TAX

LAWS

How tax refunds are construed?

La Carlota Sugar Central v. Jimenez GR L-12436, 31 May 1961 (2 SCRA 295)

Facts:
Sometime in September 1955 La Carlota Sugar Central, which was under the administration
of Elizalde, imported 500 short tons of ammonium sulphate and 350 short tons of ammonium
phosphate. When the fertilizers arrived in the Philippines, the Central Bank imposed 17% exchange
tax from the Central in accordance with the provisions of Republic Act 601. On 18 November 1955
the Central filed, through the Hong Kong & Shanghai Banking Corporation, a petition for the refund of
the P20, 872.09 paid (the 17% tax), claiming that it had imported the fertilizers mentioned
heretofore upon request and for the exclusive use of 5 haciendas owned and managed by Elizalde,
and therefore the importation was exempt from the 17% exchange tax in accordance with Section 2,
RA 601, as amended by RA 1375.On 2 July 1956, the Auditor of the Central Bank denied the petition.
The Central requested the Auditor to reconsider his ruling, but after a re-examination of all pertinent
papers the reconsideration was denied. The Central then appealed to the Auditor General of the
Philippines. On 18 January 1957, the Auditor General affirmed the ruling of the Auditor of the Central
Bank upon the ground that the importation of the fertilizers does not fall within the scope of the
exempting provisions of Section 2 of RA 601, as amended by RA 1375; and thus affirming the
decision of the Auditor, Central Bankof the Philippines. The Central and Elizalde filed the petition for
review in the Supreme Court.

Issue: Whether upon the importation of the fertilizers are covered by the exemption
(provided by Section 1 and 2 of Republic Act No. 601, as amended by Republic Acts
1175, 1197 and 1375).

Held:
The law is, therefore, clear that imported fertilizers are exempt from the payment of the 17%
tax only if the same were imported by planters or farmers directly or through their cooperatives. The
exemption covers exclusively fertilizers imported by planters or farmers directly or through their
cooperatives. The word directly has been interpreted to mean without anything intervening.
Consequently, an importation of fertilizers made by a farmer or planter through an agent, other than
his cooperative, is not imported directly as required by the exemption. When the issue is whether or
not the exemption from a tax imposed by law is applicable, the rule is that the exempting provision is
to be construed liberally in favor of the taxing authority and strictly against exemption from tax
liability, the result being that statutory provisions for the refund of taxes are strictly construed in
favor of the State and against the taxpayer. Exempting from the 17% tax all fertilizers imported by
planters or farmers through any agent other than their cooperatives, this would be rendering useless
the only exception expressly established in the case of fertilizers imported by planters or farmers
through their cooperatives

Applied Food Ingredients Company, Inc. v. Commissioner of Internal Revenue,

G.R. No. 184266, 11 November 2013


FACTS

Petitioner is a Value-Added Tax (VAT) taxpayer engaged in the importation and exportation
business, as a pure buy-sell trader. Petitioner alleged that from September 1998 to December 31,
2000, it paid an aggregate sum of input taxes for its importation of food ingredients.Subsequently,
these imported food ingredients were exported between the periods of April 1, 2000 to December
31, 2000, from which the petitioner was able to generate export sales amounting to P114,577,937.24.
The aforestated export sales which transpired from April 1, 2000 to December 31, 2000 were zero-
rated sales, pursuant to Section 106(A (2)(a)(1) of the NIRC of 1997.Petitioner alleged that the
accumulated input taxes for the period of September 1, 1998 to December 31, 2000 have not been
applied against any output tax.

On March 26, 2002 and June 28, 2002, petitioner filed two separate applications for the
issuance of tax credit certificates.On July 24, 2002, in view of respondents inaction, petitioner
elevated the case before this Court by way of a Petition for Review, docketed as C.T.A. Case No.
6513.Trial ensued and the CTA First Division rendered a Decision on 13 June 2007. It denied
petitioners claim for failure to comply with the invoicing requirements prescribed under Section 113
in relation to Section 237 of the National Internal Revenue Code (NIRC) of 1997 and Section 4.108-1
of Revenue Regulations No. 7-95.On appeal, the CTA En Banc likewise denied the claim of petitioner
citing violation of the invoicing requirements.

