Article 1311 of the Civil Code provides that
“contracts take effect only between the parties,
their assigns and heirs xxx”. In this case, the
Compromise Agreement presented to the trial
court, only the spouses Uy and the bank [SBTC]
were parties. Petitioner Limpo did not
participate in its execution and there was no
reference to him in any of its provisions.
Hence, he cannot be bound by the Compromise
Agreement.
What happens then, asks the highest
Court, if the trial court approves a compromise
agreement that fails to include all of the
defendants i.e., Limpo [the solidary debtor]?
Considering that the Compromise
Agreement imposed no obligation upon Limpo,
there is no basis to include him in reviving the
judgment rendered by the RTC based on the
Compromise Agreement. However, the Court of
Appeals ruled that “xxx if the spouses Uy would
become insolvent and could not pay their
obligation under the Compromise Agreement, the
Bank could collect the whole amount of the
obligation from defendant Rolando Limpo xxx.”
Citing an earlier SC decision (Bopis v. Prov
Sheriff of Camarines Norte), the Court ruled
that the failure to mention Limpo in the
judgment of the RTC will mean his absence of
liability to the Bank. Thus, the instructions of
the Court of Appeals to continue the proceedings
against Limpo amount to an alteration of a
matter that is already res judicata (G.R.
144732, 2/13/06).
- - - o - - -
Where remedy of
appeal is available, certiorari
under Rule 65 is inappropriate
The general rule, said the Court, is that a
petition for certiorari under Rule 65 of the
Rules of Court to nullify an order denying a
motion to quash the information is inappropriate
because the aggrieved party has a remedy of
appeal in the ordinary course of law.
Appeal and certiorari are mutually
exclusive. The remedy of
the aggrieved party is to continue with the case
in due course, and, when an unfavorable judgment
is rendered, assail the order and the decision
on appeal.
However, if the trial court issues the order
denying the motion to quash the information with
grave abuse of discretion amounting to excess or
lack of jurisdiction, or if such order is
patently erroneous, or null and void for being
unconstitutional, and the remedy of appeal would
not afford adequate and expeditious relief, the
accused may resort to the extraordinary remedy
of certiorari (G.R. 155076, 2/27/06).
- - - o - -
-
Supreme Court
voids “no spouse”
rule
The respondent company had a policy banning
husband and wife from working in the same
company. In this case, a woman employee had to
resign from her job after she married her fellow
employee.
In nullifying the respondent’s “no spouse”
employment policy, the Supreme Court ruled
(through Justice Reynato S. Puno) that while
there is no express prohibition in Philippine
jurisdiction on marital discrimination, the “no
spouse” rule violates the employees’ marital
status because it arbitrarily discriminates
against all spouses of present employees without
regard to the particular individual’s
qualification or work performance. The policy is
invalid for failure of the employer to present
evidence of business necessity other than the
general perception that spouses in the same
workplace might adversely affect the business.
This policy similarly violates the bonafide
occupational qualification rule.
To justify such an employer’s “no spouse”
rule, the employer, declared the Court, must
prove that (1) the employment
qualification is reasonably related to the
essential operation of the job involved, and (2)
there is a factual basis for believing that all
or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job (G. R.
164774, 4/12/06).
- - - o - - -
Certificate of non-forum shopping
The resident agent of the plaintiff
corporation has no authority to execute a
verification and certificate of non-forum
shopping unless it is so authorized through a
resolution of the corporation’s board of
directors. Under the Corporation Code the
resident agent of a foreign corporation with
license to do business in the Philippines is to
receive, for and in behalf of the foreign
corporation, services and other legal processes
in all actions and other legal proceedings
against such corporation. Thus, under the law,
the resident agent is not specifically
authorized to execute a certificate of non-forum
shopping as required under Rule 7 of the Rules
of Court. This is so because while the resident
agent may be aware of action filed against its
principal (a foreign corporation doing business
in the Philippines) such resident may not be
aware of actions initiated by its principal
whether in the Philippines against a domestic
corporation or private individual or in the
country where such corporation was organized and
registered, against a Philippine registered
corporation or a Filipino citizen (G.R. 152392,
5/26/2005).
