INTROLAW 7

7/28/2019 INTROLAW 7

1/21

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 133036 January 22, 2003

JOY LEE RECUERDO, petitioner,vs.PEOPLE OF THE PHILIPPINES AND THE COURT OF APPEALS, respondents.

CARPIO-MORALES, J.:

Before us for review is the July 16, 1997 decision of the Court of Appeals in CA-G.R. No.20577 affirming that rendered by the Regional Trial Court (RTC), Branch 150, Makati Citywhich in turn affirmed that of the Metropolitan Trial Court (MeTC) of Makati City, Branch 67convicting Joy Lee Recuerdo (petitioner) for violation of Batas Pambansa Blg. 22 (TheBouncing Checks Law) on 5 counts.

From the evidence of the prosecution, the following facts are established:

Sometime in the first week of December 1993, Yolanda Floro (Yolanda) who is engaged injewelry business sold a 3-karat loose diamond stone valued at P420,000.00 to petitionerwho gave a downpayment of P40,000.00. In settlement of the balance of the purchaseprice, petitioner issued 9 postdated checks, 8 of which in the amount of P40,000.00, and 1in the amount of P20,000.00, all drawn against her account at the Prudential Bank.

1

When Yolanda deposited 8 of the 10 checks to her depository bank, Liberty Savings andLoan Association, only 3, those dated December 25, 1993, January 25, 1994, andFebruary 25, 1994, were cleared. The remaining 5 were dishonored due to the closure ofpetitioners account.

2

Yolanda thus went to petitioners dental clinic and advised her to change the dishonoredchecks to cash. Petitioner promised alright but she welshed on it.

3

A demand letter4

was thereupon sent to petitioner for her to settle her obligation but shefailed to heed the same,

5hence, the filing of 5 informations

6against her for violation of B.

P. 22 at the Makati MeTC, the accusatory portion of the first of which reads:

That sometime in the first week of December, 1993, in the Municipality of Makati,Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, theabove-named accused, did then and there willfully, unlawfully and feloniously

make out, drawn (sic) and issue to YOLANDA G. FLORO to apply on account orfor value the check described below:

Check No. - 008789

Drawn Against - Prudential Bank

In the Amount of - P40,000.00

Postdated/dated - July 25, 1994

Payable to - Cash

said accused well knowing that at the time of issue thereof, said account did not

have sufficient funds in or credit with the drawee bank for the payment in full ofthe face amount of such check upon its presentment, which check when

presented for payment within ninety (90) days from the date thereof wassubsequently dishonored by the drawee bank for the reason "ACCOUNTCLOSED" and despite receipt of notice of such dishonor, the accused failed topay said payee the face amount of said check or to make arrangement for fullpayment within five (5) banking days after receiving said notice."

Except for the check numbers and dates of maturity, the four other informations aresimilarly worded.

After trial, Branch 67 of the Makati MeTC convicted petitioner in a Joint Decision7

thedispositive portion of which reads:

Wherefore, in view of the foregoing, the court finds the accused guilty beyondreasonable doubt of Violation of Batas Pambansa Bilang 22 on five (5) countsand therefore sentences the accused to suffer an imprisonment of 30 days foreach count and to restitute the amount of P 200,000.00 to Miss Yolanda G. Floro,which is the total amount of the five (5) checks, and to pay her also the amount ofP20,000.00 as damages to compensate the payment of attorneys fees.

SO ORDERED.8

As stated early on, the RTC, on appeal, affirmed the decision of the MeTC.9

And the Courtof Appeals

10affirmed that of the RTC.

In the petition for review on certiorari at bar, petitioner proffers as follows:

"1. Petitioner was convicted by an invalid law which is Batas Pambansa Blg. 22

for being an unconstitutional law.

2. Petitioner was denied her constitutional right to due process for failure of thecourts a quo to uphold her presumption of innocence and for convicting her evenif the prosecution evidence does not prove her guilt beyond reasonable doubt.

3. The findings of fact of the courts a quo, primarily the Court of Appeals, arebased on surmises, conjectures and speculations.

4. The Court of Appeals was biased against petitioner when it denied the petitionmoto propio (sic) without the comment of the Office of the Solicitor General."

11

Petitioner contends that since banks are not damaged by the presentment of dishonoredchecks as they impose a penalty for each, only creditors/payees are unduly favored by thelaw; that the law "is in essence a resurrected form of 19th century imprisonment for debt"since the drawer is coerced to pay his debt on threat of imprisonment even if his failure to

pay does not arise from malice or fraud or from any criminal intent to cause damage;12 andthat the law is a bill of attainder

13as it does not leave much room for judicial determination,

the guilt of the accused having already been decided by the legislature.14

These matters subject of petitioners contention have long been settled in the landmarkcase ofLozano v. Martinez

15where this Court upheld the constitutionality of B. P. 22:

The gravamen of the offense punished by BP 22 is the act of making and issuinga worthless check or a check that is dishonored upon its presentation forpayment. It is not the non-payment of an obligation which the law punishes .The law is not intended or designed to coerce a debtor to pay his debt. The thrustof the law is to prohibit, under pain of penal sanctions, the making of worthlesschecks and putting them in circulation. Because of its deleterious effects on thepublic interest, the practice is proscribed by law . The law punishes the act notas an offense against property, but an offense against public order.16(Emphasis supplied)


2/21

The contention that B. P. 22 is a bill of attainder, one which inflicts punishment without trialand the essence of which is the substitution of a legislative for a judicial determination ofguilt,

17fails. For under B. P. 22, every element of the crime is still to be proven before the

trial court to warrant a conviction for violation thereof.

Reinforcing her thesis, petitioner cites the speech made by now Vice-President TeofistoGuingona delivered before the Philippine Bar Association wherein he stressed the need toreview the law since it has not prevented the proliferation of bouncing checks.

18

As correctly argued by the Solicitor General, however, while due deference is given to theopinion of the Vice-President, the same should properly be addressed to the legislature

which is in a better position to review the effectiveness and usefulness of the law. 19 Asheld in the case ofLozano,

20it is not for the Court to question the wisdom or policy of the

statute. It is sufficient that a reasonable nexus exists between the means and the end.

Petitioner further claims that the dishonored checks were not issued for deposit andencashment,

21nor was there consideration therefor, in support of which she cites her

alleged agreement with Yolanda that she could have the stone appraised to determinethe purchase price,

22and since she found out that it is only worth P160,000.00,

23there

was no longer any need to fund the remaining checks which should be returned to her.24

Yolanda, however, so petitioner adds, could no longer be reached.

25Petitioner thus

concludes that she had already paid in full the purchase price of the stone, she having paidP40,000.00 cash plus the P120,000.00 proceeds of the three cleared checks.

26

Petitioners submission does not lie. Such alleged agreement does not inspire belief. Theterms and conditions surrounding the issuance of the checks are irrelevant.

27

"A check issued as an evidence of debt, though not intended for encashment,has the same effect like any other check. It is within the contemplation of B.P.22, which is explicit that "any person who makes or draws and issues any checkto apply for an account or for value, knowing at the time of issue that he does nothave sufficient funds in or credit with the drawee bank x x x which check issubsequently dishonored x x x shall be punished by imprisonment."

28(Emphasis

supplied.)

"BP 22 does not appear to concern itself with what might actually beenvisioned by the parties, its primordial intention being to instead ensure thestability and commercial value of checks as being virtual substitutes for currency.It is a policy that can be easily eroded if one has yet to determine the reason forwhich checks are issued, or the terms and conditions for their issuance, beforean appropriate application of the legislative enactment can be made."

29

(Emphasis supplied)

Additionally, petitioner argues that as no bank representative testified as to "whether thequestioned checks were dishonored due to insufficiency of funds (sic)," such element wasnot clearly and convincingly proven,

30hence, the trial court failed to uphold her right to

presumption of innocence when she was convicted based on the sole testimony ofYolanda.

Whether the checks were dishonored due to insufficiency of funds, or "Account Closed" asalleged in the informations and testified on by Yolanda,

31 petitioners argument is

untenable.

"It is not required much less indispensable, for the prosecution to present thedrawee banks representative as a witness to testify on the dishonor of thechecks because of insufficiency of funds. The prosecution may present, as it

did in this case, only complainant as a witness to prove all the elements ofthe offense charged. She is competent and qualified witness to testify that she

deposited the checks to her account in a bank; that she subsequently receivedfrom the bank the checks returned unpaid with a notation drawn againstinsufficient funds stamped or written on the dorsal side of the checksthemselves, or in a notice attached to the dishonored checks duly given to thecomplainant, and that petitioner failed to pay complainant the value of the checksor make arrangements for their payment in full within five (5) banking days afterreceiving notice that such checks had not been paid by the drawee bank."

32

(Emphasis supplied)

Yolandas testimony that when she deposited the checks to her depository bank they were

dishonored due to "Account Closed"

33

thus sufficed. In fact, even petitioners counselduring trial admitted the dishonor, and on that ground.34

Finally, petitioner imputes bias on the part of the appellate court when it decided herpetition for review without the comment of the Office of the Solicitor General.

The rendition of the decision by the appellate court without the comment of the People-Appellee is not by itself proof of bias. In any event, the Office of the Solicitor General gaveits comment on petitioners Motion for Reconsideration of the appellate courts decision.

In fine, the affirmance of petitioners conviction is in order.

Under Administrative Circular No. 12-2000, imprisonment need not be imposed on thosefound guilty of violating B.P. Blg. 22. Administrative Circular No. 13-2001 issued onFebruary 14, 2001 vests in the courts the discretion to determine, taking into considerationthe peculiar circumstances of each case, whether the imposition of fine alone would best

serve the interests of justice, or whether forbearing to impose imprisonment woulddepreciate the seriousness of the offense, work violence on the social order, or otherwisecontrary to the imperatives of justice.

35

In the case at bar, this Court notes that no proof, nay allegation, was proffered thatpetitioner was not a first time offender. Considering this and the correctness of the case, itwould best serve the interests of justice if petitioner is just fined to enable her to continueher dental practice so as not to deprive her of her income, thus insuring the earlysettlement of the civil aspect of the case, not to mention the FINE.

WHEREFORE, the assailed decision of the Court of Appeals finding petitioner JOY LEERECUERDO guilty of violating Batas Pambansa Blg. 22 is AFFIRMED withMODIFICATION.

In lieu of imprisonment, accused-herein petitioner JOY LEE RECUERDO, is ordered topay a FINE equivalent to double the amount of each dishonored check subject of the fivecases at bar. And she is also ordered to pay private complainant, Yolanda Floro, theamount of Two Hundred Thousand (P200,000.00) Pesos representing the total amount ofthe dishonored checks.

SO ORDERED.


3/21


Manila

EN BANC

G.R. No. 148326 November 15, 2001

PABLO C. VILLABER, petitioner,vs.COMMISSION ON ELECTIONS and REP. DOUGLAS R. CAGAS, respondents.

SANDOVAL-GUTIERREZ, J. :

In this petition for certiorari, Pablo C. Villaber, seeks the nullification of two Resolutions ofthe Commission on Election (COMELEC) in SPA-01-058. The first one was issued by itsSecond Division on April 30, 2001, disqualifying him as a candidate for the position ofCongressman in the First District of the Province of Davao del Sur in the last May 14, 2001elections, and cancelling his certificate of candidacy; and the second is the en bancResolution dated May 10, 2001 denying his motion for reconsideration.

Both petitioner Villaber and respondent Douglas R. Cagas were rival candidates for acongressional seat in the First District of Davao del Sur during the May 14, 2001 elections.Villaber filed his certificate of candidacy for Congressman on February 19, 2001,

1while

Cagas filed his on February 28, 2001.2

On March 4, 2001, Cagas filed with the Office of the Provincial Election Supervisor,

Commission On Elections (COMELEC), Davao del Sur, a consolidated petition3 todisqualify Villaber and to cancel the latter's certificate of candidacy. Cagas alleged in thesaid consolidated petition that on March 2, 1990, Villaber was convicted by the RegionalTrial Court of Manila, Branch 15, in Criminal Case No. 86-46197 for violation of BatasPambansa Blg. 22 and was sentenced to suffer one (1) year imprisonment. The check thatbounced was in the sum of P100,000.00.

4Cagas further alleged that this crime involves

moral turpitude; hence, under Section 12 of the Omnibus Election Code, he isdisqualified to run for any public office. On appeal, the Court of Appeals (Tenth Division), inits Decision dated April23, 1992 in CA-G.R. CR No. 09017,

5affirmed the RTC Decision.

Undaunted, Villaber filed with this Court a petition for review on certiorari assailing theCourt of Appeals Decision, docketed as G. R. No. 106709. However, in its Resolution

6of

October 26, 1992, this Court (Third Division) dismissed the petition. On February 2, 1993,our Resolution became final and executory.

7Cagas also asserted that Villaber made a

false material representation in his certificate of candidacy that he is "Eligible for the office I

seek to be elected " - which false statement is a ground to deny due course or cancel thesaid certificate pursuant to Section 78 of the Omnibus Election Code.

In his answers8

to the disqualification suit, Villaber countered mainly that his conviction hasnot become final and executory because the affirmed Decision was not remanded to thetrial court for promulgation in his presence.

9Furthermore, even if the judgment of

conviction was already final and executory, it cannot be the basis for his disqualificationsince violation of B.P. Blg. 22 does not involve moral turpitude.

After the opposing parties submitted their respective position papers, the case wasforwarded to the COMELEC, Manila, for resolution.1wphi1.nt

On April 30, 2001, the COMELEC (Second Division), finding merit in Cagas' petition,issued the challenged Resolution

10in SPA A 01-058 declaring Villaber disqualified as "a

candidate for and from holding any elective public office" and canceling his certificate ofcandidacy. The COMELEC ruled that a conviction for violation of B.P. BIg. 22 involvesmoral turpitude following the ruling of this Court en banc in the administrative case ofPeople vs. Atty. Fe Tuanda.

11

Villaber fIled a motion for reconsideration but was denied by the COMELEC en banc inaResolution

12dated May 10, 2001.

Hence, this petition.

The sole issue for our Resolution is whether or not violation of B.P. Blg. 22 involves moralturpitude.

The COMELEC believes it is. In disqualifying petitioner Villaber from being a candidate forCongressman, the COMELEC applied Section 12 of the Omnibus Election Code whichprovides:

"Sec. 12. Disqualifications. - Any person who has been declared bycompetent authority insane or incompetent, or has been sentenced by finaljudgment for subversion, insurrection, rebellion, or for any offense for which hehas been sentenced to a penalty of more than eighteen months, or for a crimeinvolving moral turpitude, shall be disqualified to be a candidate and tohold any office, unless he has been given plenary pardon or grantedamnesty.

"The disqualifications to be a candidate herein provided shall be deemedremoved upon the declaration by competent authority that said insanity orincompetence had been removed or after the expiration of a period of five yearsfrom his service of sentence, unless within the same period he again becomesdisqualified." (Emphasis ours)

As to the meaning of "moral turpitude," we have consistently adopted the definition inBlack's Law Dictionary as "an act of baseness, vileness, or depravity in the private dutieswhich a man owes his fellow men, or to society in general, contrary to the accepted andcustomary rule of right and duty between man and woman, or conduct contrary to justice,honesty, modesty, or good morals."

13

In In re Vinzon,14

the term "moral turpitude" is considered as encompassing "everythingwhich is done contrary to justice, honesty , or good morals."

We, however, clarified in Dela Torre vs. Comm ission on Elections15

that "not everycriminal act involves moral turpitude," and that ''as to what crime involves moral turpitude isfor the Supreme Court to determine."

16We further pronounced therein that:

"...in International Rice Research Institute vs. NLRC(221 SCRA 760 [1993]), theCourt admitted that it cannot always be ascertained whether moral turpitude doesor does not exist by merely classifying a crime as malum in se or as malum

prohibitum. There are crimes which are mala in se and yet but rarely involvemoral turpitude, and there are crimes which involve moral turpitude and are mala

prohibita only. In the final analysis, whether or not a crime involves moralturpitude is ultimately a question of fact and frequently depends on all thecircumstances surrounding the violation of the statute." (Emphasis ours)

We reiterate here our ruling in Dela Torre17 that the determination of whether a crime

involves moral turpitude is a question of fact and frequently depends on all thecircumstances surrounding the violation of the statute.

In the case at bar, petitioner does not assail the facts and circumstances surrounding thecommission of the crime. In effect, he admits all the elements of the crime for which hewas convicted. At any rate, the question of whether or not the crime involves moralturpitude can be resolved by analyzing its elements alone, as we did in Dela Torrewhichinvolves the crime of fencing punishable by a special law.

18

Petitioner was charged for violating B.P.Blg. 22 under the following Information:


4/21

"That on or about February 13, 1986, in the City of Manila, Philippines, the saidaccused did then and there wilfully, unlawfully and feloniously make or draw andissue to Efren D. Sawal to apply on account or for value Bank of PhilippineIslands (Plaza Cervantes, Manila) Check No. 958214 dated February 13, 1986payable to Efren D. Sawal in the amount of P100,000.00, said accused wellknowing that at the time of issue he did not have sufficient funds in orcredit with the drawee bank for payment of such check in full upon itspresentment, which check, when presented for payment within ninety (90)days from the date thereof, was subsequently dishonored by the draweebank for insufficiency of funds, and despite receipt of notice of such

dishonor, said accused failed to pay said Efren D. Sawal the amount of saidcheck or to make arrangement for full payment of the same within five (5)banking days after receiving said notice." (Emphasis ours)

He was convicted for violating Section 1 of B.P. Blg. 22 provides :

"SECTION 1. Checks without sufficient funds. - Any person who makes or drawsand issues any check to apply on account or for value, knowing at the time ofissue that he does not have sufficient funds in or credit with the draweebank for the payment of such check in full upon its presentment , whichcheck is subsequently dishonored by the drawee bank for insufficiency of fundsor credit or would have been dishonored for the same reason had not the drawer,without any valid reason, ordered the bank to stop payment, shall be punished byimprisonment of not less than thirty days but not more than one (1) year or by afine of not less than but not more than double the amount of the check which fine

shall in no case exceed Two Hundred Thousand Pesos, or both such fine andimprisonment at the discretion of the court." (Emphasis ours).

The elements of the offense under the above provision are:

1. The accused makes, draws or issues any check to apply to account or forvalue;

2. The accused knows at the time of the issuance that he or she does nothave sufficient funds in, or credit with, the drawee bank for the payment ofthe check in full upon its presentment; and

3. The check is subsequently dishonored by the drawee bank for insufficiency offunds or credit, or it would have been dishonored for the same reason had notthe drawer, without any valid reason, ordered the bank to stop payment.

19

The presence of the second element manifests moral turpitude. In People vs. Atty. FeTuanda

20 we held that a conviction for violation of B.P. BIg. 22 "imports deceit" and

"certainly relates to and affects the good moral character of a person."21

The effects ofthe issuance of a worthless check, as we held in the landmark case of Lozano vs .Mart inez,

22 through Justice Pedro L. Yap, "transcends the private interests of the parties

directly involved in the transaction and touches the interests of the community at large.The mischief it creates is not only a wrong to the payee or holder, but also an injury to thepublic" since the circulation of valueless commercial papers "can very well pollute thechannels of trade and commerce, injure the banking system and eventually hurt thewelfare of society and the public interest."

23Thus, paraphrasing Black's definition, a drawer

who issues an unfunded check deliberately reneges on his private duties he owes hisfellow men or society in a manner contrary to accepted and customary rule of right andduty, justice, honesty or good morals.

Petitioner contends that this Court's pronouncement in People v. Atty. Fe Tuanda,24

insofar as it states that conviction under B.P. BIg. 22 involves moral turpitude, does notapply to him since he is not a lawyer.

This argument is erroneous.

In that case, the Court of Appeals affirmed Atty. Fe Tuanda's conviction for violation of B.P.BIg. 22 and, in addition, suspended her from the practice of law pursuant to Sections 27and 28 of Rule 138 of the Revised Rules of Court. Her motion seeking the lifting of hersuspension was denied by this Court on the ground that the said offense involves moralturpitude. There we said in part:

"We should add that the crimes of which respondent was convicted alsoimport deceit and violation of her attorney's oath and the Code of ProfessionalResponsibility, under both of which she was bound to 'obey the laws of the land.'

Conviction of a crime involving moral turpitude might not (as in the instantcase, violation of B.P. Blg. 22 does not) relate to the exercise of the professionof a lawyer; however, it certainly relates to and affects the good moralcharacter of a person convicted of such offense. x x x."25 (Emphasis ours)

Clearly, in Tuanda, this Court did not make a distinction whether the offender is a lawyeror a non-lawyer. Nor did it declare that such offense constitutes moral turpitude whencommitted by a member of the Bar but is not so when committed by a non-member.

We cannot go along with petitioner's contention that this Court's ruling in Tuandahas beenabandoned or modified in the recent case ofRosa Lim vs. People of the Phi l ippines,

26

which reiterated the ruling in Vaca vs. Court of Appeals.27

In these two latter cases, thepenalty of imprisonment imposed on the accused for violation of B.P. BIg. 22 was deletedby this Court. Only a fine was imposed. Petitioner insists that with the deletion of the prisonsentence, the offense no longer involves moral turpitude. We made no such

pronouncement. This is what we said in Rosa Lim:

"In Vaca v. Courtof Appeals, we held that in determining the penalty to beimposed for violation of B.P. Blg. 22, the philosophy underlying the IndeterminateSentence Law applies. The philosophy is to redeem valuable human material,and to prevent unnecessary deprivation of personal liberty and economicusefulness with due regard to the protection of the social order. There we deletedthe prison sentence imposed on petitioners. We imposed on them only a finedouble the amount of the check issued. We considered the fact that petitionersbrought the appeal, believing in good faith, that no violation of B.P. Blg. 22 wascommitted, 'otherwise, they would have simply accepted the judgment of the trialcourt and applied for probation to evade prison term.' We do the same here. Webelieve such would best serve the ends of criminal justice."

In fine, we find no grave abuse of discretion committed by respondent COMELEC in

issuing the assailed Resolutions.

WHEREFORE, the petition is DISMISSED. Costs against petitioner.1wphi1.nt

SO ORDERED.


5/21


Manila

FIRST DIVISION

G.R. No. 156658 March 10, 2004

BONIFACIO ASUFRIN, JR., petitioner,vs.SAN MIGUEL CORPORATION and the COURT OF APPEALS, respondents.

D E C I S I O N

YNARES-SANTIAGO, J. :

Coca Cola Plant, then a department of respondent San Miguel Beer Corporation (SMC),hired petitioner as a utility/miscellaneous worker in February 1972. On November 1, 1973,he became a regular employee paid on daily basis as a Forklift Operator. On November16, 1981, he became a monthly paid employee promoted as Stock Clerk.

Sometime in 1984, the sales office and operations at the Sum-ag, Bacolod City SalesOffice were reorganized. Several positions were abolished including petitioners position asStock Clerk. After reviewing petitioners qualifications, he was designated warehousechecker at the Sum-ag Sales Office.

On April 1, 1996, respondent SMC implemented a new marketing system known as the

"pre-selling scheme" at the Sum-ag Beer Sales Office. As a consequence, all positions ofroute sales and warehouse personnel were declared redundant. Respondent notified theDOLE Director of Region VI that 22 personnel of the Sales Department of the NegrosOperations Center

1would be retired effective March 31, 1995.

Respondent SMC thereafter wrote a letter2

to petitioner informing him that, owing to theimplementation of the "pre-selling operations" scheme, all positions of route andwarehouse personnel will be declared redundant and the Sum-ag Sales Office will beclosed effective April 30, 1996. Thus, from April 1, 1996 to May 15, 1996, petitionerreported to respondents Personnel Department at the Sta. Fe Brewery, pursuant to aprevious directive.

Thereafter, the employees of Sum-ag sales force were informed that they can avail ofrespondents early retirement package pursuant to the retrenchment program, while thosewho will not avail of early retirement would be redeployed or absorbed at the Brewery or

other sales offices. Petitioner opted to remain and manifested to Acting PersonnelManager Salvador Abadesco his willingness to be assigned to any job, considering that hehad three children in college.

3

Petitioner was surprised when he was informed by the Acting Personnel Manager that hisname was included in the list of employees who availed of the early retirement package.Petitioners request that he be given an assignment in the company was ignored by the

Acting Personnel Manager.

Petitioner thus filed a complaint for illegal dismissal with the NLRC, docketed as RAB CaseNo. 06-06-10233-96. On December 27, 1996, the Labor Arbiter dismissed the complaintfor lack of merit. Petitioner appealed to the National Labor Relations Commission (NLRC)which set aside the Labor Arbiters decision and ordered respondent SMC to reinstatepetitioner to his former or equivalent position with full backwages.

4

Respondent filed a petition with the Court of Appeals which reversed the decision of the

NLRC and reinstated the judgment of the Labor Arbiter dismissing the complaint for illegal

dismissal. Petitioners motion for reconsideration5

was denied in a Resolution datedDecember 11, 2002.

6

Hence, this petition for review assigning the following errors:

1. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS, WITH DUERESPECT, COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THATPETITIONER WAS "NOT SINGLED-OUT FOR TERMINATION, AS MANY OTHERSWERE ALSO ADVERSELY AFFECTED."

2. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED

GROSS MISAPPREHENSION OF FACT WHEN IT AFFIRMED THE FINDING OF THELABOR ARBITER THAT THE POSITION OF PETITIONER BECAME REDUNDANT ATTHE SUM-AG SALES OFFICES.

3. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS COMMITTEDGRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE DISMISSAL OFPETITIONER WAS VALID.

4. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED INDISMISSING THE ENTIRE RELIEFS PRAYED FOR BY THE PETITIONER.

The primordial issue to be resolved is whether or not the dismissal of petitioner is based ona just and authorized cause.

Factual findings of administrative bodies, being considered experts in their fields, arebinding on this Court. However, this is a general rule which holds true only when

established exceptions do not obtain. One of these exceptive circumstances is when thefindings of the Labor Arbiter and the NLRC are conflicting. Considering that the ruling ofthe Labor Arbiter was reversed by the NLRC whose judgment was in turn overturned bythe appellate court, it behooves us in the exercise of our equity jurisdiction to determinewhich findings are more conformable to the evidentiary facts.

7

In the case at bar, petitioner was dismissed on the ground of redundancy, one of theauthorized causes for dismissal.

8In Dole Philippines, Inc. v. NLRC,

9citing the leading case

of Wiltshire File Co., Inc. v. NLRC,10

we explained the nature of redundancy as anauthorized cause for dismissal thus:

. . . redundancy in an employers personnel force necessarily or even ordinarily refers toduplication of work. That no other person was holding the same position that privaterespondent held prior to the termination of his services, does not show that his positionhad not become redundant. Indeed, in any well-organized business enterprise, it would be

surprising to find duplication of work and two (2) or more people doing the work of oneperson. We believe that redundancy, for purposes of the Labor Code, exists where theservices of an employee are in excess of what is reasonably demanded by the actualrequirements of the enterprise. Succinctly put, a position is redundant where it issuperfluous, and superfluity of a position or positions may be the outcome of a number offactors, such as overhiring of workers, decreased volume of business, or dropping of aparticular product line or service activity previously manufactured or undertaken by theenterprise.

The determination that employees services are no longer necessary or sustainable and,therefore, properly terminable is an exercise of business judgment of the employer. Thewisdom or soundness of this judgment is not subject to discretionary review of the Labor

Arbiter and the NLRC, provided there is no violation of law and no showing that it wasprompted by an arbitrary or malicious act.

11In other words, it is not enough for a company

to merely declare that it has become overmanned. It must produce adequate proof thatsuch is the actual situation to justify the dismissal of the affected employees forredundancy.

12


6/21

Persuasive as the explanation proffered by respondent may be to justify the dismissal ofpetitioner, a number of disturbing circumstances, however, leave us unconvinced.

First, of the 23 SMC employees assigned at the Sum-ag Sales Office/Warehouse, 9accepted the offer of SMC to avail of the early retirement whose separation benefits wascomputed at 250% of their regular pay. The rest, including petitioner, did not accept theoffer. Out of the remaining fourteen 14, only petitioner clearly manifested, through severalletters,

13his desire to be redeployed to the Sta. Fe Brewery or any sales office and for

any position not necessarily limited to that of a warehouse checker. In short, he was evenwilling to accept a demotion just to continue his employment. Meanwhile, other employeeswho did not even write a letter to SMC were redeployed to the Sta. Fe Brewery orabsorbed by other offices/outlets outside Bacolod City.

14

Second, petitioner was in the payroll of the Sta. Fe Brewery and assigned to the MaterialsSection, Logistics Department, although he was actually posted at the Sum-agWarehouse.

15Thus, even assuming that his position in the Sum-ag Warehouse became

redundant, he should have been returned to the Sta. Fe Brewery where he was actuallyassigned and where there were vacant positions to accommodate him.

Third, it appears that despite respondents allegation that it ceased and closed down itswarehousing operations at the Sum-ag Sales Office, actually it is still used for warehousingactivities and as a transit point where buyers and dealers get their stocks.

16Indeed, the

Sum-ag Office is strategically situated on the southern part of Bacolod City making itconvenient for dealers from the southern towns of Negros Occidental to get their stocksand deposit their empty bottles in the said warehouse, thereby decongesting the businessactivities at the Sta. Fe Brewery.

Fourth, in selecting employees to be dismissed, a fair and reasonable criteria must beused, such as but not limited to (a) less preferred status, e.g. temporary employee; (b)efficiency; and (c) seniority.

17In the case at bar, no criterion whatsoever was adopted by

respondent in dismissing petitioner. Furthermore, as correctly observed by the NLRC,respondent "has not shown how the cessation of operations of the Sum-ag Sales Officecontributed to the ways and means of improving effectiveness of the organization with theend in view of efficiency and cutting distribution overhead and other related costs.Respondent, thus, clearly resorted to sweeping generalization[s] in dismissingcomplainant."

18 Indeed, petitioners predicament may have something to do with an

incident where he incurred the ire of an immediate superior in the Sales Logistics Unit forexposing certain irregularities committed by the latter.

19

In the earlier case of San Miguel Corporation v. NLRC,20

respondents reasons forterminating the services of its employees in the very same Sum-ag Sales Office wasrejected, to wit:

Even if private respondents were given the option to retire, be retrenched or dismissed,they were made to understand that they had no choice but to leave the company. Morebluntly stated, they were forced to swallow the bitter pill of dismissal but afforded a chanceto sweeten their separation from employment. They either had to voluntarily retire, beretrenched with benefits or be dismissed without receiving any benefit at all.

What was the true nature of petitioners offer to private respondents? It was in reality aHobsons choice.

21All that the private respondents were offered was a choice on the

means or method of terminating their services but never as to the status of theiremployment. In short, they were never asked if they wanted to work for petitioner.

In the case at bar, petitioner is similarly situated. It bears stressing that whether it be byredundancy or retrenchment or any of the other authorized causes, no employee may be

dismissed without observance of the fundamentals of good faith.

It is not difficult for employers to abolish positions in the guise of a cost-cutting measureand we should not be easily swayed by such schemes which all too often reduce to nearnothing what is left of the rubble of rights of our exploited workers.

22Given the nature of

petitioners job as a Warehouse Checker, it is inconceivable that respondent could notaccommodate his services considering that the warehousing operations at Sum-ag SalesOffice has not shut down.

All told, to sustain the position taken by the appellate court would be to dilute theworkingmans most important right: his constitutional right to security of tenure. Whilerespondent may have offered a generous compensation package to those whose serviceswere terminated upon the implementation of the "pre-selling scheme," we find such anoffer, in the face of the prevailing facts, anathema to the underlying principles which givelife to our labor statutes because it would be tantamount to likening an employer -employeerelationship to a salesman and a purchaser of a commodity. It is an archaic abomination.To quote what has been aptly stated by former Governor General Leonard Wood in hisinaugural message before the 6

thPhilippine Legislature on October 27, 1922 "labor is

neither a chattel nor a commodity, but human and must be dealt with from the standpointof human interest."

23

As has been said: "We do not treat our workers as merchandise and their right to securityof tenure cannot be valued in precise peso-and-centavo terms. It is a right which cannot beallowed to be devalued by the purchasing power of employers who are only too willing tobankroll the separation pay of their illegally dismissed employees to get rid of them."

24This

right will never be respected by the employer if we merely honor it with a price tag. Thepolicy of "dismiss now and pay later" favors moneyed employers and is a mockery of the

right of employees to social justice.25

WHEREFORE, in view of all the foregoing, the petition is GRANTED. The Decision of theCourt of Appeals in CA-G.R. SP No. 53521 dated April 10, 2002, and the Resolution datedDecember 11, 2002 denying petitioners Motion for Reconside ration, are SET ASIDE. Thedecision of the National Labor Relations Division dated February 20, 1998 isREINSTATED. Accordingly, petitioners dismissal is declared illegal, and respondent isordered to reinstate him to his former or equivalent position, wi th full backwages computedfrom April 1, 1996 up to his actual reinstatement. Respondent is likewise ordered to paypetitioner the sum equivalent to ten percent (10%) of his total monetary award asattorneys fees.

SO ORDERED.
http://www.lawphil.net/judjuris/juri1998/jul1998/gr_107693_1998.htmlhttp://www.lawphil.net/judjuris/juri1998/jul1998/gr_107693_1998.html


7/21


Manila

SECOND DIVISION

G.R. No. 120384 January 13, 2004

PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION, petitioner-appellant,vs.PHILIPPINE INFRASTRUCTURES, INC., PHILIPPINE BRITISH ASSURANCE CO., INC., THE

SOLID GUARANTY, INC., B.F. HOMES, INC., PILAR DEVELOPMENT CORPORATION andTOMAS F. AGUIRRE, respondents-appellees.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed byPhilippine Export and Foreign Loan Guarantee Corporation. Petitioner corporation seeks to setaside the Decision

1of the Court of Appeals dated August 31, 1994, dismissing CA-G.R. SP No.

31483; the Resolution dated May 18, 1995 denying petitioners motion for reconsideration; theOrder of the Regional Trial Court (Branch 29) of Manila, dated December 7, 1992, dismissingCivil Case No. 86-38169

2and the Order dated April 12, 1993 denying the motion for

reconsideration of said dismissal order.

The antecedent facts are as follows:

The case was commenced at the Regional Trial Court on October 30, 1986, upon thefiling by herein petitioner of a complaint for collection of sum of money against hereinrespondents Philippine Infrastructures, Inc. (PII for brevity), Philippine British

Assurance Co., Inc. (PBAC), The Solid Guaranty, Inc. (Solid), B.F. Homes, Inc. (BFHomes), Pilar Development Corporation (PDC) and Tomas B. Aguirre (Aguirre). Thecomplaint alleges that: petitioner issued five separate Letters of Guarantee in favor ofthe Philippine National Bank (PNB) as security for various credit accommodationsextended by PNB to respondent PII; respondents PII, BF Homes, PDC and Aguirreexecuted a Deed of Undertaking binding themselves, jointly and severally, to pay orreimburse petitioner upon demand such amount of money or to repair the damages,losses or penalties which petitioner may pay or suffer on account of its guarantees; assecurity for prompt payment by respondent PII, the latter submitted to petitioner,surety and performance bonds issued by respondents PBAC and Solid; on April 24,1985, the PNB called on the guarantees of petitioner, and so, the latter demandedfrom respondent PII the immediate settlement of P20,959, 529.36, representing the

aggregate amount of the guarantees of petitioner called by PNB and the further sumof P351,517.57 representing various fees and charges; PII refused to settle saidobligations; petitioner likewise demanded payment from respondents Solid and PBACbut they also refused to pay petitioner; and because of the unjustified refusal ofrespondents to comply with their respective obligations, petitioner was constrained tosecure the services of counsel and incur expenses for the purpose of prosecuting itsvalid claims against the respondents. It is prayed in the complaint that judgment berendered ordering respondents PII, BF Homes, PDC and Aguirre to pay petitioner theamount of P21,311,046.93 plus interest and penalty charges thereon, orderingrespondents Solid and PBAC to pay P5,758,000.00 and P9,596,000.00, respectively,under their surety and/or performance bonds and ordering respondents to paypetitioner the sums of P2,000,000.00 as attorneys fees and expenses of litigation andP50,000.00 as exemplary damages.

Respondent BF Homes filed a Motion to Dismiss3

on the ground that it is undergoing

rehabilitation receivership in the Securities and Exchange Commission (SEC) and pursuant toP.D. 902-A, the trial court has no jurisdiction to try the case. Respondent PII also filed a Motion

to Dismiss4

on the ground that the complaint states no cause of action since it does not allegethat petitioner has suffered any damage, loss or penalty because of the guarantees petitionerhad extended for and on behalf of respondent PII.

The other respondents filed their respective responsive pleadings.

On June 10, 1987, Judge Roberto M. Lagman issued an Order5

suspending the case only asagainst respondent BF Homes and denying respondent PIIs motion to dismiss. Thereafter,hearing on the merits ensued. On January 21, 1992, petitioner presented Rosauro Termulo, thetreasury department manager of petitioner, who testified that the amount of P19,035,256.57 waspaid on July 28, 1990 by petitioner to the PNB through the account of the National Treasury tocover the principal loan and interests, as guaranteed by petitioner; and, Exhibit "LL," a debitmemo issued by the PNB, showing that the latter was paid by the National Treasurer in behalf ofpetitioner corporation. Consequently, on February 19, 1992, petitioner filed a Motion to AmendComplaint to Conform to Evidence

6pursuant to Section 5, Rule 10 of the Revised Rules of

Court, seeking to amend Paragraph 17 and the pertinent portion of the prayer in the complaint,to read as follows:

17. Because of the unjustified refusal of the defendants to comply with their respectiveobligations, the plaintiff as guarantor has been constrained to pay the PhilippineNational Bank thru the account of the National Treasury the amount of NineteenMillion Thirty-five Thousand Two Hundred Fifty-six and 57/100 (P19,035,256.57) onJuly 28, 1990 representing payment of principal loan of P12,790,094.83 and interest ofP6,245,111.54 due March 16, 1987 on the Philippine Infrastructure, Inc./Philguarantyloan under the PNB Expanded Loan Collection Program; and which amount wasdeducted from the equity share of the National Government in Philguarantee. In viewof defendants unwarranted failure and refusal to settle their respective accountabilities

plaintiff was likewise constrained to secure the services of counsel and incur expensesin the process of prosecuting its just and valid claims against the defendants;accordingly, the defendants should be held liable, jointly and severally, to pay theplaintiff attorneys fees and expenses of litigation in the amount of P2,000,000.00 orabout ten (10%) percent of the guaranteed obligations.

. . .

PRAYER

. . .

(a) Ordering defendant PII, BF Homes, PILAR and AGUIRRE to pay plaintiff, jointlyand severally, the amount of P19,035,256.57 plus P351,517.57 extension guaranteefees and amendment fees, plus interests and penalty charges thereon;

. . .7

Acting on the motion to amend, the trial court, at that time presided by Judge Joselito J. DelaRosa, issued the assailed Order dated December 7, 1992,

8dismissing the case without

prejudice on the ground of failure of the complaint to state a cause of action, thus in effect,reversing the Order dated June 10, 1987 issued by Judge Lagman five years earlier. Petitionersmotion for reconsideration of the order of dismissal was denied by Judge de la Rosa per hisOrder

9dated April 12, 1993.

On June 9, 1993, a petition for review on certiorari was filed by petitioner against the RegionalTrial Court with this Court. On June 23, 1993, the Court issued a Resolution

10which reads:

Considering that under Section 9 of Batas Pambansa Blg. 129, the Intermediate Appellate Court(Court of Appeals) now exercises exclusive appellate jurisdiction over all final judgments,decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,instrumentalities, boards or commissions, the Court Resolved to REFERthis case to the Courtof Appeals, for disposition.

The Court of Appeals re-docketed the petition as CA-G.R. SP No. 31483.


8/21


9/21

respective evidence. The Court did not consider the allegation of this affirmative defense in theanswer as an objection to evidence presented by the plaintiffs. Furthermore, the Court ruled that:

The presentation of the contrariant evidence for and against imputations undoubtedlycured, clarified or expanded, as the case may be, whatever defects in the pleadings orvagueness in the issues there might have been in the amended complaint. . . .

It is settled that even if the complaint be defective, but the parties go to trial thereon,and the plaintiff, without objection, introduces sufficient evidence to constitute theparticular cause of action which it intended to allege in the original complaint, and thedefendant voluntarily produces witnesses to meet the cause of action thusestablished, an issue is joined as fully and as effectively as if it had been previously

joined by the most perfect pleadings. Likewise, when issues not raised by thepleadings are tried by express or implied consent of the parties, they shall be treatedin all respects as if they had been raised in the pleadings.

18

Evidently, herein respondents failure to object to the evidence at the time it is pres ented in courtis fatal to their cause inasmuch as whatever perceived defect the complaint had was cured bythe introduction of petitioners evidence proving actual loss sustained by petitioner due topayment made by it to PNB.

Thus, the contention of respondents that the amendment would introduce a subsequentlyacquired cause of action as there was none at the time the original complaint was filed, isuntenable.

Furthermore, petitioners cause of action against respondents stemmed from the obligation ofrespondents PII, BF Homes, PDC and Aguirre under their Deed of Undertaking that was securedby the surety and performance bonds issued by respondents PBAC and Solid. Said Deed ofUndertaking, which was annexed to and made an integral part of the complaint, provides asfollows:

. . .

NOW, THEREFORE, for and in consideration of the foregoing premises, theOBLIGOR [PII] and CO-OBLIGORS [BF HOMES, PILAR, AGUIRRE] hereby promise,undertake and bind themselves to keep the OBLIGEE [PETITIONER] free andharmless from any damage or liability which may arise out of the issuance of itsguarantee referred to in the first "whereas" clause. By these presents, the OBLIGORand CO-OBLIGORS further bind themselves, jointly and severally, to pay or reimburseon demand, such amount of money, or repair the damages, losses or penalties whichthe OBLIGEE may pay or suffer on account of the aforementioned guarantees. TheOBLIGOR and CO-OBLIGORS further undertake to comply with and be bound by theaforementioned terms and conditions enumerated in the attached Annex "A" and toperform such other acts and deeds which the OBLIGEE may impose for theimplementation of the aforementioned guarantees.

It is a condition of this instrument that failure of the OBLIGOR and CO-OBLIGORS tocomply with this undertaking and to make good the performance of the otherobligations herein undertaken and/or promised, shall be sufficient cause for theOBLIGEE to consider such failure as an event of default which shall give to theOBLIGEE the right to take such action against the OBLIGOR and/or CO-OBLIGORSfor the protection of the OBLIGEEs interests.

. . .19

A reading of the foregoing provisions of the contract, specially the phrase "the OBLIGOR andCO-OBLIGORS hereby promise, undertake and bind themselves to keep the OBLIGEE freeand harmless from any damage or liability which may arise out of the issuance of itsguarantee referred to in the first whereas clause," shows that the Deed of Undertaking isactually an indemnity against liability. In Cochingyan, Jr. vs. R & B Surety and Insurance Co.,Inc.,20 the Court held thus:

The petitioners lose sight of the fact that the Indemnity Agreements arecontracts of indemnification not only against actual lossbut against l iabi l i ty aswell. While in a contract of indemnity against loss an indemnitor will not beliable until the person to be indemnified makes payment or sustains loss, in acontract of indemnity against liability, as in this case, the indemnitors liabilityarises as soon as the liability of the person to be indemnified has arisen withoutregard to whether or not he has suffered actual loss.

. . .

(3) Petitioners are indemnitors of R & B Surety against both payments to and liabilityfor payments to the PNB. The present suit is therefore not premature despite the factthat the PNB has not instituted any action against R & B Surety for the collection of itsmatured obligation under the Surety Bond.

21[Emphasis supplied]

In the present petition, petitioner had become liable to pay the amounts covered by saidguarantees when, as the original complaint alleges, the PNB called upon said guarantees.Respondents obligation under the Deed of Undertaking to keep petitioner free and harmlessfrom any damage or liability then became operative as soon as the liability of petitioner aroseand there was no need for petitioner to first sustain actual loss before it could have a cause ofaction against respondents. The mere inclusion in petitioners original complaint of the allegationthat the PNB had already called on the guarantees of petitioner is sufficient to constitute a causeof action against respondents. Clearly therefore, the original complaint, by itself, stated a validcause of action.

Verily, it was patently erroneous on the part of the trial court not to have allowed theamendments as to make the complaint conform to petitioners evidence that was presented

without any objection from respondents. The trial court likewise patently acted with grave abuseof discretion or in excess of its jurisdiction amounting to lack of jurisdiction when, acting on amere motion to amend the complaint, it erroneously dismissed the complaint on the ground offailure to state a cause of action. Consequently, the Court of Appeals committed a reversibleerror in sustaining the trial court.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated August31, 1994 and its Resolution dated May 18, 1995 are REVERSED and SET ASIDE; and theOrders of the Regional Trial Court (Branch 29), Manila, dated December 7, 1992 and April 12,1993 are NULL and VOID and SET ASIDE.

Let the original records of Civil Case No. 86-38169 be REMANDED to the Regional Trial Court(Branch 29), Manila, for continuation of the trial on the merits. The presiding judge is directed toproceed with immediate dispatch upon receipt of the records of the case.

Treble costs against private respondents.

SO ORDERED.


10/21


Manila

EN BANC

G.R. No. L-953 September 18, 1947

EL PUEBLO DE FILIPINAS, querellante-apelado,vs.PEDRO MARCAIDA, acusado-apelante.

D. Victoriano H. Endaya en representacion del apelante.El Procurador General Auxiliar Sr. Ruperto Kapunan,Jr., y el Procurador Sr.Esmeraldo Umali en representacion del Gobierno.

PABLO, J .:

Satrata de una apelacion interpuesta por Pedro Marcaidaque fue condenado por eldelito de traicion, despues de lavista correspondiente, a la pena de reclusionperpetua con las accesorias prescritas por la ley y al pago de una multa de P10,000 ylas costas del juico. El apelante senala tres errores en que incurrio, segun el, elTribunal del Pueblo.1.o Al declarar que la cuidadania y lealtad del acusado estabansuficientemente probados; 2.o Al dar credito al testimonio de los testigos de laacusacion; y 3.o Al declarar culpable al acusado del cargo No. 3.

La defensa contiende que las pruebas obrantes en autos no prueban la cuindadaniafilipina y alianza del acusado algobierno del Commonwealth. La transcripcion de lasnotas taquigraficas dice aue el acusado es natural de Lopez (a native of Lopez). Ladefensa alega que el testigo declaro en Tagalog diciendo: "Taga Lopez" y no dijo "aypanganak sa Lopez." No aperece tal cosa en el expediente. Si fuese cierto, esextrao que el abogado no haya pedido el Juzgadoque ordenase al taquigrafo quehiciera constar asi en sus notas. Cuando una parte no esta conforme con latraduction de una declaracion de un testigo debe pedir que se haga constar en autosne solamente la traduccion sino tambien la declaracion original traducida; en sudefecto, sepresumira correcta la traduccion del interprete oficial.

Pero aun admitiendo dice la defensa que el acusado fuese natural de Lopez,provincia de Quezon, su cuidadaniafilipina no esta debidamente probada. En apoyode esta contencion invoca el articulo IV de la Constitucion, que entro en vigor el 15

de noviembre de 1935. (Articulo XVI, seccion 6, Constitucion.) La vista de esta causatuvo lugarel 15 de julio de 1946. Si el acusado he nacido, por ejemplo, un diadespues que entro en vigor la Constitucion, en el dia de la vista no tendria mas quediez aos y ocho mesesde edad, y entonces cometio el delito a la edad de unosnueve aos. Aunque no consta en autos la fecha de sunacimiento, estamos segurossin embargo que no era un nio de tal edad cuando entro en vista. No le hubieraquerallado el fiscal de un delito tan grave. Indudablemente, nacio antes y no despuesde entrar en vigor la Constitucion. No puede acogerse, por tanto, a sus disposiciones.

El articulo 2 de la Ley Jones aprobada por el Congreso el 29 de agosto de 1916,dispone asi: "Que todos los habitantes de las Islas Filipinas que el once de abril demilochocientos noventa y nueve eran subditos espaoles y quea la sazon residian endichas Islas, y sus hijos nacidos con posterioridad a aquella fecha, seranconsiderados y tenidos como cuidadanos de las Islas Filipinas, exceptuandose aaquellos que hayan preferido conservar su lealtad a laCorona de Espaa, de acuerdo

con las disposiciones del Tratado de Paz entre los Estados Unidos y Espaa, firmadoen Paris el diez de diciembre de mil ochocientos noventa y ocho, y con excepcion deaquellos otros que despues de dicha fecha se hayan cuidadanos de algun otro pais:... .

El articulo 4 de la ley constitutiva de Filipina de 1.o de julio de 1902, es del tenorsiguiente: "Todos los habitantes de los Islas Filipinas que residan en ellas y que elonce deabril de mil ochocientos noventa y nueve eran subditos espaoles residentesen dichas Islas y sus hijos nacidos con posterioridad a aquella fecha, seranconsiderados y tenidos como cuidadanos de las Islas Filipinas y como tales

conderecho a la proteccion de los Estados Unidos, exceptuandose aquellos quehayan eligado conservar su lealtad a la Corona de Espana, de acuerdo con lasdisposiciones del Tratado de Paz entre los Estados Unidos y Espaa firmado enParis el diez de diciembre de mil ochocientos noventa y ocho."

El acusado se llama Pedro Marcaida. Por su nombre y apellido, puede ser filipino,espaol o sudamericano. Nohay prueba de que era residente de Filipinas y subditoespaol el 11 de abril de 1899. Si era residente y no era subdito espaol no podiaadquirir la cuidadania filipina porque continuaria siendo extranjero.

Si era subdito espaol y residia en las Islas Filipinas el 11 de abril de 1899,automaticamente se hizo cuidadanofilipino a menos que haya optado por conservarla cuidadania espaol; pero como no hay pruebas en tal sentido, la presuncion esque el es filipino.

Si nacio despues del 11 de abril de 1899 de padres que eran subditos espaolseguiria la nacionalidad de aquellos: espaol, si sus padres han querido de conservarsu lealtad ala Corona de Espaa, y filipino, si optaron por perderla. No hay pruebapresentada en un sentido u otro: puede serentonces espaol o filipino.

Si nacio despues del 11 de abril de 1899 de padres filipinos es filipinos.

Puede suceder que descendiente de un sudamericano que se haya establecido en laprovincia de Quezon despues de la firma del Tratado de Paris; si su padre no quisoacogerse a las disposiciones de la ley de naturalizacion, entonces el acusado esextranjero: segue la nacionalidad de su padre.

Si es descendiente de un cuidadano espaol que haya comenzado a residir enFilipinas despues del Tratado de Paris, continuaria siendo espaol a menos que se

haya naturalizado. Tampoco hay pruebas en este sentido; entonces es espaol,extranjero.

Paz Chua Uang por el mero hecho de haber nacido en Filipinas de fue declaradafilipina porque no era sibdita espaola o hija de un subdito espaol el 11 de abril de1899. (Chua contra Secretario del Trabajo, 68 Phil., 649.) Esta doctrina ha revocadoimplicitamente la de Roa contraAdministrador Insular de Aduanas (23 Jur. Fil., 321) yotras posteriores. (Vao contra Administrador Insularde Aduanas, 23 Jur. Fil., 491;Estados Unidos contra Ong Tianse, 29 Jur. Fil., 352; Estados Unidos contraAng, 36Jur. Fil., 915; Go Julian contra Gobierno de las Islas Filipinas, 45 Jur. Fil., 301; Hawcontra Administrador Insular de Aduanas, 59 Jur. Fil., 646.) En el asunto de Torres yGallofin contra Tan Chim se adopto otra vezla teoria sentada en el asunto de Roa,pero el Tribunal estaba dividido en la proporcion de cuatro por tres. ElactualPresidente del Tribunal y el Magistrado Imperial eran disidentes. El magistrado

Villareal opinaba que el simple nacimiento en filipinas no le hace a uno cuidadanofilipino; pero concurrio en la parte dispositiva porque ladoctrina de Roa se estuvo


11/21

aplicando por mas de 20 aos. El principio de stare decisis es la razon principal quemovio a la mayoria a volver a adoptar la teoria de Roa. En su disidencia, el actualPresidente del Tribunal decia:

The majority says nothing in support of the correctness of theRoa ruling, andseeks simply to justify its continued observance upon the fact that it "hadbeen adhered to and accepted for more than 20 years before the adoption ofthe Constitution," and that not "only this Court but also inferior courts hadconsistently and invariably followed it; the executive and administrativeagencies of theGovernment had theretofore abide by it; and the general

public had acquiesced in it. I do not yield to this judicial policy. If we inducedthe Government and the public to follow and accept an error for some time, itdoes not seem to be a good policy to continue inducing them to follow andaccept the same error once discovered. The rule of stare decisis does notapply to the extent of perpetuating an error (15 C. J., p. 918.) It is the duty ofevery court to examine its own decisions without fear and to revise themreluctance (Bakervs. Lorillard, 4 N. Y., 257.) As was well said in a case, "Ihold itto be the duty of this court freely to examine its own decisions, and,when satisfied that it has fallen into a mistake, to correct the error byoverruling its own decision. An acknowledged error must be more venerableand more inveterate than it can be made by any single decision before it canclaim impunity upon the principle of stare decisis." (Leavitt vs. Blatchaford,17 N. Y., 521, 523.)"Precedents are to be regarded as the great storehouse

of experience; not always to be followed, but to be looked to as beaconlights in the progress of judicial investigation." (Per Bartley, C. J., in Leavittvs. Morrow, 6 Ohio St., 71, 78.) Their "authority must often yield to the forceof reason, and to the paramount demands of justice as well as to thedecencies of civilized society, and the law ought to speak with a voiceresponsive to these demands." (Norton vs. Randolph, 176 Ala., 381, 383, 58S. 283.)" (Torres y Gallofin contra Tan Chim, 69 Phil., 518.)

En los asuntos de Tan Chong contra Secretario del Trabajo, p. 249, ante, y LamSwee Sang contra Commonwealth de Filipinas, p. 249, ante, hemos declaradodefinitivamente abandonada esta teoria y adoptado la deChua contra Secretario delTrabajo. La razon es sencilla. La teoria de jus solien Estados Unidos es absoluta:elsimple nacimiento en Americano segun su constitucion y la decision en UnitedStates vs. Wong Kim Ark (169 U. S.,649). La constitucion americana nunca entro en

vigor en Filipinas. La teoria de jus solien Filipinas de acuerdo con la ley de 1.o dejulio de 1902, aprobada por el Congreso Americano que, segun el Tratado de Paris,es el que ha dedeterminar la condicional: que el nacido en Filipinas esconsideradocuidadano filipino si era residente y subdito espaol o hijo de un residente y subditoespaol en 11 de abril de 1899. Si era extranjero o hijo de un extranjero en aqeullafecha no puede ser cuidadano filipino.

El acusado pues, de acuerdo con las pruebas obrantes enautos, puede ser filipino oextranjero.

Bajo la ley de traicion No. 292 de la Comision Civil, todo residente en Filipinas que,debiendo fidelidad a los EstadosUnidos o al Gobierno de las Islas Filipinas, lesheciere guerra o formare causa comun con sus enemigos ayudandoles ysocorriendoles dentro o fuera de dichas Islas, cometia el delito traicion. El articulo 1.ode esta ley es unasimple transplantacion de las dispocisiones del Codigo CriminalAmericano que es del tenor siguente: "Whoever,owing allegiance to the United

States, levies war against them or adhere to their enemies, giving them aid andcomfort within the United States or elsewhere, is guilty of treason." (Sec. 1, Crim.Code: R. S., sec. 5331; Mar. 4,1909, c. 321, sec. 1, 35 Stat., 1088.)

"Treason against the United States," dice la Constitucion Americana, "shall consistonly in levying against them,or in adhering to their Enemies, giving them aid andcomfort." (Section 3 [1], Article III.)

En Americana tanto los extranjros como los nacionales pueden cometer el delito detraicion. Los extranjeros deben lealtad al gobierno de America durante el tiempo de

su residencia. (Carlisle vs. U. S., 21 Law. ed., 426; Raditch vs. Hutchins, 24 Law. ed.,409.) Los ingleses sostienen la misma teoria. (De Jager vs. Attorney General ofNatal, 8 Ann. Cas., 76.) No es necesario ser cuidadano americano para que puedancometer el delito de traicion. Pero el Codigo Penal Revisado he excluido a losextranjeros, solamente los nacionales pueden cometerlo. El articulo 114 dice asi: "Elque, debiendo fidelidad a los Estados Unidos o al Gobierno de las Islas Filipinas,sinser de nacionalidad extranjera, les hiciere la guerra o formare causa comun consus enemigos, ayudandoles o socorriendoles dentro o fuera de dichas Islas, seracastigado con las penas de reclusion temporala muerte y multa que no exceda deviente mil pesos." La orden ejecutiva No.44, reconociendo que no era posible bajo elCodigo Penal Revisado castigar por el delito de traicion a los extranjeros residentesen Filipinas que han ayudado a los enemigos,enmendo el articulo 114, aadiendo unparrafo del tenor siguente: "Likewise, any alien, residing in the Philippine Islands, whocommits acts of treason as defined in paragraph 1 of this article shall be punished by

prision mayorto death and shall pay a fine not to exceed 20,000 pesos." (ExecutiveOrder No. 44, May 31, 1945.)

Si el acusado es filipino, debe lealtad al Gobierno del Commonwealth y debe sercondenado por traicion; pero sies extranjero no puede ser castigado por actoscometidos por el antes de la enmienda del articulo 114 del CodigoPenal Revisado.Como las pruebas no establecen de unamanera clara que el acusado es filipino, nopuede ser responsable criminalmente del delito de traicion.

Se revoca la sentencia apelada. Se ordena su inmediata libertad con las costas deoficio.


12/21


Manila

FIRST DIVISION

G.R. No. 137980 June 20, 2000

TALA REALTY SERVICES CORP., petitioner,vs.BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent.

YNARES-SANTIAGO, J. :

The instant Petition presents a classic example where the application of the principleofstare decisis comes into play.

The facts may be summarized as follows:

Sometime in 1979, respondent Banco Filipino Savings and Mortgage Bank faced alegal problem with respect to its branch site holdings. Republic Act No. 337, otherwiseknown as the General Banking Act, provides that banks may only invest in real estateup to fifty percent (50%) of their net worth.

1This ceiling on real estate holdings posed

a bar to respondent's plans for expansion and to address the problem, its majorstockholders agreed to set up an entity to which its existing branch sites may beunloaded. The said entity would also acquire new branch sites for it, with all such

branch sites, including those unloaded, to be leased to respondent bank. It was thusthat petitioner was organized, its name TALA being an acronym of four (4) of themajor stockholders and directors of respondent, namely: Antonio Tiu, Tomas B.Aguirre, Nancy Lim Ty and Pedro B. Aguirre.

On August 25, 1981, pursuant to the foregoing arrangement, respondent sold eleven(11) real estate properties housing its branch sites to petitioner, including the Davaobranch site subject of the instant suit. Immediately following the sale, petitioner leasedthe same branch sites to respondent. According to respondent, petitioner was merelyholding out such properties for it for a three percent (3%) per annum add-on to theircarrying cost. Respondent further claims that it was part of their agreement that thesaid properties would be returned to it at its pleasure at the same transfer price.

At present, therefore, there stand pending cases filed by respondent against

petitioner for reconveyance of all such branch sites held by petitioner on the groundthat the latter is a mere trustee of respondent.

The present Petition, however, stems from an action for ejectment wherein the issuewas which of two (2) different contracts of lease presented by each party governsthem. For its part, petitioner presents an 11-year amended lease contract allegedlyexecuted on August 25, 1981 before Notary Public Generoso Fulgencio. On the otherhand, respondent presents a 20-year lease contract executed on the same date,August 25, 1981, but before Notary Public Jose Dimaisip.

The lease arrangement subject of this case also covered the other branch sites heldby petitioner in other locations, i.e., Malabon, Sta. Cruz, R. Hidalgo, Paraaque,Marikina, Malolos, Cabanatuan, Lucena, Urdaneta, La Union, Iloilo and Cotabato.Aside from the present case, therefore, other similar cases for ejectment have beenfiled where, ultimately, the question of which among the two lease contracts is validbecomes an issue.

Under the terms of the eleven-year amended contract presented by petitioner, thelease expired on August 31, 1992. Petitioner claims that thereafter, the lease wasextended on a month-to-month basis on the condition that whatever terms andconditions are agreed upon would retroact to September 1, 1992. The parties'negotiations failed to yield any results, whereupon petitioner informed respondent thatthe rental rates shall be those it submitted to the latter, which were based on a studyby the Asian Appraisal Co., Inc., retroactive to September 1, 1992. More particularly,rates were as follows: Two Hundred Thousand Eight Hundred Forty Pesos(P200,840.00) monthly with a rental escalation of ten percent (10%) per year, withfour months deposit, four months advance deposit, and a Five Hundred ThousandPeso (P500,000.00) goodwill.

Respondent refused to comply with these terms. Instead, it continued to pay rent inthe old monthly rate until March 31, 1994, when it totally ceased paying any rent. Thisprompted petitioner to demand from respondent, in a letter dated April 14, 1994,payment of its accrued rentals. Petitioner also gave notice to respondent that at theend of the month, the month-to-month lease over the premises would no longer berenewed. This was followed by a letter, dated May 2, 1994, demanding thatrespondent pay its obligations under the lease and vacate the premises.

On March 27, 1995, petitioner instituted a Complaint for Ejectment againstrespondent before the Municipal Trial Court of Davao City, docketed as Civil CaseNo. 2109-95. On June 5, 1995, respondent filed its Answer. After the submission ofthe parties' respective Position Papers, the court a quo rendered its Decision on July

20, 1995,2dismissing the Complaint on the ground of lack of jurisdiction, after findingthat the real issue, i.e., which of the two contracts of lease was controlling, was notcapable of pecuniary estimation.

On appeal, the Regional Trial Court of Davao City affirmed the decision in toto onJune 13, 1996.

3With the denial of its Motion for Reconsideration, petitioner filed a

Petition for Review with the Court of Appeals,4docketed as CA-G.R. SP No. 48667.

On January 12, 1999, the Court of Appeals rendered its now questioned Decision,5

holding that both lower courts erred in refusing to exercise jurisdiction over the casewhen the issue of validity of lease contract is intertwined with the issue of possession.However, it dismissed the Petition to maintain judicial stability and consistency, itappearing that in other similar ejectment suits brought before the Court of Appeals,the twenty-year lease contract presented by respondent had been upheld. Petitioner's

Motion for Reconsideration was granted in that respondent was ordered to payunpaid rentals to petitioner.

6Subsequently, however, on Motion for Reconsideration

of respondent, the Court of Appeals reversed itself and revoked its order for paymentof back rentals.

7

Petitioner now seeks a reversal of the Decision of the Court of Appeals upon thefollowing grounds

I

THE HONORABLE COURT OF APPEALS ERRED IN CONSIDERING THERULING OF THE COURT IN CA-G.R. NO. 39104 AS THE LAW OF THECASE BETWEEN HEREIN PARTIES.

II
http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt1http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt1http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt1http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt2http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt2http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt2http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt3http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt3http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt3http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt4http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt4http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt4http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt5http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt5http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt5http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt6http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt6http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt6http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt7http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt7http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt7http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt7http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt6http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt5http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt4http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt3http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt2http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt1


13/21

THE HONORABLE COURT BELOW ERRED IN NOT EJECTINGRESPONDENT FROM THE LEASED PREMISES.

8

In its favor, respondent argues that "only decisions of the Supreme Court establishjurisprudence or doctrines." And that is exactly what we are faced with at present.

On February 17, 2000, the Second Division of this Court, through Mr. Justice SabinoR. De Leon, Jr., rendered a Decision in G.R. No. 129887 between the same parties,this time involving respondent's Urdaneta, Pangasinan branch, finding the eleven-year lease contract presented by petitioner as a forgery and consequently upholding

the validity of the twenty-year lease contract. Resolving this identical issue, theDecision states, to wit

Second. Petitioner Tala Realty insists that its eleven (11)-year lease contractcontrols. We agree with the MTC and the RTC, however, that the eleven(11)-year contract is a forgery because (1) Teodoro O. Arcenas, thenExecutive Vice-President of private respondent Banco Filipino, deniedhaving signed the contract; (2) the records of the notary public who notarizedthe said contract, Atty. Generoso S. Fulgencio, Jr., do not include the saiddocument; and (3) the said contract was never submitted to the CentralBank as required by the latter's rules and regulations (Rollo, pp. 383-384.).

Clearly, the foregoing circumstances are badges of fraud and simulation thatrightly make any court suspicious and wary of imputing any legitimacy andvalidity to the said lease contract.

Executive Vice-President Arcenas of private respondent Banco Filipinotestified that he was responsible for the daily operations of said bank. Hedenied having signed the eleven (11)-year contract and reasoned that it wasnot in the interest of Banco Filipino to do so ( Rollo, p. 384). That fact wascorroborated by Josefina C. Salvador, typist of Banco Filipino's LegalDepartment, who allegedly witnessed the said contract and whose initialsallegedly appear in all the pages thereof. She disowned the said marginalinitials (Id., p. 385).

The Executive Judge of the RTC supervises a notary public by requiringsubmission to the Office of the Clerk of Court of his monthly notarial reportwith copies of acknowledged documents thereto attached. Under thisprocedure and requirement of the Notarial Law, failure to submit such

notarial report and copies of acknowledged documents has direconsequences including the possible revocation of the notary's notarialcommission.

The fact that the notary public who notarized petitioner Tala Realty's allegedeleven (11)-year lease contract did not retain a copy thereof for submissionto the Office of the Clerk of Court of the proper RTC militates against the useof said document as a basis to uphold petitioner's claim. The said allegedeleven (11)-year lease contract was not submitted to the Central Bankwhose strict documentation rules must be complied with by banks to ensuretheir continued good standing. On the contrary, what was submitted to theCentral Bank was the twenty (20)-year lease contract.

Granting arguendo that private respondent Banco Filipino deliberately

omitted to submit the eleven (11)-year contract to the Central Bank, we donot consider that fact as violative of the res inter alios acta aliis non nocet

(Section 28, Rule 130, Revised Rules of Court provides, viz.: "Sec. 28.Admission by third party The rights of a party cannot be prejudiced by anact, declaration or omission of another, except as hereinafter provided.";Compania General de Tabacos v. Ganson, 13 Phil. 472, 477 [1909]) rule inevidence. Rather, it is an indication of said contract's inexistence.

It is not the eleven (11)-year lease contract but the twenty (20)-year leasecontract which is the real and genuine contract between petitioner TalaRealty and private respondent Banco Filipino. Considering that the twenty(20)-year lease contract is still subsisting and will expire in 2001 yet, Banco

Filipino is entitled to the possession of the subject premises for as long as itpays the agreed rental and does not violate the other terms and conditionsthereof (Art. 1673, New Civil Code).

In light of the foregoing recent Decision of this Court, we have no option but to upholdthe twenty-year lease contract over the eleven-year contract presented by petitioner.It is the better practice that when a court has laid down a principle of law asapplicable to a certain state of facts, it will adhere to that principle and apply it to allfuture cases where the facts are substantially the same. "Stare decisis et non quietamovere."

9

That the principle ofstare decisis applies in the instant case, even though the subjectproperty is different, may be gleaned from the pronouncement in Negros NavigationCo., Inc. vs. Court of Appeals,

10to wit

Petitioner criticizes the lower court's reliance on the Mecenas case, arguingthat although this case arose out of the same incident as that involved inMecenas, the parties are different and trial was conducted separately.Petitioner contends that the decision in this case should be based on theallegations and defenses pleaded and evidence adduced in it or, in short, onthe record of this case.

The contention is without merit. What petitioner contends may be true withrespect to the merits of the individual claims against petitioner but not as tothe cause of the sinking of its ship on April 22, 1980 and its liability for suchaccident, of which there is only one truth. Otherwise, one would besubscribing to the sophistry: truth on one side of the Pyrenees, falsehood onthe other!

Adherence to the Mecenas case is dictated by this Court's policy ofmaintaining stability in jurisprudence in accordance with the legal maxim"stare decisis et non quieta movere" (Follow past precedents and do notdisturb what has been settled.) Where, as in this case, the same questionsrelating to the same event have been put forward by parties similarlysituated as in a previous case litigated and decided by a competent court,the rule of stare decisis is a bar to any attempt to relitigate the same issue(J.M. Tuason & Corp. v. Mariano, 85 SCRA 644 [1978]). In Woulfe v.Associated Realties Corporation (130 N.J. Eq. 519, 23 A. 2d 399, 401[1942]), the Supreme Court of New Jersey held that where substantiallysimilar cases to the pending case were presented and applicable principlesdeclared in prior decisions, the court was bound by the principle of staredecisis. Similarly, in State ex rel. Tollinger v. Gill (75 Ohio App., 62 N.E. 2d

760 [1944]), it was held that under the doctrine of stare decisis a ruling isfinal even as to parties who are strangers to the original proceeding and not
http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt8http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt8http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt8http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt9http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt9http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt9http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt9http://www.lawphil.net/judjuris/juri2000/jun2000/gr_137980_2000.html#fnt8


14/21

bound by the judgment under the res judicata doctrine. The Philadelphiacourt expressed itself in this wise: "Stare decisis simply declares that, for thesake of certainty, a conclusion reached in one case should be applied tothose which follow, if the facts are substantially the same, even though theparties may be different" (Heisler v. Thomas Colliery Co., 274 Pa. 448, 452,118A, 394, 395 [1922]. Manogahela Street Ry, Co. v. Philadelphia Co., 350Pa. 603, 39 A. 2d 909, 916 [1944]; In re Burtt's Estate, 353 Pa. 217, 4 A. 2d670, 677 [1945]). Thus, in J. M. Tuason v. Mariano, supra, this Court reliedon its rulings in other cases involving different parties in sustaining thevalidity of a land title on the principle of "stare decisis et non quieta movere."(emphasis, Ours)

Here, therefore, even if the property subject of the Decision of G.R. No. 129887 islocated in Urdaneta, Pangasinan while that in the instant case is located in Davao, wecan very well apply the conclusion in G.R. No. 129887 that it is the twenty-year leasecontract which is controlling inasmuch as not only are the parties the same, but moreimportantly, the issue regarding its validity is one and the same and, hence, should nolonger be relitigated.

Petitioner is even barred from questioning our adherence to the ruling in G.R. No.129887 since it categorically declared in its Petition that the same was "likewise filedso that any favorable ruling in said petitions (referring to G.R. Nos. 129887 and132051) may be extended or made to apply in the instant case."

11Petitioner cannot

now complain that the ruling in G.R. No. 129887 regarding the validity of the twenty-

year lease contract is not binding in this case simply because the same is unfavorableto it.

Coming now to the issue of whether or not respondent should be ejected for non-payment of rentals, we do not agree with the ruling in G.R. No. 129887 that since theunpaid rentals demanded by petitioner were based on a new rate which it unilaterallyimposed and to which respondent did not agree, there lies no ground for ejectment. Insuch a case, there could still be ground for ejectment based on non-payment ofrentals. The recent case ofT & C Development Corporation vs. Court of Appeals

12is

instructional on this point. It was there cautioned that

The trial court found that private respondent had failed to pay the monthlyrental of P1,800.00 from November 1992 to February 16, 1993, despitedemands to pay and to vacate the premises made by petitioner. Even if

private respondent deposited the rents in arrears in the bank, this factcannot alter the legal situation of private respondent since the account wasopened in private respondent's name. Clearly, there was cause for theejectment of private respondent. Although the increase in monthly rentalsfrom P700.00 to P1,800.00 was in excess of 20% allowed by B.P. Blg. 877,as amended by R.A. No. 6828, what private respondent could have donewas to deposit the original rent of P700.00 either with the judicial authoritiesor in a bank in the name of, and with notice to, petitioner. As this Court heldin Uy v. Court of Appeals (178 SCRA 671, 676 [1989]):

The records reveal that the new rentals demanded since 1979 (P150.00 permonth) exceed that allowed by law so refusal on the part of the lessor toaccept was justified. However, what the lessee should have done was todeposit in 1979 the previous rent. This deposit in the Bank was made only in

1984 indicating a delay of more than four years.

From the foregoing facts, it is clear that the lessor was correct in asking forthe ejectment of the delinquent lessee. Moreover, he should be granted notonly the current rentals but also all the rentals in arrears. This is so even ifthe lessor himself did not appeal because as ruled by this Court, there havebeen instances when substantial justice demands the giving of the properreliefs." (Emphasis, ours).

While advance rentals appear to have been made to be applied for the payment ofrentals due from the eleventh year to the twentieth year of the lease, to wit

3. That upon the signing and execution of this Contract, the LESSEE shallpay the LESSOR ONE MILLION TWENTY THOUSAND PESOS ONLY(P1,020,000.00) Philippine Currency representing advance rental to beapplied on the monthly rental for the period from the eleventh to thetwentieth year,

1

the records show that such advance rental had already been applied for rent on theproperty for the period of August, 1985 to November, 1989.

14

Thus, when respondent stopped paying any rent at all beginning April, 1994, it gavepetitioner good ground for instituting ejectment proceedings.

15We reiterate the ruling

in T & C Development Corporation, supra, that if ever petitioner took exception to theunilateral or illegal increase in rental rate, it should not have completely stoppedpaying rent but should have deposited the original rent amount with the judicialauthorities or in a bank in the name of, and with notice to, petitioner. This

circumstance, i.e., respondent's failure to pay the rent at the old rate, does not appearin G.R. No. 129887. Thus, while we are bound by the findings of this Court's SecondDivision in that case under the principle of stare decisis, the fact that respondent'sfailure to pay any rentals beginning Ap

INTROLAW 7

Documents

Transcript of INTROLAW 7