ISSUE

Is the petitioner is entitled to the issuance of a tax certificate or refund representing
creditable input taxes attributable to zero-rated sales?



HELD

NO. The Commissioner of Internal Revenue (CIR) had one hundred twenty (120) days from
the date of submission of complete documents in support of the application within which to decide
on the administrative claim.Counting 120 days from 26 March 2002, the CIR had until 24 July 2002
within which to decide on the claim of petitioner for an input VAT refund attributable to the its zero-
rated sales for the period April to September 2000.On the other hand, the CIR had until 26 October
2002 within which to decide on petitioners claim for refund filed on 28 June 2002, or for the period
covering October to December 2000.

In this case, the judicial claim of petitioner was filed on 24 July 2002. Petitioner clearly failed
to observe the mandatory 120-day waiting period. Consequently, the premature filing of its claim for
refund/credit of input VAT before the CTA warranted a dismissal, inasmuch as no jurisdiction was
acquired by the CTA. In accordance with the ruling in San Roque and considering that petitioners
judicial claim was filed on 24 July 2002, when the 120+30 day mandatory periods were already in the
law and BIR Ruling No. DA-489-03 had not yet been issued, petitioner does not have an excuse for
not observing the 120+ 30 day period. Failure of petitioner to observe the mandatory 120-day period
is fatal to its claim and rendered the CT A devoid of jurisdiction over the judicial claim

Who has burden of proof in tax cases?

COMMISSIONER OF INTERNAL REVENUEvs.COURT OF APPEALSG.R. NO.
115349, APRIL 18, 1997

STATUTORY CONSTRUCTION DOCTRINE:In the Interpretation of tax laws, a statute will not be
construed as imposing a tax unless it does so clearly, expressly and ambiguously. A tax cannot
be imposed without clear and express words for that impose. Provisions of taxing laws are not to
be extended by implication.

FACTS:
Private respondent, the Ateneo de Manila University, is a non-stock, non-profit educational
institution with auxiliary units and branches all over the Philippines. One auxiliary unit is the
Institute of Philippine Culture (IPC), which has no legal personality separate and distinct from
that of private respondent. The IPC is a Philippine unit engaged in social science studies of
Philippine society and culture, which occasionally accepts sponsorships for its research activities
from international organizations, private foundations and government agencies.Private respondent
received from Commissioner of Internal Revenue (CIR) a demand letter dated 3 June 1983,
assessing private respondent the sum of P174,043.97 for alleged deficiency contractors tax, and
an assessment dated 27 June 1983 in the sum of P1,141,837 for alleged deficiency income tax, both
for the fiscal year ended 31 March 1978. Denying said tax liabilities, private respondent sent
petitioner a letter-protest and subsequently filed with the latter a memorandum contesting the
validity of the assessments.On 17 March 1988, petitioner rendered a letter-decision
canceling the assessment for deficiency income tax but modifying the assessment for
deficiency contractors tax by increasing the amount due to P193,475.55. Unsatisfied, private
respondent requested for a reconsideration or reinvestigation of the modified
assessment.On 12 July 1993, the respondent court set aside respondents decision, and
canceling the deficiency contractors tax assessment in the amount of P46,516.41 exclusive of
surcharge and interest for the fiscal year ended 31 March 1978. No pronouncement as to cost.
On 27 April 1994, Court of Appeals, in CA-GR SP 31790, affirmed the decision of the Court of Tax
Appeals.
Not in accord with said decision, petitioner came to Supreme Court via a petition for review.

ISSUE: Whether or not Ateneo de Manila University, through IPC, is performingthe work of an
independent contractor thus subjecting them to the 3% contractors tax levied by then Section 205 of
the National Internal Revenue?

HELD: No. The CIR failed to apply the abovementioned doctrine as they should have
determined first if the Ateneo was covered by Section 205. Instead, they asked Ateneo to prove its
exemption without establishing its coverage under Section 205. And as stated by the Court of
Tax Appeals, they found no evidence that Ateneo sells the services of IPC.

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITYvs.HON. FERDINAND J.

