STATCON DIGEST i

A. STATUTES STRICTLY CONSTRUED

Strict construction is construction according to the letter of a statue, which recognizes nothing that
is not expressed, takes the language used in its exact meaning and admits no equitable
consideration. It means that the scope of a statue shall not be extended or enlarged by implication,
intendment, or equitable consideration beyond the literal meaning of its terms.

PENAL LAWS
Penal statutes refer to those laws by which punishments are imposed for violation or
transgression of their provisions. It is a well-known rule of legal hermeneutics that penal or criminal
laws are strictly construed against the State and liberally in favor of the accused. Penal statutes
cannot be enlarged or exten dssffded or enlarged by implication, intendment, or equitable
consideration. The court must not bring cases within the provision of a statute that are not clearly
embraced by it, nor by a narrow, technical, or forced construction exclude cases from it that are
obviously within its provision.

INTESTATE ESTATE OF MANOLITA GONZALES VDA. DE CARUNGCONG V. PEOPLE OF

THE PHILIPPINES

FACTS:
Mediatrix Carungcong in her capacity as the duly appointed Administratrix of petitioner
intestate estate of her deceased mother Manolita Gonzales vda. de Carungcong, filed a
complaint-affidavit for estafa against her brother-in-law, William Sato, a Japanese national.

The Accused, William Sato, defrauded the then blind, and old Manolita Gonzales VDA.
De Carungcong to sign a Special Power of Attorney, in favor of Wendy Mitsuko Sato, his daughter.
He made Manolita believed that it only involved the taxes while the accused fully knew that the
document authorizes Wendy, a minor, to sell, assign, transfer, and otherwise dispose to another
person or entity all of their properties.

Sato moved to quash the Information, claiming that under Article 332 of the Revised Penal
Code, his relationship to the person allegedly defrauded, the deceased Manolita who was his
mother-in-law, was an exempting circumstance.

Article 332 of the Revised Penal Code provides:

ART. 332. Persons exempt from criminal liability. – No criminal, but only civil liability shall
result from the commission of the crime of theft, swindling, or malicious mischief
committed or caused mutually by the following persons:

1. Spouses, ascendants and descendants, or relatives by affinity in the same line;

 2. The widowed spouse with respect to the property which belonged to the deceased
spouse before the same shall have passed into the possession of another; and

3. Brothers and sisters and brothers-in-law and sisters-in-law, if living together.

The exemption established by this article shall not be applicable to strangers participating
in the commission of the crime. (emphasis supplied)

ISSUE:
WON is the accused within the scope of the Absolutely Cause of the provision.

RULING:

No. The provision of ART. 332 provides for an absolutely cause that only in theft, swindling
(or estafa), or malicious mischief. It limits the responsibility of the offender to civil liability and frees
him from criminal liability by virtue of his relationship to the offended party.

However, due to the information given, what the accused committed is not simple estafa
of a relative by affinity but complex crime of estafa through falsification of public documents.

Thus by inducing Manolita to sign the SPA, Sato made it appear that Manolita granted his
daughter Wendy a special power of attorney for the purpose of selling, assigning, transferring or
otherwise disposing of Manolita’s Tagaytay properties when the fact was that Manolita signed
and thumbmarked the document presented by Sato in the belief that it pertained to her taxes.
Indeed, the document itself, the SPA, and everything that it contained were falsely attributed to
Manolita when she was made to sign the SPA.

Statutory Construction:

AFFINITY is the relation that one spouse has to the blood relatives of the other spouse. It
is a relationship by marriage or a familial relation resulting from marriage. It is a fictive kinship, a
fiction created by law in connection with the institution of marriage and family relations.

Philippine jurisprudence has no previous encounter with the issue that confronts us in this
case. That is why the trial and appellate courts acknowledged the "dearth of jurisprudence and/or
commentaries" on the matter. In contrast, in the American legal system, there are two views on
the subject:

The first view (the terminated affinity view) holds that relationship by affinity terminates
with the dissolution of the marriage either by death or divorce which gave rise to the relationship
of affinity between the parties.
The second view (the continuing affinity view) maintains that relationship by affinity
between the surviving spouse and the kindred of the deceased spouse continues even after the
death of the deceased spouse, regardless of whether the marriage produced children or not.
 In dubio pro reo, - When in doubt, rule for the accused.

The rule applies when the court is faced with two possible interpretations of a penal
statute, one that is prejudicial to the accused and another that is favorable to him. The rule calls
for the adoption of an interpretation which is more lenient to the accused.

Lenity becomes all the more appropriate when this case is viewed through the lens of the
basic purpose of Article 332 of the Revised Penal Code to preserve family harmony by providing
an absolutory cause. Since the goal of Article 332(1) is to benefit the accused, the Court should
adopt an application or interpretation that is more favorable to the accused. In this case, that
interpretation is the continuing affinity view.

WHY IT CANNOT BE JUST ESTAFA OR FALSIFICATION?

While in estafa under Article 315(a) of the Revised Penal Code, the law does not require
that the document be falsified for the consummation thereof, it does not mean that the falsification
of the document cannot be considered as a necessary means to commit the estafa under that
provision.

The phrase "necessary means" does not connote indispensable means for if it did, then
the offense as a "necessary means" to commit another would be an indispensable element of the
latter and would be an ingredient thereof. In this case, the crime of falsification of public document,
the SPA, was such a "necessary means" as it was resorted to by Sato to facilitate and carry out
more effectively his evil design to swindle his mother-in-law through the use of the SPA.

“The situation would have been different if Sato, using the same inducement, had made
Manolita sign a deed of sale of the properties either in his favor or in favor of third parties. In that
case, the damage would have been caused by, and at exactly the same time as, the execution of
the document, not prior thereto. Therefore, the crime committed would only have been the simple
crime of estafa. On the other hand, absent any inducement (such as if Manolita herself had been
the one who asked that a document pertaining to her taxes be prepared for her signature, but
what was presented to her for her signature was an SPA), the crime would have only been the
simple crime of falsification.”

ELVIRA YU OH V. CA

FACTS:
 Elvira Yu Oh, purchased pieces of jewelry from Solid Gold International Traders, Inc. Due
to her failure to pay the purchase price, the company filed civil cases against her for specific
performance before the RTC of Pasig. On September 17, 1990, petitioner and Solid Gold through
it general manager, Joaquin Novales III entered into a compromise agreement to settle said civil
cases. It was approved by the trial court provided that petitioner shall issue a total of ninety-nine
post-dated checks in the amount of PHP 50,000.00 each, dated every 15th and 30th of the month
starting October 1, 1990 and the balance of over PHP 1million to be paid in lump sum on
November 16, 1994 (the due date of the 99th post dated check).

Petitioner then issued ten checks at Php 50,000.00 each for a total of Php 500,000.00
drawn against her account at the Equitable Banking Corporation (EBC). Novales then deposited
each of the ten checks on their respective due dates to the company bank account. However,
said checks were dishonored by the EBC for the reason “Account Closed”. Dishonor slips were
issued for each check that was returned to Novales. On October 5, 1992, Novales filed 10
separate informations before the RTC of Quezon City charging the petitioner with violation of
Batas Pambansa Blg. 22. Upon arraignment, petitioner pleaded not guilty.

Statutory Construction Issues:

1. Whether or not the Court of Appeals erred in not giving retroactive effect to R.A.
7690 in view of Article 22 of the RPC.
2. Whether or not the Court of Appeals erroneously construed B.P. Blg. 22

RULING:

First Issue:

Petitioner argues, Failure of the appellate court to give retroactive application to R.A. 7691
is a violation of Art. 22 of the Revised Penal Code which provides that penal laws shall have
retroactive effect insofar as they favor the person guilty.

R.A. 7691 is a penal law in the sense that it affects the jurisdiction of the court to take
cognizance of criminal cases; the offense covered by each of the ten Informations in this case
falls within the exclusive original jurisdiction of the Municipal Trial Court; and the Court of Appeals
is guilty of judicial legislation in stating that after the arraignment of petitioner, said cases could
no longer be transferred to the MTC without violating the rules on double jeopardy, because that
is not so provided in R.A. 7691.

The Solicitor General, counters that the argument that they are baseless. Penal Laws are
those which define crimes and provides for their punishment.

Laws defining the jurisdiction of courts are substantive in nature and not procedural for
they do not refer to the manner of trying cases but to the authority of the courts to hear and decide
certain and definite cases in the various instances of which they are susceptible. R.A. No. 7691
is a substantive law and not a penal law as nowhere in its provisions does it define a crime
neither does it provide a penalty of any kind.

The purpose of enacting R.A. No. 7691 is laid down in the opening sentence thereof as
"An Act Expanding the Jurisdiction of the Municipal Trial Courts, Municipal Circuit Trial Courts
and the Metropolitan Trial Court" whereby it reapportions the jurisdiction of said courts to cover
certain civil and criminal case, erstwhile tried exclusively by the Regional Trial Courts.

Art. 22 of the RPC finds no application to the case at bar.

ART. 22. Retroactive effect of penal laws. – Penal laws shall have a retroactive effect
insofar as they favor the person guilty of a felony, who is not a habitual criminal, as this term is
defined in Rule 5 of Article 62 of this Code, although at the time of the publication of such laws a
final sentence has been pronounced and the convict is serving sentence.law in force at the time
of the filing of the complaint, and once acquired.

In this case, the RTC was vested with jurisdiction to try petitioner's cases when the same
were filed in October 1992 at that time, R.A. No. 7691 was not yet effective.

In so far as the retroactive effect of R.A. No. 7691 is concerned, that same is limited only
to pending civil cases that have not reached pre-trial stage as provided for in Section 7 thereof
and as clarified by this Court in People vs. Yolanda Velasco, where it was held:

"[a] perusal of R.A. No. 7691 will show that its retroactive provisions apply only to civil
cases that have not yet reached the pre-trial stage. Neither from an express proviso nor
by implication can it be understood as having retroactive application to criminal cases pending or
decided by the RTC prior to its effectivity.

Penal Law, as defined by this Court, is an act of the legislature that prohibits certain acts
and establishes penalties for its violations. It also defines crime, treats of its nature and provides
for its punishment. R.A. No. 7691 is not a penal law, and therefore, Art. 22 of the RPC does not
apply in the present case.

Second Issue:

Petitioner insists that: penal statutes must be strictly construed and where there is any
reasonable doubt, it must always be resolved in favor of the accused. Court of Appeals, in
construing that B.P. Blg. 22 embraces cases of "no funds" or "closed accounts" when the express
language of B.P. Blg. 22 penalizes only the issuance of checks that are subsequently dishonored
by the drawee bank for "insufficiency" of funds or credit, has enlarged by implication the meaning
of the statute which amounts to judicial legislation. A postdated check, not being drawn payable
on demand, is technically not a special kind of a bill of exchange, called check, but an ordinary
bill of exchange payable at a fixed date, which is the date indicated on the face of the postdated
check, hence, the instrument is still valid and the obligation covered thereby, but only civilly and
not criminally.

The Solicitor General counters that a postdated check is still a check and its being a
postdated instrument does not necessarily make it a bill of exchange "payable at a fixed or
determinable future time" since it is still paid on demand on the date indicated therein or thereafter
just like an ordinary check. The Court concurred with the Solicitor General.

The rationale behind B.P. Blg. 22 explained by the Court in the landmark case of Lozano
vs. Martinez where the court held that:

The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a
worthless check or a check that is dishonored upon its presentation for payment
… The thrust of the law is to prohibit, under pain of penal sanctions, the making or
worthless checks and putting them in circulation. Because of its deleterious effects
on the public interest, the practice is proscribed by law. The law punished the act not as
an offense against property, but an offense against public order.

In this light, it is easy to see that the claim of petitioner that B.P. Blg. 22 does not include 'postdated
checks' and cases of 'closed accounts' has no leg to stand on. The term "closed accounts" is
within the meaning of the phrase "does not have sufficient funds in or credit with the drawee
bank".

GERARDO VILLASEÑOR V. SANDIGANBAYAN

FACTS

On August 18,2001, disaster struck when early in the morning Quezon City Manor Hotel went in
flames causing the death of (74) people and injuries to others. The investigation came to the
conclusion that the hotel itself was a verified fire trap.
Petitioners along with the Office of City Engineers of Quezon City were faced with criminal
charges before the 5th Division of the Sandiganbayan for the crime of multiple homicide through
reckless imprudence and they also violated Section 3 (e) of R.A. No. 3019. Not just that, they
were also charged administratively with gross negligence, gross misconduct and conduct
prejudicial to the interest of the service in connection with the Manor Hotel Inferno.

In two separate Orders regarding the administrative charges against them, petitioners Villasenor
and Mesa were preventively suspended for a period of (6) months, effective upon receipt of the
suspension order.

Louella Mae Oco-Pesquerra filed a motion for suspension pendente lite of petitioners, all during
the pendency of the criminal cases.

Petitioners opposed the said suspension pendente lite on grounds that both petitioners
have already served the (6) months of preventive suspension in the administrative case.
They argued that the preventive suspension that was being warranted in the criminal case
was already absorbed in the administrative case, having both cases anchored by the same
set of facts.

On July 3, 2007, respondent court granted the prosecution’s motion for suspension.

This caused a petition for certiorari under rule 65 of the 1997 Rules of Civil Procedure. Petitioners
want to annul and set aside the Resolution of the Sandiganbayan on July 3, 2007, for the
violation of Section 3, Republic Act (R.A.) No. 3019, as amended, suspending them
pendente lite.

STATCON ISSUES
(1) Whether or not preventive suspension is a penalty that fall under penal statutes that are
strictly construed?
(2) Whether or not Section 3, Republic Act No. 3019 is a penal law?

