LABOR LAW resolutions.

The CA affirmed the decision of the NLRC with respect to

the finding of illegal dismissal.
SAMEER OVERSEAS PLACEMENT AGENCY, INC., vs. CABILES
G.R. No. 170139, August 5, 2014 ISSUE: Whether the CA erred when it affirmed the ruling of the NLRC finding
respondent illegally dismissed?
EMERGENCY RECIT: Joy Cabiles, thru Sameer Agency, applied for a quality
control work in Taiwan but was hired as cutter, and was dismissed in less than HELD: No, CA has validly affirmed the ruling of the NLRC.
1 year. Cabiles sued Sameer and Wacoal as Sameer’s foreign principal. SC
upheld NLRC & CA that Cabiles was illegally dismissed, Sameer Agency failed Sameer Overseas Placement Agency failed to show that there was just cause
to show that there was just cause for causing Cabiles’ dismissal. The for causing Cabiles’ dismissal. The employer, Wacoal, also failed to accord
employer, Wacoal, also failed to accord her due process of law (notice & her due process of law. Certainly, employers cannot be compelled to retain the
hearing). services of an employee who is guilty of acts that are inimical to the interest of
the employer. Security of tenure for labor is guaranteed by our
FACTS: Constitution.
• Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment
and placement agency. Responding to an ad it published, respondent, Employees are not stripped of their security of tenure when they move
Joy C. Cabiles, submitted her application for a quality control job in to work in a different jurisdiction. With respect to the rights of overseas
Taiwan. Filipino workers, we follow the principle of lex loci contractus (the law of
• Cabiles’ application was accepted. Joy was later asked to sign a the place where the contract is made) which governs in this jurisdiction.
oneyear employment contract for a monthly salary of NT$15,360.00. There is no question that the contract of employment in this case was perfected
She alleged that Sameer Overseas Agency required her to pay a here in the Philippines. Therefore, the Labor Code, its implementing rules and
placement fee of P70,000.00 when she signed the employment regulations, and other laws affecting labor apply in this case. Furthermore,
contract. settled is the rule that the courts of the forum will not enforce any foreign claim
• Cabiles was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) obnoxious to the forum’s public policy. Herein the Philippines, employment
on June 26, 1997. She alleged that in her employment contract, she agreements are more than contractual in nature. The Constitution itself, in
agreed to work as quality control for one year. In Taiwan, she was Article XIII, Section 3, guarantees the special protection of workers.
asked to work as a cutter.
• Sameer Overseas Placement Agency claims that on July 14, 1997, a By our laws, overseas Filipino workers (OFWs) may only be terminated for a
certain Mr. Huwang from Wacoal informed Joy, without prior notice, just or authorized cause and after compliance with procedural due process
that she was terminated and that "she should immediately report to requirements. Article 282 of the Labor Code enumerates the just causes of
their office to get her salary and passport." She was asked to "prepare termination by the employer.
for immediate repatriation."
• Subsequently, Cabiles filed a complaint with the NLRC against Petitioner’s allegation that respondent was inefficient in her work and negligent
petitioner and Wacoal. She identified Wacoal as Sameer Overseas in her duties may, therefore, constitute a just cause for termination under
Placement Agency’s foreign principal. Article 282(b), but only if petitioner was able to prove it. The burden of proving
• Sameer Overseas Placement Agency alleged that respondent's that there is just cause for termination is on the employer.
termination was due to her inefficiency, negligence in her duties, and
her "failure to comply with the work requirements [of] her foreign To show that dismissal resulting from inefficiency in work is valid, it must be
[employer]." shown that:
• Labor Arbiter dismissed Cabiles’ complaint. Cabiles appealed to the 1) the employer has set standards of conduct and workmanship against which
NLRC. In a resolution, the NLRC declared that Cabiles was illegally the employee will be judged;
dismissed. The Commission denied the agency’s motion for 2) the standards of conduct and workmanship must have been communicated
reconsideration. to the employee; and 3) the communication was made at a reasonable time
prior to the employee’s performance assessment.
• Aggrieved by the ruling, Sameer Overseas Placement Agency caused
the filing of a petition for certiorari with the CA assailing the NLRC’s
There was also no showing that respondent was sufficiently informed of the officers. Zurbano had received a retirement package consisting of 150%
standards against which her work efficiency and performance were judged. retirement pay plus other benefits which totalled to P76,501.88.
The parties’ conflict as to the position held by respondent showed that even
the matter as basic as the job title was not clear. The bare allegations of Before the lapse of a year, Zurbano filed against SMC and Honasan an action
petitioner are not sufficient to support a claim that there is just cause for for illegal dismissal and unfair labor practice. Labor Arbiter Aurellano decided
termination. There is no proof that respondent was legally terminated. in favor of petitioner Zurbano. On appeal, they dismissed herein Zurbano’s
Respondent’s dismissal less than one year from hiring and her repatriation on complaint against SMC for lack of merit. It held that he should have known that
the same day show not only failure on the part of petitioner to comply with the he enjoyed security of tenure and need not have believed the threats of Mr.
requirement of the existence of just cause for termination. They patently show Honasan. It further held that he was principally induced by the benefit package
that the employers did not comply with the due process requirement. that accompanied it.

A valid dismissal requires both a valid cause and adherence to the valid Procedural Issue: WON the petition must fail for failure of Zurbano to move
procedure of dismissal.75 The employer is required to give the charged for reconsideration of the impugned decision before certiorari may be availed
employee at least two written notices before termination. One of the written of.
notices must inform the employee of the particular acts that may cause his or
her dismissal. The other notice must "[inform] the employee of the employer’s Held: No. Though the petition suffers from a technical infimity, the Court
decision." Aside from the notice requirement, the employee must also be given allowed the instant petition first, because it involves the public policy of
"an opportunity to be heard." Petitioner failed to comply with the twin notices providing justice to the poor and uneducated; and second, because technical
and hearing requirements. Respondent started working on June 26, 1997. She rules of procedure should not be strictly applied to labor cases, especially
was told that she was terminated on July 14, 1997 effective on the same day where the result will be detrimental to the working man.
and barely a month from her first workday. She was also repatriated on the
same day that she was informed of her termination. The abruptness of the In the case at bar, it is not in dispute that petitioner Zurbano—a man with only
termination negated any finding that she was properly notified and given the a first-grade education, unemployed since 1985, and the principal bread-
opportunity to be heard. Her constitutional right to due process of law was winner for his wife and 12 children—lost his former counsel. Hardly literate,
violated. financially broke and unschooled in the labyrinths of the law, petitioner was not
able to immediately find a new counsel to represent him, and to inform the
Zurbano, Sr. vs. National Labor Relations Commission respondent NLRC of such change.
G.R. No. 103679, 17 December 1993, SECOND DIVISION
Considering these strictures of life, mostly dictated by his poverty, we cannot
Technical rules of procedure should not be strictly applied to labor cases, throw out the petition of the petitioner without running afoul of the mandate
especially where the result will be detrimental to the working man. declared in Article 3 of the Labor Code of the Philippines, thus:
“ART. 3. Declaration of basic policy.—The State shall afford protection to labor,
Facts: Zurbano worked for the Legazpi City office of the private respondent promote full employment, ensure equal work opportunities regardless of sex,
corporation (San Miguel Corporation, or SMC for short) for more or less 27 race or creed, and regulate the relations between workers and employers. The
years as truck helper. In 1980, the petitioner was hospitalized a number of State shall assure the rights of workers to self-organization, collective
times for the following illnesses and work-related accidents. He was on sick bargaining, security of tenure, and just and humane conditions of work.”
leave again in 1983 when he had to be treated for facial injuries which he
sustained during another work-related accident.
Substantive Issue: Whether or not petitioner was illegally dismissed from
On May 7, 1985 he was summoned by respondent Honasan, SMC Manager, work.
and one Jingco, SMC personnel officer. Jingco asked Zurbano to retire
because of the numerous sick leave he had. They then threatened Zurbano Held: Yes. Public respondent Commission acted with grave abuse of
with termination of employment if he did not opt to retire from SMC. That they discretion. Its conclusions do not do justice to Zurbano, a lowly laborer who
will give him an above ordinary retirement package and will employ his children deserves more sympathy in law because he has less in life.
in the SMC. Due to his fear of the power and influence of Honasan and Jingco
he signed the previously prepared retirement letter provided by the two SMC
Firstly, it is difficult to understand how the public respondent could contradict • The strategy entails that route salesmen were given specific territories to
itself. While it deduced from the evidence that pressure may have been sell beer products directly to the wholesalers.
exerted on petitioner to make him retire, yet it held that his consent to retire
was not vitiated. The threat was clear and present considering that Mr.
Honasan is petitioner Zurbano’s immediate superior in the corporation. • The union alleged that the new marketing scheme violates Sec 1, Art IV f
the CBA be-
Secondly, it was the direct threat of dismissal that compelled petitioner to retire cause the introduction of the CDS would reduce the take home pay of th
and not due to the attractive retirement package. Nonetheless, it is e salesmen.
unthinkable for petitioner to prefer its short term benefits rather than the longer
benefits that he will derive from continuing his employment with the private
respondent. Petitioner is the sole breadwinner of a family of fourteen and his • The marketing strategy was charged unto this court on the basis that the
primary concern ought to be to work as long as he could to assure the support San Miguel Corporation is promoting unfair labor practices and that
of his loved ones. It is farthest from the minds of the poor to retire from work. numerous workers will be affected by such implementation

