Diokno vs. Rehabilitation Finance
Corporation
FACTS
1. Diokno is the holder of a
backpay certificate of
indebtedness issued by the
treasurer of the Philippines
under the Provisions of R.A.
No. 304 of a face value of
P75,857.14.
2. When the action was brought
he had an outstanding loan
with the Rehabilitation
Finance Corp. in the total
amount of P50k covered with
a mortgage on his property in
Manila and has an interest of
4% per annum of which P47k
was still unpaid.
DECISIONS/ CONTENTION
1. Diokno: compel the
corporation to accept his
backpay certificate.
2. RFC: Can’t accept because
it’s not authorized under Sec.
2 of R.A. 304, the law permits
ONLY “acceptance or
discount of backpay
certificates” NOT the
“repayment of loans”
3. RTC: Diokno is not acquiring
property for a home or
construing a residential
house, but compelling the
acceptance of his backpay
certificate to pay a debt after
the enactment of RA 304,
therefore the complaint must phrases employed (Fields vs.
be dismissed. US).
LAWS 2. Presumption is that word shall
in ordinance is mandatory, but
1. Section 2 of RA 302 where it is necessary to give
..And provided also, that intent, the word will be
investments funds or banks or construed as may (City of
other financial institutions Colorado vs. Streets)
owned or controlled by the
government shall, subject to RULING
the availability of loanable
1. No, Discount and acceptance
funds, and any provision of
of back wages certificates are
their charters, articles of
concerned, should be
incorporation, bylaw or rules
interpreted to be directory
and regulations to the contrary merely not mandatory as
notwithstanding, accept or claimed by the appellant, the
discount at not more than 2% same to be construed as a
per annum per annum of ten directive for the rehabilitation
years such certificate for the fiancé corp. to invest a
following purposes only: (1) reasonable portion of its funds
the acquisition of real property for the discount of back pay
for the use as the applicants certificates, from time to time
home or (2) the building or and in its sound discretion, as
construction of the residential circumstances and its
house of the payee of said resources may warrant. Can’t
be enjoined by an action of
certificate
mandamus
ISSUE
1. Whether Diokno can use his
back pay certificate to pay for
his loan to respondent
company
PRINCIPLE OF STAT CON
1. Words like may, must, shall
are constantly used in statutes
without intending that they
shall be taken literally and in
their construction the object
evidently designed to be
reached limits and controls the
literal import of the terms and
Bersabal vs Salvador & Tan That
Ong Pin Tee
FACTS
1. Private respondents Tan That
and Ong Pin Tee filed an
ejectment suit, in the City
Court of Caloocan City,
against the petitioner. A
decision was rendered by said
Court, which decision was
appealed by the petitioner to
the respondent Court.
2. During the pendency of the
appeal the respondent court
issued an order that order to
submit the stenographic notes
taken in the city court. She
received this order and raised
a motion to extend the
deadline from 15 days to 30
days and was granted by
court. However, the judge
issued an order against her for
her failure to execute her
appeal. Her motion for
reconsideration in line with her
earlier motion to extend the
deadline to 30 days were
denied.
LAWS
1. The second paragraph of
Section 45 of R.A. No. 296,
otherwise known as the
Philippine Judiciary Act of
1948, as amended by R.A. No.
6031 provides, in part, as
follows:
Courts of First Instance shall
decide such appealed cases
on the basis of the evidence
and records transmitted from
the city or municipal courts:
Provided, That the parties
may submit memoranda
and/or brief with oral argument
if so requested ... .
ISSUE
1. Whether, in the light of the
provisions of the second
paragraph of Section 45 of
Republic Act No. 296, as
amended by R.A. No. 6031,
the mere failure of an
appellant to submit on nine the
memorandum mentioned in
the same paragraph would
empower the Court of First
Instance to dismiss the appeal
on the ground of failure to
Prosecute
2. Whether it is mandatory upon
said Court to proceed to
decide the appealed case on
the basis of the evidence and
records transmitted to it, the
failure of the appellant to
submit a memorandum on
time notwithstanding.