MARCOS, THE CITY OF CEBU, REPRESENTED BY ITS MAYOR HON. TOMAS R.
OSMEA, AND EUSTAQUIO B. CESA G.R. NO. 120082, SEPTEMBER 11, 1996

STATUTORY CONSTRUCTION DOCTRINE:Statutes granting taxexemptions are construed
strictissimi juris against the taxpayers and liberally in favor ofthe taxing authority.

FACTS: Petitioner Mactan Cebu International Airport Authority (MCIAA) was created by virtue of
Republic Act No. 6958, mandated to principally undertake the economical, efficient and effective
control, management and supervision of the Mactan International Airport in the Province of Cebu
and the Lahug Airport in Cebu City... and such other airports as may be established in the Province of
Cebu... (Sec. 3, RA 6958).Since the time of its creation, petitioner MCIAA enjoyed the
privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter.On
October 11, 1994, however, Mr. Eustaquio B. Cesa, Officer-in-Charge, Office of the Treasurer of the
City of Cebu, demanded payment for realty taxes on several parcels of land belonging to the
petitioner.Petitioner objected to such demand for payment is baseless and unjustified, claiming
in its favor the aforecited Section 14 of RA 6958 which exempt it from payment of realty taxes. It
was also asserted that it is an instrumentality of the government performing governmental
functions, citing section 133 of the Local Government Code of 1991 which puts limitations on the
taxing powers of local government units.Thecity refused insisting that petitioner is a GOCC
performing proprietary functions whose tax exemption was withdrawn by Sections 193 and
234of the LGC. Petitioner filed a declaratory relief before the RTC.The trial courtdismissed the
petitioner ruling that the LGC withdrew the tax exemption granted the GOCCs.

ISSUE: Whether or not the City of Cebu has the powerto impose taxes on
petitioner?


HELD:
Yes, the City of Cebu has the powerto impose taxes onpetitioner since the last paragraph of Section
234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from payment of real
property taxes granted to natural or juridical persons, including government-owned or controlled
corporations, except as provided in the said section, and the petitioner is, undoubtedly, a
government-owned corporation, it necessarily follows that its exemption from such tax
granted it in Section 14 of its Charter, R.A. No. 6958, has been withdrawn.

TAX sales construed

FEDERICO SERFINO AND CORNA BACHAR vs.COURT OF APPEALS AND LOPEZ
SUGAR MILL CO. INC.G.R.No.L-40858,SEPTEMBER 15, 1958andPHILIPPINE
NATIONAL BANK vs.COURT OF APPEALS, LOPEZ SUGAR CENTRAL MILL CO.
INC, SPOUSES FREDERICO SERFINO AND CORNA BUCHARG.R. No. L-40751,
SEPTEMBER 15, 1987

STATUTORY CONSTRUCTION DOCTRINE: Strict adherence to the statutes governing tax sales is
imperative not only for the protection of tax payers but also all any possible suspicion of collusion
between the buyer and the public officials called upon to enforce such laws. Notice of sale to
the delinquent land owners and to the public is an essential and indispensable requirement of law,
the non-fulfillment of which vitiates the sale.

FACTS: On August 25, 1937 a parcel of land, consisting of 21.1676 hectares, was patented by
Pacifico Casa mayor. Not long after, the land was sold to Nemesia Baltazar which then sold it to Lopez

Sugar Central Mill Co., Inc. Lopez Sugfa Central Mill did not registered to the Office of Registry of
Deeds until December 17,1964. However, the Registry of Deeds did not accept the registration
because the said land was already registered under the name of the spouses Frederico Serfino
and Corna Bachar. The couple said they acquired the land when the Provincial Treasurer of Negros
auctioned it due to tax deliquency. Serfino mortgaged the land to PNB to secure a loan amounting to
five thousand pesos which is why when Lopez Sugar Mill filed an action to recover the land,
which the lower courtgranted and cancelled the title of TCT No. 985 (under Serfinos name), the
lower court orderedLopez Sugar Mill Co. Inc.to pay PNB the balance of Serfino.Both parties
appealed the decision.