- - - o - - -
Supreme Court affirms proper
computation of damages
In considering the earning capacity of the
victim as an element of damages, the net
earnings, which is computed by deducting
necessary expenses from gross earnings, and not
the gross earnings, is to be utilized in the
computation. The amount of net earnings is
arrived at after deducting the necessary
expenses (pegged at 50% of gross income) from
the gross annual income.
Failure to present documentary evidence to
support a claim for loss of earning capacity
need not invalidate such claim. Testimonial
evidence suffices to establish a basis for
which to court can make a fair and reasonable
estimate of loss of earning capacity. Thus, the
testimony of the victim’s widow that her husband
was earning a monthly income of P8,000 is
sufficient to establish a basis for an estimate
of damages for loss of earning capacity.
Well-settled jurisprudence lists the factors
in determining the compensable amount of lost
earnings:
1) the number of years for which the
victim would otherwise have lived; and
2) the rate of loss sustaine by the heirs
of the deceased.
The first factor, i.e., life expectancy is
computed by applying the formula (2/3 x
[80 – age at death]) adopted in the American
Table of Mortality the Actuarial Combined
Experience Table of Mortality. The
second factor is computed by multi- plying the
life expectancy by net earnings of the deceased,
i.e., the total earnings less living and other
incidental expenses. Thus, the formula used by
the Court in computing loss of earning capacity
is:
Net Earning Capacity = (2/3 x 80 –
age at time
of death) x (gross annual income –
reasonable and necessary living expenses)
In this case the award for actual damages for
funeral and burial, and medical expenses was
reduced to the extent that they were supported
by receipts. To justify an award of actual
damages, there must be competent proof of the
actual amount of loss.
Citing Article 2206 of the Civil Code, the
Court said that the spouse, legitimate children
and legitimate descendants and ascendants of the
deceased may demand moral damages for mental
aguish by reason of the death of the deceased.
However, the Court stressed that moral damages
are in the category of an award to compensate
the claimant for actual injury and are not meant
to enrich complainant at the expense of the
defendant (G.R. 148737, 6/16/2004).
- - - o - - -
Power to deport aliens vested on
President
Executive Order 292 vests on the President of
the Philippines the power to deport aliens,
subject to due process requirements. The
Commissioner of Immigration is vested with
authority to deport aliens under Section 17 of
the Philippine Immigration Act of 1940. Thus, a
party aggrieved by a Deportation Order issued by
the Board of Commissioners (BOC) is proscribed
from assailing said order in the RTC even via a
petition for a writ of
habeascorpus. Conformably with
existing jurisprudence (Domingo v. Scheer), the
aggrieved may file a motion for reconsideration
of the Order with the BOC.
In case such motion for reconsideration is
denied by the BOC, the aggrieved party may
appeal to the Secretary of Justice and if the
latter denies the appeal, such party can appeal
to the Office of the President.
In this case, the petitioner did not file any
motion with BOC for reconsideration of the
Summary Deportation Order or appeal therefrom.
Neither was an appeal filed with the Secretary
of Justice or to the Office of the President or
a petition for certiorari under Rule 65 on the
ground of grave abuse of discretion by the
Secretary of Justice. Thus, the Supreme
Court ruled that the Court of Appeals acted
correctly when it affirmed the ruling of the RTC
that it had no jurisdiction over the
petitioner’s plea that it set aside the Summary
Deportation Order issued by the BOC (G.R.
160922, 2/27/06).
- - - o - - -
Complainant was not dismissed: he
voluntarily resigned
Complainant was hired on January 8, 1997 as
materials Manager by respondent VMPI through its
then President and General Manager, a Filipino
national. In August 1997, the Filipino President
was transferred to China, and was replaced by a
Dutch national. Complainant claimed that the new
GM immediately set a one-on-one meeting with him
and asked for his courtesy resignation. When he
refused to resign, complainant said that the
management made life “difficult for him”, by
subjecting him to verbal abuse and undermining
his competence “by baseless and derogatory
memos.” Following a “veiled threat” for him to
resign or get fired, complainant signed and
submitted a “ready-made” resignation letter on
June 10,1998.
