Report on Trust Fund

Charges and Liabilities

Report on Required and
Actual Deposits

Report on Withdrawals

Progress Report on the
Divestment Program

Monitoring Sheet on
Findings of Non-
Compliance

The following clarifications
were likewise issued relative
to the implementation of the
Circular:

The requirements of the
Circular, shall cover all
trustees, whether banks
or non-banks, which
hold trust fund assets of
pre-need companies;

An accounting firm that
will be engaged for the
valuation shall evaluate
whether there is a possi-
ble threat to its inde-
pendence by reason of
its past or present audit
or review engagement
with the pre-need com-
pany or the trustee of
the funds;

Section 4(f)(vii) of the
Circular should read as
follows: There are re-
imbursements by the
trustee to the pre-need
company for its alleged
advances which based
on documents were not
used for the settlement
SECURITIES AND EX-
CHANGE COMMISSION
MEMORANDUM CIRCULAR
NO. 7 SERIES OF 2009

In its meeting on 11 June
2009, the following resolu-
tion was adopted to further
facilitate the registration and
monitoring of corporations:

Applications for registra-
tion of articles of incorpora-
tion, articles of partnership
and amendment of such arti-
cles may be filed at the
Commissions main office at
SEC Building, EDSA, Green-
hills, Mandaluyong City, or
any of its Extension Offices
(EO), regardless of the pro-
posed companys or partner-
ships principal office ad-
dress;

A corporation registered
with or under the territorial
coverage of any EO may, at
its option, request that its
submission of the required
reports or compliance with
the monitoring requirements
(if it has pending application
for amendment, increase or
decrease of its authorized
capital stock or merger or
consolidation) be made or
done at the Commissions
main office.

This Circular shall take
effect in July 15, 2009.



SECURITIES AND EX-
CHANGE COMMISSION
MEMORANDUM CIRCULAR
NO. 5 SERIES OF 2009

SUPPLEMENT TO THE RE-
QUIREMENTS ON THE SUB-
MISSION OF TRUST FUND
VALUATION AND COMPLI-
ANCE REPORT OF PRE-NEED
COMPANIES

In order to facilitate full
compliance with SEC Memo-
randum Circular No. 3, Se-
ries of 2009 (Circular),
template forms have been
designated and prepared for
use in the evaluation to be
conducted by the independ-
ent firm (Set 1) and in the
updating of the baseline in-
formation by the pre-need
companies (Set 2), as fol-
lows:

Set 1Templates for
the Baseline Report

Schedule of Trust Fund
Assets

Schedule of Trust Fund
Charges and Liabilities

Schedule of Required
and Actual Deposits

Schedule of Withdraw-
als

Evaluation Sheet on the
Divestment Program

Set 2Templates for
the Quarterly Reports

Report on Trust Fund
Assets
SEC MEMORANDUM CIRCULARS
JUNE 2009 VOLUME II, ISSUE No. 6
L C A L C A L C A
LINES LINES LINES
Inside this issue:
Bangko Sentral
Issuances
2
BIR Issuances 2-
3
Republic Act
No. 9547
4-
5
Republic Act
No. 9523
5-
6
Jurisprudence 7-
10


of benefits of planhold-
ers.



BANGKO SENTRAL NG
PILIPINAS CIRCULAR NO
657 SERIES OF 2009

Pursuant to Monetary Board
Resolution No. 827 dated 4
June 2009, item a of Cir-
cular No. 564 dated 3 April
2007, as amended by Circu-
lar No. 608 dated 20 May
2008 is hereby amended to
read as follows:

a) Clients who engage
in a financial transaction
with covered institutions
for the first time shall be
required to present the
original and submit a
clear copy of at least one
(1) valid photo-bearing
identification document
issued by an official au-
thority. For this purpose,
the term official authori-
ty shall refer to any of
the following: (i.) Gov-
ernment of the Republic
of the Philippines; (ii.)
its political subdivisions
and instrumentalities;
(iii.) government-owned
and controlled corpora-
tions (GOCCs); (iv.) pri-
vate entities or institu-
tions registered with or
supervised or regulated
either by the Bangko
Sentral ng Pilipinas (BSP)
or Securities and Ex-
change Commission
(SEC) or Insurance Com-
mission (IC). Valid IDs
include the following:

x x x
PASSPORTS ISSUED BY
FOREIGN GOVERNMENTS
SHALL ALSO BE CONSID-
ERED VALID IDENTIFI-
CATION DOCUMENTS.
BANGKO SENTRAL NG PILIPINAS CIRCULAR
Page 2 L C A LINES
BUREAU OF INTERNAL REVENUE ISSUANCES
confirm the tax-exempt sta-
tus of such transfer.