ISSUES:
1.Whether or not the auction ofthe property is null and void?
2.Whether or not PNB is entitled to the payment?

HELD: The selling of the land by the Province of Negros to Serfino is void because the provinces not
the real owner.Since Baltazar did not receive any notice nor was she given a certificate of sale, it
is clear that the sale was null and void.PNB is entitled to the payment as the invalidity of the auction
was not PNBs fault and when they loaned the sum of money and considered the land as
mortgage, they were acting in good faith. It should be noted that there was a title under Serfinos
name, which served as PNBs basis.

Labor Laws

Rule on Labor Laws

MARIA E. MANAHANvs.EMPLOYEES' COMPENSATION COMMISSION and GSIS
(LAS PIAS MUNICIPAL HIGH SCHOOL)G.R. No. L-44899April 22, 1981

STATUTORY CONSTRUCTION DOCTRINE: This Court applied the provisions of the Workmens
Compensation Act, as amended, on passing upon petitioners claim. The illness that claimed the life
of the deceased may have its onset before 10 December 1974, thus, his action accrued before
10 December 1974. Still, in any case, and in case of doubt, the same should be resolved in favor of
the worker, and that social legislations like the Workmens Compensation Act and the Labor
Code should be liberally construed to attain their laudable objective, i.e., to give relief to the
workman and/or his dependents in the event that the former should die or sustain an injury.
Pursuant to such doctrine and applying now the provisions of the Workmens Compensation Act in
this case, the presumption of compensability subsists in favor of the claimant.

FACTS: This is a petition to review the decision of the Employees' Compensation Commission in
ECC Case No. 0070. GSIS denied the claim for death benefit of herein petitioner, Maria Manahan, wife
of the deceased. The claimant, petitioner herein, widow of Nazario Manahan, Jr., who died of
"Enteric Fever" while employed as classroom teacher in Las Pias Municipal High School, Las
Pias Rizal, on May 8, 1975. In a letter dated June 19,1975, the GSIS denied the claim on a finding that
the ailment of Nazario Manahan, Jr., typhoid fever, is not an occupational disease. The petitioner filed
a motion for reconsideration on theground that the deceased, Nazario Manahan, Jr., was in
perfect health when admitted to the serviceand such ailment was attributable to his
employment

ISSUE: Whether or not Manahan is entitled of death benefits?

HELD: Yes. In any case, Supreme Court have always maintained that in case of doubt, the same should
be resolved in favor of the worker, and that social legislations like the Workmen's Compensation
Act and the Labor Code should be liberally construed to attain their laudable objective, i.e., to

give relief to the workman and/or his dependents in the event that the former should die or sustain
an injury.As a teacher of the Las Pias Municipal High School at Las Pias Rizal, the deceased
used to eat his meals at the school canteen. He also used the toilet and other facilities of the school.
Said the respondent Commission," ... it is not improbable that the deceased might have contracted
the illness during those rare moments that he was away from his family, since it is medically
accepted that enteric fever is caused by salmonella organisms which are acquired by ingestion
of contaminated food or drinks. Contamination of food or water may come from the excretion
of animals such as rodentsflies, or human beings who are sick or who are carriers, or infection in
meat of animals as food. Meat, milk and eggs arethe foods most frequently involved in the
transmission of this type of species, since the organism may multiply even before ingestion. ..."
These findings of the respondent Commission lead to the conclusion that the risk of contracting the
fatal illness was increased by the decedent's working condition.

DOMNA N. VILLAVERTvs.EMPLOYEES COMPENSATION COMMISSION &
GOVERNMENTSERVICE INSURANCE SYSTEMG.R. No. L-48605, DECEMBER 14,
1981

STATUTORY CONSTRUCTION DOCTRINE:Labor laws are to be construed liberally in favour of

the employees. Further, Article 4 of the Labor Code provides that all doubts in the
implementation and interpretation of this Code, including its implementing rules and
regulations shall be resolved in favour of labor.

