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Specifically on the "control test," this power to control is oft-repeated in

jurisprudence as the most important and crucial among the four tests. 38 The Court
explained in Gapayao v. Fulo, et al.:39

In Legend Hotel Manila v. Realuyo, the Court held that "the power of the employer to
control the work of the employee is considered the most significant determinant of
the existence of an employer-employee relationship. This is the so-called control test
and is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and means used
to achieve that end." It should be remembered that the control test merely calls for
the existence of the right to control, and not necessarily the exercise thereof. It is
not essential that the employer actually supervises the performance of duties by the
employee. It is enough that the former has a right to wield the power. 40 (Citations
omitted)
From the records, it is clear that Alba possessed this power to control, and had in
fact freely exercised it over the respondents. Alba failed to satisfactorily rebut the
respondents' direct assertions that Alba frequented the work sites, and would
reprimand his workers whom he believed were idle or sluggish. He even controlled
the time when they had to stay at work.41 The respondents relied upon instructions
coming from Alba, as their work was for projects obtained by the latter. He
controlled the results of the work that the respondents had to perform, along with
the means and methods by which to accomplish them. His control was not negated
by any instructions that came from a foreman or an architect, as directives that
came from them, if there were at all, were understandably limited. The respondents
worked for Alba who held the project, and the latter was the one who exercised
authority over them.

Even Alba's allegation that the respondents were independent contractors was not
amply substantiated. Time and again, the Court has emphasized that "the test of
independent contractorship is 'whether one claiming to be an independent contractor
has contracted to do the work according to his own methods and without being
subject to the control of the employer, except only as to the results of the
work.'"42 The Court has explained Alba's exercise of control over the respondents.
For a worker to be deemed an independent contractor, it is further necessary to
establish several indicators. In Television and Production Exponents, Inc. and/or
Tuviera v. Servaña,43 the Court explained: chanRoblesvirtualLawlibrary

Aside from possessing substantial capital or investment, a legitimate job contractor


or subcontractor carries on a distinct and independent business and undertakes to
perform the job, work or service on its own account and under its own responsibility
according to its manner and method, and free from the control and direction of the
principal in all matters connected with the performance of the work except as to the
results thereof. x x x.44 (Citation omitted)
"It is the burden of the employer to prove that a person whose services it pays for is
an independent contractor rather than a regular employee with or without a fixed
term."45 Undeniably, Alba failed to discharge this burden.

As the Court affirms the finding of illegal dismissal, it underscores the fact that the
respondents were regular employees, and not project employees as Alba asserts.
The mere fact that the respondents worked on projects that were time-bound did not
automatically characterize them as project employees. The nature of their work was
determinative, as the Court considers its ruling in DM. Consunji, Inc., et al. v.
Jamin46 that "[o]nce a project or work pool employee has been: (1) continuously, as
opposed to intermittently, rehired by the same employer for the same tasks or
nature of tasks; and (2) these tasks are vital, necessary and indispensable to the
usual business or trade of the employer, then the employee must be deemed a
regular employee."47

As construction workers, the respondents performed tasks that were crucial and
necessary in Alba's business. Their work was the core of his trade. His enterprise
could not have thrived through the years without their service. The fact that the
respondents had been engaged to work for long periods of time, and across several
construction projects, further substantiate the finding that their work was vital in the
business. Most respondents were separately employed beginning way back to the
1990s to 2006.48 One employee, Samuel, even began working for Alba in
1982.49 "[A]n employment ceases to be co-terminus with specific projects when the
employee is continuously rehired due to the demands of the employer's business and
re-engaged for many more projects without interruption." 50

Given the respondents' regular employment, their employment could not have been
validly terminated by Alba without just or valid cause, and without affording them
their right to due process. In cases affecting an employee's dismissal, the burden is
on the employer to prove that the dismissal was legal, a matter that in this case,
Alba miserably failed to establish. There were no adequate explanations from Alba as
to why the respondents had ceased obtaining assignments in his construction
projects. In view of the illegal dismissal, the respondents were rightfully entitled to
the ordered reinstatement and award of backwages, or separation pay in case of
strained relations.51

Alba is liable for the payment of the other monetary claims

The awards of 13th month pay, SIL pay, moral and exemplary damages, and
attorney's fees are sustained.

Article 95 of the Labor Code provides that "[e]very employee who has rendered at
least one year of service shall be entitled to a yearly [SIL] of five days with pay." On
the other hand, the respondents derive their right to the 13 th month pay from
Presidential Decree No. 851, otherwise known as the 13 th Month Pay Law, as
amended.

After the respondents alleged non-payment of the 13th month and SIL pays, it
became incumbent upon Alba to prove payment of the statutory monetary benefits
when he opted to deny further liability therefor. Instead of doing so, however, Alba
could only harp on his argument that the respondents, in the first place, could not be
considered as his employees.

The award of P200,000.00 as total moral and exemplary damages for the
respondents is reasonable under the circumstances. When it declared such award,
the NLRC aptly referred to the dismissal as a retaliatory action by Alba after his
employees had asked for their benefits as employees. The NLRC sufficiently
explained:chanRoblesvirtualLawlibrary

A dismissed employee is entitled to moral damages when the dismissal is attended


by bad faith or fraud; or constitutes an act oppressive to labor; or is done in a
manner contrary to good morals, good customs or public policy. Exemplary
damages, on the other hand, may be awarded if the dismissal is effected in a
wanton, oppressive or malevolent manner. Dismissing the [respondents] as an act of
retaliation and after they requested to be given their rightful benefits as employees
constitute an act oppressive to labor and displays x x x wanton exercise of
authority.52
Finally, attorney's fees in labor cases are sanctioned "when the employee is illegally
dismissed in bad faith and is compelled to litigate or incur expenses to protect his
rights by reason of the unjustified acts of his employer." 53

If substantial evidence is presented to show that a person selects and

engages another for employment, pays his/her wages, has the power to

dismiss him/her and/or controls his/her conduct, then the courts will

consider such person as his/her employer.

It is the so-called “control test” which constitutes the most important index

of the existence of the employer-employee relationship that is, whether the

employer controls or has reserved the right to control the employee not

only as to the result of the work to be done but also as to the means and

methods by which the same is to be accomplished. Stated otherwise, an

employer-employee relationship exists where the person for whom the

services are performed reserves the right to control not only the end to be

achieved but also the means to be used in reaching such end. (Pacific

Consultants International Asia, Inc. v. Klaus K. Schonfeld, 516 SCRA

209).

“It should be borne in mind that the control test calls merely for the

existence of the right to control the manner of doing the work, not the

actual exercise of the right.” (Dy Keh Beng v. International Labor and

Marine Union of the Philippines, et al., 90 SCRA 161.)


In a job contracting arrangement where the principal farms out the

performance of a part of its business activities to another entity (the job

contractor), the job contractor’s own employees perform or undertake that

portion of the principal’s business which has been farmed out.

If the job contracting arrangement is illegitimate (known as ‘labor-only

contracting’), the job contractor’s employees may be considered as the

employees of the principal.

Section 8 of the Department of Labor and Employment (DOLE)

Department Order No. 174, series of 2017 (D.O. No. 174-17) summarizes

the requirements found in law and jurisprudence for legitimate job

contracting:

a) The contractor or subcontractor is engaged in a distinct and independent


business and undertakes to perform the job or work on its own

responsibility, according to its manner and method;

b) The contractor or subcontractor has substantial capital to carry out the

job farmed out by the principal on his account, manner and method,

investment in the form of tools, equipment, machinery and supervision;

c) In performing the work farmed out, the contractor is free from the

control and/or direction of the principal in all matters connected with the

performance of the work except as to the result thereto; and


d) The service agreement ensures compliance with all the rights and

benefits for all the employees of the contractor or subcontractor under the

labor laws.

Conversely, D.O. No. 174-17 defines illegal and prohibited labor-only

contracting as an arrangement where:

a) The contractor or subcontractor does not have substantial capital, or

b) The contractor or subcontractor does not have investments in the form

of tools, equipment, machineries, supervision, work premises, among

others,

c) The contractor’s or subcontractor’s employees recruited and placed are

performing activities which are directly related to the main business

operation of the principal; or


The contractor or subcontractor does not exercise the right to control over

the performance of the work of the employee.

The applicability of the control test is clear from D.O. No. 174-17 that if

the principal exercises control over the work of the contractor and the

contractor’s employees, the principal may be considered as the employer

of the contractor’s employees.

In conclusion, control is key in determining whether a person is one’s

employee and should be carefully exercised.


Gerardo Maximo V. Francisco is a Partner of Mata-Perez, Tamayo &

Francisco (MTF Counsel). He is a corporate, deal, litigation and

employment lawyer.

The contents of the above article are intended for general information

purposes only and do not constitute legal advice. If you have any question

or comment regarding this article, you may email the author at

info@mtfcounsel.com or visit MTF Counsel’s website at

www.mtfcounsel.com.

