LCA LINES | Volume III, Issue No. 10

8/12/2019 LCA LINES | Volume III, Issue No. 10

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July 2005 is exempt from VAT.

Provided that every three (3) years

thereafter, the aforesaid threshold

amounts shall be adjusted to its pre-

sent value using the Consumer Price

Index, as published by the national

Statistics Office (NSO); Provided,

further, that such adjustment shall be

published through revenue regula-

tions to be issued not later than 31

March of each year;

If two or more adjacent residential

lots are sold or disposed in favor of

one buyer, for the purpose of utiliz-

ing the lots as one residential lot, the

sale shall be exempt from VAT only

if the aggregate value of the lots do

not exceed P1,919,500.00. Adjacent

residential lots, although covered by

separate titles and/or separate tax

declarations, when sold or disposed

to one and the same buyer, whether

covered by one or separate Deed of

Conveyance, shall be presumed as a

sale of one residential lot.

REVENUE REGULATIONS

NO. 16-2011

Issued in 28 October 2011, the

regulation increases the amount of

threshold amount for sale of resi-

dential lot, lease of residential unit

and sale or lease of goods or prop-

erties or performance of services

covered by Section 109 (P), (Q),

and (V) of the Tax Code of 1997, as

amended thereby amending certain

provisions of Revenue Regulations

No. 16-2005, as amended, other-

wise known as Consolidated Value

-Added tax (VAT) Regulations of

2005.

The adjusted threshold amounts,

rounded off to the nearest hundreds,

are as follows:

Sale of residential lot with gross selling

price exceeding P1,919,500.00, resi-dential house and lot or other residen-

tial dwellings with gross selling price

exceeding P3,199,200.00, where the

instrument of sale (whether the instru-

ment is nominated as a deed of absolute

sale, deed of conditional sale or other-

wise) is executed on or after 1 Novem-

ber 2005, shall be subject to 10% out-

put VAT, and starting 1 February 2006,

to 12% output VAT.

Sale or lease of goods or properties or

the performance of services of non-

VAT registered persons, other than the

transactions mentioned in paragraph

(A) to (U) of Section 109(1) of the Tax

Code, the gross annual sales and/or

receipts of which does not exceed the

amount of P1,919,500.00, is subject to

Percentage Tax.

Sale of residential lot valued at

P1,919,500.00 and below, or house and

lot and other residential dwellings val-

ued at P3,199,200.00 and below, where

the instrument of sale/transfer/

disposition was executed on or after 1

I n s i d e t h i s

i s su e:

BIR Issuanc-

es

2

Jurisprudence 5

JLs Corner

12

LCA LINESD E C E M B E R 2 0 1 1V o l u m e I I I I s s u e N o . 1 0

Serving your purpose, realizing your dreams...

BIR ISSUANCES

Sec-tion Amountin Pesos

(2005)Adjustedthresholdamounts

109

(P) 1,500,000.00 1,919,500.00109

(P) 2,500,000.00 3,199,200.00109

(Q) 10,000.00 12,800.00109

(V) 1,500,000.00 1,919,500.00
http://www.google.com.ph/imgres?imgurl=http://www.mindanao.com/images/bir_logo.gif&imgrefurl=http://picsicio.us/domain/mindanao.com/&usg=__Ke5IbMpMZ3NwNjTDPtfpUUwy7H8=&h=100&w=100&sz=8&hl=tl&start=19&zoom=1&um=1&itbs=1&tbnid=hJFNIyBymUFxgM:&tbnh=82&tbnw=


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V o l u m e I I I I s s u e N o . 1 0 D E C E M B E R 2 0 1 1

Lease of residential units with a monthly

rental per unit not exceeding P12,800.00,

regardless of the amount of aggregate rent-

als received by the lessor during the year is

also exempt from VAT; provided, every

three (3) years thereafter, the amount shall

be adjusted to its present value using the

Consumer price Index, as published by the

NSO; Provided, further, that such adjust-

ment shall be published through revenue

regulations to be issued not later than 31

March every year.

The foregoing, notwithstanding, lease of

residential units where the monthly rental

per unit exceeds P12,800.00 but the aggre-

gate of such rentals of the lessor during the

year do not exceed P1,919,500.00 shall

likewise be exempt from VAT, however,

the same shall be subjected to 3% Percent-

age tax.

