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REVENUE REGULATIONS NO. 1-2012 is-
sued on February 20, 2012 requires the
mandatory submission of Quarterly Summary
List of Sales and Purchases (SLSP) by all
Value-Added Tax (VAT) registered taxpayers,
thereby amending Section 4.114-3 of Reve-
nue Regulations (RR) No. 16 -2005, as
amended, otherwise known as the Consoli-
dated Value-Added Tax Regulations of 2005.

Section 4.114-3 (a) and (e)(7) is
hereby modified to read as follows:

SECTION 4.114-3.
Submission of Quar-
terly Summary List of
Sales and Purchas-
es.

a. Persons Required to Sub-
mit Summary Lists of Sales/
Purchases.

(1) Persons Required to
Submit Summary Lists of
Sales. All persons
liable for VAT such as
manufacturers, wholesal-
ers, service-providers,
among others are re-
quired to submit Sum-
mary List of Sales.

(2) Persons Required to
Submit Summary Lists of
Purchases. All per-
sons liable for VAT such
as manufacturers, ser-
vice-providers, among
others are required to file
Summary List of Pur-
chases.

x x x

e. Rules in the Presentation
of the Required Information
in the Summary Schedules.


x x x

(7) The Quarterly
Summary List of
Sales and Purchases
shall be submitted
through Compact
Disk-Recordable
(CDR) medium fol-
lowing the format pro-
vided in Subsection
(g) hereof.

All reference to magnetic form 3.5-inch
floppy diskettes in RR No. 16-2005 shall
henceforth refer to Compact Disk-
Recordable (CDR).

This Revenue Regulations shall take ef-
fect on January 1, 2012.
REVENUE REGULATIONS NO. 2-2012
issued on February 20, 2012 prescribes
the tax administration treatment of petrole-
um and petroleum products imported into
the Philippines including those coming in
through freeport zones and economic
zones and registration of all storage tanks,
facilities, depots and terminals.
The Value-Added Tax (VAT) and Excise
Taxes which are due on all petroleum and
petroleum products that are imported and/
or brought directly from abroad to the Phil-
ippines, including Freeport and Economic
zones, shall be paid by the importer there-
of to the Bureau of Customs (BOC).
The subsequent exportation or sale/delivery
of these petroleum or petroleum products to
registered enterprises enjoying tax privileges
within the Freeport and Economic zones, as
well as the sale of said goods to persons
engaged in international shipping or interna-
tional air transport operations, shall be sub-
ject to 0% VAT. With respect to the VAT paid
on petroleum or petroleum products by the
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importer on account of aforesaid 0% VAT
transactions/entities and the Excise Taxes
paid on account of sales to international carri-
ers of Philippine or Foreign Registry for use or
consumption outside the Philippines or ex-
empt entities or agencies covered by tax trea-
ties, conventions and international agree-
ments for their use or consumption (covered
by Certification in such entitys favor), as well
as entities which are by law exempt from indi-
rect taxes, the importer may file a claim for
credit or refund with the BOC. The BOC shall
process the claim for refund, subject to the
favorable endorsement of the BIR, in accord-
ance with existing rules and procedures: Pro-
vided, that no claim for refund shall be granted
unless it is properly shown to the satisfaction
of the BIR that said petroleum or petroleum
products have been sold to a duly registered
locator and have been utilized in the regis-
tered activity/operation of the locator, or that
such have been sold and have been used for
international shipping or air transport opera-
tions, or that the entities to which the said
goods were sold are statutorily zero-rated for
VAT, and/or exempt from Excise Taxes.
In the event that the said Freeport/Economic
zone-registered enterprise shall subsequently
sell/introduce the petroleum or petroleum prod-
ucts, or part of the volume thereof, into the
customs territory (except sales of fuel for use
in international operations) or another Free-
port/Economic zone-registered enterprise not
enjoying tax privileges, no refund for Excise
Taxes shall be granted to the importer for the
product sold. In any event, the possessor of
petroleum or petroleum products must be able
to present sufficient evidence that the Excise
Taxes due thereon have been paid, otherwise
the Excise Taxes due on said goods shall be
collected from said possessor/user.
In case of sale/introduction of petroleum and
petroleum products, or part of the volume
thereof, by a Freeport/Economic zone-
registered enterprise, or part/volume thereof,
into the customs territory or to a Freeport/
Economic zone-registered enterprise not en-
joying tax privileges, or any sale to an entity
not enjoying 0% VAT rate, the seller shall be
liable for 12% VAT. In this instance, no refund
for VAT shall be allowed the importer or an
assessment for VAT shall be issued to the said
importer, if the refund has already been grant-
ed, and another assessment for VAT shall be
made against the seller.
For each and every importation of petroleum
and petroleum products, the importer thereof
shall secure the prescribed ATRIG from the
BIRs Excise Tax Regulatory Division (ETRD),
and pay the VAT and Excise Taxes, as com-
puted, before the release thereof from the
BOCs custody. In case of subsequent sale/
introduction to customs territory by a Freeport/
Economic zone-registered enterprise of petro-
leum and petroleum products, the importer
shall secure the necessary Withdrawal Certifi-
cate.
For Excise Tax purposes, all importers of pe-
troleum and petroleum products shall secure a
Permit to Operate with the BIRs ETRD. Such
permit shall prescribe the appropriate terms
and conditions which shall include, among oth-
ers, the issuance of a Withdrawal Certificate
and the submission of liquidation reports, for
the Permitees strict compliance.
All tank facilities, depots or terminals through-
out the Philippines, including those located
within the Freeport Zones as well as within the
Economic Zones shall be registered by the
owners, lessors or operators thereof with the
appropriate BIR Office having jurisdiction over
the said facilities as follows:
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In cases where said facilities will be used
for the storage of petroleum or petroleum
products or other goods subject to Ex-
cise Taxes, a Permit to Operate from the
BIR shall be issued. Said permit shall
prescribe the appropriate terms and con-
ditions which shall include, among oth-
ers, the maintenance of Official Register
Books or their equivalent, joint supervi-
sion over the facilities with the BIR,
through the assignment of Revenue Of-
ficers, and stocktaking/physical inventory
taking of petroleum and petroleum prod-
ucts stored therein. The monitoring re-
quirements prescribed in this Section
and in the permit granted shall likewise
be strictly observed.
A facility which will not be used for stor-
age of petroleum or petroleum products
or other articles subject to Excise Taxes,
if satisfactorily established to the BIR, will
be issued a Permit to Operate Exempt
Facility. This notwithstanding, both Per-
mit to Operate and Permit to Operate
Exempt Facility should categorically state
the goods stored therein, and should any
changes be planned, an application for
new permit should be made.
All owners, lessors or operators of tank
facilities, depots or terminals shall submit
the required documents specified in the
Regulations to the appropriate BIR offic-
es within fifteen (15) days from the date
of effectivity of these Regulations.
REVENUE REGULATIONS NO. 3-2012
issued on February 20, 2012 prescribes
the effectivity of threshold amounts for
sale of residential lot, sale of house and
lot, lease of residential unit and sale or
lease of goods or properties or perfor-
mance of services covered by Section
109 (P), (Q) and (V) of the Tax Code of
1997, as amended.

