1

-The taxpayer must first submit

a Late Return whet her No
Payment or With Payment
to the proper RDO/LTDO/LT
Division, for stamping of the
words LATE FILING, and for
recording.
-The RDO/LTDO Head/LT Di-
vision Chief shall include to the
late return a computation of the
corresponding penalties.
-No AAB or RCO shall ac-
cept a late return that has not
been stamped with the qualifi-
er

LATE FILING and is not sup-
ported by a computation of the
corresponding penalties prepared
by the concerned RDO/LTDO/
LT Division.

A late return that was
filed by a taxpayer, and received
by an AAB/RCO/RDO/LTDO/
LT Division, without prior ob-
servation of the guidelines pre-
scribed in the Regulations shall
constitute prima facie evidence
that the late return is fraudulent
or spurious. Receipt of such late
returns shall subject the con-
cerned Revenue District Officer/
LTDO Head/LT Division Chief/
RCO and other concerned reve-
nue employees (if any) to disci-
plinary sanctions provided in the
Regulations.


REVENUE REGULATIONS
NO. 13-2010

Issued on December 10, 2010
prescribes the policies and
guidelines in the acceptance of
late and out-of-district tax re-
turns by the following:

-Authorized Agent Banks
(AABs);
-
-Revenue Collection Officers
(RCOs);
-Revenue District Offices
(RDOs);
-Large Taxpayers District Of-
fices (LTDOs); or,
-Large Taxpayers Divisions
(LT Divisions).

As a general rule, all RCOs,
AABs, RDOs, LTDOs and LT
Divisions, and other internal
revenue officers concerned,
shall not accept out-of-district
returns except on the following
cases:

-In cases where an AAB, in the
regular course of its operations,
inadvertently or erroneously
accepted an out-of-district re-
turn and the corresponding tax
payment, the RDO/LTDO/LT
Division receiving such return
and payment shall, in no case,
process or encode data from the
out-of-district return.
-The rules on the non-
acceptance of out-of-district re-
turns notwithstanding, the policies
for the filing of tax returns, and
payment of the taxes due, for One-
Time-Transactions involving Es-
tate, Donors, Capital Gains and
Documentary Stamps Taxes, as
provided under the pertinent reve-
nue issuances, shall continue to be
observed.

Out-of-district returns
filed by taxpayers and/or received
by RDOs/LTDOs/LT Divisions/
RCOs/AABs under circumstances
other than those described above
shall constitute prima facie evi-
dence that such returns are fraudu-
lent or spurious. Receipt of such
out-of-district returns shall subject
the concerned Revenue District
Officer/LTDO Head/LT Division
Chief/RCO and other concerned
revenue employees (if any) to dis-
ciplinary sanctions provided in the
Regulations.

In general, all RCOs,
AABs, RDOs, LTDOs, LT Divi-
sions and other internal revenue
officers concerned shall not accept
any tax return filed, or taxes paid,
beyond the deadline prescribed
under the National Internal Reve-
nue Code and existing revenue
issuances, without the imposition
of the applicable penalties. Prior to
the filing of a late return, the fol-
lowing guidelines must be ob-
served:
I ns i de t hi s
i s s ue:
BIR Issuanc-
es
2
PDIC Issu-
ance
5
Legal Up-
dates
6
Jurisprudence 7
JLs Corner 17


LCA LINES
M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
Serving your purpose, realizing your dreams...
BIR ISSUANCES
2

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1
REVENUE REGULATIONS
NO. 14-2010

Issued on December 10, 2010 amends
pertinent provisions of Revenue Reg-
ulations Nos. 11-2006 and 4-2010 on
the accreditation of tax practitioners/
agents as a prerequisite to their prac-
tice and representation before the Bu-
reau of Internal Revenue (BIR).

Only those tax agents/
practitioners, partners or officers of
General Professional Partnerships, or
Officers or Directors of Corporate
entities engaged in tax practice who
have been issued Certificate of Ac-
creditation or ID card shall be allowed
to represent a taxpayer or transact
business with the BIR in representa-
tion of a taxpayer for the purpose(s)
defined in the regulations. The Com-
missioner or his authorized representa-
tive shall only consider as valid docu-
ment/attachments to tax returns, infor-
mation returns or other statements or
reports required by the Code or Regu-
lations, the financial statements pre-
pared, signed and certified by duly
accredited tax practitioners. The BIR
can refuse to transact official business
with tax practitioners who are not ac-
credited before it and shall require that
certain official statements such as re-
turns, financial statements, reports,
protests, requests for ruling, official
correspondence and other statements,
paper or documents filed on behalf of
a taxpayer be signed or certified to by
accredited persons


REVENUE REGULATIONS
NO. 16-2010

Issued on December 10, 2010 pre-
scribes the guidelines, rules and proce-
dures in the filing of confidential in-
formation and the investigation of
cases arising therefrom.

A qualified informer shall be
rewarded in a sum equivalent to 10%
of the revenues, surcharges or fees
recovered and/or fine or penalty im-
posed and collected or P 1,000,000 per
case, whichever is lower. The follow-
ing are disqualified to avail of the in-
former's reward:

-A BIR official or employee or any
other incumbent public official or em-
ployee;
-Relative within the 6
th
civil degree of
consanguinity of a BIR official or em-
ployee, or other public official or em-
ployee; and
-Though already retired or otherwise
separated from service, BIR officials
or employees or other public officials
who acquired the information in the
course of the performance
of their duties during their incumben-
cy.

Confidential Information against the
denounced taxpayer shall be under
oath and shall be personally executed
and filed by the Informer before the
Chief, Prosecution Division, BIR Na-
tional Office on the following viola-
tions:

-Attempt to evade or defeat tax;
-Failure to file return, supply correct
and accurate information, pay tax,
withhold and remit tax and refund
excess taxes withheld on compensa-
tion;
-Failure or refusal to issue receipts or
sales or commercial invoices, viola-
tions related to the printing of such
receipts or invoices or other viola-
tions;
-Unlawful pursuit of business;
-Use of multiple Tax Identification
Number/s (TINs);
-Making false entries, records or re-
ports or using falsified or false ac-
countable forms; and
-Other violations of the National Inter-
nal Revenue Code (NIRC) of 1997.

However, if the estimated basic tax
liability arising from the alleged viola-
tion is less than P 1,000,000.00, the
confidential information should be
filed before the Chief, Legal Division
of the Revenue Region having juris-
diction over the taxpayer being de-
nounced. A Confidential Information
shall be treated as valid only if it
meets ALL the following requisites:

-The Informer is not disqualified.
-The Informer voluntarily provides
sworn information on the tax fraud
or violation of the NIRC of 1997, as
amended, allegedly committed by
the denounced taxpayer.
-The said information is not yet in
the possession of the BIR.
-The said information does not refer
to a case already pending or previ-
ously investigated or examined by
the Commissioner of Internal Reve-
nue or any of his deputies, agents or
examiners, or by the Secretary of
Finance or any of his deputies or
agents.
-The said information does not refer
to or is not exactly similar to a previ-
ous information filed by another
informer covering the same taxpayer
describing the same scheme or infor-
mation covering the same taxable
year or period.