In cases where a lessor has several residen-

tial units for lease, some are leased out for

a monthly rental per unit not exceeding

p12,800.00 while others are leased out for

more than P12,800.00 per unit, his tax lia-

bility will be as follows:

-The gross receipts from rentals not ex-

ceeding P12,800.00 per month per unitshall be exempt from VAT regardless of

the aggregate annual gross receipts.

-The gross receipts from rentals exceeding

P12,800.00 per month per unit shall be

subject to VAT if the aggregate annual

gross receipts from said units only (not

including the gross receipts from units

leased for not more than P12,800.00) ex-

ceeds P1,919,500.00. Otherwise, the gross

receipts will be subject to the 3% tax im-

posed under Section 116 of the Tax Code.

Sale or lease of goods or properties or the

performance of services other than the

transactions mentioned in the preceding

paragraphs, the gross annual sales and/or

receipts do not exceed the amount of

P1,919,500.00 is exempt from Vat; Provid-

ed, every 3 years thereafter, the amount

shall be adjusted to its present value using

the Consumer Price Index, as published by

the NSO; Provided, further, that such ad-

justment shall be published through reve-

nue regulations to be issued not later than

31 March every year;

For purposes of threshold of

P1,919,500.00, the husband and wife shall

be considered separate taxpayers. However,

the aggregation rule for each taxpayer shall

apply. For instance, of a professional,

aside from the practice of profession, also

derives revenue from other lines of busi-

ness which are otherwise subject to VAT,

the same shall be combined for purposes of

determining whether the threshold has been

exceeded. Thus, the VAT-exempt sales

shall not be including the threshold.

These regulations shall take effect starting

1 January 2012.

REVENUE REGULATIONS

NO. 18-

2011

Issued on 21 November 2011, the regula-

tion provides for the penalties for the

violation of the requirement that Output

Tax on the sale of goods and services

should be separately indicated in the sales

invoice or official receipt.

All VAT-registered taxpayers who are

required under Section 237 of the 1997

Tax Code, as amended, to issue sales or

commercial invoices or official receipts

should separately bill the VAT corre-

sponding thereto. The amount of the tax

shall be shown as a separate item in the

invoice or receipt.

Failure or refusal to comply with the saidrequirement, shall, upon conviction, for

each act or omission, be punished by a

fine not less than P1,000.00 but not more

than P50,000.00 and suffer imprisonment

of not less than two (2) years but not

more than four (4) years.

REVENUE REGULATIONS

NO. 19-

2011

Issued on 9 December 2011, the regula-

tion prescribes the new Income Tax

forms that will be used for Income Tax

filing covering and starting with Calendar

Year 2011, modifying Revenue Memo-

randum Circular 57-2011.


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Issued on 25 November 2011 further

amends BIR Form Nos. 1700, 1701 and

1702, previously amended under Revenue

Memorandum Circular (RMC) 40-2011.

The amendment consists mainly in making

the disclosure of Supplemental Information

under BIR Form Nos. 1700 and 1701 op-

tional on the part of the taxpayer for in-

come tax filing covering and starting with

calendar year 2011, due for filing on or

before 15 April 2012, and renaming of BIR

Form No. 1702 as a November 2011 ver-

sion.

Individual tax filers using Forms No. 1700

and 1701 are advised that for Income Tax

filing covering and starting with calendar

year 2012, the disclosures required under

the Supplemental Information portion of

the said forms will be mandatory. Thus,

taxpayers are advised to demand from their

payors and properly document their BIR

Form No. 2307 and other pieces of evi-

dence for final taxes withheld. Likewise,

said taxpayers should properly receipt and

book their tax-exempt income.


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LINA CALILAP-ASMERON,vs.

DEVELOPMENT BANK OF THEPHILIPPINES, PABLO CRUZ, TRINI-DAD CABANTOG, ENI S.P. ATIENZA

and EMERENCIANA CABANTOGG.R. No. 157330 23 November 2011

FACTS: Lina CalilapAsmeron (Asmeron)

and her brother Celedonio Calilap (Calilap)

constituted a real estate mortgage over two

parcels of land to secure the performance of

their loan obligation with Development

Bank of the Philippines (DBP). With the

principal obligation being ultimately un-

paid, DBP foreclosed the mortgage. The

mortgaged parcels of land were then sold to

DBP as the highest bidder. The one-year

redemption period expired on September 1,

1981.