The concerned RDO, upon
receipt of all the documents
can proceed with the issu-
ance of the CAR/TCL relative
to the conveyance of the
land and the common areas
made by the real estate
developer to the Condomini-
um Corporation, provided,
that the RDO is assured that
the facts and the circum-
stances surrounding such
transfer are analogous to
the facts and circumstances
contained in the previously
promulgated rulings of the
Bureau resolving the tax
issues on the matter.


DOCUMENTARY RE-
QUIREMENTS

Before the CAR/TCL can be
issued, the concerned RDO
shall first require the tax-
payer to submit the follow-
ing documents:

Letter duly signed by
the authorized repre-
sentative of the tax-
payer requesting for
the issuance of CAR/
TCL to transfer the land
and common areas
from the real estate
developer to the Con-
dominium Corporation
and stating the reasons
why such real proper-
ties are being trans-
ferred to the Condomin-
ium Corporation as well
as the facts and infor-
mation necessary for
the RDO to establish
that the intended trans-
fer is of the same kind;

Certified true copy of
the Notarized Master
Deed of Conveyance of
Land and Common Are-
as with Declaration of
Restrictions;

Certified true copy of
the Notarized Amend-
ment to the Master
Deed of Conveyance of
Land and Common Are-
as with Declaration of
Restrictions, if any;

Certified true copy of
the TCT of the land
being conveyed;
REVENUE MEMORANDUM
ORDER NO 18-2009

Issued on 3 June 2009, the
Order is issued to improve
taxpayer service and en-
hance the process by short-
ening the period within
which to secure the Certifi-
cate Authorizing Registra-
tion (CAR)/Tax Clearance
(TCL) with respect to trans-
fer of real property. The
said Order likewise provides
for the guidelines and pro-
cedures to be observed in
the issuance of CAR/TCL.

The Bureau dispenses with
the requirement of securing
a prior ruling before any
CAR/TCL can be issued by
the concerned Revenue Dis-
trict Officer (RDO) allowing
the transfer of the land and
the common areas from the
real estate developer to the
Condominium Corporation
established pursuant to the
provisions of Republic Act
No. 4726, otherwise known
as the Condominium Act.

The taxpayer, may at his
option still secure a prior
ruling from the Bureau to
Certified true copy of
the Tax Declaration of
the land;

Certified true copy of
the Tax Declaration of
the common areas;

Certified true copy of
the SEC Registration of
the Condominium Cor-
poration including the
Articles of Incorpora-
tion; and

Certified true copy of
the by-laws of the
Condominium Corpo-
ration.

TAX CONSEQUENCES OF
THE TRANSFER

Since the Deed of Convey-
ance was made without con-
sideration and not in con-
nection with a sale made to
the Condominium Corpora-
tion, no taxable income is
realized and therefore, no
creditable withholding tax is
payable and collectible;

In addition to the exemp-
tion from the imposition of
creditable withholding tax
imposed by Revenue Regu-
lations No. 2-98, as amend-
ed, the Bureau has likewise
held that the Deed of Con-
veyance executed is exempt
from the imposition of Docu-
mentary Stamp Tax (DST)
imposed under Sec. 196 of
the Code, as amended.

For the notarial acknowl-
edgement made to said
Deed of Conveyance, the
same is subject to the DST
of P15.00.

The transfer of land and
the common areas to the
Condominium Corporation
as embodied in the Deed of
Conveyance is also not sub-
ject to VAT. The transfer of
a real property from one
party to another where the
beneficial ownership of
which is retained by the
original party is not taxable.
Hence, when the title of the
land and the common areas
are transferred to the Con-
dominium Corporation com-
posed of the condominium
unit owners, the real estate
developer receives no addi-
tional payment. The con-
veyance is without any
monetary consideration and
is not in connection with any
sale in favor of the Condo-
minium Corporation. As
such, the same cannot be
considered as a transaction
subject to VAT.



REVENUE MEMORAN-
DUM ORDER NO. 19-2009

Issued on 4 June 2009, the
Order provides for the 2009
Audit Program for Revenue
District Officers. The 2009
Audit Program shall cover
the audit/investigation of
2008 internal revenue tax
returns, including tax re-
turns of fiscal period taxpay-
ers whose taxable year end-
ed on 31 July 2008 up to 30
June 2009.

