Velarde v SJS (2004)

Doctrine: Decision, more specifically a decision not conforming to the form and substance required by the Constitution is void and deemed legally inexistent (Panganiban) 

Mike Velarde, Petitioner vs. SOCIAL JUSTICE SOCIETY, respondent.

Date promulgated: April 28, 2004

Ponente: J. Panganiban

Facts:

-On January 28, 2003, SJS filed a Petition for Declaratory Relief before the RTC-Manila against Velarde and his co-respondents Eminence, Jaime Cardinal Sin, Executive Minister Eraño Manalo, Brother Eddie Villanueva and Brother Eliseo F. Soriano.

-SJS, a registered political party, sought the interpretation of several constitutional provisions, specifically on the separation of church and state; and a declaratory judgment on the constitutionality of the acts of religious leaders endorsing a candidate for an elective office, or urging or requiring the members of their flock to vote for a specified candidate.

-The petitioner filed a Motion to dismiss before the trial court owing to the fact that alleged that the questioned SJS Petition did not state a cause of action and that there was no justiciable controversy.

-The trial court’s junked the Velarde petitions under certain reasons:

1. It said that it had jurisdiction over the SJS petition, because in praying for a determination as to whether the actions imputed to the respondents were violative of Article II, Section 6 of the Fundamental Law, the petition has raised only a question of law.

2. It then proceeded to a lengthy discussion of the issue raised in the Petition – the separation of church and state – even tracing, to some extent, the historical background of the principle. Through its discourse, the court quipped at some point that the "endorsement of specific candidates in an election to any public office is a clear violation of the separation clause."

-The trial court’s essay did not contain a statement of facts and a dispositive portion, however. Due to this aberration, Velarde and Soriano filed separate Motions for Reconsideration before the trial court owing to these facts.

-The lower court denied these Motions. Hence, this petition for review.

On April 13, 2004, the Court en banc conducted an Oral Argument.14

-In his Petition, Brother Mike Velarde submits the following issues for this Court’s resolution:

1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo was proper and valid;

2. Whether or not there exists justiciable controversy in herein respondent’s Petition for declaratory relief;

3. Whether or not herein respondent has legal interest in filing the Petition for declaratory relief;

4. Whether or not the constitutional question sought to be resolved by herein respondent is ripe for judicial determination;

5. Whether or not there is adequate remedy other than the declaratory relief; and,

6. Whether or not the court a quo has jurisdiction over the Petition for declaratory relief of herein respondent.

Issues:

In its oral argument, the Supreme Court condensed Velarde’s issues and divided it into 2 groups:

A. Procedural Issues

1. Did the Petition for Declaratory Relief raise a justiciable controversy?

2. Did it state a cause of action?

3.Did respondent have any legal standing to file the Petition for Declaratory Relief?

B. Substantive Issues

1. Did the RTC Decision conform to the form and substance required by the Constitution, the law and the Rules of Court?

2.                    May religious leaders like herein petitioner, Bro. Mike Velarde, be prohibited from endorsing candidates for public office? Corollarily, may they be banned from campaigning against said candidates? (Not answered in the affirmative)

Decision:

Petition for Review GRANTED. The assailed June 12, 2003 Decision and July 29, 2003 Order of the Regional Trial Court of Manila DECLARED NULL AND VOID and thus SET ASIDE. The SJS Petition for Declaratory Relief is DISMISSED for failure to state a cause of action.

Holding:

Procedural Issues:

1.                    NO. A justiciable controversy to an existing case or controversy that is appropriate or ripe for judicial determination, not one that is conjectural or merely anticipatory. A petition filed with the trial court should contain a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim.

The SJS Petition fell short of the requirements to constitutue a jusiciable controversy. Why?

a. It stated no ultimate facts. The petition simply theorized that the people elected who were endorsed by these religious leaders might become beholden to the latter.

b.                    It did not sufficiently state a declaration of  its rights and duties, what specific legal right of the petitioner was violated by the respondents therein, and what particular act or acts of the latter were in breach of its rights, the law or the constitution,

c.                    The petition did not pray for a stoppage of violated rights (duh, wala ngang rights na sinabi eh). It merely sought an opinion of the trial court. However, courts are proscribed from rendering an advisory opinion. (tantamount to making laws, remember the questionability of justice panganiban’s guidelines for article 36 of the family code)

It must also be considered that even the religious leaders were puzzled as to the breach of rights they were claimed to have committed. As pointed out by Soriano, what exactly has he done that merited the attention of SJS? Jaime Cardinal Sin adds that the election season had not even started at the time SJS filed its Petition and that he has not been actively involved in partisan politics. The Petition does not even allege any indication or manifest intent on the part of any of the respondents below to champion an electoral candidate, or to urge their so-called flock to vote for, a particular candidate. It is a time-honored rule that sheer speculation does not give rise to an actionable right.