In order to protect the iden-
tity of the Informer and safeguard
the strict confidentiality of his infor-
mation, the name of the Informer or
any information appearing in the
second copy of the Confidential In-
formation that may possibly lead to
the identity of the said Informer shall
be deleted by the Records Manage-
ment Division. From start until com-
pletion of the investigation, the
docket of the case shall bear no in-
formation on the identity of the In-
former. However, in extremely meri-
torious cases, wherein there is a need
to communicate with the Informer,
the Chief, National Investigation
Division (NID) or Special Investiga-
tion Division (SID), as the case may
be, should be given access to the
identity or contact details of the In-
former.

In order for an Informer to be enti-
tled to a reward, the Confidential
3

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
Information given must lead to or be
instrumental in the discovery of the
fraud or violation of the provisions
of the NIRC of 1997, as amended, or
special laws being administered by
the BIR, and the same must result in
the actual recovery or collection of
revenues, surcharges and fees, and/
or the conviction of the guilty party
or parties, and/or the imposition of
any fine or penalty or the actual col-
lection of a compromise amount, in
case of amicable settlement.

Where there are two (2) or more
Informers in the same case, the one
who gave the information in full
satisfaction of the conditions herein
outlined shall be entitled to the re-
ward. In the event that each Informer
meets all conditions fully, the In-
former who first furnished the infor-
mation shall be entitled to the re-
ward. In case two (2) or more per-
sons jointly filed the confidential
information who are qualified for the
reward, they shall divide the reward
equally among themselves.


REVENUE REGULATIONS
NO. 17-2010

Issued on December 14, 2010 con-
solidates the regulations implement-
ing Republic Act No. 7646, which
authorizes the Commissioner of In-
ternal Revenue (CIR) to prescribe
the place for payment of internal
revenue taxes by large taxpayers,
and prescribes the coverage and cri-
teria for determining large taxpayers.

Additional Large Taxpayers may be
selected and notified by the CIR, and
covered by these Regulations. Tax-
payers classified and notified as
Large Taxpayers by the CIR shall
continue as such, and shall be cov-
ered by these Regulations, unless
notified by the CIR in writing of its
delisting.

Taxpayers already classified and noti-
fied as Large Taxpayer (LT) by the
CIR are mandatorily covered by the
Electronic Filing and Payment System
(EFPS) in filing and paying their inter-
nal revenue tax liabilities, including
the accompanying schedules and at-
tachments as prescribed under existing
revenue issuances. All withholding tax
remittances and information returns of
the Head Office and/or any branch/
unit of a LT shall be contained in a
consolidated return.

All existing LTs must have adopted,
and be maintaining, a working and
duly-accredited Computerized Ac-
counting System (CAS) starting 31
December 2010. Newly-identified
LTs, on the other hand, must have
adopted and secured the accreditation
of, the required CAS within six (6)
months after having been officially
notified, in writing, of their status as
LTs.

The procedures in the filing of returns
and payment of taxes by LTs are spec-
ified in the Regulations. In case of
systems unavailability as declared by
the CIR or his duly authorized repre-
sentative during tax filing deadlines,
filing of tax returns and payment of
taxes due thereon shall be accepted
manually or over-the-counter by the
EFPS-AABs. However, once the sys-
tem is up/online, the required tax re-
turns, which was manually filed shall
be e-filed within 15 days from the date
of manual filing.



REVENUE MEMORANDUM CIR-
CULAR NO. 95-2010

Issued on December 13, 2010 circular-
izes the increase of Excise Tax rates
on alcohol and tobacco products effec-
tive January 1, 2011, as prescribed by
Republic Act No. 9334 and imple-
mented by Revenue Regulations No. 3
-2006.
REVENUE MEMORANDUM
CIRCULAR NO. 97-2010

Issued on December 21, 2010 clari-
fies the VAT exemption of services
by agricultural contract growers.

Toll processing/toll dressing/
toll manufacturing services performed
independently from growing poultry,
livestock or other agricultural and
marine food products is subject to
VAT pursuant to Section 108 of the
Tax Code of 1997, as amended.



REVENUE MEMORANDUM
CIRCULAR NO. 99-2010

Issued on December 29, 2010 circu-
larizes the full text of Department
Administrative Order (DAO) No. 10-
08 issued by the Department of Trade
and Industry, further amending the
revised implementing rules and regu-
lations of Act No. 3883, as amended,
otherwise known as the Business
Name Law.

The amendments include, among oth-
ers, the registration requirements;
contents of the Application Form and
Certificate of Business Name (BN)
Registration; fees; period for filing;
procedures for over-the-counter appli-
cation and online application and
grounds for revocation of BN regis-
tration.


REVENUE REGULATIONS
NO. 2-2011

Issued on March 2, 2011 prescribes
the filing of Income Tax Return (ITR)
and/or Annual Information Return
(AIR) by certain individual citizens,
including estates and trusts, resident
aliens and non-resident aliens en-
gaged in trade or business in the Phil-
ippines.

4

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1
Starting with taxable year 2010, indi-
viduals, estates and trusts required
under the law and existing issuances to
file an ITR should file said ITR to-
gether with the AIR (BIR Form No.
1705). Said individuals, estate and
trusts shall include in the AIR such
income subject to final withholding
tax and those exclusions from gross
income under Section 32(B) of the
Tax Code, as amended.

Individuals not required to file ITRs or
those qualified for substituted filing,
may file an ITR, together with a duly
accomplished AIR, for purposes of
loans, foreign travel requirements, etc.

The following are now required to file
the AIR, which shall include such
income subject to final withholding
tax and those exclusions from gross
income:

-An individual with respect to pure
compensation income, as defined in
Section 32(A)(1), derived from
sources within the Philippines, the
Income Tax on which has been cor-
rectly withheld under the provisions of
Section 79 of the Tax Code, as amend-
ed, whose annual taxable income ex-
ceeds Php 500,000.00: Provided, That
an individual deriving compensation
concurrently from two or more em-
ployers at any time during the taxable
year shall file an ITR;
-Individuals, estates and trusts whose
sole income has been subjected to fi-
nal withholding tax under Section 57
(A) of the Tax Code, as amended, with
aggregate final tax withheld exceeding
Php 125,000.00 annually, whether or
not remitted to the BIR; and
-Individuals whose sole income is
exempt from Income Tax and whose
total annual income (exempt) exceeds
Php 500,000.00.

The filing of ITR (BIR Form Nos.
1700 or 1701) and/or AIR (BIR Form
No. 1705), shall be filed in triplicate
copies with the Revenue District Of-
fice (RDO) where the individual, in-
cluding estates and trusts, is required
to register or where the individual has
his legal residence or place of busi-
ness on or before the 15
th
day of April
of each year covering income for the
preceding taxable year.


REVENUE REGULATIONS
NO. 3-2011

Issued on March 7, 2011 provides the
policies, guidelines and procedures on
the application for change in account-
ing period under Section 46 of the
National Internal Revenue Code
(NIRC) of 1997, as amended.

If a taxpayer, other than an individual,
changes his accounting period from
fiscal year to calendar year, from cal-
endar year to fiscal year, or from one
fiscal year to another, the net income
shall, with the approval of the Bureau
of Internal Revenue (BIR), be comput-
ed on the basis of such new account-
ing period. Whenever a taxpayer
changes its accounting period, the tax-
payer is required to file with the BIR a
separate final or adjustment return for
the period between the close of the
original accounting period and the
date designated as the close of the new
accounting period.

The request for approval of the change
in accounting period should be filed at
anytime not less than 60 days prior to
the beginning of the proposed new
accounting period. The procedures for
the processing of request for issuance
of certificate granting change in ac-
counting period are specified in the
Regulations.