Thirdly, the acceptance of by an illegally dismissed employee must not

necessarily be construed as to stop him from questioning the legality of his ISSUE:
dismissal.
Whether such Complimentary Distribution System is against the Collective
Finally, it is plain that the promise to employ the children of Zurbano was part
Bargaining Agreement
of the deception to induce the retirement of Zurbano.

RULING:
San Miguel Brewery Sales Force Union(PTGWO)
vs. Hon. Blas Ople
G.R. No. L-53515, February 8, 1989 • The Supreme Court held that such new marketing strategy does not
impair the right the Collective Bargaining Agreement
FACTS:

• It’s a valid exercise of managerial prerogative. So long as a company

• For 3 years, a collective bargaining agreement was being implemented b ’s management prerogatives are exercised in good faith for the adva
y San Miguel Corporation Sales Force Union (PTGWO), and San Miguel ncement of the employer’s inter-
Corporation. The collective bargaining agreement grants the former and est and not for the purpose of defeating or circumventing the rights of
their associates a monthly compensation and commission based on their the employees under special laws or under valid agreements
sales

• San Miguel Corporation’s offer to compensate the members of its sal

• Section 1, of Article IV of which provided “Employees within the appropri es force who will be adversely affected by the implementation of the
ate bargain- CDS by paying them a so-
ing unit shall be etitled to a basic monthly cnsation plus commission base called “back adjustment commission” to make up for the cmmissions
d on their respective sales.” they might lose as a result of the CDS proves the company’s good fai
th and lack of intention to bust their union.

• The company introduced a marketing scheme known as “Complementar

y Distribution Sys- • The term back adjustment commission was made in order to
tem”(CDS) whereby its beer products were offered for sale directly to wh compensate for the commission that the workers might lose which
olesalers through San Miguel’s Sales Offices. further proves that the San Miguel Corporation didn't have any
intention to ransack their union.
 • UST contented that it has the sole and exclusive right and prerogative
to determine the nature and kind of work its employees perform and
to control and manage its own operations.
GR No. 89920 | October 18, 1990
ISSUE
UNIVERSITY OF STO. TOMAS v NATIONAL LABOR RELATIONS W/N UST may comply with the NLRC readmission order by granting
COMMISSION (Labor Law Generally) substantially equivalent academic assignments in lieu of actual reinstatement?

FACTS: HELD
• UST, through its Board of Trustees, terminated the employment of 16 NO – Art. 263 of the Labor Code, amended by RA 6715, the NLRC is charged
union officers and directors of UST Faculty Union on the ground that with the task of implementing a valid return-to-work order by the Secretary of
in publishing or causing to be published in Strike Bulletin No. 5, the DOLE. As the implementing body, its authority did not include the power to
libelous and defamatory attacks against the Father Rector each of amend the order. Since the Secretary’s order specifically provided that the
them has committed the offenses of grave misconduct, serious dismissed faculty members shall be readmitted under the same terms and
disrespect to a superior and conduct unbecoming of a faculty member. conditions prior to the dispute, the NLRC should have directed the
• As a result, some faculty members staged mass leaves of absence, reinstatement of the concerned faculty members. It erred in granting the
which disrupted the classes in all levels at the University. alternative remedy of payroll reinstatement. The grand of substantially
• The union filed a complaint for illegal dismissal and unfair labor equivalent academic assignments cannot be sustained since it has no actual
practice with the DOLE. teaching loads, thus, it is not the same terms and conditions implemented
• The Labor Arbiter, on a prima facie showing that termination was before the issue rose. The phrase “under the same terms and conditions” in
causing a serious labor dispute, certified the matter to the Secretary the order means actual reinstatement or the return of actual teaching load to
of DOLE for a possible suspension on the effects of the termination. the dismissed faculty. Art. 263 was devised to maintain the status quo between
• Sec. Drilon issued an order to bring back the terminated faculty the workers and management in a labor dispute. The grant of substantially
members back to work under the same terms and conditions before equivalent academic assignments would evidently alter the existing status quo
their dismissal while the labor case is proceeding. since the temporarily reinstated teachers will not be given their usual loads.
• UST filed a motion for reconsideration asking the DOLE to assume Art. 263 calls for the admission of all workers under the same terms and
jurisdiction over the present case or certify it to the NLRC for conditions prevailing before the strike, UST is restricted from exercising its
compulsory arbitration without suspending the effects of termination. generally unbounded right to transfer or reassign its employees. But since the
Sec. Drilon approved the motion except to the effect of suspending the first semester is about to end, the actual reinstatement of the non-reinstated
termination. He also barred all succeeding motions. faculty members may take effect at the start of the second semester. The
• NLRC issued a resolution directing UST to comply and abide with the contracts of the new professors cannot prevail over the right to reinstatement
Orders of Sec. Drilon by reinstating the dismissed members. of the dismissed personnel.
• UST states that it has reinstated 6 of the dismissed members; 2 were
given back teaching loads but were only given substantially equivalent
academic assignments since their teaching loads were already taken
over by new faculty members; 7 were also given substantially MARCOPPER MINING CORPORATION v NLRC and NATIONAL MINES
equivalent academic assignments in lieu of actual teaching loads AND ALLIED WORKERS UNION (NAMAWU-MIF)
because all of the loads given at the start of the first semester were G.R. No. 103525. March 29, 1996
already taken over by new faculty members; 1 had been AWOL.
FACTS:
• SC issued a TRO enjoining NLRC from enforcing its resolution.
• UST argues that the actual reinstatement of the dismissed members • On August 23, 1984, Marcopper Mining Corporation and private respondent
NAMAWU-MIF (a labor federation duly organized and registered with the
is not feasible nor practicable since this would compel UST to violate
Department of Labor and Employment, to which the Marcopper Employees
and terminate its contracts with new members who had taken over the
Union is affiliated) entered into a CBA effective from May 1, 1984 until April
courses. Also, if they were to change the members right when the
30, 1987.
semester is about to end, it would impair and prejudice the welfare and
interest of the students.
• On July 25, 1986, prior to the expiration of the CBA, the petitioner and private good. As such, it must be construed liberally rather than narrowly and
respondent executed a MOA, wherein the terms of the CBA, specifically on technically, and the courts must place a practical and realistic construction
matters of wage increase and facilities allowance were modified. upon it, giving due consideration to the context in which it is negotiated and
• Petitioner implemented the initial 5% wage increase due on May 1, 1986 purpose which it is intended to serve. (Davao Integrated Port Stevedoring
• Petitioner then implemented the second 5% wage increase due on May 1, Services v Abarquez)
1987 and thereafter added the integrated COLA
• On June 1 of the same year, EO 178 was promulgated mandating the NOTES:
integration of the COLA under Wage Orders Nos. 1, 2, 3, 5 and 6 into the • Collective Bargaining Agreement (CBA) - contractual agreement between
basic wage of workers. (Its effectivity retroactive to May 1, 1987) employer and a group of employees part of a Labor Union, said agreement
• Consequently, the basic wage rate of petitioner's laborers categorized as governs wages, hours, working conditions for employees, which can be
non-agricultural workers was increased by P9.00 per day. enforced against both employers and the union.
• Respondent assailed the manner in which the second wage increase was • Memorandum of Agreement (MOA) - written document describing a
affected. It argued that the COLA should first be integrated into the basic cooperative relationship between two parties wishing to work together on a
wage before the 5% wage increase is computed. project or to meet an agreed upon objective. An MOA serves as
a legal document and describes the terms and details of the
ISSUE: partnership agreement.
• WoN the computation for wage increase of the basic wage should include • Cost of living allowance (COLA) - periodic increase in wages to
the COLA compensate or help workers keep up with inflation.