2.                    NO. A cause of action is an act or an omission of one party in violation of the legal right or rights of another, causing injury to the latter. (Rebollido v. Court of Appeals, 170 SCRA 800)

Its essential elements are the following: (1) a right in favor of the plaintiff; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) such defendant’s act or omission that is violative of the right of the plaintiff or constituting a breach of the obligation of the former to the latter.

The court held that the complaint’s failure to state a cause of action became a ground for its outright dismissal. Why?

The Court found nothing in the SJS Petition to suggest that an explicit allegation of fact that SJS had a legal right to protect. (trigger for the cause of action)

In special civil actions for declaratory relief, the concept of cause of action under ordinary civil actions does not strictly apply. The reason for this exception is that an action for declaratory relief presupposes that there has been no actual breach of the instruments involved or of rights arising thereunder. Nevertheless, a breach or violation should be impending, imminent or at least threatened.

The justices could only infer that the interest from its allegation was its mention of “its (SJS) thousands of members who are citizens-taxpayers-registered voters and who are keenly interested”. Aside from the fact that this general averment did not constitute a legal right or interest, the court’s inferred interest too vague and speculative in character. Rules require that the interest must be material to the issue and affected by the questioned act or instrument.

To bolster its point, the SJS cited the Corpus Juris Secundum and submitted that the plaintiff in a declaratory judgment action does not seek to enforce a claim against the defendant, but sought a judicial declaration of the rights of the parties for the purpose of guiding their future conduct, and the essential distinction between a ‘declaratory judgment action’ and the usual ‘action’ is that no actual wrong need have been committed or loss have occurred in order to sustain the declaratory judgment action, although there must be no uncertainty that the loss will occur or that the asserted rights will be invaded. (???)

During the Oral Argument, Velarde and co-respondents strongly asserted that they had not in any way engaged or intended to participate in partisan politics. Not even the alleged proximity of the elections to the time the Petition was filed below would have provided the certainty that it had a legal right that would be jeopardized or violated by any of those respondents.

Even if the SJS petition asserted a legal right, there was nevertheless no certainty that such right would be invaded by the said respondents.

3.                    NO. Legal standing or locus standi has been defined as a personal and substantial interest in the case, such that the party has sustained or will sustain direct injury as a result of the challenged act.

Interest means a material interest in issue that is affected by the questioned act or instrument, as distinguished from a mere incidental interest in the question involved.

SJS has no legal interest in the controversy and has failed to establish how the resolution of the proffered question would benefit or injure it.

Parties bringing suits challenging the constitutionality of a law, an act or a statute must demonstrate that they have been, or are about to be, denied some right or privilege to which they are lawfully entitled, or that they are about to be subjected to some burdens or penalties by reason of the statute or act complained of.

If the petition were to be valid, it should satisfy:

First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing the illegal expenditure of money raised by taxation, particularly that of Congress' taxing power.

Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its members as registered voters would be adversely affected by the alleged acts of the respondents below, such as the deprivation of votes or barring of suffrage to its constituents.

Finally, the allegedly keen interest of its "thousands of members who are citizens-taxpayers-registered voters" is too general and beyond the contemplation of the standards set by our jurisprudence. Not only is the presumed interest impersonal in character; it is likewise too vague, highly speculative and uncertain to satisfy the requirement of standing.

In not a few cases, the Court has liberalized the locus standi requirement when a petition raises an issue of transcendental significance or importance to the people (IBP v Zamora). The Court deemed the constitutional issue raised to be both transcendental in importance and novel in nature. Nevertheless, the barren allegations in the SJS Petition as well as the abbreviated proceedings in the court would prevent the resolution of the transcendental issue.

Substantive Issues

1.                    NO. The Constitution commands that no decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.  No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the basis therefor.

Consistent with this are Section 1 of Rule 36 of the Rules on Civil Procedure, Rule 120 of the Rules of Court on Criminal Procedure, Administrative Circular No. 1. which states that :

“A judgment or final order determining the merits of the case shall be rendered. The decision shall be in writing, personally and directly prepared by the judge, stating clearly and distinctly the facts and law on which it is based, signed by the issuing magistrate, and filed with the clerk of court.”

The SC has reminded magistrates to heed the demand of Section `4, Art VIII of the contsitution. This was evinced in Yao v. Court of Appeals  where Davide, CJ said that faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a paramount component of due process and fair play.

In People v. Bugarin, the court held that the requirement that the decisions of courts must be in writing and that they must set forth clearly and distinctly the facts and the law on which they are based is intended, among other things, to inform the parties of the reason or reasons for the decision so that if any of them appeals, he can point out to the appellate court the finding of facts or the rulings on points of law with which he disagrees.