The new threshold amounts specified in
Revenue Regulations (RR) No. 16-2011
shall be made effective for instrument of
sale (whether the instrument is nominat-
ed as a deed of absolute sale, deed of
conditional sale or otherwise) is executed
and notarized on or after January 1,
2012.
Thus, pertinent portions of Section 4.106
-3 of RR No. 16-2005, as amended by
RR No. 16-2011 should properly be
worded as follows:
Revenue Re-
gions Where
the Storage
Facilities are
Located
Appropriate BIR Office
Where to Register
Revenue Re-
gion Nos. 4, 5,
6, 7, 8, 9 and
10
Excise Tax Regulatory Di-
vision, National Office
Revenue Re-
gion Nos. 1, 2
and 3
Excise Tax Area I-Baguio
City
Revenue Re-
gion Nos. 11
and 12
Excise Tax Area III-
Bacolod
Revenue Re-
gion Nos. 13,
14
Excise Tax Area IV-Cebu
Revenue Re-
gion Nos. 15
and 19
Excise Tax Area V-Davao
Revenue Re-
gion Nos. 16,
17 and 18
Excise Tax Area VI-
Cagayan de Oro

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"Section 4.106-3 Sale of Real Properties.
Sale of real properties held primarily
for sale to customers or held for lease in
the ordinary course of trade or business
of the seller shall be subject to VAT.
Sale of residential lot with gross selling
price exceeding P 1,919,500.00, residen-
tial house and lot or other residential
dwellings with gross selling price exceed-
ing P 3,199,200.00, where the instrument
of sale (whether the instrument is nomi-
nated as a deed of absolute sale, deed of
conditional sale or otherwise) is executed
and notarized on or after January 1,
2012 and shall be subject to twelve
percent (12%) output VAT.
However, for instruments of sale exe-
cuted and notarized on or after Nov. 1,
2005 but prior to January 1, 2012, the
threshold amounts should appropriate-
ly be P 1,500,000 and P 2,500,000 re-
spectively, and excess thereof shall be
subject to ten percent (10%) output
VAT, and starting Feb. 1, 2006, to
twelve percent (12%) output VAT.
x x x x x x x x "

Moreover, Sections 4.109.-1 (B)(1), (p)(4) of
RR No. 16-2005, as amended by RR No. 16-
2011 should properly be worded as follows:

(p) The following sales of real properties
are exempt from VAT, namely:

(4) Sale of residential lot valued at One
Million Nine Hundred Nineteen Thou-
sand Five Hundred Pesos (P
1,919,500.00) and below, or house & lot
and other residential dwellings valued at
Three Million One Hundred Ninety-Nine
Thousand Two Hundred Pesos (P
3,199,200.00) and below where the in-
strument of sale/transfer/ disposition was
executed and notarized on or after Jan-
uary 1, 2012;

However, for instruments executed
and notarized on or after Nov. 1, 2005
but prior to January 1, 2012, the
threshold amounts should appropri-
ately be P 1,500,000 and P 2,500,000
respectively.

Provided, That every three (3) years
thereafter, the amounts stated herein
shall be adjusted to its present value
using the Consumer Price Index, as pub-
lished by the National Statistics Office
(NSO); Provided, further, that such ad-
justment shall be published through rev-
enue regulations to be issued not later
than March 31 of each year;

x x x x x x x x x "

This Revenue Regulations shall take effect
starting January 1, 2012.


REVENUE MEMORANDUM CIRCULAR
NO. 7-2012 issued on February 24, 2012
circularizes relevant portion of BIR Ruling
No. 023-10 dated August 4, 2010 concern-
ing the Capital Gains Tax (CGT) and Docu-
mentary Stamp Tax (DST) liability of a non-
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stock, non-profit organization on its real
property disposition. BIR employees en-
gaged in the processing and review of
One-Time Transactions are enjoined to
assess the appropriate CGT and DST, if
warranted, on real property disposition by
a non-stock, non-profit organization.

