I.

Introductory

A. Law
1. What is “law”?
2. Effect and Applications of Law

● When Laws Take Effect

● Judicial Decisions
● Ignorance of the Law
● Silence of the Law

Vivencio Cerrano v. FACTS: Cerrano’s action for damages caused by breach of contract
Tan Chuco, 38 Phil. Tan Chuco owns casco No. 1033 (a long almost rectangular barge with sails used in PH).
392 (1918) Jan 1916: He rented it to Cerrano at a monthly rate of P70 with no express agreement as to contract duration,
payable at the end of each month. Contract was made in Manila.
August 1, 1918 May 1916: Tan told Cerrano that the casco would be sent to Malabon for repairs. C told T that he would rent it
Fisher, J. again after. T agreed but said payment must be P80. T contends he agreed but C says his offer was never
accepted. Contended on behalf of C & denied by T that according to the custom prevailing in Manila ports, a
OCULTO contract for rental of a casco must run from the date of the contract until the casco has to be docked for its
annual repair. C says that contract was to commence again as soon as the casco came off the dock & that its
term was to be 10 months (period which is ordinarily allowed from one docking to another). T says without an
express stipulation regarding the duration, it is deemed from month to month when a monthly rental is agreed
upon.
Jun 1916: casco was taken to Malabon & stayed there until Jul 24, 1916. A week before the end of the
repair, T sold the casco to Siy Cong Bieng & Co. J. Santos (employed by C as patron of the casco) refused to hand
over the casco & was induced by C not to turn over the casco / not to take orders from the new owners. As a
result, Siy Cong Bieng broung an action of replevin against Santos for the recovery of the casco. Sheriff
confiscated the casco but redelivered it to Santos after T & wife gave a delivery bond as sureties. After 3
months, the replevin suit was submitted to court for decision upon a written stipulation admitting Siy Cong
Bieng & Co. were the owners. C paid the judgment in the replevin suit for which he has become liable under the
terms of the delivery bond. C has to pay the attorney he hired for the nominal defendant Santos. C testified that
the average profit he should have earned when he should have been in possession of the casco during the 10-
month rental period is P60/month. Trial court ruled that T is liable to C for the breach of contract a sum of P600
for the loss of profits C would have derived from the use of the casco + P457.98 paid as damages to Siy Cong
Bieng & Co. + P500 C’s attorney who defended Santos.

ISSUE: 1. Whether or not it was agreed between Cerrano & Tan Chuco that the casco was to be leased again
after it was repaired - - - - lease again
2. What is the duration of the lease, if there was any - - - - monthly, but not required to renew
3. Is Cerrano entitled to recover as damages for the breach - - - - yes
HELD:
1. Evidence sustains Cerrano’s contention, that it was understood between the parties, when the casco
was taken to Malabon in June, C was to have it again at the increased rental as soon as the repairs were
completed. Such understanding was shown by the fact that Cerrano paid for the towage of the casco to
the dry dock in Malabon, that he left his equipment in it, and that his patron stayed with the casco in
Malabon during the dry dock. Its sale to Siy Cong Bien & Co. was a breach of the contract.

2. Under the terms of his contract, Tan Chuco was bound to deliver the casco to plaintiff for one month
from the date the repairs ended, but was under no obligation to renew the contract at the end of the
month. By selling the casco, he broke his contract & is responsible for the damage caused by his failure
to give Cerrano possession of the casco for the term of one month.
 Absent an express agreement for a definite period of the contract of hire, there being no rule of law, expressly
applicable to the hiring of personal property in general or of vessels in particular, and no local custom having
been satisfactorily proved, the court is required to apply the general principles of law.
Article 6, Civil Code. Under this authorization we may adopt and apply by analogy the general rules
established by the Code relating to the lease of real property.
Article 1581, Civil Code provides that when no definite agreement has been made regarding its
duration, the lease of a house is deemed to have been made from day to day, from month to month,
or from year to year, according to whether a daily, monthly, or yearly rent is to be paid. Article
established the reasonable presumption that one who agrees to pay a monthly rent intends that his
tenancy is to endure for a like period, subject to indefinite tacit renewals at the end of each month as
long as the arrangement is agreeable to both parties.
a. Cerrano’s contention about the custom of the port of Manila is having the rental duration as
ten months from July 24, 1916 when the repairs were completed is characterized by
uncertainty and unreasonable character. No evidence supports this contention.
b. There is no definite season of the year, of necessity, when casco are docked, nor is it possible
in the nature of things, that the length of the time which much transpire from one overhauling
to another can be fixed and invariable with respect to any particular vessel. It must depend on
the age and condition of the vessel. No definite standard by which to determine the precise
period it becomes necessary to dock a casco.

3. Cerrano is entitled to recover as damages for the breach of the contract, the profit which he would have
been able to make had the contract been performed.
a. Article 1106, Civil Code establishes the rule that prospective profits may be recovered as
damages.
b. Article 1107, Civil Code provides that the damages recoverable for the breach of obligations
not originating in fraud (dolo) are those which were or might have been foreseen at the time
the contract was entered into. | Unquestionable that Cerrano had foreseen losses.
c. When the existence of a loss is established, absolute certainty as to its amount is not required.
d. The burden of proof is on the defendant to show that the plaintiff might have reduced
damages. T made no effort to show C that similar cascos were available to him.
Trial court ERRED in holding Cerrano liable for damages for breach of contract. Proximate cause of the loss
incurred for the unlawful acts of Santos was not the breach of his contract by Tan Chuco. If Cerrano is unable to
recover from Santos paid by him upon his account, it is on Cerrano.
Judgment REVERSED. Cerrano is to recover from Tan Chuco P50 as damages, & costs in the CFI.
Philippine Bank of Facts:
Commerce v. De ● April 26, 1951 - a contract entitled: “'Consolidation of First Real Estate Mortgage and Deed of Assignment”
Vera, 6 SCRA 1026 was executed
(1962) ● This contract binds defendant Tomas de Vera in indebtedness to the plaintiff in the total amount of
P127,312.24, guarantee by a real estate mortgage of the defendant's land, particular described in TCT No.
LUNA 1631 of the Register of Deeds of Pasay City and in TCT No. 37641 of the Register of Deeds of the City of Rizal
(now Pasay City)
● This contract has the same terms and conditions embodies in the original deed of real estate mortgage,
both dated Feb. 28, 1947
● Both deeds were registered in the Registry of Deeds of Pasay
● The obligation the defendant matured on March 15, 1956
● As of January 31, 1958, after several demands, the defendant failed to pay the outstanding balance of his
obligation in the amount of P99,033.20
● March 14, 1956 - plaintiff filed a petition with the Sheriff of Pasay City to sell the properties subject to the
Real Estate Mortgage executed and duly recorded in the Registry of Deeds on May 17, 1949, for the sum of
P150,000.00
● May 17, 1947 (same day from the date above) - Another document, Assignment of Real Estate Mortgage
was executed
 ● April 26, 1951 - Two documents, were later on consolidated
● Sheriff acting accordingly, sold at public auction the two parcels of land covered by TCT No. 1631 and No.
37641 to the highest bidder
● Herein plaintiff was the highest bidder for the amount of P86,700.00
● April 16, 1956 - corresponding certificate of sale was issued by the Sheriff of Pasay City
● Plaintiff now seeks to recover from the defendant the balance of his obligation after deducting the price of
the land sold at public auction, of which, together with the interest up to January 31, 1958
● Plaintiff claims that there remained an outstanding balance of P99,033.20, as per the Statement of Account

Issue: W/N the silence of Act. 3135, since it discloses nothing about the mortgagee's right to recover such deft
efficiency, renders the award De Vera the balance of his obligation

Held: NO.

By following the defendant's theory, there may occur ridiculous situation in which, when the amount of the loan
is very much bigger than the value of the mortgaged property, by abandonment or default of the debtor
mortgagor his obligation may automatically be reduced in quantity, against the will and consent of the creditor
mortgagee, and in prejudice of the latter, which situation is absurd and not contemplated by Act No. 3135, as
amended.