In August 1982, Asmeron negotiated with

DBP to buy back one of the property by

offering P15,000.00 as downpayment. Her

offer was rejected by an executive officer

of DBPs Acquired Assets Department,

who required her to pay the full purchase

price of P55,500.00 for the property within

ten days.She returned to DBP with the

amount, only to be told that DBP would not

sell back only one lot. Being made to be-

lieve that one of the lots would be released

after paying two amortizations for the oth-

er, Asmeron signed the deed of conditional

sale covering both lots for the total consid-

eration ofP157,000.00. When she later on

requested the release of one of the proper-

ties after paying two quarterly amortiza-

tions, DBP did not approve the release. She

continued paying the amortizations until

she had paid P40,000.00 in all, at which

point she sought again the release of the

other property. DBP still denied her re-

quest, warning that it would rescind the

contract should her remaining amortiza-

tions be still not paid. On August 1985,

DBP rescinded the deed of conditional sale

over her objections.

On November 25, 1987, DBP sold one of

the the lots to Pablo Cruz (Cruz)viaa deed

of absolute sale.Asmeron consequently

filed a complaint for the rescission of the

sale to Cruz.Notwithstanding their

knowledge of her pending suit against

Cruz, Emerenciana Cabantog (Cabantog)

and Eni S.P. Atienza (Atienza) still bought

the property from Cruz.

The Regional Trial Court (RTC) rendered

its decision dismissing the case. The Court

of Appeals (CA) affirmed the same.

ISSUE: Whether or not DBP validly exer-

cised its right to rescind the deed of condi-

tional sale upon the petitioners default

RULING: DBP validly exercised its right

to rescind the deed of conditional sale upon

Asmerons default.

The issue of whether or not DBP validly

exercised the right to rescind is a factual

one that the RTC and the CA already

passed upon and determined. The Court,

which is not a trier of facts, adopts their

findings, and sustains the exercise by DBP

of its right to rescind following the peti-

tioners failure to pay her six monthly

amortizations, and after her being given

due notice of the notarial rescission. As a

consequence of the valid rescission, DBP

had the legal right to thereafter sell the

property to a person other than Asmeron,

like Cruz. In turn, Cruz could validly sell

the property to Cabantog and Trinidad,

which he did.

Article 1191 of theCivil Codedid not pro-

hibit the parties from entering into an

agreement whereby a violation of the terms

of the contract would result to its cancella-

JURISPRUDENCE


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tion. InPangilinan v. Court of Appeals, the

Court upheld the vendors right in a contract

to sell to extrajudicially cancel the contract

upon failure of the vendee to pay the install-

ments and even to retain the sums already

paid, holding:

[Article 1191 of the Civil Code]

makes it available to the injured party

alternative remedies such as the power

to rescind or enforce fulfillment of the

contract, with damages in either case if

the obligor does not comply with whatis incumbent upon him. There isnothing in this law which prohibitsthe parties from entering into anagreement that a violation of theterms of the contract would cause itscancellation even without court in-tervention. The rationale for theforegoing is that in contracts provid-ing for automatic revocation, judi-cial intervention is necessary not forpurposes of obtaining a judicialdeclaration rescinding a contractalready deemed rescinded by virtueof an agreement providing for re-

scission even without judicial inter-vention, but in order to determinewhether or not the rescission wasproper. Where such propriety issustained, the decision of the courtwill be merely declaratory of therevocation, but it is not itself therevocatory act. Moreover, the ven-dors right in contracts to sell withreserved title to extrajudicially can-cel the sale upon failure of the ven-dee to pay the stipulated install-ments and retain the sums and in-stallments already received has longbeen recognized by the well-

established doctrine of 39 yearsstanding. The validity of the stipula-tion in the contract providing forautomatic rescission upon non-payment cannot be doubted.It is inthe nature of an agreement grantinga party the right to rescind a con-tract unilaterally in case ofbreachwithout need of going tocourt. Thus, rescission under Arti-cle 1191 was inevitable due to peti-tioners failure to pay the stipulated

price within the original periodfixed in the agreement.

