the default of a party. The arbitrators shall require the other party to submit such evidence as they may require for making an award.

No one other than a party to said arbitration, or a person in the regular employ of such party duly authorized in writing by said party, or a practicing attorney-at-law, shall be permitted by the arbitrators to represent before him or them any party to the arbitration. Any party desiring to be represented by counsel shall notify the other party or parties of such intention at least five days prior to the hearing.

The arbitrators shall arrange for the taking of a stenographic record of the testimony when such a record is requested by one or more parties, and when payment of the cost thereof is assumed by such party or parties.

Persons having a direct interest in the controversy which is the subject of arbitration shall have the right to attend any hearing; but the attendance of any other person shall be at the discretion of the arbitrators.

Section 13. Oath of arbitrators. - Before hearing any testimony, arbitrators must be sworn, by any officer authorized by law to administer an oath, faithfully and fairly to hear and examine the matters in controversy and to make a just award according to the best of their ability and understanding. Arbitrators shall have the power to administer the oaths to all witnesses requiring them to tell the whole truth and nothing but the truth in any testimony which they may give in any arbitration hearing. This oath shall be required of every witness before any of his testimony is heard.

Section 14. Subpoena and subpoena duces tecum. - Arbitrators shall have the power to require any person to attend a hearing as a witness. They shall have the power to subpoena witnesses and documents when the relevancy of the testimony and the materiality thereof has been demonstrated to the arbitrators. Arbitrators may also require the retirement of any witness during the testimony of any other witness. All of the arbitrators appointed in any controversy must attend all the hearings in that matter and hear all the allegations and proofs of the parties; but an award by the majority of them is valid unless the concurrence of all of them is expressly required in the submission or contract to arbitrate. The arbitrator or arbitrators shall have the power at any time, before rendering the award, without prejudice to the rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration.

Section 15. Hearing by arbitrators. - Arbitrators may, at the commencement of the hearing, ask both parties for brief statements of the issues in controversy and/or an agreed statement of facts. Thereafter the parties may offer such evidence as they desire, and shall produce such additional evidence as the arbitrators shall require or deem necessary to an understanding and determination of the dispute. The arbitrators shall be the sole judge of the relevancy and materiality of the evidence offered or produced, and shall not be bound to conform to the Rules of Court pertaining to evidence. Arbitrators shall receive as exhibits in evidence any document which the parties may wish to submit and the exhibits shall be properly identified at the time of submission. All exhibits shall remain in the custody of the Clerk of Court during the course of the arbitration and shall be returned to the parties at the time the award is made. The arbitrators may make an ocular inspection of any matter or premises which are in dispute, but such inspection shall be made only in the presence of all parties to the arbitration, unless any party who shall have received notice thereof fails to appear, in which event such inspection shall be made in the absence of such party.

Section 16. Briefs. - At the close of the hearings, the arbitrators shall specifically inquire of all parties whether they have any further proof or witnesses to present; upon the receipt of a negative reply from all parties, the arbitrators shall declare the hearing closed unless the parties have signified an intention to file briefs. Then the hearing shall be closed by the arbitrations after the receipt of briefs and/or reply briefs. Definite time limit for the filing of such briefs must be fixed by the arbitrators at the close of the hearing. Briefs may filed by the parties within fifteen days after the close of the oral hearings; the reply briefs, if any, shall be filed within five days following such fifteen-day period.

Section 17. Reopening of hearing. - The hearing may be reopened by the arbitrators on their own motion or upon the request of any party, upon good cause, shown at any time before the award is rendered. When hearings are thus reopened the effective date for the closing of the hearings shall be the date of the closing of the reopened hearing.

Section 18. Proceeding in lieu of hearing. - The parties to a submission or contract to arbitrate may, by written agreement, submit their dispute to arbitration by other than oral hearing. The parties may submit an agreed statement of facts. They may also submit their respective contentions to the duly appointed arbitrators in writing; this shall include a statement of facts, together with all documentary proof. Parties may also submit a written argument. Each party shall provide all other parties to the dispute with a copy of all statements and documents submitted to the arbitrators. Each party shall have an opportunity to reply in writing to any other party's statements and proofs; but if such party fails to do so within seven days after receipt of such statements and proofs, he shall be deemed to have waived his right to reply. Upon the delivery to the arbitrators of all statements and documents, together with any reply statements, the arbitrators shall declare the proceedings in lieu of hearing closed.