FACTS: Marcelino Villavert, who was employed as a Code Verifier in the Philippine
Constabulary, died of acute hemorrhagic pancreatitis on December 12, 1975. It was shown in
the records that he did not only perform duties as a Code Verifier but also served as a
computer operator and clerk typist due to the lack of manpower in the Philippine
Constabulary. This means that he handles administrative functions, computer operation and
typing jobs. On the day prior to his death, he was required to do an overtime service until late in the
evening after a whole day of strenuous activities. He went when home without taking his meal.
Shortly, he was gasping for breath, perspiring profusely and mumbling incoherent words. He was
rushed tothe UE Ramon Magsaysay Hospital where he was pronounced dead at 5:30 oclock in the
morning of the following day.His mother, Domna Villavert, filed for income benefits for the
death of her son under PD n. 626 as amended with the Government Insurance System on
March 18, 1976. Her claim was denied by the GSIS on the ground that the acute hemorrhagic
pancreatitis is not an occupational disease and that the petitioner failed to show the causal
connection between the fatal ailment of Marcelino and the natureof his employment. She
appealed to the Employees Compensation Commission but it affirmed the decision of the GSIS.

ISSUE: Whether or not Domna Villavert is entitled to her sons income benefits?

HELD:The Medico Legal Officer of the NBI stated that the exact cause of hemorrhagic pancreatitis is
still unknown despite extensive researches in this field, although most research data are agreed
that physical and mental stresses are strong causal factors in the development of the disease. It is
then clear that the cause of death of Marcelino Villavert was directly caused or at least
aggravated by the duties he performed as code verifier, computer operator and clerk typist of the
Philippine Constabulary. There is no evidence that he had a bout of alcoholic intoxication, in
connection to the claim of the respondents that alcoholism causes such disease. Domna Villavert
is, therefore, entitled to collect the income benefits of his son from the GSIS.

DEL ROSARIO & SONS LOGGING ENTERPRISES, INC.vs.THE NATIONAL LABOR

RELATIONS COMMISSION, PAULINO MABUTI, NAPOLEO BORATA, SILVINO
TUDIO and CALMAR SECURITY AGENCYG.R. No. L-64204, May 31, 1985

STATUTORY CONSTRUCTION DOCTRINE:The rules of evidence prevailing in the courts of law or

equity are not controlling in proceedings before the NLRC and its Labor Arbiters. It is the spirit &
intention of the Labor Code which shall be used to ascertain the facts of the case without due regard
to the technicalities of a case proceeding.

FACTS:Petitioner Del Rosario & Sons Enterprises, Inc. entered into a Contract of Services
with private-respondent Calmar Security Agency. The employees (security guards stationed at
petitioners premises) filed a complaint against petitioner and private-respondent because of
underpayment of salary, non-payment of living allowance and 13th month pay. Petitioner
contends that the complainants had no cause of action due to the absence of employer-employee
relation while private-respondent alleged that due to inadequacy of the amounts paid by petitioner
under the Contract, it could not comply with the above payments to the complainants. The Labor
Arbiter ruled in favor of the Petitioner but a resolution of the NLRC reversed the decision
declaring petitioner as an indirect employer.

ISSUE:Whether or not petitioner is responsible for salary payment on the ground of being a
direct employer?

HELD:It is the Security Agency, and not the petitioner, who isresponsible for the payment of
salaries of the employees. On ascertaining the facts of a labor case, the spirit and intention of
the Labor Law shall give its aid. The NLRC & its Labor Arbiters do not need to deal with the
technicalities of the proceedingsof a Labor Case such as the indirectness of being an employer as in
this case. Although the technical problem arose from the contract between the petitioner and
private-respondent, it doesnt mean that the Security Agency may preclude itself from performing
its obligation towards its employees.

INSURANCE

Rule in the interpretation of insurance provisions

Ty v First National G.R. No. L-16138 April 29, 1961
J. Labrador

Facts:
Ty, a mechanic foreman in Caloocan, bought 18 insurance policies at 8 pesos each. A fire broke out,
and Ty fought his way out of the factory. His hand was broken by a heavy object in the process. He
wanted to collect an indemnity valuing 650 pesos for the loss of hand by means of amputation even if
he only suffered from broken fingers. The insurance companies sued him in court and they won. Ty
then appealed to the Supreme Court.

Issue: Can he collect the sums even if there was no amputation?