HELD
(1) Preventive suspension is not a penalty in itself. It is a precautionary measure to segregate
the employees who are charged for obvious reasons from the office. It is distinct from the
penalty. This preventive suspension is more of a procedural step to fully establish the
proper charges against the person accused. The preventive suspension is usually given
or imposed on a respondent during the investigation of the charges against him. It is
stated by Section 24 of Rule XIV of the Omnibus Rules Implementing Book V of the
Administrative Code of 1987 (Executive Order No. 292) and other Pertinent Civil
Service Laws that it is not a penalty.
(2) Being contented by the petitions that Section 3, Republic Act No. 3019 is a penal law, the
statute, the provision on preventive suspension should be strictly construed against the
State and liberally in their favor. But this is not true, agree. Section 13 of R.A. No. 3019
on preventive suspension is not a penal provision. It is procedural in nature. Hence,
 the strict construction rule finds no application. It was expounded on the “Buenaseda
v. Flavier” case that Penal statutes are strictly construed while procedural statutes are
liberally construed. The test in determining if a statute is penal is whether a penalty
is imposed for the punishment of a wrong to the public or for the redress of an
injury to an individual. While a Code prescribing the procedure in criminal cases is not
a penal statute and is to be interpreted liberally

STATUTES IN DEROGATION OF RIGHTS

The term derogation is used to refer, generally, to the partial suspension or suppression of a law
or right under particular circumstances.

"Statutes in derogation of rights are to be strictly construed and not to be enlarged in their
operation by construction beyond their express terms. Accordingly, a statutory change in the
common law is limited to that which is expressly stated in the statute or necessarily implied by its
language because there is a presumption that no change was intended.
 HEIRS OF ALBERTO SUGUITAN V. MANDALUYONG
(Marica Mae Docena)

FACTS

October 13, 1994, the Sangguniang Panlungsod of Mandaluyong City issued a Resolution
authorizing then Mayor Benjamin B. Abalos to institute expropriation proceedings (the action by
an authority of taking property from its owner for public use or benefit) over the property of Alberto
Suguitan located at Boni Avenue and Sto. Rosario streets in Mandaluyong City. The intended
purpose of the expropriation was the expansion of the Mandaluyong Medical Center.

January 20, 1995, Mayor Benjamin Abalos wrote Alberto Suguitan a letter offering to buy his
property, but Suguitan refused to sell.

March 13, 1995, the city of Mandaluyong filed a complaint for expropriation with the Regional Trial
Court of Pasig.

Suguitan, the property owner, filed a motion to dismiss the complaint based on the following
grounds (1 out of 5)

(1) the power of eminent domain is not being exercised in accordance with law;

On October 24, 1995, the trial court denied Suguitan's motion to dismiss.

On November 14, 1995, the trial court issued an order allowing the City of Mandaluyong to take
immediate possession of Suguitan's property upon the deposit of P621,000 representing 15% of
the fair market value of the subject property as required by law.

On December 15, 1995, the City of Mandaluyong assumed possession of the subject property
and eventually, the court granted the assailed order of expropriation.

Petitioners assert that the city of Mandaluyong may only exercise its delegated power of eminent
domain by means of an ordinance as required by section 19 of Republic Act (RA) No. 7160,
and not by means of a mere resolution.

Respondent contends, however, that it validly and legally exercised its power of eminent
domain; that pursuant to article 36, Rule VI of the Implementing Rules and Regulations (IRR)
of RA 7160, a resolution is a sufficient antecedent for the filing of expropriation proceedings
with the Regional Trial Court. Respondent's position, which was upheld by the trial court.

STATCON ISSUE
 (1) Statutes in derogation of rights: whether or not the power of eminent domain is being
exercised in accordance with law and its requisites are strictly complied with
(2) Whether or not the Implementing Rules and Regulations (IRR) should be followed in this
case instead of the statutory provision itself
(3) Whether or not “resolution” and “ordinance” are synonymous

HELD:

(1) The power of eminent domain is not being exercised in accordance with law.
Eminent domain is the right or power of a sovereign state to claim private property to
particular uses to promote public welfare. In the present case, the City of Mandaluyong
seeks to exercise the power of eminent domain over petitioners' property by means of a
resolution, contrary to the first requisite of section 19 of RA 7160. The law in this case is
clear and free from ambiguity. Section 19 of the Code requires an ordinance, not a
resolution, for the exercise of the power of eminent domain.

(2) There is indeed an inconsistency between the law and its IRR, nevertheless the law
itself should prevail. Petitioner relies on Article 36, Rule VI of the Implementing Rules,
which requires only a resolution to authorize an LGU to exercise eminent domain. This is
clearly misplaced, because Section 19 of RA 7160, the law itself, surely prevails over said
rule which merely seeks to implement it. It is axiomatic that the clear letter of the law is
controlling and cannot be amended by a mere administrative rule issued for its
implementation. Besides, what the discrepancy seems to indicate is a mere oversight in
the wording of the implementing rules.

(3) A municipal ordinance is different from a resolution. An ordinance is a law, but a

resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a
specific matter. An ordinance possesses a general and permanent character, but a
resolution is temporary in nature. Additionally, the two are enacted differently — a third
reading is necessary for an ordinance, but not for a resolution, unless decided otherwise
by a majority of all the Sanggunian members.

It should be noted that the ruling in this case will not preclude the City of Mandaluyong from
enacting the necessary ordinance and thereafter reinstituting expropriation proceedings, for so
long as it has complied with all legal requirements.

Since such power of eminent domain involves the derogation of private rights, the authority
must be strictly construed and limits should be set in order to preserve the people’s rights
and to ensure that such power will not be abused.

“When the legislature interferes with that right, and, for greater public purposes,
appropriates the land of an individual without his consent, the plain meaning of the law
should not be enlarged by doubtful interpretation”
 PHILACOR CREDIT CORPORATION V. CIR

Facts:
Philacor Credit Corporation is a domestic corporation engaged in the business of retail
financing. Through retail financing, a prospective buyer of a home appliance — with neither cash
nor any credit card — may purchase appliances on installment basis from an appliance dealer.
After Philacor conducts a credit investigation and approves the buyer's application, the buyer
executes a unilateral promissory note in favor of the appliance dealer. The same promissory note
is subsequently assigned by the appliance dealer to Philacor.

Bureau of Internal (BIR) assessed Philcor for deficiency documentary stamp tax (DST) on
the promissory notes executed by the buyers of appliances on installment basis in favor of
appliance dealers, and also, on the subsequent assignment of the same promissory notes in favor
of the company. The BIR contended that the financing company is subject to DST on the issuance
of promissory notes as the transferee that “accepted” the promissory notes from the appliance
dealer. Philacor argued that “accepting” in Section 173 of the Tax Code does not apply to
promissory notes. It was manifested in the legislative intent that only assignment/transfer of
certain documents in Section 176, 178 and 198 are subject to DST as they were expressly stated
and not in promissory notes.

Issues:
1.) Whether or not Philacor is liable for the DST on the issuance of promissory notes.
2.) Whether or not Philacor is liable for the DST on the assignment of promissory notes.

Held:
1.) The Supreme Court ruled that Philcor is not liable to DST on the issuance of promissory
notes. Under Section 173 of the National Internal Revenue Code of 1997 (NIRC), the persons
liable for the DST payment are the persons making, signing, issuing, accepting or transferring
the taxable documents, instrument or papers. Should these parties be exempted from paying
tax, the court further explained that the other party who is not exempt would then be liable.

However, this rule cannot be extended to persons who are not the parties named in the taxable
document or instrument and are merely using or benefiting from it.

Philcor did not make, sign, issue, accept or transfer the promissory notes. Instead, the buyers of
the appliances made, signed and issued the documents subject to tax, while the appliance
dealer transferred the documents to the financing company, which likewise indisputably
“received” or “accepted” the promissory notes. As further clarified by the court, the financing
company cannot be made primarily liable for the DST on issuance of promissory notes just
because it had “accepted” the promissory notes in the plain and ordinary meaning.

STATCON:
CIR cannot justify their position that Philacor is liable for the tax by citing Section 42 of
Regulations No. 26:

“Section 42. Responsibility for payment of tax on promissory notes. — The person who signs or
issues a promissory note and any person transferring or using a promissory note can be held
responsible for the payment of the documentary stamp tax.”

The rule uses the word "can" which is permissive, rather than the word "shall," which would
make the liability of the persons named de􏰁nite and unconditional.

In this sense, a person using a promissory note can be made liable for the DST if he or she is:
(1) among those persons enumerated under the law — i.e., the person who makes, issues,
signs, accepts or transfers the document or instrument; or (2) if these persons are exempt, a
non-exempt party to the transaction.
Section 42 of Regulations No. 26 cannot be interpreted to mean that anyone who "uses" the
document, regardless of whether such person is a party to the transaction, should be liable, as
this would go beyond Section 173 of the 1986 Tax Code — the law that the rule seeks to
implement. Implementing rules and regulations cannot amend a law for they are intended to
carry out, not supplant or modify, the law.

In addition, Internal Revenue Law of the United States cannot be used to interpret DTS because
of the apparent differences of both laws. US Laws provide for a wider set of taxpayers, while
DST liability refers only to "persons who shall make, sign or issue [the document or instrument]."
Ha

It cannot be interpreted in such a way as to extend the DST liability to persons who are not the
parties named in the taxable document or instrument and are merely using or benefiting from it,
against the clear intention of our legislature.

2.) In the same manner, the Philcor is also not liable to DST on the assignment of promissory
notes since the transaction is not taxed under the law. The SC held that while there are
provisions in the NIRC that specifically impose the DST on the transfer and/or assignment of
documents evidencing particular transactions, the assignment or transfer becomes taxable only
in connection with mortgages, leases, and policies of insurance. Under Section 198 of the
NIRC, the list of transferred or assigned documents that are subject to DST does not include
assignment or transfer of evidence of indebtedness. Rather, it is the renewal of evidence of
indebtedness that is taxable. Considering that the case at bar does not involve a renewal, but a
mere transfer or assignment of the evidence of indebtedness or promissory notes, the
assignment of promissory notes is not subject to DST.

STATCON:

“The settled rule is that in case of doubt, tax laws must be construed strictly against the State
and liberally in favor of the taxpayer. The reason for this ruling is not hard to grasp: taxes, as
burdens which must be endured by the taxpayer, should not be presumed to go beyond what
the law expressly and clearly declares. That such strict construction is necessary in this case is
evidenced by the change in the subject provision as presently worded, which now expressly
levies the tax on shares of stock as against the privilege of issuing certificates of stock as
formerly provided.
 CIR V. KUDOS METAL CORPORATION
(Marica Mae Docena)

What right is derogated in this case? Taxpayer’s right to security against prolonged and
unscrupulous investigations.

It is for this reason that BIR has a prescription period (or limit) of 3 years to assess tax. By the filing of
the “Waiver of the Statute of Limitations”, the taxpayer suspends his right to speedy assessment
and allows BIR an extended period within which they may issue a deficiency assessment.

FACTS

(1) On April 15, 1999, respondent Kudos Metal Corporation filed its Annual Income Tax
Return (ITR) for the taxable year 1998.
 (2) On September 7, 1999The Bureau of Internal Revenue (BIR) served upon respondent
three Notices of Presentation of Records however Kudos Metal Corporation was unable
to comply. A review and audit of respondent’s records then ensued.

(3) Kudos Metal Corporation’s accountant then executed a written agreement executed before
the expiration of the three-year period: A waiver of the Statute of Limitations (2
waivers). This was received and accepted by Assistant Commissioner Salazar on January
31, 2002 and February 28, 2003.

(4) On August 25, 2003, the BIR issued a Preliminary Assessment Notice for the taxable year
1998 against the respondent.

(5) Respondent challenged the assessments on February 2, 2004.

(6) On June 22, 2004, the BIR rendered a final Decision on the matter, requesting the immediate
payment of the tax liabilities.

(7) However, Court of Tax Appeals found the first Waiver of the Statute of Limitations incomplete
and defective for failure to comply with the provisions of Revenue Memorandum Order
(RMO) No. 20-90.

STATCON ISSUE:

(1) Whether or not said waiver was defective for failure to comply with the provisions of the law
(2) Whether or not such failure renders the waiver of the taxpayer’s right to security against
prolonged and unscrupulous investigations invalid

HELD:

Section 20315 of the National Internal Revenue Code of 1997 (NIRC) mandates the government to
assess internal revenue taxes within three years from the last day prescribed by law for the filing of
the tax return or the actual date of filing of such return, whichever comes later. Hence, an
assessment notice issued after the three-year prescriptive period is no longer valid and effective.
Exceptions however can be done through waivers written between the taxpayer and CIR before the
end of the prescriptive period.

BIR does not deny that the assessment notices were issued beyond the three-year prescriptive
period, but claims that the period was extended by the two waivers executed by Kudos Metal
Corporation’s accountant. The Supreme Court decreed that such waivers were not valid.

The waiver should strictly follow the following as directed by law:

(i) acceptance date; (ii) expiry date; (iii) signed by authorized officer of tax payer and BIR; (iv)
The CIR or the revenue official authorized by him must sign the waiver indicating that the
BIR has accepted and agreed to the waiver. The date of such acceptance by the BIR should
be indicated. However, before signing the waiver, the CIR or the revenue official
 authorized by him must make sure that the waiver is in the prescribed form, duly
notarized, and executed by the taxpayer or his duly authorized representative.; (v) fact of
receipt must be indicated in the copies

A perusal of the waivers executed by Kudos Metal Corporation’s accountant reveals the following
discrepancy:

1. The waivers were executed without the notarized written authority of Pasco, the accountant, to
sign the waiver on behalf of respondent (owner/s of Kudos Metal Corporation).

2. The waivers failed to indicate the date of acceptance.

3. The fact of receipt by the respondent of its file copy was not indicated in the original copies of the
waivers.

Due to the defects in the waivers, the period to assess or collect taxes was not extended.
Consequently, the assessments were issued by the BIR beyond the three-year period and are void.

The BIR failed to verify whether a notarized written authority was given by the respondent to its
accountant, and to indicate the date of acceptance and the receipt by the respondent of the waivers.
Having caused the defects in the waivers, the BIR must bear the consequence. It cannot shift the
blame to the taxpayer. To stress, a waiver of the statute of limitations, being a derogation of the
taxpayer’s right to security against prolonged and unscrupulous investigations, must be carefully and
strictly construed.

As to the alleged delay of the respondent to furnish the BIR of the required documents, this cannot be
taken against respondent. Neither can the BIR use this as an excuse for issuing the assessments
beyond the three-year period because with or without the required documents, the CIR has the power
to make assessments based on the best evidence obtainable

MAPULO MINING ASSOC. V. HON. FERNANDO LOPEZ

(Geo Perez)

FACTS:
The Mapulo Mining Association, petitioner herein, relocated the area through Antonio
Chavez on 16-22 December 1963 and registered it as the Mapulo Placer Mining Area with the
Office of the Mining Recorder (Register of Deeds) of Batangas on 22 January 1964.
Upon the other hand, on 6-10 June 1966, private respondent Projects & Ventures, Inc.
(PROVEN) located mining claims over an area embraced by petitioners' mining claims. The notice
of application was published in the 7, 14, and 21 August 1967 issues of the Official Gazette;
however, these issues were actually released for circulation to the public only on 5, 19 and 29
September 1967, respectively, per certification of the Bureau of Printing. The notice was also
published in the 15, 22 and 29 July 1967, both published in Manila. It was not, however, published
in a local newspaper in Batangas such as the People's Courier or The Batangas Reporter.
On 2 August 1967, petitioners filed with the Bureau of Mines an application for an order of
lease survey of the "Mapulo Placer Claim," "Chavez I" and "Chavez II" mining claims. This
application was denied on the ground that said claims are in conflict with the claims of the private
respondent. After several motions by the petitioner, all of the following appeals were denied.
Petitioner filed an instant petition for review alleging that the private responedent did not
comply with the Mining Act, then the publication of the private respondent was not properly met.
The petitioner’s adverse claim that was filed a day late is not grounds for justifying the denial of
the adverse claim. This was just merely noted by the Court in 1969.
Public Respondent contended that publication of private respondent's notice of filing of
applications for lease in a provincial newspaper is not necessary; with respect to the publication
in the Official Gazette, what is controlling is not the date of the actual release but rather the date
appearing thereon; and petitioners are guilty of laches in filing their adverse claim only on 29
August 1967.
Then on March 1990, where the parties were asked to moved in the premises, which
informed the Court to proceed with the case.

ISSUE:
a.) Whether or not there was valid and sufficient publication of the notice of private
respondent's application for a mining lease over its claims.

RULING:
Yes. The court agreed with petitioners that the publication requirements prescribed in
Section 72 of the Mining Act are mandatory and that substantial compliance therewith is not
enough. Such mandatory character is obvious from the Section itself, which provides that:

". . . the Director of the Bureau of Mines shall publish a notice that such
application has been made, once a week for a period of three consecutive weeks,
in the Official Gazette and in two newspapers, one published in Manila either in
English or Spanish, and the other published in the municipality or province in
which the mining claim is located, if there is such newspaper, otherwise, in the
newspaper published in the nearest municipality or province…”

Another reason why the publication requirements should be strictly complied with is that any
person who fails to file an adverse claim against the applicant during the period of publication is
forever barred to file such a claim since the section itself provides that "if no adverse claim shall
have been presented to the Director of the Bureau of Mines, it shall be conclusively presumed
that no such adverse claim exists and thereafter no objection from third parties of the granting of
the lease shall be heard." In view then of its adverse consequences on the rights of others, nothing
short of strict compliance is demanded. Statutes in derogation of rights must be construed strictly.

Thus, the contention and rationalization of public respondents that substantial compliance with
the publication requirements would suffice, is wholly unacceptable for the letter and the spirit of
the law do not sustain it.
||| |||

STATUTES GRANTING PRIVILEGES

CIR V. PHIL. LONG DISTANCE TELEPHONE COMPANY

(Nica Janeth Abas)

FACTS:
PLDT, under RA 7082, was granted a franchise to operate and maintain a
telecommunications systems throughout the Philippines. On October 1, 1992-May 31, 1994,
PLDT paid the BIR the amount of 164,510,953.00 for equipment, machineries and spare parts
and 116,041,333.00 for Value Added Tax. On March 15, 1994, PLDT addressed a letter to the
BIR seeking a confirmatory ruling regarding their tax privilege under the Section 12 of RA 7082.
The BIR in return, issued Ruling No. UN-140-94 which stated that the PLDT shall only be
subject to following taxes under RA 7082, “7. The 3% franchise tax on gross receipts which
shall be in lieu of all taxes on its franchise or earnings thereof.”
With this ruling, the PLDT filed for tax credit/refund of the taxes it has paid “in connection
with its importation of various equipment, machineries and spare parts needed for its
operations". However, the BIR, did not act regarding the claim and this prompted the PLDT to
file with the CTA a petition for review and seeking refund of 280,552,286.00 paid during the
period of October 1992 to May 1994.
The CTA ruled that the petition is meritorious and ordered BIR to refund or issue
P223,265,276.00 representing erroneously paid value-added taxes, compensating taxes,
advance sales taxes and other BIR taxes on its importation of equipments (sic), machineries
and spare parts for the period covering the taxable years 1992 to 1994. Th
Thereafter, the BIR Commissioner moved for reconsideration to the CTA, but was denied.
Unable to accept the CTA decision, the BIR Commissioner elevated the matter to Court of
Appeals by way of review. However, it was also denied by the CA. According to the CA, the "in
lieu of all taxes" clause found in Section 12 of PLDT's franchise (R.A. 7082) covers all taxes,
whether direct or indirect. In fine, the appellate court, agreeing with PLDT, posits the view that
the word "all" encompasses any and all taxes collectible under the National Internal Revenue
Code (NIRC), save those specically mentioned in PLDT's franchise, such as income and real
property taxes. The BIR Commissioner however, argues that the "in lieu of all taxes" clause
covers direct taxes only, adding that for indirect taxes to be included in the exemption, the
intention to include must be specific and unmistakable.
Still unsatisfied with the results, the BIR Commissioner brought it to the Supreme Court for a
motion for time to file a petition for review but on the last day of the filing, had changed his mind
and did not pursue the petition. On September 28, 1998, the Court notified the parties that the
decision of the CA, being there “no petition”, the decision is now, “final and executory” with the
additional ground of stare decisis. The stare decisis doctrine, however should not be blindly
followed. The court, now reviewed the decision of the CA even though the BIR Commissioner
did not pursue the petition as the BIR may be denied of its opportunity to have an authoritative
interpretation of Section 12 of RA 7082 and be denied of its taxation power.
ISSUE:
Whether or not the privilege of PLDT granted by the CA regarding tax exemption under the
Sec. 12 of RA 7082 is valid as it encompasses both “direct and indirect” taxes.

RULING:
The Court ruled that those that are “direct taxes” are the only ones exempt under Sec. 12 of
RA 7082. There were taxes paid by PLDT which are not direct, namely the revenue taxes on
importations. The only taxes that are exempt were: VAT, advance sales tax and compensating
tax.
The direct tax and indirect tax was herein differentiated. Direct taxes are “those that are
extracted from the very person who, it is intended or desired, should pay them; they are
impositions for which a taxpayer is directly liable on the transaction or business he is engaged
in”, while Indirect taxes are “those that are demanded, in the first instance, from, or are paid by,
one person in the expectation and intention that he can shift the burden to someone else.
Stated elsewise, indirect taxes are taxes wherein the liability for the payment of the tax falls on
one person but the burden thereof can be shifted or passed on to another person, such as when
the tax is imposed upon goods before reaching the consumer who ultimately pays for it.“
The liability for the payment of the indirect taxes lies only with the seller of the goods or
services, not in the buyer thereof. Thus, one cannot invoke one's exemption privilege to avoid
the passing on or the shifting of the VAT to him by the manufacturers/suppliers of the goods he
purchased. Hence, it is important to determine if the tax exemption granted to a taxpayer
specifically includes the indirect tax which is shifted to him as part of the purchase price,
otherwise it is presumed that the tax exemption embraces only those taxes for which the buyer
is directly liable.
As may be noted, the clause "in lieu of all taxes" in Section 12 of RA 7082 is immediately
followed by the limiting or qualifying clause "on this franchise or earnings thereof", suggesting
that the exemption is limited to taxes imposed directly on PLDT since taxes pertaining to PLDT's
franchise or earnings are its direct liability. Accordingly, indirect taxes, not being taxes on
PLDT's franchise or earnings, are outside the purview of the "in lieu" provision.
Therefore, to impart the "in lieu of all taxes" clause a literal meaning, as did the Court of
Appeals and the CTA in this case, is fallacious. It is basic that in construing a statute, it is the
duty of courts to seek the real intent of the legislature, even if, by so doing, they may limit the
literal meaning of the broad language.
It cannot be over-emphasized that tax exemption represents a loss of revenue to the
government and must, therefore, not rest on vague inference. When claimed, it must be strictly
construed against the taxpayer who must prove that he falls under the exception (stricissimi
juris). And, if an exemption is found to exist, it must not be enlarged by construction, since the
reasonable presumption is that the state has granted in express terms all it intended to grant at
all, and that, unless the privilege is limited to the very terms of the statute the favor would be
extended beyond dispute in ordinary cases.
The Court ruled that PLDT may only be granted a refund of the advance sales tax and
compensating tax in the total amount of P94,673,422.00, subject to the condition that PLDT
present proof of payment of the corresponding VAT on said transactions.
 RAOUL DEL MAR V. PAGCOR

FACTS:
The Philippine Amusement and Gaming Corporation or PAGCOR (respondent) is a
government-owned controlled corporation organized and existing under Presidential Decree
1869. Pursuant to sections 1 to 10 of P.D. 1869, petitioner asked the legal advice of Secretary of
Justice if in their charter, that they are authorized to operate and manage jal-alai frontons in the
country. In the opinion of the Secretary of Justice, he opined that "the authority of PAGCOR to
operate and maintain games of chance or gambling extends to jai-alai which is a form of sport or
game played for bets and that the Charter of PAGCOR amounts to a legislative franchise for the
purpose.” Thus, they started the operation of jal-alai and entered into an agreement with Belle Jal
Alai Corportaion (BELLE) and Filipinas Gaming Entertainment Totalizator Corporation
(FILGAME) about the funding of infrastructure facilities of jal-alai in the country.
Raoul Del Mar (petitioner) filed a petition for certiorari questioning the validity of the said
agreement that PAGCOR is without jurisdiction, legislative franchise, authority or power to enter
into an Agreement for the opening and operation of Jal-alai in the country. Juan Miguel Zubiri and
other petitoners filed a motion for intervention alleging that the operation by PAGCOR of jai-alai
is illegal because it is not included in the scope of PAGCOR’s franchise which covers only games
of chance.

ISSUE:
Whether or not the charter of PAGCOR allows the operation and franchise of jal-alai and
if it is considered as a game-of-chance under the law.

RULING:
The court ruled that PAGCOR cannot operate jal-alai under its charter due to the following
reasons:
First, a "franchise" is a special privilege conferred upon a corporation or individual by a
government duly empowered legally to grant it. It emanates from a sovereign power and the grant
is inherently a legislative power. In such cases, Congress prescribes the conditions on which the
grant of a franchise may be made. Thus, the manner of granting the franchise, to whom it may
be granted, the mode of conducting the business, the character and quality of the service to be
rendered and the duty of the grantee to the public in exercising the franchise are almost always
defined in clear and unequivocal language. In the absence of these defining terms, any claim
to a legislative franchise to operate a game played for bets and denounced as a menace to
morality ought to be rejected.
Second, a historical background of the creation, growth and development of PAGCOR
will show that it was never given the legislative franchise to operate Jal-Alai. Before the creation
of PAGCOR, a 25-year right to operate Jal-Alai was given by President Marcos to the Philippine
Jai-Alai and Amusement Corporation then controlled by his in-laws, the Romualdez family. After
almost one year and a half after granting the right to operate the franchise of Jal-Alai, President
Marcos issued P.D. 1067-A which created PAGCOR. Under its policy, it was created to implement
"the policy of the State to centralize and integrate all games of chance not heretofore authorized
by existing franchises or permitted by law; to establish and maintain clubs, casinos branches,
subsidiaries, or other units in the Philippines. On the same day after creating PAGCOR, President
Marcos issued P.D. 1067-B granting PAGCOR the franchise and maintain gambling casinos on
land or water within the territorial jurisdiction of the Republic of the Philippines. Then came the
1986 People Power Revolution which ousted the former President Marcos’s regime. President
Corazon Aquino issued E.O. 169 thus revoking the 25-year license of the Romualdez family of
operating Jal-Alai in Manila but PAGCOR’s franchise was not revoked nor given the franchise of
operating Jal-Alai.
Third, by the plain reading of the various provisions of P.D. 1869, PAGCOR’s franchise is
only limited to operate gambling casinos and not Jai-Alai. In addition, P.D. No. 1869 does not
have the usual provisions with regards to jai-alai because such terms and conditions must be
unequivocally defined by the grantor.
Lastly, in the dissent, it was asserted that the legislative intent must be sought first of all
in the language of the statute itself. If we apply the literal interpretation of provision 11 of P.D.
1869 which states that "x x x the Corporation is hereby granted x x x the rights, privileges, and
authority to operate and maintain gambling casinos, clubs, and other recreation or amusement
places, sports, gaming pools, i.e., basketball, football, lotteries, etc. x x x," it implies that the
extent of PAGCOR’s franchise is broad that it includes all kinds of sports and gambling pools,
which includes Jal-Alai. It was concluded since games of skill like basketball and football were
lumped together with ‘lotteries’ just before the word ‘etc.’ it may be concluded from the wording of
the law that bets and stakes are made in connection with games of skill, thus classified as a game
of chance under the coverage of PAGCOR’s franchise.
This kind of simplistic reading shall be rejected. The plain meaning rule used in the dissent
rests on the assumption that there are no ambiguity and obscurity in the language of the law.
Since the statute admits of different interpretations mean that it is vague and ambiguous. A statute
is "ambiguous", and so open to explanation by extrinsic aids, not only when its abstract meaning
or connotation of its terms is uncertain, but also when it is uncertain in its application to, or effect
upon, the fact-situation of the case at bar.

REPUBLIC V. KERRY LAO ANG

ahahaahah
 EXCEPTIONS AND PROVISOS

CIR V. CA, Court Tax Appeals, CENTRAL VEGETABLE MANUFACTURING CO., INC.
(Alonzo, Eliel)

Facts:
Petitioner CIR filed a certiorari for the decision of the Court of Appeals confirming in toto
the decision of Court Tax Appeals which favored CENVOCO (manufacturer of Coconut Oil/
Edible Oil Related Products) in crediting the sales taxes paid by CENVOCO on “Containers and
Packaging Materials” of its milled products against the Deficiency Millers Tax due for year 1986.

Story:
>CENVOCO purchased a number of containers and packaging materials for its edible oil
and paid the SALES TAX due for containers
>CIR issued Deficiency Miller’s Tax for CENVOCO amouting to 1.575m
>CENVOCO in a letter requested for reconsideration that the SALES TAX paid for the
containers be credited to the Deficiency Miller’s Tax contending that the final provision of
Section 168 of the Tax Code does not apply to sales tax paid on containers and packaging
materials, hence, the amount paid therefore should have been credited against the miller's tax
assessed against it.
> CIR rejecting the contention answered in a letter that: Taxes paid on Raw materials or
Supplies used in the Milling process should not be allowed to be credited against the Miller’s
Tax as stated in the last proviso of the Art 168 of the Tax Code.
>CENVOCO filed to Court Tax Appeals and was favored(CENVOCO won the case), CIR
filed for reconsideration to Court of Appeals but reaffirmed the decision of CTA in toto (CIR lost
the Motion for Recon) hence this certiorari

ISSUE: W/N CENVOCO is liable for 1.575m Deficiency Taxes which hinges on the question
W/N Containers and Packaging Materials are Raw Materials used in Milling Process
contemplated in the final proviso of Sec 168 of Tax Code which reads:
Provided, finally, that credit for any sales, miller's or excise taxes paid on raw materials or supplies
used in the milling process shall not be allowed against the miller's tax due,

HELD (PS I only included important paragraphs related to StatCon):

NO. Containers and Packing Materials are not RAW Materials.
Raw materials used by Cenvoco in manufacturing edible oil are copra and/or coconut oil. In other
words, the term "used" in the final proviso of Section 168 of the NIRC refers or is strictly confined to
"raw materials" or supplies fed, supplied or put into the apparatus, equipment, machinery or its
adjuncts that cause or execute the milling process. On the other hand, the containers, such as tin
cans, and/or packages are not used or fed into the milling machinery nor were ever intended for
conversion to form part of the finished product, i.e., refined coconut/edible oil. Consequently, it would
be absurd to say that said containers and packages are "used in the milling process", for the
process. involves "grinding, crushing, stamping, cutting, shaping or polishing".
Notably, the law relied upon by the BIR Commissioner as the basis for not allowing Cenvoco's tax
credit is just a proviso of Section 168 of the old Tax Code. The restriction in the said proviso, however,
is limited only to sales, miller's or excise taxes paid "on raw materials used in the milling process".

Under the rules of statutory construction, exceptions, as a general rule, should be strictly but
reasonably construed. They extend only so far as their language fairly warrants, and all doubts
should be resolved in favor of the general provisions rather than the exception. Where a
general rule is established by statute with exceptions, the court will not curtail the former nor
add to the latter by implication. . . . (Samson vs. Court of Appeals, 145 SCRA 659 [1986]).

The exception provided for in Section 168 of the old Tax Code should thus be strictly construed.
Conformably, the sales, miller's and excise taxes paid on all Other materials (except on raw materials
used in the milling process), such as the sales taxes paid on containers and packaging materials of
the milled products under consideration, may be credited against the miller's tax due therefor.

It is a basic rule of interpretation that words and phrases used in the statute, in the absence of a clear
legislative intent to the contrary, should be given their plain, ordinary and common usage or meaning.
(Mustang Lumber Inc. v. CA, 257 SCRA 430 [1996] citing Ruben E. Agpalo, Statutory Construction,
second ed. [1990], 131).

From the disquisition and rationalization aforequoted, containers and packaging materials are certainly
not raw materials. Cans and tetrakpaks are not used in the manufacture of Cenvoco's finished products
which are coconut, edible oil or coprameal cake. Such finished products are packed in cans and
tetrapaks.

WHEREFORE, the petition is hereby DISMISSED and the decision of the Court of Appeals
AFFIRMED. No pronouncement as to costs.

GEOLOGISTICS INC. V. GATEWAY ELECTRONICS CORP.

(Nica Janeth Abas)

Facts:
The petitioner, Geologistics, Inc is a corporation engaged in the business of freight
forwarding and customs brokerage. The petitioners on October 1997, instituted an action for
recovery of money against the respondent Gateway Electronic Corp. before the RTC and
prayed for the judgment amount of P4,769,954.32, representing the fees, including interest
owed by respondent for petitioner's services as customs broker and freight forwarder. The case
was docketed as Civil Case No. 97-0496. When the RTC issued a writ of preliminary attachment
on the properties of the respondent, First Lepanto, the respondent surety, filed a counter-bond
in the amount of P5 million to secure the payment of any judgment that petitioner could recover
from the respondent. The RTC ruled that the payment be given to the petitioner Geologistics,
Inc.
 On October 2001, the petitioner now filed a motion for execution of pending appeal which
was opposed by the respondents. The motion alleged the following "good reasons" to execute
the RTC decision pending appeal: (1) respondent Gateway was guilty of fraud in contracting its
obligations to petitioner; (2) the appeal was interposed to delay the case; (3) respondent
Gateway had ceased operations and was in imminent danger of insolvency; and (4) the counter-
bond posted by respondent Gateway could be the subject of execution. On December 2001, the
court granted the petitioner’s motion and the respondents filed a motion to set aside the order,
however, it was denied.
Thereafter, the respondents now filed petitions before the Court of Appeals against the
petitioners advancing the following arguments: (1) no good reason existed to justify execution
pending appeal especially considering the fact that the case had already been elevated on
appeal; (2) the ground cited in the assailed order was not supported by the evidence on record;
and (3) a writ of partial execution can implement only a partial judgment. It was granted by the
Court of Appeals and the petitioners, Geologistics, Inc. were ordered to return the money
garnished to them.
Now, herein, the petitioners, Geologistics argue that the CA erred in holding that no good
reasons existed to warrant the discretionary execution of the RTC decision and that it would
render nugatory the RTC judgment to the prejudice of petitioner. In granting petitioner's motion
for execution pending appeal, the RTC gave weight to the fact that the case had been pending
since 1997 and the alleged admission of liability on the part of respondent Gateway, which the
Court of Appeals found to be unsupported by the evidence on record. Petitioner now counters
that only the exact amount of liability is disputed but not respondent's admission of liability.

Issue:
Whether or not a sufficient ground exists in warranting the discretionary execution of the
RTC decision.

Statcon Issue:
Whether or not the rule on execution pending appeal, which is now termed discretionary
execution under Rule 39, Section 2 of the Rules of Court, must be strictly construed being an
exception to the general rule.

Ruling:
There is no sufficient ground in warranting the discretionary execution of the RTC decision
as it cannot be considered as “good reasons”. The alleged admission by respondent Gateway of
its liability is more apparent than real because the issue of liability is precisely the reason the
case was elevated on appeal. The exact amount of respondent Gateway's liability to petitioner
remains under dispute even if, as claimed by petitioner, the evidence on record indicates that
respondent Gateway's obligation is almost a certainty. Precisely the appeal process must be
allowed to take its course all the way to the finality of judgment to determine once and for all the
incidents of the suit. Therefore, there is no sufficient ground as to the discretionary execution,
and that the petitioners are now required to refund the garnishments to the respondents.

Statcon Ruling:
 Yes, it must be strictly construed as being an exception to the general rule. Discretionary
execution of appealed judgments may be allowed upon concurrence of the following requisites:
(a) there must be a motion by the prevailing party with notice to the adverse party; (b) there
must be a good reason for execution pending appeal; and (c) the good reason must be stated in
a special order. The yardstick remains the presence or the absence of good reasons consisting
of exceptional circumstances of such urgency as to outweigh the injury or damage that the
losing party may suffer, should the appealed judgment be reversed later. Since the execution of
a judgment pending appeal is an exception to the general rule, the existence of good reasons is
essential.
The Rules of Court does not state, enumerate, or give examples of "good reasons" to justify
execution. The determination of what is a good reason must, necessarily, be addressed to the
sound discretion of the trial court. In other words, the issuance of the writ of execution must
necessarily be controlled by the judgment of the judge in accordance with his own conscience
and by a sense of justice and equity, free from the control of another's judgment or conscience.
It must be so for discretion implies the absence of a hard and fast rule.

B. STATUTES LIBERALLY CONSTRUED

(Agpalo) Liberal Construction means such equitable construction as will enlarge of a statute to
accomplish its intended purpose, carry out its intent, or promote justice. It does not mean
enlargement of a provision which is clear, unambiguous and free from doubt, for a statute which
is plain and clear is not subject to construction. Liberal construction is that construction which
expands the meaning of a statute to meet cases which are clearly within the spirit or reason
thereof or within the evil which the statute was designed to remedy, or which give the statute its
generally accepted meaning to the end that the most comprehensive application thereof maybe
accorded, without being inconsistent with its language or doing violence to any of its terms.
Liberal construction means that the words should receive a fair and reasonable interpretation,
so as to attain the intent, spirit and purpose of the law.

RE: APPLICATION FOR SUPERVISORSHIP PENSION BENEFITS UNDER REPUBLIC ACT.

NO. 9946
(Viel Cruz)
Facts:
1. The petitioner was a spouse of Hon. Manuel K. Gruba (Judge Gruba), an
appointed Associate Judge of the Court of Tax Appeals on September 17, 1992.
2. On June 25, 1996, Judge Gruba passed away. The cause of his death was natural
and was reported as brain stem/midbrain stroke. He was 55 years old when he
died. He was in government service for a total of 16 years, six (6) months, and 21
days. In those years, he rendered service for three (3) years, nine (9) months, and
eight (8) days in the Judiciary.
3. Initially, the petitioner applied for the retirement/gratuity benefits under RA 910.
4. The SC through a resolution approved the 5 years lump sum money.
5. Subsequently RA 910 was amended by RA 9946 providing more benefits,
including survival benefits, in which the petitioner also filed for application.
Issues:
1. Whether or not the benefits applied to Judge Gruba.
2. Whether or not the heirs of judge Gruba is entitled of 10 year lump sum benefit
under RA 9946
3. Whether Mrs Aguba is entitled of the survival benefit of the same law.

Held:

1. Yes, the benefits applied to Judge Gruba.

Under Section 3-B of RA 9946:
“The benefits under this Act shall be granted to all those who have retired prior to
the effectivity of this Act: Provided, That the benefits shall be applicable only to the
members of the Judiciary: Provided, further, That the benefits to be granted shall be
prospective.”

The term retired apply the holistic treatment of the law not only restricted to those who
retired at a certain age but it includes those who are permanently disabled or partially
disabled and those who died and were killed while in service.

It provides retroactive application to the judges and justices who died while in
service and should be liberally construed in favor of retiree (1) for humanitarian
purpose in order that the efficiency and well being of government employees will
be achieved(2) to benefit their heirs.

Justice Gruba then applying this construction can be considered “retired” as he died in
service due to natural causes is considered as retired judge of the Judiciary.

2. Yes, Section 2 of the same l law provides that those who died in natural cause is entitled
of 10 years lump sum benefits and rendered 15 years in service. It does not preclude her
in receiving this benefit even if she already received from RA 910 because of the
retroactive application of the law

3. No, she is not entitled/qualified for survivorship pension benefit under Section 3 of RA
9946. The law provides that survivorship benefit shall be given to the judge who has
retired, or was eligible to retire optionally, at the time of death, the surviving legitimate
spouse shall be entitled for retirement benefits.

Mr Agruba has not yet tired when he died, further he was not also eligible to retire
optionally. He died 5 years short of the optional retirement age. While it is true that the
age for optional retirement was also amended by RA 9946, the law that should be applied
was the requirement for 5 years in optional requirements.