The certification approving the adop-
tion of a new accounting period must
be released within 30 working days
from the date of receipt of the com-
plete documentary requirements.




REVENUE REGULATIONS
NO. 4-2011

Issued on March 15, 2011 prescribes
the rules on the proper allocation of
costs and expenses amongst income
earnings of banks and other financial
institutions, for Income Tax report-
ing purposes.

Only costs and expenses attributable
to the operations of the Regular
Banking Unit (RBU) can be claimed
as deduction to arrive at the taxable
income of the RBU subject to regu-
lar Income Tax. Any cost or expense
related with or incurred for the oper-
ations of Foreign Currency Deposit
Unit/ Expanded Foreign Currency
Deposit Unit (FCDU/EFCDU) or
Offshore Banking Unit (OBU) are
not allowed as deduction from the
RBU's taxable income.


REVENUE REGULATIONS
NO. 5-2011

Issued on March 16, 2011 further
amends Revenue Regulations (RR)
Nos. 2-98 and 3-98, as last amended
by RR No. 5-2008, with respect to
"De Minimis Benefits", which are
exempt from Income Tax on com-
pensation as well as from Fringe
Benefit Tax.

The following shall be considered as
"de minimis" benefits, which are not
subject to Fringe Benefit Tax and
Income Tax as well as Withholding
Tax on compensation income of
both managerial and rank and file
employees:

-Monetized unused vacation leave
credits of private employees not
exceeding 10 days during the year;
-Monetized value of vacation and
sick leave credits paid to govern-
ment officials and employees;
-Medical cash allowance to depend-
ents of employees, not exceeding P
750 per employee per semester or P
5

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
125 per month;
-Rice subsidy of P 1,500 or one (1)
sack of 50 kg. rice per month
amounting to not more than P 1,500;
-Uniform and clothing allowance not
exceeding P 4,000 per annum;
-Actual medical assistance, e.g.
medical allowance to cover medical
and healthcare needs, annual medi-
cal/executive check-up, maternity
assistance, and routine consultations,
not exceeding P 10,000.00 per an-
num;
-Laundry allowance not exceeding P
300 per month;
-Employees achievement awards,
e.g., for length of service or safety
achievement, which must be in the
form of a tangible personal property
other than cash or gift certificate,
with an annual monetary value not
exceeding P 10,000 received by the
employee under an established writ-
ten plan which does not discriminate
in favor of highly paid employees;
-Gifts given during Christmas and
major anniversary celebrations not
exceeding P 5,000 per employee per
annum; and
-Daily meal allowance for overtime
work and night/graveyard shift not
exceeding 25% of the basic mini-
mum wage on a per region basis.

All other benefits given by employers,
which are not included in the above
enumeration shall not be considered as
"de minimis" benefits, and hence, shall
be subject to Income Tax as well as to
withholding tax on compensation in-
come.

The benefits provided in the Regu-
lations shall apply to income
earned starting the year 2011.



REVENUE REGULATIONS
NO. 6-2011

Issued on March 16, 2011 suspends
the implementation of Revenue Regu-
lations No. 2-2011 (filing of Income
Tax Return and/or Annual Information
Return by individuals, including es-
tates and trusts).


REVENUE MEMORANDUM OR-
DER NO. 12-2011

Issued on March 17, 2011 prescribes
the allocation of the CY 2011 BIR
collection goal by implementing of-
fice.


The overall CY 2011 collection goal
of the BIR, as set by the Department
of Finance (DOF), is P 940,000 Mil-
lion. This is 9.25% higher than CY
2010 goal of P 860,441 Million. Out
of the P 940,000 Million, P 897,705
Million is for BIR Operations and P
42,295 Million is for Non-BIR Opera-
tions.



REVENUE MEMORANDUM OR-
DER NO. 15-2011

Issued on March 18, 2011 allows the
acceptance of out-of-district Income
Tax Returns (ITRs) for CY 2010
filed by certain government officials
and employees.
No penalties and/or sanctions shall be
imposed to the said taxpayers for fil-
ing ITRs for CY 2010 (BIR Forms
1700 and 1701) and paying the tax
due thereon at the wrong venue. No
penalties and/or sanctions shall like-
wise be imposed to the AABs and
RCOs for accepting the same.







REGULATORY
ISSUANCE NO. 2011-01

Unsafe and/or Unsound
Banking Practices

The PDIC adopts the general princi-
ples and guidelines in Bangko Sen-
tral ng Pilipinas (BSP) Circular No.
341 (series of 2002), as amended by
BSP Circular No. 640 (series of 2009),
relating to the determination of activi-
ties that may be considered unsafe
and/or unsound banking practices.

To view full text, please go to:

http://www.pdic.gov.ph/index.php?
nid1=7&nid2=1&rid=170

REGULATORY
ISSUANCE NO. 2011-02


FEATURES: Regulatory Issuance
No. 2011-02 was published by the
Philippine Deposit Insurance Corpora-
tion (PDIC) last January to clarify
which deposit accounts and transac-
PHILIPPINE DEPOSIT
INSURANCE CORPORATION
6

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1
LEGAL UPDATES


Implementing Rules
and Regulation on Anti Tor-
ture Act of 2009


FEATURES: The Department of
Justice and the Commission on Hu-
man Rights jointly promulgated the
Implementing Rules and Regulations
of the Anti-Torture Act of 2009 which
seeks to implement the provisions of
Republic Act No. 9745, entitled An
Act Penalizing Torture and Other Cru-
el, Inhuman and Degrading Treatment
or Punishment and Prescribing Penal-
ties Therefor. The said Implementing
Rules reiterates the provisions of the
Anti-Torture Act, defining acts of tor-
ture and providing penalties for com-
mitting such acts, whether as princi-
pal, accomplice or accessory. It also
reiterates that torture is a separate and
independent crime and shall not ab-
sorb or be absorbed by any other
crime or felony. Furthermore, persons
guilty of torture shall not benefit from
any special amnesty law or similar
measures that will have the effect of
exempting them from criminal pro-
ceedings or sanctions.

To view full text, please go to:
http://www.chr.gov.ph/MAIN%
20PAGES/about%20hr/IRR/IRR%
20Anti-Torture.pdf











tions are excluded from the coverage
of deposit insurance.

Republic Act No. 9576 in 2009
which increased the maximum
amount of deposits covered by PDIC
insurance to P500,000. The same law
excluded from the coverage of the
PDIC insurance the following ac-
counts or transactions:

(i) investment products, such as
bonds and securities;
(ii) deposit accounts which are un-
funded, or that are fictitious or fraud-
ulent;
(iii) deposit accounts constituting or
emanating from unsafe or unsound
banking practices; and
(iv) deposits determined to be the pro-
ceeds of unlawful activity.