HELD: CIVIL LAW

• Yes. The principle that the CBA is the law between the contracting parties
stands strong and true. However, the present controversy involves not Albetz Investment Inc., vs. CA
merely an interpretation of CBA provisions. More importantly, it requires a G.R. No. L-32570 February 28, 1977
determination of the effect of an executive order on the terms and the
conditions of the CBA. Doctrine:
• It is unnecessary to delve too much on the intention of the parties as to what
they allegedly meant by the term "basic wage" at the time the CBA and MOA Civil Code on Human Relations (Chapter 2), Article 19. Every person must, in
were executed because there is no question that as of May 1, 1987, as the exercise of his rights and in the performance of his duties, act with justice,
mandated by E.O. No. 178, the basic wage of workers, or the statutory give everyone his due, and observe honesty and good faith.
minimum wage, was increased with the integration of the COLA.
• As of said date, then, the term "basic wage" includes the COLA. This is what Facts:
the law ordains and to which the CBA of the parties must conform. Respondent Spouses Calma were the lessees of that lot No. 27 pt., Block No.
• Petitioner's arguments eventually lose steam in the light of the fact that BP-52 of a subdivision plan and located No. 816 Prudencio Street, Sampaloc,
compliance with the law is mandatory and beyond contractual stipulation by Manila. Petitioner Albetz Investments, Inc., the lessor, needing the premises
and between the parties; thus, whether or not petitioner intended the basic in order to construct a new building, demanded delivery of the lot to it and upon
wage to include the COLA becomes immaterial. refusal of of the Calma Spouses, Albetz Investments, Inc. brought an action of
• EO 178 retroactively took effect on the same date the CBA increase became unlawful detainer against Vicenta Calma. Vicenta Calma and others filed a
effective, therefore, there cannot be any doubt that the computation of the petition for certiorari with preliminary injunction on September 7, 1964 in the
CBA increase on the basis of the "integrated" wage does not constitute a Court of First Instance of Manila. Alleging that the demolition was illegal
violation of the CBA. because it was made eight (8) months after issuance of the demolition order,
• While the terms and conditions of the CBA constitute the law between the and that the manner it was carried out was indiscriminate, causing damage to
parties, it isn’t an ordinary contract to which is applied the principles of law their personal properties, the spouses Calma, owners of the house, and the
governing ordinary contracts. A CBA, as a labor contract within the spouses Umengan, occupants of its ground floor, commenced the instant
contemplation of Article 1700 of the Civil Code of the Philippines that action in the Court of First Instance of Manila. On the principal grounds that
governs the relations between labor and capital, is not merely contractual in the order of demolition was no longer in force, having been issued eight (8)
nature but impressed with public interest, hence, it must yield to the common months before its enforcement, and that the said spouses were not notified of
the order of demolition, and they demolished the house indiscrimately and the creditors agreed to appoint representatives to a working committee that would
personal properties were carelessly placed, resulting in their being damaged, determine the order of preference as to how each creditor should be paid. They
the Court of First Instance rendered judgment in favor of the plaintiffs and also agreed not to file suit against CALI but CALI did reserve that it will file
against the defendant, awarding them damages in specified amounts, as well insolvency proceedings should its assets be not enough to pay them up. Shell
as attorney's fees and costs of suit. Defendant appealed to the Court of Company was represented by a certain Fitzgerald to the three man working
Appeals. CA upheld CFI's decision. The plaintiffs in this case should be committee. Later, the working committee convened to discuss how CALI’s
understood as "Spouses Calma"(fellow respondent of CA in the SC's case) asset should be divided amongst the creditors but while such was pending,
and defendant is "Albetz Investment" (the petitioner for certiorari in the same Fitzgerald sent a telegraph message to Shell USA advising the latter that Shell
SC case) Philippines is assigning its credit to Shell USA in the amount of $79k, thereby
effectively collecting almost all if not the entire indebtedness of CALI to Shell
Issue: Philippines. Shell USA got wind of the fact that CALI has a C-54 plane is
W/N Petitioner is liable for recovery of damages following the principle of California and so Shell USA petitioned before a California court to have the
Article 19 of the Civil Code? plane be the subject of a writ of attachment which was granted.
Meanwhile, the stockholders of CALI were unaware of the assignment of credit
Ruling:
made by Shell Philippines to Shell USA and they went on to approve the sale
YES. Based on records, the Calma spouses could not have been unaware of
of CALI’s asset to the Philippine Airlines. In September 1948, the other
the order of demolition prior to the date when their house was actually
creditors learned of the assignment made by Shell. This prompted these other
demolished. It is apparent, therefore, that the Calma spouses were given more
creditors to file their own complaint of attachment against CALI’s assets. CALI
than sufficient time to comply with the order of the Municipal Court to remove
then filed for insolvency proceedings to protect its assets in the Philippines
voluntarily their house from the premises. It is not even necessary to await the
from being attached. Alfredo Velayo’s appointment as CALI’s assignee was
order of demolition to be served upon the said spouses before carrying out the
approved in lieu of the insolvency proceeding. In order for him to recover the
writ of demolition. Certainly, the demolition complained of in the case at bar
C-54 plane in California, it filed for a writ of injunction against Shell Philippines
was not carried out in a manner consistent with justice and good faith as sought
in order for the latter to restrain Shell USA from proceeding with the attachment
for in Article 19 of the Civil Code. At the instance of petitioner, it was done in a
and in the alternative that judgment be awarded in favor of CALI for damages
swift, unconscionable manner, giving the occupants of the house no time at all
double the amount of the C-54 plane. The C-54 plane was not recovered. Shell
to remove their belongings therefrom. No damage worth mentioning would
Company argued it is not liable for damages because there is nothing in the
have been sustained by petitioner Albetz Investments, Inc. if their men, led by
law which prohibits a company from assigning its credit, it being a common
the Sheriff, had been instructed to allow said occupants to remove their
practice.
personal properties, considering that this would not have taken a considerable
length of time. ISSUE: Whether or not Shell is liable for damages considering that it did not
violate any law.
Disposition:
HELD: Yes. The basis of such liability, in the absence of law, is Article 21 of
WHEREFORE, with the foregoing modifications, the appealed decision is
the Civil Code which states:
hereby AFFIRMED, without pronouncement as to costs.
“Art. 21. Any person who willfully causes loss or injury to another in a manner
Velayo, etc v Shell Co of the Phils, et al that is contrary to morals, good customs or public policy shall compensate the
G.R. No. L-8883 latter for the damage”.
July 14, 1959