Let it be noted that when the legislature intends to foreclose the right of a creditor to sue for any deficiency
resulting from the foreclosure of the security given to guarantee the obligation, it so expressly provides. Thus, in
respect to pledges, Article 2115 of the new Civil Code expressly states: ".... If the price of the sale is less (than
the amount of the principal obligation) neither shall the creditor be entitled to recover the deficiency,
notwithstanding any stipulation to the contrary." Likewise, in the event of a foreclosure of a chattel mortgage
on the thing sold in installments "he (the vendor) shall have no further action against the purchaser to recover
any unpaid balance of the price. Any agreement to the contrary shall be void" (Article 1484, paragraph 3, ibid). It
is then clear that in the absence of a similar provision in Act No. 3135, as amended, it cannot be concluded that
the creditor loses his right given him under the Mortgage Law and recognized in the Rules of Court, to take
action for the recovery of any unpaid balance on the principal obligation, simply because he has chosen to
foreclose his mortgage extra-judicially pursuant to a special power of attorney given him by the mortgagor in
the mortgage contract.

Dispositive Portion:
“WHEREFORE, finding no reversible error in the decision appealed from of the court a quo, the same is hereby
affirmed with costs against the defendant-appellant. So ordered.”

Note:
Act. 3135 - “An Act To Regulate The Sale Of Property Under Special Powers Inserted In Or Annexed To Real-
Estate Mortgages”

3. Law v. Morality, Justice, Social Justice, Equity

● An Introduction to Philippine Law, 7th Edition by Melquiades J. Gamboa, “Chapter I: The General Nature of Law”
● On the Connection Between Law and Justice, Anthony D'ʹAmato, 26 U. C. Davis L. Rev. 527-­­­582 (1992-­­­93) available
at http://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?a rticle=1001&context=facultyworkingpapers
(last accessed August 2016)

Leus v. St. FACTS:

Scholastica'ʹs
College Westgrove, ISSUE:
748 SCRA 378
(2015) HELD:
SOBREVEGA
Ang Ladlad LGBT FACTS:
Party v. Commission · The case at hand This is a Petition for Certiorari under Rule 65 of the Rules of Court, with an application for
on Elections, 618 a writ of preliminary mandatory injunction, led by Ang Ladlad LGBT Party (Ang Ladlad) against the Resolutions of
SCRA 32 (2010) the Commission on Elections (COMELEC).
· Before the COMELEC, petitioner argued that the LGBT community is a marginalized and under-represented
PANISALES sector that is particularly disadvantaged because of their sexual orientation and gender identity; that LGBTs are
victims of exclusion, discrimination, and violence; that because of negative societal attitudes, LGBTs are
constrained to hide their sexual orientation; and that Ang Ladlad complied with the 8point guidelines
enunciated by this Court in Ang Bagong Bayani-OFW Labor Party v. Commission on Elections.
· On November 11, 2009, after admitting the petitioner's evidence, the COMELEC (Second Division)
DISMISSED THE PETITION ON MORAL GROUNDS.
· When Ang Ladlad sought reconsideration, 9 three commissioners voted to overturn the First Assailed
Resolution (Commissioners Gregorio Y. Larrazabal, Rene V. Sarmiento, and Armando Velasco), while three
commissioners voted to deny Ang Ladlad's Motion for Reconsideration (Commissioners Nicodemo T. Ferrer,
Lucenito N. Tagle, and Elias R. Yusoph). The COMELEC Chairman, breaking the tie and speaking for the majority
in his Separate Opinion, UPHELD the First Assailed Resolution and DENIED the Motion for Reconsideration.
· On January 4, 2010, Ang Ladlad filed this Petition, praying that the Court annul the Assailed Resolutions
and direct the COMELEC to grant Ang Ladlad's application for accreditation. Ang Ladlad also sought the
issuance ex parte of a preliminary mandatory injunction against the COMELEC, which had previously
announced that it would begin printing the final ballots for the May 2010 elections by January 25, 2010.
· On January 13, 2010, the Commission on Human Rights (CHR) led a Motion to Intervene or to Appear as
Amicus Curiae, attaching thereto its Comment in Intervention. The CHR opined that the denial of Ang Ladlad's
petition on moral grounds violated the standards and principles of the Constitution, the Universal Declaration of
Human Rights (UDHR), and the International Covenant on Civil and Political Rights (ICCPR).

ISSUE: W/N the COMELEC should deny Ang Ladlad’s petition for party-list accreditation solely on moral and
religious grounds

HELD:
WHEREFORE, the Petition is hereby GRANTED. The Resolutions of the Commission on Elections dated
November 11, 2009 and December 16, 2009 in SPP No. 09-228 (PL) are hereby SET ASIDE. The Commission on
Elections is directed to GRANT petitioner's application for party-list accreditation.

· NO. Our Constitution provides in Article III, Section 5 that “[n]o law shall be made respecting an
establishment of religion or prohibiting the free exercise thereof.” At bottom, what our non-establish-ment
clause calls for is “government neutrality in religious matters.” Clearly, “governmental reliance on religious
justification is inconsistent with this policy of neutrality.” We thus find that it was grave violation of the non-
establishment clause for the COMELEC to utilize the Bible and the Koran to justify the exclusion of Ang Ladlad.
We hold that moral disapproval, without more, is not a sufficient governmental interest to justify exclusion of
homosexuals from participation in the party-list system. The denial of Ang Ladlad’s registration on purely moral
grounds amounts more to a statement of dislike and disapproval of homosexuals, rather than a tool to further
any substantial public interest. Respondent’s blanket justifications give rise to the inevitable conclusion that the
COMELEC targets homosexuals themselves as a class, not because of any particular morally reprehensible act. It
is this selective targeting that implicates our equal protection clause. Furthermore, Ang Ladlad has sufficiently
demonstrated its compliance with the legal requirements for accreditation. Indeed, aside from COMELEC’s
moral objection and the belated allegation of non-existence, nowhere in the records has the respondent ever
found/ruled that Ang Ladlad is not qualified to register as a party-list organization under any of the requisites
under RA 7941 or the guidelines in Ang Bagong Bayani. The difference, COMELEC claims, lies in Ang Ladlad’s
 morality, or lack thereof.

Calalang v. Williams FACTS:

et al., 70 Phil., 726
(1940) ISSUE:

JOSOL HELD:
Agabon v. National Facts: (DISCLAIMER: SEPARATE OPINION NOT INCLUDED)
Labor Relations ● Riviera Home Improvements, Inc. (Respondent) is engaged in the business of selling and installing ornamental and
Commission, 442 construction materials.
● Respondent employed Virgilio Agabon and Jenny Agabon (Petitioners) as gypsum board (wall panels) and cornice
SCRA 573
(ledge) installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work.
(November 17,
● Petitioners filed a complaint for illegal dismissal and payment of money claims
2004) ● December 28, 1999, Labor Arbiter Decision: WHEREFORE, premises considered, We find the termination of the
complainants illegal. Accordingly, respondent is hereby ordered to pay them their backwages up to November 29,
MASCAREÑAS 1999 in the sum of: 1. Jenny M. Agabon - P56, 231.93 2. Virgilio C. Agabon - 56, 231.93 and, in lieu of
reinstatement to pay them their separation pay of one (1) month for every year of service from date of hiring up to
November 29, 1999. Respondent is further ordered to pay the complainants their holiday pay and service incentive
leave pay for the years 1996, 1997 and 1998 as well as their premium pay for holidays and rest days and Virgilio
Agabon's 13th month pay differential amounting to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or
the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100
(P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED TWENTY
EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached computation of Julieta C. Nicolas, OIC,
Research and Computation Unit, NCR.
● Respondent appealed on National Labor Relations Commission (NLRC): The Labor Arbiter decision is reversed, the
petitioners had abandoned their work, and were not entitled to backwages and separation pay. The other money
claims awarded by the Labor Arbiter is denied for lack of evidence.
● Petitioners filed a petition for certiorari with the CA: WHEREFORE, the decision of the National Labor Relations
Commission is REVERSED only insofar as it dismissed petitioner's money claims. Private respondents are ordered to
pay petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as their service incentive
leave pay for said years, and to pay the balance of petitioner Virgilio Agabon's 13th month pay for 1998 in the
amount of P2,150.00.