To view full text, please go to:
http://www.pdic.gov.ph/index.php?
nid1=7&nid2=1&rid=171


7

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1

ANTONIO LEJANO
vs.
PEOPLE OF THE PHILIPPINES
G.R. No. 176389 14 December 2010
x---------------------------------------------x
PEOPLE OF THE PHILIPPINES
vs.
HUBERT JEFFREY P. WEBB, AN-
TONIO LEJANO, MICHAEL A.
GATCHALIAN, HOSPICIO FER-
NANDEZ, MIGUEL RODRIGUEZ,
PETER ESTRADA and GERARDO
BIONG
G.R. No. 176864

FACTS: In Estrellita Vizconde
(Estrelita) and her daughters Carmela
and Jennifer were brutally slain at their
home in Paraaque City. Following an
intense investigation, the police arrest-
ed a group of suspects, but the court
later ordered them discharged. Four
years later in 1995, the National Bureau
of Investigation (NBI) announced that
it had solved the crime. It presented star
-witness Jessica M. Alfaro (Alfaro),
one of its informers, who claimed that
she witnessed the crime. She pointed to
accused Hubert Jeffrey P. Webb
(Webb), Antonio "Tony Boy" Lejano
(Lejano), Artemio "Dong" Ventura
(Ventura), Michael A. Gatchalian
(Gatchalian), Hospicio "Pyke" Fernan-
dez (Fernandez), Peter Estrada
(Estrada), Miguel "Ging" Rodriguez
Rodriguez), and Joey Filart (Filart) and
police officer, Gerardo Biong, as an
accessory after the fact.
The Regional Trial Court (RTC) of
Paraaque City, Branch 274, tried
only seven of the accused since Ventu-
ra and Filart remained at large and
rendered a judgment finding the seven
accused guilty as charged.

The Court of Appeals (CA) affirmed
RTCs decision, modifying the penalty
imposed on Biong.

The motion for reconsideration by the
accused was denied.

As a result of its initial deliberation in
this case, the Supreme Court (SC)
issued a Resolution granting the re-
quest of Webb to submit for DNA
analysis the semen specimen taken
from Carmelas cadaver, which speci-
men was then believed still under the
safekeeping of the NBI. Unfortunate-
ly, the NBI no longer has custody of
the specimen.

ISSUES: 1. Whether or not Alfaros
testimony as eyewitness, describing
the crime and identifying Webb,
Lejano, Gatchalian, Fernandez, Estra-
da, Rodriguez, and two others as the
persons who committed it, is entitled
to belief; and
2. Whether or not Webb presented
sufficient evidence to prove his alibi
and rebut Alfaros testimony that he
led the others in committing the crime.



RULING: Alfaros testimony as
eyewitness, describing the crime and
identifying Webb, Lejano, Gatchali-
an, Fernandez, Estrada, Rodriguez,
and two others as the persons who
committed it, is not entitled to belief
for the following reasons:









1. The quality of the witness
According to Atty. Artemio Sacagu-
ing Sacaguing), former head of the
NBI Anti-Kidnapping, Hijacking,
and Armed Robbery Task Force
(AKHAR) Section, Alfaro had been
hanging around at the NBI as an
"asset." Because of her talent, the
task force gave her "very special
treatment" and she was allowed the
privilege of spending nights in one of
the rooms at the NBI offices.

Alfaro unexpectedly told Sacaguing
that she knew someone who had the
real story behind the Vizconde mas-
sacre and promised to bring that
JURISPRUDENCE
8

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
someone to the NBI to tell his story.
When this did not happen and Sacagu-
ing continued to press her, she told
him that she might as well assume the
role of her informant. Sacaguing said
that she cannot testify in the Vizconde
massacre since she did not witness the
crime. This fact was never refuted by
Alfaro.

2. The suspicious details
Since Alfaro hanged out at the NBI
offices and practically lived there, it
was not too difficult for her to hear of
these evidentiary details and gain ac-
cess to the documents. The SC con-
sidered the following testimony of
Alfaro:

a. The Barroso gang members said
that they got into Carmelas house by
breaking the glass panel of the front
door using a stone wrapped in cloth to
deaden the noise. Alfaro could not use
this line since the core of her story was
that Webb was Carmelas boyfriend.
Webb had no reason to smash her
front door to get to see her.

Consequently, to explain the smashed
door, Alfaro had to settle for claiming
that, on the way out of the house,
Webb picked up some stone and, out
of the blue, hurled it at the glass-
paneled front door of the Vizconde
residence. His action really made no
sense. From Alfaros narration, Webb
appeared rational in his decisions. It
was past midnight, the house was
dark, and they wanted to get away
quickly to avoid detection. Hurling a
stone at that glass door and causing a
tremendous noise was bizarre, like
inviting the neighbors to come.

b. The crime scene showed that the
house had been ransacked. The reject-
ed confessions of the Barroso "akyat-
bahay" gang members said that they
tried to rob the house. To explain this
physical evidence, Alfaro claimed that
at one point Ventura was pulling a
kitchen drawer, and at another point,
going through a handbag on the dining
table. He said he was looking for the
front-door key and the car key.

This portion of Alfaros story appears
tortured to accommodate the physical
evidence of the ransacked house. She
never mentioned Ventura having taken
some valuables with him when they
left Carmelas house. And why would
Ventura rummage a bag on the table
for the front-door key, spilling the
contents, when they had already gotten
into the house. It is a story made to fit
in with the crime scene although rob-
bery was supposedly not the reason
Webb and his companions entered that
house.

c. It is the same thing with the garage
light. She claimed that Ventura
climbed the cars hood, using a chair,
to turn the light off. But, unlike the
Barroso "akyat-bahay" gang, Webb
and his friends did not have anything
to do in a darkened garage. They sup-
posedly knew in advance that Carmela
left the doors to the kitchen open for
them. It did not make sense for Ventu-
ra to risk standing on the cars hood
and be seen in such an awkward posi-
tion instead of going straight into the
house.

Alfaro named Miguel "Ging" Rodri-
guez as one of the culprits in the Viz-
conde killings. But when the NBI
found a certain Michael Rodriguez, a
drug dependent from the Bicutan Re-
habilitation Center, initially suspected
to be Alfaros Miguel Rodriguez and
showed him to Alfaro at the NBI of-
fice, she ran berserk, slapping and
kicking Michael, exclaiming: "How
can I forget your face. We just saw
each other in a disco one month ago
and you told me then that you will kill
me." As it turned out, he was not Mi-
guel Rodriguez, the accused in this
case.
Two possibilities exist: Michael was
really the one Alfaro wanted to impli-
cate to settle some score with him but
it was too late to change the name she
already gave or she had myopic vi-
sion, tagging the wrong people for
what they did not do.

3. The quality of the testimony
One. In her desire to implicate
Gatchalian, Fernandez, Estrada, Rodri-
guez, and Filart, who were supposed
to be Webbs co-principals in the
crime, Alfaro made it a point to testify
that Webb proposed twice to his
friends the gang-rape of Carmela who
had hurt him.

Gatchalian, Fernandez, Estrada, and
Rodriguez supposedly stayed around
Alfaros car, which was parked on the
street between Carmelas house and
the next. Some of these men sat on top
of the cars lid while others milled on
the sidewalk, visible under the street
light to anyone who cared to watch
them, particularly to the people who
were having a drinking party in a near-
by house. Obviously, the behavior of
Webbs companions out on the street
did not figure in a planned gang-rape
of Carmela.
9

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1

Two. Ventura, Alfaros dope supplier,
introduced her for the first time in her
life to Webb and his friends in a park-
ing lot by a mall. They were practical-
ly strangers to her and her boyfriend
Estrada. When it came to a point that
Webb decided with his friends to gang
-rape Carmela, clearly, there was noth-
ing in it for Alfaro. Yet, she stuck it
out with them, as a police asset would,
hanging in there until she had a crime
to report, only she was not yet an
"asset" then. If, on the other hand,
Alfaro had been too soaked in drugs to
think clearly and just followed along
where the group took her, how could
she remember so much details that
only a drug-free mind can?