PRINCIPLE OF STAT CON
1. As a general rule, the word
"may" when used in a statute
is permissive only and
operates to confer discretion;
while the word "shall" is
imperative, operating to
impose a duty which may be
enforced (Dizon vs.
Encarnacion)
RULING
1. No, The foregoing provision is
clear and leaves no room for
doubt. It cannot be interpreted
otherwise than that the
submission of memoranda is
optional on the part of the
parties. Being optional on the
part of the parties, the latter
may so choose to waive
submission of the
memoranda. Moreover,
memoranda, briefs and oral
arguments are not essential
requirements. They may be
submitted and/or made only if
so requested.
2. Yes, the Court of First
Instance is left with no
alternative but to decide the
case on the basis of the
evidence and records
transmitted from the city or
municipal courts. In other
words, the Court is not
empowered by law to dismiss
the appeal on the mere failure
of an appellant to submit his
memorandum, but rather it is
the Court's mandatory duty to
decide the case on the basis
of the available evidence and
records transmitted to it.
Grande vs. Antonio
FACTS
1. Petitioner Grace Grande
(Grande) and respondent
Patricio Antonio (Antonio) for
a period of time lived together
as husband and wife, although
Antonio was at that time
already married to someone
else. Out of this illicit
relationship, two sons were
born: Andre Lewis and Jerard
Patrick. The children were not
expressly recognized by
respondent as his own in the
Record of Births of the
children in the Civil Registry.
The parties’ relationship,
however, eventually turned
sour, and Grande left for the
United States with her two
children in May 2007.
DECISIONS/ CONTENTION
1. Respondent Antonio:
Filed a Petition for Judicial
Approval of Recognition to
take Parental Authority,
Parental Physical Custody,
Correction/Change of
Surname of Minors and for the
Issuance of Writ of Preliminary
Injunction.
2. RTC: rendered a Decision in
favor of herein respondent
Antonio, ruling that "the
evidence at hand is
overwhelming that the best
interest of the children can be
promoted if they are under the
sole parental authority and
physical custody of Antonio.
3. Grande:
Petitioner moved for motion of
reconsideration. But, her
motion was denied by the trial
court in for being pro forma
and for lack of merit. Petitioner
Grande then filed an appeal
with the CA attributing grave
error on the part of the RTC for
allegedly ruling contrary to the
law and jurisprudence
respecting the grant of sole
custody to the mother over her
illegitimate children.
4. CA: In resolving the appeal,
the appellate court modified in
part the Decision of the RTC.
In ruling thus, the appellate
court ratiocinated the father’s
recognition of his children but
the mother cannot be deprived
of her sole parental custody
over them absent the most
compelling of reasons. Since
respondent Antonio failed to
prove that petitioner
committed any act that
adversely affected the welfare
of the children or rendered her
unsuitable to raise the minors,
she cannot be deprived of her
sole parental custody over
their children.
LAWS
1. Art. 176. – Illegitimate children
shall use the surname and
shall be under the parental
authority of their mother, and
shall be entitled to support in
conformity with this Code.
However, illegitimate children
may use the surname of their
father if their filiation has been
expressly recognized by their
father through the record of
birth appearing in the civil
register, or when
admission in a public
document or private
handwritten instrument is
made by the father. Provided,
the father has the right to
institute an action before the
regular courts to prove non-
filiation during his lifetime. The
legitime of each illegitimate
child shall consist of one-half
of the legitime of a legitimate
child.
ISSUE
1. Whether a father has the right
to compel the use of his
surname by his illegitimate
children upon his recognition
of their filiation.
PRINCIPLE OF STAT CON
1. Nothing is more settled than
that when the law is clear and
free from ambiguity, it must be
taken to mean what it says
and it must be given its literal
meaning free from any
interpretation. Respondent’s
position that the court can
order the minors to use his
surname, therefore, has no
legal basis.
2. The word "may" is permissive
and operates to confer
discretion upon the illegitimate
children.
RULING
1. No, Art. 176 gives illegitimate
an
children the right to decide if
they want to use the surname
of their father or not. It is not
the father (herein respondent)
or the mother (herein
petitioner) who is granted by
law the right to dictate the
surname of their illegitimate
children.
The appeal is partly GRANTED. Accordingly. the
appealed Decision of the Regional Trial Court is
MODIFIED in part and shall hereinafter read as
follows:
a. [Antonio] is ORDERED to deliver the minor
children to Grace Grande who by virtue hereof
is hereby awarded the full or sole custody of
these minor children;
b. [Antonio] shall have visitation rights at least
twice a week, and may only take the children out
upon the written consent of [Grande]:
c. The parties are DIRECTED to give and share
in support of the minor children Jerard Patrick
and Andre Lewis in the amount of ₱30,000.00
per month at the rate of 70% for [Antonio] and
30% for [Grande]; and
d. The case is REMANDED to the Regional Trial
Court, for the sole purpose of determining the
surname to be chosen by the children Jerard
Patrick and Andre Lewis.
Rule 7 and Rule 8 of the Office of the Civil
Registrar General Administrative Order No. 1,
Series of 2004 are DISAPPROVED and hereby
declared NULL and VOID.
Loyola Grand Villas Homeowners
South Association vs. CA
FACTS
1. LGVHAI was organized on as
the association of
homeowners and residents of
the Loyola Grand Villas. It was
registered with the Home
Financing Corporation, as the
sole home owners org. in the
said subdivision under. It was
organized by the developer of
the subdivision and its first
president was Victorio V.
Soliven, himself the owner of
the developer. For unknown
reasons, however, LGVHAI
did not file its corporate by-
laws.
2. Sometime in 1988, the officers
of the LGVHAI tried to register
its by-laws. They failed to do
so. They discovered that there
were two other organizations
within the subdivision the
North Association and the
South Association. According
to private respondents, a non-
resident and Soliven himself,
respectively headed these
associations. They also
discovered that these
associations had five (5)
registered homeowners each
who were also the
incorporators, directors and
officers thereof. None of the
members of the LGVHAI was
listed as member of the North
Association while three (3)
members of LGVHAI were
listed as members of the
South Association. The North
Association was registered
with the HIGC on February 13,
1989 under Certificate of
Registration No. 04-1160
covering Phases West II, East
III, West III and East IV. It
submitted its by-laws on
December 20, 1988.
DECISIONS/ CONTENTION
1. Legal department of the
HIGC: LGVHAI had been
automatically dissolved for
two reasons: (1) it did not
submit its by-laws within the
period required by the
Corporation Code and, (2),
there was non-user of
corporate charter because
HIGC had not received any
report on the associations’
activities. Apparently, this
information resulted in the
registration of the South
Association with the HIGC .
2. LGVHI: lodge a complaint with
the HIGC. They questioned
the revocation of LGVHAIs
certificate of registration w/o
due notice and hearing and
concomitantly prayed for the
cancellation of the certificates
of registration of the North and
South Associations by reason
of the earlier issuance of a
certificate of registration in
favor of LGVHAI.
3. HIGC Hearing Officer:
favorable ruling to LGVHI.
4. The South Association
appealed to the Appeals
Board of the HIGC but
dismissed the appeal for lack
of merit. Turn the appeal to the
Court of Appeals, raising two
issues. First, whether or not
LGVHAIs failure to file its by-
laws within the period
prescribed by Section 46 of
the Corporation Code resulted
in the automatic dissolution of
LGVHAI. Second, whether or
not two homeowners
associations may be
authorized by the HIGC in one
sprawling subdivision
5. Court of Appeals held that
under the Corporation Code, a
private corporation
commences to have corporate
existence and juridical
personality from the date the
Securities and Exchange
Commission (SEC) issues a
certificate of incorporation
under its official seal. The
requirement for the filing of by-
laws under Section 46 of the
Corporation Code within one
month from official notice of
the issuance of the certificate
of incorporation presupposes
that it is already incorporated,
although it may file its by-laws
with its articles of
incorporation. On the second
issue, the CA reiterated its
previous ruling that the HIGC
has the authority to order the
holding of a referendum to
determine which of two
contending associations
should represent the entire
community, village or
subdivision.
LAWS
1. Sec. 46. Adoption of by-laws.
Every corporation formed
under this Code, must within
one (1) month after receipt of
official notice of the issuance
of its certificate of
incorporation by the Securities
and Exchange Commission,
adopt a code of by-laws for its
government not inconsistent
with this Code….
2. Under Section 6(I) of PD 902-
A, the SEC is empowered to
suspend or revoke, after
proper notice and hearing, the
franchise or certificate of
registration of a corporation on
the ground inter alia of failure
to file by-laws within the
required period.
ISSUE
1. Whether the failure of a
corporation to file its by-laws
within one month from the
date of its incorporation, as
mandated by Section 46 of the
Corporation Code, result in its
automatic dissolution?
PRINCIPLE OF STAT CON
1. Every statute must be so
construed and harmonized
with other statutes as to form
a uniform system of
jurisprudence.
2. Taken as a whole and under
the principle that the best
interpreter of a statute is the
statute itself (optima statuli
interpretatix est ipsum
statutum.
RULING
1. Ordinarily, the word must
connotes an imperative act or
operates to impose a duty
which may be enforced. It is
synonymous with ought which
connotes compulsion or
mandatories. However, the
word must in a statute, like
shall, is not always imperative.
It may be consistent with an
exercise of discretion. This is
equally true as regards the
word must. Thus, if the
language of a statute
considered as a whole and
with due regard to its nature
and object reveals that the
legislature intended to use the
words shall and must to be
directory, they should be given
that meaning.
6(I) of PD 902-A, the SEC is
empowered to suspend or
revoke, after proper notice
and hearing, the franchise or
certificate of registration of a
corporation on the ground
inter alia of failure to file by-
laws within the required
period. It is clear from this
provision that there must first
of all be a hearing to
determine the existence of the
ground, and secondly,
assuming such finding, the
penalty is not necessarily
revocation but may be only
suspension of the charter. In
fact, under the rules and
regulations of the SEC, failure
to file the by-laws on time may
be penalized merely with the
imposition of an administrative
fine without affecting the
corporate existence of the
erring firm.

2. No, Non-filing of the by-laws

will not result in automatic
dissolution of the
corporation. Under Section
Fule vs. CA
FACTS
1. That the accused was an
agent of the Towers
Assurance Corporation. That
the accused issued and made
out check in the sum of P2,
541.05. That the said check
was drawn in favor of the
complaining witness, Roy
Nadera. That the said check
was presented for payment on
January 24, 1981 but the
same was dishonored for the
reason that the said checking
account was already closed.
That the accused Manolo Fule
has been properly Identified
as the accused party in this
case. He was charged
violating the BP 22 or the
Bouncing Check Law.
DECISIONS/ CONTENTION
1. RTC: The Trial Court
convicted petitioner-appellant.
petitioner-appellant waived
the right to present evidence
because the prosecution
solely presented evidence.
2. CA: Appellate Court upheld
the Stipulation of Facts and
affirmed the judgment of
conviction.
LAWS
1. The 1985 Rules on Criminal
Procedure, applicable to this
case, provides:
SEC. 4. Pre-trial agreements
must be signed. — No
agreement or admission made
or entered during the pre-trial
conference shall be used in
evidence against the accused
unless reduced to writing and
signed by him and his counsel.
ISSUE
1. Whether Court of Appeals
erred in affirming the decision
of the RTC convicting the
petitioner of the offense
charged, despite the cold fact
that the basis of the conviction
was based solely on the
stipulation of facts made
during the pre-trial which was
not signed by the petitioner,
nor by his counsel.
PRINCIPLE OF STAT CON
1. By its very language, the Rule
is mandatory. Under the rule
of statutory construction,
negative words and phrases
are to be regarded as
mandatory while those in the
affirmative are merely
directory. The use of the term
"shall" further emphasizes its
mandatory character and
means that it is imperative,
operating to impose a duty
which may be enforced
RULING
1. The conclusion is inevitable,
therefore, that the omission of
the signature of the accused
and his counsel, as
mandatorily required by the
Rules, renders the Stipulation
of Facts inadmissible in
evidence. Without said
evidence independent of the
admission, the guilt of the
accused cannot be deemed
established beyond
reasonable doubt.