Issue:
W/N the petitioners were illegally dismissed. NO

Ratio:
● To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the
employer to give the employee the opportunity to be heard and to defend himself.
● Labor Code Article 282, just causes for termination by the employer: (a) serious misconduct or willful disobedience
by the employee of the lawful orders of his employer or the latter's representative in connection with the
employee's work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the
employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a
crime or offense by the employee against the person of his employer or any immediate member of his family or his
duly authorized representative; and (e) other causes analogous to the foregoing.
● Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee
two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard
and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on
authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor
and Employment written notices 30 days prior to the effectivity of his separation.
● From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article
282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due
process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the
dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or
authorized cause but due process was not observed.
 Held:
● In February 1999, petitioners were frequently absent having subcontracted for an installation work for another
company which clearly showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not report for work because they
were working for another company. Private respondent at that time warned petitioners that they would be
dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever their
employer-employee relationship.
● The dismissal should be upheld, it was established that the petitioners abandoned their jobs to work for another
company. Private respondent, however, did not follow the notice requirements and instead argued that sending
notices to the last known addresses would have been useless because they did not reside there anymore.
Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice
requirements to the employee's last known address. Thus, it should be held liable for non-compliance with the
procedural requirements of due process.
● In cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the
better rule is to abandon the Serrano doctrine (the termination is illegal only if it is not for any of the justified or
authorized causes provided by law.) and to follow Wenphil/Belated Due Process Rule (where the employer had a
valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld
but the employer will be penalized to pay an indemnity to the employee.) by holding that the dismissal was for just
cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in
Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing justice not just to employees,
but to employers as well.
● the petitioners committed a grave offense, i.e., abandonment, which, if the requirements of due process were
complied with, would undoubtedly result in a valid dismissal. An employee who is clearly guilty of conduct violative
of Article 282 should not be protected by the Social Justice Clause of the Constitution. Social justice, as the term
suggests, should be used only to correct an injustice.
● Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify
the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights
● As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege
non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the
employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents – which will show that overtime, differentials, service incentive leave and
other claims of workers have been paid – are not in the possession of the worker but in the custody and absolute
control of the employer.
● if private respondent indeed paid petitioners' holiday pay and service incentive leave pay, it could have easily
presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. But it did not,
except with respect to the 13th month pay wherein it presented cash vouchers showing payments of the benefit in
the years disputed.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23, 2003,
in CA-G.R. SP No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned their work, and ordering private
respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of
P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's
thirteenth month pay for 1998 in the amount of P2,150.00 is AFFIRMED with the MODIFICATION that private respondent
Riviera Home Improvements, Inc. is further ORDERED to pay each of the petitioners the amount of P30,000.00 as nominal
damages for non-compliance with statutory due process.
Reno Foods, Inc. v. Doctrine:
Nagkakaisang Lakas Labor Law; Termination of Employment; A criminal conviction is not necessary to find just cause for employment
ng Manggagawa termination.
(NLM)-­­‑
Katipunan, 615 FACTS:
SCRA 240 (2010) ● Reno Foods is a manufacturer of canned meat products. Vicente Khu is the president. Nenita Capor was
G.R. No. 164016. an employee of Reno.
March 15, 2010 ● A guard on duty found six Reno canned goods wrapped in nylon leggings inside Capor’s fabric clutch
bag. (The other contents of the bag were money and a small medicine container.)
KANG ● Reno gave Capor several opportunities to explain her side. After they sent her a Notice of Termination,
 she was given an opportunity for reconsideration through a labor-management grievance conference.
However, Reno did not find reason to change its decision to terminate her employment.
● Afterwards, Reno filed a complaint against Capor for qualified theft. A Resolution was issued finding
probable cause for the crime charged.
● The NLM-Katipunan filed on behalf of Capor a complaint for illegal dismissal, and prayed that she be
paid her full backwages as well as moral and exemplary damages.
● LA (Labor Arbiter): guilty of serious misconduct (cause for termination); not entitled to separation pay.
NLRC (National Labor Relations Commission) affirmed, added award for financial assistance. CA
affirmed NLRC, and stressed the primacy of laborer’s welfare.
● On the date that the CA issued its Decision, Capor filed a Manifestation that she was acquitted of the
charge against her (due to lack of substantial evidence on Reno’s part).

ISSUE:
● W/N financial assistance should be granted to an employee validly dismissed for theft of company
property

HELD:
● NO. Financial assistance should not be granted to an employee validly dismissed for theft of
company property.
● Capor’s acquittal in the criminal case - one grounded on the existence of reasonable doubt will
not preclude the determination in a labor case that she is guilty of the acts inimical to Reno’s
interests.
● Criminal cases require proof beyond reasonable doubt while labor disputes require only
substantial evidence (relevant evidence as a reasonable mind might accept as adequate to
justify a conclusion).
● The lower courts found substantial evidence to conclude that Capor had been validly dismissed
for dishonesty or serious misconduct.
● RE SEPARATION PAY: Separation pay is only warranted when the cause for termination is
not attributable to the employee’s fault (Art. 283 and 284), as well as illegal dismissal in which
reinstatement is no longer feasible.
● Jurisprudence has classified theft of company property as a serious misconduct.
● It is true that there have been instances when the Court awarded financial assistance to
employees who were terminated for just causes, on grounds of equity and social justice. But in
those cases, the Court recognized the harsh realities faced by employees that forced them to
violate company policies.
● But when the employee commits an act of dishonesty, depravity or iniquity, the grant of
financial assistance is misplaced compassion. It is tantamount not only to condoning a patently
illegal or dishonest act, but an endorsement thereof. It will be an insult to all the laborers who,
despite their economic difficulties, strive to maintain good values and moral conduct.
● Length of service (Capor served for 39 years) and a previously clean employment record
cannot simply erase the gravity of the betrayal exhibited by a malfeasant.

WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision of the Court of Appeals in CA-G.R. SP
No. 76789 affirming the September 20, 2002 Decision of the National Labor Relations Commission is ANNULLED
and SET ASIDE. The November 16, 1999 Decision of the Labor Arbiter is REINSTATED and AFFIRMED.
SO ORDERED.

Hodges v. Yulo, 81 FACTS:

Phil. 622 (1948) ● As attorney-in-fact of Paz Salas and Carlota Salas the herein defendant-appellant (Felix S. Yulo)
obtained a loan from the herein plaintiff-appellee (C. N. Hodges) in the amount of P28,000 for which a
AMATORIO mortgage on certain real estate owned by appellant’s principals was executed In favor of the appellee
on March 27, 1926.
● Appellant applied the sum of P10,188.29 to the payment of his personal indebtedness to the appellee
consisting of two promissory notes which matured on November 29,1920, and December 7, 1920, and
 of the first instalment of the price of certain property bought by the appellant from the appellee.
● Upon breach of the mortgage, a foreclosure action was instituted by the appellee against Paz Salas and
Carlota Salas which was in the main decided against the appellee in the Court of First Instance of
Negros Occidental.
● Upon appeal, the Supreme Court rendered judgment on October 21, 1936, holding that the application
by the appellant of the sum of P10,188.29 to his personal account was beyond his authority granted in
the power of attorney executed by Paz Salas and Carlota Salas, and that the latter were bound to pay
to the appellee the balance that actually inured to their benefit and credit, or only P17,811.71.
● On April 16, 1938, the appellee brought an action against the appellant for the recovery of the
aforesaid P10,188.29.
● After trial, the Court of First Instance of Occidental Negros sustained appellee’s claim with respect to
the sum of P8,188.29, applied by the appellant to his two promissory notes in favor of appellee, but
disallowed the other item of P2,000 on the ground that the transaction to which it was applied by the
appellant in partial payment was usurious.
● Appellant contends that appellee’s action had prescribed, because it was not brought within ten
years from 1920, the year when appellant’s two notes to which the amount of P8,188.29 was applied
(Act No. 190, section 43), and because, even supposing that appellee’s right of action was renewed on
March 27, 1926, when said notes were paid out of the loan of P28,000 secured from the appellee on
behalf of Paz Salas and Carlota Salas, said action was likewise not brought within ten years from
March 27, 1926 (Act No. 190, section 50).

ISSUE:
W/N appellee’s action had prescribed.

HELD:
YES. There is no hesitancy in ruling that the appellant has rightly invoked the statute of limitations, although the
applicable provision is section 49 of Act 190: “if, in an action commenced, or attempted to be commenced, in
due time, a judgment for the plaintiff be reversed, or if the plaintiff fails otherwise than upon the merits, and
the time limited for or the commencement of such action has, at the date of such reversal or failure, expired,
the plaintiff, or, if he die and the cause of action survive, his representatives may commence a new action within
one year after such date, and this provision shall apply to any claim asserted in any pleading by a defendant.”

