First Week

SEVERINO, EMILIA CONCEPCION D.BAR OPERATION 2 – SY 2013-2014CASE DIGESTS Period Assigned: January 10, 2011 to FEBRUARY 25, 2011

FIRST WEEK: DECEMBER 14, 2013 January 10, 2011 to January 12, 2011

1 G.R. No. 181298 January 10, 2011

Belle Corporation vs. Commissioner of Internal Revenue

2 G.R. No. 176339 January 10, 2011

Do-All Metals Industries, Inc., et al. vs. Security Bank Corp, et al.

3 G.R. No. 188792/G.R. Nos. 190677-78 & G.R. Nos. 190699-700 January 10, 2011

Sps. George R. Tan and Susan L. Tan vs. BancoDe Oro Unibank, Inc. / George R. Tan and Susan L. Tan vs. Banco De Oro Unibank, Inc./Banco De Oro Unibank, Inc. vs. George R.Tan and Susan L. Tan

4 G.R. No. 190889 January 10, 2011

Elenita C. Fajardo vs. People of the Philippines

5 G.R. No. 180452 January 10, 2011

People of the Philippines vs. Ng Yik bun, et al.

6 G.R. No. 171379/G.R. No. 171419 January 10, 2011

Jose Marques, et al. vs. Far East Bank and Trust Company, et al. / Far East Bank and Trust Company, et al. vs. Jose Marques, et al.

7 G.R. No. 181930 January 10, 2011

Milagros Salting vs. John Velez and Clarissa r. Velez

8 G.R. No. 184954 January 10, 2011

People of the Philippines vs. Jay Lorena y Labag

9 G.R. No. 190122 January 10, 2011

Sps. Castro vs. Sps. Se and Dela Cruz, et al.

10 G.R. No. 188314 January 10, 2011

People of the Philippines vs. Khaddafy Janjalani, et al.

11 G.R. No. 178895 January 10, 2011

Republic of the Philippines, rep. by Dept. Agrarian Reform vs. Salvador N. Lopez Agri-Business Corp./Agri-Business Corp. vs. Dept. Agrarian Reform

12 G.R. No. 179446 January 10, 2011

Loadmasters Customs Services, Inc. vs. GlodelBrokerage Corporation and R & B Insurance Corporation

13 G.R. No. 182547 January 10, 2011

China Banking Corporation vs. Armi S. Abel

14 G.R. No. 176264 January 10, 2011

People of the Philippines vs. Teresita "Tessie" Laogo

15 G.R. No. 190640 January 12, 2011

People of the Philippines vs. luis Pajarin y Dela Cruz and Efren Pallaya y Tuviera

16 G.R. No. 190521 January 12, 2011

Leticia Tan, et al. vs. OMC Carriers, Inc. and Bonifacio Arambala

17 G.R. No. 148076/G.R. No. Antonio M. Carandang vs. Hon. Desierto,

Severino, Emilia D. PSU-School of LawBar Ops 2 SY 2013-2014

153161 January 12, 2011 Office of the Ombudsman/Antonio M. Carandang vs. Sandiganbayan

JANUARY 10, 2011 TO FEBRUARY 25, 2011CASE NO. 1

Carry Over of the Excess Income Tax to succeeding year/Claim for Refund or Carry Over of Excess Income Tax: MutuallyExclusive

Belle Corporation, petitioner vs. Commissioner of Internal Revenue,respondent.

G.R. No. 181298 January 10, 2011Del Castillo, J.:

Section 69 of the old National Internal Revenue Code (NIRC) allows unutilized tax credits to berefunded as long as the claim is filed within the prescriptive period. This, however, no longer holdstrue under Section 76 of the 1997 NIRC as the option to carry-over excess income tax payments to thesucceeding taxable year is now irrevocable.

Facts:Petitioner Belle Corporation is a domestic corporation engaged in the realestate and property business. It filed BIR its Income Tax Return (ITR) forthe year of 1997. In view of the overpayment, no taxes were paid for thesecond and third quarters of 1997. Petitioner’s ITR for the taxable yearending December 31, 1997 reflected an overpayment of income taxes. Insteadof claiming the amount as a tax refund, petitioner decided to apply it as atax credit to the succeeding taxable year by marking the tax credit optionbox in its 1997 ITR. For the taxable year 1998, petitioner’s amended ITRshowed again an overpayment of its income tax. On 2000, petitioner filedwith the BIR an administrative claim for refund of its unutilized excessincome tax payments for the taxable year 1997. Notwithstanding the filingof the administrative claim for refund, petitioner carried over the excesstax being claimed to the taxable year 1999 and applied a portion thereof to


its 1999 Minimum Corporate Income Tax (MCIT) liability. Due to theinaction of the CIR, Belle Corp., appealed its claim for refund ofunutilized excess income tax payments for the taxable year 1997. The CTArendered a Decision denying petitioner’s claim for refund. It stressedthat the applicable provision in the case at bar is Section 69 of the oldTax Code and not Section 76 of the 1997 Tax Code. Settled is the rule thatunder Section 69 of the old Tax Code, the carrying forward of anyexcess/overpaid income tax for a given taxable year is limited only up tothe succeeding taxable year. Not satisfied with the ruling of the CTA,Belle Corp., appealed to the CA. The appellate court ruled that BELLE mayno longer opt to claim for a refund considering that the remedy of refundis barred after the corporation has previously opted for the tax carry overremedy. Hence, this present petition for certiorari.

Issue:Whether or not petitioner is entitled to carry over its excess income taxpayment for the year 1997 to the year beyond next preceding which is 1999.

Held:The petition has no merit. However, both the CTA and the CA erred inapplying Section 69 of the old NIRC. The law applicable is Section 76 ofthe NIRC. Unutilized excess income tax payments may be refunded within twoyears from the date of payment under Section 69 of the old NIRC. UnderSection 69 of the old NIRC, in case of overpayment of income taxes, acorporation may either file a claim for refund or carry-over the excesspayments to the succeeding taxable year. Availment of one remedy, however,precludes the other. The option to carry over excess income tax paymentsis irrevocable under Section 76 of the 1997 NIRC. Under the new law, incase of overpayment of income taxes, the remedies are still the same; andthe availment of one remedy still precludes the other. But unlike Section69 of the old NIRC, the carry-over of excess income tax payments is nolonger limited to the succeeding taxable year. Unutilized excess income taxpayments may now be carried over to the succeeding taxable years untilfully utilized. In addition, the option to carry-over excess income taxpayments is now irrevocable. Hence, unutilized excess income tax paymentsmay no longer be refunded.

In the instant case, both the CTA and the CA applied Section 69 of the oldNIRC in denying the claim for refund. We find, however, that the applicableprovision should be Section 76 of the 1997 NIRC because at the timepetitioner filed its 1997 final ITR, the old NIRC was no longer in force.Accordingly, since petitioner already carried over its 1997 excess incometax payments to the succeeding taxable year 1998, it may no longer file aclaim for refund of unutilized tax credits for taxable year 1997. Torepeat, under the new law, once the option to carry-over excess income taxpayments to the succeeding years has been made, it becomes irrevocable.Thus, applications for refund of the unutilized excess income tax paymentsmay no longer be allowed.JANUARY 10, 2011 TO FEBRUARY 25, 2011CASE NO. 2Filing Fee: Suplemental Complaint


DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM and LELY KUNG LIM,petitioners, vs.

SECURITY BANK CORP., TITOLAIDO E. PAYONGAYONG, EVYLENE C. SISON, PHIL.INDUSTRIAL SECURITY AGENCY CORP. and GIL SILOS, Respondents.

G.R. No. 176339 January 10, 2011ABAD, J.:

This case is about the propriety of awarding damages based on claims embodied in the plaintiff’ssupplemental complaint filed without prior payment of the corresponding filing fees.