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October 2016 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence

Philippine Supreme Court Jurisprudence > Year 2016 > October 2016 Decisions > G.R. No. 192282,
October 05, 2016 - A. NATE CASKET MAKER AND/OR ARMANDO AND ANELY NATE, Petitioners, v.
ELIAS V. ARANGO, EDWIN M. MAPUSAO, JORGE C. CARIÑO, JERMIE MAPUSAO, WILSON A. NATE,
EDGAR A. NATE, MICHAEL A. MONTALES, CELSO A. NATE, BENJES A. LLONA AND ALLAN A.
MONTALES, Respondent.:

G.R. No. 192282, October 05, 2016 - A. NATE CASKET MAKER AND/OR ARMANDO AND ANELY NATE,
Petitioners, v. ELIAS V. ARANGO, EDWIN M. MAPUSAO, JORGE C. CARIÑO, JERMIE MAPUSAO,
WILSON A. NATE, EDGAR A. NATE, MICHAEL A. MONTALES, CELSO A. NATE, BENJES A. LLONA AND
ALLAN A. MONTALES, Respondent.
THIRD DIVISION

G.R. No. 192282, October 05, 2016

A. NATE CASKET MAKER AND/OR ARMANDO AND ANELY NATE, Petitioners, v. ELIAS V. ARANGO,


EDWIN M. MAPUSAO, JORGE C. CARIÑO, JERMIE MAPUSAO, WILSON A. NATE, EDGAR A. NATE,
MICHAEL A. MONTALES, CELSO A. NATE, BENJES A. LLONA AND ALLAN A. MONTALES, Respondent.

DECISION

PERALTA, J.:

Before us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court which seeks the
reversal of the Decision2 dated January 6, 2010, and Resolution 3 dated May 13, 2010 of the Court of
Appeals (CA) in CA-G.R. SP No. 106965. The CA reversed and set aside the Decision 4 of the National
Labor Relations Commission (NLRC), Sixth Division, in NLRC NCR Case No. 00-02-01233-07 which
affirmed the Decision5 of the Labor Arbiter dismissing the complaint for illegal dismissal,
underpayment of wages, and non-fayment of overtime pay, holiday pay, service incentive leave pay
and 13th month pay filed by respondents.

The factual antecedents are as follows:

chanRoblesvirtualLawlibraryPetitioners Armando and Anely Nate are the owners/proprietors of A.


Nate Casket Maker. They employed respondents on various dates as carpenters, mascilladors and
painters in their casket-making business from 1998 until their alleged termination in March 2007.
Petitioners alleged in their Position Paper6 that respondents are pakyaw workers who are paid per
job order.7 Respondents are "stay-in" workers with free board and lodging, but they would "always"
drink, quarrel with each other on petty things such that they could not accomplish the job orders on
time. Hence, petitioners would then be compelled to "contract out" to other workers for the job to
be finished.  On February 3, 2007, they met with respondents in order to present a proposed
employment agreement which would change the existing  pakyaw system to "contractual basis" and
would provide for vacation leave and sick  leave pay and other benefits  given to regular employees.
Petitioners alleged that the proposed employment agreement would be more beneficial to
respondents.8chanrobleslaw

On the other hand, respondents alleged in their Position Paper, 9 that they worked from Monday to
Saturday, from 7:00a.m. to 10:00 p.m., with no overtime pay and any monetary benefits despite
having claimed for such. On March 15, 2007, they were called by petitioners and were made to sign a
Contract of Employment10 with the following terms and conditions: (1) they shall be working on
contractual basis for a period of five months; (2) renewal of employment contract after such period
shall be on a case-to-case basis or subject to respondents' efficiency and performance; (3) petitioners
shall reserve the right to terminate their employment should their performance fall below
expectations or if the conditions under which they were employed no longer exist; (4) their wages
shall be on a piece-rate basis; (5) in the performance of their tasks, they shall be obliged to strictly
follow their work schedules; (6) they shall not be eligible to avail of sick leave or vacation leave, nor
receive 13th month pay and/or bonuses, or any other benefits given to a regular employee.
Respondents then alleged that when they were adamant and eventually refused to sign the contract,
petitioners told them to go home because their employment has been terminated.

On February 8, 2007, respondents filed a Complaint for illegal dismissal and non-payment of
separation pay against petitioners. On March 15, 2007, they amended the complaint to include
claims for underpayment of wages, non-payment of overtime pay, holiday pay, 5-day service
incentive leave pay and 13th month pay.

On August 15, 2007, Labor Arbiter (LA) Eduardo J. Carpio, issued a Decision dismissing the complaint
for lack of merit. While the LA acknowledged that respondents being pakyaw workers are considered
regular employees, he ruled that petitioners did not terminate the services of respondents and
believed in the denial of petitioners that respondents were called to their office on March 15, 2007
since respondents already initiated the present case on February 8, 2007. On the issue of
underpayment, the LA held that respondents were earning more than the minimum wage per day;
and as pakyaw workers, though they are deemed regular workers, they are not entitled to overtime
pay, holiday pay, service incentive leave pay and 13 th month pay citing the case of field personnel and
those paid on purely commission basis.

Thereafter, respondents elevated the case before the NLRC, Sixth Division. On July 29, 2008, the
NLRC affirmed the Decision of the LA and held that no substantial evidence was presented to show
that petitioners terminated the employment of respondents. It stated that pakyaw workers are not
entitled to money claims because their work depends on the availability of job orders from
petitioners' clients. Also, there was no proof that overtime work was rendered by respondents. A
motion for reconsideration was filed by respondents but the same was denied.

Aggrieved, respondents filed a petition for certiorari before the CA. In a Decision dated January 6,
2010, the CA reversed and set aside the decision ofthe NLRC. The fallo states:

chanRoblesvirtualLawlibrary

WHEREFORE, the petition for certiorari is GRANTED. Public Respondent's Decision dated July 29,
2008 and Resolution dated November 7, 2008 in NLRC LAC No. 12-003252-07 (NCR Case No. 00-02-
01233-07) are REVERSED AND SET ASIDE, and in lieu thereof, a new one is ENTERED, declaring
petitioners to have been illegally dismissed and ordering private respondents to pay them
backwages, separation pay and other monetary benefits as required by law. Upon the finality of this
decision and for the enforcement of the same, the Labor Arbiter of origin is directed to conduct
further proceedings for the purpose of determining the amount of backwages and separation pay
due petitioners.

SO ORDERED.11

A motion for reconsideration was filed by petitioners but the same was denied by the Court of
Appeals on May 13, 2010.

Hence, this petition, raising the following issues for resolution:

chanRoblesvirtualLawlibrary
1. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DECLARING THAT COMPLAINANTS
WERE ILLEGALLY DISMISSED; [and]

2. THERE ARE SERIOUS ERRORS IN THE FINDINGS OF FACTS WHICH, IF NOT CORRECTED,
WOULD CAUSE GRAVE AND IRREPARABLE DAMAGE TO THE PRIVATE RESPONDENTS. 12

Petitioners emphasized in their petition that they had always agreed and admitted 13 from the
beginning of the case the regular employment status of respondents. According to petitioners, what
they are insisting, contrary to the findings of the CA, is the alleged fact that they never dismissed the
respondents from their employment. They argued that since petitioners' business depended on the
availability of job orders, necessarily the duration of respondents' employment is not permanent but
coterminous with the completion of such job orders. They further argued that since respondents arc
"pakyaw " workers or "paid by result," they are not entitled to their money claims.

In their Comment to the Petition, respondents countered that only questions of law may be raised in
a petition for review on certiorari and that the errors being raised by petitioners arc questions of fact.

A petition for review on certiorari under Rule 45 is a mode of appeal where the issue is limited to
questions of law. In labor cases, a Rule 45 petition is limited to reviewing whether the Court of
Appeals correctly determined the presence or absence of grave abuse of discretion and deciding
other jurisdictional errors of the National Labor Relations Commission. 14chanrobleslaw

The case of Career Philippines Shipmanagement, Inc., et al. v. Serna, 15 citing Montoya v. Transmed


Manila Corp./Mr. Ellena, et al.,16 is instructive on the parameters of judicial review under Rule 45:

chanRoblesvirtualLawlibrary

As a rule, only questions of law may be raised in a Rule 45 petition. In one case, we discussed the
particular parameters of a Rule 45 appeal from the CA's Rule 65 decision on a labor case, as
follows:ChanRoblesVirtualawlibrary

In a Rule 45 review, we consider the correctness of the assailed CA decision, in contrast with the
review for jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45 limits us to the
review of questions of law raised against the assailed CA decision. In ruling for legal correctness, we
have to view the CA decision in the same context that the petition for certiorari it ruled upon was
presented to it; we have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC decision before it,
not on the basis of whether the NLRC decision on the merits of the case was correct. In other
words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal,
of the NLRC decision challenged before it. 17

Therefore, in this kind of petition, the proper question to be raised is, "Did the CA correctly
determine whether the NLRC committed grave abuse of discretion in ruling on the case?" In other
words, did the CA correctly determine whether the NLRC ruling had basis in. fact and in law? In Our
Rule 45 review, this Court must deny the petition if it finds that the CA correctly acted. These
parameters shall be used in resolving the substantive issues in this petition. 18chanrobleslaw

To resolve the issue of whether petitioners are guilty of illegal dismissal, We necessarily have to
determine the veracity of the parties' allegations, a function we are ordinarily barred from
performing when deciding a Rule 45 petition. However, due to the conflicting factual findings of the
NLRC and the CA, we find the review of the evidence on record compelling and
proper.19chanrobleslaw

The crux of the dispute boils down to two issues, namely, (a) whether respondents' employment was
terminated, and (b) whether respondents who are pakyaw workers and considered regular workers
are entitled to overtime pay, holiday pay, service incentive leave pay and 13 th month pay. Both issues
are clearly factual in nature as they involved appreciation of evidence presented before the NLRC.