REVENUE MEMORANDUM CIRCULAR
NO. 8-2012 issued on February 29, 2012
circularizes relevant excerpts from the En
Banc Supreme Court Decision in the case
of Philippine Amusement and Gaming
Corporation (PAGCOR) vs. the Bureau of
Internal Revenue, G.R. No. 172087 dated
March 15, 2011, concerning the liability of
PAGCOR to corporate Income Tax and
the revocation of the pertinent provi-
sions of Revenue Regulations (RR) No.
16-2005 relative to the imposition of
10% Value-Added Tax (VAT) on
PAGCOR.

PAGCOR failed to prove that it is still ex-
empt from the payment of corporate In-
come Tax, considering that Section 1 of
Republic Act (RA) No. 9337 amended
Section 27(c) of the National Internal Rev-
enue Code of 1997 by omitting PAGCOR
from the exemption. The legislative intent
is to require PAGCOR to pay Income Tax.
Since PAGCOR is exempt from VAT under
RA No. 9337, the BIR exceeded its authori-
ty in subjecting PAGCOR to 10% VAT un-
der RR No. 16-2005; hence the said regu-
latory provision is nullified.
Subsequently, the Court En Banc Resolu-
tion dated May 31, 2011 denied with finality
the separate motions for partial reconsider-
ation filed by the BIR and PAGCOR since
no substantial arguments were presented
to warrant the reversal of the questioned
Decision.
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6
JURISPRUDENCE
BANK OF LUBAO, INC., Petitioner,
vs.
ROMMEL J. MANABAT and the NATION-
AL LABOR RELATIONS COMMIS-
SION, Respondents.
G.R. No. 188722 February 1, 2012

FACTS:
Rommel J. Manabat (respondent) was
hired by petitioner Bank of Lubao, a rural bank,
as a Market Collector. Subsequently, the re-
spondent was assigned as an encoder at the
Bank of Lubaos Sta. Cruz Extension Office,
which he manned together with two other em-
ployees, teller Lingad and May O. Manasan. As
an encoder, the respondents primary duty is to
encode the clients deposits on the banks com-
puter after the same are received by Lingad.

In November 2004, an audit on the Bank
conducted by the petitioner revealed that there
was a misappropriation of funds in the amount
of P3,000,000.00, more or less. The respondent
then was asked to explain in writing the discrep-
ancies that were discovered during the audit.
On December 11, 2004, an administra-
tive hearing was conducted by the banks inves-
tigating committee where the respondent was
further made to explain his side. Subsequently,
the investigating committee concluded that the
respondent conspired with Lingad in making
fraudulent entries disguised as error corrections
in the banks computer.

On August 9, 2005, the petitioner filed
several criminal complaints for qualified theft
against Lingad and the respondent. Thereafter,
citing serious misconduct tantamount to willful
breach of trust as ground, it terminated the re-
spondents employment effective September 1,
2005.

On September 26, 2005, the respondent
filed a Complaint for illegal dismissal and to bol-
ster his claim that there was no valid ground for
his dismissal, averred that the charge against
him for qualified theft was dismissed for lack of
sufficient basis to conclude that he conspired
with Lingad. The respondent sought an award
for separation pay, full backwages, 13th month
pay for 2004 and moral and exemplary damag-
es.
For its part, the petitioner insists that the
dismissal of the respondent is justified, asserting
the February 14, 2006 Audit Report which con-
firmed the participation of the respondent in the
alleged misappropriations. Likewise, the petition-
er asserted that the dismissal of the qualified
theft charge against the respondent is immateri-
al to the validity of the ground for the latters dis-
missal.

The Labor Arbiter (LA) rendered a deci-
sion sustaining the respondents claim of illegal
dismissal thus ordering the petitioner to reinstate
the respondent to his former position and award-
ing the latter backwages
The petitioner appealed the foregoing
disposition to the NLRC. The NLRC rendered a
Decision affirming the Decision of the LA.
Subsequently, the petitioner filed a Peti-
tion for Certiorari with the CA.

The CA agreed with the LA and the
NLRC that the petitioner failed to establish by
substantial evidence that there was indeed a
valid ground for the respondents dismissal.
Nevertheless, the CA held that the petitioner
should pay the respondent separation pay since
the latter did not pray for reinstatement before
the LA and that the same would be in the best
interest of the parties considering the animosity
and antagonism that exist between them.

ISSUES:

1. Whether or not the CA erred in ordering the
petitioner to pay the respondent separation
pay in lieu of reinstatement.
2. Whether the respondent is entitled to
payment of backwages.

HELD:
1. No, the CA did not err in ordering the pe-
titioner to pay the respondent separation
pay in lieu of reinstatement.

Under the law and prevailing jurispru-
dence, an illegally dismissed employee is enti-
tled to reinstatement as a matter of right. How-
ever, if reinstatement would only exacerbate the
tension and strained relations between the par-
ties, or where the relationship between the em-
Volume IV Issue No. 2 F E B R U A R Y 2012
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7
JURISPRUDENCE
ployer and the employee has been unduly
strained by reason of their irreconcilable differ-
ences, particularly where the illegally dismissed
employee held a managerial or key position in
the company, it would be more prudent to order
payment of separation pay instead of reinstate-
ment.

The law on reinstatement is provided for
under Article 279 of the Labor Code of the Phil-
ippines:
Article 279.Security of Tenure. - In cases of reg-
ular employment, the employer shall not termi-
nate the services of an employee except for a
just cause or when authorized by this Title. An
employee who is unjustly dismissed from
work shall be entitled to reinstate-
ment without loss of seniority rights and other
privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the
time of his actual reinstatement.

In such cases, it should be proved that
the employee concerned occupies a position
where he enjoys the trust and confidence of his
employer; and that it is likely that if reinstated,
an atmosphere of antipathy and antagonism
may be generated as to adversely affect the effi-
ciency and productivity of the employee con-
cerned

Here, we agree with the CA that the rela-
tions between the parties had been already
strained thereby justifying the grant of separa-
tion pay in lieu of reinstatement in favor of the
respondent.

First, the petitioners filing of various
criminal complaints against the respondent for
qualified theft and the subsequent filing by the
latter of the complaint for illegal dismissal
against the latter, taken together with the pen-
dency of the instant case for more than six
years, had caused strained relations between
the parties.

Second, considering that the respond-
ents former position as bank encoder involves
the handling of accounts of the depositors of the
Bank of Lubao, it would not be equitable on the
part of the petitioner to be ordered to maintain
the former in its employ since it may only inspire
vindictiveness on the part of the respondent.


2. Yes, the respondent is entitled to payment
of back wages.

The petitioner failed to assert any cir-
cumstance which would impel the Court to disre-
gard the findings of fact of the lower tribunals on
the propriety of the award of backwages in favor
of the respondent. However, the backwages that
should be awarded to the respondent should be
modified. Employees who are illegally dismissed
are entitled to full backwages, inclusive of allow-
ances and other benefits or their monetary
equivalent, computed from the time their actual
compensation was withheld from them up to the
time of their actual reinstatement. But if rein-
statement is no longer possible, the backwages
shall be computed from the time of their illegal
termination up to the finality of the decision.

Thus, when there is an order of reinstate-
ment, the computation of backwages shall be
reckoned from the time of illegal dismissal up to
the time that the employee is actually reinstated
to his former position. The fact that the CA, in its
April 4, 2009 decision, ordered the payment of
separation pay in lieu of the respondents rein-
statement would not entitle the latter to back-
wages. It bears stressing that decisions of the
CA, unlike that of the LA, are not immediately
executory. Accordingly, the petitioner should on-
ly pay the respondent backwages from Septem-
ber 1, 2005, the date when the respondent was
illegally dismissed, until May 4, 2007, the date
when the petitioner required the former to report
to work.

D.M. FERRER & ASSOCIATES CORPO-
RATION, Petitioner
versus
UNIVERSITY OF SANTO TO-
MAS, Respondent.
G.R. No. 189496 February 1, 2012

FACTS:
Petitioner and UST Hospital Inc.,
(USTHI) executed a project construction man-
agement contract for the renovation of the 4th
and 5th floors of the Clinical Division Building,
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8
JURISPRUDENCE
Nurse Call Room and Medical Records, Medical
Arts Tower, Diagnostic Treatment Building and
Pay Division Building. On various dates, petition-
er demanded payment of the construction costs,
but USTHI did not pay. USTHI was dissolved
and under its charter, its assets go to UST.

On May 23, 2008, petitioner filed a Com-
plaint for sum of money, breach of contract and
damages against UST and USTHI when the lat-
ter failed to pay petitioner despite repeated de-
mands. The RTC of Quezon City dismissed the
case against UST on the ground that UST has
no privity with petitioner.

ISSUE:

WHETHER OR NOT THE COMPLAINT
STATED NO CAUSE OF ACTION

HELD:

The complaint stated a cause of action.
The existence of a cause of action is determined
by the allegations in the complaint. In resolving a
motion to dismiss based on the failure to state a
cause of action, only the facts alleged in the
complaint must be considered. The test is
whether the court can render a valid judgment
on the complaint based on the facts alleged and
the prayer asked for. Indeed, the elementary test
for failure to state a cause of action is whether
the complaint alleges facts which if true would
justify the relief demanded. Only ultimate facts
and not legal conclusions or evidentiary facts,
which should not be alleged in the complaint in
the first place, are considered for purposes of
applying the test (Abacan v. Northwestern Uni-
versity, Inc).


While it is admitted that respondent UST
was not a party to the contract, petitioner posits
that the former is nevertheless liable for the con-
struction costs. Petitioners complaint alleged
that:

(1) UST and USTHI are one and the
same corporation;
(2) UST stands to benefit from the assets
of USTHI by virtue of the latters Articles of In-
corporation;
(3) Respondent controls the business of
USTHI; and
(4) USTs officials have performed acts
that may be construed as an acknowledgement
of respondents liability to petitioner.

Clearly, the foregoing issues would have
been best resolved during trial. Thus, the RTC
therefore committed grave abuse of discretion
when it dismissed the case against respondent
for lack of cause of action. The trial court relied
on the contract executed between petitioner and
USTHI, when the court should have instead con-
sidered merely the allegations stated in the com-
plaint.


BANK OF THE PHILIPPINE ISLANDS, AS
SUCCESSOR-IN-INTEREST OF FAR
EAST BANK & TRUST COMPA-
NY, Petitioner,
versus
CYNTHIA L. REYES, Respondent.
G.R. No. 182769 February 1, 2012

FACTS:

Respondent Reyes borrowed, renewed
and received from Far East Bank the principal of
P20, 950,000.00. As security for the obligation,
Reyes executed Real Estate Mortgage Agree-
ments involving 22 parcels of land. When the
debt became due and demandable, the defend-
ant failed to settle her obligation and the plaintiff
was constrained to foreclose the properties. At
the public auction, the mortgaged properties
were awarded to BPI. After applying the pro-
ceeds of the public auction to the outstanding
obligation, there remains to be a deficiency and
Reyes is still indebted, as of January 20, 2003,
to the plaintiff in the amount of P24, 545,094.67,
broken down as follows:

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JURISPRUDENCE


Petitioner contends that it has the right to
collect from the respondent the remainder of her
obligation after deducting the amount obtained
from the extrajudicial foreclosure sale. On the
other hand, respondent avers that since petition-
ers predecessors own valuation of the subject
property shows that its value is more than the
amount of respondents outstanding obligation,
then respondent cannot be held liable for the
balance especially because it was petitioner who
bought the property at the foreclosure sale.

The RTC rendered its decision in favor of the
petitioner. The CA reversed the ruling of the
RTC.

ISSUE:

WHETHER OR NOT THE PETITIONER IS EN-
TITLED TO RECOVER THE DEFICIENCY
FROM THE RESPONDENT.

HELD:
The petition is meritorious.
In the case of BPI Family Savings Bank,
Inc. v. Avenido, the Court held that a creditor is
not precluded from recovering any unpaid bal-
ance on the principal obligation if the extrajudi-
cial foreclosure sale of the property subject of
the real estate mortgage results in a deficiency.
It is settled that if "the proceeds of the sale are
insufficient to cover the debt in an extrajudicial
foreclosure of mortgage, the mortgagee is enti-
tled to claim the deficiency from the debtor.
While Act No. 3135, as amended, does not dis-
cuss the mortgagees right to recover the defi-
ciency, neither does it contain any provision ex-
pressly or impliedly prohibiting recovery.

Furthermore, the Court has also ruled in
Suico Rattan & Buri Interiors, Inc. v. Court of Ap-
peals that, in deference to the rule that a mort-
gage is simply a security and cannot be consid-
ered payment of an outstanding obligation, the
creditor is not barred from recovering the defi-
ciency even if it bought the mortgaged property
at the extrajudicial foreclosure sale at a lower
price than its market value notwithstanding the
fact that said value is more than or equal to the
total amount of the debtors obligation. Thus, it is
wrong for petitioners to conclude that when re-
spondent bank supposedly bought the fore-
closed properties at a very low price, the latter
effectively prevented the former from satisfying
their whole obligation. Petitioners still had the
option of either redeeming the properties and,
thereafter, selling the same for a price which
corresponds to what they claim as the proper-
ties actual market value or by simply selling
their right to redeem for a price which is equiva-
lent to the difference between the supposed
market value of the said properties and the price
obtained during the foreclosure sale.

Moreover, petitioners are not justified in
concluding that they should be considered as
having paid their obligations in full since re-
spondent bank was the one who acquired the
mortgaged properties and that the price it paid
was very inadequate. The fact that it is respond-
ent bank, as the mortgagee, which eventually
acquired the mortgaged properties and that the
bid price was low is not a valid reason for peti-
tioners to refuse to pay the remaining balance of
their obligation. Settled is the rule that a mort-
gage is simply a security and not a satisfaction
of indebtedness.


CARMINA G. BROKMANN, Petitioner,
vs.
PEOPLE OF THE PHILIP-
PINES, Respondent.
G.R. No. 199150 February 6, 2012

FACTS:
The petitioner was charged of the crime
of estafa. The criminal charge stemmed from the
failure of the petitioner to return or remit the pro-
ceeds of jewelries amounting to P1,861,000.00.
The prosecution anchored its case on the testi-
mony of Anna de Dios (private complainant),
Principal P19,700,000.00
Unsatis-
fied Inter-
est
2,244,694.67
Interest 2,383,700.00
Penalty 216,700.00
TOTAL P24,545,094.67
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JURISPRUDENCE
and the Memorandum of Agreement (MOA) exe-
cuted between the private complainant and the
petitioner. The gist of the MOA provides: (1) the
petitioners acknowledgment and receipt, on var-
ious dates, of jewelries from the private com-
plainant amounting to P1,861,000.00; (2) the
petitioner failed to remit the proceeds of the sale
of the subject jewelries; and (3) the private com-
plainant filed the estafa case against the peti-
tioner for the non-remittance of the proceeds of
the sale of the jewelries.

The petitioner asserted in defense her
lack of bad faith and intention to deceive the pri-
vate complainant. She narrated that she and the
private complainant had been engaged in the
buy and sell of jewelries for 15 years. She admit-
ted receiving the subject jewelries on a consign-
ment basis but she averred that not all the jewel-
ries were sold. The petitioner emphasized that
she made partial payments of her obligation and
had no intention of absconding. With respect to
the MOA, she insisted that there was no period
in the agreed terms as to when the remittance of
the proceeds for the sale of the jewelries or the
return of the unsold jewelries should be made.

The RTC found the petitioner liable for
estafa, and sentenced the petitioner to imprison-
ment of six (6) years and six (6) months of pri-
sion mayor, as minimum, to twenty (20) years of
reclusion temporal, as maximum.
4
The RTC also
ordered the petitioner to restitute the private
complainant P1,047,720.00 as actual damages.

The petitioner appealed the judgment of
the RTC to the CA which affirmed the petition-
ers conviction.

ISSUE:
Whether or not the CA committed re-
versible error in affirming the judgment of
the RTC finding the petitioner guilty of
estafa beyond reasonable doubt.

HELD:
Except for the penalty imposed, the
Court found no reversible error in the CAs deci-
sion.
The CA held: As to the first element,
without a doubt[,] appellant acquired material
possession of the jewelry. She admitted that she
received the subject pieces of jewelry from De
Dios.
x x x
Additionally, by the terms and conditions
of the memorandum of agreement, Brokmann
agreed to hold in trust the said pieces of jewelry
for the purpose of selling them to the customers
and with the obligation to remit the proceeds of
those sold and return the items unsold. What
was created was an agency for the sale of jewel-
ry, in which Brokmann as an agent has the duty
to return upon demand of its owner, herein ap-
pellee.

On the second element, misappropriation
was clearly evident. Appellee sent a demand
letter to appellant, reminding the latter of her
subsisting obligation, however, it was simply ig-
nored. x xx. The demand for the return of the
thing delivered in trust and the failure of the ac-
cused-agent to account for it are circumstantial
evidence of misappropriation.
x xx.
x xxx
The third element, it is apparent that ap-
pellee was prejudiced when appellant did not
return the pieces of jewelry upon her demand. x
xx. Damage as an element of estafa may consist
in 1) the offended party being deprived of his
money or property as a result of the defrauda-
tion; 2) disturbance in property right; or 3) tem-
porary prejudice. x xx.

Lastly, the fourth element, it has duly
been established that appellee demanded for
the payment and return of the pieces of jewelry,
however, the same was unheeded.

The offense of estafa, in general, is com-
mitted either by (a) abuse of confidence or (b)
means of deceit.
8
The acts constituting estafa
committed with abuse of confidence are enu-
merated in item (1) of Article 315 of the Revised
Penal Code, as amended; item (2) of Article 315
enumerates estafa committed by means of de-
ceit. Deceit is not an essential requisite of estafa
by abuse of confidence; the breach of confi-
dence takes the place of fraud or deceit, which
is a usual element in the other estafas.
9
In this
case, the charge against the petitioner and her
subsequent conviction was for estafa committed
by abuse of confidence. Thus, it was not neces-
sary for the prosecution to prove deceit as this
was not an element of the estafa that the peti-
Volume IV Issue No. 2 F E B R U A R Y 2012
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JURISPRUDENCE
tioner was charged with.

SC MODIFIED the penalty imposed and
sentence her to suffer the penalty of imprison-
ment of four (4) years and two (2) months of pri-
sion correccional, as minimum term, to twenty
(20) years of reclusion temporal, as maximum
term.


NANCY T. LORZANO, Petitioner,
vs.
JUAN TABAYAG, JR., Respondent.
G.R. No. 189647 February 6, 2012

FACTS:
The petitioner and the respondent are
two of the children of the late Juan Tabayag.
Tabayag owned a parcel of land situated in Sto.
Domingo, Iriga City (subject property). Right af-
ter the burial of their father, the petitioner re-
quested from her siblings that she be allowed to
take possession of and receive the income gen-
erated by the subject property until after her eld-
est son could graduate from college. The peti-
tioners siblings acceded to the said request.

After the petitioners eldest son finished
college, her siblings asked her to return to them
the possession of the subject property but peti-
tioner refused claiming that she purchased the
subject property from their father as evidenced
by a Deed of Absolute Sale of Real Property.

The respondent claimed that their father
did not execute the said deed of sale. He point-
ed out that the signature of their father appear-
ing in the said deed of sale was a forgery and
that the deed of sale was acknowledged before
a person who was not a duly commissioned No-
tary Public.

For her part, the petitioner maintained
she is the owner of the subject parcel of land
having purchased the same from Tabayag as
evidenced by the May 25, 1992 deed of sale.
Further, the petitioner asserted that the respond-
ent failed to establish that the signature of
Tabayag appearing on the said deed of sale was
a forgery considering that it was not submitted
for examination by a handwriting expert.

Respondent filed a complaint for annul-
ment of document and reconveyance.

The petitioner asserts that the amended
complaint for annulment of document, reconvey-
ance and damages is a collateral attack on her
title over the subject property. She avers that,
when the said amended compliant was filed,
more than a year had already lapsed since OCT
No. 1786 over the subject property was issued
under her name. Thus, the petitioner maintains
that her title over the subject property is already
indefeasible and, hence, could not be attacked
collaterally.

The RTC ruled in favor of the respond-
ents. The CA affirmed the decision.

ISSUE:
1. Whether the lower courts erred in declaring
the deed of sale a nullity.

2. Whether an action for reconveyance is prop-
er.

HELD:

First Issue: Section 1, Rule 45 of the Rules of
Court categorically states that the petition filed
shall raise only questions of law, which must be
distinctly set forth. A question of law arises when
there is doubt as to what the law is on a certain
state of facts, while there is a question of fact
when the doubt arises as to the truth or falsity
of the alleged facts.

The CA aptly ruled that a handwriting
expert is not indispensable to prove that the sig-
nature of Tabayag in the questioned deed of
sale was indeed a forgery. It is true that the
opinion of handwriting experts are not necessari-
ly binding upon the court, the experts function
being to place before the court data upon which
the court can form its own opinion. A finding of
forgery does not depend entirely on the testimo-
nies of handwriting experts, because the judge
must conduct an independent examination of
the questioned signature in order to arrive at a
reasonable conclusion as to its authenticity.

Second Issue: An action for reconveyance is
proper in this case.

The petitioners assertion that the
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JURISPRUDENCE
amended complaint for annulment of document,
reconveyance and damages is a collateral at-
tack on her title over the subject property is un-
tenable. She avers that, when the said amended
complaint was filed, more than a year had al-
ready lapsed since OCT No. 1786 over the sub-
ject property was issued under her name. Thus,
the petitioner maintains that her title over the
subject property is already indefeasible and,
hence, could not be attacked collaterally. It must
be noted that a title emanating from a free pa-
tent which was secured through fraud does not
become indefeasible, precisely because the pa-
tent from whence the title sprung is itself void
and of no effect whatsoever.

Fraudulent statements were made in the
application for the patent and no notice thereof
was given to plaintiffs, nor knowledge of the peti-
tion known to the actual possessors and occu-
pants of the property. The action is one based
on fraud and under the law, it can be instituted
within four years from the discovery of the fraud.
(Art. 1146, Civil Code, as based on Section 3,
paragraph 43 of Act No. 190.) It is to be noted
that as the patent here has already been issued,
the land has the character of registered property
in accordance with the provisions of Section 122
of Act No. 496, as amended by Act No. 2332,
and the remedy of the party who has been in-
jured by the fraudulent registration is an action
for reconveyance.

Here, the respondent, in filing the
amended complaint for annulment of docu-
ments, reconveyance and damages, was not
seeking a reconsideration of the granting of the
patent or the decree issued in the registration
proceedings. What the respondent sought was
the reconveyance of the subject property to the
heirs of the late Tabayag on account of the fraud
committed by the petitioner. Thus, the lower
courts did not err in upholding the respondents
right to ask for the reconveyance of the subject
property. To hold otherwise would be to make
the Torrens system a shield for the commission
of fraud.

That the subject property was not regis-
tered under the name of the heirs of Tabayag
prior to the issuance of OCT No. 1786 in the
name of the petitioner would not effectively deny
the remedy of reconveyance to the former. An
action for reconveyance is a legal and equitable
remedy granted to the rightful landowner, whose
land was wrongfully or erroneously registered in
the name of another, to compel the registered
owner to transfer or reconvey the land to him.
It cannot be gainsaid that the heirs of
Tabayag, by themselves and through their pre-
decessors-in-interest, had already acquired a
vested right over the subject property. An open,
continuous, adverse and public possession of a
land of the public domain from time immemorial
by a private individual personally and through
his predecessors confers an effective title on
said possessors whereby the land ceases to be
public, to become private property, at least by
presumption.
36
Hence, the right of the heirs of
Tabayag to ask for the reconveyance of the sub-
ject property is irrefutable.


BANK OF THE PHILIPPINE ISLANDS, as
successor-in-interest of Far East Bank
and Trust Company,Petitioner,
vs.
EDUARDO HONG, doing business under
the name and style "SUPER LINE PRINT-
ING PRESS" and the COURT OF AP-
PEALS, Respondents.
G.R. No. 161771 February 15,
2012

FACTS:
On September 16, 1997, the EYCO
Group of Companies ("EYCO") filed a petition
for suspension of payments and rehabilitation
before the Securities and Exchange Commis-
sion (SEC), docketed as SEC Case No. 09-97-
5764. A stay order was issued on September
19, 1997 enjoining the disposition in any manner
except in the ordinary course of business and
payment outside of legitimate business ex-
penses during the pendency of the proceed-
ings, and suspending all actions, claims and
proceedings against EYCO until further or-
ders from the SEC. On September 14, 1999,
the SEC rendered its decision disapproving
the petition for suspension of payments, ter-
minating EYCOs proposed rehabilitation
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JURISPRUDENCE
plan and ordering the dissolution and liqui-
dation of the petitioning corporation.

Sometime in November 2000 while
the case was still pending with the CA, peti-
tioner Bank of the Philippine Islands (BPI),
filed with the Office of the Clerk of Court,
Regional Trial Court of Valenzuela City, a
petition for extra-judicial foreclosure of real
properties mortgaged to it by Eyco Proper-
ties, Inc. and Blue Star Mahogany, Inc. Pub-
lic auction of the mortgaged properties was
scheduled on December 19, 2000.

Claiming that the foreclosure pro-
ceedings initiated by petitioner was illegal,
respondent Eduardo Hong, an unsecured
creditor of Nikon Industrial Corporation, one
of the companies of EYCO, filed an action
for injunction and damages against the peti-
tioner in the same court (RTC of Valenzuela
City).

After hearing, the trial court issued a
temporary restraining order (TRO). Petition-
er filed a motion to dismiss arguing that by
plaintiffs own allegations in the complaint,
jurisdiction over the reliefs prayed for be-
longs to the SEC, and that plaintiff is actually
resorting to forum shopping since he has
filed a claim with the SEC and the desig-
nated Liquidator in the ongoing liquida-
tion of the EYCO Group of Companies.

On January 17, 2001, the trial court
denied the motion to dismiss. Petitioners
motion for reconsideration was likewise de-
nied. Petitioner challenged the validity of the
trial courts ruling before the CA via a peti-
tion for certiorari under Rule 65.

The CA affirmed the trial courts deni-
al of petitioners motion to dismiss. No grave
abuse of discretion was committed by the
trial court in issuing the assailed orders.
Hence this case.

ISSUES:
1. Whether or not the RTC has jurisdic-
tion to rule as to the validity or legality
of foreclosure proceedings initiated
by herein petitioner.

2. Whether or not the SEC has jurisdic-
tion to rule on the liquidation of corpo-
rations.

3. Whether or not the RTC properly took
cognizance of the injunction case
filed by the respondent.

HELD:
1. Yes. The Decision of the CA was af-
firmed by the SC. In its Decision, CA
held that questions relating to the va-
lidity or legality of the foreclosure pro-
ceedings, including an action to en-
join the same, must necessarily be
cognizable by the RTC, notwithstand-
ing that the SEC likewise possesses
the power to issue injunction in all
cases in which it has jurisdiction as
provided in Sec. 6 (a) of Presidential
Decree (P.D.) No. 902-A. Further, the
CA stated that an action for foreclo-
sure of mortgage and all incidents rel-
ative thereto including its validity or
invalidity is within the jurisdiction of
the RTC and is not among those cas-
es over which the SEC exercises ex-
clusive and original jurisdiction under
Sec. 5 of P.D. No. 902-A. Conse-
quently, no grave abuse of discretion
was committed by the trial court in
issuing the assailed orders.

2. None. R.A. No. 8799, which took effect
on August 8, 2000, transferred to the ap-
propriate regional trial courts the SECs
jurisdiction over those cases enumerated
in Sec. 5 of P.D. No. 902-A. Section 5.2
of R.A. No. 8799 provides:

SEC. 5.2 The Commissions jurisdiction
over all cases enumerated under Section
5 of Presidential Decree No. 902-A is
hereby transferred to the Courts of gen-
eral jurisdiction or the appropriate Re-
gional Trial Court: Provided, that the Su-
Volume IV Issue No. 2 F E B R U A R Y 2012
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JURISPRUDENCE
preme Court in the exercise of its authority
may designate the Regional Trial Court
branches that shall exercise jurisdiction over
these cases. The Commission shall retain
jurisdiction over pending cases involving
intra-corporate disputes submitted for final
resolution which should be resolved within
one (1) year from the enactment of this
Code. The Commission shall retain jurisdic-
tion over pending suspension of payments/
rehabilitation cases filed as of 30 June 2000
until finally disposed.

The SECs jurisdiction does not extend
to the liquidation of a corporation. While
the SEC has jurisdiction to order the disso-
lution of a corporation, jurisdiction over the
liquidation of the corporation now pertains to
the appropriate regional trial courts. This is
the reason why the SEC, in its 29 November
2000 Omnibus Order, directed that "the pro-
ceedings on and implementation of the or-
der of liquidation be commenced at the Re-
gional Trial Court to which this case shall be
transferred." This is the correct procedure
because the liquidation of a corporation re-
quires the settlement of claims for and
against the corporation, which clearly falls
under the jurisdiction of the regular courts.
The trial court is in the best position to con-
vene all the creditors of the corporation, as-
certain their claims, and determine their
preferences.




3. Yes. There is no showing in the records that
SEC Case No. 09-97-5764 had been trans-
ferred to the appropriate RTC designated as
Special Commercial Court at the time of the
commencement of the injunction suit on De-
cember 18, 2000. Given the urgency of the
situation and the proximity of the scheduled
public auction of the mortgaged properties
as per the Notice of Sheriffs Sale, respond-
ent was constrained to seek relief from the
same court having jurisdiction over the fore-
closure proceedings RTC of Valenzuela
City. Respondent thus filed Civil Case No.
349-V-00 in the RTC of Valenzuela City on
December 18, 2000 questioning the validity
of and enjoining the extrajudicial foreclosure
initiated by petitioner. Pursuant to its original
jurisdiction over suits for injunction and
damages, the RTC of Valenzuela City,
Branch 75 properly took cognizance of the
injunction case filed by the respondent. No
reversible error was therefore committed by
the CA when it ruled that the RTC of Valen-
zuela City, Branch 75 had jurisdiction to
hear and decide respondents complaint for
injunction and damages.


Volume IV Issue No. 2 F E B R U A R Y 2012
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JLs Corner
Law Like Love -W. H. Auden-
Law, say the gardeners, is the sun,
Law is the one
All gardeners obey
To-morrow, yesterday, to-day.

Law is the wisdom of the old,
The impotent grandfathers feebly scold;
The grandchildren put out a treble tongue,
Law is the senses of the young.

Law, says the judge as he looks down his nose,
Speaking clearly and most severely,
Law is as Ive told you before,
Law is as you know I suppose,
Law is but let me explain it once more,
Law is The Law.

And always the loud angry crowd,
Very angry and very loud,
Law is We,
And always the soft idiot softly Me.


If we, dear, know we know no more
Than they about the Law,
If I no more than you
Know what we should and should not do
Except that all agree
Gladly or miserably
That the Law is
And that all know this
If therefore thinking it absurd
To identify Law with some other word,
Unlike so many men
I cannot say Law is again,


No more than they can we suppress
The universal wish to guess
Or slip out of our own position
Into an unconcerned condition.
Although I can at least confine
Your vanity and mine
To stating timidly
A timid similarity,
We shall boast anyway:
Like love I say.


Like love we dont know where or why,
Like love we cant compel or fly,
Like love we often weep,
Like love we seldom keep.
V o l u m e I V I s s u e N o . 2 F E B R U A R Y 2012


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