Letters of Authority (LAs)
shall be issued to cover the
audit/investigation of tax-
payers falling under the
following selection criteria:

Mandatory Cases

Top Priority Taxpayers
where the gross sales/
receipts exceed
P5,000,000.00 for Rev-
enue Region Nos. 5,6,7
and 8 except RDO Nos.
35,36 and 37 and gross
sales/receipts exceed
P3,000,000.00 for all
other Regions, including
the RDO herein men-
tioned as exceptions:

Review Centers;

Corporations accredited
by TESDA;

Health providers;

Hospitals;

Nursing schools;

Call Centers;

Restaurants, food
chains and catering
services;

Construction compa-
nies;

Taxpayers engaged in
the leasing industry;

Non-stock no profit
corporations/
organizations and foun-
dations;

Cooperatives;

Lending investors;

Pawnshops;

Real estate dealers/
developers;

Hotels and other tour-
ism-related establish-
ments, including resort
operators

Retail/Wholesale Trade

Dealers of agricultural
products and supplies;

Logistic providers;

Contractors of govern-
ment agencies, instru-
mentalities, local go-
vernment units and
government corpora-
tions;

Taxpayers who failed to
submit the required Sum-
mary List of Sales and Pur-
Inside Story Headline
Page 3 VOLUME II, ISSUE No. 6
chases for at least one (1)
quarter.

-Other Priority Taxpayers
-Revenue District Officers
Discretion


REVENUE MEMORAN-
DUM ORDER NO. 20-
2009

Issued on 9 June 2009,
the BIR Audit Committee
was created. The said
committee shall discharge
the following functions:

Oversee the financial
reporting and disclo-
sure process;

Monitor the choice of
accounting policies
and principles;

Oversee independ-
ence of external
auditors and monitor
compliance of audit
recommendations;

Oversight of regula-
tory compliance and
ethics;

Monitor the internal
control process;

Oversee the perfor-
mance of the inter-
nal audit function;

Discuss risk man-
agement policies and
practices with man-
agement;

The Committee Chairman,
Vice-Chairman and mem-
bers shall designate for-
mally in writing any re-
sponsible official of their
respective office who shall
represent them.
Section 1 of R.A. 7323, oth-
erwise known as the
"Special Program for Em-
ployment of Students
(SPES)", is amended to read
as follows:

"SECTION 1. Any
provision of law to the
contrary notwithstand-
ing, any person or
entity employing at
least ten (10) persons
may employ poor but
deserving students
fifteen (15) years of
age but not more than
twenty-five (25) years
old, paying them a
salary or wage not
lower than the mini-
mum wage for private
employers and the
applicable hiring rate
for the national and
l ocal gover nment
agencies: Provided,
that student enrolled in
the secondary level
shall only be employed
during summer and/or
Christmas vacations,
while those enrolled in
the tertiary, vocational
or technical education
may be employed at
any time of the year:
Provided, further, That
their period of employ-
ment shall be from
twenty (20) to fifty-
two (52) working days
only, except that dur-
ing Christmas vaca-
tion, employment shall
be from ten (10) to
fifteen (15) days which
may be counted as
part of the students'
probationary period
should they apply in
the same company or
agency after gradua-
tion: Provided, finally,
That students employed
in activities related to
their course may earn
equivalent academic
credits as may be deter-
mined by the appropri-
ate government agen-
cies.

"For purposes of this
Act, poor but deserving
students refer to those
whose parents' com-
bined income, together
with their own, if any,
does not exceed the
annual regional poverty
threshold level for a
family of six (6) for the
preceding year as may
be determined by the
National Economic and
Development Authority
(NEDA). Employment
facilitation services for
applicants to the pro-
gram shall be done by
the Public Employment
Service Office (PESO).

"Participating employ-
ers in coordination with
the PESO, must inform
their SPES employees of
their rights, benefits,
and privileges under
existing laws, company
policies, and employ-
ment contracts."



Section 2 of the same Act is
amended to read as follows:

"SEC. 2. Sixty per cen-
tum (60%) of the said
salary or wage shall be
paid by the employers in
cash and forty per cen-
tum (40%) by the gov-
ernment in the form of a
voucher which shall be
applicable in the pay-
ment for the students'
tuition fees and books
in any educational insti-
tution for secondary,
tertiary, vocational or
technical education:
Provided, That local
gover nment uni t s
(LGUs) may assume
responsibility for paying
in full his salary or wag-
es. The amount of the
educati on vouchers
shall be paid by the
government to the edu-
cational institutions
concerned within thirty
(30) days from its
presentation to the of-
ficer or agency desig-
nated by the Secretary
of Finance.

"The vouchers shall
not be transferable ex-
cept when the payees
thereof dies or for a
justifiable cause stops
in his duties, in which
case it can be trans-
ferred to his brothers or
sisters. If there be
none, the amount
thereof shall be paid his
heirs or to the payee
himself, as the case
may be."