FACTS: Thus at one stroke, the legislator, if the forgoing rule is approved (as it was
approved), would vouchsafe adequate legal remedy for that untold numbers
Prior to 1948, Commercial Airlines (CALI) owed P170k (abt. $79k) to Shell of moral wrongs which is impossible for human foresight to provide for
Company. CAL offered its C-54 plane as payment to Shell Company (the plane specifically in the statutes. A moral wrong or injury, even if it does not constitute
was in California) but Shell at that time declined as it thought CALI had a violation of a statute law, should be compensated by damages. Moral
sufficient money to pay its debt. In 1948 however, CALI was going bankrupt damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability
so it called upon an informal meeting of its creditors. In that meeting, the
for damages arises from a willful or negligent act contrary to law. In this article, If fraud or malice had been proven, her actions should be directed against the
the act is contrary to morals, good customs or public policy. individual judge who fraudulently or maliciously injured her.
Judgment. In view of all the foregoing, we are of the opinion and so declare,
Felipe v. Leuterio
that the judiciary has no power to reverse the award of the board of judges of
G.R. No. L-4606
an oratorical contest. For that matter it would not interfere in literary contests,
May 30, 1952
beauty contests and similar competitions
FACTS:
FONACIER VS. COURT OF APPEALS
An inter-collegiate oratorical competition was held in Naga City. Felipe was
G.R. L-5917; 28 JAN 1955
one of the Judges and was the chairman.
Nosce was awarded the first price and Imperial the second place.
Facts: Case was filed by Iglesia Filipina Independiente (IFI), represented by
Imperial addressed a letter to the Board of Judges protesting the verdict and
its supreme bishop Gerardo Bayaca, against Bishop Fonacier seeking to
alleged that one of the judges committed a mathematical error on computing
render an accounting of his administration of all the temporal properties and to
the scores.
recover the same on the ground that he ceased to be the supreme bishop of
The Board refused to amend their award;
IFI. Isabelo De los Reyes Jr. had been elected as the Supreme Bishop.
Imperial filed a complaint in court. She asserts that she should have ranked
rd
3 place in the vote, which makes her score 9 or the First place.
Petitioner claims that he was not properly removed as Supreme Bishop and
Judge Nosce Imperial Buenavides General
his legal successor was Juan Jamias. He claims that the there was an
Felipe Sr. 3 1 2 4 accounting of his administration and was turned over to bishop Jamias. Also,
......... that Isabelo De los Reyes and Bayaca have abandoned their faith and formally
Obias 1 2 4 3 joined the Prostestant Episcopal Church of America.
..............
Rodriguez 1 4 5 3 CFI rendered judgment declaring Isabelo De Los Reyes, Jr. as the sole and
.......... legitimate Supreme Bishop of IFI and ordered Fonacier to render an
Prado 3 2 1 3 accounting of his admistration
..............
Moll 2 1 5 4 CA affirmed the decision of the CFI
...............
10 10 17 17
Issue: Whether or not the petitioner should still be regarded as the legitimate
ISSUE: supreme bishop of IFI.
Whether or not the judiciary has the power to reverse the award of the board
of judges of an oratorical contest?
HELD: Held: Supreme Court affirmed CA’s decision. The legitimate Supreme Bishop
No, Granting that Imperial suffered some loss or injury, this is an instance of of IFI is Isabelo De los Reyes, Jr. The Supreme Court affirms the validity of the
"damnum absque injuria" election of Bishop Delos Reyes as the Supreme Bishop based on their internal
(damnum absque injuria – damage resulting from the legitimate exercise laws
of a person’s rights is a loss without injury for which the law gives no
remedy) To finally dispose of the property issue, the Court, citing Watson v. Jones,368
Respondent judge erred in his reasoning that if there is a “wrong” there is a declared that the rule in property controversies within religious congregations
remedy. strictly independent of any other superior ecclesiastical association (such as
There was merely an error on the part of one judge the Philippine Independent Church) is that the rules for resolving such
Error and wrong do not mean the same thing. "Wrong" as used in the controversies should be those of any voluntary association. If the congregation
aforesaid legal principle is the deprivation or violation of a right. A Contestant adopts the majority rule then the majority should prevail; if it adopts adherence
has no right to the prize unless and until he or she is declared winner by the to duly constituted authorities within the congregation, then that should be
board of referees or judges. followed.
 if there was mutual lust; or if expenses were made because of the promise
Gashem v. CA (expenses for the wedding), then actual damages may be recovered.

Facts:
Domalagan v. Bolifer
- Gashem and Marilou met in Dagupan City where Marilou was working
as a waitress.
Facts:
- The two got close and intimate. According to Marilou, Gashem
Jorge Domalagan, the herein petitioner alleged that he and the defendant
proposed to her in which she later introduced him to her parents.
entered into a contract by virtue of the terms of which he was to pay to the
- Her parents then started preparing for the wedding as they invited
defendant a certain amount upon the marriage of his son with the daughter of
guests and sponsors.
the defendant; that he has completed his obligation under said contract by
- Marilou started living in Gashem’s apartment where they banged all
paying the stipulated amount; that notwithstanding said agreement, the
night.
daughter was joined to a lawful wedlock with another man not his son; that
- Eventually their relationship went south as Gashem started
immediately upon learning of the marriage, he demanded the return of the
maltreating Marilou and later revoked the proposal to marry her as he
payment he has made. The trial court rendered a judgment in favor of the
told her that he is already married to someone else.
plaintiff and against the defendant.
- Marilou then filed a case against Gashem for damages wherein the
trial court ruled in favor of Marilou which was brought up to the Court
of Appeals but the decision of the lower court was still affirmed by the
CA. Issue: Whether or not the verbal contract entered into by the plaintiff and the
defendant in regard to the delivery of the money by reason of a prospective
ISSUE: W/N the CA erred in holding Gashem liable for damages (No) marriage is valid and effective.

Ruling:
Held:
Gashem is liable to pay for damages in favor of Marilou not really because of
Petitioner invokes paragraph 3 of section 335 of the Code of Procedure in Civil
his breach of promise to marry her but based on Article 21 of the Civil Code.
Action and, appellant argues that the verbal contract, not having been reduced
Breach of promise to marry is not an actionable wrong per se. In this case, it
to writing, plaintiff cannot recover.
is the deceit and fraud employed by Gashem that constitutes a violation of
Article 21 of the Civil Code. His promise of marrying Marilou was a deceitful Said section simply provides the method by which the contract mentioned
scheme to lure her into sexual congress. Gashem’s blatant disregard of therein may be proved. It does not declare that said contract are invalid, which
Filipino traditions on marriage and on the reputation of Filipinas is contrary to have not been reduced to writing, except perhaps those mentioned in
morals, good customs, and public policy. As a foreigner who is enjoying the paragraph 5 of said section (335). A contract may be a perfectly valid contract
hospitality of our country and even taking advantage of the opportunity to study even though it is not clothed with the necessary form. If it is not made in
here he is expected to respect our traditions. Any act contrary will render him conformity with said section of course it cannot be proved, if proper objection
liable under Article 21 of the Civil Code. is made. But a failure to except to evidence presented in order to prove the
The Supreme Court also elucidated that Article 21 was meant to expand the contract, because it does not conform to the statute, is a waiver of the
concepts of torts and quasi delict. It is meant to cover situations such as this provisions of the law.
case where the breach complained of is not strictly covered by existing laws. The section does not render oral contracts invalid. If the parties to an action,
It was meant as a legal remedy for the untold number of moral wrongs which during the trial of the cause, make no objection to the admissibility of oral
is impossible for human foresight to specifically enumerate and punish in the evidence to support contracts like the one in question and permit the contract
statute books – such as the absence of a law penalizing the breach of promise to be proved, by evidence other than a writing, it will be just as binding upon
to marry. the parties as if it had been reduced to writing.
The Supreme Court however agreed with legal luminaries that if the promise
to marry was made and there was carnal knowledge because of it, then moral LAW ON TAXATION
damages may be recovered (presence of moral or criminal seduction), Except
PASEO REALTY V. COURT OF APPEALS G.R. NO. 119286, OCTOBER 13, Such return would have shown whether petitioner actually applied its 1989 tax
2004 credit, which includes the creditable taxes withheld for 1989 subject of the
claim for refund, against its 1990 tax liability as it had elected in its 1989 return,
FACTS : Paseo Realty and Development Corporation, a domestic corporation or at least, whether petitioner’s tax credit of was applied to its approved refunds
engaged in the lease of two (2) parcels of land at Paseo de Roxas in Makati as it claims. The return would also have shown whether there remained an
City, filed its ITR for the calendar year 1989. Thereafter, Paseo Realty filed excess
with CIR a claim for the refund of excess creditable withholding and income
taxes for the years 1989 and 1990. JOSE J. FERRER, JR., Petitioner, v. CITY MAYOR HERBERT BAUTISTA,
CITY COUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY,
Alleging that the prescriptive period for refunds for 1989 would soon expire and AND CITY ASSESSOR OF QUEZON CITY, Respondents.
that it was necessary to interrupt the prescriptive period, Paseo Realty filed
with the CTA a petition for review praying for the refund. G.R. No. 210551, June 30, 2015

The CTA ordered the refund of the alleged excess creditable withholding taxes Facts:
paid. CIR moved for reconsideration.
Petitioner, a QC property owner, assails the constitutionality of two QC
CTA reversed and dismissed the petition for review. Paseo Realty then filed a ordinances, namely Ordinance No. SP-2095, S-2011 or the Socialized
petition for review with the CA. In resolving the twin issues of whether Paseo Housing Tax of Quezon City and Ordinance No. SP-2235, S-2013 on garbage
Realty is entitled to a refund representing creditable taxes withheld in 1989 collection fees.
and whether Paseo Realty applied such creditable taxes withheld to its 1990
income tax liability, the CA held that petitioner is not entitled to a refund Section 3 of SP-2095 provides:
because it had already elected to apply the total amount which includes SECTION 3. IMPOSITION. A special assessment equivalent to one-half
the refund claimed, against its income tax liability for 1990. The CA denied percent (0.5%) on the assessed value of land in excess of One Hundred
Paseo Realty’s MR. Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer
which shall accrue to the Socialized Housing Programs of the Quezon City
Government. The special assessment shall accrue to the General Fund under
ISSUE : Whether the alleged excess taxes paid by Paseo Realty in 1989
a special account to be established for the purpose (i.e., programs and projects
should be refunded or credited against its tax liabilities for 1990?
for low-cost housing and other mass dwellings).
c
HELD : NO. Paseo Realty’s failure to present sufficient evidence to prove its
claim for refund is fatal to its cause. It is axiomatic that a claimant has the On the other hand, Ordinance No. SP-2235, S-2013 on garbage collection
burden of proof to establish the factual basis of his or her claim for tax credit places the rates of the imposable fee dependent on the land or floor area and
or refund. whether the payee is an occupant of a lot, condominium, social housing project
or apartment.
Tax refunds, like tax exemptions, are construed strictly against the taxpayer.
In this case, Paseo Realty combined its 1988 and 1989 tax credits and applied
its 1990 tax due against the total, and not against its creditable taxes for 1989. Issues:

The then Section 69 of the NIRC (now Section 76) provides that in case the 1. WON SP-2095, S-2011 on the Socialized Housing Tax (SHT) is valid.
corporation is entitled to a refund of the excess estimated quarterly income a. WON the SHT is a tax which is within the QC government to
taxes paid, the refundable amount shown on its final adjustment return may be impose.
credited against the estimated quarterly income tax liabilities for the taxable b. WON the SHT violates the rule on equality.
quarters of the succeeding year. The carrying forward of any excess or c. WON the SHT is confiscatory or oppressive.
overpaid income tax for a given taxable year is limited to the succeeding 2. WON SP-2235, S-2013 on Garbage Fee is valid.
taxable year only. The confusion as to Paseo Realty’s entitlement to a refund a. WON the Ordinance on Garbage Fee violates the rule on
could altogether have been avoided had it presented its tax return for 1990. double taxation.
 b. WON it violates the rule on equality. special assessment paid beginning in the sixth (6th) year of its
effectivity. Far from being obnoxious, the provisions of the subject
Ruling: ordinance are fair and just.

1. SP-2095, S-2011 on the Socialized Housing Tax (SHT) is VALID.

2. SP-2235, S-2013 on Garbage Fee is INVALID. Although it does not violate
a. Yes. The SHT charged by the QC Government is a tax which is within the rule on double taxation, it nonetheless violates the rule on equality.
its power to impose. Cities are allowed to exercise such other powers
and discharge such other functions and responsibilities as are a. SP-2235 does NOT violate the rule on double taxation.
necessary, appropriate, or incidental to efficient and effective provision
of the basic services and facilities which include, among others, The fee imposed for garbage collections under Ordinance No. SP-
programs and projects for low-cost housing and other mass dwellings. 2235 is a charge fixed for the regulation of an activity. In Progressive
The collections made accrue to its socialized housing programs and Development Corporation v. Quezon City, the Court declared that “if
projects. The tax is not a pure exercise of taxing power or merely the generating of revenue is the primary purpose and regulation is
to raise revenue; it is levied with a regulatory purpose. The levy is merely incidental, the imposition is a tax; but if regulation is the primary
primarily in the exercise of the police power for the general welfare of purpose, the fact that incidentally revenue is also obtained does not
the entire city. It is greatly imbued with public interest. Removing slum make the imposition a tax.” In a U.S. case, the garbage fee was
areas in Quezon City is not only beneficial to the underprivileged and considered as a "service charge" rather than a tax as it was actually a
homeless constituents but advantageous to the real property owners fee for a service given by the city which had previously been provided
as well. The situation will improve the value of the their property at no cost to its citizens.
investments, fully enjoying the same in view of an orderly, secure, and
safe community, and will enhance the quality of life of the poor, making Hence, not being a tax, the contention that the garbage fee under
them law-abiding constituents and better consumers of business Ordinance No. SP-2235 violates the rule on double taxation must
products. necessarily fail.

b. No, the SHT does NOT violate the rule on equality. For the purpose of b. Yes, SP-2235 violates the rule on equality.
undertaking a comprehensive and continuing urban development and
housing program, the disparities between a real property owner and For the purpose of garbage collection, there is, in fact, no substantial
an informal settler as two distinct classes are too obvious and need distinction between an occupant of a lot, on one hand, and an
not be discussed at length. The differentiation conforms to the occupant of a unit in a condominium, socialized housing project or
practical dictates of justice and equity and is not discriminatory within apartment, on the other hand. Most likely, garbage output produced
the meaning of the Constitution. Notably, the public purpose of a tax by these types of occupants is uniform and does not vary to a large
may legally exist even if the motive which impelled the legislature to degree; thus, a similar schedule of fee is both just and equitable.
impose the tax was to favor one over another. It is inherent in the
power to tax that a State is free to select the subjects of taxation. The rates being charged by the ordinance are unjust and inequitable:
Inequities which result from a singling out of one particular class for a resident of a 200 sq. m. unit in a condominium or socialized housing
taxation or exemption infringe no constitutional limitation. project has to pay twice the amount than a resident of a lot similar in
size; unlike unit occupants, all occupants of a lot with an area of 200
c. No, the SHT is NOT confiscatory nor oppressive. The reasonableness sq. m. and less have to pay a fixed rate of Php100.00; and the same
of Ordinance No. SP-2095 cannot be disputed. It is not confiscatory or amount of garbage fee is imposed regardless of whether the resident
oppressive since the tax being imposed therein is below what the is from a condominium or from a socialized housing project.
UDHA actually allows. While the law authorizes LGUs to collect SHT
on lands with an assessed value of more than P50,000.00, the Indeed, the classifications under Ordinance No. S-2235 are not
questioned ordinance only covers lands with an assessed value germane to its declared purpose of “promoting shared responsibility
exceeding P100,000.00. Even better, on certain conditions, the with the residents to attack their common mindless attitude in over-
ordinance grants a tax credit equivalent to the total amount of the consuming the present resources and in generating waste.” Instead of
 simplistically categorizing the payee into land or floor occupant of a lot • In its answer, the defendant contended that the imposition and collection of
or unit of a condominium, socialized housing project or apartment, the municipal licenses were within the power and duties of the Municipal
respondent City Council should have considered factors that could Board in the exercise of its police power. The parties submitted an agreed
truly measure the amount of wastes generated and the appropriate statement of facts to the effect that during the period above-mentioned,
fee for its collection. Factors include, among others, household age Saldaña had sent fish out of Iloilo City to Manila, for the sending of which,
and size, accessibility to waste collection, population density of the the City collected P1,359.80 under the two ordinances in question, and that
barangay or district, capacity to pay, and actual occupancy of the the payment of said amount was made under protest
property. • The lower court rendered the decision now appealed to us, holding that
Ordinance No. 28 as amended was valid; that the purpose of the said
Dispositive Portion: ordinances was to regulate the exit of food supply and labor animals from
the city of Iloilo and their sale beyond city limits, and falls squarely within the
WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality provisions of paragraph (aa), Section 21 of the Charter of the City, namely,
and legality of Ordinance No. SP-2095, S-2011, or the “Socialized Housing Commonwealth Act No. 158; that the ordinance does not restrict trade but
Tax of Quezon City,” is SUSTAINED for being consistent with Section 43 of only regulates the business of purchase of foodstuffs for the purpose of
Republic Act No. 7279. On the other hand, Ordinance No. SP-2235, S-2013, taking them outside, with the purpose of averting the scarcity of foodstuffs;
which collects an annual garbage fee on all domestic households in Quezon that the imposition and collection of the license fees provided in the said
City, is hereby declared as UNCONSTITUTIONAL AND ILLEGAL. ordinance was included within the police power and that said fees were
Respondents are DIRECTED to REFUND with reasonable dispatch the sums reasonable amounts, necessary to cover the expenses in the issuance of
of money collected relative to its enforcement. the licenses and the cost of the necessary inspection or police surveillance.