Section 19. Time for rendering award. - Unless the parties shall have stipulated by written agreement the time within which the arbitrators must render their award, the written award of the arbitrators shall be rendered within thirty days after the closing of the hearings or if the oral hearings shall have been waived, within thirty days after the arbitrators shall have declared such proceedings in lieu of hearing closed. This period may be extended by mutual consent of the parties.

Section 20. Form and contents of award. - The award must be made in writing and signed and acknowledged by a majority of the arbitrators, if more than one; and by the sole arbitrator, if there is only one. Each party shall be furnished with a copy of the award. The arbitrators in their award may grant any remedy or relief which they deem just and equitable and within the scope of the agreement of the parties, which shall include, but not be limited to, the specific performance of a contract.

In the event that the parties to an arbitration have, during the course of such arbitration, settled their dispute, they may request of the arbitrators that such settlement be embodied in an award which shall be signed by the arbitrators. No arbitrator shall act as a mediator in any proceeding in which he is acting as arbitrator; and all negotiations towards settlement of the dispute must take place without the presence of the arbitrators.

The arbitrators shall have the power to decide only those matters which have been submitted to them. The terms of the award shall be confined to such disputes.

The arbitrators shall have the power to assess in their award the expenses of any party against another party, when such assessment shall be deemed necessary.

Section 21. Fees of arbitration. - The fees of the arbitrators shall be fifty pesos per day unless the parties agree otherwise in writing prior to the arbitration.

Section 22. Arbitration deemed a special proceeding. - Arbitration under a contract or submission shall be deemed a special proceeding, of which the court specified in the contract or submission, or if none be specified, the Court of First Instance for the province or city in which one of the parties resides or is doing business, or in which the arbitration was held, shall have jurisdiction. Any application to the court, or a judge thereof, hereunder shall be made in manner provided for the making and hearing of motions, except as otherwise herein expressly provided.

Section 23. Confirmation of award. - At any time within one month after the award is made, any party to the controversy which was arbitrated may apply to the court having jurisdiction, as provided in section twenty-eight, for an order confirming the award; and thereupon the court must grant such order unless the award is vacated, modified or corrected, as prescribed herein. Notice of such motion must be served upon the adverse party or his attorney as prescribed by law for the service of such notice upon an attorney in action in the same court.

Section 24. Grounds for vacating award. - In any one of the following cases, the court must make an order vacating the award upon the petition of any party to the controversy when such party proves affirmatively that in the arbitration proceedings:

(a) The award was procured by corruption, fraud, or other undue means; or

(b) That there was evident partiality or corruption in the arbitrators or any of them; or

(c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; that one or more of the arbitrators was disqualified to act as such under section nine hereof, and wilfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or

(d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made.

Where an award is vacated, the court, in its discretion, may direct a new hearing either before the same arbitrators or before a new arbitrator or arbitrators to be chosen in the manner provided in the submission or contract for the selection of the original arbitrator or arbitrators, and any provision limiting the time in which the arbitrators may make a decision shall be deemed applicable to the new arbitration and to commence from the date of the court's order.

Where the court vacates an award, costs, not exceeding fifty pesos and disbursements may be awarded to the prevailing party and the payment thereof may be enforced in like manner as the payment of costs upon the motion in an action.

Section 25. Grounds for modifying or correcting award. - In any one of the following cases, the court must make an order modifying or correcting the award, upon the application of any party to the controversy which was arbitrated:

(a) Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing or property referred to in the award; or

(b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matter submitted; or

(c) Where the award is imperfect in a matter of form not affecting the merits of the controversy, and if it had been a commissioner's report, the defect could have been amended or disregarded by the court.