Section 3 of the same Act is
amended to read as follows:

"SEC. 3. The Secretary
of Labor and Employ-
ment, the Secretary of
Education, the Chairman
of the Commission on
Higher Education, the
Secretary of Budget and
Management, the Secre-
tary of Social Welfare
and Development and
the Secretary of Finance
Republic Act No. 9547
AN ACT STRENGTHENING AND EXPANDING THE COVERAGE OF THE SPECIAL
PROGRAM FOR EMPLOYMENT OF STUDENTS, AMENDING FOR THE PURPOSE
PROVISIONS OF R.A. NO. 7323, OTHERWISE KNOWN AS THE SPECIAL PROGRAM FOR
EMPLOYMENT OF STUDENTS

Page 4 L C A LINES
shall issue the corre-
sponding rules and
regulations to carry
out the purposes of
this act.

"The Secretary of
Labor and Employment
shall be the Program
Chairman."


Section 4 of the same Act
is amended to read as
follows:

"SEC. 4. Any persons
or entity who refuses
to honor education
vouchers or makes any
fraudulent or fictitious
claim under this Act,
regardless of whether
payment has been
made, shall upon con-
viction be punished
with imprisonment of
not less than six (6)
months and not more
than one (1) year and
a fine of not less than
Ten thousand pesos
(P10,000.00), without
prejudice to their pros-
ecution and punish-
ment for any other
offense punishable
under the Revised Pe-
nal Code or any other
penal statute.

"In case of partner-
ships or corporations,
the managing partner,
general manager, or
chief executive officer,
as the case may be,
shall be criminally lia-
ble."





(2) Proof that efforts
were made to locate
the parent(s) or any
known relatives of the
child. The following
shall be considered
sufficient:

(a) Written certifi-
cation from a local or
national radio or
television station
that the case was
aired on three (3)
different occasions;

(b) Publication in
one (1) newspaper
of general circula-
tion;

(c) Police report or
barangay certifica-
tion from the locality
where the child was
found or a certified
The petition for adoption
shall be in the form of an
affidavit, subscribed and
sworn to before any person
authorized by law to admin-
ister oaths. It shall contain
facts necessary to establish
the merits of the petition
and shall state the circum-
stances surrounding the
abandonment or neglect of
the child.

The petition shall be sup-
ported by the following doc-
uments:

(1) Social Case
Study Report made by
the DSWD, local gov-
ernment unit, licensed
or accredited child-
caring or child-placing
agency or institution
charged with the cus-
tody of the child;
copy of a tracing
report issued by the
Philippine National
Red Cross (PNRC),
National Headquar-
ters (NHQ), Social
Service Division,
which states that
despite due dili-
gence, the child's
parents could not be
found; and

(d) Returned reg-
istered mail to the
last known address
of the parent(s) or
known relatives, if
any.

(3) Birth certificate,
if available; and

(4) Recent photo-
graph of the child and
photograph of the
Republic Act No. 9523
AN ACT REQUIRING CERTIFICATION OF THE DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT (DSWD) TO DECLARE A "CHILD LEGALLY AVAILABLE FOR ADOPTION" AS A
PREREQUISITE FOR ADOPTION PROCEEDINGS, AMENDING FOR THIS PURPOSE CERTAIN
PROVISIONS OF REPUBLIC ACT NO. 8552, OTHERWISE KNOWN AS THE DOMESTIC ADOPTION
ACT OF 1998, REPUBLIC ACT NO. 8043, OTHERWISE KNOWN AS THE INTER-COUNTRY
ADOPTION ACT OF 1995, PRESIDENTIAL DECREE NO. 603, OTHERWISE KNOWN AS THE CHILD
AND YOUTH WELFARE CODE, AND FOR OTHER PURPOSES

Page 5 VOLUME II, ISSUE No. 6
child upon aban-
donment or ad-
mission to the
agency or institu-
tion.


Procedure for the
Filing of the Petition

The petition shall be
filed in the regional of-
fice of the DSWD where
the child was found or
abandoned.

The Regional Director
shall examine the peti-
tion and its supporting
documents, if sufficient
in form and substance
and shall authorize the
posting of the notice of
the petition conspicuous
place for five (5) consec-
utive days in the locality
where the child was found.

The Regional Director
shall act on the same and
shall render a recommenda-
tion not later than five (5)
working days after the com-
pletion of its posting. He/
she shall transmit a copy of
his/her recommendation
and records to the Office of
the Secretary within forty-
eight (48) hours from the
date of the recommenda-
tion.


Declaration of Availability
for Adoption

Upon finding merit in the
petition, the Secretary shall
issue a certification declar-
ing the child legally availa-
ble for adoption within sev-
en (7) working days from
receipt of the recommenda-
tion.