As on the date of the promulgation of the decision of the Supreme Court (October 21, 1936), and the
presumption is that final entry of judgment had been entered ten days thereafter, the time limited for the
commencement of appellee’s action against appellant had expired, whether appellee’s right of action be
computed from 1920 (maturity date of appellant’s two promissory notes which had been paid off out of the
loan of P28.000), or from March 27, 1946 (when appellant applied the amount in question to his personal
debts), the appellee, under said section 49 of Act No. 190, had one year from the promulgation of the final
judgment within which to commence a new action against the right defendant, or the appellant. It appearing,
however, that the action which is the subject of this appeal, was brought on April 16, 1938, or more than one
year after October 21, 1936, the same had in fact prescribed.

Wherefore, the appealed judgment is reversed and the defendant-appellant absolved from the complaint So
ordered.

Muller v. Muller, FACTS:

500 SCRA 65 (2006)
● Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg,
AGUSTIN Germany on September 22, 1989.
● The couple resided in Germany at a house owned by respondent’s parents but decided to move and
reside permanently in the Philippines in 1992.
● By this time, respondent had inherited the house in Germany from his parents which he sold and used
 the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the
construction of a house amounting to P2,300,000.00. The Antipolo property was registered in the name
of petitioner, Elena Buenaventura Muller.
● Due to incompatibilities and respondents alleged womanizing, drinking, and maltreatment, the spouses
eventually separated.
● On September 26, 1994, respondent filed a petition for separation of properties before the Regional
Trial Court of Quezon City. The court granted said petition.
● It also decreed the separation of properties between them and ordered the equal partition of personal
properties located within the country, excluding those acquired by gratuitous title during the marriage.
● With regard to the Antipolo property, the court held that it was acquired using paraphernal funds of
the respondent. However, it ruled that respondent cannot recover his funds because the property was
purchased in violation of Section 7, Article XII of the Constitution.
● The respondent elevated the case to the Court of Appeals, which reversed the decision of the RTC. It
held that respondent merely prayed for reimbursement for the purchase of the Antipolo property, and
not acquisition or transfer of ownership to him. It ordered the respondent to REIMBURSE the petitioner
the amount of P528,000.00 for the acquisition of the land and the amount of P2,300,000.00 for the
construction of the house situated in Antipolo, Rizal.
● Elena Muller then filed a petition for review on certiorari.
ISSUE:

W/N Respondent Helmut Miller is entitled to reimbursement.

HELD:

No, respondent Helmut Muller is not entitled to reimbursement.

RATIO:

There is an express prohibition against foreigners owning land in the Philippines.

Art. XII, Sec. 7 of the 1987 Constitution provides: “Save in cases of hereditary succession, no private lands shall
be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands
of the public domain.”

In the case at bar, the respondent willingly and knowingly bought the property despite a constitutional
prohibition. And to get away with that constitutional prohibition, he put the property under the name of his
Filipina wife. He tried to do indirectly what the fundamental law bars him to do directly.

With this, the Supreme Court ruled that respondent cannot seek reimbursement on the ground of equity. It has
been held that equity as a rule will follow the law and will not permit that to be done indirectly which, because
of public policy, cannot be done directly.

Department of FACTS:
Public Works and ● After the Mt. Pinatubo tragedy in 1991, DPWH engaged a number of contractors,
Highways v. Quiwa, including the respondents, for the urgent rehabilitation of the affected river systems.
665 SCRA 479 ● The contractors signed written agreements with Engineer Philip Meñez, Project
(2012) Manager II of the DPWH.
● It is undisputed that the contractors have completed their assigned rehabilitation
DE CHAVEZ works. DPWH refused to pay the contractors for the reason that the contracts were
invalid due to non-compliance with legal requirements.
● Respondents filed an action for a sum of money against DPWH. The Regional Trial
Court (RTC) of Manila
 ● RTC held that the contracts were valid and thus directed payment of compensation to
the contractors. DPWH appealed to the Court of Appeals (CA), which like the RTC,
ruled that the respondents are entitled to their claim of compensation.
ISSUE:
Are the contractors entitled to their compensation?

HELD:
YES
● Petitioner unsuccessfully established the applicability of the clean hands doctrine.
Citing Muller v. Muller, petitioner points out that "a litigant may be denied relief by a
court of equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue."
● However, respondents’ purported omissions, standing alone, cannot be construed as
fraudulent or deceitful. Petitioner did not present evidence of actual fraud and merely
inferred that because of the omissions, the respondent contractors were in bad faith.
"Fraud is never presumed but must be established by clear and convincing evidence.
The strongest suspicion cannot sway judgment or overcome the presumption of
regularity.
● Bad faith and fraud are allegations of fact that demand clear and convincing proof.
They are serious accusations that can be so conveniently and casually invoked, and
that is why they are never presumed. They amount to mere slogans or mudslinging
unless convincingly substantiated by whoever is alleging them.
● After the unfounded clean hands doctrine resorted to by petitioner DPWH is cleared
up, all that remains is its repeated arguments.

IN VIEW THEREOF, the 8 November 2011 Motion for Partial Reconsideration of the 12
October 2011 Decision of this Court’s Second Division is denied for lack of merit.
ANTONIO R. AGRA, Doctrine: PRINCIPLE OF EQUITY; NOT APPLICABLE IN CASE AT BAR. In the present case, there is no showing of
CAYETANO any mistake or any inequity. The fact alone that seven years had lapsed before PNB filed the collection suit does
FERRERIA, not mean that it discovered the obligation of the sureties only then. There was a Surety Arrangement, and the
NAPOLEON M. law says that the said contract can be enforced by action within ten years. The bank and the sureties all knew
GAMO and that the action to enforce the contract did not have to be filed immediately. In other words, the bank
VICENTE O. committed no mistake or inequitable conduct that needed correction, and the sureties had no misconception
NOVALES, about their liabilities under the contract. Clearly, petitioners have no recourse in equity, because they failed to
petitioners, show any inequity on the part of PNB.
vs .
PHILIPPINE FACTS:
NATIONAL BANK, ● The petitioners are the sureties in the loan granted by the Philippine National Bank (PNB) to the Fil-
respondents. Eastern Wood Industries, Inc. on July 17, 1967, in the amount of P2,500,000.00 with an interest rate of
G.R. No. 133317. 21% per annum.
June 29, 1999 ● On August 20, 1976, for failure to pay the said loan, the PNB filed an action for collection of a sum of
money against Fil-Eastern and the petitioners.
● The petitioners admitted that they signed the Surety Agreement, but they challenged their liability on
MANLONGAT the ground that they were allegedly coerced by their employer, Felipe Ysmael, Jr., to sign the Surety
Agreement; they did not receive a single centavo in consideration thereof and the cause of the
complainant was barred by laches and estoppel considering that the PNB with full knowledge of the
deteriorating financial condition of the Fil-Eastern, did not take steps to collect from the said
corporation while it was still solvent

ISSUE:
1. W/N the claim of the PNB against the petitioners is already barred by the equitable defense of Laches?
a. W/N the equitable defense of Laches applies independently of prescription?
 HELD:
1. Yes. Petitioners admit that PNB's claim, though filed more than seven years from the maturity of the
obligation, fell within the ten-year prescriptive period. However, the cause was already barred by
laches, which is defined as "the failure or neglect for an unreasonable or unexplained length of time
to do that which by exercising due diligence, could or should have been done earlier warranting a
presumption that he has abandoned his right or declined to assert it."

a. Yes. Prescription is different from laches, As held in the Nielson & Co., Inc v. Lepanto Consolidated
Mining Co., laches is principally a question of equity. Necessarily, "there is no absolute rule as to what
constitutes laches or staleness of demand; each case is to be determined according to its particular
circumstances. The question of laches is addressed to the sound discretion of the court and since
laches is an equitable doctrine, its application is controlled by equitable considerations."

Dispositive Portion:
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is AFFIRMED.
Costs against petitioners.

Note: Laches is a recourse in equity. Equity, however, is applied only in the absence, never
in contravention, of statutory law. Thus, laches cannot, as a rule, abate a collection suit filed
within the prescriptive period mandated by the Civil Code.