The assailed Decision contains no statement of facts (much less an assessment or analysis thereof) or of the court’s findings as to the probable facts.  The assailed Decision begins with a statement of the nature of the action and the question or issue presented.  Then follows a brief explanation of the constitutional provisions involved, and what the Petition sought to achieve.  Thereafter, the ensuing procedural incidents before the trial court are tracked.  The Decision proceeds to a full-length opinion on the nature and the extent of the separation of church and state.  Without expressly stating the final conclusion she has reached or specifying the relief granted or denied, the trial judge ends her “Decision” with the clause “SO ORDERED.”

 A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is precisely prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.  More than that, the requirement is an assurance to the parties that, in reaching judgment, the judge did so through the processes of legal reasoning. 

It was truly obvious that the RTC’s Decision did not adhere to the Bugarin precedent because of its failure to express clearly and distinctly the facts on which it was based. The significance of factual findings lies in the value of the decision as a precedent (how will the ruling be applied in the future, if there is no point of factual comparison?).

Respondent SJS insisted that the dispositive portion can be found in the body (p. 10) of the assailed Decision.  Stating “Endorsement of specific candidates in an election to any public office is a clear violation of the separation clause.”

The Court held that the statement is merely an answer to a hypothetical legal question and just a part of the opinion of the trial court. It does not conclusively declare the rights (or obligations) of the parties to the Petition. Neither does it grant any -- much less, the proper -- relief under the circumstances, as required of a dispositive portion.

The standard for a dispositive was set in Manalang v. Tuason de Rickards where the resolution of the Court on a given issue as embodied in the dispositive part of the decision or order is the investitive or controlling factor that determines and settles the rights of the parties and the questions presented therein, notwithstanding the existence of statements or declaration in the body of said order that may be confusing.

In Magdalena Estate, Inc. v. Caluag: The rule is settled that where there is a conflict between the dispositive part and the opinion, the former must prevail over the latter on the theory that the dispositive portion is the final order while the opinion is merely a statement ordering nothing.

The statement quoted by SJS does not conclusively declare the rights (or obligations) of the parties to the Petition.  Neither does it grant proper relief under the circumstances, as required of a dispositive portion.

Failure to comply with the constitutional injunction is a grave abuse of discretion amounting to lack or excess of jurisdiction.  Decisions or orders issued in careless disregard of the constitutional mandate are a patent nullity and must be struck down as void.

2.                    It is not legally possible to take up, on the merits, the paramount question involving a constitutional principle. It is a time-honored rule that the constitutionality of a statute or act will be passed upon only if, and to the extent that, it is directly and necessarily involved in a justiciable controversy and is essential to the protection of the rights of the parties concerned. (So no answer)

Vda de Urbano v GSIS (2001)

Vda De Urbano v Gsis

2001

Facts

In 1971, petitioners mortgaged their 200 sqm property in Q.C. to Gsis to secure a housing loan. Since they were unable to pay the loan, GSIS foreclosed the mortgage in 1988. GSIS bid 154k on the property and emerged as the highest bidder.

In 1984, the petitioners tried to reclaim their property. They wrote to the GSIS Acquired Assets Department signifying their intent to reclaim. On October 16, GSIS told them to pay the redemption price of 154k in full before Nov 18, 1984.

The petitioners asked for more time to recover the property while the Acquired Assets Dpeartment subsequently told them to pay 174k in cash with an extension of 30 days to the November date. Failure to do so forfeited the reclamation of the property and sold in a public bidding.

The petitioners wrote again requesting for remortgage through repurchase of the property. The Gsis AAD declined.

The petitioners wrote to the Board for an approval to file a loan worth 240,000 with the GSIS real estate department to repurchase their foreclosed property. Despite attempts from Vice Governor Mathay to adjust to a more liberal arrangement for the petitioners, the the petitioners were unable to pay. GSIS then issued a TCT in its favor.

The respondent De La Cruz entered the picture and offered to purchase the property for 250,000 spot cash. Without knowledge of the rival offer, the petitioners then offered a 50,000 downpayment with the 124k balance to be paid in 5 years.  He also enclosed 10k in check as earnest money. The Board informed them that it had adopted reolution 881 that declined their offer to repurchase.

At the same time, GSIS negotiated with Dela Cruz for the purchase of the property. They accepted her offer of purchase. A new TCT was issued to her.

The petitioners, on the other hand, had their loan request rescinded because a certificate of award or sale was not issued in favor of the applicant. Moreover, the applicant, Urbano the petitioner, was 81 years old and no longer a member of the GSIS. It wasn’t given due consideration.

Having learned about the transaction with dela Cruz, the petitioners  requested the formal investigation with the GSIS regarding the sale. Not satisfied, they filed a case with the RTC of QC branch 102.

The petition was dismissed. The same view was upheld by the court of appeals.

Hence this petition.