The order may modify and correct the award so as to effect the intent thereof and promote justice between the parties.

Section 26. Motion to vacate, modify or correct award: when made. - Notice of a motion to vacate, modify or correct the award must be served upon the adverse party or his counsel within thirty days after award is filed or delivered, as prescribed by law for the service upon an attorney in an action.

Section 27. Judgment. - Upon the granting of an order confirming, modifying or correcting an award, judgment may be entered in conformity therewith in the court wherein said application was filed. Costs of the application and the proceedings subsequent thereto may be awarded by the court in its discretion. If awarded, the amount thereof must be included in the judgment.

Section 28. Papers to accompany motion to confirm, modify, correct, or vacate award. - The party moving for an order confirming, modifying, correcting, or vacating an award, shall at the time that such motion is filed with the court for the entry of judgment thereon also file the following papers with the Clerk of Court;

(a) The submission, or contract to arbitrate; the appointment of the arbitrator or arbitrators; and each written extension of the time, if any, within which to make the award.

(b) A verified of the award.

(c) Each notice, affidavit, or other paper used upon the application to confirm, modify, correct or vacate such award, and a copy of each of the court upon such application.

The judgment shall be docketed as if it were rendered in an action.

The judgment so entered shall have the same force and effect in all respects, as, and be subject to all the provisions relating to, a judgment in an action; and it may be enforced as if it had been rendered in the court in which it is entered.

Section 29. Appeals. - An appeal may be taken from an order made in a proceeding under this Act, or from a judgment entered upon an award through certiorari proceedings, but such appeals shall be limited to questions of law. The proceedings upon such an appeal, including the judgment thereon shall be governed by the Rules of Court in so far as they are applicable.

Section 30. Death of party. - Where a party dies after making a submission or a contract to arbitrate as prescribed in this Act, the proceedings may be begun or continued upon the application of, or notice to, his executor or administrator, or temporary administrator of his estate. In any such case, the court may issue an order extending the time within which notice of a motion to confirm, vacate, modify or correct an award must be served. Upon confirming an award, where a party has died since it was filed or delivered, the court must enter judgment in the name of the original party; and the proceedings thereupon are the same as where a party dies after a verdict.

Section 31. Repealing clause. - The provisions of chapters one and two, Title XIV, of the Civil Code shall remain in force. All other laws and parts of laws inconsistent with this Act are hereby repealed. If any provision of this Act shall be held invalid the remainder that shall not be affected thereby. 

Section 32. Effectivity. - This Act shall take effect six months after its approval.

Approved: June 19, 1953

ONG VS. IAC, 201 SCRA 543

Madrigal Shipping Co., Inc., owner of Barge No. 601, pledged said vessel and tugboat to secure the Shipping Company's obligation to herein private respondent Solidbank in the amount of PhP 2,094,000.  Both parties executed a document denominated as "Pledge Agreement".

Madrigal failed to pay its obligation to the Solidbank.  When the latter was about to sell the pledge property, the same was no where to be found from its bodega.  Meanwhile, on August 1, 1979, petitioner Honesto Ong bought one barge, the same barge which was the subject of the pledge from Santiago Ocampo.

Solidbank filed a complaint against Honesto Ong, et al.  Petitioner contends that they are purchaser in good faith, and the contract of pledge by and between Solidbank and Madrigal Shipping Co., Inc. was not recorded under Section 804 and 809 of the Tariff and Custom Code, hence, not binding on third person like the petitioners.

Private respondent argued that petitioner acted in bad faith, and that it complied with all the requirements necessary to bind third persons.

ISSUE: WON the contract of pledge entered into by and between Solidbank and Madrigal Shipping Co., Inc. is binding to petitioner Ong?

HELD:
YES, it is binding on said petitioners.  Article 2096 of the Civil Code requires that a pledge to take effect against third persons, it should be in a public instrument which must contain the description of the  thing pledged and the date of the pledges.  In the case at bar, all three requirements have been complied.