Philippine National Facts:

Bank v. ● Instant petition for review on certiorari seeks to annul and set aside the decision of the Intermediate
Intermediate Appellate court which dismissed this case for lack of evidence.
Appellate Court, 189 ● Fr. Venerando Reynes had filed a petition before the court of first instance of Cebu for
SCRA 680 (1990) consolidation and subdivision of lands which the court had approved.
● One of the lots were technically described as “Public open space” which had no annotation that it
CLEMENCIO was public open space nor did it have restrictions or limitations in terms of its use
● The lot was donated to the spouses Luis Romero & Rosario Suarez on Jan. 14 1965.
■ o The deed of donation was annotated at the back of TCT No. 12135 on January
14, 1965. A new transfer certificate of title (TCT No. 31180) was later issued in favor
of the donees.
● In 1977, the couple had sold the Property to spouses ildefonso Mercado & Isabel Palacio The lot
was again subdivided and two titles, TCT Nos. 69839 and 69840 were issued in the name of the buyers.
● On January 18, 1978, the subdivision of the Friendship Village commenced an action alleging that
the lot in question had been reserved as a park or playground for the use of the residents of the village,
that as early as 1960 a concrete basketball court with steel goals had been constructed at the expense
of the City Government of Cebu and that Father Reynes acted in bad faith by using his influence in the
issuance of TCT No. 12135 without the necessary annotation that the lot is a "Public Open Space."
● RTC: Complaint Dismissed
● CA: Reversed RTC ruling and the annulment of transfer certificates, free from mortgage in favor of
PNB and for the spouses to vacate the said lot.
Issues:
1. W/N the CA erred in their decision

Held:
Yes. Every registered owner receiving a certificate of title in pursuance of a decree of registration and every
subsequent purchaser of registered land taking a certificate of title for value and in good faith shall hold the
same free from all encumbrances not noted on the title. When transfer certificates of title were issued in favor
of the transferees (the donees and the purchaser) nothing was said therein about the land having been reserved
for a public open space. Persons dealing with a property covered by a Torrens Certificate of Title are not
 required to go beyond what appears on the face of the title.
Ruling:
“WHEREFORE, the decision appealed from is REVERSED and SET ASIDE. A new one is issued upholding the
validity of the donation inter ivos and sustaining the validity of the real estate mortgage executed by the
spouses Luis Romero and Rosario Suarez in favor of the petitioner Philippine National Bank.”

Rubio v. Alabata, 17 FACTS:

SCRA 554 (2014) ● Petitioners Rufa A. Rubio, Bartolome Bantoto, Leon Alagadmo, Rodrigo Delicta, and Adriano Alabata
(petitioners) and respondent Lourdes Alabata (respondent) filed petition for review on certiorari to
ARUGAY annul and set aside the ruling of a lower court and an action for revival of judgment.
● In an earlier case for annulment of declaration of heirship and sale, reconveyance and damages, The
RTC ruled in favor of the respondents and (1) voided the "Declaration of Heirship and Sale;" (2) ordered
respondent to reconvey the entire subject property to petitioners; (3) dismissed respondent's
counterclaim; and (4) ordered her to pay moral and exemplary damages plus the cost of suit.
● Respondent appealed the case to the Court of Appeals but later withdrew her appeal, which rendered
the judgment of the RTC final and executory.
● On August 20, 1997, the Entry of Judgment was issued and recorded in the CA Book of Entries of
Judgments, however the judgment was not executed
● Petitioners claim that their counsel at the Public Attorney's Office, Dumaguete City (PAO-Dumaguete),
was never informed that the entry of judgment had already been issued
● Initially, the case was handled by PAO Dumaguete, however, when the respondent appealed in the CA,
the case was handed over to their Special Appealed Cases Division (SAC-PAO) at the PAO Central Office
in Manila.
● They explained that although a copy of the Entry of Judgment was sent to Atty. Ma. Lourdes Naz, the
SAC-PAO lawyer in charge of their case, she failed to inform petitioners of the issued entry of judgment
before she resigned from PAO and also failed to inform PAO-Dumaguete of the said development.
When petitioners followed up with PAO-Dumaguete, it was of the belief that the appeal of respondent
was still pending.
● After more than 10 years from the date that the RTC decision was entered into the CA book of entries
of judgments, petitioners found out that CD Technologies Asia, Inc. 2018 cdasiaonline.com the said
decision had become final and executory when their nephew secured a copy of the Entry of Judgment.
● In 2007, petitioners, through PAO-Dumaguete, Eled an action for revival of judgment which was raffled
to RTC-42. On February 28, 2008, after respondent filed her Answer with Affirmative Defenses, RTC-42
granted her Motion to Dismiss and ordered petitioners' case for revival of judgment dismissed on the
ground of prescription. Petitioners sought reconsideration, but RTC-42 denied the motion on April 4,
2008.
● Petitioners then an appealed before the CA. The latter, on November 16, 2011, rendered its assailed
decision denying the petitioners’ appeal and affirming the dismissal by the RTC-42 of their case for
revival of judgment. On September 26, 2012, the CA denied petitioners' motion for reconsideration

ISSUE:
WON THE COURT A QUO ERRED IN STRICTLY APPLYING THE PROCEDURAL RULES ON PRESCRIPTION AND
DISMISSING THE CASE BASED ON THE SAID GROUND, INSPITE [OF] THE FACT THAT PETITIONERS WILL SUFFER
MANIFEST INJUSTICE AND DEPRIVATION OF THEIR PROPERTY, DUE TO A FAULT NOT ATTRIBUTABLE TO THEM.

HELD:
Indeed, both the RTC-42 and the CA were acting in accordance with the rules and jurisprudence when they
dismissed the action for revival of judgment. Section 6 is clear. Once a judgment becomes Final and executory,
the prevailing party can have it executed as a matter of right by mere motion within Eve (5) years from the date
of entry of judgment. If the prevailing party fails to have the decision enforced by a motion after the lapse of Eve
(5) years, the said judgment is reduced to a right of action which must be enforced by the institution of a
complaint in a regular court within ten (10) years from the time the judgment becomes final.
 An action for revival of judgment is governed by Article 1144 (3), Article 1152 of the Civil Code and Section 6,
Rule 39 of the Rules of Court. Thus,
Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues
Article 1152 of the Civil Code states: Art. 1152. The period for prescription of actions to demand the
fulfillment of obligations declared by a judgment commences from the time the judgment became
final.

To allow a strict application of the rules, however, would result in an injustice to petitioners considering (1)
that respondent decided not to contest the RTC-43 decision and withdrew her appeal and (2) that no fault
could be attributed to petitioners.

Due to the peculiarities of this case, the Court, in the exercise of its equity jurisdiction, relaxes the rules and
decides to allow the action for the revival of judgment filed by petitioners. The Court believes that it is its
bounden duty to exact justice in every way possible and exercise its soundest discretion to prevent a wrong.
Although strict compliance with the rules of procedure is desired, liberal interpretation is warranted in cases
where a strict enforcement of the rules will not serve the ends of justice; and that it is a better rule that courts,
under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of
laches when to do so, manifest wrong or injustice would result.

In Sy v. Local Government of Quezon City

". . . procedural rules may, nonetheless, be relaxed for the most persuasive of reasons in order to
relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not
complying with the procedure prescribed. Corollarily, the rule, which states that the mistakes of
counsel bind the client, may not be strictly followed where observance of it would result in the outright
deprivation of the client's liberty or property, or where the interest of justice so requires.