NIA JEWELRY MANUFACTURINGOF METAL ARTS, INC. (otherwise

known as NIA MANUFACTURINGAND METAL ARTS, INC.) and

ELISEA B. ABELLA

vs.MADELINE C. MONTECILLO and

LIZA M. TRINIDADG.R. No. 188169 28November 2011

FACTS: Madeline Montecillo (Madeline)

and Liza Trinidad (Liza), were first em-

ployed as goldsmiths by NiaJewelryManufacturing of Metal Arts, Inc. (Nia

Jewelry) in 1996 and 1994, respectively.

Madeline's weekly rate wasP1,500.00

while Liza's wasP2,500.00. Elisea Abella

(Elisea) is Nia Jewelry's president and

general manager.

There were incidents of theft involving

goldsmiths in Nia Jewelry's employ. Con-

sequently, Nia Jewelry imposed a policy

for goldsmiths requiring them to post cash

bonds or deposits in varying amounts but in

no case exceeding 15% of the latter's sala-

ries per week. The deposits were intended

to answer for any loss or damage which

Nia Jewelry may sustain by reason of the

goldsmiths' fault or negligence in handling

the gold entrusted to them. The deposits

shall be returned upon completion of the

goldsmiths' work and after an accounting of

the gold received.

Nia Jewelry alleged that the goldsmiths

were given the option not to post deposits,

but to sign authorizations allowing the

former to deduct from the latter's salaries

amounts not exceeding 15% of their take

home pay should it be found that they lost

the gold entrusted to them. Madeline and

Liza claims otherwise and claimed that

they were constructively dismissed by

Nia Jewelry as their continued employ-

ments were made dependent on their read-

iness to post the required deposits.

Thus, Madeline and Liza filed against

Nia Jewelry complaintsfor illegal dis-

missal and for the award of separation

pay.

The Labor Arbiter (LA) dismissed Made-

line and Lizas complaints for lack of

merit which was affirmed on appeal by

the National Labor Relations Commission

(NLRC)

Madeline and Liza filed a Petition

forCertioraribefore the Court of Ap-

peals which reversed the findings of the

LA and NLRC.

ISSUE: Whether or not Madeline and

Liza were constructively dismissed.

RULING: Madeline and Liza were not

constructively dismissed.


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D E C E M B E R 2 0 1 1V o l u m e I I I I s s u e N o . 1 0

Constructive dismissal occurs when there is

cessation of work because continued em-

ployment is rendered impossible, unreason-

able or unlikely; when there is a demotion

in rank ordiminution in pay or both; or

when a clear discrimination, insensibility,

or disdain by an employer becomes

unbearable to the employee.

In the case at bar, Nia Jewelry did not

whimsically or arbitrarily impose the poli-

cy to post cash bonds or make deductions

from the workers' salaries. As attested to by

Madeline and Lizas fellow goldsmiths in

their Joint Affidavit, the workers were

convened and informed of the reason be-

hind the implementation of the new policy.

Instead of airing their concerns, Madeline

and Liza just promptly stopped reporting

for work.

Further, the imposition of the new policy

cannot be viewed as an act tantamount to

discrimination, insensibility or disdain

against Madeline and Liza. For one, the

policy was intended to be implemented

upon all the goldsmiths in Nia Jewelry's

employ and not solely upon Madeline and

Liza. Besides, as stressed by Nia Jewelry,

the new policy was intended to merely curb

the incidences of gold theft in the work

place. The new policy can hardly be said to

be disdainful or insensible to the workers

as to render their continued employment

unreasonable, unlikely or impossible.

VICTOR R. REYES,substituted by his heirs, CLARIBEL G.

REYES,CLARISSA G. REYES,

and CZARINA G. REYES

vs.

COURT OF APPEALS, CIVIL SER-VICE COMMISSION,

HON. JOSE L. ATIENZA, JR.,

in his capacity as City Mayor ofManila,SENEN D. TOMADA,

and HERNANDO B. GARCIAG.R. No. 167002 12 December 2011

FACTS: Forty-six (46) days before the11

May 1998elections, then Mayor Alfredo

Lim (Lim) of the City

ofManilaappointed Senen Tomada

(Tomada) as City Government Assistant

Department Head III (Assistant City Asses-

sor, or subject position).

On the same

date, Tomadas appointment, which was

indicated as Transfer with Promotion,

was submitted to the Civil Service Com-

mission Field Office (or CSCFO)

inManilafor consideration and approval.