Three. When Alfaro went to see Car-
mela at her house for the second time,
Carmella told her that she still had to
go out and that Webb and his friends
should come back around midnight.
Alfaro returned to her car and waited
for Carmela to drive out in her own
car. And she trailed her up to Aguirre
Avenue where she supposedly
dropped off a man whom she thought
was Carmelas boyfriend. Clearly,
Alfaro had to provide a reason for
Webb to freak out and decide to come
with his friends and harm Carmela.

Four. According to Alfaro, when they
returned to Carmelas house the third
time around midnight, she led Webb,
Lejano, and Ventura through the pe-
destrian gate that Carmela had left
open. Webb was the gang leader who
decided what they were going to do.
He decided and his friends agreed with
him to go to Carmelas house and
gang-rape her. Why would Alfaro, a
woman, a stranger to Webb before that
night, and obviously with no role to
play in the gang-rape of Carmela, lead
him and the others into her house?

Five. Alfaro claimed that she immedi-
ately walked out of the garden and
went to her car when she heard some-
one say sino yan?. Alfaro walked
away because, she did not want to get
involved in a potential confrontation.
This was supposedly her frame of
mind: fear of getting involved in what
was not her business. But if that were
the case, how could she testify based
on personal knowledge of what went
on in the house? She next claimed
that she went back into the house to
watch as Webb raped Carmela on the
floor of the masters bedroom. He had
apparently stabbed to death Carmelas
mom and her young sister whose
bloodied bodies were sprawled on the
bed. Now, Alfaro testified that she got
scared (another shift to fear) for she
hurriedly got out of the house after
Webb supposedly gave her a meaning-
ful look. Alfaro quickly went to her
car and turned on the engine but she
testified that she did not know where
to go. This emotional pendulum swing
indicates a witness who was confused
with her own lies.

5. The missing corroboration
Alfaro testified that she saw Carmela
drive out of her house with a male
passenger, Mr. X, whom Alfaro
thought the way it looked was also
Carmelas lover. However, none of
Carmelas relatives, friends, or people
who knew her ever testified about the
existence of Mr.X in her life. Nobody
has come forward to testify having
ever seen him with Carmela. And de-
spite the gruesome news about her
death and how Mr. X had played a
role in it, he never presented himself
like anyone who had lost a special
friend normally would.

As to the second issue, Webb present-
ed sufficient evidence to prove his
alibi and rebut Alfaros testimony that
he led the others in committing the
crime.


a. The travel preparations
Webb claims that in 1991 he went to
the United States (U.S.). Gloria Webb
(Gloria), his aunt, accompanied him.
Rajah Tours confirmed that Webb and
Gloria used their plane tickets.
On March 8,1991, the eve of his de-
parture, he took girlfriend to a dinner
at Bunchums at the Makati Cinema
Square together with his friends. They
afterwards went to Faces Disco for
Webb's despedida party.

b. The two immigration checks
Proof that the Immigration Officer
checked Webbs visa, stamped, and
initialed his passport, and let him pass
through were likewise presented.
Webb and Gloria were listed on the
United Airlines Flights Passenger
Manifest.

Also, the U.S. Immigration Naturali-
zation Service, checking with its Non-
immigrant Information System, con-
firmed Webb's entry into the U.S. on
March 9, 1991. Webb presented at the
trial the INS Certification issued by
the U.S. Immigration and Naturaliza-
tion Service, the computer-generated
print-out of the US-INS indicating
Webb's entry on March 9, 1991, and
10

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
the US-INS Certification dated August
31, 1995, authenticated by the Philip-
pine Department of Foreign Affairs,
correcting an earlier August 10, 1995
Certification.

c. Details of U.S. sojourn
Sufficient proof were presented show-
ing Webbs stay in the UShe
watched the concert of Deelite Band in
SanFrancisco, worked at his cousin-in-
laws pest control company, applied
for a drivers license, wrote letters to
his friend, purchased an MR2 Toyota
car and presented witnesses to prove
the same.

d. The second immigration checks
Webbs departure from the U.S. was
confirmed by the same certifications
that confirmed his entry. Furthermore,
a Diplomatic Note of the U.S. Depart-
ment of State with enclosed letter from
the Acting Director of the Records
Operations, Office of Records of the
US-INS stated that the issued Certifi-
cation is a true and accurate statement.
The Passenger Manifest of Philippine
Airlines confirmed his return trip. The
arrival stamp and initial on his pass-
port indicating his return to Manila on
October 27, 1992 was authenticated by
the immigration officer who processed
Webbs reentry.

e. Alibi versus positive identification
The positive identification of the ac-
cused by the witness must meet at
least two criteria:

First, the positive identification of the
offender must come from a credible
witness. She is credible who can be
trusted to tell the truth, usually based
on past experiences with her. Her
word has, to one who knows her, its
weight in gold.

And second, the witness story of what
she personally saw must be believable,
not inherently contrived. A witness
who testifies about something she nev-
er saw runs into inconsistencies and
makes bewildering claims.

Here, Alfaro and her testimony fail to
meet the above criteria.

Indeed, her superior testified that she
volunteered to play the role of a wit-
ness in the Vizconde killings when she
could not produce a man she promised
to the NBI.

Although Alfaros testimony included
details, she had prior access to the
details that the investigators knew of
the case. She took advantage of her
familiarity with these details to in-
clude in her testimony the clearly in-
compatible act of Webb just so she
can accommodate this crime scene
feature.

Further, her testimony was inherently
incredible. Alfaros story that she
agreed to serve as Webbs messenger
to Carmela, using up her gas, and stay-
ing with him till the bizarre end when
they were practically strangers, also
taxes incredulity. Alfaros quality as a
witness and her inconsistent, if not
inherently unbelievable, testimony
cannot be the positive identification
that jurisprudence acknowledges as
sufficient to jettison a denial and an
alibi.

f. Documented alibi
To establish alibi, the accused must
prove by positive, clear, and satisfac-
tory evidence that (a) he was present
at another place at the time of the per-
petration of the crime, and (b) that it
was physically impossible for him to
be at the scene of the crime.

The U.S. Immigration certification and
the computer print-out of Webbs arri-
val in and departure from that country
were authenticated by no less than the
Office of the U.S. Attorney General
and the State Department. Still the
Court of Appeals refused to accept
these documents for the reason that
Webb failed to present in court the
immigration official who prepared the
same. But this was unnecessary.
Webbs passport is a document issued
by the Philippine government, which
under international practice, is the
official record of travels of the citizen
to whom it is issued. The entries in
that passport are presumed true.

The prosecution did not bother to pre-
sent evidence to impeach the entries in
Webbs passport and the certifications
of the Philippine and U.S. immigra-
tion services regarding his travel to the
U.S. and back. The prosecutions re-
buttal evidence is the fear of the un-
known that it planted in the lower
11

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1
courts minds.


PEOPLE OF THE PHILIPPINES
vs.
ROBERTO LOPEZ y CABAL
G.R. No. 188902 16 February 2011

FACTS: On 10 August 2006, Rob-
erto Lopez was charged with the mur-
der of Prudencio Melendres, forty one
(41) years of age and a photo corre-
spondent for Tanod Newspaper
(newspaper) owned by Tanod Publish-
ing (Tanod).

On 15 February 2008, the Regional
Trial Court (RTC) rendered its deci-
sion finding Lopez guilty of murder.
The RTC ordered Lopez to pay the
heirs of Melendres as fol-
lows: P50,000 as death indemni-
ty, P50,000 as moral damag-
es, P40,000 as actual damages
and P7,570 per month for six months
as lost income.