PROVISIONAL REMEDIES

PROVISIONAL REMEDIES UNDER THE RULES OF COURT:

a.    Attachment (Rule 57)

b.    Preliminary Injunction (Rule 58)

c.    Receivership (Rule 59)

d.    Replevin or delivery of private property (Rule 60)

e.    Support Pendente Lite (Rule 61) 

f.     Criminal Cases (Rule 127 – in connection with the civil action deemed instituted with the criminal action)

OTHER PROVISIONAL REMEDIES

a.    Temporary Protection Order [TPO] (RA 9262, Anti-Violence Against Women and their

Children; Rule on the Writ of Amparo)

b.    Witness Protection Order [WPO] (RA 6981; Rule on the Writ of Amparo)

c.    Inspection Order [IO] (AM 07-9-12, Rule on the Writ of Amparo)

d.    Production Order [PO] (AM 07-9-12, Rule on the Writ of Amparo)

e.    Administration of Common Property (AM 02-11-12,  Rule on Provisional Orders)

f.     Inspection, Examination of Accounts and Freeze Order (RA 9372, Human Security Act)

g.    Freeze Order under RA 9160 as amended by RA 9194 (Anti-Money Laundering Act)

h.    Seizure and Sequestration of Accounts and Assets (RA 9372, Human Security Act)

i.      Restriction of Travel (RA 9372,  Human Security Act)

j.      Stay Order ( AM 00-8-10, Rules of Procedure on Corporate Rehabilitation)

k.    Hold Departure Order (Criminal cases under Circular 39-97 and Family cases under AM 02-11-12)

l.      Temporary visitation rights  (AM 02-11-12, Rule on Provisional Orders )

m.   Guardian Ad Litem of Child (AM 02-1-19, Rule on Involuntary Commitment of Children)

n.    Temporary Custody of Child (AM 02-1-19 and AM 02-11-12)

o.    Spousal and Child Support (AM 02-11-12, Rule on Provisional Orders)  

Commissioner of Internal Revenue vs. Juliane Baier-nickel

Respondent Juliane Baier-nickle, a non-resident German citizen, is the President of JUBANITEX, a domestic corporation engaged in manufacturing, marketing on wholesale only embroided textile products.  The corporation appointed and engaged the service of respondent as commission agent.  It was agreed that respondent will receive 10% sales commission on all sales actually concluded and collected through her efforts.

In 1995, respondent received the amount of PhP1,707,772.64 representing her sales commission income from which JUBANITEX withheld the corresponding 10% withholding tax amounting to PhP170,777.26 and remitted the same to the BIR.  Respondent filed a claim to refund the amount PhP170,777.26 alleged to have been mistakenly withheld and remitted by JUBANITEX to the BIR.  Respondent contended that her sales commission income is not   taxable in the Philippines because the same was a compensation for her services rendered in Germany considered as income from source outside the Philippines.

ISSUE: WON respondent's sales commission income is taxable in the Philippines?

HELD:

YES.  Commission received by respondent were actually her remuneration in the performance of her duties as President of JUBANITEX and not as a mere sales agent.  The income derived by respondent is therefore an income taxable in the Philippines because JUBANITEX is a domestic corporation.

Pursuant to the foregoing provision of the NIRC, non-resident aliens, whether or not engaged in trade or business, are subject to Philippine income taxation on their income received from all sources within the Philippines.

Respondent failed to discharge the burden of proving that her income was from sources outside the Philippines and exempt from the application of our income tax law.

DE LA SALLE UNIVERSITY vs. DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA-NAFTEU)

G.R. No. 169254               August 23, 2012

FACTS:

            Respondent DLFSUEA-NAFTEU has two opposing factions. The Aliazas faction filed a petition for election of union officers in the Bureau of Labor Relations. They alleged that there has been no election for respondent’s officers since 1992 in supposed violation of the respondent union’s constitution and by-laws which provided for an election of officers every three years. It would appear that the respondent’s members repeatedly voted to approve the hold-over of the previously elected officers led by Baylon R. Banez (Banez faction) and to defer the elections to expedite the negotiations of the economic terms covering the last two years of the 1995-2000 collective bargaining agreement.