Pending action on Tomadas appointment,

however, Mayor Jose L. Atienza, Jr. (or

Mayor Atienza) assumed Lims position

and appointed Hernando Garcia (or

Garcia) to the subject position.

Tomadas appointment was later on can-

celled pending approval from the CSC of

the said appointment.

The CSC later issued a resolution approv-

ing the promotional appointment of Toma-

da.

Mayor Atienza filed a petition for reconsid-

eration which was, however, dismissed by

the CSC.

Garcia filed the instant petition for certiora-

ri and quo warranto, with an application for

temporary restraining order and/or prelimi-

nary injunction, ascribing grave abuse of

discretion on the CSC for recalling his

appointment.

The Court of Appeals (CA) rendered the

assailed decisiongranting the petition of

Garcia and upholding his appointment over

the claims of Tomada to the position.

ISSUE: Whether or not the CA was cor-

rect in upholding the validity of the ap-

pointment of Garcia.

RULING: The CA committed no reversi-

ble error in granting the petition of Garcia

and upholding the appointment of Garcia as

Assistant City Assessor of the City

ofManila.

As Tomadas appointment or transfer ap-

peared to have been made during a prohibi-

tive period, it was questioned on the ground

that it was violative of Section 261(g) of

the Omnibus Election Code. Said section


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prohibits any transfer or detail whatever of

any officer or employee in the civil service

including public school teachers, within the

election period except upon prior approval

of the Commission. In this regard, the

CSC, through Office Memorandum (OM)

No. 11, Series of 1998, issued the follow-

ing guideline:

The transfer or detail of officers and

employees in the civil service, in-

cluding public school teachers pursu-

ant to Section 261(h) of the Omnibus

Election Code for the period begin-

ningJanuary 11, 1998(Sunday)

toJune 10, 1998(Wednesday), or

120 days before election and 30 days

after election, is hereby prohibit-

ed.The phrase transfer or detail

shall be construed in general terms.

Thus any movement of officer oremployee in the civil service, in-

cluding public school teachers,

from one agency is prohibited and

is considered an election of-

fense.[Emphasis supplied]

Another reason why the CA granted Garci-

as petition was Tomadas lack of standing

to appeal the disapproval of her appoint-

ment to the CSC. It cited the case

ofMathay, Jr. v. Civil Service Commission

where it was ruled that only the appointing

officer may ask for reconsideration of ac-

tions taken by the CSC on appointments.

Thus, the CA stated that CSC should have

refrained from acting on Tomadas request

for reconsideration, the same not having

been endorsed by Mayor Atienza, the in-

cumbent mayor of Manila and the appoint-

ing authority at the time of the disapproval

of her appointment.

Moreover, asGarcia qualified, assumed

office and became at that moment a gov-

ernment employee or part of the civil ser-

vice, he then began to enjoy the constitu-

tional protection that No officer or em-

ployee in the civil service shall be removed

or suspended except for cause provided by

law. He acquired a legal right to the of-

fice which is protected not only by statute

but also by the Constitution. Therefore, he

could only be removed for cause, after

notice and hearing, consistent with the

requirements of due process.

PHILIPPINE AMUSEMENT AND

GAMING CORPORATION

vs.

COURT OF APPEALS and MIA

MANAHAN

G.R. No. 185668 13 December 2011

FACTS: Mia Manahan (Manahan) was a

Treasury Officer of Philippine Amusement

and Gaming Corporation (PAGCOR) as-

signed in Casino Filipino-Manila Pavilion

(CF-Pavilion). Among her functions as

Treasury Officer was the handling of fund

transfer requests received by CF-Pavilion

and the supervision of the office's Vault-in-

Charge and Senior Cashier.

In April 2004, Manahan received from the

fax machine of CF-Pavilion's SVIP-

Treasury a document that appeared to be a

Request for Fund Transfer coming from

Casino Filipino-Laoag (CF-Laoag). The

request was for P4,200,000.00 to be re-

leased by CF-Pavilion to Arnulfo Fuenta-

bella or David Fuentabella (Fuentabella).

About 30 minutes from Manahan's receipt

of the fax document, a person who repre-

sented himself to be David Fuentabella

claimed from CF-Pavilion the amount

ofP4,200,000.00. Said David Fuentabel-

la showed valid identification cards to

prove his identity, duly accepted by Mana-

han, who as the Treasury Officer then on

duty, also approved the release of the mon-

ey and chips to Fuentabella.P2,000,000.00

was released in cash, andP2,200,000.00

was released in the form of chips.