WHEREFORE, the petition is GRANTED. The November 16, 2011 Decision and the September 26, 2012
Resolution of the Court of Appeals in CA-G.R. CV No. 02497 are REVERSED and SET ASIDE. The case is
REMANDED to the Regional Trial Court for appropriate action.
Salvacion v. Central FACTS:
Bank of the ● February 4, 1989, Karen Salvacion was at the Plaza Fair Makati Cinema Square, when an American
Philippines, 278 approached her, asked her name and introduced himself as Greg Bartelli. He invited her to go with him
SCRA 27 (1997) to his house so she could teach Pilipino to his niece - a lie to lure the victim. When they reached the
apartment house, defendant took a packing tape and he covered her mouth with it, tied her with
ZUÑO cotton rope, and proceeded to rape her.
● He detained her for four days and raped her up to ten times despite her heavy bleeding (she was just
12 years old), and only fed her with biscuits. The defendant boarded the windows with styrofoam and
planks of wood to prevent them from being heard, but Karen found a hole in the bathroom window
and called for help.
● Fearing for her life in that she might get caught, she only managed two attempts on two separate days
before the policemen and people living nearby finally took notice and rescued Karen. Greg Bartelli was
arrested and detained at the Makati Municipal Jail.
● Petitioners filed for damages with preliminary attachment against Greg Bartelli, but on the day there
was a scheduled hearing for bail the latter escaped from jail.
● The trial court published Summons in the Manila Times once a week for three consecutive weeks. Greg
Bartelli failed to file his answer to the complaint and was declared in default. Thus, the court rendered
judgment in favor of petitioners.
● Petitioners tried to execute on Bartelli's dollar deposit with China Banking Corporation, but the bank
invoked Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits of defendant
Greg Bartelli are exempt from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body, whatsoever.
 ● On the other hand, respondent Central Bank alleges that in issuing Section 113 of CB Circular No. 960, it
did not exceed its power or authority because the subject Section is copied verbatim from a portion of
R.A. No. 6426 as amended by P.D. 1246. (Foreign Currency Deposit Act). They further stated that one
reason for this is to assure the development and speedy growth of the Foreign Currency Deposit
System and the Offshore Banking System in the Philippines; to encourage the inflow of foreign currency
deposits into the banking institutions, thereby placing such institutions more in a position to properly
channel the same to loans and investments in the Philippines, thus directly contributing to the
economic development of the country.
● Petitioners aver that Section 113 of Central Bank Circular No. 960 should be adjudged as
unconstitutional on the grounds that: (1) it has taken away the right of petitioners to satisfy the
judgment rendered in petitioners' favor [in violation of substantive due process guaranteed by the
Constitution]; (2) it has given foreign currency depositors an undue favor or a class privilege [in
violation of the equal protection clause of the Constitution]; (3) it has provided a safe haven for
criminals like the herein respondent Greg Bartelli y Northcott since criminals could escape civil liability
for their wrongful acts by merely converting their money to a foreign currency and depositing it in a
foreign currency deposit account with an authorized bank.

ISSUE/S:
WoN Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246,
otherwise known as the Foreign Currency Deposit Act is applicable to a foreigner who is only traveling in the
Philippines. - NO

HELD:
● The purpose of the questioned law, in according protection against attachment, garnishment and other
court process to foreign currency deposits, is designed to draw deposits from foreign lenders and
investors and give them protection and incentives. Obviously, the foreign currency deposit made by a
transient or a tourist is not the kind of deposit encouraged and protected by said laws because
transient depositors stay only for a few days in the country and, therefore, will maintain his deposit in
the bank only for a short time.
● The application of the law depends on the extent of its justice. Eventually, if we rule that the
questioned Section 113 of Central Bank Circular No. 960 applicable to a foreign transient, injustice
would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would
negate Article 10 of the New Civil Code which provides that “in case of doubt in the interpretation or
application of laws, it is presumed that the lawmaking body intended right and justice to prevail.”
“Ninguno non deue enriquecerse tortizeramente con dano de otro.”
● Is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory
judgment of the lower court against the Central Bank Circular protecting the foreign depositor?
Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a national
and victim of a crime? This situation calls for fairness against legal tyranny. We definitely cannot have
both ways and rest in the belief that we have served the ends of justice.
● IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it
amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its
peculiar circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of execution
issued and to RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y Northcott in such
amount as would satisfy the judgment. (Around PHP 1,000,000.00)

4. Substantive v. Adjective Law

Substantive law is that part of the law which creates, defines, and regulates rights adjective or procedural law which prescribes the
method of enforcing rights.
Tamayo v. Gsell, 35 FACTS:
Phil. 982 (1916) ● An action for damages against Gsell (employer) was filed for personal injuries suffered by Braulio
Tamayo son of plaintiff asking for P 400, without costs except P 25 for the attorney of the Bureau of
ALMADRO Labor.
● Braulio is a minor about 11 or 12 years old who is employed as a workman in the match factory located
in Sta. Ana, Manila.
● The accident arose by reason of him being assigned by Eugenio Murcia, a foreman employed in the
same factory to perform work which he was not accustomed to.
● He was not given any instruction and was put in the new task only on the day of the accident.
● He met an accident through the knife of one of the machines of the factory which cut his little and ring
finger
● He was thereupon brought to the General Hospital.

ISSUE: Whether or not the trial court erred in awarding damages against the defendant?

HELD: NO. Applying the foregoing principles (cited in the decision are many American cases in relation to the
case and Act No. 1874, Employer’s Liability Act), which are founded upon reason and justice, it is concluded that
the trial court did not err in rejecting the defense’ claim. Tamayo is also awarded damages for the injury cost on
him on the negligence of the part of the foremen to warn Tamayo or to give instructions and consideration to
his age, skills and capabilities & for pecuniary loss occasioned by the injury as well as his diminished capacity
resulting from the injury.

The rights to damages are the essence of the cause of action. It is a substantive right granted by the act. Take
this away and the injured employee has nothing of value left.

Separate Dissenting
Opinion of Justice FERIA, J., dissenting: chanrob les vi rtual law lib rary

Feria in Bustos v. Ø It is evident that the refusal or waiver of the petitioner to present his evidence during the investigation in the
Lucero, 81 Phil. 640, justice of the peace, was not a waiver of his alleged right to be confronted with and cross-examine the
(1948) witnesses for the prosecution, that is, of the preliminary investigation provided for in General Order No. 58 and
Act No. 194, to which he claims to be entitled, as shown by the fact that, as soon as the case was forwarded to
YÑIGUEZ the Court of First Instance, counsel for the petitioner filed a motion with said court to remand the case to the
Justice of the Peace of Masantol ordering the latter to make said preliminary investigation. His motion having
been denied, the petitioner has filed the present action in which he squarely attacks the validity of the provision
of section 11, Rule 108, on the ground that it deprives him of the right to be confronted with and cross-examine
the witnesses for the prosecution, contrary to the provision of section 13, Article VIII, of the Constitution.
Ø In the case of Dequito and Saling Buhay vs. Arellano, No. L-1336, we did not discuss and decide the question
of validity or constitutionality of said section 11 in connection with section 1 of Rule 108, because that question
was not raised therein, and we merely construed the provisions on preliminary investigation or Rule 108. In said
case the writer of this dissenting opinion said:
Ø It may not be amiss to state that, modesty aside, the writer of this dissenting opinion, then a practising
attorney, was the one who prepared the draft of the Rules of Court relating to criminal procedure, and the
provisions on preliminary investigation in the draft were the same as those of the old law, which gave the
defendant the right to be confronted with and to cross-examine the witnesses for the prosecution. But the
Supreme Court approved and adopted in toto the draft, except the part referring to preliminary investigation
which it modified, by suppressing said right and enacting, in its stead, the provisions of section 11 of Rule 108 in
its present form.
Ø I can not subscribe to the majority decision, which is a judicial legislation and makes the exercise of the right
of a defendant to be confronted, with and cross-examine the witnesses against him, to depend entirely upon
 the whim or caprice of a judge or officer conducting the preliminary investigation.
Ø But now the question of the validity of said section 11, Rule 108, is squarely presented to this Court for
decision, we have perforce to pass upon it.chan
Ø Section 13, Article VIII, of the Constitution prescribes that "the Supreme Court shall have power to
promulgate rules concerning pleading, practice and procedure in all courts, but said rules shall not diminish,
increase or modify substantive rights." The constitution added the last part of the above-quoted constitutional
precept in order to emphasize that the Supreme Court is not empowered, and therefore can not enact or
promulgate substantive laws or rules, for it is obvious that rules which diminish, increase or modify substantive
rights, are substantive and not adjective laws or rules concerning pleading, practice and procedure.
Ø It does not require an elaborate arguments to show that the right granted by law upon a defendant to be
confronted with and cross-examine the witnesses for the prosecuted in preliminary investigation as well as in
the trial of the case is a substantive right. It is based on human experience, according to which a person is not
prone to tell a lie against another in his presence, knowing fully well that the latter may easily contradict him,
and that the credibility of a person or veracity of his testimony may be efficaciously tested by a cross-
examination.
Ø It is substantive right because by exercising it, an accused person may show, even if he has no evidence in his
favor, that the testimonies of the witnesses for the prosecution are not sufficient to indicate that there is a
probability that a crime has been committed and he is guilty thereof, and therefore the accused is entitled to be
released and not committed to prison, and thus avoid an open and public accusation of crime, the trouble,
expense, and anxiety of a public trial, and the corresponding anxiety or moral suffering which a criminal
prosecution always entails.
Ø The law does not grant such right to a person charged with offenses triable by the Court of First Instance in
the City of Manila, because of the promptness, actual or presumptive, with which criminal cases are tried and
disposed of in the Court of First Instance of said city. But this right, though not a constitutional one, cannot be
modified, abridged, or diminished by the Supreme Court, by virtue of the rule making power conferred upon
this Court by the Constitution.
Ø Since the provisions of section 11 of Rule 108 as construed by this Court in several cases, (in which the
question of constitutionality or validity of said section had not been squarely raised) do away with the
defendant's right under discussion, it follows that said section 11 diminishes the substantive right of the
defendant in criminal case, and this Court has no power or authority to promulgate it and therefore is null and
void.
Ø The fact that the majority of this Court has ruled in the above cited case of Dequito and Saling Buhay vs.
Arellano, that the inferior or justice of the peace courts have discretion to grant a defendant's request to have
the witnesses for the prosecution recalled to testify again in the presence of the defendant and be cross-
examined by the latter, does not validate said provision; because to make the exercise of an absolute right
discretionary or dependent upon the will or discretion of the court or officer making the preliminary
investigation, is evidently to diminish or modify it. Petition is therefore granted.