On November 20, 1998 ,
complainant filed a complaint for illegal
dismissal before the NLRC-NCR, alleging that he
was coerced and intimidated into signing his
letter of resignation. Respondent VMPI denied
that complainant was illegally dismissed,
contending that with his education and
professional background he could not have been
coerced and intimidated into resigning from the
company. In fact, complainant informed VMPI
about his intention to resign and requested a
“soft landing” financial assistance in the
amount of P300,000.00 on top of accrued benefits
due him upon resignation. VMPI granted the
request, depositing the amount to his payroll
bank account. Subsequently complainant changed
his mind, proposing transfer of ownership of the
car assigned to him in lieu of the financial
assistance from the company. Since company
policy prohibits disposition of assets without
valuable consideration, the parties agreed that
complainant shall pay for the car with the
P300,000.00 “soft landing” financial assistance
from VMPI. Complainant, however, did not use
this money to pay for the car as agreed upon.
On June 14, 1999, the Labor
Arbiter, dismissed the complaint for illegal
dismissal for lack of merit. Complainant was
ordered to reconvey to the company the car sold
to him and thus retain full credit of the
P300,000.00 “soft landing” assistance or retain
ownership of the car by paying respondents the
purchase price of P300,000.00 minus any amount
due him by way of accrued benefits that has been
applied by respondents as partial payment for
the car.
The NLRC affirmed the LA’s decision on
January 26, 2001 and denied
complainant’s motion for reconsideration on
March 5, 2001. Complainant then
filed for certiorari before the Court
of Appeals but the petition as well as the
motion for reconsideration were dismissed by the
court on February 28, 2002 and
July 17, 2002, respectively.
On September 12, 2002,
complainant filed a petition for certiorari
before the Supreme Court, but he filed the
Memorandum of Appeal only on April
2004, after 3 extensions totalling 45
days and 7 months after he should have filed the
same.
On 30 September 2005, the
Supreme Court rendered a decision affirming the
finding of the Labor Arbiter, the NLRC and the
Court of Appeals that petitioner was not
illegally dismissed. The Court likewise agreed
with the court a quo that the Labor
Arbiter has jurisdiction to hear and decide the
question on the transfer of ownership of the car
assigned to the petitioner, ruling that this
issue falls squarely under Article 217 (a) of
the Labor Code which covers “all other
claims arising from employer-employee
relationship xxx.” Petitioner’s motion for
reconsideration filed on 10 Nov.
2005, was dismissed with finality by
the Court on 14 Dec. 2005 (G.R.
154376, 8/30/05).
- - - o - - -
SC: Courts “cannot annul the
effects of foolish acts”
In adopting the trial court’s narration of
the antecedent facts in their petition,
petitioners thereby admitted that they
authorized respondent to represent them in
negotiations with the “squatters” occupying the
disputed property and, in consideration of
respondent’s services, petitioners executed the
subject deed of sale. Aside from respondent’s
services, petitioners also acknowledged in the
deed of sale that they received in full the
amount of P10,000.00. Evidently the
consideration for the sale is respondent’s
services plus the cash money.
Petitioners now impugn the validity of the
said deed of sale, contending that the same is
merely simulated given that the consideration
stated in the deed of sale is extremely
inadequate. The Court disagreed, citing its
ruling in Buenaventura vs. Court of Appeals
that…“Indeed, there is no
requirement that the price be equal to the exact
value ofthe subject
matter of sale…” The court quoted
further its ruling in Vales vs. Vila, to wit:
“Courts cannot follow one every step of his life
and extricate him from bad bargains, protect him
from unwise investments, relieve him from
one-sided contracts or annul the effects of
foolish acts. Courts cannot constitute
themselves guardians of persons who are not
legally incompetent. Courts operate not
because one person has been defeated or overcome
by another, but because he has been defeated or
overcome illegally. Men may do foolish
things, make ridiculous contracts, use miserable
judgment, and lose money by them – indeed, all
they have in the world; but not for that alone
can the law intervene and restore. There
must be, in addition, a violation of the law,
the commission of what the law knows as an
actionable wrong, before the courts
are authorized to lay hold of the
situation and remedy it.” (G.R. 141323, 6/8/05).
- - - o - - -
May an unlicensed foreign corporation
doing business in RP bring suit
in Philippine courts?
The respondents in this petition for
certiorari argue that since the petitioner is an
unlicensed foreign corporation doing
business in the Philippines, it lacks legal
capacity to file suit in Philippine Courts.