Held: No

Ratio:

The insurance policies clearly define loss of hand as amputation of the bones on the wrist. The injury
was only a temporary total disability of plaintiff's left hand." This wasnt covered by the policies.

De La Cruz V. Capital Ins. & Surety Co, Inc. (1966)

G.R. No. L-21574 June 30, 1966

FACTS:

Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines, Inc. in Baguio, was the holder
of an accident insurance policy "against death or disability caused by accidental means"
January 1, 1957: For the celebration of the New Year, the Itogon-Suyoc Mines, Inc. sponsored a
boxing contest for general entertainment wherein Eduardo, a non-professional boxer participated. In
the course of his bout with another non-professional boxer of the same height, weight, and size,
Eduardo slipped and was hit by his opponent on the left part of the back of the head, causing Eduardo
to fall, with his head hitting the rope of the ring.He was brought to the Baguio General Hospital the
following day. He died due to hemorrhage, intracranial. Simon de la Cruz, the father of the insured
and who was named beneficiary under the policy, thereupon filed a claim with the insurance
company. The Capital Insurance and Surety co., inc denied stating that the death caused by his
participation in a boxing contest was not accidental
RTC: favored Simon

ISSUE: W/N the cause of death was accident

HELD:YES.

Eduardo slipped, which was unintentional
The terms "accident" and "accidental"as used in insurance contracts, have not acquired any technical
meaning and are construed by the courts in their ordinary and common acceptationhappen by
chance or fortuitously, without intention and design, and which is unexpected, unusual, and
unforeseen event that takes place without one's foresight or expectation event that proceeds from an
unknown cause, or is an unusual effect of a known cause and, therefore, not expected where the
death or injury is not the natural or probable result of the insured's voluntary act, or if something
unforeseen occurs in the doing of the act which produces the injury, the resulting death is within the
protection of policies insuring against death or injury from accident while the participation of the
insured in the boxing contest is voluntary, the injury was sustained when he slid, giving occasion to
the infliction by his opponent of the blow that threw him to the ropes of the ring is not The fact that
boxing is attended with some risks of external injuries does not make any injuries received in the
course of the game not accidental In boxing as in other equally physically rigorous sports, such as
basketball or baseball, death is not ordinarily anticipated to result. If, therefore, it ever does, the
injury or death can only be accidental or produced by some unforeseen happening or event as what
occurred in this case

Furthermore, the policy involved herein specifically excluded from its coverage
(e) Death or disablement consequent upon the Insured engaging in football, hunting, pigsticking,
steeplechasing, polo-playing, racing of any kind, mountaineering, or motorcycling.
Death or disablement resulting from engagement in boxing contests was not declared outside of the
protection of the insurance contract

Ambigous provision interpreted against insurer

Qua v Law Union. G.R. No. L-4611 December 17, 1955
J. Reyes

Facts:
Qua owned 4 warehouses used for the storage of copra and hemp. They were insured with the Law
Union.
Fire broke out and completely destroyed 3 bodegas. The plaintiff submitted claims totalling
P398,562.81. The Insurance Company resisted payment on the grounds that the fire had been
deliberately caused by the insured or by other persons in connivance with him. Que Chee Gan and his
brother were tried for arson, but were acquitted by the trial court. As regards the insurance claim,
the trial court ruled in favor of Qua and entitled him to recover more than Php 300,000 for
indemnities from the insurance company. Hence, the company appealed to the SC.
In its first assignment of error, the insurance company alleged that the trial Court should have held
that the policies were avoided for breach of warranty. The contract noted that fire hydrants were
required in a particular measurement of space (every 150 feet). Hence, they argued that since the
bodegas insured had an external wall perimeter of 500 meters, the appellee should have 11 fire
hydrants in the compound, and that he actually had only 2, with a further pair.

Issues:
1. WON the insurance company can void the policies it had issued
2. WON the insured violated the "Hemp Warranty" provisions of the policy against the storage of
gasoline

Held: No.