There is no doubt that respondents have been under the employ of petitioners for some years. The
conflict arose when petitioners presented to respondents an employment contract hereunder
reproduced:

chanRoblesvirtualLawlibrary

A. NATE CASKET MAKER


30 Espirito St. Pangulo
Malabon, Metro Manila

CONTRACT OF EMPLOYMENT

DATE: February 3, 2007

You arc hereby assigned as worker/laborer at A. NATE CASKET MAKER. The following constitute the
terms and conditions under which the management of NATE CASKET MAKER governs.

You will be working a 5-month contract basis. Your contract will be renewed on a case-to-case basis
or based upon the efficiency of your performance. The company also reserves the right to
discontinue or terminate your employment anytime if your performance does not come to
expectations or if the conditions under which you have been employed no longer exist.

You will be receiving remuneration on a per item/piece basis [i.e., per casket made]. You are obliged
to follow strictly your schedules to work or perform your duty. During the period of your
employment, you will not [be] eligible to earn or receive any sick leave pay, [vacation] leave pay, or
any other benefits given to regular employees such as 13 th month pay and bonuses.

This contract and other conditions of your employment arc governed further by existing company
policies and regulations, of which you have already been oriented into, and by future company
policies which may be issued from time to time.
Mr. and Mrs. Armando and Anely NATE
Proprietor Proprietress

I hereby accept this employment contract knowing and understanding fully well the terms and
conditions under which it shall be governed. I hereby acknowledge that I have been thoroughly
oriented and I fully understand the whole company policies, rules and regulations and thereby agree
to abide by them when employed.

DATE: February 3, 2007                                                  EMPLOYEE/WORKER20

The said contract with a short term of five (5) months, renewable upon the terms set by petitioners,
was presented to respondents on February 3, 2007 21 (not February 8, 2007). Naturally, respondents
who had been continuously reporting to the petitioners sine 1998 without any interruption would
have second thoughts on signing the said contract.  Feeling disgruntled, they filed a Complaint with
the NLRC on February 8, 2016 for money claims. To their minds, it was a way to protect their status
of employment. It was explained in the Rejoinder they presented to the LA that it was purely money
claims but, not being learned nor assisted by a lawyer, they also checked the box for "illegal
dismissal."22chanrobleslaw

When the petitioners received the summons on March 15, 2007 in connection with the complaint,
respondents were ordered by petitioners to go to the latter's office. 23 Because there was no dismissal
yet, and thinking perhaps that it was for an amicable settlement of their claims, respondents went to
the office of petitioners. However, respondents were presented with the same contract. According to
respondents, their refusal to sign the contract irated petitioners who then told them to go home and
not to report for work anymore.24 This prompted respondents to file an amended complaint for
illegal dismissal and money claims.

The meeting on March 15, 2007 was denied by petitioners as well as the dismissal of respondents. It
is worth noting, however, that in the Position Paper of petitioners, they alleged that their offer of the
said employment contract to respondents was caused by the alleged refusal/failure of the latter to
report for work as a result of the alleged drinking and petty quarrels:

chanRoblesvirtualLawlibrary

8. Considering that the complainants refuse to do their work, a meeting was held on February 8,
2007, to have a proposal for a change of [pakyaw] system to that of contractual basis, giving them
the sample employment agreement for them to study. The herein respondents  explained to
them  that the change of work system to that of a contract basis which is  beneficial to the
complainants, the employees  will receive a vacation and sick leave, or any other benefits given to a
regular [employee] x x x.25cralawred

Clearly, the aforequoted allegation in the Position Paper of petitioners is contrary to the terms and
conditions stated in the employment contract. It is specifically stated in the employment agreement
that during the period of employment, respondents would not be eligible to earn or receive any sick
leave pay, vacation leave pay, or any other benefits given to regular employees such as 13 th month
pay and bonuses. Hence, the key to understanding petitioners' motive in severing respondents'
employment lies in the tenor of the contract itself which is the opposite to what is alleged by
petitioners in their position paper. Moreover, as correctly observed by the CA, there was the absence
of proof to show that petitioners conducted an investigation on the alleged drinking and petty
quarrelling of respondents nor did the petitioners provide respondents with an opportunity to
explain their side with respect to charges against them. The validity of the charge must be
established in a manner consistent with due process. These circumstances, taken together, lead Us
to conclude that petitioners indeed terminated respondents' employment. The positive assertion of
respondents that they were dismissed by petitioners is more convincing than the mere denial of
petitioners.

In termination cases, the burden of proving just and valid cause for dismissing an employee from his
employment rests upon the employer, and the latter's failure to do so would result in a finding that
the dismissal IS unjustified. Petitioners failed to discharge this burden. 26chanrobleslaw

It must be emphasized that employers cannot seek refuge under whatever terms of the agreement
they had entered into with their employees. The law, in defining their contractual relationship, does
so, not necessarily or exclusively upon the terms of their written or oral contract, but also on the
basis of the nature of the work of employees who had been called upon to perform. The law affords
protection to an employee, and it will not countenance any attempt to subvert its spirit and intent. A
stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his
security of tenure. The sheer inequality that characterizes employer employee relations, where the
scales generally tip against the employee, often scarcely provides him real and better
options.27chanrobleslaw

Furthermore, petitioners agreed that respondents arc regular employees. Article 280 of the Labor
Code provides:

chanRoblesvirtualLawlibrary

Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be
deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph;


Provided, That, any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he
is employed and his employment shall continue while such activity exist.

This provision classifies employees into regular, project, seasonal, and casual. It further classifies
regular employees into two kinds: (I) those "engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer"; and (2) casual employees who
have "rendered at least one year of service, whether such service is continuous or broken."
A regular employment, whether it is one or not, is aptly gauged from the concurrence, or the non-
concurrence, of the following factors  (a) the manner of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c) the presence or absence of the power of dismissal;
and (d) the presence or absence of the power to control the conduct of the putative employee or the
power to control the employee with respect to the means or methods by which his work is to be
accomplished. The "control test" assumes primacy in the overall consideration. Under this test, an
employment relation obtains where work is performed or services are rendered under the control
and supervision of the party contracting for the service, not only as to the result of the work but also
as to the manner and details of the performance desired. 28chanrobleslaw

There is no dispute that the tasks performed by respondents as carpenters, painters,


and mascilladors were necessary and desirable in the usual business of petitioners who are engaged
in the manufacture and selling of caskets. We have to also consider the length of time that
respondents worked for petitioners, commencing on various dates from 1998 to 2007. In addition,
the power of control of petitioners over respondents is clearly present in this case. Respondents
follow the steps in making a casket, as instructed by the petitioners, like carpentry, mascilla, rubbing
and painting. They had their own notebooks where they listed the work completed with their
signature and the date finished. The same would be checked by petitioners as basis for the
compensation for the day. Thus, petitioners wielded control over the respondents in the discharge of
their work.

It should be remembered that the control test merely calls for the existence of the right to control,
and not necessarily the exercise thereof. It is not essential that the employer actually supervises the
performance of duties by the employee. It is enough that the former has a right to wield the
power.29 Hence, pakyaw workers are considered regular employees for as long as their employers
exercise control over them. Thus, while respondents' mode of compensation was on a per-piece
basis, the status and nature of their employment was that of regular employees. 30chanrobleslaw

As regular employees, respondents were entitled to security of tenure and could be dismissed only
for just or authorized causes and after the observance of due process. The right to security of tenure
is guaranteed under Article XIII, Section 3 of the 1987 Constitution:

chanRoblesvirtualLawlibrary

Article XIII. Social Justice and Human Rights


Labor

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.31

Likewise, Article 279 of the Labor Code also provides for the right to security of tenure, thus:

chanRoblesvirtualLawlibraryArt. 279. Security of tenure. In cases of regular employment, the


employer shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual
reinstatement.32chanrobleslaw

Therefore, on the right to security of tenure, no employee shall be dismissed, unless there are just or
authorized causes and only after compliance with procedural and substantive due process. Section 2,
Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code provides:

chanRoblesvirtualLawlibrary

SEC. 2. Notice of Dismissal. - Any employer who seeks to dismiss a worker shall furnish him a written
notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of
abandonment of work, the notice shall be served at the workers' last known address.

Petitioners violated respondents' rights to security of tenure and constitutional right to due process
in not even serving them with a written notice of termination which would recite any valid or just
cause for their dismissal. Respondents were merely told that their services are terminated. Thus, the
Court of Appeals correctly ruled that private respondents were illegally dismissed.