Issues:

1. Do petitioners have a right to repurchase the subject property?

2. Does GSIS have a duty to dispose of the subject property through public bidding?

3. Was Gsis in bad faith in dealing with petitioners?

Ruling: Petition Dismissed

Ratio:

1. No

Charter of the GSIS was PD 1146 which stipulated the power of the GSIS to acquire, utilize, and dispose of real or personal properties in the Philippines or elsewhere. It was amended by PD 1981 which gave the GSIS the power to compromise or release any claim or settled liability to the system.

SC- The laws granted the GSIS Board the power to exercise discretion in determining the terms and condition of financial accommodations to its members with the dual purpose of making the GSIS more responsive  to the needs of GSIS members.  The laws also stipulated that the Board could exercise discretion on whether to accept or reject petitioner’s offer to repurchase the subject property taking into account the dual purpose enunciated in the whereas clause of PD 1981 which made the GSIS more responsive to the needs of its members.

With regard to the Board’s exercise of discretion, in Natino v IAC,  the Court also held that repurchase of foreclosed property after redemption period imposes no such obligation on the purchaser  (the board in this case) to re-sell the property since the property belongs to him (the board as well)

The board’s denial of petitioner’s request to purchase the subject property was not based on whim but on a factual assessment of the financial capacity of the petitioners to make good their repeated offers to purchase the subject property. Based on the circumstances, the petitioners were repeatedly unable to fulfill their obligations to pay. In the comments of the AAD manager, the observation was that the petitioners lacked the capacity to pay up.

The petitioners are not entitled to a request for repurchase as a matter of right. The Board exercised its discretion in accordance with law in denying their requests and the GSIS can’t be faulted for their failure to repurchase as it acted under the petitioner’s application under Operation Pabahay. The sale to respondent can’t be annulled on such invoked “right”.

2. No. The agreement with de la Cruz was valid.

Pets.- aver that Sec. 79 of PD 1445 and the COA Circular 86-264 mandated the GSIS to dispose of the assets through public bidding and only upon its failure, through a public sale.

GSIS contended that SEC 79 of PD 1445 did not apply because it covered unserviceable govt property and not acquired assets.

SC- Gsis was right. Why? The provision (SEC 79) applies only to unserviceable govt property or those no longer needed. The house was obviously not unserviceable. And it was still used by petitioners.

With regard to COA Circular 86-264 or the “General guidelines on the divestment or disposal of assets of government owned corporations” the law stipulated that it availed of an exception to the requirement of disposition through  public bidding and such exception applied to sales of merchandise held for sale in the regular course of business.  The Court read it in relation to Coa circular 89-296 which provided for  “Audit Guidelines on the Disposal of Property and other Assets of Government Agencies”, which also did not apply the public bidding disposal requirement to merchandise or inventory held for sale in the regular course of business nor to the disposal by gov’t financial institutions of foreclosed assets or collaterals acquired in the regular course of business and not transferred to the Govt under proclamation no 50.

The modes of disposal included Public auction and sale thru negotiation.

Doctrine: With regard to these 2 laws, the Court held  the question whether the subject property was covered by the said Circular or falls under its exception. It held that 89-296 was to be interpreted with 86-264 in adherence with stat con wherein statutes that relate to the same thing ought to be taken in consideration in construing any one of them, and it is an established rule of law that all acts in pari material are to be taken together as if they were one law.

Moreover, the court looked into the intent of both laws and held that these were used to generate more revenue for GOCC’S through the disposition of its non-preforming assets. (Look into PD 50 or the asset privatization trust in the case) According to the court, the policy intent on the disposition of acquired assets then governed the case at bar.

Was the property covered by the public bidding exceptions in these laws? The court said yes, which meant that their sale negotiation fell under the regular course of business, and thus did not offend the requirements of the said coa circulars.   

3. No.

GSIS denial of petitioners’ further requests for repurchase of subject property was based on a factual determination of the petitioners’ financial capacity and the GSIS charter, PD 1146. Also, GSIS sold the property to dela Cruz only after giving them one year to repurchase.

The petitioners, on the strength of the Valmonte case, can’t also impute bad faith on GSIS when it was secretly negotiating with Dela Cruz. In the Valmonte case, the court held that the constitutional right to information was limited to matters of public concern to transactions involving public interest.The sale of the property was not imbued by public interests as it was a purely private transaction. Pets. Can’t  demand to be informed of such public negotiation since they had no interest on the subject property since they failed to comply with the GSIS terms of repurchase and the denial to repurchase under the GSIS terms.

Tiangco v Uniwide (2009)

Tiangco v Uniwide (2009)

Petitioners Tiangco and Manego were employees of Uniwide Sales Warehouse Club as group merchandising manager and senior category head. Both filed separate complaints for illegal dismissal, payment of separation pay as well as award for moral and exemplary damages In the NLRC.

The respondents filed a motion for suspension on the petitions due to the ground that Uniwide had been placed in a suspension of payments by the SEC as early as April 11, 2000and a receivership committee had been appointed. The labor arbiter suspended the proceedings until further orders from the SEC.