Facts: Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim andLely Kung Lim (the Lims) took out loans from respondent Security BankCorporation (the Bank). Unable to pay the loans on time, the Lims assignedsome of their real properties to the Bank to secure the same, including abuilding and the lot on which it stands (the property). Later on, theBank offered to lease the property to the Lims through petitioner Do-AllMetals Industries, Inc. (DMI) primarily for business although the Lims wereto use part of the property as their residence. DMI and the Bank executed atwo-year lease contract but the Bank retained the right to pre-terminatethe lease. The contract also provided that, should the Bank decide to sellthe property, DMI shall have the right of first refusal. Before the leasewas to expire, the Bank gave notice to DMI that it was pre-terminating thelease. Wanting to exercise its right of first refusal, DMI tried tonegotiate with the Bank the terms of its purchase. DMI offered purchase theproperty, but the Bank declined. While the negotiations were on going, theLims claimed that they continued to use the property in their business. Butthe Bank posted at the place private security guards and later on padlockedthe entrances to the place and barred the Lims as well as DMI’s employeesfrom entering the property. The Lims eventually filed a complaint with theRTC of Pasig City for damages with prayer for the issuance of a temporaryrestraining order (TRO) or preliminary injunction against the Bank. InAnswering the complaint, the Bank pointed out that the lease contractallowed it to sell the property at any time provided only that it gave DMIthe right of first refusal. However, despite negotiation, DMI and the Bankfailed to come up with an agreement as regards the purchase price. TheBank offered no objection to the issuance of a TRO since it claimed that itnever prevented DMI or its employees from entering or leaving the building.For this reason, the RTC directed the Bank to allow DMI and the Lims toenter the building and get the things they left there. The latter claimed,however, that on entering the building, they were unable to find themovable properties they left there. In a supplemental complaint, DMI andthe Lims alleged that the Bank surreptitiously took such properties,resulting in additional actual damages to them. The RTC rendered adecision in favor of DMI and the Lims. The Bank moved for reconsiderationof the decision, questioning among other things the RTC’s authority togrant damages considering plaintiffs’ failure to pay the filing fees on


their supplemental complaint. The RTC denied the motion. On appeal to theCA, the latter found for the Bank, reversed the RTC decision, and dismissedthe complaint as well as the counterclaims. DMI and the Lims filed amotion for reconsideration but the CA denied the same, hence this petition.

Issue:Whether or not the RTC acquired jurisdiction to hear and adjudicateplaintiff’s supplemental complaint against the Bank considering theirfailure to pay the filing fees on the amounts of damages they claim in it.

Held:Yes. On the issue of jurisdiction, respondent Bank argues that plaintiffs’failure to pay the filing fees on their supplemental complaint is fatal totheir action. But what the plaintiffs failed to pay was merely the filingfees for their Supplemental Complaint. The RTC acquired jurisdiction overplaintiffs’ action from the moment they filed their original complaintaccompanied by the payment of the filing fees due on the same. Theplaintiffs’ non-payment of the additional filing fees due on theiradditional claims did not divest the RTC of the jurisdiction it already hadover the case. JANUARY 10, 2011 TO FEBRUARY 25, 2011CASE NO. 3

Effect of Amicable Resolution in a pending case between parties

SPOUSES GEORGE R. TAN and SUSAN L. TAN, Petitioners, vs. BANCO DE ORO UNIBANK, INC., Respondent.

G.R. No. 188792 January 10, 2011NACHURA, J.:

R E S O L U T I O N

Facts:Spouses Tan obtained various loans and other credit accommodations fromBDO. As security for the loans and other credit accommodations, SpousesTan executed a Real Estate Mortgage and Amended Real Estate Mortgage over aparcel of land owned by the spouses Tan. Spouses Tan defaulted in thepayment of their loan obligations. Hence, the Bank initiated foreclosureproceedings on the foregoing Real Estate Mortgage. At the auction sale, theBank emerged as highest bidder and was issued Certificate of Sale SpousesTan filed a complaint for annulment of mortgage. The RTC of QC issued thewrit of preliminary injunction restraining the foreclosure of the realestate mortgage constituted by Spouses Tan in favor of BDO. On appeal, theCA dissolved the writ of preliminary injunction issued by the RTCconcluding that the issuance of writ was unfounded and unsubstantiated. Itlikewise found that the bond set by the RTC was gross insufficient to coverall the damages which BDO might sustain by reason of the injunction if thecourt should finally decide that Spouses Tan were not entitled to the writ.Thus, this case is a consolidated petitions filed before the Courtassailing the CA’s Resolutions.


Held:After the filing of the Reply to BDO’s Comment in G.R. No. 188792 and whileawaiting BDO’s Comment on the petition in G.R. Nos. 190677-78 and SpousesTan’s Comment on the petition in G.R. Nos. 190699-700, BDO moved forextension of time to file the appropriate pleading in view of thesettlement of the consolidated cases. On December 16, 2010, Spouses Tanand BDO filed a Joint Manifestation and Motion to Dismiss, alleging thatthey have come to an agreement for the amicable resolution of theirrespective claims to avoid the inconvenience of litigation. Attached to themotion are the Compromise Agreement executed by the parties and a copy ofthe RTC decision approving the agreement.

WHEREFORE, premises considered, the Joint Manifestation and Motion toDismiss is hereby GRANTED. Consequently, the consolidated petitions areDISMISSED. The cases are considered CLOSED and TERMINATED.


Plain View Doctrine

ELENITA C. FAJARDO, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent.G.R. No. 190889 January 10, 2011

NACHURA, J.:

Facts:Petitioner, Elenita Fajardo, and one Zaldy Valerio (Valerio) were chargedwith violation of P.D. No. 1866, or illegal possession of firearms beforethe RTC, Branch 5, Kalibo, Aklan. The said heavy firearms were recovered


and confiscated from the accused’s possession during a search conducted bymembers of the Provincial Intelligence Special Operation Group (PISOG),Aklan Police Provincial Office by virtue of a search warrant.

Members of the PISOG were instructed by the Provincial Director of PNP torespond to the complaint of concerned citizens residing at BarangayAndagao, that armed men drinking liquor at the residence of petitioner wereindiscriminately firing guns. Upon arrival at the said placie, they noticedthat several persons scampered and ran in different directions. Theresponding team saw Valerio holding two .45 caliber pistols. He fired shotsat the policemen before entering the house of petitioner. Fajardo was seentucking a .45 caliber handgun between her waist and the waistband of hershorts, after which, she entered the house and locked the main door. A fewminutes later, petitioners went out of the house and negotiated for thepull-out of the police troops. No agreement materialized. The policemenposted at the back of the house, saw Valerio emerge twice on top of thehouse and throw something. As it turned out, the discarded objects were two(2) receivers of .45 caliber pistol, The recovered items were thensurrendered to the group investigator, who utilized them in applying forand obtaining a search warrant. The warrant was served on petitioner andthe Police Team proceeded to search the house and they found several heavyfirearms. Since Fajardo and Valerio failed to present any documentsshowing their authority to possess the confiscated firearms and the tworecovered receivers, a criminal information for violation of P.D. No. 1866was filed against them. For their exoneration, petitioner and Valerioargued that the issuance of the search warrant was defective because theallegation contained in the application filed and signed by the groupinvestigator was not based on his personal knowledge. They furtherasserted that the execution of the search warrant was infirm sincepetitioner, who was inside the house at the time of the search, was notasked to accompany the policemen as they explored the place, but wasinstead ordered to remain in the living room. Consequently, petitioner andValerio were convicted of illegal possession of firearms and explosives,punishable under paragraph 2, Section 1 of P.D.

On appeal, the CA concurred with the factual findings of the RTC, butdisagreed with its conclusions of law, and held that the search warrant wasvoid. Resultantly, all firearms and explosives seized inside petitioner’sresidence were declared inadmissible in evidence. However, the 2 receiversrecovered by the policemen outside the house of petitioner before thewarrant was served were admitted as evidence, pursuant to the plain viewdoctrine. Hence, the present recourse.

Issue: Whether or not the two firearms thrown by Valerio can be admitted inevidence pursuant to the plain view doctrine.

Held:Yes. First, we rule on the admissibility of the receivers. We hold that thereceivers were seized in plain view, hence, admissible. Under the plainview doctrine, objects falling in the "plain view" of an officer, who has aright to be in the position to have that view, are subject to seizure andmay be presented as evidence. It applies when the following requisites


concur: (a) the law enforcement officer in search of the evidence has aprior justification for an intrusion or is in a position from which he canview a particular area; (b) the discovery of the evidence in plain view isinadvertent; and (c) it is immediately apparent to the officer that theitem he observes may be evidence of a crime, contraband, or otherwisesubject to seizure. The law enforcement officer must lawfully make aninitial intrusion or properly be in a position from which he canparticularly view the area. In the course of such lawful intrusion, he cameinadvertently across a piece of evidence incriminating the accused. Theobject must be open to eye and hand, and its discovery inadvertent. Testedagainst these standards, we find that the seizure of the two receivers ofthe .45 caliber pistol outside petitioner’s house falls within the purviewof the plain view doctrine.