Ratio:
1. The insurer, who at the time of issuance, has knowledge of existing facts which would invalidate
the contract from the beginning, such constitutes a waiver of conditions in the contract inconsistent
with the facts, and the insurer is stopped thereafter from asserting the breach of such conditions.
Also, an insurance company intends to executed a valid contract in return for the premium received;
and when the policy contains a condition which renders it voidable at its inception, and this result is
known to the insurer, it will be presumed to have intended to waive the conditions and to execute a
binding contract, rather than to have deceived the insured into thinking he is insured when in fact he
is not. The appellant is barred estoppel to claim violation of the so-called fire hydrants warranty,
because it knew the number of hydrants demanded therein never existed from the very beginning
and issued the policies.To allow a company to accept one's money for a policy of insurance which it
then knows to be void and of no effect, though it knows as it must, that the assured believes it to be
valid and binding, is so contrary to the dictates of honesty and fair dealing, and so closely related to
positive fraud, as to the abhorrent to fair-minded men.The appellant company so worded the policies
that while exacting the greater number of fire hydrants and appliances, it kept the premium discount
at the minimum of 2 1/2%, thereby giving the insurance company a double benefit. Such abnormal
treatment of the insured strongly points at an abuse of the insurance company's selection of the
words and terms of the contract, over which it had absolute control.Receipt of Premiums or
Assessments after Cause for Forfeiture Other than Nonpayment. It is a well settled rule of law that
an insurer which with knowledge of facts entitling it to treat a policy as no longer in force, receives
and accepts a premium on the policy, estopped to take advantage of the forfeiture. It cannot treat the
policy as void for the purpose of defense to an action to recover for a loss thereafter occurring and at
the same time treat it as valid for the purpose of earning and collecting further premiums.
Moreover, taking into account the well known rule that ambiguities or obscurities must be strictly
interpreted against the party that caused them, the "memo of warranty" invoked by appellant bars
the latter from questioning the existence of the appliances called for in the insured premises

2. The ambiguity must be held strictly against the insurer and liberally in favor of the insured,
specially to avoid a forfeiture. So long as insurance companies insist upon the use of ambiguous,
intricate and technical provisions, which conceal rather than frankly disclose, their own intentions,
the courts must, in fairness to those who purchase insurance, construe every ambiguity in favor of
the insured.

CORPORATE LAW

Rule on the interpretation on Corporate Law provisions


Home Insurance vs. Eastern Shipping Lines

Whether a foreign corporation doing business in the Philippines initially without a license can claim
indemnity through Philippine Courts. The objective of the law was to subject the foreign corporation
to the jurisdiction of our courts. The Corporation Law must be given a reasonable, not an unduly
harsh, interpretation which does not hamper the development of trade relations and which fosters
friendly commercial intercourse among countries. The Supreme Court consolidated and granted the
petitions, reversed and set aside the CFI decisions. In L-34382 (Civil Case 71923), Eastern Shipping
Lines and Angel Jose Transportation Inc. are ordered to pay the Home Insurance Company.
(See the Case. Masyadong mahaba yung digest)

NATURALIZATION LAWS

Rule on the construction of Naturalization Laws

(no digest available except kay lee cho na kay scribd)

AGRARIAN REFORM LAWS

Rule on the construction of Agrarian Reform

(see: http://www.docfoc.com/guerrero-vs-ca-digest-aiJgy)

RULES OF COURT

Rules on the construction of the provision of the Rules of Court

Spouses Bello Petitioners
Vs.
CA, Hon. Francisco Llamas, Judge of Pasay City Court and Republic of the
Philippines Respondents




Facts:
On August 25, 1970, spouses Bello were charged with estafa for allegedly having misappropriated a
ladys ring with a value of P1, 000.00 received from them from Atty. Prudencio De Guzman for sale on

commission basis. After trial, they were convicted and sentenced. They then filed an appeal to the
Court of First Instance and after that to the respondent city court which was also dismissed and
ordered for execution of judgment for having been erroneously addressed to this court. Petitioner
spouses then filed for prohibition and mandamus against the People and respondent city court to
elevate their appeal to the Court of Appeals which was again dismissed after finding that the city
courts judgment was directly appealable to it. Still, the couple moved for reconsideration and
stressing the merits of their appeal and of their defense but was again denied for lack of sufficient
merit.