SALDANA V CITY OF ILOILO G.R. NO. L-10470 PROVISIONS:

THE LAW ON TAXATION;PURPOSE ORDINANCE No. 28
AN ORDINANCE REGULATING THE EXIT OF FOOD SUPPLY AND LABOR
PETITIONER: Serafin Saldana ANIMALS AND IMPOSING PERMIT FEE THEREFOR.
RESPONDENT: City of Iloilo Be it ordained by the Municipal Board of the City of Iloilo, that:
ARTICLE 1. — For the purpose of regulating during this state of emergency,
ISSUE: WON Respondent acted beyond its powers by imposing such the exit of food supply and labor animals in order to avert shortage of the same
taxation? (YES) in the City of Iloilo, it is strictly prohibited to send outside of the City of Iloilo,
without first obtaining the necessary license permit from the Mayor, the
FACTS: following:
• Serafin Saldaña is appealing the decision of the CFI of Iloilo dismissing his Large cattle, pigs, goats, sheep or the like;
complaint against the City of Iloilo, for the refund of taxes paid by him under Domestic fowls, eggs;
protest, and upholding the legality of Ordinance No. 28 Fish, whether fresh, salted or dried;
• Ordinance No. 30, passed on June 4, 1946, amended Ordinance No. 28 by Milkfish (semilla), bagoon (guinamos, crabs, prawn or the like);
reducing the fees for each chicken from P.50 to P.20, eggs from P2 to P1 Fruits, such as bananas, melon, papayas or the like.
per hundred, and for fish from P.20 to P.10 per kilo, bananas from P2 to P1 ART. 2. — The City Treasurer shall, for issuance of license permit required in
per hundred bunches etc. article one hereof, collect a fee as follows:
• Under said ordinances, Saldaña had been paying, though under protest, so- Large cattle, whether alive or slaughtered, P10 per head.
called fees on fish bought in the City of Iloilo and sent by him to Manila by Pigs, goats, and sheep, whether alive or slaughtered, P5 each.
plane, during the period from September 16, 1946 to December 6, 1946, Chicken and other domestic fowls, whether alive or dressed — P0.50 each.
totalling P1,359.80. Eggs, P2.00 per hundred or P0.02 each.
• On September 17, 1951, plaintiff commenced the present proceedings by Fish, whether fresh, dried or salted, P0.20 per kilo.
complaint for the reimbursement to him of the said amount with interest, on Bagoon (guinamos) P0.10 per kilo.
the ground that the ordinances in question were illegal, null and void, having Crabs, prawn or the like, P0.20 per kilo.
been enacted beyond the powers of the Municipal Board of the City. Milkfish (semilla), P2 per pot.
Banana, P2, per hundred bunches or P0.02 per bunch.
Other fruits not mentioned herein — P0.02 per kilo. consumption of the residents thereof, but for export to other places. But once
Art. 3. — It shall be unlawful for any carrier whether land, water, or air, to load inside the city limits, under the ordinance, the mayor takes absolute
any of the articles mentioned herein which is not provided with the control and has jurisdiction to allow or disallow their being taken out of
corresponding permit as required by this ordinance. the city, and in case he issues the permit for their being taken away, taxes
Art. 4. — Violation of this ordinance shall be punished with a fine of not less are imposed thereon under the guise of license fees.
than One Hundred (P100) Pesos, or more than Two Hundred (P200) Pesos,
imprisonment of not less than ten (10) days but not exceeding six (6) months As correctly argued by the appellant, nowhere in the charter of the
and to suffer subsidiary imprisonment in case of insolvency to pay the fine. . . defendant City is it authors to regulate and collect fees or taxes for, the
taking out of the city, of animals and articles listed in the ordinance. On
HELD: the other hand, a municipal corporation like the defendant City has no inherent
YES. power of taxation. To enact a valid ordinance, the City must find in its charter
Judging from the amount of the fees fixed in the ordinances in question, we do the power to do so, for said power cannot be assumed.
not hesitate to find and to hold that the so-called fees were in reality taxes for
city revenue. For instance, the P10.00 fee for every head of large cattle, A municipal corporation, unlike a sovereign state, is clothed with no
whether alive or slaughtered, and the P5.00 fee for every pig, goat, or sheep, inherent power of taxation. Its charter must plainly show an intent to confer
whether alive or slaughtered, cannot possibly be considered as mere expense that power or the corporation cannot assume it. And the power when granted
incurred for, or the cost of the inspection of each animal and the issuance of is to be construed strictissimi juris. Any doubt or ambiguity arising out of the
the corresponding permit. If a pig, goat, or sheep costs, say, P15 or even P20, term used must be resolved against the corporation. (Santos Lumber Co. vs.
then the P5.00 fee would constitute quite a considerable slice or portion of said City of Cebu, et al., 102 Phil., 870; See also Arong vs. Raffiñan, 98 Phil., 422).
cost; and if the animals and articles listed in the ordinances were sent out from
the City of Iloilo in large quantities and numbers, there would be no doubt that Aside from this lack of inherent power of taxation by a municipal
the fees collected would amount to a sizable sum and augment greatly the corporation, Section 2287 of the Revised Administrative Code provides
revenues of the municipal corporation, way in excess of the cost of inspections that municipal revenue obtainable by taxation shall be derived from such
and the issuance of the permits. sources only as are expressly authorized by law; and it further provides,
and this is very important, that:
Another important question is that Article 1 of the ordinance also strictly It shall not be in the power of the municipal council to impose a tax in
prohibits the sending out of the City of Iloilo, of the animals and articles any form whatever upon goods and merchandise into the municipality,
enumerated therein, like large cattle, pigs, fowl, fish, eggs, fruits, etc., without or out of the same, and any attempt to impose an import or export tax upon
first obtaining the necessary license permit from the mayor; and Article 3 such goods in the guise of an unreasonable charge for wharfage, use of
declares it unlawful for any carrier whether land water or air, to load any of said bridges or otherwise, shall be void. (Emphasis supplied).
animals or articles without the corresponding permit. The ordinance fails to
provide for any regulations or conditions under which the permit can be
granted or denied. In other words, the mayor has absolute power to refuse DISPOSITION:
to issue any permit, practically making him absolute dictator over the In conclusion, we find that the ordinance in question as amended, is ultra vires,
subject matter. With merely telling the applicant and prospective licensee that enacted beyond the general powers of a municipal corporation and not
said animals and articles are needed in the City of Iloilo, the mayor could refuse authorized by the defendant-appellee's charter, and consequently null and
to grant the permit. To realize the danger of the grant of said absolute void; that the prohibition against taking animals and articles out of the City of
power is not difficult. Iloilo without permit of the mayor is in restraint of trade and a curtailment of the
rights of the owners of the said animals and articles to freely sell and of
As to the reasonableness of the prohibition of selling and taking out of the City prospective purchasers to buy and dispose of them without the city limits in the
of Iloilo of any of the animals and articles enumerated in the ordinance, ordinary course of commerce and trade; that the fees imposed in the said
appellant asks us to consider or take judicial notice of the fact that those ordinances are in fact taxes not only unauthorized by the law or the charter of
animals and articles are not all produced in the City of Iloilo, but come from defendant City, but also in contravention of the provisions of Sections 2287
other towns of the province, even from other provinces adjacent, and are taken and 2629 of the Revised Administrative Code, which prohibit municipal
to the City of Iloilo only for the purpose of transportation to other places, like corporations from imposing any tax in any form upon goods and merchandise
Manila. In other words, they are not brought into the City of Iloilo for the carried into or out of the town or City.
In view of the foregoing, the appealed decision is hereby reversed and the City that a trust is created. ” To constitute a valid testamentary trustthere must
of Iloilo is hereby ordered to reimburse plaintiff the amount of P1,359.80, with be a concurrence of three circumstances:
legal interest and costs.
(1) Sufficient words to raise a trust;
LORENZO vs. POSADAS JR. (2) a definite subject;
G.R. No. L-43082 (3) a certain or ascertain object; statutes in some jurisdictions expressly or in
June 18, 1937 effect so providing.”