On appeal, the Court of Appeals (CA)
denied Lopezs appeal and affirmed
with modification the trial courts de-
cision. On the award of damages, the
CA reduced the award of actual dam-
ages from P40,000 to P33,000, the
latter amount having been substantiat-
ed by receipts. As to the loss of in-
come, the CA noted that there was no
accurate way to determine Melendres
earnings since the certification submit-
ted by the heirs of Melendres did not
reflect a fixed amount but only a sala-
ry range. However, the CA held that
the heirs of Melendres are still entitled
to a reasonable amount as a result of
Melendres loss of earning capacity
and deemed it proper to increase the
award from P45,420 to P200,000.

ISSUE: Whether or not the CA erred
in computing the loss of earning ca-
pacity of Melendres.

RULING: The CA erred in compu-
ting the loss of earning capacity of
Melendres.

The rule is that documentary evidence
should be presented to substantiate a
claim for loss of earning capacity. In
this case, the heirs of Melendres pre-
sented a certification from Melendres
employer Tanod which showed that
Melendres monthly salary ranges
from P1,780 to P3,570 on per story
basis. The heirs of Melendres also
presented another certification from
Tanod which showed that Melendres
received the total amount of P24,990
representing payment of honoraria and
transportation allowance which Lopez
did not object to before the RTC. The
rule is that evidence not objected to is
deemed admitted and may be validly
considered by the court in arriving at
its judgment.

It was also established
that at the time of his death.

Thus, Melendres net earning capacity
can be derived from two sources: (1)
his monthly salary and (2) his honorar-
ium and transportation allowance,
whereby Lopez is ordered to pay the
heirs of Melendres the amount
of P974,220 for loss of earning capaci-
ty.

The loss of earning capacity is com-
puted as follows:

Net Earning
Capacity = Life expectancy x Gross
Annual Income Living Expenses
= [2/3 (80 age at death)] x GAI
[50% of GAI]
= [2/3 (80 41)] x P74,940 P37,470
= [2/3 (39)] x P37,470
= 26 x P37,470
Net Earning
Capacity = P974,220


PFIZER, INC. AND/OR REY
GERARDO BACARRO, AND/OR
FERDINAND CORTES, AND/OR
ALFRED MAGALLON, AND/OR
ARISTOTLE ARCE
vs.
GERALDINE VELASCO
G.R. No. 177467 9 March 2011

FACTS: Geraldine L. Velasco
(Velasco) was employed with Pfizer,
Inc. (Pfizer) 1992. Sometime 2003,
Velasco had a high-risk pregnancy and
was subsequently advised bed rest.
She filed her sick leave for the period
for four (4) months.

While Velasco was still on leave, Pfiz-
er served Velasco a "Show-cause No-
tice" regarding "unauthorized deals
and/or discounts in money or samples
and unauthorized withdrawal and/or
pull-out of stocks" and placed her un-
der "preventive suspension". Thereaf-
ter, Pfizer retrieved the company car
and other properties of Pfizer under
the custody of Velasco. In response,
Velasco sent a letter denying the
charges.

Velasco received a "Second Show-
cause Notice". That same day, Velasco
filed a complaint for illegal suspension
with money claims before the Region-
al Arbitration Branch.
12

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9

Velasco received a "Third Show-cause
Notice". Finally, Pfizer terminated
Velascos employment.

The Labor Arbiter rendered its deci-
sion declaring the dismissal of Velas-
co illegal, ordering her reinstatement
with backwages and further awarding
moral and exemplary damages with
attorneys fees. On appeal, the NLRC
affirmed the same but deleted the
award of moral and exemplary damag-
es.

Pfizer appealed to the National Labor
Relations Commission (NLRC) but
the same was denied.

On appeal, the Court of Appeals (CA)
upheld the validity of Velascos dis-
missal from employment.

Velasco filed a Motion for Reconsid-
eration. The CA modified its earlier
ruling by directing Pfizer to pay Ve-
lasco her wages from the date of the
Labor Arbiters Decision up to the CA
Decision.

ISSUE: Whether or not Velasco is
entitled to receive her accrued back-
wages from the moment the reinstate-
ment order was issued up to the date
when the same was reversed by the
CA.

RULING: Velasco is entitled to re-
ceive her accrued backwages from the
moment the reinstatement order was
issued up to the date when the same
was reversed by the CA.

An award or order of reinstatement is
immediately self-executory without
the need for the issuance of a writ of
execution in accordance with the third
paragraph of Article 223 of the Labor
Code. The provision of Article 223 is
clear that an award for reinstate-
ment shall be immediately executory
even pending appeal and the posting
of a bond by the employer shall not
stay the execution for reinstatement
and any attempt on the part of the em-
ployer to evade or delay its execution
should not be allowed.

In the case at bar, Pfizer did not imme-
diately admit Velasco back to work
which, according to the law, should
have been done as soon as an order or
award of reinstatement is handed
down by the Labor Arbiter without
need for the issuance of a writ of exe-
cution. Thus, Velasco was entitled to
the wages paid to her under the writ of
execution.

To reiterate, under Article 223 of the
Labor Code, an employee entitled to
reinstatement "shall either be admitted
back to work under the same terms
and conditions prevailing prior to his
dismissal or separation or, at the op-
tion of the employer, merely reinstated
in the payroll."

It is established in jurisprudence that
reinstatement means restoration to a
state or condition from which one had
been removed or separated. The per-
son reinstated assumes the position he
had occupied prior to his dismissal.
Reinstatement presupposes that the
previous position from which one had
been removed still exists, or that there
is an unfilled position which is sub-
stantially equivalent or of similar na-
ture as the one previously occupied by
the employee.

Applying the foregoing principle, it
cannot be said that with Pfizers 2005
Letter, in belated fulfillment of the
Labor Arbiters reinstatement order, it
had shown a clear intent to reinstate
Velasco to her former position under
the same terms and conditions nor to a
substantially equivalent position. The
return-to-work order Pfizer sent Velas-
co is silent with regard to the position
or the exact nature of employment that
it wanted Velasco to take up in 2005.

An order for reinstatement entitles an
employee to receive his accrued back-
wages from the moment the reinstate-
ment order was issued up to the date
when the same was reversed by a
higher court without fear of refunding
what he had received. It cannot be
denied that, under our statutory and
jurisprudential framework, Velasco is
entitled to payment of her wages.


CENTRAL LUZON DRUG COR-
PORATION
vs.
COMMISSIONER OF INTERNAL
REVENUE
G.R. No. 181371 2 March 2011

FACTS: Central Luzon Drug Corpo-
ration (CLDC) is a duly registered
corporation engaged in the retail of
medicines and other pharmaceutical
products.

It operates 22 drugstores
located in Central Luzon under the
business name and style of "Mercury
Drug."

In 2005, CLDC filed with Commis-
sioner of Internal Revenue (CIR) a
13

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1
request for the issuance of a tax credit
certificate in the amount
of P32,170,409, representing the 20%
sales discounts allegedly granted to
senior citizens for the year 2002.

The Court of Tax Appeals (CTA) de-
nied CLDCs claim for insufficiency
of evidence.

Aggrieved, CLDC moved for recon-
sideration

but the First Division of the
CTA denied the same.