The ends of justice require that
evidence be presented to determine
the culpability of the accused. When a
judgment has been entered by
consent of an attorney without special
authority, it will sometimes be set aside
or reopened.
The judgment of respondent Appellate
Court was REVERSED and this case
is hereby ordered RE-OPENED and
REMANDED to the appropriate
Branch of the Regional Trial Court of
Lucena City, for further reception of
evidence.
Colgate Palmolive Philippines Inc. Philippines of . . . stabilizer 1. SEC, 2. The tax collected statute's object and purpose."
vs. Gimenez and flavors . . . shall be under the preceding section Ejusdem Generis
refunded to any importer on foreign exchange used for
FACTS making application therefor, the payment of the cost, 2. Ubi lex non distinguish nec
upon satisfactory proof of transportation and/or other nos distinguire debemos", or
1. The petitioner Colgate- actual importation under the charges incident to "where the law does not
Palmolive Philippines, Inc. is a rules and regulations to be importation into the distinguish, neither do we
corporation duly organized promulgated pursuant to Philippines of …stabilizer and distinguish"
and existing under Philippine section seven thereof." After flavors, …may be certified by
laws engaged in the the applications were the Secretary of Health from 3. The rule of construction that
manufacture of toilet processed by the officer-in- time to time to promote and general and unlimited terms
preparations and household charge of the Exchange Tax protect the health of the are restrained and limited by
remedies. For every Administration of the Central people of the Philippines shall particular recitals when used
importation made of these Bank, that official advised, be refunded to any importer in connection with them, does
materials, the petitioner paid making application therefor, not require the rejection of
to the Central Bank of the 2. The auditor of the Central upon satisfactory proof of general terms entirely. It is
Philippines the 17% special Bank, however, refused to actual importation under the intended merely as an aid in
excise tax on the foreign pass in audit its claims for rules and regulations to be ascertaining the intention of
exchange used for the refund even for the reduced promulgated pursuant to the legislature and is to be
payment of the cost, amount fixed by the Officer-in- section seven thereof." taken in connection with other
transportation and other Charge of the Exchange Tax rules of construction.
charges incident thereto, Administration, on the theory ISSUE
pursuant to Republic Act No. that toothpaste stabilizers and RULING
601, as amended, commonly flavors are not exempt under 1. Whether or not the foreign
known as the Exchange Tax section 2 of the Exchange Tax exchange used by petitioner 1. Yes, on the basis of the
Law. Law. for the importation of dental grouping of the articles alone,
cream stabilizers and flavors it cannot validly be maintained
DECISIONS/ CONTENTION 3. Auditor General: affirmed the is exempt from the 17% that the term "stabilizer and
ruling of the auditor of the special excise tax imposed by flavors" as used in the above-
1. Colgate: the petitioner filed Central Bank, maintaining that the Exchange Tax Law, quoted provision of the
with the Central Bank three the term "stabilizer and (Republic Act No. 601) so as Exchange Tax Law refers only
applications for refund of the flavors" mentioned in section 2 to entitle it to refund under to those used in the
17% special excise tax it had of the Exchange Tax Law section 2 manufacture of food and food
paid in the aggregate sum of refers only to those used in the products. Since the law does
P113,343.99. The claim for preparation or manufacture of PRINCIPLE OF STAT CON not distinguish between
refund was based on section 2 food or food products. Not "stabilizer and flavors" used in
of Republic Act 601, which satisfied, the petitioner 1. principle of statutory the preparation of food and
provides that "foreign brought the case to this Court construction that "general those used in the manufacture
exchange used for the thru the present petition for terms may be restricted by of toothpaste or dental cream,
payment of the cost, review. specific words, with the result we are not authorized to make
transportation and/or other that the general language will any distinction and must
charges incident to the LAWS be limited by the specific construe the words in their
importation into the language which indicates the general sense.