In the case at bar, the presence of SPO2 Nava at the back of the house andof the other law enforcers around the premises was justified by the factthat petitioner and Valerio were earlier seen respectively holding .45caliber pistols before they ran inside the structure and sought refuge. Theattendant circumstances and the evasive actions of petitioner and Valeriowhen the law enforcers arrived engendered a reasonable ground for thelatter to believe that a crime was being committed. There was thussufficient probable cause for the policemen to cordon off the house as theywaited for daybreak to apply for a search warrant. Furthermore, from wherehe was situated, SPO2 Nava clearly saw, on two different instances, Valerioemerge on top of the subject dwelling and throw suspicious objects. Lastly,considering the earlier sighting of Valerio holding a pistol, SPO2 Nava hadreasonable ground to believe that the things thrown might be contrabanditems, or evidence of the offense they were then suspected of committing.Indeed, when subsequently recovered, they turned out to be two (2)receivers of .45 caliber pistol. Hence, as correctly declared by the CA,the two receivers were admissible as evidence. The liability for theirpossession, however, should fall only on Valerio and not on petitioner. Theforegoing disquisition notwithstanding, we find that petitioner is notliable for illegal possession of part of a firearm.



Warrantless Arrest

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs.NG YIK BUN, KWOK WAI CHENG, CHANG CHAUN SHI, CHUA SHILOU HWAN, KAN SHUN

MIN, AND RAYMOND S. TAN, Accused-Appellants.G.R. No. 180452 January 10, 2011

VELASCO, JR., J.:

Facts:A member of a Task Force Aduana received an in information that there wasan ongoing shipment of contraband in a certain barangay in Quezon Province.The Team together in coordination with PNP proceed to Villa Vicenta Resort.While observing from a distance, they spotted six Chinese-looking menloading bags containing a white substance into a white van. Having beennoticed, the Team Leader identified his team and asked accused-appellantChua Shilou Hwan (Hwan) what they were loading on the van. Hwan repliedthat it was shabu and pointed, when probed further, to accused-appellantRaymond Tan as the leader. A total of 172 bags of suspected shabu were thenconfiscated. Thereafter an information was filed against the accusedcharging them of transporting, delivering and distributing, withoutauthority of law, in violation of the Dangerous Drugs Act. The RTCconvicted accused-appellants of the crime charged. On appeal, the accused


contended that The trial court erred when it held as valid the warrantlesssearch, seizure and subsequent arrest of the accused-appellants despite thenon-concurrence of the requisite circumstances that justify a warrantlessarrest. On appeal, the appellate court found accused-appellants’contentions unmeritorious as it consequently affirmed in toto the RTCDecision. Hence, this present appeal, where essentially, accused-appellantsclaim that no valid in flagrante delicto arrest was made prior to the seizure andthat the police officers placed accused-appellants under arrest even whenthere was no evidence that an offense was being committed. Since there wasno warrant of arrest, they argue that the search sans a search warrantsubsequently made on them was illegal. They contend that a seizure of anyevidence as a result of an illegal search is inadmissible in any proceedingfor any purpose.

Issue:Whether or not warrantless search and seizure is valid in this case.

Held: warrantless arrest is considered reasonable and valid under Rule 113, Sec.5(a) of the Revised Rules on Criminal Procedure, which states:

Sec. 5. Arrest without warrant; when lawful. — A peace officer or a private person may, without awarrant, arrest a person: (a) When, in his presence, the person to be arrested has committed, isactually committing, or is attempting to commit an offense; The foregoing proviso refers to arrest inflagrante delicto.

In the instant case, contrary to accused-appellants’ contention, there wasindeed a valid warrantless arrest in flagrante delicto. Consider thecircumstances immediately prior to and surrounding the arrest of accused-appellants: (1) the police officers received information from an operativeabout an ongoing shipment of contraband; (2) the police officers, with theoperative, proceeded to Villa Vicenta Resort in Barangay Bignay II,Sariaya, Quezon; (3) they observed the goings-on at the resort from adistance of around 50 meters; and (4) they spotted the six accused-appellants loading transparent bags containing a white substance into awhite L-300 van. The arresting police officers had probable cause tosuspect that accused-appellants were loading and transporting contraband,more so when Hwan, upon being accosted, readily mentioned that they wereloading shabu and pointed to Tan as their leader. Thus, the arrest ofaccused-appellants––who were caught in flagrante delicto of possessing, and inthe act of loading into a white L-300 van, shabu, a prohibited drug underRA 6425, as amended––is valid.


Insurance: Payment of Premium


JOSE MARQUES and MAXILITE TECHNOLOGIES, INC.,(MAXILITE) Petitioners, vs.FAR EAST BANK AND TRUST COMPANY, FAR EAST BANK INSURANCE BROKERS, INC., and

MAKATI INSURANCE COMPANY, Respondents.G.R. No. 171379 January 10, 2011

CARPIO, J.:

Facts:Maxilite is a domestic corporation engaged in the importation and tradingof equipment for energy-efficiency systems. Jose N. Marques is thePresident and controlling stockholder of said corporation. Maxiliteobtained a straight loan from FEBTC and secured by real estate mortgage. Onthe other hand, FEBIBI is a local insurance brokerage corporation whileMakati Insurance Company (MIC) is a local insurance company. Both companiesare subsidiaries of FEBTC. Maxilite and Marques entered into a trustreceipt transaction with FEBTC, for the shipment of various high-technologyequipment from the US, with the merchandise serving as collateral. Theforegoing importation was covered by a trust receipt document signed byMarques on behalf of Maxilite. FEBIBI, upon the advice of FEBTC,facilitated the procurement and processing from Makati Insurance Company offour separate and independent fire insurance policies over the trustreceipted merchandise. Maxilite paid the premiums for these policiesthrough debit arrangement with FEBTC. One of the insurance policies wasreleased to cover the trust receipted merchandise. It was provided in saidinsurance policy was policy is not in force until the premium has beenfully paid to and duly receipted by the insurance company. Finding thatMaxilite failed to pay the insurance premium for said insurance policy,FEBIBI sent written reminders to FEBTC to debit Maxilite’s account. In themeanwhile, Maxilite fully settled its trust receipt account. Thereafter, afire gutted the Aboitiz Sea Transport Building Maxilite’s office andwarehouse were located. As a result, Maxilite suffered losses whichMaxilite claimed against the fire insurance policy with MIC. The insurancecompany denied the fire loss claim on the ground of non-payment of premium.FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim.Maxilite and Marques sued FEBTC, FEBIBI, and Makati Insurance Company andprayed among others for actual damages representing full insurance coverageand "business opportunity losses. In their complaint, Maxilite and Marquesalleged they were led to believe and they in fact believed that thesettlement of Maxilite’s trust receipt account included the payment of theinsurance premium. Maxilite and Marques faulted FEBTC "if it failed totransmit the premium payments on subject insurance coverage contrary to itsrepresented standard operating procedure of solely handling the insurancecoverage and past practice of debiting its account.” Maxilite isessentially claiming estoppel on the part of the respondents. FEBTC,FEBIBI, and Makati Insurance Company countered that Maxilite and Marqueshave no cause of action against them and essentially denied the allegationsin the complaint. The trial court ruled in favor of Maxilite saying thatthe fault of nonpayment of premium by Maxilite was due to the fault andnegligence of FEBTC and now estopped . On appeal, the CA affirmed thedecision of the trial court.

Issues:


Whether or not the respondents are estopped in claiming that the insurancepolicy is ineffective for nonpayment of premium.

Held:Yes. In estoppel, a party creating an appearance of fact, which is false,is bound by that appearance as against another person who acted in goodfaith on it. Estoppel is based on public policy, fair dealing, good faithand justice. Its purpose is to forbid one to speak against his own act,representations, or commitments to the injury of one who reasonably reliedthereon. It springs from equity, and is designed to aid the law in theadministration of justice where without its aid injustice might result.

In the case at bar, both trial and appellate courts basically agree thatFEBTC is estopped from claiming that the insurance premium has been unpaid.That FEBTC induced Maxilite and Marques to believe that the insurancepremium has in fact been debited from Maxilite’s account is grounded on thethe following facts: (1) FEBTC represented and committed to handleMaxilite’s financing and capital requirements, including the relatedtransactions such as the insurance of the trust receipted merchandise; (2)prior to the subject Insurance Policy, the premiums for the three separatefire insurance policies had been paid through automatic debit arrangement;(3) FEBIBI sent FEBTC, not Maxilite nor Marques, written reminders to debitMaxilite’s account, establishing FEBTC’s obligation to automatically debitMaxilite’s account for the premium amount; (4) there was no written demandfrom FEBTC or Makati Insurance Company for Maxilite or Marques to pay theinsurance premium; (5) the subject insurance policy was released toMaxilite and (6) the subject insurance policy remained uncancelled despitethe alleged non-payment of the premium, making it appear that the insurancepolicy remained in force and binding.