           

Due to the brewing conflict between the two factions, petitioner thru a letter to the respondent informed the latter that the intra-union dispute between the incumbent set of officers of the Union on one hand and a sizeable number of its members on the other hand has reached serious levels. By virtue of the 19 March 2001 Decision and the 06 July 2001 Order of the Department of Labor and Employment (DOLE), the hold-over authority of Union’s incumbent set of officers has been considered extinguished and an election of new union officers, to be conducted and supervised by the DOLE, has been directed to be held. Until the result of this election [come] out and a declaration by the DOLE of the validly elected officers is made, a void in the Union leadership exists.

In light of these circumstances, the University has no other alternative but to temporarily do the following:

1. Establish a savings account for the Union where all the collected union dues and agency fees will be deposited and held in trust; and

2. Discontinue normal relations with any group within the Union including the incumbent set of officers.

            In view of the foregoing decision of petitioner, respondent filed a complaint for unfair labor practice in the National Labor Relations Commission (NLRC) on August 21, 2001. It alleged that petitioner committed a violation of Article 248(a) and (g) of the Labor Code which provides:

Article 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practice:

(a)   To interfere with, restrain or coerce employees in the exercise of their right to self-organization.

 (d) To initiate, dominate, assist or otherwise interfere with the formation or administrator of any labor organization, including the giving of financial or other support to it or its organizers or supporters.

Respondent union asserted that the creation of escrow accounts was not an act of neutrality as it was influenced by the Aliazas factions’s letter and was an act of interference with the internal affairs of the union. Thus, petitioner’s non-remittance of union dues and discontinuance of normal relations with it constituted unfair labor practice.

Petitioner, for its defense, denied the allegations of respondent and insisted that its actions were motivated by good faith.

The Labor Arbiter dismissed the complaint for unfair labor practice against petitioner for lack of merit affirming the need to conduct an election of the union’s officers. The labor arbiter, in effect, upheld the validity of petitioner’s view that there was a void in the leadership of respondent.

The Secretary of Labor assumed jurisdiction over the matter pursuant to Article 263 of the Labor Code as petitioner, an educational institution, was considered as belonging to an industry indispensable to national interest.

The Secretary of Labor issued a Decision, finding petitioner guilty of violating Article 248(g) in relation to Article 252 of the Labor Code. The salient portion thereof stated:

The University is guilty of refusal to bargain amounting to an unfair labor practice under Article 248(g) of the Labor Code. Indeed there was a requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, both [petitioner] and [respondent] entered into a [CBA] on [March 20, 2001. The term of the said CBA commenced on [June 1, 2000 and with the expiration of the economic provisions on the third year, [respondent] initiated negotiation by sending a letter dated March 15, 2003, together with the CBA proposal. In reply to the letter of [respondent], [petitioner] in its letter dated [March 20, 2003 refused.

Such an act constituted an intentional avoidance of a duty imposed by law. There was nothing in the [March 19, 2001 and July 6, 2001 orders] of Director Maraan and Cacdac which restrained or enjoined compliance by the parties with their obligations under the CBA and under the law. The issue of union leadership is distinct and separate from the duty to bargain.

ISSUE: Whether the petitioner’s refusal to bargain amount to unfair labor practice under the Labor Code.

HELD: YES. Petitioner erred in unilaterally suspending negotiations with respondent since the pendency of the intra-union dispute was not a justifiable reason to do so. 

            The continued refusal by the University to negotiate amounts to unfair labor practice. The non-proclamation of the newly elected union officers cannot be used as an excuse to fulfill the duty to bargain collectively.