In 2004, the petitioners filed a motion to reopen the case on the ground that the sec had already approved the second amendment to the rehabilitation plan of Uniwide. Uniwide opposed the motion.

On June 16, 2004, the Labor Arbiter ordered both parties to file their memoranda with the comment that without the memoranda, the cases would be ordered submitted for decision after the lapse of the period for filing.

The respondents filed a petition for certiorari with a prayer for a TRO in the CA regarding the Labor Arbiter’s abuse of discretion. The CA reversed the decision of the Labor Arbiter and held that the cases be suspended until further orders.

Issue:

WON the consolidated illegal dismissal cases can be reopened at this point of the SEC proceedings for Uniwide’s rehabilitation.

Relevant law was PD 902 –A which stipulated in Section 6 thatupon appointment of a management committee, rehabilitation receiver, board or body pursuant to this Decree, all actions for claims against corporations under management or receivership pending before any court shall be suspended accordingly.

The claim here refers to debts or demands of a pecuniary nature or an assertion of rights for the payment of money. Petitioners have pecuniary claims such as separation pay and moral and exemplary damages.

In Rubberworld V nlrc, the SC held that a labor claim is a claim within the contemplation of PD 902 –A as defined in the Interim Rules as “including all claims or demands of whatever nature or character against a debtor or its property, whether for money or otherwise.”

Thus labor claims are included. In Rubberworld, the court said that the law stipulated that in the creation of a receivership committee, all claims for actions should be suspended accordingly and that no exception in favor of labor claims is mentioned in the law.

DOCTRINE: Where the law doesn’t distinguish, the courts do not. (Referring the aforementioned sentence)

Why so? Allowing labor cases to proceed clearly defeats the purpose of the automatic stay and encumbers the management committees’ time and resources. Labor cases would ultimately hinder the rescue of the debtor company.

 Decision:

Petition denied.

JMM v NLRC (1993)

JMM Promotions & Management, Inc., petitioner, vs. National Labor Relations Commission and Ulpiano L. De Los Santos, respondents.

Ponente: Cruz, J.

Facts:

1.       Following Secs. 4 and 17, Rule II, Book II of the POEA Rules, the petitioner, a recruiting agency, made the following:

a.       Paid the license fee (Sec. 4)

b.      Posted a cash bond of 100k and surety bond of 50k(Sec. 4)

c.       Placed money in escrow worth 200k (Sec. 17)

2.       The petitioner wanted to appeal a decision of the Philippine Overseas Employment Administration (POEA) to the respondent NLRC, but the latter dismissed the appeal because of failure of the petitioner to post an appeal bond required by Sec. 6, Rule V, Book VII of the POEA Rules.  The decision being appealed involved a monetary award.

3.       The petitioner contended that its payment of a license fee, posting of cash bond and surety bond, and placement of money in escrow are enough; posting an appeal bond is unnecessary.  According to Sec. 4, the bonds are posted to answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment.  On the other hand, according to Sec. 17, the escrow shall answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims.

4.       Sec. 6 reads:

“In case the decision of the Administration involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond…”

The bonds required here are different from the bonds required in Sec. 4.

Issue: Was the petitioner still required to post an appeal bond despite the fact that it has posted bonds of 150k and placed 200k in escrow before?

Held:

Yes.  It is possible for the monetary reward in favor of the employee to exceed the amount of 350,000 because of the stringent requirements posed upon recruiters. The reason for such is that overseas employees are subjected to greater risks and hence, the money will be used to insure more care on the part of the local recruiter in its choice of foreign principal to whom the worker will be sent.

Doctrine: Construction:

It is a principle of legal hermeneutics that in interpreting a statute (or a set of rules as in this case), care should be taken that every part thereof be given effect, on the theory that it was enacted as an integrated measure and not as a hodge-podge of conflicting provisions.  Ut res magis valeat quam pereat.  “That the thing may rather have effect than be destroyed.”

The rule is that a construction that would render a provision inoperative should be avoided; instead, apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole. With regard to the present case, the doctrine can be applied when the Court found that Sec. 6 complements Sec. 4 and Sec. 17.

In the POEA Rules, the bonds required in Sec. 4 Rule 2, Book 2 and the escrow required in Sec. 17 Rule 2, Book 2 have different purposes from the appeal bond required in Sec. 6, Rule 5 Book 7.

The bonds in Sec. 4 are made to answer for all claims against the employer, which is not limited to monetary awards to employees whose contracts of employment have been violated.

The escrow agreement in Sec. 17 is used only as a last resort in claiming against the employer.

On the other hand, Sec. 6 requires an appeal bond in an amount equivalent to the monetary award.  Indeed, this appeal bond is intended to further insure the payment of the monetary award.  Also, it is possible that the monetary award may exceed the bonds posted previously and the money placed in escrow.  If such a case happens, where will the excess be sourced?  To solve such a dilemma, an appeal bond equivalent to the amount of the monetary award is required by Sec. 6.

Dai Chi v Villarama (1994)

Dai-Chi v Villarama (RTC judge) and Limjuco

On July 29, 1993, the petitioner Daichi electronics filed a complaint for damages with RTC branch 156 for an employee’s (Limjuco) violation of their contract in 1990 which stipulated that the termination of service of an employee restricted him from working in a company which has a similar set of products or ventures for a span of 2 years following the termination of service.

The petitioner claimed that respondent became an employee of such a company called Angel Sound with the same position as head of material management control before the 2 years was up.

The petitioner sought to claim 100k in damages and prevent the former employee from working in the rival business within the 1 year timespan.

The respondent court under villarama claimed that it had no jurisdiction because the complaint was for damages from labor-employee relations and should be adjudicated under the Labor Arbiter under Art 217 s 4 of the LC.

The petitioner asked for reversal because the case was recognizable under the regular courts and that the cause of action didn’t arise from employee-employer relationships even if the claim was in the employee’s contract.

Issue: Is the petitioner’s claim for damages one arising from employee-employer relations?

Decision: No, petition granted

1. Art 217 s4 of the LC stipulated that Labor Arbiters have exclusive jurisdiction to hear and decide cases for workers with claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations.

The court held that the cuase of action was under Civil Law, not the labor code. Why?

 The petitioner sought to recover damages agreed upon in the contract as redress for respondent’s breach of his contractual obligation to its damage and prejudice. He also didn’t ask for relief under the Labor Code.

The applicable case law was Singapore airlines v Pano where the employer’s claim for damages was based on wanton failure and refusal without just cause to report to duty coupled with the averment that the employee maliciously and with bad faith violated the contract. The employee didn’t report for duty as a course of convention training- quasi-delict diba!

There must be a causal connection for claims provided in the RT217 S4 OF THE LC. Only when there is such a connection with other claims can damages be considered as arising from employer-employee relations.

2. In SMC v NLRC, the interpretation of Art 217 then was focused on in the phrase “all money claims of workers” in par 3.

There was no phrase “arising from employer-employee relations at that time” (art 217 amended by bp blg 227, not yet the present labor code)

DOCTRINE: The use of noscitur a sociis wherein the entire universe of family claims asserted by workers has been observed into the exclusive jurisdiction of labor arbiters.

Nos a soc was also used to limit par 3 (par 4 in the present labor code) of art 217 wherein it was read in relation to par 1 (unfair labor practices), par 2 (terms and conditions of employment), par 4 (household services) and par 5 (restrictions on activities of employees and employers)

There was a unifying element which referred to cases out of employer-employee relations.

Money claims that didn’t arise out of such relations was to be taken in by regular courts. The claims should have a causal connection with employer-employee relations

In Ocheda, the action based on tort or quasi-delict with no such causal connection was in the juris of the regular courts.

In pepsi-cola, the action by employees against the malicious filing of the employer of a criminal complaint against them was with the regular courts.

The rationale for the Dai-chi case was that the complaint for damages wasn’t anchored on term of employee’s service but the effects of such term.

Cases decided under the earlier version of Art 217 was also consistent in allocating civil disputes bet employers and employes to the realm of the regular courts. In Medina (1929), the civil complaint for damagaes against the employer for slanderous remarks against the employtess were tried in the civil courts. In Laron (1984), the court held that the Labor Arbiters have no jurisdiction if the labor code wasn’t involved.

Aisporna v CA (1982)

Aisporna v CA (1982)

Facts

Mapalad Aisporna, the wife of one Rodolfo Aisporna, an insurance agent, solicited the application of Eugenio Isidro in behalf of Perla Compana de Seguros without the certificate of authority to act from the insurance commissioner. Isidro passed away while his wife was issued  Php 5000 from the insurance policy. After the death, the fiscal instigated criminal action against Mapalad for violating sec 189 of the Insurance code for feloniously acting as agent when she solicited the application form.

In the trial court, she claimed that she helped Rodolfo as clerk and that she solicited a renewal, not a new policy from Isidro through the phone. She did this because her husband was absent when he called. She only left a note on top of her husband’s desk to inform him of what transpired. (She did not accept compensation from Isidro for her services)

Aisporna was sentenced to pay Php 500 with subsidiary costs in case of insolvency in 1971 in the Cabanatuan city court.

In the appellate court, she was found guilty of having violating par 1 of sec 189 of the insurance code.

 The OSG kept on repeating that she didn’t violate sec 189 of the insurance code.

In seeking reversal of the judgment, Aisporna assigned errors of the appellate court:

1. the receipt of compensation was not a necessary element of the crime in par 1 of sec 189 of the insurance code

2. CA erred in giving due weight to exhibits F, F1, F17 inclusive sufficient to establish petitioner’s guilt beyond reasonable doubt.