CLDC filed with the CTA En Banc a
Petition for Review, but the same was
dismissed for failure of CLDC to at-
tach a Verification, a Certification of
Non-Forum Shopping, as well as a
Special Power of Attorney and a Sec-
retarys Certificate, authorizing CLD-
Cs counsel to file the Petition for Re-
view.


CLDC sought for reconsideration and
argued that the Verification and Certi-
fication of Non-Forum Shopping was
already attached to the Motion for
Extension of Time to File Petition for
Review on Certiorari (Motion).

The CTA En Banc denied reconsidera-
tion.

CLDC filed with the Supreme Court a
Petition for Review on Certiorari.

It later on filed a Motion to Withdraw,
praying that the case be dismissed
without prejudice.

The Office of the Solicitor General
(OSG) did not oppose the Motion to
Withdraw. However, citing Section
2, Rule 17 of the Rules of Court, the
OSG argues that the withdrawal of the
instant case is no longer a matter of
right on the part of CLDC, but is dis-
cretionary upon the Court.

The OSG
also calls attention to the failure of the
person who signed the Verification
and Certification of Non-forum Shop-
ping, to exhibit before the notary pub-
lic a valid Identification Card. The
OSG insists that such failure renders
the instant Petition defective. Thus, it
should be dismissed with prejudice.









ISSUE: Whether or not the case
should be dismissed with prejudice.

RULING: The case should be dis-
missed with prejudice.

Section 1, Rule 13 of the Internal
Rules of the Supreme Court provides
that "[a] case shall be deemed submit-
ted for decision or resolution upon the
filing of the last pleading, brief, or
memorandum that the Court or its
Rules require." In the instant case,
records show that when the SC re-
solved to require CLDC to file a reply,
instead of complying, CLDC opted to
file a motion to withdraw. Clearly, by
requiring CLDC to file its Reply, the
SC has not yet deemed the case sub-
mitted for decision or resolution.

By withdrawing the appeal, CLDC is
deemed to have accepted the decision
of the CTA. And since the CTA had
already denied CLDCs request for the
issuance of a tax credit certificate in
the amount of P32,170,409 for insuffi-
ciency of evidence, it may no longer
be included in CLDCs future claims.
CLDC cannot be allowed to circum-
vent the denial of its request for a tax
credit by abandoning its appeal and
filing a new claim. To reiterate, "an
appellant who withdraws his appeal x
x x must face the consequence of his
withdrawal, such as the decision of the
court a quo becoming final and execu-
tory."


HICOBLINO M. CATLY
(Deceased), Substituted by his wife,
LOURDES A. CATLY
vs.
WILLIAM NAVARRO, ISAGANI
NAVARRO, BELEN DOLLETON,
FLORENTINO ARCIAGA, BAR-
TOLOME PATUGA, DIONISIO
IGNACIO, BERNARDINO ARGA-
NA, AND ERLINDA ARGANA-
DELA CRUZ, and AYALA LAND,
INC.
G.R. No. 167239 5 May 2010


FACTS: William Navarro and eight
(8) other plaintiffs (Navarro, et al.)
filed a Complaint against Las Pias
Ventures, Inc. (now substituted by
Ayala Land, Inc. [ALI]), for annul-
ment of Transfer Certificate of Title
(TCT) No. T-5332 and recovery of
possession with damages.

While the case was pending before the
trial court, both parties executed a
Memorandum of Agreement
(MOA), where Navarro, et al. waived,
renounced and ceded in favor of ALI
any and all rights of exclusive owner-
14

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
ship over the subject properties and
executed the Joint Motion for Judg-
ment Based on Compromise express-
ing their desire toward an amicable
settlement.

Consequently, the parties executed an
Amendatory Agreement incorporating
the provision that Hicoblino shall be
entitled to the amount
of P30,000,000.00 as attorneys fees,
subject to the trial courts approval.

The trial court, in a separate judgment
ordered for the payment of the attor-
neys fees based on the Amendatory
Agreement. Hicoblino filed an Ex-
Parte Motion to Issue Writ for Execu-
tion of Judgment with the trial court to
enforce his claim for attorneys fees
pursuant to the Separate Judgment.

The parties opposed to Ex-Parte mo-
tion of Hicoblino.

The trial court, ordered for the execu-
tion of the attorneys fees, but only up
to the amount of P1,000,000.00.

ISSUE: Whether or not the claim of
Hicoblino in the amount of
P30,000,000.00 as payment for attor-
neys fees is unconscionable.

RULING: The claim of Hicoblino in
the amount of P30,000,000.00 as pay-
ment for attorneys fees is unconscion-
able.

The principle of quantum meruit (as
much as he deserves) may be a basis
for determining the reasonable amount
of attorneys fees. Quantum meruit is
a device to prevent undue enrichment
based on the equitable postulate that it
is unjust for a person to retain benefit
without paying for it. It is applicable
even if there was a formal written con-
tract for attorneys fees as long as the
agreed fee was found by the court to
be unconscionable. In fixing a reason-
able compensation for the services
rendered by a lawyer on the basis
of quantum meruit, factors such as the
time spent, and extent of services ren-
dered; novelty and difficulty of the
questions involved; importance of the
subject matter; skill demanded; proba-
bility of losing other employment as a
result of acceptance of the proffered
case; customary charges for similar
services; amount involved in the con-
troversy and the benefits resulting to
the client; certainty of compensation;
character of employment; and profes-
sional standing of the lawyer, may be
considered. Indubitably entwined
with a lawyers duty to charge only
reasonable fee is the power of the
Court to reduce the amount of attor-
neys fees if the same is excessive and
unconscionable in relation to Sec. 24,
Rule 138 of the Rules. Attorneys fees
are unconscionable if they affront
ones sense of justice, decency or un-
reasonableness.

Verily, the determination of the
amount of reasonable attorneys fees
requires the presentation of evidence
and a full-blown trial. It would be
only after due hearing and evaluation
of the evidence presented by the par-
ties that the trial court can render judg-
ment as to the propriety of the amount
to be awarded.




ASIAN TERMINALS, INC.
vs.
MALAYAN INSURANCE, CO., INC.
G.R. No. 171406 4 April 2011


FACTS: In November 1995, Shandong
Weifang Soda Ash Plant (Shandong)
shipped on board 60,000 plastic bags of
soda ash dense (each bag weighing 50
kilograms) from China to Manila. The
shipment was insured with Malayan Insur-
ance Company, Inc. (Malayan) covered by
a Bill of Lading issued by Tianjin Naviga-
tion Company (Tianjin) with Philippine
Banking Corporation (PBC) as the con-
signee and Chemphil Albright and Wilson
Corporation (Chemphil) as the notify par-
ty.

Upon arrival of the vessel in Manila, the
stevedores of Asian Terminals, Inc. (ATI)
providing arrastre and stevedoring ser-
vices, unloaded the 60,000 bags of soda
ash dense from the vessel and brought
them to the open storage area of ATI for
temporary storage and safekeeping, When
the unloading of the bags was completed
2,702 bags were found to be in bad order
condition.

After all the bags were transferred and
unloaded in the warehouses of PBC, a total
of 2,881 bags were in bad order condition
due to spillage, caking, and hardening of
the contents.

Malayan paid the value of the lost/ dam-
aged cargoes to the PBC in the amount of
P643,600.25.