Under Article 279 of the Labor Code as aforestated, an employee unjustly dismissed from work is
entitled to reinstatement and backwages, among others. Reinstatement restores the employee who
was unjustly dismissed to the position from which he was removed, that is, to his status quo ante
dismissal, while the grant of backwages allows the same employee to recover from the employer
that which he had lost by way of wages as a result of his dismissal. These twin remedies -
reinstatement and payment of ackwages - make the dismissed employee whole who can then look
forward to continued employment. Thus, do these two remedies give meaning and substance to the
constitutional right of labor to security of tenure. 33  Respondents are, therefore, entitled to
reinstatement with full backwages pursuant to Article 279 of the Labor Code, as amended by R.A. No.
6715.

On reinstatement, the CA ordered payment of separation pay in lieu of reinstatement. The accepted
doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be
awarded if the employee decides not to be reinstated. We defer to the findings of the Court of
Appeals and authorized under jurisprudence, that separation pay in lieu of reinstatement is
warranted in this case.34 Respondents filed their complaint in 2007. Nine (9) years are a substantial
period35 to bar reinstatement. The dispositive portion of the CA Decision is consistent with the
premise that the respondents were entitled to reinstatement by reason of their illegal dismissal, but
they could receive instead separation pay in lieu of reinstatement if reinstatement is no longer
practicable.

That being said, the amount of backwages to which each respondent is entitled, however, cannot be
fully settled at this time. As respondents are piece-rate workers being paid by the piece, there is need
to determine the varying degrees of production and days worked by each worker. Clearly, this issue
is best left to the NLRC. In Labor Congress of the  Philippines v. NLRC,36 the Court was confronted with
a situation wherein several workers paid on a piece-rate basis were entitled to backwages by reason
of illegal dismissal. The Court noted that as the piece-rate workers had been paid by the piece, "there
[was] a need to determine the varying degrees of production and days worked by each worker," and
that "this issue is best left to the [NLRC]." We believe the same result should obtain in this case, and
the NLRC be tasked to conduct the proper determination of the appropriate amount of backwages
due to each of the respondents.37chanrobleslaw

Nonetheless, even as the case should be remanded to the NLRC for the proper determination of
backwages, nothing in this decision should be construed in a manner that would impede the award
of separation pay to the respondents as previously rendered by the CA. In lieu of reinstatement then,
separation pay at the rate of one month for every year of service, with a fraction of at least six (6)
months of service considered as one (1) year, is in order. 38chanrobleslaw

As to the other benefits, namely, holiday pay, 13 th month pay, service incentive leave pay and
overtime pay which respondents prayed for in their complaint, We affirm the ruling of the CA that
respondents are so entitled to these benefits.

In the case of David v. Macasio,39 We held that workers engaged on pakyaw or "task basis" are
entitled to holiday and service incentive leave pay (SIL) provided they are not field personnel:

chanRoblesvirtualLawlibrary

In short, in determining whether workers engaged on "pakyaw" or task basis" is entitled to holiday
and SIL pay, the presence (or absence) of employer supervision as regards the worker's time and
performance is the key: if the worker is simply engaged on "pakyaw" or task basis, then the general
rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay)40 and Article 95 (SIL pay) 41 of the Labor
Code. However, if the worker engaged on pakyaw or task basis also falls within the meaning of "field
personnel" under the law, then he is not entitled to these monetary benefits.42

Based on the definition of field personnel under Article 82, 43 respondents do not fall under the
definition of "field personnel." First, respondents regularly performed their duties at petitioners'
place of business; second, their actual hours of work could be determined with reasonable certainty;
and, third, petitioners supervised their time and performance of their duties. Since respondents
cannot be considered as "field personnel," then they are not exempted from the grant of holiday and
SIL pay even as they were engaged on pakyaw or task basis.

With respect to the payment of 13 th month pay, however, We find that respondents are not entitled
to such benefit. Again, as We ruled in the case of David v. Macasio:44chanrobleslaw

The governing law on 13th month pay is Presidential Decree No. 851. 45 As with holiday and SIL pay,
13th month pay benefits generally cover all employees; an employee must be one of those expressly
enumerated to be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 851
enumerates the exemptions from the coverage of 13th month pay benefits. Under Section 3(e),
"employers of those who are paid on xxx task basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the performance thereof' are
exempted.

Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and
Regulations Implementing PD No. 851 exempts employees "paid on task basis" without any reference
to "field personnel." This could only mean that insofar as payment of the 13th month pay is
concerned, the law did not intend to qualify the exemption from its coverage with the requirement
that the task worker be a "field personnel" at the same time. 46

All told, We need to stress that the Constitution affords full protection to labor, and that in light of
this Constitutional mandate, We must be vigilant in striking down any attempt of the management to
exploit or oppress the working class. The law, in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer. It should be made clear that when the law
tilts the scales of justice in favor of labor, it is in recognition of the inherent economic inequality
between labor and management. The intent is to balance the scales of justice; to put the two parties
on relatively equal positions.47chanrobleslaw

WHEREFORE, the Petition is PARTIALLY GRANTED in so far as the payment of 13th month pay to
respondents is concerned. In all other aspects, the Court AFFIRMS the Decision dated January 6,
2010 and the Resolution dated May 13, 2010 of the Court of Appeals in CA-G.R. SP No. 106965.

SO ORDERED.chanRoblesvirtualLawlibrary

Velasco, Jr., (Chairperson), Perez, Reyes, and Jardeleza, JJ., concur.

Endnotes:

1
Rollo, pp. 3-15.

2
 Penned by Associate Justice Hakim S. Abdulwahid, with Associate Justices Ramon M. Balo, Jr. and
Amy C. Lazaro-Javier, concurring; rollo, pp. 217-226.

3
 Id. at 239-240.

4
 Id. at 153-159.

5
 Id. at 123-129.

6
 Id. at 18-24.

7
 Petitioners presented as evidence several job orders for caskets dating from February 1, 2007 to
February 8, 2007 which were attached as Annexes "A" to "E" in their Position Paper; id.  at 25-30.

8
Rollo, p. 20.

9
 Id. at 31-36.

10
 Annex "A" of the Position Paper of Respondents; id. at 37.

11
Rollo, pp. 225-226.
12
 Id. at 8.

13
 Id.

14
Fuji Television Network, Inc. v. Espiritu,  G.R. Nos. 204944-45, December 3, 2014, 744 SCRA, 31, 63.

15
 700 Phil. 1, 9 (2012).

16
 613 Phil. 696. 707 (2009).

17
Career Philippines v. Serna, supra note 15. (Emphasis in the original)

18
Fuji Television Network, Inc. v. Espiritu, supra note 14, at 65-66.

19
Philippine Rural Reconstruction Movement (PRRM) v. Pulgar; 637 Phil. 244, 252 (2010).

20
Rollo, p. 37.

21
 Respondents' (petitioners, herein) Reply to Complainants' (respondents, herein) Position Paper, id.
at 41; Petition for Certiorari filed by herein respondents with the CA, id. at 213; Petitioners' Comment
to the Petition for Review (filed by herein respondents with the CA), id. at 245.

22
 The Revised Rules of the NLRC provide under Sec. 3, Rule V, that parties should not be allowed to
allege facts not referred to or included in the complaint, or position paper, affidavits and other
documents. This would mean that although not contained in the complaint, any claim can still be
averred in the position paper, as was done by the petitioners, or in an affidavit or other documents.
(Garcia v. NLRC, G.R. No. ll 0518, August 1, 1994, 234 SCRA 632, 638).

23
Rollo, p. 213.

24
 Respondent's (Complainant) Memorandum of Appeal with the NLRC, id. at 133.

15
Rollo, p. 20. (Underlining supplied)

26
Reno Foods, Inc. v. NLRC, 319 Phil. 500, 507-508 (I995).

27
Paguio v. NLRC, 451 Phil. 243, 252-253 (2003).

28
 Id. at 250-251.

29
Gapayao v. Fulo, et al., 711 Phil. 179, 196 (2013).

30
  Labor Congress of the Philippines v. NLRC, 352 Phil. 1118, 1139 (1998).

31
Emphasis supplied.

32
Emphasis supplied.
33
  Verdadero v. Barney Autolines Group of' Companies Transport, Inc., et al, 693 Phil. 646, 659 (2012).

34
  Velasco v. NLRC,  525 Phil. 749,761 (2006).

35
  In Association of Independent Unions in the Philippines v. National Labor Relations
Commission (364 Phil. 697, 713 (1999) [Per J. Purisima, Third Division]), this court considered "more
than eight (8) years" as substantial. In San Miguel Properties Philippines, Inc. v. Gucaban (669 Phil.
288, 302 (2011) [Per J. Peralta, Third Division]), more than 10 years had lapsed. In G & S Transport
Corporation v. Infante (559 Phil. 701, 716 (2007) [Per J. Tinga, Second Division]), 17 years had lapsed
from the time of illegal dismissal. In these cases, this court deemed it proper to award separation pay
in lieu of reinstatement. Television Network, Inc. v. Espiritu, supra note 14, at 98.

36
 Supra note 30, at 1138.

37
  Velasco v. NLRC, supra note 34, at 763.

38
 Labor Congress of the Philippines, supra note 30, at 1138.

39
 G.R. No. 195466, July 2, 2014, 729 SCRA 67.

40
 The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR
reads:

chanRoblesvirtualLawlibrary

A11. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than (10) workers.

xxxx

SECTION 1. Coverage.- This Rule shall apply to all employees except:

chanRoblesvirtualLawlibraryxxxx

(e) Field personnel and other employees whose time and performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely commission basis, or
those who are paid a fixed amount for performing work irrespective of the time consumed in the
performance thereof.

41
 Art. 95.  Right to service incentive.

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.

(b) This provision shall not apply to those who are already enjoying the benefit herein provided,
those enjoying vacation leave with pay of at least five days and those employed in establishments
regularly employing less than ten employees or in establishments exempted from granting this
benefit by the Secretary of Labor and Employment after considering the viability or financial
condition of such establishment.

xxxx

Section 1. Coverage.  This rule shall apply to all employees except:

chanRoblesvirtualLawlibraryxxxx

(e) Field personnel and other employees whose performance' is unsupervised by the employer


including those who are engaged on task or contract basis, purely commission basis, or those who
are paid a fixed amount for performing work irrespective of the time consumed in the performance
thereof. (Emphasis ours)

42
David v. Macasio, supra note 39, at 92-93. (Underscoring supplied.)

43
 "Field personnel" shall refer to non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty.

44
Supra note 39.

45
 Enacted on December 16, 1975.

46
David v. Macasio, supra note 39, at 93-94.

47
  Ledesma, Jr. v. NLRC, Second Division, 562 Phil. 939. 952 (2007).

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October-2016 Jurisprudence                 

 G.R. No. 201809, October 11, 2016 - H. SOHRIA PASAGI DIAMBRANG, Petitioner, v. COMMISSION
ON ELECTIONS AND H. HAMIM SARIP PATAD, Respondent.

 G.R. No. 212686, October 05, 2016 - SERGIO R. OSMEÑA III, Petitioner, v. POWER SECTOR ASSETS
AND LIABILITIES MANAGEMENT CORPORATION, EMMANUEL R. LEDESMA, JR., SPC POWER
CORPORATION, AND THERMA POWER VISAYAS, INC., Respondents.

 G.R. Nos. 221562-69, October 05, 2016 - COMMO. LAMBERTO R. TORRES (RET.), Petitioner, v.
SANDIGANBAYAN (FIRST DIVISION) AND PEOPLE OF THE PHILIPPINES, Respondents.

 A.C. No. 8494, October 05, 2016 - SPOUSES EMILIO AND ALICIA JACINTO, Complainants, v. ATTY.
EMELIE P. BANGOT, JR., Respondent.

 G.R. No. 210903, October 11, 2016 - PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), Petitioner,
v. COMMISSION ON AUDIT (COA) AND HON. MA. GRACIA M. PULIDO TAN, CHAIRPERSON,
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 A.C. No. 4269, October 11, 2016 - DOLORES NATANAUAN, Complainant, v. ATTY. ROBERTO P.
TOLENTINO, Respondent.

 G.R. No. 198127, October 05, 2016 - CO IT a.k.a. GONZALO CO IT, Petitioner, v. ANTHONY CO,
MARY CO CHO, PETER CO AND LUCY SO HUA TAN CO, Respondent.

 G.R. No. 167952, October 19, 2016 - GONZALO PUYAT & SONS, INC., Petitioner, v. RUBEN ALCALDE
(DECEASED), SUBSTITUTED BY GLORIA ALCALDE, REPRESENTATIVE OF THE FARMER BENEFICIARIES,
Respondent.
 A.C. No. 8168, October 12, 2016 - SPOUSES EDWIN B. BUFFE AND KAREN M. SILVERIO-BUFFE,
Complainants, v. SEC. RAUL M. GONZALEZ, USEC. FIDEL J. EXCONDE, JR., AND CONGRESSMAN
ELEANDRO JESUS F. MADRONA, Respondent.

 G.R. No. 212483, October 05, 2016 - PHILIPPINE NATIONAL BANK, Petitioner, v. VENANCIO C.
REYES, JR., Respondent.

 G.R. No. 218952, October 19, 2016 - PEOPLE OF THE PHILIPPINES, Appellee, v. AURELIO
GUILLERGAN Y GULMATICO, Appellant.

 G.R. No. 219037, October 19, 2016 - RCBC SAVINGS BANK, Petitioner, v. NOEL M. ODRADA,
Respondent.

 G.R. No. 208535, October 19, 2016 - LEO'S RESTAURANT AND BAR CAFÉ MOUNTAIN
SUITE BUSINESS APARTELLE, LEO Y. LUA AND AMELIA LUA, Petitioners, v. LAARNE C. BENSING,
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 G.R. No. 216671, October 03, 2016 - JERWIN DORADO, Petitioner, v. PEOPLE OF THE PHILIPPINES,
Respondent.

 G.R. No. 225044, October 03, 2016 - MANILA DOCTORS COLLEGE AND TERESITA O. TURLA,
Petitioners, v. EMMANUEL M. OLORES, Respondent.

 G.R. No. 205090, October 17, 2016 - GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR.,
Petitioners, v. UNIVERSAL ROBINA CORPORATION AND NISSIN UNIVERSAL ROBINA CORPORATION,
Respondent.

 G.R. No. 221062, October 05, 2016 - ELIZABETH SY-VARGAS, Petitioner, v. THE ESTATE OF
ROLANDO OGSOS, SR. AND ROLANDO OGSOS, JR., Respondent.

 G.R. No. 196134, October 12, 2016 - VALENTIN S. LOZADA, Petitioner, v. MAGTANGGOL
MENDOZA, Respondent.

 G.R. No. 171420, October 05, 2016 - AURORA A. SALES, Petitioner, v. BENJAMIN D. ADAPON,
OFELIA C. ADAPON AND TEOFILO D. ADAPON, Respondent.

 G.R. No. 191825, October 05, 2016 - DEE JAY'S INN AND CAFE AND/OR MELINDA FERRARIS,
Petitioners, v. MA. LORINA RAÑESES, Respondent.

 G.R. No. 171865, October 12, 2016 - PHILIPPINE NATIONAL BANK, Petitioner, v. HEIRS OF
BENEDICTO AND AZUCENA ALONDAY, Respondent.

 G.R. No. 191150, October 10, 2016 - NATIONAL ASSOCIATION OF ELECTRICITY CONSUMERS FOR
REFORMS (NASECORE), REPRESENTED BY PETRONILO ILAGAN, FEDERATION OF VILLAGE
ASSOCIATIONS (FOVA), REPRESENTED BY SIEGFRIEDO VELOSO, AND FEDERATION OF LAS PIÑAS
VILLAGE ASSOCIATIONS (FOLVA), REPRESENTED BY BONIFACIO DAZO, Pemtitioners, v. MANILA
ELECTRIC COMPANY (MERALCO), Respondent.

 G.R. No. 208351, October 05, 2016 - BENJAMIN RUSTIA, JR., BENJAMIN RUSTIA, SR., AND
FAUSTINO "BONG" RUSTIA, Petitioners, v. PEOPLE OF THE PHILIPPINES, Respondent.

 I.P.I. No. 16-243-CA-J, October 11, 2016 - ARTHUR F. MORALES I, Complainant, v. LEONCIA REAL-
DIMAGIBA, JHOSEP Y. LOPEZ, AND RAMON R. GARCIA, ASSOCIATE JUSTICES, FIFTEENTH DIVISION,
COURT OF APPEALS, MANILA, Respondents.
 G.R. No. 215038, October 17, 2016 - NORMA C. MAGSANO, ISIDRO C. MAGSANO, RICARDO C.
MAGSANO, ROQUE C. MAGSANO, JR., NIDA M. CAGUIAT, PERLITA MAGSANO, AND SALVADOR C.
MAGSANO, Petitioners, v. PANGASINAN SAVINGS AND LOAN BANK, INC. AND SPOUSES EDDIE V.
MANUEL AND MILAGROS C. BALLESTEROS, SUBSTITUTED BY HER HEIRS: GEMMA C. MANUEL PEREZ,
ANGELO JOHNDREW MANUEL, AND RESSY C. MANUEL, Respondents.

 A.C. No. 8638, October 10, 2016 - DATU BUDENCIO E. DUMANLAG, Complainant, v. ATTY.
WINSTON B. INTONG, Respondent.

 G.R. Nos. 177857-58, October 05, 2016 - PHILIPPINE COCONUT PRODUCERS FEDERATION, INC.
(COCOFED), MANUEL V. DEL ROSARIO, DOMINGO P. ESPINA, SALVADOR P. BALLARES, JOSELITO A.
MORALEDA, PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA TITULAR, AND RAYMUNDO C. DE
VILLA, Petitioners, v. REPUBLIC OF THE PHILIPPINES, Respondent.; WIGBERTO E. TAÑADA, OSCAR F.
SANTOS, SURIGAO DEL SUR FEDERATION OF AGRICULTURAL COOPERATIVES (SUFAC) AND MORO
FARMERS ASSOCIATION OF ZAMBOANGA DEL SUR (MOFAZS), REPRESENTED BY ROMEO C.
ROYANDOYAN, Intervenors.; G.R. No. 178193 - DANILO B. URSUA, Petitioner, v. REPUBLIC OF THE
PHILIPPINES, Respondent.

 A.C. No. 7388, October 19, 2016 - ATTY. RUTILLO B. PASOK, Complainant, v. ATTY. FELIPE G.
ZAPATOS, Respondent.

 G.R. No. 220761, October 03, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. EDDIE
OLAZO, MIGUEL CORDIS, CHARITO FERNANDEZ AND ROGELIO LASCONIA, Accused,; CHARITO
FERNANDEZ, Accused-Appellant.

 G.R. No. 214875, October 17, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ARIELLAYAG
ACCUSED-APPELLANTS., Respondent.

 G.R. No. 219584, October 17, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. PLACIDO
GOCO Y OMBROG, Accused-Appellant.

 G.R. No. 192679, October 17, 2016 - ANTONIO ESCOTO, Petitioner, v. PHILIPPINE AMUSEMENT
AND GAMING CORPORATION, Respondent.

 G.R. No. 216023, October 05, 2016 - DR. RESTITUTO C. BUENVIAJE, Petitioner, v. SPOUSES JOVITO
R. AND LYDIA B. SALONGA, JEBSON HOLDINGS CORPORATION AND FERDINAND JUAT BAÑEZ,
Respondent.

 G.R. No. 206691, October 03, 2016 - ATTY. RAYMUND P. PALAD, Petitioner, v. LOLIT SOLIS, SALVE
V. ASIS, AL G. PEDROCHE AND RICARDO F. LO, Respondents.

 G.R. No. 206534, October 05, 2016 - JULIA LIM ROSARIO, MERCEDES LIM CUSTODIO AS
REPRESENTED BY DONNO CUSTODIO, NORMA LICARDO, AND LEILA ESPIRITU, Petitioners, v.
ALFONSO LIM, Respondent.

 G.R. No. 198782, October 19, 2016 - ALLAN BAZAR, Petitioner, v. CARLOS A. RUIZOL, Respondent.

 G.R. No. 191823, October 05, 2016 - DEE JAY'S INN AND CAFE AND/OR MELINDA FERRARIS,
Petitioners, v. MA. LORINA RAÑESES, Respondent.

 G.R. No. 207898, October 19, 2016 - ERROL RAMIREZ, JULITO APAS, RICKY ROSELO AND ESTEBAN
MISSION, JR., Petitioners, v. POLYSON INDUSTRIES, INC. AND WILSON S. YU, Respondent.

 G.R. No. 223561, October 19, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JIMMY
PITALLA, JR. Y DIOSA A.K.A. "BEBE," Accused-Appellant.
 G.R. No. 196670, October 12, 2016 - ALLIED BANKING CORPORATION, Petitioner, v. SPOUSES
RODOLFO AND GLORIA MADRIAGA, Respondents.

 G.R. No. 192282, October 05, 2016 - A. NATE CASKET MAKER AND/OR ARMANDO AND ANELY
NATE, Petitioners, v. ELIAS V. ARANGO, EDWIN M. MAPUSAO, JORGE C. CARIÑO, JERMIE MAPUSAO,
WILSON A. NATE, EDGAR A. NATE, MICHAEL A. MONTALES, CELSO A. NATE, BENJES A. LLONA AND
ALLAN A. MONTALES, Respondent.

 A.C. No. 6767, October 05, 2016 - ELIZABETH RECIO, Complainant, v. ATTY. JOSELITO I. FANDIÑO,
Respondent.

 G.R. No. 187544, October 03, 2016 - MARILOU BALASBAS, FELIPE OLEGARIO, JOSE NARYAEZ,
RODOLFO BUMANLAG,* TEODORO MISIA, MARCELINO VILA, HILARIO ALCALA, MACARIO CORDOVA,
SALVADOR ABAIGAR, ATILANO BACUD & LEONIDES BOLVIDO, Petitioners, v. ROBERTO L. UY REALTY
& DEVELOPMENT CORPORATION, Respondent.

 G.R. No. 211539, October 17, 2016 - THAMERLANE M. PEREZ, Petitioner, v. DOMINADOR PRISCILLA
RASACEÑA, NAVARRO AND ADELFA LIM, Respondent.

 G.R. No. 179566, October 19, 2016 - SPOUSES LORETO G. NICOLAS AND LOLITA SARIGUMBA,
Petitioners, v. AGRARIAN REFORM BENEFICIARIES ASSOCIATION (ARBA), AND FARMERS
ASSOCIATION OF DAVAO CITY KMPI, FELIPE RAMOS, HILARIO PASIOL, ROGELIO ASURO, ARTURO
ATABLANCO, RODRIGO ATABLANCO, BONIFACIO ATIMANA, PATRICIO AVILA, CRISANTO BACUS,
ERNESTO DONAHAN, SR., NESTOR LOCABERTE, MANILO REYES, ANDRES SAROL, SHERLITO TAD-I,
ANTONIO TANGARO, OLIGARIO TANAGARO,* CRISITUTO TANGARO,** FELICIANO TANGARO,
GODOFREDO NABASCA, WENNIE ALIGARME, PEDRO TATOY, JR., FELIPE UMAMALIN, PEDRO TATOY,
SR., ANTONIO YANGYANG, ROMEO GANTUANGCO, VICTOR ALIDON, JAIME TATOY AND JESUS TATOY,
JR., Respondents.

 G.R. No. 208410, October 19, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. MARY JOY
CILOT Y MARIANO AND ORLANDO BRIGOLE Y APON, Accused-Appellants.

 G.R. No. 168134, October 05, 2016 - FERRO CHEMICALS, INC., Petitioner, v. ANTONIO M. GARCIA,
ROLANDO NAVARRO, JAIME Y. GONZALES AND CHEMICAL INDUSTRIES OF THE PHILIPPINES, INC.,
Respondents.; G.R. NO. 168183 - JAIME Y. GONZALES, Petitioner, v. HON. COURT OF APPEALS AND
FERRO CHEMICALS, INC., Respondents.; G.R. NO. 168196 - ANTONIO M. GARCIA, Petitioner, v. FERRO
CHEMICALS, INC., Respondent.

 G.R. Nos. 188642 & 189425, October 17, 2016 - AGDAO RESIDENTS INC., THE DIRECTORS
LANDLESS LANDLESS ASSOCIATION, BOARD OF OF AGDAO ASSOCIATION, INC., IN THEIR PERSONAL
CAPACITY NAMELY: ARMANDO JAVONILLO, MA. ACELITA ARMENTANO, ALEX JOSOL, ANTONIA
AMORADA, JULIUS ALINSUB, POMPENIANO ESPINOSA, JR., SALCEDO DE LA CRUZ, CLAUDIO LAO,
CONSORCIO DELGADO, ROMEO CABILLO, RICARDO BACONG, RODOLFO GALENZOGA, BENJAMIN
LAMIGO, AND ASUNCION A. ALCANTARA, Petitioners, v. ROLANDO MARAMION, LEONIDAS
JAMISOLA, VIRGINIA CANOY, ELIZABETH GONZALES, CRISPINIANO QUIRE-QUIRE, ERNESTINO
DUNLAO, ELLA DEMANDANTE, ELLA RIA DEMANDANTE, ELGIN DEMANDANTE, SATURNINA WITARA,
VIRGILIO DAYONDON, MELENCIA MARAMION, ANGELICA PENKIAN, PRESENTACION TAN, HERNANI
GREGORY, RUDY GIMARINO, VALENTIN CAMEROS, RODEL CAMEROS, ZOLLO JABONETE, LUISITO
TAN, JOSEPH QUIRE-QUIRE, ERNESTO DUNLAO, JR., FRED DUNLAO, LIZA MARAMION, CLARITA
ROBILLA, RENATO DUNLAO AND PRUDENCIO JUARIZA, JR., Respondents.; G.R. NOS. 188888-89 -
ROLANDO MARAMION, LEONIDAS JAMISOLA, VIRGINIA CANOY, ERNESTINO DUNLAO, ELLA
DEMANDANTE, ELLA RIA DEMANDANTE, ELGIN DEMANDANTE, SATURNINA WITARA, MELENCIA
MARAMION, LIZA MARAMION, ANGELICA PENKIAN, PRESENTACION TAN, AS SUBSTITUTED BY HIS
LEGAL HEIRS: HERNANI GREGORY, RUDY GIMARINO, RODEL CAMEROS, VALENTIN CAMEROS,
VIRGILIO DAYONDON, PRUDENCIO JUARIZA, JR., ZOILO JABONETE, LUISITO TAN, ERNESTINO
DUNLAO, JR., FRED DUNLAO, CLARITA ROBILLA, AND RENATO DUNLAO, Petitioners, v. AGDAO
LANDLESS RESIDENTS ASSOCIATION, INC., THE DIRECTORS LANDLESS BOARD OF OF AGDAO
RESIDENTS ASSOCIATION, INC., IN THEIR PERSONAL CAPACITY, NAMELY: ARMANDO JAVONILLO, MA.
ACELITA ARMENTANO, ALEX JOSOL, ANTONIA AMORADA, JULIUS ALINSUB, POMPENIANO ESPINOSA,
JR. JACINTO BO-OC, HERMENIGILDO DUMAPIAS, SALCEDO DE LA CRUZ, CLAUDIO LAO, CONSORCIO
DELGADO, ROMEO CABILLO, RICARDO BACONG, RODOLFO GALENZOGA, BENJAMIN LAMIGO,
ROMEO DE LA CRUZ, ASUNCION ALCANTARA AND LILY LOY, Respondents.

 G.R. No. 183416, October 05, 2016 - PROVINCIAL ASSESSOR OF AGUSAN DEL SUR, Petitioner, v.
FILIPINAS PALM OIL PLANTATION, INC., Respondent.

 G.R. No. 212980, October 10, 2016 - BUENAVISTA PROPERTIES, INC., AND/OR JOSEPHINE CONDE,
Petitioners, v. RAMON G. MARIÑO, REPRESENTED BY ATTY. OSWALDO F. GABAT AS ATTORNEY-IN-
FACT AND COUNSEL VICE ATTY. AMADO DELORIA, FORMER ATTORNEY-IN-FACT AND COUNSEL,
Respondent.

 G.R. No. 203610, October 10, 2016 - REPUBLIC OF THE PHILIPPINES AND HOUSING AND URBAN
DEVELOPMENT COORDINATING COUNCIL (HUDCC), Petitioners, v. GONZALO ROQUE, JR., MANUELA
ALMEDA ROQUE, EDUVIGIS A. PAREDES, MICHAEL A. PAREDES, PURIFICACION ALMEDA, JOSE A.
ALMEDA, MICHELLE A. ALMEDA, MICHAEL A. ALMEDA, ALBERTO DELURA, AND THERESA ALMEDA,
Respondent.

 G.R. No. 199271, October 19, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. JEHAR
REYES, Accused-Appellant.

 G.R. No. 211977, October 12, 2016 - MARIANO LIM, Petitioner, v. PEOPLE OF THE PHILIPPINES,
Respondent.

 G.R. No. 222419, October 05, 2016 - RAMIL R. VALENZUELA, Petitioner, v. ALEXANDRA MINING
AND OIL VENTURES, INC. AND CESAR E. DETERA, Respondent.

 G.R. No. 197557, October 05, 2016 - MAUREEN P. PEREZ, Petitioner, v. COMPARTS INDUSTRIES,
INC., Respondent.

 G.R. No. 212562, October 12, 2016 - AVELINO ANGELES Y OLANO, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.

 A.M. No. MTJ-10-1755, October 18, 2016 - WILFREDO F. TUVILLO, Complainant, v. JUDGE HENRY E.
LARON, RESPONDENT.; A.M. NO. MTJ-10-1756 - MELISSA J. TUVILLO A.K.A MICHELLE JIMENEZ,
Complainant, v. JUDGE HENRY E. LARON, Respondent.

 G.R. No. 215802, October 19, 2016 - RIZALINA GEMINA, ROSARIO ACANTILADO, JUANITA REYES,
EFREN EUGENIO, ROMELIA EUGENIO, AMADOR EUGENIO, JR., ANTONIO EUGENIO, LERMA E. RIBAC,
ELVIRA E. SIMEON AND TOMAS EUGENIO, ALL REPRESENTED BY CANDIDO GEMINA, JR., Petitioners,
v. JUANITO EUGENIO, LOLITA EUGENIO-SEV1LLA, BONIFACIO EUGENIO, ELEONOR EUGENIO, JOSE
EUGENIO, AND THE SPOUSES LAUREL AND ZENAIDA MARIANO, Respondents.

 G.R. No. 224889, October 19, 2016 - PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. MC HENRY
SUAREZ Y ZURITA, JOHN JOSEPH RAVENA Y ACOSTA AND JOHN PAUL VICENCIO Y BARRANCO,
Accused-Appellants.
 G.R. No. 193321, October 19, 2016 - TAKENAKA CORPORATION-PHILIPPINE BRANCH, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.

 G.R. No. 172948, October 05, 2016 - PHILIPPINE ASSOCIATED SMELTING AND REFINING
CORPORATION, Petitioner, v. PABLITO O. LIM, MANUEL A. AGCAOILI, AND CONSUELO M. PADILLA,
Respondents.

 G.R. No. 219558, October 19, 2016 - HEIRS OF JOHNNY AOAS, REPRESENTED BY BETTY PUCAY,
Petitioners, v. JULIET AS-IL, Respondent.

 G.R. No. 217455, October 05, 2016 - OYSTER PLAZA HOTEL, ROLITO GO, AND JENNIFER AMPEL,
Petitioners, v. ERROL O. MELIVO, Respondent.

 G.R. No. 195295, October 05, 2016 - REPUBLIC OF THE PHILIPPINES, Petitioner, v.
SANDIGANBAYAN, FOURTH DIVISION, FERDINAND "BONGBONG" R. MARCOS, JR., MA. IMELDA
"IMEE" R. MARCOS-MANOTOC, GREGORIO MA. ARANETA III, AND IRENE R. MARCOS ARANETA,
Respondents.

 G.R.No. 204261, October 05, 2016 - EDWARD C. DE CASTRO AND MA. GIRLIE F. PLATON,
Petitioners, v. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, SILVERICON, INC.,
AND/OR NUVOLAND PHILS., INC., AND/OR RAUL MARTINEZ, RAMON BIENVENIDA, AND THE BOARD
OF DIRECTORS OF NUVOLAND, Respondents.

 G.R. No. 201074, October 19, 2016 - SPOUSES RAMON SY AND ANITA NG, RICHARD SY, JOSIE ONG,
WILLIAM SY AND JACKELINE DE LUCIA, Petitioners, v. WESTMONT BANK (NOW UNITED OVERSEAS
BANK PHILIPPINES) AND PHILIPPINE DEPOSIT INSURANCE CORPORATION, AS ASSIGNEE OF UNITED
OVERSEAS BANK PHILIPPINES, Respondents.

 G.R. No. 203072, October 18, 2016 - DEVELOPMENT ACADEMY OF THE PHILIPPINES, Petitioner, v.
CHAIRPERSON MA. GRACIA M. PULIDO TAN, COMMISSIONER JUANITO G. ESPINO, JR.,
COMMISSIONER HEIDI L. MENDOZA, AND COMMISSION ON AUDIT, Respondents.

 G.R. No. 220383, October 05, 2016 - SONEDCO WORKERS FREE LABOR UNION (SWOFLU) / RENATO
YUDE, MARIANITO REGINO, MANUEL YUMAGUE, FRANCISCO DACUDAG, RUDY ABABAO, DOMINIC
SORNITO, SERGIO CAJUYONG, ROMULO LABONETE, GENEROSO GRANADA, EMILIO AGUS, ARNOLD
CAYAO, BEN GENEVE, VICTOR MAQUE, RICARDO GOMEZ, RODOLFO GAWAN, JIMMY SULLIVAN,
FEDERICO SUMUGAT, JR., ROMULO AVENTURA, JR., JURRY MAGALLANES, HERNAN EPISTOLA, JR.,
ROBERTO BELARTE, EDMON MONTALVO, TEODORO MAGUAD, DOMINGO TABABA, MAXIMO SALE,
CYRUS DIONILLO, LEONARDO JUNSAY, JR., DANILO SAMILLION, MARIANITO BOCATEJA, JUANITO
GEBUSION, RICARDO MAYO, RAUL ALIMON, ARNEL ARNAIZ, REBENCY BASOY, JIMMY VICTORIO
BERNALDE, RICARDO BOCOL, JR., JOB CALAMBA, WOLFRANDO CALAMBA, RODOLFO CASISID, JR.,
EDGARDO DELA PENA, ALLAN DIONILLO, EDMUNDO EBIDO, JOSE ELEPTICO, JR., MARCELINO FLORES,
HERNANDO FUENTEBILLA, SAUL HITALIA, JOSELITO JAGODILLA, NONITO JAYME, ADJIE JUANILLO,
JEROLD JUDILLA, EDILBERTO NACIONAL, SANDY NAVALES, FELIPE NICOLASORA, JOSE PAMALO-AN,
ISMAEL PEREZ, JR., ERNESTO RANDO, JR., PHILIP REPULLO, VICENTE RUIZ, JR., JOHN SUMUGAT,
CARLO SUSANA, ROMEO TALAPIERO, JR., FERNANDO TRIENTA, FINDY VILLACRUZ, JOEL VILLANUEVA,
AND JERRY MONTELIBANO, Petitioners, v. UNIVERSAL ROBINA CORPORATION, SUGAR DIVISION-
SOUTHERN NEGROS DEVELOPMENT CORPORATION (SONEDCO), Respondent.

 G.R. No. 174964, October 05, 2016 - SANGGUNIANG PANLALAWIGAN OF BATAAN, Petitioner, v.
CONGRESSMAN ENRIQUE T. GARCIA, JR., MEMBERS OF THE FACULTY, CONCERNED STUDENTS AND
THE BOARD OF TRUSTEES OF THE BATAAN POLYTECHNIC STATE COLLEGE, Respondents.
 G.R. No. 218902, October 17, 2016 - HELEN EDITH LEE TAN, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.