3. The CA erred in not acquitting the petitioner

Issues: Won a person can be convicted of having violated the 1^st par of the sec 189 of the IC without reference to the 2^nd paragraph of the said section. Or

Is it necessary to determine WON the agent mentioned in the 1^st paragraph of the aforesaid section is governed by the definition of an insurance agent found on its second paragraph

Decision: Aisporna acquitted

Ruling:

Sect 189 of the I.C., par 1 states that “No insurance company doing business with the Philippine Islands nor l any agent thereof shall pay any commission or other compensation to any person for services in obtaining new insurance unless such person shall have first procured from the Insurance Commissioner a certificate of authority to act as an agent of such company as herein after provided.

No person shall act as agent, sub-agent, or broker in the solicitation of procurement of applications for insurance without obtaining a certificate from the Insurance Commissioner.

Par2 Any person who for COMPENSATION solicits or obtains insurance for any for any insurance compna or offers or assumes to act in the negotiating of such insurance shall be an insurance agent in the intent of this section and shall thereby become liable to all liabilities to which an insurance agent is subject.

Par 3 500 pseo fine for person or company violating the provisions of the section.

The court held that the 1^st  par prohibited a person to act as agent without certificate of authority from the commissioner

In the 2^nd par, the definition of an insurance agent is stipulated

The third paragraph provided the penalty for violating the 1^st 2 rules

The appellate court said that the petitioner was penalized under the1st paragraph and not the 1nd. The fact that she didn’t receive compensation wasn’t an excuse for her acquittal because she was actually punished separately under sec 1 because she did not have a certificate of authority as under par 1.

The SC held that the definition of an insurance agent was made by CA to be limited to paragraph 2 and not applicable to the 1^st paragraph.

The appellate court said that a person was an insurance agent under par 2 if she solicits insurance for compensation, but in the 1^st paragraph, there was no necessity that a person solicits an insurance compensation in order to be called an agent.

The SC said that this was a reversible error.

The CA said that Aisporna didn’t receive compensation.

The SC said that  the definition of an insurance agent was found in the 2nd par of Sec 189 (check the law) The definition in the 2^nd paragraph qualified the definition of an agent used in the 1^st and third paragraphs.

DOCTRINE: The court held that legislative intent must be ascertained from the consideration of  the statute as a whole. The words shouldn’t be studied in isolated explanations but the whole and every part of the statute must be considered in fixing the meaning  of any of its parts in order to pronounce the harmonious whole.

Noscitur a sociis provides that where a particular word or phrase in a statement is ambiguous in itself, the true meaning may be made clear in the company it is fixed in. In applying this, the court held that the definition of an insurance agent in the 2^nd paragraph was applicable in the 1^st paragraph.

To receive compensation be the agent is an essential element for violation of the 1^st paragraph.

The appellate court said that she didn’t receive compensation by the receipt of compensation wasn’t an essential element for violation of the 1^st paragraph.

The SC said that this view wasn’t correct owing to the American insurance laws which qualified compensation as a qualifying factor in penalizing unauthorized persons who solicited insurance (Texas code and snyder’s law)   

Molina v Rafferty (1918)

Molina v Rafferty

April 4, 1918

Jacinto Molina- Plaintiff-Appellee

Rafferty, Collector of Internal Revenue- Defendant- Appellant

Appeal from a judgment of the CFI of Manila

J. Abreu

I.  Definition, Concept, and purpose of Statutory Construction

1. Judge Cooley- The underlying principle of all construction is that the intent of the legislature should be sought in the words employed to express it, and that when found, it should be made to govern…. If the words of the law seem to be doubtful import, it may then perhaps become necessary to look beyond them in order to ascertain what was in the legislative mind at the time the law was enacted; what evil, is any, was meant to be redressed;…

2. And where the law was contemporaneously been put upon it, this construction, especially if followed for some considerable period, is entitled to great respect, as being very probably a true expression of the legislative purpose, & is not lightly to be overruled, although it isn’t conclusive.

II. Facts:

1. The present case was a rehearing granted to the appellee for a trail court decision on Feb 1, 1918. The petition was granted and oral argument of the motion was permitted.

 2. Jacinto Molina was the owner of various fish ponds in Bulacan. He was required to pay the merchant’s tax required by the Bureau of Internal Revenue.

3. Molina protested that he was an agriculturist and not a merchant and therefore exempt from the taxes imposed by the Internal Revenue Law upon the gross sales of merchants.

4. Point of contention- Plaintiff contends that the fish produced by him are to be regarded as an “agricultural product” within the meaning of the term  used in paragraph (c) of Section 41 of Act No. 2339 (Now section 1460 of the Administrative Code of 1917), enforced when the disputed tax was levied and that he is exempt from the percentage tax on merchants’ sales established by section 40 of Act No. 2339.