FACTS: Thomas Hanley died, leaving a will and a considerable amount of real There is no doubt that the testator intended to create a trust. He ordered in his
and personal properties. Proceedings for the probate of his will and the will that certain of his properties be kept together undisposed during a fixed
settlement and distribution of his estate were begun in the CFI of Zamboanga. period, for a stated purpose. The probate court certainly exercised sound
The will was admitted to probate. judgment in appointmening a trustee to carry into effect the provisions of the
The CFI considered it proper for the best interests of the estate to appoint a will
trustee to administer the real properties which, under the will, were to pass to
nephew Matthew ten years after the two executors named in the will was As the existence of the trust was already proven, it results that the estate which
appointed trustee. Moore acted as trustee until he resigned and the plaintiff plaintiff represents has been delinquent in the payment of inheritance tax and,
Lorenzo herein was appointed in his stead. therefore, liable for the payment of interest and surcharge provided by law in
During the incumbency of the plaintiff as trustee, the defendant Collector of such cases.
Internal Revenue (Posadas) assessed against the estate an inheritance tax, The delinquency in payment occurred on March 10, 1924, the date when
together with the penalties for deliquency in payment. Lorenzo paid said Moore became trustee. On that date trust estate vested in him. The interest
amount under protest, notifying Posadas at the same time that unless the due should be computed from that date.
amount was promptly refunded suit would be brought for its recovery. Posadas
overruled Lorenzo’s protest and refused to refund the said amount. Plaintiff NOTES: Other issues:
went to court. The CFI dismissed Lorenzo’s complaint and Posadas’
counterclaim. Both parties appealed to this court. (a) When does the inheritance tax accrue and when must it be satisfied?
ISSUE: The accrual of the inheritance tax is distinct from the obligation to pay the
same.
(e) Has there been delinquency in the payment of the inheritance tax? Acording to article 657 of the Civil Code, “the rights to the succession of a
person are transmitted from the moment of his death.” “In other words”, said
HELD: The judgment of the lower court is accordingly modified, with costs Arellano, C. J., “. . . the heirs succeed immediately to all of the property of the
against the plaintiff in both instances deceased ancestor. The property belongs to the heirs at the moment of the
YES death of the ancestor as completely as if the ancestor had executed and
The defendant maintains that it was the duty of the executor to pay the delivered to them a deed for the same before his death.”
inheritance tax before the delivery of the decedent’s property to the trustee. Whatever may be the time when actual transmission of the inheritance takes
Stated otherwise, the defendant contends that delivery to the trustee was place, succession takes place in any event at the moment of the decedent’s
delivery to the cestui que trust, the beneficiary in this case, within the meaning death. The time when the heirs legally succeed to the inheritance may differ
of the first paragraph of subsection (b) of section 1544 of the Revised from the time when the heirs actually receive such inheritance. ” Thomas
Administrative Code. This contention is well taken and is sustained. A trustee Hanley having died on May 27, 1922, the inheritance tax accrued as of the
is but an instrument or agent for the cestui que trust date.
From the fact, however, that Thomas Hanley died on May 27, 1922, it does not
The appointment of Moore as trustee was made by the trial court in conformity follow that the obligation to pay the tax arose as of the date. The time for the
with the wishes of the testator as expressed in his will. It is true that the word payment on inheritance tax is clearly fixed by section 1544 of the Revised
“trust” is not mentioned or used in the will but the intention to create one is Administrative Code as amended by Act No. 3031, in relation to section 1543
clear. No particular or technical words are required to create a testamentary of the same Code. The two sections follow:
trust. The words “trust” and “trustee”, though apt for the purpose, are not SEC. 1543. Exemption of certain acquisitions and transmissions. — The
necessary. In fact, the use of these two words is not conclusive on the question following shall not be taxed:
(a) The merger of the usufruct in the owner of the naked title.
(b) The transmission or delivery of the inheritance or legacy by the fiduciary MANILA PRINCE HOTEL CORPORATION v. GOVERNMENT SERVICE
heir or legatee to the trustees. INSURANCE SYSTEM
(c) The transmission from the first heir, legatee, or donee in favor of another
beneficiary, in accordance with the desire of the predecessor. xx FACTS:
SEC. 1544. When tax to be paid. — The tax fixed in this article shall be paid: • There was a Government initiative to privatize its operations and GSIS
(a) In the second and third cases of the next preceding section, before decided to sell through public bidding, 30% to 51% of the issued and
entrance into possession of the property. outstanding shares of Manila Hotel Corporation (MHC).
(b) In other cases, within the six months subsequent to the death of the • Only two bidders participated in the bidding that was held on
predecessor; but if judicial testamentary or intestate proceedings shall be
September 18, 1995:
instituted prior to the expiration of said period, the payment shall be made by
o MPHC, a Filipino corporation, offered to buy 51% or
the executor or administrator before delivering to each beneficiary his share.
The instant case does[not] fall under subsection (a), but under subsection (b), 15,300,000 of MHC’s total outstanding shares at ₱41.58 per
of section 1544 above-quoted, as there is here no fiduciary heirs, first heirs, share.
legatee or donee. Under the subsection, the tax should have been paid before o Renong Berhad, a Malaysian firm, offered to buy the same
the delivery of the properties in question to Moore as trustee. number of shares for ₱44.00 per share.
(b) Should the inheritance tax be computed on the basis of the value of the • Pending the declaration of Renong Berhad as the winning bidder,
estate at the time of the testator’s death, or on its value ten years later? MPHC submitted a letter to GSIS, matching the bid price of ₱44.00
per share and subsequently sent a manager’s check for
If death is the generating source from which the power of the estate to impose ₱33,000,000.00 as security to match the bid of Renong Berhan.
inheritance taxes takes its being and if, upon the death of the decedent, • GSIS refused to accept the letter.
succession takes place and the right of the estate to tax vests instantly, the tax
• MPHC thus came to the Supreme Court to apply for a petition for
should be measured by the value of the estate as it stood at the time of the
prohibition and mandamus.
decedent’s death, regardless of any subsequent contingency value of any
subsequent increase or decrease in value • The Court issued a temporary restraining order enjoining respondents
from perfecting and consummating the sale to the Malaysian firm.
(c) In determining the net value of the estate subject to tax, is it proper to • MPHC contended that the Manila Hotel is part of the national
deduct the compensation due to trustees? patrimony as mentioned in Sec. 10, second par., Art. XII, of the 1987
Constitution: “In the grants of rights, privileges and concessions
A trustee, no doubt, is entitled to receive a fair compensation for his services. covering the national economy and patrimony, the State shall be given
But from this it does not follow that the compensation due him may lawfully be preference to qualified Filipinos.”
deducted in arriving at the net value of the estate subject to tax. There is no • Manila Hotel has been identified with the Filipino nation that houses
statute in the Philippines which requires trustees’ commissions to be deducted
foreign dignitaries and a venue for historically significant events.
in determining the net value of the estate subject to inheritance tax
• MPHC also argues that since GSIS is a government entity involved in
(d) What law governs the case at bar? Should the provisions of Act No. 3606 tourism, any transaction involving 51% of shares of stock of a
favorable to the tax-payer be given retroactive effect? corporation owned by GSIS is also governed by the term national
economy in the aforementioned constitutional provision
A statute should be considered as prospective in its operation, whether it • GSIS argued that the provision is merely a statement of principle of
enacts, amends, or repeals an inheritance tax, unless the language of the policy and not self-executing, and requires implementing legislation to
statute clearly demands or expresses that it shall have a retroactive effect, . . lay down conditions under which business may be done
. .” Act No. 3606 itself contains no provisions indicating legislative intent to give • Legislative enactment is necessary to give effect to the constitutional
it retroactive effect. No such effect can be given the statute by this court. provision.
• GSIS further argued that the Manila Hotel does not fall under national
patrimony since the term only refers to lands of the public domain,
COMMERCIAL LAW
waters, minerals, coal, petroleum and other mineral oils, all forces of
 potential energy, fisheries, forests or timber, wildlife, flora and fauna industries and producers from increased imports which inflict or could inflict
and all marine wealth. GSIS downplayed the events that transpired in serious injury on them.
Manila Hotel, stating that such events do not qualify Manila Hotel as
patrimony of the nation.
Petitioner Southern Cross Cement Corporation (Southern Cross) is a domestic
Issue: W/n the provison is self executing and w/n Manila hotel forms part corporation engaged in the business of cement manufacturing, production,
of the national patrimony? importation and exportation. Its principal stockholders are Taiheiyo Cement
Corporation and Tokuyama Corporation, purportedly the largest cement
Held: Yes to both, The Court held that the provision is self-executing. manufacturers in Japan.[5]
Constitutional provisions are self executing if the nature and extent of the
right conferred and the liability imposed are fixed by the constitution itself.
In other words, no legislature is needed to enforce the right that a self- Private respondent Philippine Cement Manufacturers Corporation[6]
executing provision is trying to protect. In the case at bar, Sec. 10, second (Philcemcor) is an association of domestic cement manufacturers. It has
par., Art. XII, of the 1987 Constitution is a mandatory provision, a positive eighteen (18) members,[7] per Record. While Philcemcor heralds itself to be
command which is complete in itself and needs no further guidelines or an association of domestic cement manufacturers, it appears that considerable
laws to implement it. equity holdings, if not controlling interests in at least twelve (12) of its member-
corporations, were acquired by the three largest cement manufacturers in the
IT does not require any legislation in order to give preference to qualified world, namely Financiere Lafarge S.A. of France, Cemex S.A. de C.V. of
Filipinos in the grant of rights, privileges and concessions covering the Mexico, and Holcim Ltd. of Switzerland (formerly Holderbank Financiere
national economy and patrimony. The Court also held that the Manila Hotel Glaris, Ltd., then Holderfin B.V.).
is part of our national patrimony. Patrimony of the Nation does not only
pertain to natural resources but also to culture heritage. Manila Hotel has
the DTIs disagreement with the conclusions of the Tariff Commission, but at
become a landmark and a living testimonial of Philippine heritage. Dubbed
the same time, ultimately denying Philcemcors application for safeguard
as the Official Guest House of the Philippine Government it plays host to
measures on the ground that the he was bound to do so in light of the Tariff
dignitaries and official visitors who are accorded the traditional Philippine
Commissions negative findings.
hospitality. The Manila Hotel is a historic relic that has hosted many of the
most important events in the history of the Philippines as a nation. Hence,
the conveyance of the controlling interest of Manila Hotel may only be Philcemcor challenged this Decision of the DTI Secretary by filing with the
accorded to a qualified Filipino, and not a foreigner Court of Appeals a Petition for Certiorari, Prohibition and Mandamus[11]
seeking to set aside the DTI Decision, as well as the Tariff Commissions
Report. The Court of Appeals Twelfth Division, in a Decision[13] penned by
SOUTHERN CROSS CEMENT CORPORATION, petitioner, vs. CEMENT Court of Appeals Associate Justice Elvi John Asuncion,[14] partially granted
MANUFACTURERS ASSOCIATION OF THE PHILIPPINES, THE Philcemcors petition.
SECRETARY OF THE DEPARTMENT OF TRADE AND INDUSTRY, THE
SECRETARY OF THE DEPARTMENT OF FINANCE and THE
COMMISSIONER OF THE BUREAU OF CUSTOMS, respondents. On 23 June 2003, Southern Cross filed the present petition, arguing that the
Court of Appeals has no jurisdiction over Philcemcors petition, as the proper
remedy is a petition for review with the CTA conformably with the SMA, and;
Facts: that the factual findings of the Tariff Commission on the existence or non-
existence of conditions warranting the imposition of general safeguard
measures are binding upon the DTI Secretary.
Republic Act No. 8800, the Safeguard Measures Act (SMA), which was one of
the laws enacted by Congress soon after the Philippines ratified the General
Agreement on Tariff and Trade (GATT) and the World Trade Organization Despite the fact that the Court of Appeals Decision had not yet become final,
(WTO) Agreement.[3] The SMA provides the structure and mechanics for the its binding force was cited by the DTI Secretary when he issued a new Decision
imposition of emergency measures, including tariffs, to protect domestic on 25 June 2003, wherein he ruled that that in light of the appellate courts
Decision, there was no longer any legal impediment to his deciding on the importation of gray Portland cement, in the form of a definitive safeguard
Philcemcors application for definitive safeguard measures. duty in the amount of P20.60/40 kg. bag for three years on imported gray
Portland Cement.