Issue:
Whether or not the Court of Appeals erred in dismissing the case due to wrong procedure.
Whether or not the execution of judgment will be issued a mandamus


Ruling: Decision of CA to dismiss petition is set aside. Mandamus is issued for the execution of its
judgment of conviction. And, said city court is commanded to elevate petitioners appeal from its
judgment to the Court of Appeals for the disposition on the merits.
The Court of Appeals should have not dismissed the appeal but should have certified the case to
the proper court. It is of the essence of judicial duty to construe statutes so as to avoid such
deplorable result of injustice and absurdity and that a literal interpretation is to be rejected if it
would be unjust or lead to absurd results.

EXPROPRIATION LAWS

City Of Manila vs. Chinese Community Of Manila, 40 Phil. 349 (1919)

FACTS: The City of Manila, plaintiff herein, prayed for the expropriation of a portion private cemetery
for the conversion into an extension of Rizal Avenue. Plaintiff claims that it is necessary that such
public improvement be made in the said portion of the private cemetery and that the said lands are
within their jurisdiction.
Defendants herein answered that the said expropriation was not necessary because other routes
were available. They further claimed that the expropriation of the cemetery would create irreparable
loss and injury to them and to all those persons owing and interested in the graves and monuments
that would have to be destroyed.
The lower court ruled that the said public improvement was not necessary on the particular-strip of
land in question. Plaintiff herein assailed that they have the right to exercise the power of eminent
domain and that the courts have no right to inquire and determine the necessity of the expropriation.
Thus, the same filed an appeal.

ISSUE: Whether or not the courts may inquire into, and hear proof of the necessity of the
expropriation.

HELD: The courts have the power of restricting the exercise of eminent domain to the actual
reasonable necessities of the case and for the purposes designated by the law. The moment the
municipal corporation or entity attempts to exercise the authority conferred, it must comply with the
conditions accompanying the authority. The necessity for conferring the authority upon a municipal
corporation to exercise the right of eminent domain is admittedly within the power of the legislature.
But whether or not the municipal corporation or entity is exercising the right in a particular case
under the conditions imposed by the general

ELECTION LAWS

Villanueva v. COMELEC
No. L 54718 (December 4, 1986)

FACTS:
On January 25, 1980, Petitioner filed a certificate of candidacy for Vice Mayor of Dolores for the
January 30 elections in substitution for his companion Mendoza who withdrew candidacy without
oath upon filing on January 4. Petitioner won in the election but Respondent Board disregarded all
his votes and proclaimed Respondent Candidate as the winner on the presumption that Petitioners
candidacy was not duly approved by Respondent. Petitioner filed a petition for the annulment of
the proclamation but was dismissed by Respondent Commission on the grounds that Mendozas
unsworn withdrawal had no legal effect, and that assuming it was effective, Petitioners
candidacy was not valid since Mendoza did not withdraw after January 4.

ISSUE:
W/N Petitioner should be disqualified on the ground of formal or technical defects.

HELD:
No. The fact that Mendozas withdrawal was not sworn is a technicality, which should not be used to
frustrate the peoples will in favor of Petitioner as the substitute candidate. Also, his withdrawal
right on the very same day that he filed his candidacy should be considered as having been made
substantially and in truth after the last day, even going by the literal reading of the provision by
Respondent Commission. The spirit of the law rather than its literal reading should have guided
Respondent Commission in resolving the issue of last-minute withdrawal and substitution of
other persons as candidates.

WILLS

Rule on interpretation of Wills

(no available digest except in scribd)

In RE: Tampoy

Whether the absence of the testators thumb mark in the first page is fatal to render the will void.
Statutes prescribing the formalities to be observed in the execution of wills are very strictly
construed. A will must be executed in accordance with the statutory requirements; otherwise it is
entirely void. Since the will suffers the fatal defect, as it does not bear the thumb mark of the testatrix
on its first page even if it bears the signature of the three instrumental witnesses, the same fails to
comply with the law and therefore cannot be admitted to probate.

For additional material: http://skinnycases.blogspot.com/2013/11/statutory-
construction-case-digests-ii_5048.html