Moreover, prior to the full settlement of the trust receipt account, FEBTChad insurable interest over the merchandise, and thus had greater reason todebit Maxilite’s account. Further, as found by the trial court, andapparently undisputed by FEBTC, FEBIBI and Makati Insurance Company,Maxilite had sufficient funds at the time the first reminder, was sent byFEBIBI to FEBTC to debit Maxilite’s account for the payment of theinsurance premium. Since (1) FEBTC committed to debit Maxilite’s accountcorresponding to the insurance premium; (2) FEBTC had insurable interestover the property prior to the settlement of the trust receipt account; and(3) Maxilite’s bank account had sufficient funds to pay the insurancepremium prior to the settlement of the trust receipt account, FEBTC shouldhave debited Maxilite’s account as what it had repeatedly done, as anestablished practice, with respect to the previous insurance policies.However, FEBTC failed to debit and instead disregarded the written reminderfrom FEBIBI to debit Maxilite’s account. FEBTC’s conduct clearlyconstitutes negligence in handling Maxilite’s and Marques’ accounts. As aconsequence of its negligence, FEBTC must be held liable for damages.Indisputably, had the insurance premium been paid, through the automaticdebit arrangement with FEBTC, Maxilite’s fire loss claim would have beenapproved. Hence, Maxilite suffered damage to the extent of the face valueof the insurance policy.



Ejectment Case: T he finality of the decision with respect to possession de facto cannot be affected by the pendency of the annulment case where the ownership of the property is beingcontested

MILAGROS SALTING, Petitioner, vs. JOHN VELEZ and CLARISSA R. VELEZ,Respondents.

G.R. No. 181930 January 10, 2011NACHURA, J.:

Facts:John Velez and Clarissa Velez filed a complaint3 for ejectment againstpetitioner Milagros Salting involving a property and obtained a favorabledecision4 when the MeTC, ordered petitioner Salting to vacate the subjectparcel of land. The decision became final and executory, after whichrespondents filed a motion for execution which was opposed by petitioner.


http://www.lawphil.net/judjuris/juri2011/jan2011/gr_181930_2011.html#fnt4


Thereafter, petitioner instituted an action before the (RTC), Annulment ofSale of the Property of the subject property with a prayer for issuance ofa TRO from executing the MeTC decision. Petitioner claimed that shepurchased the subject parcel of land from Villamena as evidenced by anotarized document known as Sale of Real Estate. She further explained thatrespondents were able to obtain title to the subject property through thefraudulent acts of the heirs of Villamena. She further sought thedeclaration of nullity of the sale by the heirs of Villamena to respondentsinvolving the subject parcel of land, and, consequently, the cancellationof the title to the property in the name of respondents. Finding thatpetitioner would suffer grave and irreparable damage if respondents wouldnot be enjoined from executing the MeTC decision while respondents wouldnot suffer any prejudice, the RTC, granted the writ of preliminaryinjunction applied for. On appeal, the appellate court concluded thatSalting had no clear and unmistakable right to possession over the subjectparcel of land in view of the decision. Hence, contrary to the conclusionof the RTC, the CA opined that petitioner was not entitled to the writ ofpreliminary injunction. Hence, this present petition for review oncertiorari averring that she has a clear and existing right and interestover the subject property which should be protected by injunction. Finally,petitioner argues that jurisprudence allows the suspension of proceedingsin an ejectment case at whatever stage when warranted by the circumstancesof the case.

Issue:Whether or not the final and executory decision in an ejectment case may beabated by the pendency of the proceedings involving the issue of ownershipover the same property in question.

Held:No. In the present case, the finality of the decision with respect topossession de facto cannot be affected by the pendency of the annulmentcase where the ownership of the property is being contested. The Court isinclined to adhere to settled jurisprudence that suits involving ownershipmay not be successfully pleaded in abatement of the enforcement of thefinal decision in an ejectment suit. The rationale of the rule has beenexplained in this wise: This rule is not without good reason. If the rulewere otherwise, ejectment cases could easily be frustrated through thesimple expedient of filing an action contesting the ownership over theproperty subject of the controversy. This would render nugatory theunderlying philosophy of the summary remedy of ejectment which is toprevent criminal disorder and breaches of the peace and to discourage thosewho, believing themselves entitled to the possession of the property,resort to force rather than to some appropriate action in court to asserttheir claims. Unlawful detainer and forcible entry suits under Rule 70 ofthe Rules of Court are designed to summarily restore physical possession ofa piece of land or building to one who has been illegally or forciblydeprived thereof, without prejudice to the settlement of the parties’opposing claims of juridical possession in appropriate proceedings.



Drugs Case: Chain of Custody of Corpus Delicti

PEOPLE OF THE PHILIPPINES, Appellee, vs. JAY LORENA y LABAG, Appellant.G.R. No. 184954 January 10, 2011

VILLARAMA, JR., J.:

Facts:Iris Mae Cleofe (Iris), a civilian informant, came to the Pasacao PoliceStation to report appellant’s alleged drug trafficking activities. Actingon said information, all members of Task Force Ubash, a unit charged withmonitoring drug trafficking activities in the area, to go with Iris andconduct a surveillance upon appellant. In coordination with PDEA, the teamwas to conduct a buy-bust operation. Around 7:00 in the evening, to startthe operation, Iris arrived and entered Saar’s house. She immediatelyproceeded with the transaction and handed over the marked P500-bill toappellant Jay Loren who was then sitting down. While handing over themoney, Iris uttered the words "O, uya na an bayad ko kaiyan ha, baad kunwara-waraon mo iyan, uya na an bayad ko ha" (This is my payment, you mightmisplace it), her voice eliberately made louder for the buy-bust team tohear. Simultaneously, appellant handed over a plastic sachet containingwhite crystalline substance to Iris. At that point, some members of thetask force rushed to the porch, arrested appellant and handcuffed him.One of the policemen recovered from appellant’s pocket the P500-bill whileIris turned over the sachet of shabu to Espiritu. Then they broughtappellant to the police station where he was detained. The sachetcontaining white crystalline substance was thereafter personally submittedto the Camarines Sur Provincial Crime Laboratory, where it was tested.Accordingly he was criminally charged for unlawfully, and knowingly sellingshabu, a dangerous drug. The RTC promulgated its judgment findingappellant guilty beyond reasonable doubt of violating Section 5, Article IIof R.A. No. 9165 (Dangerous Drugs Act). It held that even if theprosecution failed to present the poseur-buyer by reason of her death, herfailure to testify was not fatal to the prosecution’s evidence sinceprosecution witnesses Solero, Espiritu and Ayen were able to observe thetransaction between Iris and appellant, and the shabu and buy-bust moneyrecovered from him were presented as evidence to prove the sale. Appellantappealed to the CA. The appellate court affirmed the decision of the lowercourt. Hence, this present appeal, averring among others, that the lowercourt misapplied the presumption of regularity in the performance ofofficial function, especially since the arresting officers failed to complywith the guidelines prescribed by the law regarding the custody and controlof the seized drugs as mandated by Section 21, R.A. No. 9165.


Issue:Whether or not there was sufficient evidence to find the appellant guilty beyond reasonable doubt of the crime charged.

Held: The Court reversed appellant’s conviction.

In a prosecution for illegal sale of a prohibited drug under Section 5 ofR.A. No. 9165, the prosecution must prove the following elements: (1) theidentity of the buyer and the seller, the object, and the consideration;and (2) the delivery of the thing sold and the payment therefor. All theserequire evidence that the sale transaction transpired, coupled with thepresentation in court of the corpus delicti, i.e., the body or substance of thecrime that establishes that a crime has actually been committed, as shownby presenting the object of the illegal transaction. Further, consideringthe illegal drug’s unique characteristic rendering it indistinct, notreadily identifiable and easily open to tampering, alteration orsubstitution either by accident or otherwise, there is a need to complystrictly with procedure in its seizure and custody. Section 21, paragraph1, Article II of R.A. No. 9165 provides such procedure: (1) Theapprehending team having initial custody and control of the drugs shall,immediately after seizure and confiscation, physically inventory andphotograph the same in the presence of the accused or the person/s fromwhom such items were confiscated and/or seized, or his/her representativeor counsel, a representative from the media and the Department of Justice(DOJ), and any elected public official who shall be required to sign thecopies of the inventory and be given a copy thereof.

Evident from the records of this case, however, is the fact that themembers of the buy-bust team did not comply with the procedure laid down inSection 21 of R.A. No. 9165. Nothing in the testimony of Solero, Commanderof Task Force Ubash, would show that the procedure was complied with. Heeven admitted that he has not seen the inventory of the confiscated drugsallegedly prepared by the police officers and that he only read a little ofR.A. No. 9165.