Said certification, by itself
shall be the sole basis for
the immediate issuance by
the local civil registrar of a
foundling certificate. Within
seven (7) working days, the
local civil registrar shall
transmit the founding certif-
icate to the National Statis-
tic Office (NSO).

The decision of the Secre-
tary shall be appealable to
the Court of Appeals within
five (5) days from receipt of
the decision by the petition-
er, otherwise the same shall
be final and executory.


Declaration of Availa-
bility for Adoption of In-
voluntarily Committed
Child and Voluntarily
Committed Child

The certificate declaring a
child legally available for
adoption in case of an invol-
untarily committed child
under Article 141, para-
graph 4(a) and Article 142
of Presidential Decree No.
603 shall be issued by the
DSWD within three (3)
months following such invol-
untary commitment.

In case of voluntary com-
mitment as contemplated in
Article 154 of Presidential
Decree No. 603, the certifi-
cation declaring the child
legally available for adop-
tion shall be issued by the
Secretary within three (3)
months following the filing
of the Deed of Voluntary
Commitment, as signed by
the parent(s) with the
DSWD.

Upon petition filed with
the DSWD, the parent(s) or
legal guardian who volun-
tarily committed a child may
recover legal custody and
parental authority over him/
her from the agency or in-
stitution to which such child
was voluntarily committed
when it is shown to the sat-
isfaction of the DSWD that
the parent(s) or legal
guardian is in a position to
adequately provide for the
needs of the child: Provid-
ed, That, the petition for
Continuation...
Page 6 L C A LINES
restoration is filed within
(3) months after the sign-
ing of the Deed of Volun-
tary Commitment.

The certification that a
child is legally available for
adoption shall be issued by
the DSWD in lieu of a judi-
cial order, thus making the
entire process administra-
tive in nature.

The certification, shall
be, for all intents and pur-
poses, the primary evi-
dence that the child is le-
gally available in a domes-
tic adoption proceeding, as
provided in Republic Act
No. 8552 and in an inter-
country adoption proceed-
ing, as provided in Repub-
lic Act No. 8043.



PEOPLE OF THE PHILIP-
PINES
-versus-
JOVEN DE GRANO, AR-
MANDO DE GRANO,
DOMINGO LANDICHO
and ESTANISLAO LACABA
June 5, 2009, G.R. No.
167710

FACTS: On April 21, 1991,
Mayor Joven de Grano
(Joven), Armando de
Grano (Armando), Domin-
go Landicho (Domingo),
Leonides Landicho
(Leonides), Leonardo
Genil (Leonardo) and
Estanislao Lacaba
(Estanislao), conspiring,
confederating, and helping
one another, shot Emmanu-
el Mendoza (Emmanuel)
with firearms, inflicting up-
on him eight gunshot
wounds and causing his
death.

A motion for bail was filed.
The same was granted.

The People filed a petition
for certiorari with the Court
of Appeals (CA), which
was denied. Aggrieved,
they sought recourse before
the Supreme Court (SC).
The SC granted the petition
and set aside the decision of
the CA together with the
Order of the Regional Trial
Court (RTC) granting bail.
The RTC was also ordered
to immediately issue a war-
rant of arrest against Joven,
Armando, and Estanislao
Leonides, Leonardo and
Domingo remained at-large.
The resolution was also
qualified to be immediately
executory. As a result,
Estanislao was re-arrested,
but Joven and Armando
were not.

The RTC rendered a Deci-
sion finding Joven, Arman-
do, Estanislao and Domingo
guilty of the crime of Mur-
der, qualified by treachery.
The case against Leonardo
and Leonides were sent to
the archived cases to be
revived as soon as accused
are apprehended.

Only Estanislao was present
at the promulgation despite
due notice to the others.

A motion for reconsideration
was filed with the RTC. Act-
ing on the motion for recon-
sideration, the RTC issued
an Order modifying its earli-
er decision by acquitting
Joven and Armando, and
downgrading the conviction
of Domingo and Estanislao
from murder to homicide.

The People filed a Petition
for certiorari under Rule 65
of the Rules of Court before
the CA.

Joven filed a Motion to Dis-
miss but the same was dis-
missed by the CA. A Motion
for Reconsideration was
resorted to but it was like-
wise dismissed.


ISSUE: Whether or not
the CA committed reversible
error and grave abuse of
discretion amounting to lack
or excess of jurisdiction
when it dismissed the peti-
tion for certiorari on the
ground of double jeopardy;

RULING: When the Deci-
sion was promulgated, only
Estanislao was present.
Subsequently thereafter,
without surrendering and
explaining the reasons for
their absence, Joven, Ar-
mando, and Domingo joined
Estanislao filed their Joint
Motion for Reconsideration.
In blatant disregard of the
Rules, the RTC took cogni-
zance of the joint motion.