 G.R. No. 221773, October 18, 2016 - RG CABRERA CORPORATION, INC., Petitioner, v. DEPARTMENT
OF PUBLIC WORKS AND HIGHWAYS, AND COMMISSION ON AUDIT, Respondents.

 G.R. No. 209086, October 17, 2016 - ANGELITO R. PUBLICO, Petitioner, v. HOSPITAL MANAGERS,
INC., ARCHDIOCESE OF MANILA - DOING BUSINESS UNDER THE TRADENAME AND STYLE OF
"CARDINAL SANTOS MEDICAL CENTER", Respondents.

 G.R. No. 199480, October 12, 2016 - PEOPLE OF THE PHILIPPINES, Petitioner, v. TESS S.
VALERIANO, Respondent.

 A.C. No. 7927, October 19, 2016 - SANDY V. DOMINGO, Complainant, v. ATTY. PALMARIN E. RUBIO
AND ATTY. NICASIO T. RUBIO, Respondents.

 G.R.No. 213939, October 12, 2016 - LYLITH B. FAUSTO, JONATHAN FAUSTO, RICO ALVIA, ARSENIA
TOCLOY, LOURDES ADOLFO AND ANECITA MANCITA, Petitioners, v. MULTI AGRI-FOREST AND
COMMUNITY DEVELOPMENT COOPERATIVE (FORMERLY MAF CAMARINES SUR EMPLOYEES
COOPERATIVE, INC.), Respondent.

 G.R. No. 200087, October 12, 2016 - YOLANDA LUY Y GANUELAS, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.

Copyright © 1995 - 2020 REDiaz

G.R. No. 227215, January 10, 2018

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND


HIGHWAYS (DPWH), Petitioner, v. LEONOR MACABAGDAL, REPRESENTED BY EULOGIA
MACABAGDAL PASCUAL (FORMERLY JOHN DOE "DDD"), Respondent.

RESOLUTION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari1 assailing the Decision2 dated September 13,
2016 of the Court of Appeals (CA) in CA-G.R. CV No. 104473, which affirmed the Decision 3 dated
October 30, 2014 of the Regional Trial Court of Valenzuela City, Branch 172 (RTC) in Civil Case No. 49-
V-08, imposing legal interest on the unpaid balance of the just compensation for the subject lot at
the rate of twelve percent (12%) per annum (p.a.) computed from the time of the taking of the
property until full payment.

The Facts

On January 23, 2008, petitioner the Republic of the Philippines (petitioner), represented by the
Department of Public Works and Highways, filed 4 before the RTC a complaint5 against an unknown
owner for the expropriation of a 200-square meter (sq. m.) lot located in Barangay Ugong, Valenzuela
City, identified as Lot 1343-A-2-A-2-G, (LRC)Psd-315943 (subject lot), 6 for the construction of the C-5
Northern Link Road Project, otherwise known as North Luzon Expressway (NLEX) Segment 8.1,
traversing from Mindanao Avenue in Quezon City to the NLEX in Valenzuela City. 7
Petitioner thereafter applied for, and was granted 8 a writ of possession over the subject lot on May 5,
2008, and was required9 to deposit with the court the amount of P550,000.00 (i.e., at P2,750.00/sq.
m.) representing the zonal value thereof (provisional deposit). 10

On August 28, 2012, respondent Leonor Macabagdal (respondent), represented by Eulogia


Macabagdal Pascual, was substituted as party-defendant upon sufficient showing that the subject lot
is registered in her name under Transfer Certificate Title No. (TCT) V-103067. Respondent did not
oppose the expropriation, and received the provisional deposit. 11

The RTC appointed a board of commissioners to determine the just compensation for the subject lot,
which thereafter submitted its Commissioners' Report (Re: Just Compensation) 12 dated May 23, 2014,
recommending a fair market value of P9,000.00/sq. m. as the just compensation for the subject lot,
taking into consideration its location, neighborhood and land classification, utilities, amenities,
physical characteristics, occupancy and usage, highest and best usage, current market value
offerings, as well as previously decided expropriation cases of the same RTC involving properties
similarly situated in the same barangay. 13

The RTC Ruling

In a Decision14 dated October 30, 2014, the RTC found the recommendation of the commissioners to
be reasonable and just, and accordingly: (a) fixed the just compensation for the subject lot at
P9,000.00/ sq. m.; (b) directed petitioner to pay the same, less the provisional deposit of
P550,000.00; and (c) imposed legal interest at the rate of twelve percent (12%) p.a. on the unpaid
balance, computed from the time of the taking of the subject lot until full payment. 15

Dissatisfied, petitioner appealed16 before the CA, questioning the just compensation of P9,000.00/sq.
m. and the award of twelve percent (12%) interest rate p.a., instead of six percent (6%) p.a. 17 as
provided under Bangko Sentral ng Pilipinas  Monetary Board (BSP-MB) Circular No. 799, Series of
2013.18

The CA Ruling

In a Decision19 dated September 13, 2016, the CA affirmed the RTC Decision, holding that the
commissioners, in their recommendation, observed the parameters 20 set forth under Section 5 of
Republic Act No. 8974,21 and the findings of the RTC was amply supported by the evidence on
record.22

Hence, the instant petition claiming that the CA did not rule on the issue of the applicable rate of
interest which, in this case, should be at twelve percent (12%) p.a. from the filing of the complaint
until June 30, 2013, and thereafter, at six percent (6%) p.a. until full payment.

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA committed reversible error in
affirming the RTC's imposition of interest at the rate of twelve percent (12%) p.a. on the unpaid
balance, computed from the time of the taking of the subject lot until full payment.

The Court's Ruling

The petition is partly meritorious.

The purpose of just compensation is not to reward the owner for the property taken, but to
compensate him for the loss thereof. As such, the true measure of the property, as upheld in a
plethora of cases, is the market value at the time of the taking, when the loss resulted. 23 Indeed, the
State is not obliged to pay premium to the property owner for appropriating the latter's property; it
is only bound to make good the loss sustained by the landowner, with due consideration to the
circumstances availing at the time the property was taken. 24

In addition, the Court also recognizes that the owner's loss is not only his property, but also its
income-generating potential. Thus, when property is taken, full compensation of its value must be
immediately paid to achieve a fair exchange for the property and the potential income lost. 25 The
value of the landholdings should be equivalent to the principal sum of the just compensation due,
and interest is due and should be paid to compensate for the unpaid balance of this principal sum
after taking has been completed.26 This shall comprise the  real, substantial, full, and ample  value of
the expropriated property, and constitutes due compliance with the constitutional mandate of just
compensation in eminent domain.27

In this case, from the date of the taking of the subject lot on May 5, 2008 when the RTC issued a writ
of possession28 in favor of petitioner,29 until the just compensation therefor was finally fixed at
P9,000.00/sq. m., petitioner had only paid a provisional deposit in the amount of P550,000.00 (i.e., at
P2,750.00/sq. m.). Thus, this left an unpaid balance of the "principal sum of the just compensation,"
warranting the imposition of interest. It is settled that the delay in the payment of just compensation
amounts to an effective forbearance of money, entitling the landowner to interest on the difference
in the amount between the final amount as adjudged by the court and the initial payment made by
the government.30

However, as aptly pointed out by petitioner,31 the twelve percent (12%) p.a. rate of legal interest is
only applicable until June 30, 2013. Thereafter, legal interest shall be at six percent (6%) p.a. in line
with BSP-MB Circular No. 799, Series of 2013. Prevailing jurisprudence 32 has upheld the applicability
of BSP-MB Circular No. 799, Series of 2013 to forbearances of money in expropriation cases,
contrary to respondent's contention.33 The cases of  Sy v. Local Government of Quezon
City34 and  Land Bank of the Philippines v. Wycoco,35 cited by respondent are both inapplicable
because they were all decided prior to the effectivity of BSP-MB Circular No. 799, Series of 2013 on
July 1, 2013.36

Nonetheless, it bears to clarify that legal interest shall run not from the date of the filing of the
complaint but from the date of the issuance of the Writ of Possession on May 5, 2008, since it is from
this date that the fact of the deprivation of property can be established. As such, it is only proper that
accrual of legal interest should begin from this date. 37 Accordingly, the Court deems it proper to
correct the award of legal interest to be imposed on the unpaid balance of the just compensation for
the subject lot, which shall be computed at the rate of twelve percent (12%) p.a. from the date of the
taking on May 5, 2008 until June 30, 2013. Thereafter, or beginning July 1, 2013, until fully paid, the
just compensation due respondent shall earn legal interest at the rate of six percent (6%) p.a.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated September 13, 2016 of the Court
of Appeals (CA) in CA-G.R. CV No. 104473 is hereby AFFIRMED with the MODIFICATION imposing
legal interest at the rate of twelve percent (12%) per annum (p.a.) on the unpaid balance of the just
compensation, as determined by the Regional Trial Court of Valenzuela City, Branch 172, reckoned
from the date of the taking on May 5, 2008 to June 30, 2013 and, thereafter, at six percent (6%) p.a.
until full payment. The rest of the CA Decision stands.