Shandong filed before the Regional Trial
Court (RTC) a Complaint for damages
against ATI, the shipper Inchcape Ship-
ping Services (Inchcape), and MEC.
15

V o l u m e I I I I s s u e N o . 9 M A Y 2 0 1 1

RTC rendered a Decision finding ATI
liable for the damage/loss sustained by the
shipment but absolving Inchcape and
MEC.

The Court of Appeals (CA) denied ATIs
appeal.


ISSUE: Whether or not the non-
presentation of the insurance contract or
policy is fatal to Malayans cause of action

RULING: The non-presentation of the
insurance contract or policy is not fatal to
Malayans cause of action

First of all, this was never raised as an
issue before the RTC. In fact, it is not
among the issues agreed upon by the par-
ties to be resolved during the pre-
trial. Neither was this issue raised on ap-
peal. Basic is the rule that issues or
grounds not raised below cannot be re-
solved on review by the Supreme Court
(SC), for to allow the parties to raise new
issues is antithetical to the sporting idea of
fair play, justice and due process.

The non-presenttion of the insurance con-
tract or policy is not necessarily fa-
tal. Citing Delsan Transport Lines, Inc. v.
Court of Appeals, the SC ruled that the
presentation in evidence of the marine
insurance policy is not indispensa-
ble before the insurer may recover from
the common carrier the insured value of
the lost cargo in the exercise of its subroga-
tory right. The right of subrogation ac-
crues simply upon payment by the insur-
ance company of the insurance claim.



LEGEND INTERNATIONAL RE-
SORTS LIMITED
vs.
KILUSANG MANGGAGAWA NG
LEGENDA (KML-
INDEPENDENT)
G.R. No. 169754 23 February 2011


FACTS: Kilusang Manggagawa ng
Legenda (KML) filed with the DOLE, a
Petition for Certification Election. KML
alleged that it is a legitimate labor organi-
zation of the rank and file employees of
Legend International Resorts Limited
(Legend).

Legend moved to dismiss

the petition al-
leging that KML is not a legitimate labor
organization because its membership is a
mixture of rank and file and supervisory
employees in violation of Article 245 of
the Labor Code.

The Med-Arbiter rendered judg-
ment dismissing for lack of merit the peti-
tion for certification election.

KML thus appealed to the Office of the
Secretary of the DOLE which reversed the
Med-Arbiters ruling.

Legend filed a Motion for Reconsidera-
tion and Petition for Cancellation of Union
Registration. The DOLE denied Legends
Motion for Reconsideration and granted
the Petition for Cancellation of Union
Registration.

Legend filed a Petition for Certiorari with
the Court of Appeals (CA) which the latter
dismissed for lack of merit.

The Motion for Reconsideration filed by
Legend was likewise denied.


ISSUE: (1.) Whether or not a certifica-
tion election may be conducted during the
pendency of the cancellation proceedings;
(2.) Whether or not the legitimacy of the
legal personality of KML can be collateral-
ly attacked in a petition for certification
election.

RULING: With regard to the first issue, a
certification election may be conducted
during the pendency of the cancellation
proceedings.

The Supreme Court following ruling in the
case of Associated Labor Unions (ALU) v.
Ferrer-Calleja, 179 SCRA 127 [1989]
and Philippine Telegraph and Telephone
Corporation v. NLRC, 183 SCRA 451
[1990] ruled that an order to hold a certifi-
cation election is proper despite the pen-
dency of the petition for cancellation of the
registration certificate of the union. The
rationale for this is that at the time the un-
ion filed its petition, it still had the legal
personality to perform such act absent an
order directing the cancellation.

As regards the second issue, the legitimacy
of the legal personality of KML cannot be
collaterally attacked in a petition for certifi-
cation election.

The legal personality of a legitimate labor
organization cannot be subject to a collat-
eral attack. The law is very clear on this
matter. The Implementing Rules stipulate
that a labor organization shall be deemed
registered and vested with legal personality
on the date of issuance of its certificate of
registration. Once a certificate of registra-
tion is issued to a union, its legal personali-
ty cannot be subject to a collateral at-
tack. In may be questioned only in an
16

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9
independent petition for cancellation in
accordance with Section 5 of Rule V,
Book V of the Implementing Rules.


NATIONWIDE SECURITY AND
ALLIED SERVICES, INC.
vs.
RONALD P. VALDERAMA
G.R. No. 186614 23 February 2011

FACTS: Ronald Valderama
(Valderama) was hired by Nationwide
Security and Allied Services, Inc.
(NSAS) as security guard in 2002. He
was assigned at the Philippine Heart
Center (PHC), Quezon City, until his
relief in 2006. Valderama was not
given any assignment thereafter. He
filed a complaint for constructive dis-
missal and nonpayment of 13
th
month
pay, with prayer for damages against
NSAS and Romeo Nolasco
(Nolasco).
The Labor Arbiter (LA) ruled that
Valderama was constructively dis-
missed.
On appeal, the National Labor Rela-
tions Commission (NLRC) modified
the LA decision and ruled that Valde-
rama remained an employee of
NSAS. The NLRC thus ordered Val-
derama to immediately report to
NSAS and assume his duty.
Valderama filed a motion for recon-
sideration before the NLRC but the
same was denied.
On appeal, the Court of Appeals sus-
tained Valderamas claim of construc-
tive dismissal. NSAS filed a motion
for reconsideration, but the CA denied
it.

ISSUE: Whether or not Valderama is
considered to have abandoned his em-
ployment.

RULING: Valderama cannot be con-
sidered to have abandoned his em-
ployment.
Resignation is the voluntary act of an
employee who is in a situation where
one believes that personal reasons
cannot be sacrificed in favor of the
exigency of the service, and one has
no other choice but to dissociate one-
self from employment. It is a formal
pronouncement or relinquishment of
an office. The intent to relinquish must
concur with the overt act of relinquish-
ment. Thus, the acts of the employee
before and after the alleged resigna-
tion must be considered in determin-
ing whether, he or she, in fact, intend-
ed to sever his or her employment.
Should the employer interpose the
defense of resignation, it is incumbent
upon the employer to prove that the
employee voluntarily resigned. On
this point, the Supreme Court held that
NSAS failed to discharge its burden.
Moreover, the filing of a complaint
belies NSASs claim that Valderama
voluntarily resigned.
In cases involving security guards, a
relief and transfer order in itself does
not sever employment relationship
between a security guard and his agen-
cy. An employee has the right to secu-
rity of tenure, but this does not give
him a vested right to his position as
would deprive the company of its pre-
rogative to change his assignment or
transfer him where his service, as se-
curity guard, will be most beneficial to
the client. Temporary off-detail or
the period of time security guards are
made to wait until they are transferred
or assigned to a new post or client
does not constitute constructive dis-
missal, so long as such status does not
continue beyond six months.

17

M A Y 2 0 1 1 V o l u m e I I I I s s u e N o . 9


A barber gave a haircut to a priest one day. The priest tried to pay for the
haircut, but the barber refused, saying, "you do Gods work." The next morn-
ing the barber found a dozen bibles at the door to his shop.

A policeman came to the barber for a haircut, and again the barber refused to
pay, saying, "you protect the public." The next morning the barber found a
dozen doughnuts at the door to his shop.

A lawyer came to the barber for a haircut, and again the barber refused pay-
ment, saying, "you serve the justice system." The next morning the barber
found a dozen lawyers waiting for a free haircut.

JLs Corner
Volume III Issue No. 9
May 2011
LAGUNDI CARONAN AND ASSOCI ATES
FREE HAIRCUTS