MARIA OBRA V. SSS

(Susanna Ibe)
FACTS:
The husband of the petitioner worked as a driver for 24 years and 5 months. He was
employed at Jollar Industrial Sales and Services Inc. as a dump truck driver. He suffered a heart
attack while driving a dump truck inside work compound and died.
Petitioner immediately filed her claim for death benefits under SSS law. She started
receiving pension but was unaware of the other compensation benefits due her under PD 626. It
was after more than 10 years when she learned of the benefits that was due her (from TV program
of Ted Failon). She then prepared documents to support claim for the Employees Compensation
Commission (ECC) benefits. She filed with SSS her claim for funeral benefits.
SSS denied the claim ruling that the cause of death was not work connected, as there was
no seen causal relationship between illness and job. Petitioner then wrote to the Exec Director of
ECC appealing denial of her claim. It was found after a medical exam that, indeed, there was no
causal relationship between cause of death and nature of job. The ECC dismissed appeal, ruling
that petitioner failed to show substantial evidence and that claim has prescribed.
Petitioner then appealed to CA. She argued that her cause of action had not prescribed
since filing of claim shortly after death suspended running of prescriptive period. CA dismissed
petition. It interpreted ECC Resolution to mean that petitioner should have indicated the kind of
claim filed before running of prescriptive period may be interrupted. CA held that what was
applicable in this case was not PD 626, rather, Art 1142 of the Civil Code which read:
The following actions must be brought within ten (10) years from the time the right of action
accrues:
(1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment.
CA held that since husband died on June 27 1988, and filed claim for funeral benefits under PD
626 (Law on Employees’ Compensation) on Apr 23 1999, more than 10 years has passed and
action has prescribed.
ISSUE:

1) (Statcon) Whether or not in deciding claims for compensability under the Law on
Employees’ Compensation, liberal construction must be applied

2) Whether or not illness of petitioner’s husband (Myocardial infarction) was work related.

RULING:

1) Yes, liberal construction must be applied. The issue of prescription in the case at bar was
governed by PD 626 which stated the general rule: “No claim for compensation shall be given
due course unless said claim is filed with the System within three years from the time the
cause of action accrued.” It is true that under the proviso in Section 4 (B)(2) of Rule 3 in ECC
Rules of Procedure, employees' compensation claim shall be filed with the GSIS/SSS within
 a reasonable time as provided by law.Court found petitioner's claim to have been filed within
a reasonable time considering the situation and condition of the petitioner. Court has ruled
that when the petitioner filed her claim for death benefits under the SSS law, her claim for the
same benefits under the Employees' Compensation Law should be considered as filed. There
is evidence that showed that System failed to process her compensation claim. Petitioner
cannot be made to suffer lapse committed as it is the avowed policy of the State to construe
social legislations liberally in favor of the beneficiaries. This may be seen in: (a) Art 166
of PD 626 itself stating that employees and dependents, “in the event of work-connected
disability or death, may promptly secure adequate income benefit, and medical or related
benefits.”; (b) Art 4 of Labor Code of the Phil- “All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.” According to the case of ECC vs CA, it
was held that Constitution, under social justice policy called for liberal and sympathetic
approach to legitimate appeals of disabled public servants to afford relief. Therefore, as PD
626 is a social legislation whose primordial purpose is to provide meaningful protection to
working class, respondents should adopt a liberal attitude in favor of employees.

2) Yes. Under the law on employees' compensation, death is compensable only when it
results from a work-connected injury or sickness. In the instant case, the cause of petitioner's
husband's death was myocardial infarction and it must be considered work-connected. Under
ECC Resolution 432, petitioner's husband's heart disease falls under the second condition
which states that the strain of work that brought about the acute attack must be of sufficient
severity and must be followed within 24 hours by the clinical signs of a cardiac insult to
constitute causal relationship. Petitioner's husband was driving a dump truck within the
company premises where they were stacking gravel and sand when he suffered the heart
attack. He expired just a few minutes after the heart attack, which is much less than the 24
hours required by ECC Resolution No. 432. This is a clear indication that severe strain of work
brought about the acute attack that caused his death.

IN RE: PETITION FOR ADOPTION OF MICHELLE P. LIM

(Ace Tuana)

Petitioner is an optometrist by profession. On 23 June 1974, she married Primo Lim (Lim). They
were childless. Minor children, whose parents were unknown, were entrusted to them by a
certain Lucia Ayuban (Ayuban). Being so eager to have a child of their own, petitioner and Lim
2
registered the children to make it appear that they were the children’s parents. The children
were named Michelle P. Lim (Michelle) and Michael Jude P. Lim (Michael). Michelle was barely
3
eleven days old when brought to the clinic of petitioner. She was born on 15 March 1977.
Michael was 11 days old when Ayuban brought him to petitioner’s clinic. His date of birth is 1
4
August 1983.
They loved the children and treated them kindly as their own children, taking care of them
etc. One day husband died and wife remarries an American Citizen. By this time Michelle
was 25 w a husband and Michael was 18yrs and 7 months old. Monina Lim (Optometrist
mom nila) wanted to adopt Michelle and Michael since they never went through a formal
adoption process (ward is not equal adoption). She invoked amnesty in RA 8552
(simulated birth). Both “children” were considered by DSWD as abandoned children with
missing parents. His new American husband merely gave a written statement but did not
comply with any of the requirements for foreigners and did not accompany Monina in filing
for adoption.

Petitioner contends that the rule on joint adoption must be relaxed because it is the duty
of the court and the State to protect the paramount interest and welfare of the child to be
adopted. Petitioner argues that the legal maxim "dura lex sed lex" is NOT APPLICABLE to
adoption cases. She argues that joint parental authority is not necessary in this case since,
at the time the petitions were filed, Michelle was 25 years old and already married, while
Michael was already 18 years of age. Parental authority is not anymore necessary since
they have been emancipated having attained the age of majority.

We deny the petition.

Husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided,
however, That the other spouse has signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

The use of the word "shall" in the above-quoted provision means that joint adoption by the
husband and the wife is mandatory. This is in consonance with the concept of joint parental
authority over the child which is the ideal situation. As the child to be adopted is elevated to
the level of a legitimate child, it is but natural to require the spouses to adopt jointly. The rule
also insures harmony between the spouses.

The Ruling of the Trial Court

On 15 September 2004, the trial court rendered judgment dismissing the petitions. The trial
court ruled that since petitioner had remarried, petitioner should have filed the petition jointly
with her new husband. The trial court ruled that joint adoption by the husband and the wife is
mandatory citing Section 7(c), Article III of RA 8552 and Article 185 of the Family Code.

Petitioner filed a Motion for Reconsideration of the decision but the motion was denied in the
Order dated 16 June 2005. In denying the motion, the trial court ruled that petitioner did not fall
under any of the exceptions under Section 7(c), Article III of RA 8552. Petitioner’s argument
that mere consent of her husband would suffice was untenable because, under the law, there
are additional requirements, such as residency and certification of his qualification, which the
husband, who was not even made a party in this case, must comply.

As to the argument that the adoptees are already emancipated and joint adoption is merely for
the joint exercise of parental authority, the trial court ruled that joint adoption is not only for
the purpose of exercising parental authority because an emancipated child acquires certain
rights from his parents and assumes certain obligations and responsibilities.

Hence, the present petition.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 15 September 2004 of the
Regional Trial Court, General Santos City, Branch 22 in SPL. PROC. Case Nos. 1258 and 1259.
Costs against petitioner.

TL;DR: The court believes that the adoption must still be joint even if the parents do not
exercise parental authority anymore (both adoptees are adults). It is because of the word
“shall” in the phrase “shall adopt tofether.” The law is not applied liberally in this case it being
a fact that there is already express provisions and several legal remedies to adopt the children
if both parents were capacitated and wanted to do so

THE COCA-COLA EXPORT CORP. V. CLARITA P. GACAYAN

(Ace Tuaña)

Coca Cola Export Corp (CCEC) filed a motion for reconsideration for the court’s decision denying
its petition for certiorari and a subsequent resolution in the CA. The SC ruled in favor of CA with
slight modifications.

Respondent Clarita P.Gacayan was illegally dismissed from employment w CCEC. We upheld
the appellate court’s order that respondent Gacayan be reinstated to her former position, if
possible, otherwise to a substantially equivalent position without loss of seniority rights and full
backwages. We, however, modified the award of backwages, ruling that they should be computed
from the time the compensation was not paid up to the time of respondent Gacayan’s
reinstatement.

Petitioner argues the ff:

1. Lost of trust/confidence is a valid grounds for termination (this is not restricted to managers
but also supervisors et al. holding positions of responsibility)

2. Respondent breached trust of CCEC

3. Respondent had obvious wrongful, malicious, and fraudulent intent

4. RESPONDENT’S DISMISSAL IS NOT "HARSH" BUT IS COMPLETELY

COMMENSURATE TO THE SEVERITY OF HER ACTS. THE COURT’S ORDER FOR
RESPONDENT’S REINSTATEMENT WITH BACKWAGES REWARDS GROSS DISHONESTY
AND ENNOBLES BREACH OF TRUST.

One of the benefits enjoyed by the employees of petitioner company was the
reimbursement of meal and transportation expenses incurred while rendering overtime work. This
was allowed only when the employee worked overtime for at least four hours on a Saturday,
Sunday, or holiday, and for at least two hours on weekdays. The maximum amount allowed to be
reimbursed was one hundred fifty (₱150.00) pesos. It was in connection with this company policy
that respondent Gacayan, then a Senior Financial Accountant, was made to explain the alleged
alterations in three (3) receipts which she submitted to support her claim for reimbursement of
meal expenses, to wit: 1) McDonald’s Receipt No. 875493 dated October 1, 1994 for ₱111.00; 2)
Shakey’s Pizza Parlor Receipt No. 122658 dated November 20, 1994 for ₱174.06; and 3)
Shakey’s Pizza Parlor Receipt No. 41274 dated July 19, 1994 for ₱130.50.

In a letter dated April 4, 1995, petitioner company dismissed respondent Gacayan for fraudulently
submitting tampered and/or altered receipts in support of her petty cash reimbursements in gross
violation of the company’s rules and regulations.

On June 6, 1995, respondent Gacayan filed a complaint with the National Labor Relations
Commission (NLRC).

In a Decision dated June 17, 1996, the Labor Arbiter dismissed respondent Gacayan’s complaint
for lack of merit. This was affirmed by the NLRC in its Resolution dated April 14, 1998

The CA believe that the punishment was too harsh for mere reimbursement issues and so
ordered the reinstatement of Gacayan. Her dismissal was not under any of the grounds in Art 282
of the Labor Code. CCEC never mentioned its alleged loss of trust and confidence in respondent
Gacayan, nor discussed the alleged sensitive and delicate position of respondent Gacayan
requiring the utmost trust of petitioner company.

Petioner begs for the reconsideration because Gacayan was a Senior Financial Accountant who
obviously was in a position of trust and responsibility. respondent Gacayan had access to and
was responsible for confidential, delicate, and sensitive matters, particularly relating to its
operations and finances. Respondent Gacayan’s "act of falsifying or altering receipts in order to
secure unwarranted reimbursements, not only once, but on three (3) separate occasions, were
clearly established by the evidence on record and unambiguously displays [r]espondent
[Gacayan]’s wrongful intent." *Petitioner got proof that all three transactions were falsified (they
went to the restaurants/ask the person who delivered the food…they had sworn affidavits against
Gacayan).

Statcon Issue: WON the rules on dismissal should be construed liberally?

Held:

After due consideration of the motion for reconsideration, we find the same impressed with merit.
It is well-settled in our jurisdiction that loss of trust and confidence constitutes a just and valid
cause for an employee’s termination. In Etcuban, Jr. v. Sulpicio Lines, Inc.,8 this Court held:

However, petitioner’s rules cannot preclude the State from inquiring whether the strict and
rigid application or interpretation thereof would be harsh to the employee. Even when an
employee is found to have transgressed the employer’s rules, in the actual imposition of
penalties upon the erring employee, due consideration must still be given to his length of
service and the number of violations committed during his employment.

BUT, evidence shows that CCEC was never unfair to Gacayan and gave her enough time and
sufficient hearings to defend herself but she never showed up after one hearing. She was also
informed of the charges against her beforehand.

“Despite all the chances given by petitioner company for respondent Gacayan to present
her case, respondent Gacayan failed to attend the succeeding hearings and merely filed
applications for leave. Petitioner company, however, continued to send notices to respondent
Gacayan informing her of the re-setting of the continuation of the investigation on January 23,
1995 and March 15, 1995. With respondent Gacayan’s continued absence at the scheduled
hearings and after the evidence was evaluated, petitioner company finally dismissed respondent
Gacayan for fraudulently submitting tampered or altered receipts in support of her petty cash
reimbursements.

Given the foregoing, it is evident that the required procedural due process for respondent
Gacayan’s termination was fully complied with. The letter dated January 3, 1995 served on
respondent Gacayan was the written notice specifying the charges against her, while the
subsequent letter dated April 4, 1995 served as the written notice of termination.”

While the Constitution is committed to the policy of social justice and the protection of the working
class, it should not be expected that every labor dispute will be automatically decided in favor of
labor. Management also has its own rights which, as such, are entitled to respect and enforcement
in the interest of simple fair play. 24

WHEREFORE, in view of the foregoing, we GRANT the Motion for Reconsideration filed by
petitioner The Coca-Cola Export Corporation and RECONSIDER our Decision dated December
15, 2010. The assailed Decision dated May 30, 2001 and Resolution dated August 9, 2001 of the
Court of Appeals in CA-G.R. SP No. 49192 are REVERSED and SET ASIDE. The Resolutions
dated April 14, 1998 and June 19, 1998 of the National Labor Relations Commission are hereby
AFFIRMED.

REGIONAL AGRARIAN REFORM ADJUDICATION BOARD V. CA

(Mel Racela)

Respondents co-own several parcels of rice land, they themselves till the land. Petitioners are
in actual possession of the said land as tillers thereof. According to respondents, petitioners
 are agricultural lessees with the obligation to pay annual lease rentals to the Department of
Agrarian Reform Adjudication Board (DARAB). On the other hand, petitioners aver that they
are farmer-beneficiaries under Presidential Decree 27 (PD 27), who have been granted
Certificates of Land Transfer (CLTs) and (unregistered) emancipation patents (EPs).

The original defendants died on December 29, 1997 (Avelino Santos) and July 25, 1999
(Pedro Bernardo) and the current defendants are successors-in-interest

Respondent filed a case of ejectment on March 6, 2002 against petitioner for non-payment of
rentals before DARAB - Pampanga because the petitioners failed to pay the rentals since
1994.

DARAB Ruled that:

Petitioners could only retain their status as agricultural lessees if they complied with
their statutory obligations to pay the required leasehold rentals when they fell due.
Since all the petitioners failed to prove that they complied with their rental obligations
to respondents since 1994, the Regional Adjudicator held that they could no longer
invoke their right to security of tenure. Additionally, the CLT/EPs granted by them by
PD 27 was cancelled.

Subsequently, 2 Separate yet similar appeals were filed on February 28, 2003 and March 5, 2003,
each with different petitioners questioning the law and fact.

Respondents, however, argue that; (1) the statement “question of law and fact” without proper
basis, makes their petition “scraps of paper”; (2) 2nd appeal did not meet the reglementary period
of the case and; (3) the 2nd appeal contained signatures forged signatures of 2 dead defendants.

Petitioners pray that their Notices of Appeal to the DARAB be given due course on the ground
that they have substantially complied with the rules as set forth in Section 2, Rule XIII of the 1994
DARAB New Rules of Procedure. They posit that their appeal on "questions of fact and law"
should suffice, even if they omitted the phrase "which if not corrected would cause grave
irreparable damage and injury to them". They argue that the stringent application of the rules
denied them substantial justice.

Petitioners also argue that the complaint itself was filed against their deceased predecessors-in-
interest. Hence, if technicality is to be followed, the complaint should have been dismissed as to
the deceased defendants. But the case continued and they, as heirs, participated in the
proceedings. Additionally, although the names stated are of the deceased, the signature found
therein are signatures of their widows. Thus when the widows signed the Notice of Appeal,
their intent was not to defraud but only to continue their quest for justice.

Issue 1: Whether the notices of appeal should be treated as “scraps of paper” for failing to state
the grounds relied upon for an appeal.
 The petition is meritorious. The defects found in the two notices of appeal are not of such
a nature that would cause a denial of the right to appeal. Placed in their proper factual
context, the defects are not only excusable but also inconsequential.

The petitions being “scraps of paper” for lack of proper basis does not stand because the
mere threat of an action that would cause them irreparable damages and injuries is a
sufficient ground to question such.

Issue 2: Whether The petition is null and void for the forgery of the deceased respondents.

There is nothing sacred about the forms of pleadings or processes, their sole purpose
being to facilitate the application of justice to the rival claims of contending parties. Hence,
pleadings as well as procedural rules should be construed liberally. Dismissal of appeals
purely on technical grounds is frowned upon because rules of procedure should
not be applied to override substantial justice. Courts must proceed with caution so as
not to deprive a party of statutory appeal; they must ensure that all litigants are granted
the amplest opportunity for the proper and just ventilation of their causes, free from
technical constraints. If the foregoing tenets are followed in a civil case, their application
is made more imperative in an agrarian case where the rules themselves provide for
liberal construction.

PRESCRIPTION

CIR V. BASF COATING

(Mel Racela)

FACTS:
Basf Coating + Inks Phils. Inc., (BC) is a corporation created on August 1, 1990 with a BIR-
registered address found in 101 Marcos Alvarez Avenue, Barrio Talon, Las Pinas City. In a joint
special meeting held on March 19, 2001 with a majority of the members of the Board of
Directors and stockholders representing more than (2/3) of the entire subscribed and
outstanding capital stock decided to dissolve the corporation by cutting its 50-year term of
existence short (only until March 31, 2001). Subsequently, BC moved out of its address and
transferred to Carmelray Industrial Park, Canlubang, Calamba, Laguna

On June 26, 2001, BC submitted 2 letters to BIR Revenue District Officer (RDO). The 1st was a
notice of dissolution in compliance of Sec. 52© of the National Revenue Code. The 2nd send
was a manifestation with documents supporting said dissolution such as BIR Form 1905 which
refers to an update of information contained in its tax registration.
Thereafter, a Formal Assessment Notice (FAN) dated January 17, 2003, was sent to BC's
former address in Las Piñas City indicating an amount of 18 million pesos of deficiencies in
income tax, value added tax, withholding tax on compensation, expanded withholding tax and
documentary stamp tax, including increments, for the taxable year 1999. The FAN was sent by
registered mail on January 24, 2003.

On March 5, 2004, BIR's RDO No. 39, South Quezon City, issued a First Notice Before
Issuance of Warrant of Distraint and Levy (FNB), which was sent to the residence of one of BC's
directors.

On March 19, 2004, BC filed a protest letter citing lack of due process and prescription as
grounds.

On January 10, 2005, after 180 days without action on the part of the CIR, BC filed a petition for
review with the CTA.

CTA 1st Division Promulgated a decision in favor of the respondents on February 27, 2019. The
CTA ruled that since the CIR was aware of BC's new address and such error in sending should
not be taken against BC. According to the CTA, since there are no valid notices sent to BC, the
subsequent assessments against it are considered void.

CIR filed a Motion for Reconsideration which was denied. So, it went to CTA En banc. The CTA
En Banc held that CIR's right to assess respondent for deficiency taxes for the taxable year
1999 has already prescribed and that the FAN issued to respondent never attained finality
because BC did not receive it.

ISSUE 1: Was the running of the 3-year prescriptive period to assess suspended when BC
failed to notify the CIR of its change of address?

No, the 3-year prescriptive period to assess was not suspended in favor of the CIR even
if BC failed notify regarding its change of address.
 Under the Tax Code, the running of the Statute of Limitations shall be suspended when
the taxpayer cannot be located in the address given in the return filed upon which a tax
is being assessed or collected. In addition, Section 11 of RR 12-85 states that, in case of
change of address, the taxpayer is required to give a written notice thereof to the RDO
or the district having jurisdiction over his former legal residence and/or place of
business.

However, the Supreme Court ruled that the above-mentioned provisions on the
suspension of the 3-year period to assess apply only if the CIR is not aware of the
whereabouts of the taxpayer.

In the present case, the CIR, by all indications, was well aware that BC had moved to its
new address in Calamba, Laguna, as shown by the documents which formed part of
respondent's records with the BIR.

Moreover, before the FAN was sent to BC's old address, the RDO sent BC a letter
regarding the results of its investigation and an invitation to an information conference.
This could not have been done without being aware of BC's new address. Finally, the
PAN was "returned to sender" before the FAN was sent.

Hence, despite the absence of a formal written notice of BC's change of address, the
fact remains that petitioner became aware of respondent's new address as shown by
documents replete in its records. Therefore, the running of the three-year period to
assess respondent was not suspended and has already prescribed.

ISSUE 2: Section 3.1.7 of BIR Revenue Regulation No. 12-99 allows "constructive service" if
the assessment notice is served by registered mail. This constructive service rule was upheld in
Nava v. Commissioner of Internal Revenue. Isn't there constructive service in BC's case?

No there is none.

The CIR's reliance on the provisions of Section 3.1.7 of BIR RR No. 12-9944 as well as
on the case of Nava v. Commissioner of Internal Revenue is misplaced, because in the
said case, one of the requirements of a valid assessment notice is that the letter or
notice must be properly addressed. It is not enough that the notice is sent by registered
mail as provided under the said RR. In the instant case, the FAN was sent to the wrong
 address. Thus, the CTA is correct in holding that the FAN never attained finality because
BC never received it, either actually or constructively.

RAMON SYHUNLIONG V. TERESITA RIVERA

(Reuben Jade Sobrevilla)

FACTS:

1. Syhunliong is the President of BANFF Realty and Development Corporation

(BANFF) while Rivera used to be the Accounting Manager of BANFF. She was
hired in September of 2002.

2. About three years after, Rivera, citing personal and family matters, tendered her
resignation to be effective on February 3, 2006 and continued working for BANFF
until March of the same year to complete the turn-over of papers under her custody
to Jennifer Lumapas (Lumapas) Sometime in April of 2006, Rivera called Lumapas
to request for the payment of her remaining salaries, benefits and incentives.
Lumapas informed Rivera that her benefits would be paid, but the check
representing her salary was still unsigned, and her incentives were put on hold by
Syhunliong.

3. On April 6, 2006, at around 11:55 a.m., Rivera sent the following text message to
one of BANFF’s official cellular phones held by Lumapas:

“I am expecting that. grabe talaga sufferings ko dyan hanggang

pagkuha ng last pay ko. I don’t deserve this because I did my job when I was
still there. God bless. Sana yung pagsimba niya, alam niya real meaning.”
(insert Atty Cahig acting skills)

“Kailangan release niya lahat [nang] makukuha ko diyan including incentive

up to the last datena nandyan ako para di na kami abot sa labor.”

4. On December of 2006, Rivera filed before the National Labor Relations

Commission a complaint against Syhunliong for underpaid salaries, 13th to 16th
month and incentive pay, gratuities and tax refund.
 5. Syhunliong on the other hand instituted against Rivera a complaint for libel, and
the public prosecutor finds probable cause to indict Rivera the crime of libel.

6. Rivera filed a Motion to Quash the aforequoted information. She argued that the
text message, which was the subject of the libel complaint, merely reflected the
undue stress she had suffered due to the delay in the release of her unpaid
salaries, benefits and incentives. Further, the facts charged in the information did
not constitute the crime of libel as the elements of malice and the making of
defamatory imputation for public consumption were wanting. Her text message
was not prompted by ill will or spite, but was merely sent as part of her duty to
defend her own interests.

7. The lower court concurred with the Public Prosecutor’s finding that there was
probable cause to indict Rivera for having ascribed to Syhunliong the possession
of a vice or defect, or for having committed an act, tending to cause dishonor or
discredit to the latter’s name. As a defense, Rivera said her text message falls
squarely within the parameters of "Privileged Communication" or the elements
of Article 353 of the Revised Penal Code are not fully established by the
Prosecution’s evidence. Thereafter, the lower court issued an Order on June 18,
2009 denying Rivera’s motion for reconsideration of the foregoing.

8. On July 11, 2011, the Appellate Court rendered their decision directing the
dismissal of the information for libel filed against Rivera. The CA likewise explained
that:

The focal issue to the parties in the present case is whether the facts charged in the
information as well as the undeniable facts appearing on the record show that an offense
of libel has been committed. Our criminal law convincingly provide us with a definition of
libel – It is a public and malicious imputation of a crime, or of a vice or defect ... or
any act, omission, condition, status or circumstance tending to cause dishonor,
discredit or contempt of ... a person. x x x.

Hence, the instant petition.

Issue:
Main issue: Whether Rivera’s text message falls within the ambit of a qualified
privileged communication.
 Statutory issue:Whether the prescription of the crime had set in.
Ruling:
1. Yes. The petition was denied. Rivera’s text message falls within the ambit of a
qualified privileged communication since she “was speaking in response to duty
(to protect her own interest) and not out of intent to injure the reputation of
Syhunliong. Also there was no unnecessary publicity of the message beyond that
of conveying it to the party concerned. Lumapas was the one who told Rivera about
the delay so Rivera expressed her grievances to Lumapas and she was the best
person at that time that could help expedite the release of Rivera’s claims.
Supreme Court ruled that it should be noted that the libellous material must be
viewed as a whole. In order to ascertain the meaning of the published article the
whole of the article must be considered, each phrase must be construed in the
light of the entire publication.

2. The prescription had set in. There is no merit in the instant petition of Syhunliong
against Rivera since it was filed more than one year after the allegedly libellous
message was sent to Lumapas. Its institution was made beyond the prescriptive
period provided for in Article 90 of the RPC. The Court finds no persuasive reason
why Rivera should be deprived of the benefits accruing from the prescription of the
crime ascribed to her. The plea of prescription should be set up before the accused
pleads to the charge, as otherwise the defense would be deemed waived, but the
rule is not absolute, especially when it conflicts with a substantive provisions of the
law, such as that refers to prescription of crimes. The Supreme Court has only
power to promulgate rules concerning pleadings, practice, and procedure, and the
admission to the practice of law, and cannot cover substantive rights, the rule we
considering cannot be interpreted or given such scope or extent that would come
into conflict or defeat an express provision of our substantive law.

MANDATORY AND DIRECTORY STATUTES

ARTICLE V, NEW CIVIL CODE

(Pauline Turiano)

Article 5. Acts executed against the provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity. (4a)

IN RE: APPLICATION OF MARIO GUARIÑO FOR ADMISSION TO THE BAR

(Reuben Sobrevilla)

Facts:
1. Mario seeks to be exempted from taking the bar examinations as he is the
provincial fiscal of Batanes before the enactment of the law below.

He is invoking the Section 2 of Act No. 1597, enacted February 28, 1907, is
as follows:

"SEC. 2. Paragraph 1 of section 13 of Act 190 entitled 'An Act providing a Code of
Procedure in Civil Actions and Special Proceedings in the Philippine Islands,' is
hereby amended to read as follows: "'

1. Those who have been duly licensed under the laws and orders of the Islands
under the sovereignty of Spain or of the United States and are in good and regular
standing as members of the bar of the Philippine Islands at the time of the adoption
of this code: Provided, That any person who, prior to the passage of this Act, or at
any time thereafter, shall have held, under the authority of the United States, the
position of justice of the Supreme Court, judge of the Court of First Instance, or
judge or associate judge of the Court of Land Registration, of the Philippine
Islands, or the position of Attorney-General, Solicitor-General, Assistant Attorney-
General, assistant attorney in the oHce of the Attorney-General, prosecuting
attorney for the city of Manila, assistant prosecuting attorney for the city of Manila,
city attorney of Manila, assistant city attorney of Manila, provincial fiscal, attorney
for the Moro Province, or assistant attorney for the Moro Province, may be licensed
to practice law in the courts of the Philippine Islands without an examination, upon
motion before the Supreme Court and establishing such fact to the satisfaction of
said court.'"
The original provision of the law amended was as follows:

(Act No. 190.) "SEC. 13. Who “may practice as lawyers. — The following
persons, if not specially declared ineligible, are entitled to practice law in the courts
of the Philippine Islands: "1. Those who have been duly licensed under the laws
and orders of the Islands under the sovereignty of Spain or of the United States
and are in good and regular standing as members of the bar of the Philippine
Islands at the time of the adoption of this Code;
Main issue: Whether or not Guarino is exempted in the Bar Examination.

Statutory Issue: Whether or not the “may” provided in Act no.190 Section 13 shall
be construed as permissive or mandatory.
Ruling

M.I: No. While it is true that the said provision “may” qualified him to be exempted.
The Supreme Court held that it appears that the applicant was not and never had
been a practicing attorney in this or any other jurisdiction prior to the date of his
 appointment as provincial fiscal, and it further affirmatively appears that he was
deficient in the required qualifications at the time when he last applied for
admission to the bar. Based on this, the Supreme Court think that his
appointment to the office of provincial fiscal is not satisfactory proof of his
possession of the necessary qualifications of learning and ability. Therefore,
the application for a license to practice in the courts of the Philippines should
be denied.

HOWEVER , because he only lacked 4 points to pass the Bar examination and the
fact that he was chosen by the Chief Executive, the Provincial governor of
Sorsogon, the Supreme Court will not let him take the general Bar
examination provided that he would take the special examination that will be
given by the Supreme Court.

S.I: The Supreme Court held that the proper construction of the word “may”
is permissive. Without undue straining of the language used in the statute under
consideration, the word "may" may be construed as either mandatory or
permissive in its effect. But to construe it as mandatory would bring it in direct with
the Act of Congress, and we conclude therefore, despite the contentions of the
applicant as to the apparent intention of the legislator, that it should be given its
permissive and not its mandatory effect, and that the true intention of the legislator
was to leave it within the discretion of the court to admit to the bar without
examination the officials mentioned in the Act in any case wherein the court is
otherwise satisfied that they possess the necessary qualifications. Ordinarily, and
in the absence of any showing to the contrary, it may fairly be assumed that an
applicant who has held one of the offices mentioned in the statute, and who, prior
to his appointment, had been admitted to the practice of law in the courts of these
Islands under the former sovereign or in some other jurisdiction is duly qualified
for admission to the bar of these Islands.

ADASA v. ABALOS
(Kael Reyes)
FACTS:
This instant case emanated from the two complaints-affidavits filed by respondent Cecille S.
Abalos on 18 Jan 2001 before the Office of the City Prosecutor of Iligan City, against petitioner
Bernadette Adasa for Estafa.
Respondent alleged that the petitioner, through deceit, received and encashed 2 checks
issued in the name of respondent without respondent’s knowledge and consent and that despite
repeated demands by the latter, petitioner failed and refused to pay the proceeds of the checks.
On 23 March 2001, petitioner filed a counter-affidavit admitting that she received and
encashed the 2 checks in favor of respondent. However, adasa alleged that it was a certain Bebie
Correa who received the 2 checks which are the subject matter of the complaints and encashed
the same; said Bebie Correa left the country after misappropriating the proceeds of the checks.
Consequently, 2 separate criminal cases were filed against petitioner on which petitioner
entered an unconditional plea of not guilty. Dissatisfied with the finding of the Office Prosecutor
of Iligan City, petitioner filed a Petition for Review before DOJ.
The DOJ reversed and set aside resolution of the Office of the City Prosecutor of Iligan City and
directed the said office to withdraw Information for Estafa against petitioner.
Respondent then filed a motion for reconsideration of said resolution of DOJ arguing that
the DOJ should have dismissed outright the petition for review since SEC 7 of DOJ Circular No.
70 mandates that when an accused has already been arraigned and the aggrieved party files a
petition for review before the DOJ, the Secretary of Justice cannot, and SHOULD NOT take
cognizance of the petition, or even give due course, but instead deny it outright.
DOJ denied the Motion for Reconsideration opining that under SEC 12, in relation to SEC
7, of DOJ Circ No. 70, due to the permissive language “may” utilized in SEC 12 whereby the
Secretary has the discretion to entertain an appealed resolution not withstanding the fact that the
accused has been arraigned.

On 27 Feb 2003, the trial court issued an order granting petitioner’s Motion to Withdraw
Information and dismissed the Criminal Case.
Aggrieved by the resolution of the DOJ, respondent filed a Petition for Certiorari before
CA. The appellate court emphasized that DOJ Circ No. 70 used the phrase “shall not”
Petitioner then filed a petition for certiorari contending that SEC 12 of the same DOJ Circ
No 70 used the word “may” that would give discretion to the Secretary of Justice to entertain an
appeal, thus this petition.

ISSUE/s:
1. W/N language and intent of DOJ Circ No 70 gives discretion to the Secretary of Justice to
entertain an appeal even if the accused has been arraigned.

HELD: NO.
The CA stood firm by its decision. This time, it tried to construe SEC 7 side by side with SEC 12
of DOJ Circ No. 70 and attempted to reconcile these 2 provisions. According to the appellate
court, the phrase “shall not” in Par. 2, first sentence of SEC 7 of subject circular, to wit:
 “If an information has been filed in court pursuant to the appealed resolution, the petition
shall not be given due course if the accused had already been arraigned (Emphasis
supplied.)”
Applying the principle in StatCon -- that when a statute/provision contains words of positive
prohibition, such as “shall not,” “cannot,” or “ought not” or which is couched in negative terms
importing that the act shall not be one otherwise designated, that statute IS MANDATORY, thus
it opined that the subject provision simply means that Sec. of Justice has no other cause of action
but to deny or dismiss a petition before him when arraignment of an accused had already taken
place prior to the filing of the petition for review.

- SEC 12 of the same circular reads:

“The Secretary may reverse, affirm or modify the appealed resolution. He may, motu
proprio or upon motion, dismiss the petition for review on any of the following grounds; (e) that
the accused had already been arraigned when the appeal was taken;..”
CA opined that the permissible word “may” in the above mentioned provision would seem
to apply that the Sec of Justice has discretion to entertain an appeal notwithstanding the fact that
the accused had been arraigned. This provision shall not be treated separately, but should be
read in relation to SEC 7. When the 2 provision, taken together, simply meant that when an
accused was already arraigned when the aggrieved party files for a petition to review, Sec of
Justice CANNOT and SHOULD NOT take cognizance of the petition. The appellate court added
that the word “may” in SEC 12 should be read as “shall” or “must” since such construction is
absolutely necessary to give effect to the apparent intention of the rules.

WHEREFORE, petition is DENIED.

PHIL. REGISTERED ELECTRICAL PRACTITIONERS INC. V. JULIO FRANCIA

(Kael Reyes)

FACTS:
Petitioner is an organization composed of professional electrical engineers. On July 6, 1988,
petitioner filed before RTC an action for declaratory relief and prohibition, assailing constitutional
validity of Reso. No 1, Series of 1996. In said Reso., the Board adopted guidelines for the
implementation of the Continuing Professional Education (CPE) Program for electrical engineers.
Included therein is a requirement that every electrical engineer must earn credit units of CPE
before his license could be renewed. Petitioner assailed that said resolution is violative of the
Constitution’s Equal Protection and Due Process clauses.

After hearing, TC dismissed petitioner’s action on the ground that the latter failed to
establish a clear and unequivocal violation of the Constitution or statute.
The petitioner directly appealed to the SC on pure question of law. Petitioner argues that
the PRC and the Board did not have the authority to issue said resolution. Citing SEC 6(a) of PD
223, petitioner claims that the Board only has visitation powers, “to see that proper compliments
of professionals are employed and given proper responsibilities and remuneration.” Petitioner
further contends that the question board resolution does not provide any criteria for the PRC or
Board to follow in recommending exemptions to the CPE requirement.

SG opined that assailed resolution is not violative of the Constitution and dismissed
petitioner’s fears regarding the automatic revocation of license for non-compliance w/ the CPE
requirement. Nothing in the questioned resolution provides such automatic revocation. SG
likewise contends that the resolution is not a bill attainder since it does not seek to punish but only
to regulate the practice of a profession.

ISSUE/s:
1. W/N the BEE in light of the provisions of RA No 184, had authority to issue the questioned
resolution. YES
2. W/N the resolution itself violates certain provisions of the present Constitution. NO

HELD:
Section 3, of R.A. No. 184, mandates the Board to recommend to the PRC the adoption of
"measures as may be deemed proper for the maintenance of good ethics and standards in the
practice of electrical engineering in the Philippines. . ."
Moreover, Section 6(a) of P.D. No. 223 gives the various professional boards the power
to adopt such measures as may be deemed proper for the enhancement of the profession or
occupation and/or the maintenance of high professional, ethical and technical standards. . . ."

On this point, petitioner now insists that the authority of the Board is limited to the conduct
of ocular inspections. But nothing in said provision in any way imposes such an interpretation.
The Board in fact may even do away with ocular inspections, as can be gleaned from the use of
the word "may," implying that the conduct of ocular inspections is merely directory and not
mandatory. For sure, conducting ocular inspections is only one way of ensuring compliance with
laws and rules relative to the professional practice of electrical engineering. But it certainly is not
the only way.

We are, therefore, constrained to concede to the Board the existence of the power to issue
the assailed resolution, in pursuance of its mandates under R.A. 184 and P.D. 223.

** Supervening events, however, have rendered moot this constitutional inquiry. Pres
Ramos issued EO 226 which provides completion by a professional license of CPE programs
adopted by all Boards is hereby imposed as mandatory requirements for the renewal …..
WHEREFORE, the instant petition is DENIED for being moot and academic

GUADENCIO GUERRERO V. REGIONAL TRIAL COURT OF ILOCOS NORTE

(Pauline Turiano)

FACTS:
Filed by petitioner as an accion publiciana (dispossession of realty) against private respondent,
this case assumed another dimension when it was dismissed by respondent Judge on the
ground that the parties being brothers-in-law the complaint should have alleged that earnest
efforts were first exerted towards a compromise.

The Constitution protects the sanctity of the family and endeavors to strengthen it as a basic
autonomous social institution. This is also embodied in Art. 149, 3 and given flesh in Art. 151, of
the Family Code, which provides:

Art. 151. No suit between members of the same family shall prosper unless it should appear
from the verified complaint or petition that earnest efforts toward a compromise have been
made, but that the same have failed. If it is shown that no such efforts were in fact made, the
case must be dismissed.

This rule shall not apply to cases which may not be the subject of compromise under the Civil
Code.

December 7, 1992 - pre-trial conference, the relationship of petitioner Gaudencio Guerrero and
respondent Hernando was noted by respondent Judge Luis B. Bello, Jr., they being married to
half-sisters hence are brothers-in-law, and on the basis thereof respondent Judge gave
petitioner 5 days "to file his motion and amended complaint" to allege that the parties were very
close relatives, their respective wives being sisters, and that the complaint to be maintained
should allege that earnest efforts towards a compromise were exerted but failed. Apparently,
respondent Judge considered this deficiency a jurisdictional defect.

December 11, 1992 - Guerrero moved to reconsider the 7 December 1992 Order claiming that
since brothers by affinity are not members of the same family, he was not required to exert
efforts towards a compromise.

December 22, 1992 - respondent Judge denied the motion for reconsideration holding that
"failure to allege that earnest efforts towards a compromise is jurisdictional such that for failure
to allege same, the court would be deprived of its jurisdiction to take cognizance of the case."
He warned that unless the complaint was amended within 5 days the case would be dismissed.

January 29 1993 - the 5-day period having expired without Guerrero amending his complaint,
respondent Judge dismissed the case, declaring the dismissal however to be without prejudice.

ISSUE:
1. Whether or not the absence of an allegation in the complaint that earnest efforts towards
a compromise were exerted, which efforts failed, is a ground for dismissal for lack of
jurisdiction.
2. Whether or not brothers by affinity are considered members of the same family

HELD:
Considering that Art. 151 herein-quoted starts with the negative word "No," the requirement is
mandatory that the complaint or petition, which must be verified, should allege that earnest
efforts towards a compromise have been made but that the same failed, so that "[i]f it is shown
that no such efforts were in fact made, the case must be dismissed."

Under the rule of statutory construction, negative words and phrases are to be regarded
as mandatory, while those in the affirmative are merely directory (McGee v. Republic, 94
Phil. 820 [1954]). The use of the term "shall" further emphasizes its mandatory character
and means that it is imperative, operating to impose a duty which may be enforced
(Bersabal v. Salvador, No. L-35910, 21 July 1978, 84 SCRA 176).