The following day, the Treasury Officer of

CF-Pavilion then on duty, Jennifer Bagtas

(Bagtas), informed CF-Laoag through

phone that the fund transfer

forP4,200,000.00 had already been paid by

CF-Pavilion to Mr. Fuentabella. However,

CF-Laoag denied that such fund transfer

had been made by CF-Laoag to CF-


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Pavilion. Manahan was informed that no

fund transfer forP4,200,000.00 in favor of

Fuentabella was made.

Manahan was preventively suspended

pending the investigation of the case for

Serious Procedural Deviation/Gross Negli-

gence.

Manahan was consequently dismissed from

service. She filed a Motion for Reconsider-

ation of the PAGCOR Board of Directors

(BOD) decision but the same was denied

for lack of merit.

Feeling aggrieved, Manahan appealed from

the PAGCOR's rulings to the Civil Service

Commission (CSC) which granted her

appeal after a finding of violation of Mana-

han's right to due process.

PAGCOR's Motion for Reconsidera-

tionwas denied by the CSC prompting

PAGCOR to file with the Court of Appeals

a Petition for Reviewwhich later on af-

firmedin totothe Resolutions of the CSC.

ISSUE: Whether or not the requirements

of due process for a valid dismissal from

government service has been complied

with.

RULING: The requirements of due pro-

cess for a valid dismissal from government

service have not been complied with.

A reference should be made to CSC Reso-

lution No. 99-1936, being the law applica-

ble to formal charges in the civil service

prior to the imposition of administrative

sanctions. The requirements under Section

16 thereof are clear, as it provides:

Section 16.Formal Charge. After a

finding of aprima facie

case, the

disciplining authority shall formally

charge the person complained of. The

formal charge shall contain a specifi-

cation of charge(s), a brief statement

of material or relevant facts, accom-

panied by certified true copies of the

documentary evidence, if any, sworn

statements covering the testimony of

witnesses, a directive to answer the

charge(s) in writing under oath in not

less than seventy-two (72) hours from

receipt thereof, an advice for the

respondent to indicate in his answer

whether or not he elects a formal

investigation of the charge(s) and a

notice that he is entitled to be assisted

by a counsel of his choice.

If the respondent has submitted his

comment and counter-affidavits dur-

ing the preliminary investigation, he

shall be given the opportunity to

submit additional evidence.

The disciplining authority shall not

entertain requests for clarification,

bills of particulars or motions to dis-

miss which are obviously designed to

delay the administrative proceedings.

If any of these pleadings are inter-

posed by the respondent, the same

shall be considered as an answer and

shall be evaluated as such.

Evidently, the PAGCOR failed to substan-

tially comply with the requisite formal

charge, as well as with the other require-

ments under CSC Resolution No. 99-1936

concerning the procedure for the conduct of

an administrative investigation. What

PAGCOR claims to be the formal charge it

issued in compliance with the CSC rules

was the memorandum addressed to Mana-

han under the subject Preventive Suspen-

sion, which was issued by CF-Pavilion's

Senior Branch Manager only.

There is no reason to deviate from the CA's

finding that a Senior Branch Manager is

not among the company's disciplining au-

thority, he or she being merely charged

with the duty, among others, to recom-

mend disciplinary sanctions for violations

of house rules and company policies and

procedures.

Manahans was not allowed to be assisted

by counsel during the scheduled meeting

with the CIU when the latter was to ask her

questions and take her statement. This

stance of PAGCOR was in clear disregard

of the Manahan's rights protected under the

cited Section 16 of CSC Resolution No. 99 -

1936. While due process in an agency in-


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vestigation may be limited as compared to

due process in criminal proceedings, where

however a statute specifically provides for

a procedure and grants particular rights to a

party under investigation such as in the

investigations of persons covered by the

Civil Service Rules, these rights shall not

be utterly disregarded, especially so when

invoked by the party under investigation, as

was Manahan, because these rights already

form part of a procedural due process.

GOODLAND COMPANY, INC.vs.

ABRAHAM CO andCHRISTINECHAN

G.R. No. 196685 14 December 2011

FACTS: Goodland Company, Inc.