A foreign corporation without a license,
ruled the Supreme Court, is not ipso facto
incapacitated from bringing an action in
Philippine court. A license is necessary only if
a foreign corporation is “transacting” or “doing
business” in the country. In several cases the
Court has held that an unlicensed foreign
corporation doing business in the Philippines
may bring suit in Philippine courts against a
Philippine citizen or entity who had contracted
with and benefited from said corporation. The
suit is premised on the doctrine of estoppel
which states that a party is estopped from
challenging the personality of a corporation
after having acknowledged the same by executing
a contract with it. This principle prevents a
person contracting with a foreign corporation
from taking advantage of its non-compliance with
the statutes chiefly in cases where such person
has received the benefits of the contract
((G.R. 154618, 4/14/04).
- - - o - - -
Interlocutory order
not appealable
An order denying a motion to dismiss is
interlocutory, hence, unappealable. The proper
remedy in such a case is to appeal after a
decision has been rendered
(G.R.146653-54,2/20/06).
- - - o - - -
Defective information
should be quashed
If the facts alleged in the information do
not constitute an offense, the complaint or
information should be quashed. Thus, the Order
of the trial court denying the motion of the
petition to quash the information is a patent
nullity (G.R. 155076, 2/27/06).
- - - o - - -
Theory of case cannot
be changed on appeal
When a party adopts a certain theory in the
court below, he is not allowed to change his
theory on appeal as the same is not only unfair
to the other party but is also offensive to the
basic rules of fair play, justice and due
process (G.R. 167412, 2/22/06).
- - - o - - -
A final judgment Is
unalterable
The rule is well-settled that a judgment that
has acquired finality becomes “immutable and
unalterable” and, hence, may no longer be set
aside, modified in any respect even if the
modification is meant to correct what is
perceived to be an erroneous conclusion of laws
or fact. All litigations must, at some time,
come to an end however unjust the result of
error may appear (G.R. 165580, 2/20/06).
- - - o - - -
SC sets requisites for real property
tax exemption
The petitioner ( Lung Center of the
Philippines) contends that under Existing law
and jurisprudence, it enjoys property tax
exemption privileges for its real properties as
well as the building constructed thereon.
Article VI of the 1987 Constitution provides
that ---
“(3) Charitable institutions,
churches and parsonages or convents appurtenant
thereto, mosques, non-profit cemeteries, and all
land, buildings and improvements, actually,
directly, and exclusively used for religious,
charitable or educational purposes shall be
exempt from taxation.”
Thus, to be entitled to the exemption, the
petitioner must prove by clear unequivocal
proof, that (a) it is a charitable
institution, - and (b) its real properties are
ACTUALLY, DIRECTLY, and EXCLUSIVELY used for
charitable purposes. If real property
is used for one or more commercial purposes, it
is not exclusively used for the
exempted purposes but is subject to taxation.
It is not the use of the income from the real
property that is determinative of whether the
property is used for tax exempt purposes.
While portions of the hospital are used for
the treatment of patients and dispensation of
medical services to them, portions of the
property are being leased to private individuals
for their clinics and a canteen. Also, a portion
of the land is being leased to a private
individual for her business enterprise, the
“Elliptical Orchids and Garden Center.”
Accordingly, the Court held that the portions
of the land leased to private entities as well
as those parts of the hospital leased to private
individuals are not exempt from real property
taxes. However, portions of the land occupied by
the hospital and portions of the hospital used
for its patients, whether paying or non-paying,
are exempt from such property taxes (G.R. No.
144104, 6/29/04).
- - - o - - -
Certificate of non-forum shopping
The resident agent of the plaintiff
corporation has no authority to execute a
verification and certificate of non-forum
shopping unless it is so authorized through a
resolution of the corporation’s board of
directors. Under the Corporation Code the
resident agent of a foreign corporation with
license to do business in the Philippines is to
receive, for and in behalf of the foreign
corporation, services and other legal processes
in all actions and other legal proceedings
against such corporation. Thus, under the law,
the resident agent is not specifically
authorized to execute a certificate of non-forum
shopping as required under Rule 7 of the Rules
of Court. This is so because while the resident
agent may be aware of action filed against its
principal (a foreign corporation doing business
in the Philippines) such resident may not be
aware of actions initiated by its principal
whether in the Philippines against a domestic
corporation or private individual or in the
country where such corporation was organized and
registered, against a Philippine registered
corporation or a Filipino citizen (G.R. 152392,
5/26/2005).