In this case, there was no compliance with the inventory and photographingof the seized dangerous drug and marked money immediately after the buy-bust operation. We have held that such non-compliance does not necessarilyrender void and invalid the seizure of the dangerous drugs. There must,however, be justifiable grounds to warrant exception therefrom, andprovided that the integrity and evidentiary value of the seized items areproperly preserved by the apprehending officer/s. While a perfect chainof custody is almost always impossible to achieve, an unbroken chainbecomes indispensable and essential in the prosecution of drug cases owingto its susceptibility to alteration, tampering, contamination and evensubstitution and exchange. Hence, every link must be accounted for. Prosecutionwitnesses Solero, Ayen and Espiritu were united in testifying that afterthe consummation of the transaction and immediately upon appellant’sapprehension, Iris turned over the plastic sachet to Espiritu. It waslikewise clear that Espiritu turned over to Solero the specimen allegedlyseized from appellant at the police station. However, as to the subsequent


handling of said specimen at the police station until it was presented in court, the prosecution failedto clearly account for each link in the chain due to the vagueness and patent inconsistencies in thetestimonies of the prosecution witnesses. Not only did the prosecution fail to offer any justifiableground why the procedure required by law was not complied with, it was also unable to establish thechain of custody of the shabu allegedly taken from appellant. The obvious gaps in the chain of custody created a reasonable doubt as to whether the specimen seized from appellant was the samespecimen brought to the crime laboratories and eventually offered in court as evidence. Withoutadequate proof of the corpus delicti, appellant’s conviction cannot stand.As a result of the irregularities and lapses in the chain of custodyrequirement which unfortunately the trial and appellate courts overlooked,the presumption of regularity in the performance of official duties cannotbe used against appellant. It needs no elucidation that the presumption ofregularity in the performance of official duty must be seen in the contextof an existing rule of law or statute authorizing the performance of an actor duty or prescribing a procedure in the performance thereof. Thepresumption, in other words, obtains only where nothing in the records issuggestive of the fact that the law enforcers involved deviated from thestandard conduct of official duty as provided for in the law. Otherwise,where the official act in question is irregular on its face, an adversepresumption arises as a matter of course.

JANUARY 10, 2011 TO FEBRUARY 25, 2011


CASE NO. 9

Requisites: Issuance of Writ of Preliminary Mandatory Injunction

SPOUSES ISAGANI and DIOSDADA CASTRO, Petitioners, vs. SPOUSES REGINO SE and VIOLETA DELA CRUZ, SPOUSES EDUARDO and CHARITO PEREZ

and MARCELINO TOLENTINO, Respondents.G.R. No. 190122 January 10, 2011

CARPIO MORALES, J.,

Facts:Respondent Spouses Perez obtained a loan from Spouses Castro (petitioners)and to secure which they executed a real estate mortgage in petitioners’favor covering an unregistered parcel of land. Spouses Perez having failedto settle their loan, petitioners extrajudicially foreclosed the mortgageand, as the highest bidder at the public auction, bought the property. Itturned out that before the foreclosure, Spouses Perez, sold the property torespondent Spouses dela Cruz who was able to cause the issuance of taxdeclaration in their name. Spouses dela Cruz claimed that they wereunaware of the existing mortgage and the TD bore no annotation of themortgages. The petitioners filed a complaint against the two sets ofrespondent spouses. During the pendency of case, petitioners filed an exparte motion for the issuance of a writ of possession over the property byvirtue of the foreclosure sale which was granted by the trial court (RTC-Branch 16). By virtue of said writ, spouses dela Cruz were evicted fromthe property. On the other hand, Spouses dela Cruz prayed for the issuanceof a writ of preliminary mandatory injunction to restore them to physicalpossession of the property , which prayer Branch 7 of the RTC granted. Thetrial court ruled that Spouses dela Cruz were not claiming rights under thespouses Perez. They were and still are the owners in their own right.Hence, the writ of possession issued was improperly implemented and underArt. 539 of the Civil Code, they must be restored to said possession by themeans established by the laws and the Rules of Court. The writ ofpreliminary mandatory injunction prayed for is undeniably one of the meansestablished by the laws and the Rules of Court.

Issue:Whether or not the issuance of writ of preliminary mandatory injunction in favor of Spouses Dela Cruz is proper.

Held:Yes. For an injunctive writ to issue, a clear showing of extreme urgencyto prevent irreparable injury and a clear and unmistakable right to it mustbe proven by the party seeking it. The primary objective of a preliminaryinjunction, whether prohibitory or mandatory, is to preserve the status quountil the merits of the case can be heard. In the case at bar, respondentSpouses dela Cruz had long before the foreclosure of the mortgage or boughtand took possession of the property, and had in fact cancelled the seller-respondent Spouses Perez’ TD and had one issued in their name. Bypetitioners’ seeking ex parte the issuance to them of a writ of possessionover the property, which was granted and the writ enforced againstrespondent Spouses de la Cruz, they disturbed the status quo ante litem. Thetrial court did not thus commit grave abuse of discretion when it issued


the writ of preliminary mandatory injunction in favor of Spouses de laCruz. For the enforcement of the writ of possession against respondentSpouses dela Cruz, who did not take part in the foreclosure proceedings,would amount to taking of real property without the benefit of a properjudicial intervention. The procedural shortcut which petitioners isimpermissible. Even Article 433 of the Civil Code instructs that "Actualpossession under claim of ownership raises disputable presumption ofownership. The true owner must resort to judicial process for the recoveryof the property." The contemplated judicial process is not through an ex-parte petition as what petitioners availed of, but a process wherein athird party, Spouses de la Cruz herein, is given an opportunity to beheard.


Change of Plea of accused for “not guilty” to “guilty”

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs.KHADDAFY JANJALANI, GAMAL B. BAHARAN a.k.a. Tapay, ANGELO TRINIDAD a.k.a.Abu Khalil, GAPPAL BANNAH ASALI a.k.a. Maidan or Negro, JAINAL SALI a.k.a.Abu Solaiman, ROHMAT ABDURROHIM a.k.a. Jackie or Zaky, and other JOHN and

JANE DOES, Accused,GAMAL B. BAHARAN a.k.a. Tapay, ANGELO TRINIDAD a.k.a. Abu Khalil, and

ROHMAT ABDURROHIM a.k.a. Abu Jackie or Zaky, Accused-Appellants.G.R. No. 188314 January 10, 2011

SERENO, J.:Facts:This involves the Valentine’s Day bombing that happened on February 14,2005 which happened in Ayala, Makati. Prior to explosion, thespokesperson of the Abu Sayyaf Group – Abu Solaiman – announced over radiostation DZBB that the group had a Valentine’s Day "gift" for formerPresident Gloria Macapagal-Arroyo. After the bombing, he again went onradio and warned of more bomb attacks. Thereafter, Members of the AbuSayyaf Group led Khaddafy Janjalani, – were then charged with multiplemurder and multiple frustrated murder. Only Baharan, Trinidad, Asali, andRohmat were arrested, while the other accused remain at-large. On theirarraignment for the multiple murder charge, Baharan, Trinidad, and Asaliall entered a plea of guilty. On the other hand, upon arraignment for themultiple frustrated murder charge, accused Asali pled guilty. AccusedTrinidad and Baharan pled not guilty. Rohmat pled not guilty to bothcharges. In the light of the pretrial stipulations, the trial court askedwhether accused Baharan and Trinidad were amenable to changing their "not


guilty" pleas to the charge of multiple frustrated murder, considering thatthey pled "guilty" to the heavier charge of multiple murder, creating anapparent inconsistency in their pleas. Defense counsel conferred withaccused Baharan and Trinidad and explained to them the consequences of thepleas. The two accused acknowledged the inconsistencies and manifestedtheir readiness for re-arraignment. After the Information was read to them,Baharan and Trinidad pled guilty to the charge of multiple frustratedmurder. The trial court convicted the three accused guilty of the complexcrime of multiple murder and multiple frustrated murder. In thisappeal, accused-appellants Baharan and Trinidad argue that the trial courtdid not conduct a searching inquiry after they had changed their plea from"not guilty" to "guilty."

Issue:Whether or not acceptance of the plea of guilt of the accused is proper.

Held:It has been ruled that "all trial judges … must refrain from accepting withalacrity an accused's plea of guilty, for while justice demands a speedyadministration, judges are duty bound to be extra solicitous in seeing toit that when an accused pleads guilty, he understands fully the meaning ofhis plea and the import of an inevitable conviction."6 Thus, trial courtjudges are required to observe the following procedure under Section 3,Rule 116 of the Rules of Court:

SEC. 3. Plea of guilty to capital offense; reception of evidence. — When the accused pleads guilty to acapital offense, the court shall conduct a searching inquiry into the voluntariness and fullcomprehension of the consequences of his plea and shall require the prosecution to prove his guiltand the precise degree of culpability. The accused may also present evidence in his behalf.

The stringent procedure governing the reception of a plea of guilt,especially in a case involving the death penalty, is imposed upon the trialjudge in order to leave no room for doubt on the possibility that theaccused might have misunderstood the nature of the charge and theconsequences of the plea. Likewise, the requirement to conduct a searchinginquiry should not be deemed satisfied in cases in which it was the defensecounsel who explained the consequences of a "guilty" plea to the accused,as it appears in this case.

We have reiterated in a long line of cases that the conduct of a searchinginquiry remains the duty of judges, as they are mandated by the rules tosatisfy themselves that the accused had not been under coercion or duress;mistaken impressions; or a misunderstanding of the significance, effects,and consequences of their guilty plea. This requirement is stringent andmandatory. Nevertheless, we are not unmindful of the context under whichthe re-arraignment was conducted or of the factual milieu surrounding thefinding of guilt against the accused. The Court observes that accusedBaharan and Trinidad previously pled guilty to another charge – multiplemurder – based on the same act relied upon in the multiple frustratedmurder charge. The Court further notes that prior to the change of plea toone of guilt, accused Baharan and Trinidad made two other confessions ofguilt – one through an extrajudicial confession (exclusive televisioninterviews, as stipulated by both accused during pretrial), and the other



via judicial admission (pretrial stipulation). Considering the foregoingcircumstances, we deem it unnecessary to rule on the sufficiency of the"searching inquiry" in this instance. Remanding the case for re-arraignmentis not warranted, as the accused’s plea of guilt was not the sole basis ofthe condemnatory judgment under consideration.



Lands Exempted from Coverage of CARP

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF AGRARIANREFORM, through the HON. SECRETARY ASSER C. PANGANDAMAN, Petitioner, vs.SALVADOR N. LOPEZ AGRI-BUSINESS CORP.,(SNLAB) represented by SALVADOR N.

LOPEZ, JR., President and General Manager, Respondent.G.R. No. 178895 January 10, 2011

SERENO, J.:

Facts:Subject of this petition are four parcels of land owned by SNLAB which wereplaced under Compulsory Acquisition pursuant to R.A. 6657 (ComprehensiveAgrarian Reform Law). SNLAB filed an application for exemption of the lotsin question alleging that said parcels of land are used for grazing andhabitat of petitioner’s cattle, carabaos, and other livestocks, prior tothe effectivity of the Comprehensive Agrarian Reform Law (CARL). The MAROconducted an onsite investigation upon the land and confirmed the presenceof the livestock enumerated. Hence, the MARO favorably recommended forthe exemption from the coverage of CARP the lots in question. The DARRegional Director, after inspecting the properties, issued an Order denyingthe application for exemption of the other two on the ground that it wasnot clearly shown that the same were actually, directly and exclusivelyused for livestock raising since in its application, petitioner itselfadmitted that it needs the lots for additional grazing area. Theapplication for exemption, however of the other two (2) parcels of land wasapproved.

Issue:Whether the lands of SNLABC can be considered grazing lands for itslivestock business and are thus exempted from the coverage of the CARL.

Held:Yes. In Luz Farms v. Secretary of the Department of Agrarian Reform, theCourt declared unconstitutional the CARL provisions that included landsdevoted to livestock under the coverage of the CARP. The transcripts of thedeliberations of the Constitutional Commission of 1986 on the meaning ofthe word "agricultural" showed that it was never the intention of theframers of the Constitution to include the livestock and poultry industryin the coverage of the constitutionally mandated agrarian reform program ofthe government.15 Thus, lands devoted to the raising of livestock, poultryand swine have been classified as industrial, not agricultural, and thusexempt from agrarian reform.16

In the instant case, the MARO in its ocular inspection22 found on the Lopezlands several heads of cattle, carabaos, horses, goats and pigs, some ofwhich were covered by several certificates of ownership. There werelikewise structures on the Lopez lands used for its livestock business,structures consisting of two chutes where the livestock were kept during





nighttime. The existence of the cattle prior to the enactment of the CARLwas positively affirmed by the farm workers and the overseer who wereinterviewed by the MARO. Considering these factual findings and the factthat the lands were in fact being used for SNLABC’s livestock business evenprior to 15 June 1988, the DAR Regional Director ordered the exemption ofthe Lopez lands from CARP coverage. The Court gives great probative valueto the actual, on-site investigation made by the MARO as affirmed by theDAR Regional Director. The Court finds that the Lopez lands were in factactually, directly and exclusively being used as industrial lands forlivestock-raising. Hence, the Court looks with favor on the expertise ofthe MARO in determining whether livestock-raising on the Lopez lands hasonly been recently conducted or has been a going concern for several yearsalready. Absent any clear showing of grave abuse of discretion or bias, thefindings of the MARO - as affirmed by the DAR Regional Director - are to beaccorded great probative value, owing to the presumption of regularity inthe performance of his official duties. The Court affirms the findings ofthe DAR Regional Director and the Court of Appeals that the Lopez landswere actually, directly and exclusively being used for SNLABC’s livestockbusiness and, thus, are exempt from CARP coverage.


Common Carriers; Standard of Diligence

LOADMASTERS CUSTOMS SERVICES, INC., Petitioner, vs.GLODEL BROKERAGE CORPORATION and R&B INSURANCE CORPORATION, Respondents.

G.R. No. 179446 January 10, 2011MENDOZA, J.:

Facts:R&B Insurance issued marine insurance policy in favor of Columbia to insurethe shipment of 132 bundles of electric copper cathodes against All Risks.The cargoes were shipped on board the vessel "Richard Rey" from Isabela,Leyte, to Manila. They arrived on the same date. Columbia engaged theservices of Glodel for the release and withdrawal of the cargoes from thepier and the subsequent delivery to its warehouses/plants. Glodel, in turn,engaged the services of Loadmasters for the use of its delivery trucks totransport the cargoes to Columbia’s warehouses/plants in Bulacan andValenzuela City. The goods were loaded on board owned by Loadmasters,driven by its employed drivers and accompanied by its employed truckhelpers. Of the six trucks en route to Bulacan, only five (5) reached thedestination. One (1) truck, loaded with the cargos failed to deliver itscargo. Because of this incident, Columbia filed with R&B Insurance a claimfor insurance indemnity in the amount of R&B Insurance paid Columbia theinsurance indemnity. R&B Insurance, thereafter, filed a complaint fordamages against both Loadmasters and Glodel before the RTC-Manila. It


sought reimbursement of the amount it had paid to Columbia for the loss ofthe subject cargo. It claimed that it had been subrogated "to the right ofthe consignee to recover from the party/parties who may be held legallyliable for the loss." The RTC rendered a decision holding Glodel liablefor damages for the loss of the subject cargo and dismissing Loadmasters’counterclaim for damages and attorney’s fees against R&B Insurance. BothR&B Insurance and Glodel appealed the RTC decision to the CA. Theappellate court ruled that Loadmasters is an agent of appellant Glodel,whatever liability the latter owes to appellant R&B Insurance Corporationas insurance indemnity must likewise be the amount it shall be paid byappellee Loadmasters. Thus, Loadmasters is likewise held liable toappellant Glodel. Hence, Loadmasters filed the present petition for reviewon certiorari arguing that it cannot be considered an agent of Glodelbecause it never represented the latter in its dealings with the consignee.

Issue:Who, between Glodel and Loadmasters, is liable to pay R&B Insurance for theamount of the indemnity it paid Columbia?

Held:At the outset, it is well to resolve the issue of whether Loadmasters andGlodel are common carriers to determine their liability for the loss of thesubject cargo. Under Article 1732 of the Civil Code, common carriers arepersons, corporations, firms, or associations engaged in the business ofcarrying or transporting passenger or goods, or both by land, water or airfor compensation, offering their services to the public. Based on theaforecited definition, Loadmasters is a common carrier because it isengaged in the business of transporting goods by land, through its truckingservice. It is a common carrier as distinguished from a private carrierwherein the carriage is generally undertaken by special agreement and itdoes not hold itself out to carry goods for the general public. Thedistinction is significant in the sense that "the rights and obligations ofthe parties to a contract of private carriage are governed principally bytheir stipulations, not by the law on common carriers."

Loadmasters and Glodel, are being both common carriers, are mandated fromthe nature of their business and for reasons of public policy, to observethe extraordinary diligence in the vigilance over the goods transported bythem according to all the circumstances of such case, as required byArticle 1733 of the Civil Code. When the Court speaks of extraordinarydiligence, it is that extreme measure of care and caution which persons ofunusual prudence and circumspection observe for securing and preservingtheir own property or rights. This exacting standard imposed on commoncarriers in a contract of carriage of goods is intended to tilt the scalesin favor of the shipper who is at the mercy of the common carrier once thegoods have been lodged for shipment. Thus, in case of loss of the goods,the common carrier is presumed to have been at fault or to have actednegligently. This presumption of fault or negligence, however, may berebutted by proof that the common carrier has observed extraordinarydiligence over the goods.

With respect to the time frame of this extraordinary responsibility, theCivil Code provides that the exercise of extraordinary diligence lasts from


the time the goods are unconditionally placed in the possession of, andreceived by, the carrier for transportation until the same are delivered,actually or constructively, by the carrier to the consignee, or to theperson who has a right to receive them. Premises considered, the Court isof the view that both Loadmasters and Glodel are jointly and severallyliable to R & B Insurance for the loss of the subject cargo.



Issuance of a writ of possession before the possessor of the property could be heard on heropposition

CHINA BANKING CORPORATION, Petitioner, vs. ARMI S. ABEL, Respondent.G.R. No. 182547 January 10, 2011

ABAD, J.:

Facts:In a foreclosure sale, petitioner China Banking Corporation (China Bank)acquired title1 over respondent Armi S. Abel’s property in Quezon City, shehaving failed to pay her loan. To enforce its ownership, in China Bankfiled with the RTC of Quezon City an ex parte petition for the issuance of awrit of possession in its favor. The trial court granted the Bank’spetition and issued the corresponding writ of possession over the property.Abel appealed the decision but lost her appeal in the CA. The judgmentbecame final and executor and eventually her case was remanded to RTC forexecution. Upon the Bank’s motion for execution and failure of Abel tofile her opposition on said motion, the RTC issued a writ of execution. Incompliance with the court’s order the sheriff implemented the writ againstAbel and placed China Bank in possession of the subject property. Abelappealed and the CA rendered the decision setting aside the orders of theRTC saying that the RTC committed grave abuse of discretion in granting theBank’s motion for execution noting that the court gave Abel 10 days fromnotice of its order, not 10 days from the issuance of such order, withinwhich to file her opposition.

Issue:Whether or not the CA erred in setting aside the assailed RTC’s Orders on the ground of failure to observe due process respecting Abel’s right to be heard on the bank’s motion for execution.

Held:Yes. The CA erred in attributing grave abuse of discretion to the RTC.Although the RTC caused the issuance of the writ of execution before itcould establish that Abel’s 10 days "from notice" within which to file heropposition had lapsed, she filed with that court an urgent motion forreconsideration with her opposition to the motion for execution attached.The Court, acting on her motion, denied it on the following day. Anyperceived denial of her right to be heard on the bank’s motion forexecution had been cured by her motion for reconsideration and the RTC’saction on the same. True, Abel gave notice to China Bank that she wouldsubmit her motion for reconsideration for the RTC’s consideration but thatnotice is for the benefit of the bank, not for her, that it may be heard onthe matter. She cannot complain that the court acted on her motion more



promptly than she expected especially since she actually offered nolegitimate reason for opposing the issuance of a writ of possession in thebank’s favor.

Orders for the issuance of a writ of possession are issued as a matter ofcourse upon the filing of the proper motion and approval of thecorresponding bond since no discretion is left to the court to deny it. TheRTC’s issuance of such writ conformably with the express provisions of lawcannot be regarded as done without jurisdiction or with grave abuse ofdiscretion. Such issuance being ministerial, its execution by the sheriffis likewise ministerial. In truth, the bank has failed to take possessionof the property after more than seven years on account of Abel’s legalmaneuverings.


Illegal Recruitment in large scale

PEOPLE OF THE PHILIPPINES, Appellee, vs. TERESITA "TESSIE" LAOGO,Appellant.

G.R. No. 176264 January 10, 2011VILLARAMA, JR., J.:

Facts:Appellant Teresita "Tessie" Laogo was the proprietor and manager of Laogo Travel Consultancy, a travel agency firm. An Information was filed againstLaogo and a certain Susan Navarro (Susan) crime of Illegal Recruitment (Large Scale).

Susan invited several individuals to celebrate the town fiesta. Appellantwas among the several guests in Susan’s house during the said occasion.According to the complainants, Susan was introduced to them as somebody whocould help them find work abroad. Susan, on the other hand, made arepresentation that she is an employee of Laogo’s travel consultancy.Thereafter, Susan told them to fill up an application and gave her money asplacement fee. But months passed and heard nothing from Susan nor from theLaogo’s travel consultancy. They verified with the POEA the status ofthe Laogo’s Travel Consultancy and learned that neither of the accused norLaogo Travel was licensed to recruit workers for employment abroad.


Aggrieved, Rogelio, together with his six companions, filed the complaintagainst Susan and appellant. During the trial, appellant denied anyparticipation in the illegal activities undertaken by Susan. She insistedthat Susan was not in any way connected with her travel agency and that sheconfronted the latter when she came to know of Susan’s recruitmentactivities. Appellant claimed that she even had to rename her travelagency to Renz Consultancy and Employment Services to avoid beingassociated with Susan’s recruitment activities. Unsatisfied withappellant’s explanation, the trial court promulgated a Decision finding herguilty of large scale illegal recruitment. On appeal, the CA affirmed theappellant’s conviction. Hence, this present appeal.

Issue: Whether or not the appellant consciously and actively participated in therecruitment of the complainants.

Held:Yes. Recruitment and placement refers to the act of canvassing, enlisting,contracting, transporting, utilizing, hiring or procuring workers, andincludes referrals, contract services, promising or advertising foremployment, locally or abroad, whether for profit or not. When a person orentity, in any manner, offers or promises for a fee employment to two ormore persons, that person or entity shall be deemed engaged in recruitmentand placement. Article 38(a) of the Labor Code, as amended, specifies thatrecruitment activities undertaken by non-licensees or non-holders ofauthority are deemed illegal and punishable by law. And when the illegalrecruitment is committed against three or more persons, individually or asa group, then it is deemed committed in large scale and carries with itstiffer penalties as the same is deemed a form of economic sabotage.

But to prove illegal recruitment, it must be shown that the accused,without being duly authorized by law, gave complainants the distinctimpression that he had the power or ability to send them abroad for work,such that the latter were convinced to part with their money in order to beemployed. It is important that there must at least be a promise or offerof an employment from the person posing as a recruiter, whether locally orabroad.

In the present case, both the trial court and the CA found that all thefive complainants were promised to be sent abroad by Susan and hereinappellant as cooks and assistant cooks. The follow up transactions betweenappellant and her victims were done inside the said travel agency.Moreover, all four receipts issued to the victims bear the name and logo ofLaogo Travel Consultancy, with two of the said receipts personally signedby appellant herself. Indubitably, appellant and her co-accused actingtogether made complainants believe that they were transacting with alegitimate recruitment agency and that Laogo Travel Consultancy had theauthority to recruit them and send them abroad for work when in truth andin fact it had none as certified by the POEA. Absent any showing that thetrial court and the CA overlooked or misappreciated certain significantfacts and circumstances, which if properly considered, would change theresult, we are bound by said findings.



Chain of Custody of corpus delicti.

PEOPLE OF THE PHILIPPINES, Appellee, vs.LUIS PAJARIN y DELA CRUZ and EFREN PALLAYA y TUVIERA, Appellants.

G.R. No. 190640 January 12, 2011ABAD, J.:

Facts:The City Prosecutor of Manila charged the accused Pajarin and Pallayabefore the RTC of Manila in violation of the Comprehensive Dangerous DrugsAct of 2002. A buy-bust operation was conducted by police operatives. PO2Ibanez, as an interested buyer, bought shabu from the two appellants, usingthe marked P500.00 bill. When the alleged transaction was completed betweenthe posuer-buyer and the accused, the other members of the buy-bust teamapprehended the two accused and searched the scooter of the accused andrecovered another sachet of shabu. They then brought the accused to theirstation. The arresting officers turned over the seized suspected shabu toPO3 Roel Young who marked the plastic sachet seized from the scooter withthe letters "ETP," and the sachet Pajarin handed over with the letters"LDCP." The RTC found both accused guilty of the crime charged. On appealto the CA, it rendered a decision affirming the RTC decision, hence thepresent appeal to this Court. Appellants chiefly argue that the policeofficers involved in the buy-bust operation failed to comply with Section21 (a), Article II of the Implementing Rules and Regulations of R.A. 9165,which requires them to take immediate inventory of and photograph theseized item in the presence of the accused or his representative orresponsible third persons mentioned but always taking care that theintegrity and evidentiary value of the seized articles are preserved.

Issue: Whether or not the CA erred in not excluding the evidence of the seizedshabu on the ground that the prosecution failed to prove their integrity byestablishing the chain of custody of the same until they got to the trialcourt.

Held:The Court has held in numerous cases that the failure of the police tocomply with the procedure laid down in R.A. 9165 would not render void theseizure of the prohibited substance for as long as the apprehendingofficers give justifiable reason for their imperfect conduct and show thatthe integrity and evidentiary value of the confiscated items had not beencompromised. Here, the prosecution failed to show that the substancesallegedly seized from the accused were the same substances presented incourt to prove their guilt. Usually, the seized article changes hands fromthe police officer who takes it from the accused, to the supervisingofficer at their station, to the messenger who brings them to the policecrime laboratory, and then to the court where it is adduced as evidence.Since custody and possession change over time, it has been heldindispensable that the officer who seized the article places it in aplastic container unless it is already in one, seals it if yet unsealed,and puts his marking on the cover. In this way there is assurance, upon


inspection, that the substance reaches the laboratory in the same conditionit was seized from the accused.

Here, the police officers did not mark the sealed plastic sachets to showthat they were the same things they took from the accused. Rather, themarking on the items were done by the station investigator who would haveno way of knowing that the substances were really seized from the accused.The marking of captured items immediately after they are seized from theaccused is the starting point in the custodial link. This step is vitalbecause succeeding handlers of the specimens will use the markings asreference. Failure to place such markings paves the way for swapping,planting, and contamination of the evidence. These lapses seriously castdoubt on the authenticity of the corpus delicti, warranting acquittal onreasonable doubt. It is a serious concern that quite often the failure ofthe police to observe the rules governing buy-bust operations results inacquittals. Drug enforcement agencies should continually train theirofficers and agents to observe these rules and transfer out those who wouldnot. The prosecutors conducting preliminary investigation should not filein court drugs cases where the sworn statements of the police officers, thereport of the chemical analyst, and the object evidence do not showcompliance with the same. And trial courts should order the case dismissedand the accused released from detention if on examination the supportingdocuments are wanting in this respect. They should not waste their precioustime to useless exercise where the police and the prosecution fail toobserve the rule of law especially in so serious offenses.


Requisites in award of actual damages representing loss of earning capacity of the victim in quasi-delict; Exceptions.

LETICIA TAN, MYRNA MEDINA, MARILOU SPOONER, ROSALINDA TAN, and MARY JANETAN, MARY LYN TAN, CELEDONIO TAN, JR., MARY JOY TAN, and MARK ALLAN TAN,represented herein by their mother, LETICIA TAN, Petitioners, vs. OMC

CARRIERS, INC. and BONIFACIO ARAMBALA, Respondents.G.R. No. 190521 January 12, 2011

BRION, J.:

Facts:The petitioners filed a complaint for damages with the RTC against OMC andBonifacio Arambala. The complaint states that Arambala was driving a truckwith a trailer owned by OMC. When Arambala noticed that the truck hadsuddenly lost its brakes, he told his companion to jump out. Soonthereafter, he also jumped out and abandoned the truck. Driverless, thetruck rammed into the house and tailoring shop owned by petitioner LeticiaTan and her husband Celedonio Tan, instantly killing Celedonio who wasstanding at the doorway of the house at the time. The petitioners allegedthat the collision occurred due to OMC’s gross negligence in not properlymaintaining the truck, and to Arambala’s recklessness when he abandoned themoving truck. Thus, they claimed that the respondents should be heldjointly and severally liable for the actual damages that they suffered. Therespondents denied any liability for the collision, essentially claiming


that the damage to the petitioners was caused by a fortuitous event, sincethe truck skidded due to the slippery condition of the road caused byspilled motor oil. RTC ruled in favor of the petitioners and awardedactual and compensatory and for the loss of the earning capacity of thevictim, moral, exemplary and attorney’s fees. On appeal, the CA affirmedthe RTC’s findings on the issues of the respondents’ negligence andliability for damages. However, the CA modified the damages awarded to thepetitioners by reducing the actual damages award. The CA also deleted theRTC’s award for loss of earning capacity. The CA explained that thepetitioners failed to substantiate Celedonio Tan’s claimed earning capacitywith reasonable certainty; no documentary evidence was ever presented onthis point.

Issue:Whether or not the petitioners are entitled are entitled to actual damagesfor the loss of Celedonio Tan’s earning capacity.

Held: No. While petitioners admit that they did not submit any documentaryevidence to substantiate the claim of loss of earning capacity, thepetitioners point out that Celedonio Tan was undisputably a self-employedtailor who owned a small tailor shop; in his line of work, no documentaryevidence is available.

The CA was correct in disallowing the award of actual damages for loss ofearning capacity. Damages for loss of earning capacity are awarded pursuantto Article 2206 of the Civil Code, which states that: Article 2206. Theamount of damages for death caused by a crime or quasi-delict shall be atleast three thousand pesos, even though there may have been mitigatingcircumstances. In addition: (1) The defendant shall be liable for the loss of the earning capacityof the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall inevery case be assessed and awarded by the court, unless the deceased on account of permanentphysical disability not caused by the defendant, had no earning capacity at the time of his death. Asa rule, documentary evidence should be presented to substantiate the claimfor loss of earning capacity. By way of exception, damages for loss ofearning capacity may be awarded despite the absence of documentary evidencewhen: (1) the deceased is self-employed and earning less than the minimumwage under current labor laws, in which case, judicial notice may be takenof the fact that in the deceased's line of work, no documentary evidence isavailable; or (2) the deceased is employed as a daily wage worker earningless than the minimum wage under current labor laws.

According to the petitioners, prior to his death, Celedonio was a self-employed tailor who earned approximately P156,000.00 a year, or P13,000.00a month. At the time of his death, the prevailing daily minimum wage wasP145.00, or P3,770.00 per month, provided the wage earner had only one restday per week. Even if we take judicial notice of the fact that a smalltailoring shop normally does not issue receipts to its customers, and wouldprobably not have any documentary evidence of the income it earns,Celedonio’s alleged monthly income of P13,000.00 greatly exceeded theprevailing monthly minimum wage; thus, the exception set forth above doesnot apply. JANUARY 10, 2011 TO FEBRUARY 25, 2011


CASE NO. 17

Jurisdiction of the Obmudsman and the Sandiganbayan

ANTONIO M. CARANDANG, Petitioner, vs. HONORABLE ANIANO A. DESIERTO, OFFICE OF THE OMBUDSMAN, Respondent.

G.R. No. 148076 January 12, 2011BERSAMIN, J.:

Facts:Petitioner Antonio M. Carandang (Carandang) challenges the jurisdictionover him of the Ombudsman and of the Sandiganbayan on the ground that hewas being held to account for acts committed while he was serving asgeneral manager and chief operating officer of Radio Philippines Network,Inc. (RPN), which was not a government-owned or -controlled corporation;hence, he was not a public official or employee.

Roberto Benedicto, stockholder of RPN, a private corporation ceded all hisshares to the Government through the PCGG when the latter sequestered RPN’sproperties. Thereafter Carandang assumed office as general manager andchief operating officer of the RPN. Carandang and other RPN officials werecharged with grave misconduct before the Ombudsman. The charge alleged thatCarandang, in his capacity as the general manager of RPN, had entered intoa contract with AF Broadcasting Incorporated despite his being anincorporator, director, and stockholder of that corporation; that he hadthus held financial and material interest in a contract that had requiredthe approval of his office; and that the transaction was prohibited underSection 7 (a) and Section 9 of Republic Act No. 6713 (Code of Conduct andEthical Standards for Public Officials and Employees), thereby renderinghim administratively liable for grave misconduct. Carandang sought thedismissal of the administrative charge on the ground that the Ombudsman hadno jurisdiction over him because RPN was not a government-owned or -controlled corporation. However, the Ombudsman suspended Carandang fromhis positions in RPN and eventually found him guilty of grave misconductand ordered his dismissal from the service.

Issue: Whether or not the Office of the Ombudsman has jurisdiction over the hereinpetitioner.

Held:No. The conclusion that Carandang was a public official by virtue of hishaving been appointed as general manager and chief operating officer of RPNby President Estrada deserves no consideration. President Estrada’sintervention was merely to recommend Carandang’s designation as generalmanager and chief operating officer of RPN to the PCGG, which then cast thevote in his favor vis-à-vis said positions. Under the circumstances, itwas RPN’s Board of Directors that appointed Carandang to his positionspursuant to RPN’s By-Laws. In fine, Carandang was correct in insistingthat being a private individual he was not subject to the administrativeauthority of the Ombudsman and to the criminal jurisdiction of theSandiganbayan.


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