5. Paragraph (c) of Act No. 2339 sec. 41 reads:

In computing the tax above imposed transactions in the following commodities shall be excluded:

 (c) Agricultural products when sold by the producer or owner of the land where grown, whether in their original state or not

6. In the Trial Court, the Honorable Jose Abreu in a carefully prepared decision ordered defendant to refund the P71.81 paid by plaintiff as internal-revenue taxes and penalties under protest, with legal interest thereon from November 26, 1915, the date of such payment under protest.

III. Issue:

1. WON fish produced as were those upon which the tax in question was levied are an agricultural product

IV Decision:

Decision set aside. Judgment of lower court affirmed.

IV. Ruling:

1. Purpose of legislative in establishing the exemption – exempting agricultural products from the tax the farming industry would be favored and the development of the resources of the country encouraged.

2. As a consequence, it is fairly to be inferred from the statute that the object and purpose of the Legislature was to levy the tax in question (merchant’s tax) upon all persons engaged in making a profit upon goods produced by others but to exempt from the tax all persons directly producing goods from the land. Products were grouped under “agricultural products”.

3. It is also the public interest to encourage the artificial propagation of food. However, if the artificial production of fish is held not to be included within the exemption of the statute this conclusion must be based upon the inadequacy of the language used by the Legislature to express its purpose, rather than the assumption that it was actually intended to exclude producers of artificially grown fish from the benefits conferred upon producers of other substances brought into the store of national wealth by the arts of husbandry and animal industry.

4. Court held that the ponds where the fish were grown is agricultural land within the definitions set by the Acts of Congress, the Philippine Commission, and the Mapa vs. Insular Gov’t case.

5. With regard to the question that that the fish artificially grown and fed in a confined area are agricultural products and therefore exempt, the Court looked deeper. It said that a man might cultivate the surface of a tract of land patented to him under the mining law, but the products of such soil would not for that reason be any the less "agricultural products." Conversely, the admission that the land upon which these fishponds are constructed is not to be classified as mineral or forest land, does not lead of necessity to the conclusion that everything produced upon them is for that reason alone to be deemed an "agricultural product" within the meaning of the statute under consideration.

3. Courts and lexicographers are in accord in holding that the term agricultural products is not limited in its meaning to vegetable growth but includes everything which serves to satisfy human needs which is grown upon the land, whether it pertains to the vegetable kingdom or to the animal kingdom.

4. Purpose of agriculture – obtain from the land the products to which it is best adapted and through it will yield the greatest return upon the expenditure of a given amount of labor and capital. This is similar to the process of enclosing an area for fish production and one of the diets of the products are marine plants rooted at the bottom of the pond.

5. Another distinction was made between fishermen and the people artificially growing fish in ponds so as to delineate the scope of the occupation tax. Fishermen were made liable to the occupation tax. The ones growing fish in ponds were not included.

5. As the present case related to US vs Laxa, the court held that  Laxa wasn’t  controlling due to evidence that the fish subsisted solely upon free floating algae in Laxa while in Molina, the fish subsisted through plants which grow from roots which attach themselves to the bottom of the pond, thereby making Molina’s fish in the real sense a product of the land!

Dissent:

J. Malcolm:

1.  illustrates how on the same facts, same law, and the same authorities, judges can arrive at diametrically opposed conclusions

2. Take the Facts where distinction of marine plants rooted to soil of ponds and floating algae make a small difference, or

3. Take the Laws the small difference in the meaning of “agricultural products” needs to be ascertained. Primary duty of the court is to ascertain legislative intention. The decision of the majority on reconsideration in a laudable endeavor would make this the purpose of the law and would follow this idea consistently to the end.

On the other hand, the original decision would start with the same presumption but finding that to so construe the law would result in judicial amendment must then necessarily reach a different result; if the Legislature had intended to exempt all classes of domestic products which would include fish, it would undoubtedly have done so in plain language.

4. When it came to the Authorities with regard to the limits of the term “agricultural products”, another court could very well instead of prolonging the examples ad infinitum merely judicially repeal the word agricultural and include everything which would fall under the word products.

Suffice it to say that the argument on motion for reconsideration and the decision of the majority have failed to convince me that fish — or to accede to the critical suggestion of the majority — that fish produced as were those upon which the tax in question was levied, are an agricultural product. The administrative ruling of the Attorney-General, the decision of this court in United States vs. Laxa and the original decision in the instant case should not be overturned by granting this motion.

Disposition: Judgment of the lower court affirmed

Definitions:

Agriculture – science and art of the production of plants and animal useful to man

Product – anything that is produced whether as the result of generation, growth , labor or thought. Grow – raise, cultivate

Agricultural products – included animals which derived their sustenance from vegetable growths and are therefore indirectly the product of the land