Primicias v. STATEMENT OF THE CASE:

Ocampo, 93 Phil.
452 (1953) This is a petition which seeks to prohibit respondent Judge from proceeding with the trial of two criminal cases
which were then pending against petitioner without the assistance of assessors in accordance with the
ABARY provisions of section 49 of Republic Act No 409 in relation to section 154 of Act No 190, and as an auxiliary
remedy, to have a writ of preliminary injunction issued so that the trial may be held pending until further orders
of this court.

FACTS:

● This petition was originally filed with the Court of Appeals, but was later brought to the SC on the
ground that the main basis of the petition is section 49 of Republic Act No, 409, otherwise known as
Revised Charter of the City of Manila, and respondents assail the constitutionality of said section in that
it contravenes the constitutional provision that the rules of court "shall he uniform for all courts of the
 same grade * * *." (Section 313, Article VIII of the 1935 Constitution).
● Petitioner was charged for knowingly chartering a vessel of Philippine registry to an alien without the
approval of the President of the Philippines, failing to submit to the Collector of Customs the manifests
and certain authenticated documents for the vessel "Antarctic," and failing to obtain the necessary
clearance from the Bureau of Customs prior to the departure of said vessel for a foreign port.
● Before the trial of said criminal cases, petitioner filed a motion praying that assessors be appointed to
assist the court in considering the questions of fact involved in said cases as authorized by section 49 of
Republic Act No. 409, otherwise known as Revised Charter of the City of Manila, which provides that
"the aid of assessors in the trial of any civil or criminal action in the Municipal Court, or the Court of
First Instance, within the City, may be invoked in the manner provided in the Code of Civil Procedure."
This motion was opposed by the City Fiscal who appeared for the People of the Philippines.
● However, the CFI issued an order denying the motion holding in effect that with the promulgation. of
the Rules of Court by the Supreme Court, which became effective on July 1, 1940, all rules concerning
pleading, practice and procedure in all courts of the Philippines previously existing were not only
superseded but expressly repealed, that the Supreme Court, having been vested with the rule-making
power, expressly omitted the portions of the Code of Civil Procedure regarding assessors in said Rules
of Court, and that the reference to said statute by section 49 of Republic Act No. 409 on the provisions
regarding assessors should be deemed as a mere surplusage.
● Believing that this order is erroneous, petitioner now comes to this court imputing abuse of discretion
to the respondent Judge.

ISSUES:

1. W/N the right of the petitioner to a trial with the aid of assessors is an absolute substantive right, and
the duty of the court to provide assessors is mandatory – YES, it is a substantive right.
2. W/N the right to trial with the aid of assessors, being a substantive right, cannot be impaired by this
court in the exercise of its rule-making power – YES, the SC can only make rules of procedure. The
creation (and removal) of substantive rights are the domain of Congress.
3. W/N Section 49 of the Revised Charter of Manila is not invalid class legislation and does not violate the
constitutional provision that the rules of pleading, practice and procedure 'shall be uniform for all
courts of the same grade – NO, it is not invalid because the rule is also applied to other courts.

HELD:

1. [This answers Issues 1 & 2] The right to a trial by assessors is substantive right. It therefore cannot be
repealed by procedural rules mandated by the SC.
a. The right to a trial by assessors is substantive in the sense that it must be created and defined
by express enactment as opposed to a mere remedy devised to enforce such right or obtain
redress therefor. The trial with the aid of assessors as granted by section 154 of the Code of
Civil Procedure and section 2477 of the old Charter of Manila are parts of substantive law and
as such are not embraced by the rule-making power of the Supreme Court. This is so because
in said section 154 this matter is referred to as a right given by law to a party litigant. Section
1477 of the Administrative Code of 1917 is couched in such a manner that a similar right is
implied when invoked by a party litigant. It says that the aid may be invoked in the manner
provided in the Code of Civil Procedure. And this right has been declared absolute and
substantial by the Supreme Court, in several cases where the aid of assessors had been
invoked.
2. The right to assessors during trial still exists in Manila and in provinces.
a. The promulgation of the Rules of Court did not have the effect of repealing the provisions on
assessors embodied in the Code of Civil Procedure. These provisions have not been
incorporated by the Supreme Court in the present Rules of Court because they are substantive
in nature. This remedy may be invoked not only in Manila but in all other places where it
existed prior to the promulgation of the Rules of Court. The provisions on assessors embodied
 in the Code of Civil Procedure are still in force and the same may still be invoked in the light of
the provisions of section 49 of Republic Act No 409.

IMPORTANT DEFINITIONS:

1. Substantive Law vs. Procedural/Adjective Law

a. A substantive law creates, defines or regulates rights concerning life, liberty or property, or
the powers of agencies or instrumentalities for the administration of public affairs, whereas
rules of procedure are provisions prescribing the method by which substantive rights may be
enforced in courts of justice.
i. Modern day example (if this is wrong, please correct me!):
1. Substantive law: right to remarry if previous marriage was void
2. Procedural law: you have to get a judicial declaration of nullity of marriage
before remarrying, otherwise you may be charged with bigamy
Tan, Jr. v. Court of FACTS:
Appeals, 373 SCRA ● Involved in this case is a parcel of land situated in Bunawan, Davao City. The land is registered in the
524 (2002) name of Jaime Tan.
● On January 22, 1981, Tan, for a consideration of P59,000.00, executed a deed of absolute sale over the
RAMOS
property in question in favor of spouses Jose Magdangal and Estrella Magdangal.
● Simultaneous with the execution of the deed, the same parties entered into another agreement where
Tan was given 1 year within which to redeem or repurchase the property.
● Albeit given several opportunities, Tan failed to redeem the property until his death on January 4, 1988
● Tan’s heirs (Tan Jr., et al.) filed before the RTC a suit against the Magdangals for reformation of the
instrument alleging that while Tan and the Magdangals denominated their agreement as deed of
absolute sale, their real intention was to conclude an equitable mortgage.
● RTC ruled in favor of Tan Jr. ordering them to pay the Magdangals the amount of P59,000 plus interest
within 120 days after the finality of this decision. They ordered the Magdangals to turn over the
property once they received the payment.
● On Sept. 28 1995, the CA affirmed the decision of the RTC in toto and both parties received the
decision of the appellate court on Oct. 5, 1995. On March 13, 1996 the appellate court entered in the
book of entries of judgment and issued the corresponding entry of judgment which on its face, stated
that the said decision has on Oct. 21, 1995 become final and executory.
● On March 21, 1996, the Magdangals filed in the RTC a motion for consolidation and writ of
possession alleging that the 120 day period has expired and the Tan Jr. was not able to pay. The
Magdangals were praying that the lot in question be given back to them.
● RTC ruled in favor of the Magdangals.
● On appeal, Tan Jr alleged that until the entry of judgment has been issued by the CA and copy was
delivered to the parties, the appealed decision in this case cannot be considered final and executory.
● The CA dismissed the case and following the 1997 rules of court which provided that if the appeal has
been duly perfected and finally resolved, the execution may forthwith be applied immediately after the
notices was given and received by the parties. It did not need the entry in the book of judgments to be
executory.
● However, the Revised Rule of Court from 1991-1996 provided that a decision is only final and executory
during the date of its entry in the book of entries of judgment.

