Westmont Bank vs Funal Phil. Corp

G.R. No. 175733, July 8,2015

WESTMONT BANK (NOW UNITED OVERSEAS BANK PHILS.^*) Petitioner, v. FUNAI PHILIPPINES CORPORATION, SPOUSES ANTONIO AND SYLVIA YUTINGCO, PANAMAX CORPORATION, PEPITO ONG NGO, RICHARD N. YU, AIMEE R. ALBA, ANNABELLE BAESA, NENITA RESANE, AND MARIA ORTIZ, Respondents.

[G.R. No. 180162]

CARMELO V. CACHERO, Petitioner, v. UNITED OVERSEAS BANK PHILS. AND/OR WESTMONT BANK, Respondents.

Respondents Funai Philippines Corporation (Funai) and Spouses Antonio and Sylvia Yutingco (Sps. Yutingco) obtained loans from Westmont Bank (Westmont), now United Overseas Bank Phils.secured by several promissory notes (PNs) with different maturity dates. The PNs commonly provide that in case the same are referred to an attorney-at-law or a collection agency, or a suit is instituted in court for collection, Sps. Yutingco will be liable to pay twenty percent (20%) of the total amount due as attorney's fees, exclusive of costs of suit and other expenses.

However, Funai and Sps. Yutingco (original defendants) defaulted in the payment of the said loan obligations when they fell due, and ignored Westmont's demands for payment. Hence, the Westmont filed a complaint for sum of money, with prayer for the issuance of a writ of preliminary attachment before the RTC.

After an ex-parte hearing, the RTC issued a Writ of Preliminary Attachment ordering the attachment of the personal and real properties of the original defendants. Furthermore, the RTC issued another Order, directing the attachment of properties appearing under the names of other persons, but which were under the control of the original defendants. In view of the foregoing directives, Sheriff Gerry C. Duncan (Sheriff Duncan) and Sheriff Cachero levied and seized the properties situated at: (a) No. 9 Northpark Avenue, Bellevue, Grace Village, Quezon City; and (b) 2^nd Level, Phase III, Sta. Lucia East Grand Mall, Cainta, Rizal (Sta. Lucia).

Pepito Ong Ngo (Ngo), as Acting President of Panamax Corporation (Panamax), filed an Affidavit of Third-Party Claim over the properties seized in Sta. Lucia, claiming that Panamax is the true and lawful owner thereof.

Westmont filed an Amended Complaint impeding additional defendants, Panamax, Ngo, Aimee R. Alba, Richard N. Yu, Annabelle Baesa, and Nenita Resane (additional defendants), and praying that they be declared as mere alter egos, conduits, dummies, or nominees of Sps. Yutingco to defraud their creditors, including Westmont.

The RTC ruled that the additional defendants had no participation or any corresponding duty whatsoever relative to the subject PNs, which were executed only by the original defendants in favor of Westmont; hence, the latter cannot maintain an action against said additional defendants. The RTC further held that Westmont's imputation that the additional defendants acted as dummies, conduits, and alter egos of the original defendants are but mere inferences of fact, and not a narration of specific acts or set of facts or ultimate facts required in a complaint to entitle the plaintiff to a remedy in law. Thus, it concluded that the complaint failed to state a cause of action against the additional defendants.

Due to Westmont's continued refusal to release the seized items, the RTC issued a Break-Open Order  to enforce the writ. However the CA issued a TRO enjoining Sheriffs Duncan and Cachero from enforcing the writ of execution. The CA process server, Alfredo Obrence, Jr. (Obrence), duly served a copy of the TRO to the RTC Clerk of Court and informed Sheriff Cachero over the phone. Notwithstanding, the latter proceeded with the implementation of the writ of execution.

Westmont's representative who was able to secure a facsimile copy of the TRO showed the same to Sheriff Cachero who merely ignored it. Meanwhile, various audio, video, and electrical appliances were taken out from the warehouse and loaded into a truck.  Obrence arrived at the site and served on Sheriff Cachero a duplicate original copy of the TRO. Nonetheless, the items on the truck were not unloaded and the truck was allowed to leave the premises. Consequently, a case for indirect contempt was filed by Westmont against Sheriffs Cachero and Duncan, and Ngo.

Issues:

In G.R. No. 175733:
Westmont argues that the CA gravely erred in: (a) not applying the alter ego doctrine; (b) not considering additional defendants as necessary parties to the case; (c) not awarding exemplary damages in its favor; and (d) disregarding the express stipulation of the PNs regarding attorney's fees.

In G.R. No. 180162:

Sheriff Cachero asserts that the CA committed gross abuse of discretion when it adjudged him guilty of indirect contempt in implementing the writ of execution and the Break-Open Order despite the want of proper, timely, and adequate notice of the TRO.

Held:

At the outset, it must be stressed that Civil Case No. 98-86853 was submitted for judgment on the pleadings, on Westmont's motion. Hence, other than the hearing on the motion to discharge the attached items, no full-blown trial was conducted on the case.

In the case at bar, both the RTC and the CA were one in dismissing Westmont's Amended and Second Amended Complaints as to the additional defendants, but differed on the grounds therefor i.e., the RTC held that said complaints failed to state a cause of action, while the CA ruled that there was no cause of action, as to the additional defendants.

"Failure to state a cause of action and lack of cause of action are distinct grounds to dismiss a particular action. The former refers to the insufficiency of the allegations in the pleading, while the latter to the insufficiency of the factual basis for the action. Dismissal for failure to state a cause of action may be raised at the earliest stages of the proceedings through a motion to dismiss under Rule 16 of the Rules of Court, while dismissal for lack of cause of action may be raised any time after the questions of fact have been resolved on the basis of stipulations, admissions or evidence presented by the plaintiff."

Considering that, in this case, no stipulations, admissions, or evidence have yet been presented, it is perceptibly impossible to assess the insufficiency of the factual basis on which Sheriff Cachero asserts his cause of action. Hence, the ground of lack of cause of action could not have been the basis for the dismissal of this action.

Nonetheless, the Amended and Second Amended Complaints are still dismissible on the ground of failure to state a cause of action, as correctly held by the RTC.

"A complaint states a cause of action if it sufficiently avers the existence of the three (3) essential elements of a cause of action, namely: (a) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (b) an obligation on the part of the named defendant to respect or not to violate such right; and (c) an act or omission on the part of the named defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages. If the allegations of the complaint do not state the concurrence of these elements, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action."

It bears to stress that "while the facts alleged in the complaint are hypothetically admitted by the defendant, who moves to dismiss the complaint on the ground of failure to state a cause of action, it must, nevertheless, be remembered that the hypothetical admission extends only to the relevant and material facts well pleaded in the complaint, as well as inferences fairly deductible therefrom." Verily, the filing of the motion to dismiss assailing the sufficiency of the complaint "does not admit the truth of mere epithets of fraud; nor allegations of legal conclusions; nor an erroneous statement of law; nor mere inferences or conclusions from facts not stated; nor mere conclusions of law; nor allegations of fact the falsity of which is subject to judicial notice; nor matters of evidence; nor surplusage and irrelevant matter; nor scandalous matter inserted merely to insult the opposing party; nor to legally impossible facts; nor to facts which appear unfounded by a record incorporated in the pleading, or by a document referred to; nor to general averments contradicted by more specific averments."

Anent the award of attorney's fees, it is relevant to note that the stipulations on attorney's fees contained in the PNs constitute what is known as a penal clause. The award of attorney's fees by the CA, therefore, is not in the nature of an indemnity but rather a penalty in the form of liquidated damages in accordance with the contract between Westmont and the original defendants. "Such a stipulation has been upheld by [the] Court as binding between the parties so long as it does not contravene the law, morals, public order or public policy." Nevertheless, the courts possess the power to reduce the amount of attorney's fees whether intended as an indemnity or a penalty, if the same is iniquitous or unconscionable. 

Westmont's claim for exemplary damages, the Court does not find any factual and legal bases for the award. A perusal of the original, amended and second amended complaints failed to disclose specific averments that will show the wanton, fraudulent, reckless, oppressive or malevolent acts committed by the original defendants with respect to the loan obligation sought to be enforced.

Re: G.R. No. 180162

It is well-settled that a sheriff performs a sensitive role in the dispensation of justice. He is duty-bound to know the basic rules in the implementation of a writ of execution and be vigilant in the exercise of that authority. While sheriffs have the ministerial duty to implement writs of execution promptly, they are bound to discharge their duties with prudence, caution, and attention which careful men usually exercise in the management of their affairs. Sheriffs, as officers of the court upon whom the execution of a judgment depends, must be circumspect and proper in their behavior. Anything less is unacceptable because in serving the court's writs and processes and in implementing the orders of the court, sheriffs cannot afford to err without affecting the efficiency of the process of the administration of justice.

In the present case, Sheriff Cachero failed to exercise circumspection in the enforcement of the writ of execution, given the information that a TRO had already been issued by the CA enjoining him from implementing the same. This clearly evinces an intention to defy the TRO. As aptly observed by the CA:

Sheriff Cachero, being an officer of the court, should have exercised prudence by verifying whether there was really a TRO issued so as to avoid committing an act that would result in the thwarting of this Court's order. Assuming that [his] testimony that the loading of the items was completed at 4:00 p.m., and that the process server was fifteen minutes late in serving the TRO, the phone call and the presentation of the fax copy of the TRO sufficiently notified him of the Court's order which enjoined them (the Sheriffs) from carrying out the writ of execution. The fact of [his] prior actual knowledge was never refuted by him. It was also undisputed that he already knew of the existence of the TRO even before he broke the padlock of the warehouse.

In this relation, the Court does not find credence in Sheriff Cachero's insistence that while he may have "gotten wind" of the TRO through a cellular phone call, he was not bound thereby unless an official copy of the TRO was duly served upon him.

Settled is the rule that where a party has actual notice, no matter how acquired, of an injunction clearly informing him from what he must abstain, he is "legally bound from that time to desist from what he is restrained and inhibited from doing, and will be punished for a violation thereof, even though it may not have served, or may have been served on him defectively."

In view of the foregoing, the Court finds that Sheriff Cachero's open defiance of the TRO constitutes contumacious behavior falling under Section 3 (b), Rule 71 of the Rules of Court

What law was enacted today?

PRESIDENTIAL DECREE NO. 2017

MERGING THE KALINGA-APAYAO COMMUNITY COLLEGE, BIBAK NATIONAL AGRICULTURAL SCHOOL, TABUK NATIONAL HIGH SCHOOL, AND DOÑA EUFRONIA M. PUZON MEMORIAL SCHOOL INTO A STATE COLLEGE TO BE KNOWN AS THE KALINGA-APAYAO STATE COLLEGE, PROVIDING A CHARTER FOR THE PURPOSE AND APPROPRIATING FUNDS THEREFOR.

WHEREAS, the Constitution of the Philippines directs the State to establish and maintain a complete, adequate and integrated system of education relevant to the goals of national development and further prescribed that all educational institutions shall aim to develop scientific, technological and vocational efficiency;

WHEREAS, under Presidential Decree No. 6-A also known as Educational Decree of 1972, it has been declared a policy of the government to re-orient the educational system toward an accelerated national economic growth and meaningful social development;

WHEREAS, to maximize the effective utilization of limited resources, it is necessary to integrate and convert the institutions of higher learning located in the Province of Kalinga-Apayao into one institution of higher learning in order to establish an effective and efficient state college that will serve as an instrument towards the rapid development of the national manpower resources not only of the Province of Kalinga-Apayao but all the other provinces of Region II;

WHEREAS, the establishment of a State College will provide better services in professional and technical training in the arts, sciences, humanities, and technology and in the conduct of scientific research and technological studies;

WHEREAS, the integration of the above-mentioned institutions of higher learning into an autonomous state college to be known as the “Kalinga-Apayao State College” is imperative to hasten the realization of national goals as well as enhance regional development.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:

SECTION 1. The present BIBAK National Agricultural School, Kalinga-Apayao Community College, Tabuk National High School And Doña Eufronia M. Puzon Memorial School, located in Kalinga-Apayao are hereby merged into a State College which shall be known as the KALINGA-APAYAO STATE COLLEGE, hereinafter referred to as the State College.

SECTION 2. The State College shall provide advance institutions in arts, agricultural and natural sciences as well as in technological and professional fields.

SECTION 3. The governing body of the State College shall be vested in the Board of Trustees to be composed of the Minister of Education, Culture and Sports, who shall be the Chairman of the Board, the President of the College as Vice-Chairman, and the Regional Director of the Ministry of Education, Culture and Sports for Region II, the Regional Director of the Economic Development Authority for Region II, the President of the Alumni Association of the State College, and three (3) prominent citizens of Kalinga-Apayao who shall be appointed by the President of the Philippines upon recommendation of the Minister of Education, Culture and Sports, as members.

In the absence or inability of the Minister of Education, Culture and Sports, or when these positions are vacant, the Vice-Chairman of the Board shall be the Acting Chairman or in his absence, the other members of the Board may elect from among themselves a temporary Chairman of the Board;

The three (3) appointive members of the Board shall hold office for four (4) years without reappointment: Provided, that one of the first three (3) appointive members of the Board shall be appointed for two (2) years only and another one for four (4) years. In case of permanent vacancy, the appointee shall hold office for the unexpired terms only.

SECTION 4. A quorum of the Board of Trustees shall consist of a majority of all members holding office at the time of the meeting. All processes against the State College shall be served on the President of the State College or his duly authorized representative.

SECTION 5. The Members of the Board of Trustees shall not receive compensation but shall be reimbursed for actual and necessary expenses incurred either in attendance of meetings of the Board or of other official business authorized by the Board.

SECTION 6. The Board of Trustees shall have the following powers and duties in addition to its general powers of administration and the exercise of all the powers of a corporation as provided in Section 36 of Batas Pambansa Bilang 68 otherwise known as the Corporation Code of the Philippines:

a. To prescribe rules for its own government and to enact for the government of the State College such rules and regulations not contrary to law, as may be necessary to carry out the purpose and functions of the State College;

b. To receive and appropriate such funds, specified by law, for the support of the State College;

c. To import duty-free commodities for educational purposes as an exception to existing laws as well as to receive in trust legacies, gifts and donations of real and personal property of all kinds, to administer the same for the benefit of the State College or the department thereof, or for aid to any student in accordance with directions and instructions of the donor, and in default thereof, in such manner as the Board of Trustees may in its discretion determine. All such donations shall be exempt from all taxes and shall be considered as deductible items from the income tax of the donors;

d. To approve the curricula and rules of discipline drawn by the State College Council as hereinafter provided;

e. To confer decrees upon successful candidates for graduation, to award honorary degrees upon persons in recognition of learning, public service, statemanship or eminence in any field of specialization of the State College, and to authorize the President of the State College to award certificates for completion of non-degree programs;

f. To appoint, on recommendation of the President of the State College, Vice-Presidents, deans, directors, registrars, heads of departments, professors, and other officials and employees of the State College; to fix their compensation, hours of service, and such other duties and conditions as it may promulgate, any provisions of existing laws to the contrary notwithstanding; to remove them for cause after an investigation and hearing;

g. To provide fellowship for qualified faculty members and other scholarships to deserving students;

h. To fix tuition fees, matriculation fees, graduation fees, laboratory fees, and such special fees and charges, including other income generated by the State College, and to establish the said income into a specified trust fund for the exclusive use of the State College, any provision of existing laws to the contrary notwithstanding;

i. To authorize the State College to undertake the construction and/or repair of its buildings, machinery and equipment and other facilities, any provision of law or executive order to the contrary notwithstanding provided that the funds for the purpose shall come from its appropriation;

SECTION 7. No student shall be denied admission to the State College by reason of age, sex, nationality, region or political affiliation.

SECTION 8. The head of the State College shall be known as the President of the State College. He shall be appointed for a term of four (4) years by the President of the Philippines upon recommendation of the Minister of Education, Culture and Sports after consultation with the members of the Board.

The powers and duties of the President of the State College in addition to those specifically provided for in this Decree, shall be those usually pertaining to the office of the President of a State College;

SECTION 9. The incumbent presidents and/or heads of the institutions of higher learning integrated in this decree shall continue to serve as heads/presidents in their respective college or unit until such time as the terms of office and other conditions as well as other officials and employees of the State College shall have been determined by the Board of Trustees.

SECTION 10. There shall be an administrative council consisting of the President of the State College as chairman and the Vice-President and Deans as members, whose duty shall be to prepare and promulgate general policies of the State College governing personnel, financial management, and development planning, subject to the approval of the Board of Trustees.

SECTION 11. There shall be a college council in each college or unit of the State College with the Dean as Chairman and all the faculty of the college or unit as members. The body of instructors, assistant professors, associate professors, and professors of each college shall constitute the faculty of the college;

The college council shall have the power to prescribe the curricula and rules of discipline of the college or unit of the State College subject to the approval of the Board of Trustees. It shall fix the requirements for admission to the college or unit as well as for graduation and the conferring of degrees subject to review of the Board of Trustees.

SECTION 12. Members of the faculty of the State College shall not be exempt from any civil service examination or regulation as a requisite to appointment. No religious test shall be applied nor shall the religious opinions or affiliations be a matter of inquiry in the appointment of faculty members of the State College provided that no member of the faculty shall teach for or against any particular church or religious sect.

SECTION 13. There shall be an Advisory Council for each college or unit. The Advisory Council shall provide advice and counsel to the dean in matters of general policy concerning the affairs of the college or unit of the State College.

The present members of the Board of Trustees of the present institutions integrated in this Decree shall continue to serve as members of the Advisory Council of their respective institutions, except the Chairman of the Board of Trustees, for a term of four (4) years. Thereafter, the member of the Advisory Council of each college or unit of the State College shall be appointed by the Board of Trustees upon recommendation of the President of the State College.

SECTION 14. The Treasurer of the Philippines shall be ex-officio Treasurer of the State College. All accounts and expenses thereof shall be audited by the Commission on Audit or its duly authorized representative.

SECTION 15. All personnel, assets, records and appropriations of the institutions of higher learning integrated in this Decree are hereby transferred to the State College.

SECTION 16. The Minister of Education, Culture and Sports is hereby directed to take such steps as are necessary for the immediate implementation of this Decree. For this purpose, he is hereby authorized to create a technical committee to advice the Board of Trustees of the State College toward the proper establishment, development and expansion of the programs of the State College.

SECTION 17. On or before the fifteenth (15th) day of the second month after the opening of regular classes of each year, the Board of Trustees shall file with the Office of the President of the Philippines through the Minister of Education, Culture and Sports, a detailed report setting forth the progress, conditions and needs of the State College.

SECTION 18. In addition to the present appropriation of the institutions of higher learning integrated in this Decree, the sum of Ten Million Pesos (₱10,000,000.00) is hereby appropriated out of the funds of the National Treasury not otherwise appropriated to carry out the purposes of this Decree. Thereafter, funds needed for the maintenance and continued operation of the State College shall be included in the Annual Appropriation Act.

SECTION 19. All laws, acts, decrees, or executive order contrary to or inconsistent with this Decree are hereby repealed or amended accordingly.

SECTION 20. This Decree shall take effect immediately.

Done in the City of Manila, this 26th of January, in the year of Our Lord, nineteen hundred and eighty-six.

(Sgd.) FERDINAND E. MARCOS

By the President:
(Sgd.) JOAQUIN T. VENUS, JR.
Deputy Presidential Executive Assistant

Valdez vs. Atty Dabon

A.C. No. 7353

NELSON P. VALDEZ, Complainant, vs. ATTY. ANTOLIN ALLYSON

DABON, JR., Respondent.

Promulgated: November 16, 2015

Complainant Nelson charged respondent Atty. Dabon, a Division Clerk of Court of the Court of Appeals (CA), with gross immorality for allegedly carrying on an adulterous relationship with his wife, Sonia Romero Valdez (Sonia), which was made possible by sexual assaults and maintained through threat and intimidation.

Nelson Averred that he married Sonia on January 28, 1998 in Paniqui, Tarlac; that Sonia was employed as Court Stenographer of the CA from 1992 until her resignation on May 15, 2006;2 that Sonia admitted to have had an adulterous and immoral relationship with Atty. Dabon, from 2000 to 2006, a span of more than five years; that he came to know of the relationship only on April 18, 2006 after receiving an anonymous text message hinting/stating about the existence of an illicit affair between the two; and that initially, Sonia denied the affair but eventually broke down and admitted her sexual liaison with Atty. Dabon when confronted with a text message he received from Atty. Jocelyn Dabon (Atty. Joy), the wife of the respondent.

Nelson also asserted that Sonia confessed her infidelity and described her extramarital affair with Atty. Dabon to have been attended by sexual assaults and maintained through intimidation and threats of exposure, humiliation and embarrassment.

Sonia narrated that her illicit relationship with Atty. Dabon started sometime in November 2000 and ended in March 2006 when she, bothered by her conscience, decided to break it off; that Atty. Dabon relentlessly pursued her for years and even admitted that he fell in love with her the first time he laid eyes on her; that on November 13, 2000, Atty. Dabon lured her to what appeared to be a mere friendly lunch date, managed to put sleep-inducing drug into her food or drink causing her to feel drowsy and weak and, thereafter, brought her to Victoria Court Motel where he sexually molested her while she was asleep; that she opted to keep silent about the incident for fear of its adverse repercussions of shame and embarrassment to her and her family; that she pleaded with Atty. Dabon to leave her and forget what had happened, but the respondent instead taunted her by laughing at her misery; that since then, Atty. Dabon succeeded in having repeated carnal knowledge of her once or twice a week through intimidation and threats; that Atty. Dabon threatened her that he would tell everyone that she had been playing around with him, if she would not yield to his lascivious cravings; and that she suffered in silence for years and submitted herself to the bestial desires of Atty. Dabon, until she even thought that she was in love with him.

In his Comment, Atty. Dabon denied the charges of grossly immoral and unlawful acts through sexual assaults, abuses, threats and intimidation. He posited that the allegations of spouses Nelson and Sonia in their respective affidavits were nothing but pure fabrication solely intended to malign his name and honor.

Issue:

WON Atty Dabon violated CPR?

Held:

Lawyers have been repeatedly reminded by the Court that possession of good moral character is both a condition precedent and a continuing requirement to warrant admission to the Bar and to retain membership in the legal profession. This proceeds from the lawyer's bounden duty to observe the highest degree of morality in order to safeguard the Bar's integrity, and the legal profession exacts from its members nothing less. Lawyers are called upon to safeguard the integrity of the Bar, free from misdeeds and acts constitutive of malpractice. Their exalted positions as officers of the court demand no less than the highest degree of morality.

the Court notes from the respondent's Comment that he appeared to be perplexed as to whether or not he would admit his extramarital liaisons with Sonia. As Investigating Commissioner Chan stated in his report, Atty. Dabon interposed a blanket denial of the romantic involvement but at the same time, he seemed to have tacitly admitted the illicit affair only that it was not attended by sexual assaults, threats and intimidations. The Court also observed that he devoted considerable effort to demonstrate that the affair did not amount to gross immoral conduct and that no sexual abuse, threat or intimidation was exerted upon the person of Sonia, but not once did he squarely deny the affair itself.

In other words, the respondent's denial is a negative pregnant, a denial coupled with the admission of substantial facts in the pleading responded to which are not squarely denied.

It is clear from Atty. Dabon's Comment that his denial only pertained as to the existence of a forced illicit relationship. Without a categorical denial thereof, he is deemed to have admitted his consensual

affair with Sonia.

More telling of the existence of a romantic relationship are the notes and cards that Sonia sent to Atty. Dabon containing personal and intimate messages in her own handwriting. The messages conveyed Sonia's affection towards him as she even referred to him as "hon" or "honey." There were also gifts she gave him on special occasions such as signature shoes, watch and shirts. It also appeared that Sonia frequently visited him in his office either to bring him food, fruits and other goodies or to invite him to lunch which apparently displayed her emotional attachment to him. Curiously, the foregoing was never refuted by Sonia. Such "ego-boosting admissions" of Atty. Dabon indeed proved that a consensual relationship between him and Sonia existed.

It has been repeatedly held that to justify suspension or disbarment, the act complained of must not only be immoral, but grossly immoral. A grossly immoral act is one that is so corrupt as to constitute a criminal act, or so unprincipled as to be reprehensible to a high degree or committed under such scandalous or revolting circumstances as to shock the common sense of decency. It is willful, flagrant, or shameless as to show indifference to the opinion of good and respectable members of the community.

In the case at bench, Atty. Dabon's intimate relationship with a woman other than his wife showed his moral indifference to the opinion of the good and respectable members of the community. It manifested his disrespect for the laws on the sanctity of marriage and for his own marital vow of fidelity. It showed his utmost moral depravity and low regard for the fundamental ethics of his profession. Indeed, he has fallen below the moral bar. Such detestable behavior warrants a disciplinary sanction. Even if not all forms of extramarital relations are punishable under penal law, sexual relations outside of marriage are considered disgraceful and immoral as they manifest deliberate disregard of the sanctity of marriage and the marital

vows protected by the Constitution and affirmed by our laws.

Harry Go vs People

G.R. No. 185527, July 18, 2012

HARRY L. GO, TONNY NGO, JERRY NGO AND JANE GO, Petitioners,

-versus-

THE PEOPLE OF THE PHILIPPINES and HIGHDONE COMPANY, LTD., ET AL.,

Respondents.

Petitioners Harry Go, Tonny Ngo, Jerry Ngo and Jane Go were charged before the Metropolitan Trial Court (MeTC) of Manila for Other Deceits under Article 318 of the Revised Penal Code (RPC).

The prosecution's complaining witness, Li Luen Ping, a frail old businessman from Laos, Cambodia, traveled from his home country back to the Philippines in order to attend the hearing held on September 9, 2004. However, trial dates were subsequently postponed due to his unavailability.

The private prosecutor filed with the MeTC a Motion to Take Oral Deposition6 of Li Luen Ping, alleging that he was being treated for lung infection at the Cambodia Charity Hospital in Laos, Cambodia and that, upon doctor's advice, he could not make the long travel to the Philippines by reason of ill health.

Notwithstanding petitioners' Opposition, the MeTC granted the motion after the prosecution complied with the directive to submit a Medical Certificate of Li Luen Ping. Petitioners sought its reconsideration which the MeTC denied, prompting petitioners to file a Petition for Certiorari  before the RTC.

Upon denial by the RTC of their motion for reconsideration through an Order dated March 5, 2006, the prosecution elevated the case to the CA. the CA denied petitioners' motion for Reconsideration.

Issue: Whether or not CA erred in sustaining the judicial legislation committed by the MeTC in applying the ruled on deposition-taking in civil case to criminal cases.

Held:

The examination of witnesses must be done orally before a judge in open court. This is true especially in criminal cases where the Constitution secures to the accused his right to a public trial and to meet the

witnesses against him face to face. The requirement is the “safest and most satisfactory method of investigating facts” as it enables the judge to test the witness' credibility through his manner and deportment while testifying. It is not without exceptions, however, as the Rules of Court recognizes the

conditional examination of witnesses and the use of their depositions as testimonial evidence in lieu of direct court testimony.

The procedure under Rule 23 to 28 of the Rules of Court allows the taking of depositions in civil cases, either upon oral examination or written interrogatories, before any judge, notary public or person authorized to administer oaths at any time or place within the Philippines; or before any Philippine consular official, commissioned officer or person authorized to administer oaths in a foreign state or country, with no additional requirement except reasonable notice in writing to the other party.

But for purposes of taking the deposition in criminal cases, more particularly of a prosecution witness who would forseeably be unavailable for trial, the testimonial examination should be made before the court, or at least before the judge, where the case is pending as required by the clear mandate of Section 15, Rule 119 of the Revised Rules of Criminal Procedure. The pertinent provision reads thus:

SEC. 15. Examination of witness for the prosecution. – When it satisfactorily appears that a witness for the prosecution is too sick or infirm to appear at the trial as directed by the court, or has to leave the Philippines with no definite date of returning, he may forthwith be conditionally examined before the court where the case is pending. Such examination, in the presence of the accused, or in his absence after reasonable notice to attend the examination has been served on him shall be conducted in the same manner as an examination at the trial. Failure or refusal of the accused to attend the examination after notice shall be considered a waiver. The statement taken may be admitted in behalf of or against the accused.

Certainly, to take the deposition of the prosecution witness elsewhere and not before the very same court where the case is pending would not only deprive a detained accused of his right to attend the proceedings but also deprive the trial judge of the opportunity to observe the prosecution witness' deportment and properly assess his credibility, which is especially intolerable when the witness' testimony is crucial to the prosecution's case against the accused. This is the import of the Court's ruling in Vda. de Manguerra where we further declared that –

While we recognize the prosecution's right to preserve the testimony of its witness in order to prove its

case, we cannot disregard the rules which are designed mainly for the protection of the accused's constitutional rights. The giving of testimony during trial is the general rule. The conditional examination of a witness outside of the trial is only an exception, and as such, calls for a strict construction of the rules.

Exxonmobil vs CIR

EXXONMOBIL Petroleum and Chemical Holdings, Inc., Phil. Branch vs Commissioner of Internal Revenue, G.R. No. 180909, January 19, 2011

Petitioner Exxon is a foreign corporation duly organized and existing under the laws of the State of Delaware, United States of America. It is authorized to do business in the Philippines through its Philippine Branch. Exxon is engaged in the business of selling petroleum products to domestic and international carriers. In pursuit of its business, Exxon purchased from Caltex Philippines, Inc. (Caltex) and Petron Corporation (Petron) Jet A-1 fuel and other petroleum products, the excise taxes on which were paid for and remitted by both Caltex and Petron. Said taxes, however, were passed on to Exxon which ultimately shouldered the excise taxes on the fuel and petroleum products.

Exxon filed administrative claims for refund with the Bureau of Internal Revenue (BIR).

Exxon filed a petition for review with the CTA claiming a refund or tax of excise taxes paid on Jet A-1 fuel and other petroleum products it sold to international carriers from November 2001 to June 2002.

During Exxons preparation of evidence, the CIR filed a motion dated January 28, 2005 to first resolve the issue of whether or not Exxon was the proper party to ask for a refund. Exxon filed its opposition to the motion

Issue: Whether or not petitioner is the proper party to ask for refund?

Held:

Exxon argues that having paid the excise taxes on the petroleum products sold to international carriers, it is a real party in interest consistent with the rules and jurisprudence.

It reasons out that the subject of the exemption is neither the seller nor the buyer of the petroleum products, but the products themselves, so long as they are sold to international carriers for use in international flight operations, or to exempt entities covered by tax treaties, conventions and other international agreements for their use or consumption, among other conditions.

Thus, as the exemption granted under Section 135 attaches to the petroleum products and not to the seller, the exemption will apply regardless of whether the same were sold by its manufacturer or its distributor for two reasons. First, Section 135 does not require that to be exempt from excise tax, the products should be sold by the manufacturer or producer. Second, the legislative intent was precisely to make Section 135 independent from Sections 129 and 130 of the NIRC, stemming from the fact that unlike other products subject to excise tax, petroleum products of this nature have become subject to preferential tax treatment by virtue of either specific international agreements or simply of international reciprocity.

The CTA En Banc, thus, held that:

The determination of who is the taxpayer plays a pivotal role in claims for refund because the same law provides that it is only the taxpayer who has the legal personality to ask for a refund in case of erroneous payment of taxes. Section 204 (C) of the 1997 NIRC, [provides] in part, as follows:

SEC. 204. Authority of the Commissioner to Compromise, Abate, and Refund or Credit Taxes. The Commissioner may

(C)               Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return showing an overpayment shall be considered as a written claim for credit or refund.

Therefore, as Exxon is not the party statutorily liable for payment of excise taxes under Section 130, in relation to Section 129 of the NIRC, it is not the proper party to claim a refund of any taxes erroneously paid. 

Vda. De Manguerra vs Risos

G.R. No. 152643 August 28, 2008

CONCEPCION CUENCO VDA. DE MANGUERRA and THE HON. RAMON C. CODILLA, JR., Presiding Judge of theRegional Trial Court of Cebu City, Branch 19,Petitioners,

 - versus -

 RAUL RISOS, SUSANA YONGCO, LEAH ABARQUEZ and ATTY. GAMALIEL D.B. BONJE,

Respondents.

Respondents were charged with Estafa Through Falsification of Public Document before the RTC as Criminal Case that arose from the falsification of a deed of real estate mortgage allegedly committed by respondents where they made it appear that Concepcion, the owner of the mortgaged property known as the Gorordo property, affixed her signature to the document.

Concepcion, who was a resident of Cebu City, while on vacation in Manila, was unexpectedly confined at the Makati Medical Center due to upper gastro-intestinal bleeding; and was advised to stay in Manila for further treatment.

The counsel of Concepcion filed a motion to take the latters deposition. He explained the need to perpetuate Concepcions testimony due to her weak physical condition and old age, which limited her freedom of mobility.

The motion was granted by the RTC. Aggrieved, respondent filed a special civil action for certiorari before the CA.