(Goodland), a corporation duly organized

and existing in accordance with Philippine

laws, is the registered owner of a parcel of

land located at PasongTamo, Makati City

(Makati property).

Goodland andSmartnetPhilippines, Inc.

(Smartnet), likewise a duly organized and

registered corporation, are part of the Guy

Group of Companies, owned and controlled

by the family of Mr. Gilbert Guy (Mr.

Guy).

Sometime in 2000, Goodland allowed the

use of its Makati property, by way of ac-

commodation, as security to the loan facili-

ty ofSmartnetwith Asia United Bank

(AUB). Mr. Guy, Goodlands Vice Presi-

dent, was allegedly made to sign a Real

Estate Mortgage (REM) document in

blank. Upon signing the REM, Mr. Guy

delivered the same to AUB together with

the original owners copy of the TCT cov-

ering theMakati property.

About two (2) years thereafter, Goodland

found out that the REM signed in blank by

Mr. Guy has been allegedly completed and

annotated at the back of the title of the

Makati property by Abraham Co (Co) and

Christine Chan (Chan), the President and

Vice President of AUG respectively.

During trial, the Metropolitan Trial Court

(MeTC) granted the Demurrer to Evidence

of Co and Chan stating that Goodland was

unable to present competent evidence that

the Real Estate Mortgage was indeed falsi-

fied.

Goodland filed a Motion for Reconsidera-

tion but the same was denied.

Goodland filed a petition under Rule 65 of

the Rules of Civil Procedure before the

Regional Trial Court (RTC). However, the

same was denied.

The Court of Appeals (CA) later affirmed

the RTCs resolution declaring that theappeal is bereft of merit.

ISSUE: Whether or not there is a grave

abuse of discretion on the part of the CA

which would warrant the reversal of its

decision

RULING: There is no grave abuse of dis-

cretion on the part of the CA which would

warrant the reversal of its decision.

It is settled that a judgment of acquittal

cannot be recalled or withdrawn by another

order reconsidering the dismissal of the

case,nor can it be modified except to elimi-

nate something which is civil or adminis-

trative in nature. One exception to the rule

is when the prosecution is denied due pro-

cess of law. Another exception is when the

trial court commits grave abuse of discre-

tion in dismissing a criminal case by grant-

ing theaccusedsdemurrer to evidence. If

there is grave abuse of discretion, granting

Goodlands prayer is not tantamount to

putting Co and Chan in double jeopardy.

In a long line of cases of the Supreme

Court (SC), grave abuse of discretion is

defined as:

An act of a court or tribunal may only

be considered as committed in grave

abuse of discretion when the same

was performed in a capricious or

whimsical exercise of judgment

which is equivalent to lack of juris-

diction. The abuse of discretion must

besopatent and gross as to amount

to an evasion of positive duty or to a

virtual refusal to perform a duty en-

joined by law, or to act at all in con-

templation of law, as where the pow-

er is exercised in an arbitrary and

despotic manner by reason of passion

and personal hostility.

The CA made its decision after its careful

examination of the records of the case. The

CA found that Guy signed the subject Real

Estate Mortgage and was authorized by the

Board of Directors to do so, and none of

Goodlands witnesses have personal


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knowledge of the circumstances of the

discussions between Guy and Asia United

Bank. Goodland, however, failed to prove

that (1) the subject Real Estate Mortgage

was in blank at the time it was submitted to

Asia United Bank; (2) Co and Chan filled-

in the blanks in the Real Estate Mortgage;

and (3) Guy did not appear before the nota-

ry public. It was with reason, therefore, that

the CA declared that the evidence for

Goodland failed miserably in meeting the

quantum of proof required in criminal cases

to overturn the constitutional presumption

of innocence. Grave abuse of discretion

may not be attributed to a court simply

because of its allegedmisappreciationof

evidence.


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WHAT IS THE DIFFERENCE BETWEEN A GOOD

LAWYER AND A GREAT LAWYER?

A good lawyer knows the law.

A great lawyer knows the judge.

JLs CornerVolume III Issue No. 10

December 2011

L A G U N D I C A R O N A N A N D A S S O C I A T E S

GOODLAWYERvs.GREATLAW

YER

LCA LINES | Volume III, Issue No. 10

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Transcript of LCA LINES | Volume III, Issue No. 10