But the instant case presents no occasion for the application of the above-quoted provisions. As
early as two decades ago, we already ruled in Gayon v. Gayon that the enumeration of
"brothers and sisters" as members of the same family does not comprehend "sisters-in-law." In
that case, then Chief Justice Concepcion emphasized that "sisters-in-law" (hence, also
"brothers-in-law") are not listed under Art. 217 of the New Civil Code as members of the same
family. Since Art. 150 of the Family Code repeats essentially the same enumeration of
"members of the family," we find no reason to alter existing jurisprudence on the matter.
Consequently, the court a quo erred in ruling that petitioner Guerrero, being a brother-in-law of
private respondent Hernando, was required to exert earnest efforts towards a compromise
before filing the present suit.

WHEREFORE, the petition is GRANTED and the appealed Orders of 7 December 1992, 22
December 1992 and 29 January 1993 are SET ASIDE. The Regional Trial Court of Laoag City,
Branch 16, or whichever branch of the court the case may now be assigned, is directed to
continue with Civil Case No. 10084-16 with deliberate dispatch.

LUIS K. LOKIN, JR. V. COMELEC

(Pauline Turiano)

FACTS:

The Citizen’s Battle Against Corruption (CIBAC), a duly registered party-list organization,
manifested their intent to participate in the May 14, 2004 synchronized national and local
elections. They submitted a list of five nominees from which its representatives would be chosen
should CIBAC obtain the number of qualifying votes. However, prior to the elections, the list of
nominees was amended: the nominations of the petitioner Lokin, Sherwin Tugna and Emil Galang
were withdrawn; Armi Jane Borje was substituted; and Emmanuel Joel Villanueva and Chinchona
Cruz-Gonzales were retained.

Election results showed that CIBAC was entitled to a second seat and that Lokin, as second
nominee on the original list, to a proclamation, which was opposed by Villanueva and Cruz-
Gonzales.
The COMELEC resolved the matter on the validity of the amendment of the list of nominees and
the withdrawal of the nominations of Lokin, Tugna and Galang. It approved the amendment of the
list of nominees with the new order as follows:

1. Emmanuel Joel Villanueva

2. Cinchona Cruz-Gonzales

3. Armi Jane Borje

The COMELEC en banc proclaimed Cruz-Gonzales as the official second nominee of CIBAC.
Cruz-Gonzales took her oath of office as a Party-List Representative of CIBAC.

Lokin filed a petition for mandamus to compel respondent COMELEC to proclaim him as the
official second nominee of CIBAC. Likewise, he filed another petition for certiorari assailing
Section 13 of Resolution No. 7804 alleging that it expanded Section 8 of R.A. No. 7941 by allowing
CIBAC to change its nominees.

ISSUES:

1. Whether or not the Court has jurisdiction over the controversy;

2. Whether or not Lokin is guilty of forum shopping;

3. Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the Party-
List System Act; and

4. Whether or not the COMELEC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the
amendment of the list of nominees of CIBAC without any basis in fact or law and after the close
of polls.

RULING: The Court ruled that it had jurisdiction over the case. Lokin’s case is not an election
protest nor an action for quo warranto. Election protest is a contest between the defeated and the
winning candidates, based on the grounds of electoral frauds and irregularities, to determine who
obtained the higher number of votes entitling them to hold the office. On the other hand, a special
civil action for quo warranto questions the ineligibility of the winning candidate. This is a special
civil action for certiorari against the COMELEC to seek the review of the resolution of the
COMELEC in accordance with Section 7 of Article IX-A of the 1987 Constitution.

Petitioner is not guilty of forum shopping because the filing of the action for certiorari and the
action for mandamus are based on different causes of action and the reliefs they sought were
different. Forum shopping consists of the filing of multiple suits involving the same parties for the
same cause of action, either simultaneously or successively to obtain a favorable judgment.
The Court held that Section 13 of Resolution No. 7804 was invalid. The COMELEC issued
Resolution No. 7804 as an implementing rules and regulations in accordance with the provisions
of the Omnibus Election Code and the Party-List System Act. As an administrative agency, it
cannot amend an act of Congress nor issue IRRs that may enlarge, alter or restrict the provisions
of the law it administers and enforces. Section 8 of R.A. No. 7941 provides that: Each registered
party, organization or coalition shall submit to the COMELEC not later than forty-five (45) days
before the election a list of names, not less than five (5), from which party-list representatives
shall be chosen in case it obtains the required number of votes.

A person may be nominated in one (1) list only. Only persons who have given their consent in
writing may be named in the list. The list shall not include any candidate of any elective office or
a person who has lost his bid for an elective office in the immediately preceding election. No
change of names or alteration of the order of nominees shal be allowed after the same shall have
been submitted to the COMELEC except in cases where the nominee dies, or withdraws in writing
his nomination, becomes incapacitated in which case the name of the substitute nominee shall
be placed last in the list. Incumbent sectoral representatives in the House of Representatives who
are nominated in the party-list system shall not be considered resigned.

The above provision is clear and unambiguous and expresses a single and definite
meaning, there is no room for interpretation or construction but only for application.
Section 8 clearly prohibits the change of nominees and alteration of the order in the list of
nominees’ names after submission of the list to the COMELEC. It enumerates only three
instances in which an organization can substitute another person in place of the nominee whose
name has been submitted to the COMELEC : (1) when the nominee fies; (2) when the nominee
withdraws in writing his nomination; and (3) when the nominee becomes incapacitated. When the
statute enumerates the exception to the application of the general rule, the exceptions are
strictly but reasonably construed.

Section 13 of Resolution No. 7804 expanded the exceptions under Section 8 of R.A. No. 7941
when it provided four instances by adding “nomination is withdrawn by the party” as statutory
ground for substituting a nominee. COMELEC had no authority to expand, extend, or add anything
to law it seeks to implement. An IRR should remain consistent with the law it intends to carry out
not override, supplant or modify it. An IRR adopted pursuant to the law is itself law but in case of
conflict between the law and the IRR, the law prevails.

The petitions for certiorari and mandamus were granted. Section 13 of Resolution No. 7804 was
declared invalid and of no effect to the extent that it authorizes a party-list organization to withdraw
its nomination of a nominee once it has submitted the nomination to the COMELEC.

BOARD BUSINESS VENTURES, INC. V. ELVIRA VILLAREAL

(Marianne Reyeg)
FACTS:
Petitioner Boardwalk Business Ventures is a domestic corp. in the business of selling ready-to wear
merchandise. Respondent Elvira Villareal is one of their RTW merchandise distributors. Petitioner BBV filed
a complaint for replevin (a procedure whereby seized goods may be provisionally restored to their owner
pending the outcome of an action to determine the rights of the parties concerned) covering a 1995 Toyota
Tamaraw FX for Villareal’s failure to pay a car loan she obtained from BBV. wolf wolf

The Metropolitan Trial Court ruled in favor of BBV, but the decision was later reversed upon appeal to the
Regional Trial Court. BBV then filed with the Manila RTC a motion for extension of time to file a petition for
review (30 days) and paid its docket and legal fees. The RTC denied its notice of appeal because it was a
wrong mode of appeal. BBV now filed for appeal with the Court of Appeals, who dismissed the resolution
outright, because: (1) BBV erred in filing its motion for extension and payment of docket fees with the RTC
as it should have done so with the CA (Sec. 1, Rule 42 of the Rules of Court); (2) The motion period for an
extension of 30 days is irregular because the maximum period is only 15 days under the same law; (3)
There is no certification that the claimed representative, Ma. Victoria Lo, was authorized to sign the petition
or represent BBV, making the Verification and Certification against forum shopping defective; and (4) BBV
failed to attach its petition copies of the complaint and other relevant pleadings pursuant to Secs. 2 and 3
of Rule 42.

ISSUE:
Whether or not the Secs. 1 - 3 of Rule 42 of the Rules of Court may be liberally construed to effect
substantial justice in accordance with Sec. 6, Rule 1 of the Rules of Civil Procedure. (May the procedural
lapses be disregarded?).

HELD:
NO. The right to appeal is neither a natural right, nor [is it a component] of due process. It is merely a
statutory privilege and may be exercised only in the manner and in accordance with the provisions of law.

The petitioner must comply with the requirements laid down in Rule 42 of the ROC. (I summarized
nalang.) (okay lang ^^, )
● Section 1. How appeal taken; time for filing → The petition for review with CA and payment to the clerk
for docket and other fees may be filed and served within 15 days from notice of the decision reviewed
or its denial. The CA may grant an additional 15 days period only within which to file the petition for
review.
○ The petitioner filed and made its payment with the RTC. Its subsequent payment with the CA did
not cure the defects because the payment was made beyond the 15-day reglementary period for
filing for an appeal.
○ There was no compelling reason for the extension of the period to 30 days.
● Section 2. Form and contents → The petition shall be accompanied by copies of the pleadings and
other material portions of the record. The petitioner shall also submit a certification under oath that he
has not commenced any action involving the same issues with the SC, CA, its different divisions, or
any other tribunal or agency thereof.
○ There is no special power of attorney or board resolution to prove that Ms. Lo was authorized to
represent BBV in the proceedings, a requirement for juridical entities. The multiple violations
militate against the plea for leniency.
● Section 3. → Non-compliance with any of the requirements regarding payment of docket and
other lawful fees… and the contents of the documents which should accompany the petition
shall be sufficient ground for dismissal thereof.

The appeal not having been deemed perfected, the RTC decision became final and executory. The
perfection of an appeal in the manner and within the period set by the law is not only mandatory
but jurisdictional as well, hence failure to perfect the same renders the judgment final and
executory. The Supreme Court has only relaxed the governing periods only in exceptional cases, this case
not being one of them. Since the petitioner’s right of appeal is a mere statutory privilege, it was bound
to a strict observance of periods of appeal, which requirements are not merely mandatory but
jurisdictional. That it was the former counsel’s negligence will also not excuse BBV from compliance with
the rules.
FLORANTE QUIZON V. COMELEC
(Marianne Reyeg)
FACTS:
Petitioner Florante Quizon and private respondent Roberto Puno were congressional candidates for the
May 2007 elections.

Only April 17, Quizon filed a Petition for Disqualification and Cancellation of Certificate of Candidacy against
Puno, alleging Puno was material representation regarding Puno’s residency; that, while Puno claimed he
was a residency of Valley Golf, Antipolo City for 4 years and 6 months, he was in fact a resident of Quezon
City.

On April 24 filed a Supplement claiming Puno cannot be a valid candidate of the First District of Antipolo
City because he was running in the First District of the Province of Rizal, which is a different district
altogether. pConcerned residents sought clarification on that matter because Puno, according to his COC,
sought office in Rizal bought was campaigning in Antipolo

On June 5, Quizon filed the present petition for mandamus alleging that COMELEC had not rendered a
judgment on the above petitions.On July 31, 2007, COMELEC Second Division dismissed the petitions, to
which Quizon filed a motion for reconsideration.

Puno and the OSG are of the opinion the petition for mandamus has been rendered moot by the decision
of the COMELEC Second Division. Puno added that Quizon failed to show he is entitled to the writ.

ISSUE:
1. Whether or not COMELEC may be compelled by mandamus to issue a resolution.
2. STATCON: Whether or not or not the information required in the COC are mandatory which would
result in Roberto’s disqualification.

HELD:
1. NO. A mandamus’s principal function is to command and expedite, not to inquire and adjudicate. Quizon
prayed for COMELEC to resolve the petition for disqualification, but pending the petition for mandamus,
COMELEC issued the sought for resolution, rendering the instant case moot. A case is moot when it
ceases to present a justiciable controversy. Courts generally deny deciding or dismiss cases which are
moot and academic, but there are exceptions: (1) there is a grave violation of the Constitution; (2) the
exceptional character of the situation and involvement of paramount public interest; (3) when the issues
raised will provide controlling principles to guide the bench, the bar, and public; and (4) the case is capable
of repetition yet evading review. Moreover, what Quizon sought was not the execution of COMELEC’s
administrative power but its quasi-judicial function in denying due course or cancelling the certificate of
candidacy.

2. NO. Petitioner alleges that he and the third candidate (Velasco) are the only actual candidates of the
election and that since he received a higher number of votes than Velasco, he should be proclaimed the
winning candidate. Petitioner’s assertion has no merit.
Sec. 78 of the Omnibus Election Code: petitions to deny due course or cancel COCs should be resolved,
after due notice and hearing, not later than 15 days before the election.In connection to Sec. 6 of the 1987
Electoral Reforms Law, the 15 day period in Sec. 78 is merely directory. (Salcedo II v. COMELEC)

● If the petition is filed within the statutory period and the candidate is declared by final judgment to
be disqualified before the election → candidate will not be voted for and votes cast for him shall not
be counted.
● If, for any reason, the candidate is not declared by final judgment before an election to be
disqualified, is voted for, and receives the winning no. of votes → Court and COMELEC shall
continue the trial and hearing of the action, protest, or inquiry upon motion of a complainant and
may order the suspension of the candidate when evidence of his guilt is strong.
● The 15 day period in Sec. 78 for deciding the petition is merely directory.

Codilla v. De Venecia: Pursuant to Sec. 6 of the of the Electoral Reforms Law, a final judgment before the
election is required for the votes of a candidate to be considered “stray.” Absent such final judgment, the
votes cast in favor of Puno cannot be considered stray.

As to the alleged irregularity in the filing of the COC, the Court has held that provisions of the law
regarding COCs, such as signing and swearing on the same, as well as the information required to
be stated, are considered mandatory prior to the elections. Thereafter, they are regarded as merely
directory to give effect to the will of the people. Puno won by an overwhelming number of votes. The
alleged technicalities should not defeat the intention of the voter especially if discoverable from the ballot
itself. Neither will Puno’s subsequent disqualification entitle Quizon to be declared winner as the candidate
who lost cannot be proclaimed winner in the event that the candidate who won is found to be ineligible for
office. A second placer is a second placer.

Lastly, the petitioner could have appealed the COMELEC Division decision to COMELEC en banc.