The RTC clearly exceeded
its jurisdiction when it en-
tertained the joint Motion
for Reconsideration. It
should have considered the
joint motion as a motion for
reconsideration that was
solely filed by Estanislao.
Being at large, Joven and
Domingo have not regained
their standing in court.
Once an accused jumps bail
or flees to a foreign country,
or escapes from prison or
confinement, he loses his
standing in court; and un-
less he surrenders or sub-
mits to the jurisdiction of
the court, he is deemed to
have waived any right to
seek relief from the court.

Thus, Joven, Armando, and
Domingo, were not placed
in double jeopardy because,
from the very beginning,
the lower tribunal had acted
without jurisdiction. Verily,
any ruling issued without
jurisdiction is, in legal con-
templation, necessarily null
and void and does not exist.
In criminal cases, it cannot
be the source of an acquit-
tal.

True, were it not for the
procedural lapses of the
RTC and its blatant disre-
gard of the Rules, the finali-
ty of Joven and Armandos
acquittal and Domingos
conviction of homicide in-
stead of murder would have
been barred by the rule on
double jeopardy.



HEIRS OF LORETO C.
MARAMAG
-versus-
EVA VERNA DE GUZMAN
MARAMAG et.al.

June 5, 2009, G.R. No.
181132


FACTS: Heirs of Maramag
were the legitimate wife and
children of Loreto Maramag
(Loreto). Loretos illegiti-
mate familyEva de Guz-
JURISPRUDENCE
man Maramag (Eva) was
a concubine of Loreto and
a suspect in the killing of
the latter, and the illegiti-
mate children are Odessa,
Karl Brian, and Trisha An-
gelie. Insular Life Assur-
ance Company, Ltd.
(Insular) and Great Pa-
cific Life Assurance Corpo-
ration (Grepalife) were
the insurance companies
who issued policies in favor
of Loreto.

Loreto misrepresented Eva
as his legitimate wife and
Odessa, Karl Brian, and
Trisha Angelie as his legiti-
mate children. They filed
their claims for the insur-
ance proceeds of the insur-
ance policies.

Insular released Odessas
share as she was of age,
but withheld the release of
the shares of minors Karl
Brian and Trisha Angelie
pending submission of
letters of guardianship.

Grepalife alleged that Eva
was not designated as an
insurance policy benefi-
ciary and that the claims
filed by Odessa, Karl Brian,
and Trisha Angelie were
denied because Loreto was
ineligible for insurance due
to a misrepresentation in
his application form.

The heirs of Maramag now
claims that the insurance
proceeds be awarded to
them since they are the
Page 7 VOLUME II, ISSUE No. 6
legitimate family are enti-
tled to the proceeds of the
insurance for the concubine.

RULING: The heirs of
Maramag are not entitled to
the proceeds of the insur-
ance for the concubine.

Section 53 of the Insurance
Code states

SECTION 53. The insurance
proceeds shall be applied
exclusively to the proper
interest of the person in
whose name or for whose
benefit it is made unless
otherwise specified in the
policy.


Pursuant thereto, the only
persons entitled to claim the
insurance proceeds are ei-
ther the insured, if still
alive; or the beneficiary, if
the insured is already de-
ceased, upon the matura-
tion of the policy. The ex-
ception to this rule is a situ-
ation where the insurance
contract was intended to
benefit third persons who
are not parties to the same
in the form of favorable
stipulations or indemnity.
In such a case, third parties
may directly sue and claim
from the insurer.

The heirs of Maramag are
third parties to the insur-
ance contracts with Insular
and Grepalife and, thus, are
not entitled to the proceeds
thereof. Accordingly, Insu-
lar and Grepalife have no
legal obligation to turn over
the insurance proceeds to
the heirs of Maramag. The
revocation of Eva as a bene-
ficiary in one policy and her
disqualification as such in
another are of no moment
considering that the desig-
nation of the illegitimate
children as beneficiaries in
Loretos insurance policies
remains valid. Because no
legal proscription exists in
naming as beneficiaries the
children of illicit relation-
ships by the insured, the
shares of Eva in the insur-
ance proceeds, whether
forfeited by the court in
view of the prohibition on
donations under Article 739
of the Civil Code or by the
insurers themselves for rea-
sons based on the insurance
contracts, must be awarded
to the said illegitimate chil-
dren, the designated benefi-
ciaries, to the exclusion of
the heirs of Maramag. It is
only in cases where the
insured has not designated
any beneficiary, or when the
designated beneficiary is
disqualified by law to re-
ceive the proceeds, that the
insurance policy proceeds
shall redound to the benefit
of the estate of the insured.