Petitioner’s reliance on the July 12, 2002 Decision of Labor Arbiter Pati, and the NLRC’s affirmance thereof, is misplaced. The unfair labor practice complaint dismissed by Labor Arbiter Pati questioned petitioner’s actions immediately after the March 19, 2001 Decision of BLR Regional Director Maraan, finding that "the reason for the hold-over of the previously elected union officers is already extinguished." The present controversy involves petitioner’s actions subsequent to (1) the clarification of said March 19, 2001 Maraan Decision by BLR Director Cacdac who opined in a May 16, 2003 memorandum that the then incumbent union officers (i.e., the Bañez faction) continued to hold office until their successors have been elected and qualified, and (2) the July 28, 2003 Decision of the Secretary of Labor in OS-AJ-0015-2003 ruling that the very same intra-union dispute (subject of several notices of strike) is insufficient ground for the petitioner to suspend CBA negotiations with respondent union. We take notice, too, that the aforesaid Decision of Labor Arbiter Pati has since been set aside by the Court of Appeals and such reversal was upheld by this Court’s Second Division in its Decision dated April 7, 2009 in G.R. No. 177283, wherein petitioner was found liable for unfair labor practice.

Neither can petitioner seek refuge in its defense that as early as November 2003 it had already released the escrowed union dues to respondent and normalized relations with the latter. The fact remains that from its receipt of the July 28, 2003 Decision of the Secretary of Labor in OS-AJ-0015-2003 until its receipt of the November 17, 2003 Decision of the Secretary of Labor in OS-AJ-0033-2003, petitioner failed in its duty to collectively bargain with respondent union without valid reason. At most, such subsequent acts of compliance with the issuances in OS-AJ-0015-2003 and OS-AJ-0033-2003 merely rendered moot and academic the Secretary of Labor’s directives for petitioner to commence collective bargaining negotiations within the period provided.

Spouses Cesar San Jose and Margarita Batongbakal vs. CA, spouses Marcos and Gloria de Guzman

Petitioner-spouses filed a complaint to annul the extra-judicial foreclosure sale conducted by the Provincial Sheriff of Bulacan of the property covered by TCT no. T-159703 located in Duhat, Bocaue, Bulacan.

The land was mortgaged to private respondent spouses Marcos and Gloria de Guzman on April 14, 1972 as security for the payment of a loan of PhP 12,000.  For allegedly failing to comply with the conditions of the mortgage, the private respondent extra-judicially foreclosed the said land and was sold at the sheriff's sale held on Nov. 25, 1975 with the respondent as purchasers thereof.  Consequently, TCT no. T-159703 was cancelled and TCT No. T-30762(M) was issued in the name of respondent.

Petitioner spouses contend that the extra-judicial foreclosure sale was invalid or void for the following reasons:
1.  The petitioner spouses were not notified of the extra-judicial foreclosure;
2. The sheriff's certificate of posting of notice was not presented;
3. There was no proof of that the newspaper in which the notice of extra-judicial foreclosure sale was made as one of the general circulation; and
4.  The property mentioned in the Notice of Sheriff's sale and in the minutes of auction sale was covered by TCT No. T-169705 not by TCT No.T-159703, the title to the mortgage property subject of the foreclosure sale.

The trial court and CA upheld the validity of the foreclosure saying that although the property to be sold pursuant to the foreclosure of mortgage was indeed covered by the TCT No. T-159703 and NOT by TCT No. T-169705, the technical description, however, in the notice was the actual and correct technical description of the property.

ISSUE: WON the extra-judicial foreclosure sale complied with the requirements of ACT No. 3135 which governs the extra-judicial foreclosure of real estate mortgage?

HELD:
NO
In the Tambunting case, this Court stated that the failure to advertise a mortgage sale in compliance with statutory requirements constitute a jurisdictional defect invalidating the sale and that a substantial error or omission in a notice of sale will render the notice insufficient and transfer certificate of title of the property to be sold.  This is substantial and fatal error which resulted in invalidating the entire notice.  That the correct technical description appeared on the Notice of Sheriff's sale is to inform all interested parties of the date, time and place of the foreclosure sale of the real property subject thereof.  Logically, this is not only requires that the correct date, time and place of the foreclosure sale appear in the notice but also that any and all interested parties be able to determine that what is about to be sold at the foreclosure sale is the real property in which they have interest.  The extra-judicial Foreclosure Sale of the property of the petitioner spouses are null and void.