At the outset, the CA observed that there was a defect in the respondent’s petition by not impleading the People of the Philippines, an indispensable party. This notwithstanding, the appellate court resolved the matter on its merit, declaring that the examination of prosecution witnesses, as in the present case, is governed by Section 15, Rule 119 of the Revised Rules of Criminal Procedure and not Rule 23 of the Rules of Court. The latter provision, said the appellate court, only applies to civil cases. Pursuant to the specific provision of Section 15, Rule 119, Concepcions deposition should have been taken before the judge or the court where the case is pending and not before the Clerk of Court of Makati City; and thus, in issuing the assailed order, the RTC clearly committed grave abuse of discretion. 

The CA added that the rationale of the Rules in requiring the taking of deposition before the same court is the constitutional right of the accused to meet the witnesses face to face. The appellate court likewise concluded that Rule 23 could not be applied suppletorily because the situation was adequately addressed by a specific provision of the rules of criminal procedure.

Issues:

1. Whether or not Rule 23 of Civil Procedure applies to the deposition of the petitioner?

2. Whether or not failure to implead the People of the Philippines in a petition for certiorari arising from a criminal case a quo constitutes a waivable defect in the petition for certiorari?

Held:

1. It is basic that all witnesses shall give their testimonies at the trial of the case in the presence of the judge. This is especially true in criminal cases in order that the accused may be afforded the opportunity to cross-examine the witnesses pursuant to his constitutional right to confront the witnesses face to face. It also gives the parties and their counsel the chance to propound such questions as they deem material and necessary to support their position or to test the credibility of said witnesses. Lastly, this rule enables the judge to observe the witnesses demeanor.

This rule, however, is not absolute. As exceptions, Rules 23 to 28 of the Rules of Court provide for the different modes of discovery that may be resorted to by a party to an action. These rules are adopted either to perpetuate the testimonies of witnesses or as modes of discovery. In criminal proceedings, Sections 12, 13 and 15, Rule 119 of the Revised Rules of Criminal Procedure, which took effect on December 1, 2000, allow the conditional examination of both the defense and prosecution witnesses.

In the case at bench, in issue is the examination of a prosecution witness, who, according to the petitioners, was too sick to travel and appear before the trial court. Section 15 of Rule 119 thus comes into play, and it provides:

Section 15. Examination of witness for the prosecution. When it satisfactorily appears that a witness for the prosecution is too sick or infirm to appear at the trial as directed by the court, or has to leave the Philippines with no definite date of returning, he may forthwith be conditionally examined before the court where the case is pending. Such examination, in the presence of the accused, or in his absence after reasonable notice to attend the examination has been served on him, shall be conducted in the same manner as an examination at the trial. Failure or refusal of the accused to attend the examination

The procedure set forth in Rule 119 applies to the case at bar. It is thus required that the conditional examination be made before the court where the case is pending. It is also necessary that the accused be notified, so that he can attend the examination, subject to his right to waive the same after reasonable notice. As to the manner of examination, the Rules mandate that it be conducted in the same manner as an examination during trial, that is, through question and answer.

To reiterate, the conditional examination of a prosecution witness for the purpose of taking his deposition should be made before the court, or at least before the judge, where the case is pending. Such is the clear mandate of Section 15, Rule 119 of the Rules. We find no necessity to depart from, or to relax, this rule. As correctly held by the CA, if the deposition is made elsewhere, the accused may not be able to attend, as when he is under detention. More importantly, this requirement ensures that the judge would be able to observe the witness deportment to enable him to properly assess his credibility. This is especially true when the witness testimony is crucial to the prosecutions case.

2. It is undisputed that in their petition for certiorari before the CA, respondents failed to implead the People of the Philippines as a party thereto. Because of this, the petition was obviously defective. As provided in Section 5, Rule 110 of the Revised Rules of Criminal Procedure, all criminal actions are prosecuted under the direction and control of the public prosecutor. Therefore, it behooved the petitioners (respondents herein) to implead the People of the Philippines as respondent in the CA case to enable the Solicitor General to comment on the petition.

However, this Court has repeatedly declared that the failure to implead an indispensable party is not a ground for the dismissal of an action. In such a case, the remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court, on motion of the party or on its own initiative at any stage of the action and/or such times as are just. If the petitioner/plaintiff refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the petitioners/plaintiffs failure to comply.

Instructive is the Courts pronouncement in Commissioner Domingo v. Scheer in this wise:

There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is to facilitate the application of justice to the rival claims of contending parties. They were created, not to hinder and delay, but to facilitate and promote, the administration of justice. They do not constitute the thing itself, which courts are always striving to secure to litigants. They are designed as the means best adapted to obtain that thing. In other words, they are a means to an end. When they lose the character of the one and become the other, the administration of justice is at fault and courts are correspondingly remiss in the performance of their obvious duty.