LESTER BENJAMIN S.
HALILI,
versus
CHONA M. SANTOS-
HALILI
and THE REPUBLIC OF
THE
PHILIPPINES,
June 9, 2009, G.R. No.
165424

FACTS: Lester Benjamin S.
Halili (Lester) filed a peti-
tion to declare his marriage
to Chona M. Santos-Halili
(Chona) null and void on
the basis of his psychologi-
cal incapacity to perform
the essential obligations of
marriage in the Regional
Trial Court (RTC).

He alleged that he wed
Charo in civil rites thinking
that it was a joke. After
the ceremonies, they never
lived together as husband
and wife, but maintained
the relationship. However,
they started fighting con-
stantly a year later, at
which point Lester decided
to stop seeing Charo and
started dating other women.
Immediately thereafter, he
received prank calls telling
him to stop dating other
women as he was already a
married man. It was only
upon making an inquiry that
he found out that the mar-
riage was not fake.

RTC declared the marriage
null and void.

On appeal, the Court of
Appeals (CA) reversed and
set aside the decision of the
trial court on the ground
that the totality of the evi-
dence presented failed to
establish Lesters psycho-
logical incapacity. Lester
moved for reconsideration
but the same was denied.

The case was elevated to
the Supreme Court (SC)
via a petition for review
under Rule 45. SC affirmed
CAs decision and resolution
upholding the validity of the
marriage.

Lester then filed a motion
for reconsideration.

ISSUE: Whether or not the
marriage of Lester and
Charo should be declared
null and void by reason of
the psychological incapacity
of the former.

RULING: The marriage
should be declared null and
void by reason of psycho-
logical incapacity of Lester.

In this case, the psycholo-
gist found Lester to be suf-
fering from a personality
disorder. This was brought
about by a dysfunctional
family that Lester had. He
also suffered from partner
relational problem during
his marriage with Chona.
There were lots of fights.
More, his motivation for
marriage was very ques-
tionable. It was a very im-
pulsive decision. He did not
understand what it meant to
JURISPRUDENCE
legitimate heirs of Lore-
to.

The Trial Court ruled
that the designation of
Eva as one of the prima-
ry beneficiary in the in-
surances taken by the
Loreto is void. The in-
surance indemnity that
should be paid to Eva
must go to the legal
heirs of Loreto.

Motions for reconsidera-
tion were filed by Insular
and Grepalife. In grant-
ing the motions for re-
consideration, the trial
court considered the
allegations of Insular
that Loreto revoked the
designation of Eva in
one policy and that Insu-
lar disqualified her as a
beneficiary in the other
policy such that the en-
tire proceeds would be
paid to the illegitimate
children of Loreto with
Eva pursuant to Section
53 of the Insurance
Code. With respect to
the Grepalife policy, the
trial court noted that Eva
was never designated as
a beneficiary, but only
Odessa, Karl Brian, and
Trisha Angelie; thus, it
upheld the dismissal of
the case as to the illegit-
imate children.

The Court of Appeals
(CA) dismissed the
appeal.

ISSUES: Whether or
not the members of the
Page 8 L C A LINES
really be married and after
the marriage, there was no
consummation, there was
no sexual intercourse, he
never lived with the Charo.
And after three months he
refused to see or talk with
Charo and afterwards, the
relationship died a natural
death, and he never
thought it was a really seri-
ous matter at all. They did
not truly appreciate the civil
rites which they had under-
gone.







Also, Lesters dependent
personality disorder was
evident in the fact that he
was very much attached to
his parents and depended
on them for decisions. As
expected of persons suffer-
ing from a dependent per-
sonality disorder, Lester
typically acted in a self-
denigrating manner and
displayed a self-defeating
attitude. This submissive
attitude encouraged other
people to take advantage of
him. This could be seen in
the way he allowed himself
to be dominated, first, by
his father who was very
abusive and treated his
family like robots and, later,
by Charo who was as domi-
neering as his father. When
Lester could no longer take
Charos domineering ways,
he preferred to hide from
her rather than confront her
and tell her outright that he
wanted to end their mar-
riage.

The personality disorder of
Lester is grave and incura-
ble and already existent at
the time of the celebration
of his marriage to Charo
thus, making him unable to
perform the essential obli-
gations of marriage.

Courts should interpret the
provision on psychological
incapacity as a ground for
the declaration of nullity of
a marriage on a case-to-
case basis guided by ex-
perience, the findings of
experts and researchers in
psychological disciplines and
by decisions of church tribu-
nals.

Accordingly, by the very
nature of Article 36, courts,
despite having the primary
task and burden of decision-
making, must consider as
essential the expert opinion
on the psychological and
mental disposition of the
parties.



HON. SECRETARY OF FI-
NANCE,
and HON. GUILLERMO L.
PARAYNO, JR., versus
LA SUERTE CIGAR AND
CIGARETTE
FACTORY, TELENGTAN
BROTHERS
& SONS, INC.,
June 11, 2009, G.R. No.
166498

FACTS: Republic Act
(RA) No. 8240, entitled
An Act Amending Sections
138, 139, 140 and 142 of
the National Internal Reve-
nue Code (NIRC), as
Amended and For Other
Purposes took effect on
January 1, 1997. Subse-
quently, RA No. 8424 was
passed recodifying the
NIRC. Section 142 of the
NIRC was renumbered as
Section 145, paragraph (C)
thereof provides for four
tiers of tax rates based on
the net retail price per pack
of cigarettes.

Prior to the effectivity of RA
8240 on January 1, 1997, a
survey of the net retail pric-
es per pack of cigarettes as
of October 1, 1996 was con-
ducted. It classified existing
brands as those registered
and existing prior to Janu-
ary 1, 1997 which classifica-
tion cannot be revised ex-
cept by an act of Congress.
To implement RA 8240, the
BIR issued Revenue Regula-
tions No. 1-97 which provid-
ed that new brands, or
those registered after Janu-
ary 1, 1997, shall be initially
assessed at their suggested
retail prices. Three months
after a new brand is
launched in the market, a
survey shall be conducted to
determine its actual net
retail price which shall be
the basis in determining its
specific tax classification.
In February 1999, La Suerte
Cigar and Cigarette Factory
(La Suerte) and Telengtan
Brothers & Sons Inc.
(Telengtan) introduced
into the market Astro and
Memphis cigarettes and
their variants. La Suerte
and Telengtan requested
the BIR to conduct a survey
to determine the final tax
classification of said brands
of cigarettes.

The BIR issued the assailed
Revenue Regulations No. 9-
2003, Section 2 of which
amended Revenue Regula-
tions No. 1-97, by providing
for a periodic review every
two years or earlier of the
current net retail prices of
new brands and their vari-
ants to establish and update
their tax classification.

Section 4 of Revenue Regu-
lations No. 9-2003 also
mandated the determination
and re-determination of the
current net retail prices of
cigarettes launched into the
market starting January 1,
1997 and which were not
surveyed within the last
two years from the effec-
tivity of Revenue Regula-
tions No. 9-2003.

Subsequently, Revenue
Regulations No. 22-2003
was issued to implement
the revised tax classifica-
tion of certain new brands
introduced in the market
after January 1, 1997.
The results of the survey
revealed the average net
retail prices of Astro and
Memphis cigarettes thus,
increasing the applicable
excise tax.

La Suerte and Telengtan
filed a case for injunction
with the trial court assail-
ing the validity of Reve-
nue Regulations No. 9-
2003 and Revenue Regu-
lations No. 22-2003 and
praying for the issuance
of a temporary restraining
order (TRO) and/or writ
of preliminary injunction
to enjoin the implementa-
tion of said regulation
insofar as it authorizes
the BIR to update the tax
classification of cigarettes
registered after January
1, 1997.
The trial court rendered a
decision declaring Reve-
nue Regulations Nos. 9-
2003 and 22-2003 uncon-
stitutional.

ISSUE: Whether or not
the BIR has the power to
periodically review or re-
determine the current net
retail prices of new
brands for the purpose of
updating their tax classifi-
cation pursuant to Reve-
nue Regulation Nos. 9-
2003 and 22-2003.

RULING: The BIR has no
power to periodically re-
view or re-determine the
current net retail prices of
new brands.

The trial court correctly
JURISPRUDENCE
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ruled that Revenue Regula-
tions Nos. 9-2003 and 22-
2003 are void insofar as
they empower the BIR to
periodically review or re-
determine the current net
retail prices of cigarettes for
purposes of updating their
tax classification every two
years or earlier.
Revenue Regulation Nos. 9-
2003 and 22-2003 are inva-
lid insofar as they grant the
BIR the power to reclassify
or update the classification
of new brands every two
years or earlier.


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A lawyers dog running around town unleashed.
heads for a butcher shop to steal a roast.
The butcher goes to the lawyers ofce and asks if a dog running
unleashed steals a piece of meat from my store, do I have the
right to demand payment
for the meat from the dogs owner?
The lawyer replied absolutely!
Then you owe me $8.50. Your dog was loose and stole a roast
from me today.
The lawyer, without a word, writes the butcher a check for $8.50.
The butcher, having a feeling of satsfacton leaves.
Three days later, the butcher fnds a bill from the lawyer:
$100 due for a consultaton.