The Court of Appeals had held that based on the foregoing premises,
petitioner’s prayer to set aside the findings of the Tariff Commission in its Espina v Zamora Jr.
assailed Report dated March 13, 2002 is DENIED. On the other hand, the
assailed April 5, 2002 Decision of the Secretary of the Department of Trade FACTS:
and Industry is hereby SET ASIDE. Consequently, the case is REMANDED to • President Joseph Estrada signed into law RA 8762 also known as
the public respondent Secretary of Department of Trade and Industry for a final Retail Trade Liberalization Act of 2000. It expressly repealed R.A 1180
decision in accordance with RA 8800 and its Implementing Rules and which absolutely prohibited foreign nationals from engaging in the
Regulations. Hence, the appeal. retail trade business.
• The questioned law allows the said foreign placing them under 4
categories.¥ R.A. 8762 also allows natural-born Filipino citizens,
Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time who had lost their citizenship and now reside in the Philippines, to
that that in light of the appellate courts Decision there was no longer any legal engage in the retail trade business with the same rights as Filipino
impediment to his deciding Philcemcors application for definitive safeguard citizens.
measures.[41] He made a determination that, contrary to the findings of the • The petitioners assail the constitutionality of the of RA 8762 on the
Tariff Commission, the local cement industry had suffered serious injury as a following grounds:
result of the import surges.[42] Accordingly, he imposed a definitive safeguard • The law runs afoul of Sections 9, 19, and 20 of Article II of the
measure on the importation of gray Portland cement, in the form of a definitive Constitution which enjoins the State to place the national economy
safeguard duty in the amount of P20.60/40 kg. bag for three years on imported under the control of Filipinos to achieve equal distribution of
gray Portland Cement. Hence, the appeal. opportunities, promote industrialization and full employment, and
protect Filipino enterprise against unfair competition and trade
Issue: policies.
• Would lead to alien control of the retail trade, which taken together
with alien dominance of other areas of business, would result in the
Whether or not the decision of DTI Secretary, to impose safeguard measures loss of effective Filipino control of the economy.
is valid. • There is a clear and present danger that the law would promote
monopolies or combinations in restraint of trade.
• The respondents Executive Secretary Ronaldo Zamora, Jr., Trade and
Held: Industry Secretary Mar Roxas, National Economic and Development
Authority (NEDA) Secretary Felipe Medalla, Bangko Sentral ng
Pilipinas Gov. Rafael Buenaventura, and Securities and Exchange
NO, due to the nature of this case, the Court found that the DTI should follow Commission Chairman Lilia Bautista countered that:
the regulations prescribed by SMA. The Court held that he assailed Decision of • Petitioners have failed to overcome the presumption of
the Court of Appeals is DECLARED NULL AND VOID and SET constitutionality of R.A. 8762. Indeed, they could not specify how the
ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also new law violates the constitutional provisions they cite. Sections 9, 19,
DECLARED NULL AND VOID and SET ASIDE. No Costs. and 20 of Article II of the Constitution are not self-executing provisions
that are judicially demandable.
Yet on 25 June 2003, the DTI Secretary issued a new Decision, ruling this time • The Constitution mandates the regulation but not the prohibition of
foreign investments. It directs Congress to reserve to Filipino citizens
that that in light of the appellate courts Decision there was no longer any legal
certain areas of investments upon the recommendation of the NEDA
impediment to his deciding Philcemcors application for definitive safeguard
and when the national interest so dictates. But the Constitution leaves
measures. He made a determination that, contrary to the findings of the Tariff
to the discretion of the Congress whether or not to make such
Commission, the local cement industry had suffered serious injury as a result
reservation.
of the import surges. Accordingly, he imposed a definitive safeguard measure
 • It does not prohibit Congress from enacting laws allowing the entry of of the NEDA and when the national interest requires. Thus, Congress can
foreigners into certain industries not reserved by the Constitution to determine what policy to pass and when to pass it depending on the economic
Filipino citizens. exigencies. It can enact laws allowing the entry of foreigners into certain
industries not reserved by the Constitution to Filipino citizens. In this case,
ISSUE: Whether of not R.A 8762 is unconstitutional? Congress has decided to open certain areas of the retail trade business to
Held: No. foreign investments instead of reserving them exclusively to Filipino citizens.
The NEDA has not opposed such policy.
As the Court explained in Tañada v. Angara the provisions of Article II of the
1987 Constitution, the declarations of principles and state policies, are not self-
executing.

The Court further explained in Tañada that Article XII of the 1987 Constitution
lays down the ideals of economic nationalism:

1. by expressing preference in favor of qualified Filipinos in the

grant of rights, privileges and concessions covering the national
economy and patrimony and in the use of Filipino labor, domestic
materials and locally-produced goods;
2. by mandating the State to adopt measures that help make them
competitive; and
3. by requiring the State to develop a self-reliant and independent
national economy effectively controlled by Filipinos.

In other words, while Section 19, Article II of the 1987 Constitution requires the
development of a self-reliant and independent national economy effectively
controlled by Filipino entrepreneurs, it does not impose a policy of Filipino
monopoly of the economic environment.

The objective is simply to prohibit foreign powers or interests from

maneuvering our economic policies and ensure that Filipinos are given
preference in all areas of development.

Indeed, the 1987 Constitution takes into account the realities of the outside
world as it requires the pursuit of a trade policy that serves the general welfare
and utilizes all forms and arrangements of exchange on the basis of equality
and reciprocity; and speaks of industries which are competitive in both
domestic and foreign markets as well as of the protection of Filipino enterprises
against unfair foreign competition and trade practices. Thus, while the
Constitution mandates a bias in favor of Filipino goods, services, labor
and enterprises, it also recognizes the need for business exchange with
the rest of the world on the bases of equality and reciprocity and limits
protection of Filipino enterprises only against foreign competition and
trade practices that are unfair.

Section 10, Article XII of the 1987 Constitution gives Congress the discretion
to reserve to Filipinos certain areas of investments upon the recommendation