ISSUE:
WON the case be governed by the finality of judgment under the 1997 rules of court? NO.
 HELD:
The SC hold that the finality of judgment under the 1997 rules of court should not be given retroactive effect as
it would result in great injustice to the petitioner. The petitioner followed the procedural rule then existing as
well as the decisions of the Court governing the petitioner and by applying the new rules of court would result in
his losing the right to redeem the subject lot. It is difficult to reconcile the retroactive application of this
procedural rule with the rule of fairness.

5. Sources of Law
● An Introduction to Philippine Law, 7th Edition by Melquiades J. Gamboa, “Chapter II: The Sources of Law”

B. Lawyers

1. Who are lawyers?

● Rule 138, Rules of Court, “Attorneys and Admission to the Bar”
● Rule 138-­‐‑A, Rules of Court “Law Student Practice Rule”

Ulep v. Legal Clinic, FACTS:

Inc., 223 SCRA 378
(1993) ISSUE:

PANISALES HELD:
Philippine Lawyer'ʹs FACTS:
Association v.
Agrava, etc., 105 ISSUE:
Phil. 173 (1959)
HELD:
OCULTO
Cojuangco, Jr. v. FACTS:
Palma, 438 SCRA · Eduardo M. Cojuangco, Jr. filed a complaint for disbarment against Atty. Leo J. Palma, alleging as grounds
306 (2004) “deceit, malpractice, gross misconduct in office, violation of his oath as a lawyer and grossly immoral conduct.”
· Respondent Palma [from ACCRA Law Office] was employed by petitioner as his personal counsel. Respondent's
YÑIGUEZ
excellence in managing petitioner's legal affairs, prompted petitioner to introduced respondent to his family.
Since respondent gained the trust of petitioner and his family, their relationship became intimate. Respondent
then was allowed to tutor the 22 year old daughter of Petitioner.
· However, when his concern was supposed to be complainant’s legal affairs only, he sneaked at the latter’s
back and courted his daughter. Like the proverbial thief in the night, he attacked when nobody was looking.
He succeeded in misrepresenting himself to Hong Kong officials as a bachelor and successfully married
petitioner's daughter, eventhough he is legally married.
·Respondent argued that, he cannot be punished since there is no allegation that he acted with “wanton
recklessness, lack of skill or ignorance of the law” in serving complainant’s interest. Anent the charge of
grossly immoral conduct, he stressed that he married complainant’s daughter with “utmost sincerity and good
faith” and that “it is contrary to the natural course of things for an immoral man to marry the woman he
sincerely loves.”

ISSUE: WoN respondent's acts constitutes gross immoral conduct so as to warrant his disbarment from the legal
 profession.

HELD:
Yes, the Court ruled respondent's action constitutes gross immoral conduct. A gross immoral conduct, the
Court said, is a conduct which is willful, flagrant, or shameless, and which shows a moral indifference to the
opinion of the good and respectable members of the community. Thus, measured against this definition,
respondent’s act is manifestly immoral. First, he abandoned his lawful wife and three children. Second, he
lured an innocent young woman into marrying him. And third, he misrepresented himself as a “bachelor” so he
could contract marriage in a foreign land.

In particular, adds the Court, "he made a mockery of marriage which is a sacred institution demanding respect
and dignity. His act of contracting a second marriage is contrary to honesty, justice, decency and morality."
Moreover, the circumstances here speak of a clear case of betrayal of trust and abuse of confidence. It was
respondent’s closeness to the complainant’s family as well as the latter’s complete trust in him that made
possible his intimate relationship with Lisa. When his concern was supposed to be complainant’s legal affairs
only, he sneaked at the latter’s back and courted his daughter. Like the proverbial thief in the night, he
attacked when nobody was looking. Moreover, he availed of complainant’s resources by securing a plane ticket
from complainant’s office in order to marry the latter’s daughter in Hongkong. He did this without
complainant’s knowledge.

The Court stressed again the principle that law profession does not prescribe a dichotomy of standards
among its members. There is no distinction as to whether the transgression is committed in the lawyer’s
professional capacity or in his private life. This is because a lawyer may not divide his personality so as to be an
attorney at one time and a mere citizen at another. Thus, not only his professional activities but even his private
life, insofar as the latter may reflect unfavorably upon the good name and prestige of the profession and the
courts, may at any time be the subject of inquiry on the part of the proper authorities.

Respondent cannot rely on complainant's admission that he is a good lawyer, because professional competency
alone does not make a lawyer a worthy member of the Bar. Good moral character is always an indispensable
requirement.

In sum, respondent committed grossly immoral conduct and violation of his oath as a lawyer. The penalty of
one (1) year suspension recommended by the IBP is not commensurate to the gravity of his offense. The bulk of
jurisprudence supports the imposition of the extreme penalty of disbarment.

DIPOSITIVE: WHEREFORE, respondent Leo J. Palma is found GUILTY of grossly immoral conduct and violation of
his oath as a lawyer, and is hereby DISBARRED from the practice of law.

Let respondents name be stricken from the Roll of Attorneys immediately. Furnish the Bar Confidant, the
Integrated Bar of the Philippines and all courts throughout the country with copies of this Decision.

2. The Bar

In Re: Integration of FACTS:

the Bar of the
Philippines, 49 SCRA ISSUE:
22 (1973)
HELD:
CLEMENCIO
In Re: Vicente Raul FACTS:
Almacen, 31 SCRA
562 (1954) ISSUE:

MANLONGAT HELD:
In Re: Albino FACTS:
Cunanan, 94 Phil.
534 (1954) ISSUE:

KANG HELD:

3. The Practice of Law

● R.A. No. 9999, “The Free Legal Assistance Act of 2010”

Cayetano v. FACTS:
Monsod, 201 SCRA
210 (1991) ISSUE:

RAMOS HELD:
Ulep v. Legal Clinic, FACTS:
Inc., 223 SCRA 378
(1993) ISSUE:

RISHI HELD:
Cojuangco, Jr. v. FACTS:
Palma, 438 SCRA
306 (2004) ISSUE:

ALMADRO HELD:
In Re: Letter of the FACTS:
UP Law Faculty
Entitled "Restoring ISSUE:
Integrity: A
Statement by the HELD:
Faculty of the UP
College of Law on
the Allegations of
Plagiarism and
Misrepresentation
in the Supreme
Court", 644 SCRA
543 (2011)

AGUSTIN

C. Lawyering
1. The Legal Method
● The Disappearance of the Legal Method, Richard B. Cappalli, 70 Temp. L. Rev. 393-­‐‑445 (1997)
 2. Argumentation and Logic
● The Architecture of Argument, James C. Raymond, The PHILJA Judicial Journal, Vol. 4, Issue 14, October-­‐‑December 2002,
available at http://philja.judiciary.gov.ph/assets/files/pdf/journal/vol4issue14.pdf (last accessed August 2016)
● Legal Logic, Ranhilo C. Aquino, The PHILJA Judicial Journal, Vol. 4, Issue 14, October-­‐‑December 2002, available at
http://philja.judiciary.gov.ph/assets/files/pdf/journal/vol4issue14.pdf (last accessed August 2016)

3. Analyzing Decisions
● The Four “Cs” of Effective Decision-­‐‑Writing: An Introduction for Newly-­‐‑ Appointed Justices, Artemio V. Panganiban, The
PHILJA Judicial Journal, Vol. 4, Issue 14, October-­‐‑December 2002, available at
http://philja.judiciary.gov.ph/assets/files/pdf/journal/vol4issue14.pdf (last accessed August 2016)

FACTS:

ISSUE:

HELD:
FACTS:

ISSUE:

HELD:
FACTS:

ISSUE:

HELD: