METRO BOTTLED WATER CORPORATION, Petitioner v.

ANDRADA CONSTRUCTION & DEVELOPMENT

CORPORATION, INC., Respondents
G.R. No. 202430, March 6, 2019

Facts:
On April 28, 1995, Metro Bottled Water and Andrada Construction entered into a Construction Agreement for the
construction of a reinforced concrete manufacturing plant in Gateway Business Park, General Trias, Cavite for the
contract price of ₱45,570,237.90. The Construction Agreement covered all materials, labor, equipment, and tools,
including any other works required. It provided:

8. Change Order
a. Without invalidating this Agreement, the OWNER may, at any time, order additions, deletions or revisions in the Work
by means of a Change Order. The CONTRACTOR shall determine whether the Change Order causes a decrease or
increase in the Purchase Price or shortening or extension of the Contract Period. Within three (3) days from receipt of the
Change Order, CONTRACTOR shall give written notice to the OWNER of the value of the works required under the
Change Order which will increase the Contract Price and of the extension in the Contract Period necessary to complete
such works. On the other hand, if the Change Order involves deletions of some works required in the original Contract
Documents, the value of the works deleted shall be deducted from the Contract Price and the Contract Period shortened
accordingly.

In either case, any addition or reduction in the Contract Price or extension or shortening of the Contract Period
shall be mutually agreed in writing by the OWNER and the CONTRACTOR prior to the execution of the works
covered by the Change Order.

The project was to be completed within 150 calendar days or by October 10, 1995, to be reckoned from Andrada
Construction's posting of a Performance Bond to answer for liquidated damages, costs to complete the project,
and third-party claims. The Performance Bond was issued by Intra Strata Assurance Corporation (Intra Strata).
Metro Bottled Water extended the period of completion to November 30, 1995 upon Andrada Construction's
request, due to the movement of one (1) bay of the plant building, weather conditions, and change orders. De
Castro and Associates, Metro Bottled Water's consultant for the project, recommended the forfeiture of the
Performance Bond to answer for the completion and correction of the project, as well as liquidated damages for
delay. Metro Bottled Water filed a claim against the Performance Bond issued by Intra Strata. Andrada
Construction opposed the claim for lack of legal and factual basis.

According to the Construction Industry Arbitration Commission, Andrada Construction was entitled to the
claims from the change orders since Metro Bottled Water did not strictly enforce its procedures in approving
Change Orders 1 to 38 and impliedly approved Change Orders 39 to 109 by funding the payrolls and
materials. However, it deducted: (1) P648,773.63, as this was already included in the claim for change
orders; (2) P2,474,647.28, as costs for completion; and (3) P2,756,804.75, as corrective costs for the cracks
on the concrete slabs in the production plant building. The Construction Industry Arbitration Commission
also found that there was no delay in the completion since Metro Bottled Water validly granted an
extension. The Construction Industry Arbitration Commission also clarified that there were no valid factual
and legal grounds for Metro Bottled Water's termination of agreement. This was because Andrada
Construction completed the project within the extended period, and Metro Bottled Water failed to
substantiate its allegation of payroll padding. The CA affirmed the factual findings of the Construction
Industry Arbitration Commission.

Issues:
1. Whether or not the Construction Industry Arbitration Commission and the CA erred in finding that petitioner
Metro Bottled Water Corporation was liable to respondent Andrada Consumption & Development Corporation,
Inc. for unpaid work accomplishment.
2. Whether the Court of Appeals erred in affirming the arbitral tribunal's findings that: (1) petitioner agreed to
the Change Orders; (2) respondent did not commit delay in the project completion; and (3) petitioner did not
terminate the contract or take over the project. 

Rulings:
1. The Construction Industry Arbitration Commission was created by Executive Order No. 1008, or the
Construction Industry Arbitration Law, to have "original and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or after the abandonment or breach thereof." 68 The extent
of its jurisdiction is clearly provided for in the law:

The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and
workmanship; violation of the terms of agreement; interpretation and/or application of contractual time and
delays; maintenance and defects; payment, default of employer or contractor and changes in contract cost.
Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall
continue to be covered by the Labor Code of the Philippines.

Considering that the law covers a specific field of industry and the arbitral tribunal's jurisdiction is well defined,
several provisions of the law emphasize the technical nature of the proceedings before it, and provide for the
particular expertise required of the arbitrators:

SECTION 14. Arbitrators. — A sole arbitrator or three arbitrators may settle a dispute.
. .Arbitrators shall be men of distinction in whom the business sector and the government can have confidence. They
shall not be permanently employed with the CIAC. Instead, they shall render services only when called to arbitrate.
For each dispute they settle, they shall be given fees.70

The Revised Rules of Procedure Governing Construction Arbitration provides more stringent qualifications for
arbitrators and enumerate specific professions that they may hold, such as "engineers, architects, construction
managers, engineering consultants, and businessmen familiar with the construction industry": 71

SECTION 8.1 General qualification of Arbitrators. — The Arbitrators shall be men of distinction in whom
the business sector and the government can have confidence. They shall be technically qualified to resolve any
construction dispute expeditiously and equitably. The Arbitrators shall come from different professions. They may
include engineers, architects, construction managers, engineering consultants, and businessmen familiar with the
construction industry and lawyers who are experienced in construction disputes.

Likewise, the law mandates that any resort to arbitration must be voluntary.

Under the Revised Rules, a party's refusal to submit to arbitration may result in the dismissal of the complaint
without prejudice to its refiling:

ACD Corp's refusal to Answer the Complaint or the filing of a Motion to Dismiss for lack of jurisdiction shall be
deemed a refusal to submit to arbitration. In either case, the Commission (CIAC) shall dismiss the Complaint
without prejudice to its refiling upon a subsequent submission.

Thus, parties seeking to appeal an arbitral award of a construction tribunal must raise an egregious error of law
to warrant the exercise of this Court's appellate jurisdiction. Absent any allegation and proof of these exceptions,
the factual findings of the Construction Industry Arbitration Commission will be treated by the courts with great
respect and even finality

2. NO, the CA did not err in their findings.

MBWC alleges that it is not liable to respondent for the costs incurred in Change Order Nos. 39 to 109 since the
Construction Agreement clearly required a written agreement by both parties of the change orders, which MBWC
alleges it did not provide. At first glance, petitioner appears to be raising a question of law, i.e., whether ACDC
complied with the provisions of the Construction Agreement as to be entitled to compensation, which, in turn,
would require the proper interpretation of the contract between the parties. This would be a question of law since
it requires the courts to determine the parties' rights under the contract. Change Order Nos. 39 to 109 were
not authorized by MBWC. This runs counter to the factual finding established by the Construction Industry
Arbitration Commission that petitioner did indeed agree to the change orders

Under the contract, ACDC must first be found to default, after which it was only required to pay if the
enforcement of MBWC's rights exceeded the unpaid balance of the purchase price. No specific provision holds
ACDC liable for liquidated damages in case of delay.

Even assuming that liquidated damages could be awarded in case of delay, petitioner's right to receive liquidated
damages must first be anchored on a factual finding that respondent incurred delay . This, again, is a
question of fact since it requires a review of the findings of the Construction Industry Arbitration Commission. The
arbitral tribunal, however, found that there was no delay in the completion of the project.

Notes:

CE Construction discusses two (2) main principles that guide the Construction Industry Arbitration Commission in
accomplishing its tasks. First is the basic principle of fairness. The second is that of "effective dispute resolution
or the overarching principle of arbitration as a mechanism relieved of the encumbrances of litigation."114 Section
1.1 of the Revised Rules of Procedure Governing Construction Arbitration provides foremost:
 SECTION 1.1 Statement of Policy and Objectives. — It is the policy and objective of these Rules to
provide a fair and expeditious resolution of construction disputes as an alternative to judicial proceedings, which may
restore the disrupted harmonious and friendly relationships between or among the parties.
Here, services were rendered for which compensation was demanded. The contract between the parties, however,
inadequately provides for the mechanism by which compensation may be due. The fair and expeditious resolution of
the issue requires the arbitral tribunal to instead apply equitable principles to arrive at a just conclusion. In CE
Construction:115

Jurisprudence has settled that even in cases where parties enter into contracts which do not strictly conform to
standard formalities or to the typifying provisions of nominate contracts, when one renders services to another,
the latter must compensate the former for the reasonable value of the services rendered. This amount shall be
fixed by a court. This is a matter so basic, this Court has once characterized it as one that "springs from the
fountain of good conscience":

As early as 1903, in Perez v. Pomar, this Court ruled that where one has rendered services to another, and these
services are accepted by the latter, in the absence of proof that the service was rendered gratuitously, it is but
just that he should pay a reasonable remuneration therefore because "it is a well-known principle of law, that no
one should be permitted to enrich himself to the damage of another." Similarly in 1914, this Court declared that
in this jurisdiction, even in the absence of statute, ". . . under the general principle that one person may not
enrich himself at the expense of another, a judgment creditor would not be permitted to retain the purchase price
of land sold as the property of the judgment debtor after it has been made to appear that the judgment debtor
had no title to the land and that the purchaser had failed to secure title thereto . . ." The foregoing equitable
principle which springs from the fountain of good conscience are applicable to the case at bar.

BELINA CANCIO and JEREMY PAMPOLINA, Petitioners v. PERFORMANCE FOREIGN EXCHANGE

CORPORATION, Respondent
G.R. No. 182307, June 6, 2018

Facts:
Performance Forex is a corporation operating as a financial broker/agent between market participants in foreign
exchange transactions. Foreign currency exchange trading or forex trading is the speculative trade of foreign
currency for the sole purpose of gaining profit from the change in prices. The forex market is a "global,
decentralized," and essentially "an over-the-counter (OTC) market where the different currency trading locations
around the globe electronically form a unified, interconnected market entity."

Sometime in 2000, Cancio and Pampolina accepted Hipol's invitation to open a joint account with Performance
Forex. Cancio and Pampolina deposited the required margin account deposit of US$10,000.00 for trading. The
parties executed an application for the opening of a joint account, with a trust/trading facilities agreement
between Performance Forex, and Cancio and Pampolina. They likewise entered into an agreement for
appointment of an agent between Hipol, and Cancio and Pampolina. They agreed that Cancio and Pampolina
would make use of Performance Forex's credit line to trade in the forex market while Hipol would act as their
commission agent and would deal on their behalf in the forex market. The trust/trading facilities agreement
between Performance Forex, and Cancio and Pampolina provided that all parties agreed that the trading would
only be executed by Cancio and Pampolina, or, upon instructions to their agent, Hipol. The trading orders to Hipol
would be coursed through phone calls from Cancio and Pampolina. From March 9, 2000 to April 4, 2000, Cancio
and Pampolina earned US$7,223.98. They stopped trading for more or less two (2) weeks, after which, however,
Cancio again instructed Hipol to execute trading currency orders. When she called to close her position, Hipol told
her that he would talk to her personally. Cancio later found out that Hipol never executed her orders. Hipol
confessed to her that he made unauthorized transactions using their joint account from April 5, 2000 to April 12,
2000.

The unauthorized transactions resulted in the loss of all their money, leaving a negative balance of US$35.72 in
their Statement of Account. Cancio later informed Pampolina about the problem. Pampolina met with 2
Performance Forex officers, Dave Almarinez and Al Reyes, to complain about Hipol's unauthorized trading on their
account and to confront them about his past unauthorized trades with Performance Forex's other client, Justine
Dela Rosa. The officers apologized for Hipol's actions and promised to settle their account. However, they stayed
quiet about Hipol's past unauthorized trading. Performance Forex offered US$5,000.00 to settle the matter but
Cancio and Pampolina rejected this offer. Their demand letters to Hipol were also unheeded. Thus, they filed a
Complaint for damages against Performance Forex and Hipol before the Regional Trial Court of Mandaluyong City.
Hipol was declared in default. Since the parties were unable to come to a settlement, trial commenced. The RTC
rendered its Decision finding Performance Forex and Hipol solidarity liable to Cancio and Pampolina for damages.
According to the Regional Trial Court, Performance Forex should have disclosed to Cancio and Pampolina that
Hipol made similar unauthorized trading activities in the past, which could have affected their consent to Hipol's
appointment as their agent. It also noted that innocent third persons should not be prejudiced due to
Performance Forex's failure to adopt the necessary measures to prevent unauthorized trading by its agents.

Performance Forex appealed this Decision to the CA. The CA, in granting the appeal, held that Performance Forex
was a trading facility that acted only on whatever their clients or their representatives would order. It was not
privy to anything that happened between its clients and their representatives. It found that Cancio admitted to
giving Hipol pre-signed authorizations to trade; hence, Performance Forex relied on these orders and on Hipol's
designation as their agent to facilitate the trades from April 5, 2000 to April 9, 2000. Thus, the CA concluded that
Cancio and Pampolina's action should only be against Hipol. Cancio and Pampolina moved for reconsideration but
were denied by the CA in its March 31, 2008 Resolution. Hence, this Petition.

Issue:
Whether respondent Performance Forex Exchange Corporation should be held solidarity liable with Belina Cancio
and Jeremy Pampolina's broker, Hipol, for damages due to the latter's unauthorized transactions in the foreign
currency exchange trading market.

Ruling:
NO, a principal who gives broad and unbridled authorization to his or her agent cannot later hold third persons
who relied on that authorization liable for damages that may arise from the agent's fraudulent acts.

The contract between Cancio, Pampolina and PFEX provided that PFEC was irrevocably authorized to follow
bonafide instructions from Cancio and Pampolina or their broker. For instructions to be considered "bonafide,"
there must be a signed purchase order form from the client. PFEC presented signed purchase order forms for
the contested transactions occurring after April 4, 2000. If there was any breach committed by respondent, it
occurred when Cancip and Pampolina actively traded and they would have been aware of this breach, not when
they stopped trading.

PFEC likewise did not have the duty to disclose to Cancio and Pampolina any previous infractions committed
by their agent. Hipol was not employed with PFEC. He was categorized as an INDEPENDENT BROKER FOR
COMMISSION. In Behn, Meyer, and Co. v. Nolting:

A broker is generally defined as one who is engaged, for others, on a commission, negotiating contracts relative to
property with the custody of which he has no concern; the negotiator between other parties. never acting in his own
name, but in the name of those who employed him; he is strictly a middleman and for some purposes the agent of
both parties.

PFEC cancelled his accreditation when Cancio and Pampolina informed them of his unauthorized transactions. It
would be different if Hipol committed a series of infractions and respondent continued to accredit him. In that
instance, PFEC would have been complicit to Hipol's wrongdoings. PFEC, not being Hipol's employer, had no
power of discipline over him. It could only cancel his accreditation, which it did after a second incident was
reported. This was the extent by which respondent was obligated to act on Hipol's infractions.

Moreover, Cancio, Pampolina and PFEC SIGNED AND AGREED TO ABSOLVE PFEC from actions,
representations, and warranties of their agent made on their behalf. PFEC was not obligated to question whether
Hipol exceeded that authority whenever he made purchase orders. PFEC was likewise not privy on how Cancio
and Pampolina instructed Hipol to carry out their orders. It did not assign Hipol to be Cancio and Pampolina's
agent. Hipol was the one who approached Cancio, Pampolina and offered to be their agent. Cancio and
Pampolina were highly educated and were "already knowledgeable in playing in this foreign exchange trading."
They would have been aware of the extent of authority they granted to Hipol when they handed to him 10 pre-
signed blank purchase order forms. Under Article 1900 of the Civil Code:

Article 1900. So far as third persons are concerned, an act is deemed to have been performed within the scope of the
agent's authority, if such act is within the terms of the power of attorney, as written, even if the agent has in fact
exceeded the limits of his authority according to an understanding between the principal and the agent.

Before a claimant can be entitled to damages, "the claimant should satisfactorily show the existence of the factual
basis of damages and its causal connection to defendant's acts." The acts of Cancio and Pampilona’s agent, Hipol,
were the direct cause of their injury. There is no reason to hold PFEC liable for actual and moral damages. Since
the basis for moral damages has not been established, there would likewise be no basis to recover exemplary
damages and attorney's fees from PFEC. If there was any fault, the fault remains with Hipol and him alone.
 RUDY L. RACPAN, Petitioner v. SHARON BARROGA-HAIGH, Respondent
G.R. No. 234499, June 06, 2018

Facts:
Rudy Racpan filed a Complaint "For Declaration For Nullity of Deed of Sale with Right to Repurchase & Attorney's
Fees" before the Regional Trial Court of Davao City, Branch 11 (RTC-Davao). In his Complaint, which was
docketed as Civil Case No. 34, 742-2012, Racpan alleged that after his wife's death on November 12, 2011, he
instructed their daughter to arrange his wife's important documents.

In so doing, their daughter discovered a Deed of Sale with Right to Purchase dated March 29, 2011. The Deed of
Sale was purportedly signed by him and his late wife and appeared to convey to Sharon Barroga-Haigh a real
property registered in his name under TCT No. T-142-2011009374 and located in Bo. Tuganay, Municipality of
Carmen, Province of Davao del Norte. Racpan maintained that the Deed of Sale was falsified and fictitious as he
never signed any contract, not even any special power of attorney, for the sale or conveyance of the property
which is still in his possession. Thus, he prayed for the declaration of the Deed of Sale's nullity.

RTC dismissed the case for failure to comply with a condition precedent prior to its filing.

CA affirmed the RTC ruling.

The CA explained that Racpan’s Complaint is a real action as it wants the court to abrogate and nullify
-whatever right or claim the respondent might have on the property subject of the Deed of Sale. Hence, for the
appellate court, Section 1, Rule 4 of the Rules of Court is applicable. Under this Rule, real actions shall be
commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved
is situated. As the property involved is located in Bo.Tuganay, Municipality of Carmen, Province of Davao del
Norte, the appellate court held that the Complaint should have been lodged with the RTC of Davao del Norte and
not the RTC-Davao.

Issue:
Whether the venue was improperly laid?

Ruling:
NO, the venue was properly laid as the complaint was a personal action.

VENUE OF ACTION

Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest therein, shall
be commenced and tried in the proper court which has jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality
or city wherein the real property involved, or a portion thereof, is situated.

Section 2. Venue of personal actions. - All other actions may be commenced and tried where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case
of a non-resident defendant where he may be found, at the election of the plaintiff.

The basic distinction between a real and a personal action and their respective venues in
Bank of the Philippine Islands v. Hontanosas, Jr.

A real action is one that affects title to or possession of real property, or an interest therein. Such action is to be
commenced and tried in the proper court having jurisdiction over the area wherein the real property involved, or a
portion thereof, is situated, which explains why the action is also referred to as a local action

In contrast, the Rules of Court declares all other actions as personal actions. Such actions may include those
brought for the recovery of personal property, or for the enforcement of some contract or recovery of damages
for its breach, or for the recovery of damages for the commission of an injury to the person or property. The
venue of a personal action is the place where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be
found, at the election of the plaintiff, for which reason the action is considered a transitory one.

In the Complaint filed with the court a quo, Racpan sought the nullification of the Deed of Sale with Right to
Repurchase on the strength of this claim: he did not sign the same nor did he execute any special power of
attorney in favor of his late wife to do so in his behalf. But, as there was no allegation that the possession and
title to the property have been transferred to Haigh, nowhere in the Complaint did petitioner allege or pray for
the recovery or reconveyance of the real property

Evidently, as the Complaint was not concerned with the title to or recovery of the real property, it was a personal
action. Thus, Davao City, where both Racpan and Haigh reside is the proper venue for the complaint. The
appellate court therefore committed a reversible error in affirming the trial court's dismissal of the case for
improper venue.

Notes:
Well-settled is the rule that an action to annul a contract of loan and its accessory real estate mortgage is a
personal action. In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a
contract or the recovery of damages. In contrast, in a real action, the plaintiff seeks the recovery of real property,
or, as indicated in Section 2 (a), Rule 4 of the then Rules of Court, a real action is an action affecting title to real
property or for the recovery of possession, or for partition or condemnation of or foreclosure of mortgage on, real
property.

TERESITA BUGAYONG-SANTIAGO et.al, Petitioners v. TEOFILO BUGAYONG, Respondent

G.R. No. 220389, December 6, 2017

Facts:
On 24 November 1993, Teresita Bugayong-Santiago and her husband Edgardo Santiago, through a Deed of
Absolute Sale, bought a 169 square meter commercial land with a building structure located in Poblacion,
Asingan, Pangasinan. The land was originally owned by Teresita's parents, the late spouses Francisco Bugayong
and Segundina Ventura-Bugayong, and covered by Transfer Certificate of Title (TCT) No. 37637, which was
issued to the late spouses on 9 November 1961.

On 23 May 2007, Edgardo died. He was survived by Teresita and their children, Earl Eugene, Edward, and
Edgardo, Jr. The children inherited one-half of the land. In 2008, the Santiago spouses and Bugayong siblings
sent a letter to Teofilo Bugayong, Teresita's brother, demanding him to vacate the subject property within 15
days from receipt of the letter and to pay the amount of P3,000 monthly. Respondent received the letter on 20
February 2008 but refused to vacate the property.

Thus, the Santiago spouses and Bugayong siblings filed a Complaint for Unlawful Detainer with the MCTC.
Santiago spouses and Bugayong siblings alleged that since 2002, they have been tolerating the stay and
occupation of Teofilo over the two-third (2/3) eastern portion of the land and a part of the commercial building
without paying any lease rental. They added that Teofilo had been harassing Teresita whenever she went to
Asingan, Pangasinan and that on 3 June 2006, Teofilo slapped and pulled her hair which caused some injuries.
Thus, she filed a criminal case for physical injuries against him. Also, before they executed the complaint, the
spouses exerted serious efforts to settle the case amicably but to no avail.

In his Answer with Counterclaim, Teofilo alleged that his parents, Francisco Bugayong and Segundina Ventura-
Bugayong, were the absolute and registered owners of the subject parcel of land covered by TCT No. 37637
where a commercial building had been erected. Prior to their death, the late spouses executed a Deed of
Quitclaim dated 21 December 1995 in favor of all their six children, namely: Antonio, Teofilo, Erlinda, Teresita,
Francisco, Jr., and Estrellita Bugayong-Cachola (Cachola). Teofilo stated that when he was about to register the
quitclaim with the Register of Deeds after paying the necessary taxes, petitioners caused the annotation on the
title of the Deed of Absolute Sale by way of Adverse Claim on 4 March 2004. Teofilo also claimed that during the
lifetime of his parents, they reported the Owner's Duplicate Copy of TCT No. 37637 as lost and they executed an
Affidavit of Loss on 16 November 1995 and had it annotated at the back of the title. Consequently, a Second
Owner's Duplicate Copy was granted by the RTC in lieu of the lost title. Teofilo maintained that while the spouses
claimed that they purchased the subject property in 1993, he had been paying the realty taxes of the subject
property for the benefit of the estate of his deceased parents and all the heirs, including the northwestern portion
of the building occupied by Cachola, the sister of both Teofilo and Teresita. Further, Teofilo contended that he
had been in actual possession and enjoyment of the subject property long before the execution of the assailed
Deed of Absolute Sale between his parents and Teresita and Edgardo.

The MCTC ordered Teofilo to vacate the property. The MCTC resolved the question of ownership in order to
resolve the issue of possession. The MCTC considered Teofilo's occupation over the subject property as mere
tolerance and demanded that Teofilo vacate the property.

Teofilo filed an appeal with the RTC. Teofilo averred that the spouses and the siblings had failed to establish a
cause of action for unlawful detainer against him such that the MCTC had no jurisdiction over the complaint.

The RTC reversed the decision of the MCTC. The RTC stated that tolerance must be present right from the start
of possession to bring the action within the ambit of unlawful detainer. In this case, there was forcible entry at
the beginning and tolerance thereafter; thus, there can be no basis for the action for unlawful detainer. The RTC
declared that the remedy of the spouses was either accion publiciana or accion reivindicatoria.

Santiago spouses and Bugayong siblings filed a motion for reconsideration. The RTC and CA denied the petition.

Issue:
Whether or not the CA erred in affirming the decision of the RTC which dismissed the unlawful detainer case
against respondent

Ruling:
The petition lacks merit.

The spouses contend that from the start, they have tolerated and have been tolerating the stay and occupation
of Teofilo over two-third (2/3) portion of the commercial lot and the building situated thereon. The spouses and
the explain that when they bought the land, it has been agreed upon between Teresita and her husband
Edgardo, that Teresita's parents would stay on the land until their death. Teresita's mother passed away on 11
February 1997 and her father on 26 November 1999. Afterwards, Teresita allowed her sister, Cachola, to occupy
the subject property located in Asingan, Pangasinan since petitioners have been residing in San Fernando,
Pampanga since 1974. The spouses allege that sometime in 2002, Teofilo, in the presence of Cachola, just
entered the property without their knowledge and consent and had been occupying two-third (2/3) portion of the
property without paying any lease rental. Since Teofilo wanted to take possession of the subject property, they
sent a demand letter for Teofilo to vacate the premises.

Teofilo maintains that he had been in actual possession and enjoyment of the subject property, being one of the
forced heirs of the registered owners, his parents. Respondent contends that the MCTC did not acquire
jurisdiction over the complaint since the complaint failed to aver facts constitutive of forcible entry or unlawful
detainer - how entry was affected or how and when dispossession started. Thus, the complaint or case filed
should not have been for unlawful detainer with the MCTC but one for accion publiciana or accion reivindicatoria
in the proper RTC.

Ejectment or accion interdictal takes on two forms: forcible entry and unlawful detainer. The remedies for forcible
entry and unlawful detainer are laid down in

Section 1, Rule 70 of the Rules of Court, which states:

Section 1. Who may institute proceedings, and when. - Subject to the provisions of the next succeeding section, a
person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a
lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld
after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or
the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one
(1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial
Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and costs.

What determines the cause of action is the nature of defendant's entry into the land. If the entry is
illegal, then the action which may be filed against the intruder within one (1) year therefrom is forcible entry. If,
on the other hand, the entry is legal but the possession thereafter became illegal, the case is one of unlawful
detainer which must be filed within one (1) year from the date of the last demand.

In the present case, the spouses filed an unlawful detainer case against before the MCTC. They allege that they
bought the subject property from her parents on 4 November 1993. Since her family stays in San Fernando,
Pampanga she allowed her sister Cachola to live in the property. However, sometime in 2002, without Teresita's
knowledge and consent, respondent Teofilo entered the property and occupied the two-third (2/3) eastern
portion of the same. Teresita maintains that she had been merely tolerating Teofilo's stay and occupation in that
part of the property. In 2008, when petitioners were ready to make use of the property, they demanded that
Teofilo vacate the premises, but he refused.

The spouses insist that Teofilo entered the property without their knowledge and consent. Meaning, Teofilo's
entry into the property had been illegal from the beginning. Later on, when they found out that he occupied the
subject property, petitioners merely tolerated his stay there.

However, based on the record, the spouses claimed that Teofilo entered the property "without their knowledge
and consent" on one hand, and by mere "tolerance" on the other. It can be concluded then that respondent
occupied the subject property without petitioners' knowledge and consent and thereafter petitioners tolerated
respondent's stay in the property for many years. Thus, there was illegal entry into the property at the start.

As correctly observed by the RTC, since here was forcible entry at the beginning and tolerance thereafter, an
action for unlawful detainer cannot prosper since a requisite for an action for unlawful detainer is that the
possession was originally lawful, but turned unlawful only upon the expiration of the right to possess.

The complaint was not clear on how entry into the subject property was effected and how or when dispossession
started. The complaint merely states that "since 2002, plaintiff Teresita B. Santiago and her late husband have
been tolerating the stay and occupation of the defendant, brother of plaintiff Teresita B. Santiago, over the two-
third (2/3) eastern portion of the lot and portion of the commercial house thereon, without paying [any] lease
rental." However, in succeeding pleadings, the spouses insisted that Teofilo entered the property without their
knowledge and consent. Also, no contract, whether express or implied, existed between the parties and there
were no other details submitted or evidence presented by petitioners to show how respondent exactly entered
the property and when petitioners were dispossessed of such.

As similarly held in the case of Zacarias v. Anacay.

In the instant case, the allegations in the complaint do not contain any averment of fact that would
substantiate petitioners' claim that they permitted or tolerated the occupation of the property by
respondents. The complaint contains only bare allegations that "respondents without any color of title
whatsoever occupied the land in question by building their house [o]n the said land thereby depriving petitioners
the possession thereof." Nothing has been said on how respondents' entry was affected or how and when
dispossession started. Admittedly, no express contract existed between the parties. This failure of petitioners to
allege the key jurisdictional facts constitutive of unlawful detainer is fatal. Since the complaint did not satisfy the
jurisdictional requirement of a valid cause for unlawful detainer, the municipal trial court had no jurisdiction over
the case. It is in this light that this Court finds that the Court of Appeals correctly found that the municipal trial
court had no jurisdiction over the complaint.

This ruling is limited only to the determination of whether the complaint for unlawful detainer was properly filed
and whether the MCTC had jurisdiction over the case. This adjudication is not a final determination of the issue of
possession or ownership and thus, will not bar any party from filing a case in the proper RTC for (1) accion
publiciana, where the owner of the property who was dispossessed failed to bring an action for ejectment within
one (1) year from dispossession, or (2) accion reivindicatoria alleging ownership of the property and seeking
recovery of its full possession.

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee v. SIEGFRED CABELLON Y CABANERO, Accused-

Appellant
G.R. No. 207229, September 20, 2017

Facts:
Cabellon was charged with illegal sale of 0.03 grams of shabu. He was arrested in a buy-bust operation.
According to the prosecution, the poseur-buyer handed over the sachet of shabu he purchased from Cabellon to
PO3 Bucao. PO3 Bucao then handed the sachet to PO3 Abellar. PO3 Abellar was allegedly the one who prepared
the request for chemical analysis of the seized sachet. The prosecution likewise presented a Request for
Laboratory Examination signed by P/Superintendent Perigo. That same date, a sachet was marked “SCC
04/13/06” was turned over to the PNP Crime Laboratory for examination. The PNP forensic chemist testified that
she had examined a heat-sealed plastic sachet of white crystalline substance labelled with "SCC 04/13/06” and it
tested positive for shabu. Cabellon invoked denial and alibi as defenses. The trial court convicted Cabellon. The
Court of Appeals affirmed the conviction. Cabellon argues on appeal that there was a broken chain of custody.
Issue:
Whether or not there was a broken chain of custody such that Cabellon’s may be acquitted due to reasonable
doubt.

Ruling:
YES, while it may be true that strict compliance with Section 21 of Republic Act No. 9165 may be excused under
justifiable grounds, the integrity and evidentiary value of the seized items must still be preserved by the
apprehending officer.

This Court is not convinced that the prosecution was able to prove the identity of the shabu supposedly seized
from the accused. PO3 Bucao claimed that the poseur-buyer turned over to him the sachet purchased from the
accused and that he had custody of the sachet until he reached the police station. He then handed the sachet to
PO3 Abellar, who supposedly prepared the request for the chemical analysis of the seized item. However, PO3
Bucao failed to identify who placed the markings on the sachet.

Undeniably, a noticeable gap exists in the chain of custody with the prosecution's failure to present evidence that
the seized sachet was actually marked by any of the three (3) apprehending officers. The prosecution likewise did
not present evidence that the seized sachet was inventoried and photographed in the presence of the accused or
his representative, a representative from the media or the Department of Justice, and an elected public official.
Neither did it provide an explanation as to why the police officers did not follow the requirements provided under
the law. PO3 Bucao also testified that he turned over the unmarked seized sachet to PO3 Abellar, who then
prepared the request to the Philippine National Police for chemical analysis. However, a careful review of the
Request for Laboratory Examination shows that it was signed by P/Superintendent Perigo, not PO3 Abellar, who
supposedly prepared it. This blatant lack of compliance with the safeguards established in Republic Act No. 9165
is made even more egregious by the fact that the seized sachet only contained 0.03 grams51 of shabu, no more
than a grain of rice. The danger of tampering and planting of evidence was, thus, heightened, which should have
put the lower courts on guard and not have so easily relied on the presumption of regularity accorded to police
officers in the performance of their official acts.

Notes:
The marking and identification of the seized dangerous drug is an essential part of the chain of custody. Absent
this step, a gap is created which casts a shadow of doubt on the identity and integrity of the dangerous drug
presented as evidence, creating reasonable doubt, which must be resolved in favor of the accused.

People v. Nandi expounded on the four (4) links that should be established by the prosecution to constitute an
unbroken chain of custody:

[F]irst, the seizure and marking, if practicable, of the illegal drug recovered from the accused by the
apprehending officer; second, the turnover of the illegal drug seized by the apprehending officer to the
investigating officer; third, the turnover by the investigating officer of the illegal drug to the forensic chemist for
laboratory examination; and fourth, the turnover and submission of the marked illegal drug seized from the
forensic chemist to the court.

HI-LON MANUFACTURING, INC., Petitioner, v. COMMISSION ON AUDIT, Respondent.

G.R. No. 210669, August 01, 2017

Facts:
Sometime in 1978, the government, through the then Ministry of Public Works and Highways (now DPWH),
converted to a road right-of-way (RROW) a 29,690 sq. m. portion of the 89,070 sq. m. parcel of land (subject
property) located in Mayapa, Calamba, Laguna, for the Manila South Expressway Extension Project. The subject
property was registered in the name of Commercial and Industrial Real Estate Corporation (CIREC) under
Transfer Certificate of Title (TCT) No. T-40999.

Later, Philippine Polymide Industrial Corporation (PPIC) acquired the subject property, which led to the
cancellation of TCT No. T-40999 and the issuance of TCT No. T-120988 under its name. PPIC then mortgaged the
subject property with the Development Bank of the Philippines (DBP), a government financing institution, which
later acquired the property in a foreclosure proceeding on September 6, 1985. TCT No. T-120988, under PPIC's
name, was then cancelled, and TCT No. T-151837 was issued in favor of DBP.
Despite the use of the 29,690 sq. m. portion of the property as RROW, the government neither annotated its
claim or lien on the titles of CIREC, PPIC and DBP nor initiated expropriation proceedings, much less paid just
compensation to the registered owners.

Upon issuance of Administrative Order No. 14 dated February 3, 1987, entitled "Approving the Identification of
and Transfer to the National Government of Certain Assets and Liabilities of the Development Bank of the
Philippines and the Philippine National Bank," the DBP submitted all its acquired assets, including the subject
property, to the Asset Privatization Trust (APT) for disposal, pursuant to Proclamation No. 50 dated 8 December
1986.

June 30, 1987 APT disposed of a portion of the subject property in a public bidding. The Abstract of Bids5
indicated that Fibertex Corporation (Fibertex), through Ester H. Tanco, submitted a ₱154,000,000.00 bid for the
asset formerly belonging to PPIC located in Calamba, Laguna, i.e., "Land (5.9 hectares) TCT 4099, buildings &
improvements, whole mill," while TNC Philippines, Inc. and P. Lim Investment, Inc. submitted a bid of
₱106,666,000.00 and ₱138,000,000.00, respectively. With respect to the former assets of Texfiber Corporation
(Texfiber) in Taytay, Rizal i.e., "Land (214,062 sq. m. TCT (493917) 506665, buildings & improvements, whole
mill"), only Fibertex submitted a bid of ₱2 l 0,000,000.00.

July 1, 1987 APT certified that Fibertex was the highest bidder of PPIC and Texfiber assets for ₱370,000,000.00,
and recommended to the Committee on Privatization to award said assets to Fibertex. In a Letter7 dated
November 10, 1988, APT certified that Fibertex paid APT ₱370,000,000.00 for the purchase of the said assets
formerly belonging to PPIC and Texfiber. Meanwhile, Fibertex allegedly requested APT to exclude separate deeds
of sale for the parcel of land and for improvements under the subject property covered by TCT No. 151837 in the
name of DBP. Having been paid the full bid amount, APT supposedly agreed with Fibertex that the land would be
registered in the name of TG Property, Inc. (TGPI) and the improvements to Fibertex.

Upon complete submission of the required documents and proof of tax payments on December 9, 1987, the
Register of Deeds of Calamba, Laguna, cancelled DBP's TCT No. 151837 and issued TCT No. T-158786 in the
name of TGPI, covering the entire 89,070 sq. m. subject property, including the 29,690 sq. m. RROW. From 1987
to 1996, TGPI had paid real property taxes for the entire 89,070 sq. m. property, as shown by the Tax
Declarations and the Official Receipt issued by the City Assessor's Office and Office of the City Treasurer of
Calamba, Laguna, respectively.

April 16, 1995 TGPI executed a Deed of Absolute Sale in favor of HI-LON over the entire 89,070 sq. m. subject
property for a consideration of ₱44,535,000.00. HI-LON registered the Deed with the Register of Deeds of
Calamba, Laguna, which issued in its name TCT No. 383819.

In 1998 Rupert P. Quijano, Attorney-in-Fact of HI-LON, requested assistance from the Urban Road Project Office
(URPO) DPWH for payment of just compensation for the 29,690 sq. m. portion of the subject property converted
to a RROW. The DPWH created an Ad Hoc Committee which valued the RROW at ₱2,500/sq. m. based on the
1999 Bureau of Internal Revenue (BIR) zonal valuation.

December 21, 2001, a Deed of Sale was executed between HILON and the Republic of the Philippines,
represented by Lope S. Adriano, URPO-PMO Director, by authority of the DPWH Secretary, covering the 29,690
sq. m. parcel of land converted to RROW for a total consideration of ₱67,492,500.00. On January 23, 2002, the
Republic, through the DPWH, made the first partial payment to HI-LON in the amount of ₱10,461,338.00.

On post audit, the Supervising Auditor of the DPWH issued Audit Observation Memorandum No. NGS VIII-A-03-
001 dated April 2, 2003 which noted that the use of the 1999 zonal valuation of ₱2,500.00/sq. m. as basis for the
determination of just compensation was unrealistic, considering that as of said year, the value of the subject
property had already been "glossed over by the consequential benefits" it has obtained from the years of having
been used as RROW. The auditor pointed out that the just compensation should be based on the value of said
property at the time of its actual taking in 1978. Taking into account the average value between the 1978 and
1980 Tax Declarations covering the subject land, the Auditor arrived at the amount of ₱19.40/sq. m. as
reasonable compensation and, thus, recommended the recovery of excess payments.

Upon review of the auditor's observations, the Director of the LAO-N issued on January 29, 2004 ND No. 2004-32
in the amount of ₱9,937,596.20, representing the difference between the partial payment of ₱10,461,338.00 to
HI-LON and the amount of P532,741.80, which should have been paid as just compensation for the conversion of
the RROW.

The COA contended that noted that the transfer of the subject property in favor of TGPI, the parent
corporation of HI-LON, was tainted with anomalies because records show that TGPI did not participate in the
public bidding held on June 30, 1987, as only three (3) bidders participated, namely: Fibertex Corporation, TNC
Philippines, Inc., and P. Lim Investment, Inc.
Second, the COA pointed out that the Deed of Sale between APT and Fibertex has a disclosure that "The subject
of this Deed of Absolute Sale, therefore, as fully disclosed in the APT Asset Catalogue, is the total useable area of
59,380 sq. m.,"8 excluding for the purpose the 29,690 sq. m. converted to RROW. The COA added that such
exclusion was corroborated by the Abstract of Bids duly signed by the then APT Executive Assistant and Associate
Executive Trustee, showing that the land covered by TCT No. T- 151387 was offered to the public bidding for its
useable portion of 5.9 hectares only, excluding the subject 29,690 sq. m. converted to RROW.

Third, the COA observed that HI-LON is a mere subsidiary corporation which cannot acquire better title than its
parent corporation TGPI. The COA stressed that for more than (7) seven years that the subject property was
under the name of TGPI from its registration on December 9, 1987 until it was transferred to HI-LON on April 16,
1995, TGPI did not attempt to file a claim for just compensation because it was stopped so as the Deed of Sale
executed between APT and TGPI clearly stated that the 29,690 sq. m. RROW was excluded from the sale and
remains a government property. Applying the principle of piercing the veil of corporate fiction since TGPI owns
99.9% of HI-LON, the COA ruled that HI-LON cannot claim ignorance that the 29,690 sq. m. RROW was excluded
from the public auction.

Having determined that HI-LON or its predecessor-in-interest TGPI does not own the RROW in question, as it has
been the property of the Republic of the Philippines since its acquisition by the DBP up to the present, the COA
concluded that the proper valuation of the claim for just compensation is irrelevant as HI-LON is not entitled
thereto in the first place.

HI-LON relies on the Deed of Sale dated October 29, 1987, and insists that its predecessor-in-interest (TGPI)
acquired from the national government, through APT, the entire 89,070 sq. m. property, which was previously
registered in the name of DBP under TCT No. 151837. HI-LON asserts that the 29,690 sq. m. RROW was not
excluded from the sale because: (1) APT referred to the entire property in the Whereas Clauses as one of the
subject of the sale; (2) APT made an express warranty in the said Deed that the properties sold are clear of liens
and encumbrances, which discounts the need to investigate on the real status of the subject property; and (3)
the title registered in the name of DBP, as well as the titles of the previous owners, CIREC and PPIC, contains no
annotation as regards any government's claim over the RROW.

Issue:
Whether or not HI-LON is entitled to just compensation for the 29, 690 sq.m. portion of the subject property?

Ruling:
NO, the 29,690 sq. m. portion of the subject property is not just an ordinary asset, but is being used as a RROW
for the Manila South Expressway Extension Project, a road devoted for a public use since it was taken in 1978.
Under the Philippine Highway Act of 1953, "right-of-way" is defined as the land secured and reserved to the
public for highway purposes, whereas "highway" includes rights-of-way, bridges, ferries, drainage structures,
signs, guard rails, and protective structures in connection with highways. Article 420 of the New Civil Code
considers as property of public dominion those intended for public use, such as roads, canals, torrents, ports and
bridges constructed by the state, banks, shores, roadsteads, and others of similar character.

Being of similar character as roads for public use, a road right-of-way (RROW) can be considered as
a property of public dominion, which is outside the commerce of man, and cannot be leased,
donated, sold, or be the object of a contract, except insofar as they may be the object of repairs or
improvements and other incidental matters. However, this RROW must be differentiated from the concept
of easement of right of way under Article 649 of the same Code, which merely gives the holder of the easement
an incorporeal interest on the property but grants no title thereto,20 inasmuch as the owner of the servient
estate retains ownership of the portion on which the easement is established, and may use the same in such a
manner as not to affect the exercise of the easement.

As a property of public dominion akin to a public thoroughfare, a RROW cannot be registered in the name of
private persons under the Land Registration Law and be the subject of a Torrens Title; and if erroneously
included in a Torrens Title, the land involved remains as such a property of public dominion.

It is, therefore, inconceivable that the government, through APT, would even sell in a public bidding the 29,690
sq. m. portion of the subject property, as long as the RROW remains as property for public use. Hence, Hl-LON's
contention that the RROW is included in the Deed of Absolute Sale dated 29 October 1987, regardless whether
the property is a performing or non-performing asset, has no legal basis.

In this case, what is being assailed by the COA when it sustained the Notice of Disallowance for payment of just
compensation is HI-LON's claim of ownership over the 29,690 sq. m. portion of the property, and not the TCT of
TGPI from which HI-LON derived its title. Granted that there is an error in the registration of the entire 89,070 sq.
m. subject property previously in the name of TGPI under TCT No.· 15678639 and currently in the name of HI-
LON under TCT No. T-38381940 because the 29,690 sq. m. RROW portion belonging to the government was
mistakenly included, a judicial pronouncement is still ·necessary in order to have said portion excluded from the
Torrens title.

HI-LON's assertion that the titles issued to TGPI and HI-LON conclusively show that they are the registered
owners of the entire 89,070 sq. m. property in Calamba, Laguna, including the 29,690 sq. m. RROW is anathema
to the purpose of the Torrens System, which is intended to guarantee the integrity and conclusiveness of the
certificate of registration, but cannot be used for the perpetration of fraud against the real owner of the
registered land.42 On point is the case of Balangcad v. Court of Appeals where it was held that "the system
merely confirms ownership and does not create it. Certainly, it cannot be used to divest the lawful owner of his
title for the purpose of transferring it to another who has not acquired it by any of the modes allowed or
recognized by law. Where such an erroneous transfer is made, as in this case, the law presumes that no
registration has been made and so retains title in the real owner of the land.

CE LUZON GEOTHERMAL POWER COMPANY, INC., Petitioner v. COMMISSIONER

OF INTERNAL REVENUE, Respondent
G.R. No. 197526, July 26, 2017

Facts:
Filed before the Court two (2) consolidated petitions for review concerning the prescriptive period in filing judicial
claims for unutilized creditable input tax or input Value Added Tax (VAT). Petitioner CE Luzon, a domestic
corporation engaged in energy industry which owns CE Geothermal Power Plant is a VAT-registered taxpayer.
Under Section 6 of R.A. No. 9136, the sale of generated power by generation companies is a zero-rated
transaction.

During its operations, CE Luzon incurred unutilized creditable input tax amounting to P26,574,389.99 for taxable
year 2003. It filed before the BIR an administrative claim for its refund. However, without waiting for the
Commissioner of Internal Revenue to act on its claim, or for the expiration of 120 days, CE Luzon instituted
before the Court of Tax Appeals a judicial claim for refund of its 1st quarter unutilized creditable input tax on
March 30, 2005 in the amount of 4,785,234.70.

Meanwhile, on June 24, 2005, CE Luzon received the CIR’s decision denying its claim for refund of creditable
input tax for the 2nd quarter year 2003. CTA second division disallowed refund of 3,084,874.35 but granted
petitioner’s refund of 22,647,638.45 on July 20, 2010. Upon Luzon and CIR’s petitions for review, the CTA En
Banc ordered CIR to issue a tax credit certificate or to refund CE Luzon the amount of 23,489,514.64
representing its substantiated creditable input tax for taxable year 2003. However, on November 22, 2010 the
CTA En Banc rendered an Amended Decision setting aside its decision dated July 20, 2010 citing CE Luzon’s
failure to observe the 120-day period under Section 112(C) of the NIR Code. Hence, CE Luzon was barred from
claiming a refund of its input VAT for taxable year 2003. CTA En Banc held that CE Luzon’s judicial claims were
prematurely filed and that it should have waited either for the CIR to render a decision or for the 120-day period
to expire before instituting its judicial claim for refund. CE Luzon moved for partial reconsideration thus on June
27, 2011, CTA En Banc rendered a second Amended Decision, partially granting its claim for unutilized creditable
tax for the 2nd quarter of taxable year 2003 in the amount of 3,764,386.47. CTA En Banc found that CE Luzon’s
judicial claim particularly for said refund was timely filed.

CE Luzon and CIR on separate dates, filed a petition for review on certiorari before the SC questioning the CTA’s
decision. CE Luzon asserts that since the prescriptive periods in Sec. 112 (C) of the NIRC are merely permissive, it
should yield to Sec. 229. On the other hand, CIR argues that Sec. 112(C) and Sec. 229 need not be harmonized
because they are clear and explicit.

Issues:
1. Whether CE Luzon’s judicial claims for refund of input VAT for taxable year 2003 were filed within the
prescriptive period.
2. Whether CE Luzon is entitled to the refund.

Rulings:
1. NO, however, despite its noncompliance with Sec. 112 (C) of the NIRC, it is shielded by BIR Ruling DA-489-03
(effective Dec. 10, 2003 – Oct. 6, 2010) which express that a taxpayer-claimant need not wait for the lapse of the
120-day period before it could seek judicial relief with the CTA by way of petition for review.
Excess input tax or creditable input tax is not an erroneously, excessively, or illegally collected tax.Hence, it is
Section 112(C) and not Section 229 of the National Internal Revenue Code that governs claims for refund of
creditable input tax.

The tax credit system allows a VAT-registered entity to "credit against or subtract from the VAT charged on its
sales or outputs the VAT paid on its purchases, inputs and imports."

The VAT paid by a VAT-registered entity on its imports and purchases of goods and services from another VAT-
registered entity refers to input tax. On the other hand, output tax refers to the VAT due on the sale of goods,
properties, or services of a VAT-registered person

Section 112(C) of the National Internal Revenue Code provides two (2) possible scenarios. The first is when the
Commissioner of Internal Revenue denies the administrative claim for refund within 120 days. The second is
when the Commissioner of Internal Revenue fails to act within 120 days. Taxpayers must await either for the
decision of the Commissioner of Internal Revenue or for the lapse of 120 days before filing their judicial claims
with the Court of Tax Appeals.[111] Failure to observe the 120-day period renders the judicial claim premature.

CE Luzon's reliance on Atlas is misplaced because Atlas did not squarely address the issue regarding the
prescriptive period in filing judicial claims for refund of creditable input tax. Atlas did not expressly or impliedly
interpret Section 112(C) of the National Internal Revenue Code. The main issue in Atlas was the reckoning point
of the two (2)-year prescriptive period stated in Section 112(A). The interpretation in Atlas was later rectified
in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation.

The Aichi doctrine was reiterated by this Court in San Roque, which held that the 120-day and 30-day periods in
Section 112(C) of the National Internal Revenue Code are both mandatory and jurisdictional.

In the present case, only CE Luzon's second quarter claim was filed on time. Its claims for refund of creditable
input tax for the first, third, and fourth quarters of taxable year 2003 were filed prematurely. It did not wait for
the Commissioner of Internal Revenue to render a decision or for the 120-day period to lapse before elevating its
judicial claim with the Court of Tax Appeals.

However, despite its non-compliance with Section 112(C) of the National Internal Revenue Code, CE Luzon's
judicial claims are shielded from the vice of prematurity. It relied on the Bureau of Internal Revenue Ruling DA-
489-03, which expressly states that "a taxpayer-claimant need not wait for the lapse of the 120-day period before
it could seek judicial relief with the [Court of Tax Appeals] by way of a Petition for Review."

2. YES, but since it is not a question of law, SC remands the case to CTA for its determination. The determination
of whether CE Luzon duly substantiated its claim for refund of creditable input tax for the second quarter of
taxable year 2003 is a factual matter that is generally beyond the scope of a Petition for Review on Certiorari.

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee v. ROMALDO LUMAYAG, Accused-Appellant

G.R. No. 181474, July 26, 2017

Facts:
This is an appeal filed by Diony Opiniano under Rule 124, Section 13(c)2 of the Revised Rules of Criminal
Procedure, from the decision of the CA affirming his conviction by the RTC as principal for the special complex
crime of robbery with homicide, together with his co-principal, Romaldo Lumayag and the accessory Jerry Dela
Cruz.

On November 30, 1997, spouses Eladio and Leonor Santos, 72 and 71 years old at that time, respectively, were
found dead inside the garage of their store which was adjacent to their two-storey house. Some articles from the
store were missing, together with the spouses’ money and pieces of jewelry. On the previous day, the spouses’
stay-in helper, accused Dela Cruz, was caught albeit by chance by the patrolling policemen. His legs had fresh
bloodstains and a 9-inch kris found in his person. He was carrying a heavy bag which when opened yielded reams
of cigarettes and cash in coins and bills, among others. He confessed that he came from the residence of the
spouses Santos who were stabbed to death by Opiano and Lumayag. His immediate story to the police led to the
discovery of the dead bodies of the spouses and the arrest of his co-accused. During investigation of Opiniano in
the police station, a pair of earrings belonging to Leonor fell off his pants, On the other hand, two paper
wrappers were found in Lumayag’s pants which bore the initials of HE, later identified as “Honorata Estrella”, the
spouses’ daughter who was tasked to deposit these coins with the bank.

During the trial, the RTC gave credence to the straightforward narration of Dela Cruz. The court determined
Lumayag as the lead man who hatched the plan to rob the couple along with Opiniano as his co-conspirator. Dela
Cruz denied to having participated in the stabbing as he was threatened by Opiano and Lumayan when he tried
his best to pacify the two. This eyewitness account of Dela Cruz was corroborated by medico-legal examination
which identified the bloodstains found in the knife used in the crime to be that of the spouses.

In this appeal, Opiniano questions the sufficiency of the testimony of Dela Cruz, the sole eyewitness, to convict
him of the crime.

Issue:
Whether or not the testimony of the lone eyewitness is sufficient evidence to prove the culpability of Lumayag.

Ruling:
YES, the testimony of the lone eyewitness is sufficient evidence to prove the culpability of Lumayag. In People v.
De la Cruz , the SC held that an accused is always a competent witness for or against his co-accused, and the
fact that he had been discharged from the information does not affect the quality of his testimony, for the
admissibility, the relevancy, as well as the weight that should be accorded his declarations are to be determined
by the Rules on Evidence. And in this connection, it has been held that the uncorroborated testimony of an
accused, when satisfactory and convincing, may be the basis for a judgment of conviction of his co-accused.

Here, the eyewitness account of Dela Cruz, corroborated by the medico-legal findings suffices to convict accused-
appellant Opiniano of the crime charged. Dela Cruz's straightforward narration showed how Lumayag and
appellant Opiniano acted in concert to commit the robbery with homicide.

Dela Cruz's credibility is enhanced by the absence of any improper motive to show that he harbors ill-feelings
towards the appellant Opiniano. In contrast, appellant Opiniano could only offer a lame denial and alibi, which
were replete with inconsistencies. There is no corroborative evidence that appellant Opiniano was in another
place at the time the crime was committed; neither was it clearly shown that it was physically impossible for him
to be present at the scene of the crime. All told, the prosecution proved appellant Opiniano's guilt beyond
reasonable doubt of the crime of robbery with homicide.

Notes:
The uncorroborated testimony of an accused, when satisfactory and convincing, may be the basis for a judgment
of conviction of his co-accused.

PEOPLE OF THE PHILIPPINES, Plaintiff-appellee v. PABLO ARMODIA, Accused-Appellant

G.R. No. 210654, June 7, 2017

Facts:
Armodia allegedly started raping his daughter in a makeshift house beside their piggery. She was only 16 at that
time. According to the victim, his father always asked her to stay at the makeshift house and there he would
threaten her with his bolo and have sex with her. He threatened to kill her and anyone who would know about
the abuse. The incident happened again for the second time in the same makeshift house. Finally, AAA was able
to tell her mother about the abuse and filed 2 charges of Qualified Rape against her father. The RTC only
convicted the accused of 2 counts of simple rape which was affirmed by the CA.

Issue:
Whether or not the accused was only guilty of simple rape.

RULING:

YES, Armodia committed two (2) counts of simple rape, not qualified rape. The crime of qualified rape under
Article 266-B (1) of the Revised Penal Code consists of the twin circumstances of the victim's minority and her
relationship to the perpetrator, both of which must concur and must be alleged in the information. It is immaterial
whether the relationship was proven during trial if that was not specifically pleaded for in the information.
Armodia had carnal knowledge of AAA twice, through force and intimidation. His moral ascendancy also
intimidated her into submission. This ascendancy or influence is grounded on his parental authority over his child,
which is recognized by our Constitution and laws, as well as on the respect and reverence that Filipino children
generally accord to their parents. 

AAA's story cannot be trivialized as a mere fabrication or a tale allegedly weaved to take revenge for her father's
strictness. Children are vulnerable. Generally, they do not have the maturity to execute complex strategies
impelled by evil motives. That they would go through such lengths-exposing themselves and their families to
dishonor by publicly narrating how their father stripped them of their innocence only to get even for a trivial
reason is, therefore, incredulous.

The Court of Appeals and the Regional Trial Court found that Armodia’s relationship with AAA was not duly
alleged in the informations. Thus, his relationship with the victim cannot qualify the crimes of rape. Ruling
otherwise would deprive him of his constitutional right to be informed of the nature and cause of accusation
against him.

Simple rape is punishable by reclusion perpetua. Even if the aggravating circumstances of minority and
relationship were present, the appropriate penalty would still be reclusion perpetua under the law. Article 63 of
the Revised Penal Code provides that "in all cases in which the law prescribes a single indivisible penalty, it shall
be applied by the courts regardless of any mitigating or aggravating circumstances that may have attended the
commission of the deed."

Notes:
The crime of qualified rape under Article 266-B (1) of the Revised Penal Code consists of the twin circumstances
of the victim's minority and her relationship to the perpetrator, both of which must concur and must be alleged in
the information. It is immaterial whether the relationship was proven during trial if that was not specifically
pleaded for in the information.

NAYONG PILIPINO FOUNDATION, INC., Petitioner v. TAN, ET AL. AND COMMISSION ON AUDIT,
Respondent
G.R. No. 213200, September 19, 2017

Facts:
On June 6, 2000, in commemoration of NPFI's 30th Founding Anniversary, NPFI Board of Trustees, through Board
Resolution No. 63-0606000, authorized the grant to its officers and employees who have rendered services for at
least one (1) year, an Anniversary Bonus amounting to Php 3,000.00 each.

In May 2004, NPFI's Board of Trustees issued Board Resolution No. 82-052104, where on NPFI's 35th Founding
Anniversary, it authorized the grant of Anniversary Bonus amounting to a total of Php 108,000.00 to its trustees,
employees, and Job Order personnel. On even date, Board Resolution No. 95-120804 was passed authorizing the
release to the same recipients, Extra Cash Gift in the total amount of Php 90,500.00.

For 2004, NPFI paid a total of Php 132,000.00 as honoraria to the members of its BAC and TWG.

On February 4, 2005, COA issued Audit Observation Memorandum (AOM) No. 2004-002, finding that the grant of
NPFI in May 2004 of Anniversary Bonus and Extra Cash Gift amounting to Php 108,000.00 and Php 90,500.00,
respectively have no legal basis nor approval of the President; and AOM No. 2004-003, stating that NPFI did not
submit the required exemption from the Department of Budget and Management (DBM) for the payment of
honoraria to its BAC and TWG members.

Issue:
Whether the COA gravely abused its discretion when it disallowed NPFI's payment of Anniversary Bonus and
Extra Cash Gift to its trustees, officials, and personnel; and honoraria to its BAC and TWG members

Ruling:
NO, the COA, by mandate of the 1987 Constitution, is the guardian of public funds, vested of broad powers over
all accounts pertaining to government revenue and expenditures and the uses of public funds and property,
including the exclusive authority to define the scope of its audit and examination, to establish the techniques and
methods for such review, and to promulgate accounting and auditing rules and regulations. In the exercise of its
constitutional duty, the COA is given a wide latitude of discretion “to determine, prevent, and disallow irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures of government funds” and has the power to
ascertain whether public funds were utilized for the purpose for which they had been intended by law.

To warrant the issuance of the extraordinary writ of certiorari under Rule 64 in relation to Rule 65 of the Rules of
Court and set aside the Decision of the COA, the petitioner must show that the latter acted without or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. Mere abuse of
discretion is not enough. The abuse of discretion must be grave in that there is a capricious and whimsical
exercise of judgment which is equivalent to lack of jurisdiction. Abuse of discretion is grave when there is an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law
as when the judgment rendered is not based on law and evidence but on caprice, whim, and despotism.

That notwithstanding, as NPFI granted the Anniversary Bonus and the recipients received the same in good faith,
acting on the honest belief based on NPFI's articles of incorporation that its founding anniversary is reckoned
from May 7, 1969 and traditionally observed on June 11, 1969, no refund is necessary consistent with the Court's
ruling in the case of Nazareth[25] that "the refund of the disallowed payment of a benefit granted by law to a
covered person, agency or office of the Government may be barred by the good faith of the approving official and
of the recipient." In so ruling, the Court in Nazareth followed the doctrine laid down in Blaquera v. Alcala and De
Jesus v. Commission on Audit:

In Blaquera, the Petition assailed the constitutionality of Administrative Order (A.O.) Nos. 29 and 268, issued on
January 19, 1993 and February 21, 1992, respectively. The subject A.O.s grant officials and employees of the
government Productivity Incentive Benefits (PIB) and prohibit at the same time the grant of similar benefit in the
future without prior approval from the President. A.O.·No. 29 further orders the refund of any amount granted as
PIB for the year 1992 in excess of Php 1,000.00. The Court upheld the validity of the subject A.O.s as valid
exercise of the President's power of control. Nonetheless, it saw no need to order the refund of the excessive PIB
paid on account of good faith of the parties, viz.:

Considering, however, that all the parties here acted in good faith, we cannot countenance the refund of subject
incentive benefits for the year 1992, which amounts the petitioners have already received. Indeed, no indicia of
bad faith can be detected under the attendant facts and circumstances. The officials and chiefs of offices
concerned disbursed such incentive benefits in the honest belief that the amounts given were due to the
recipients and the latter accepted the same with gratitude, confident that they richly deserve such benefits.

The Court in Sison, et al. v. Tablang, et al., ruled that the provision of itself cannot serve as basis for the grant of
honoraria to the members of the BAC without an enabling rule or guideline from the DBM; and compliance
therewith is necessary for the right to accrue. We quote:

An honorarium is defined as something given not as a matter of obligation but in appreciation for services
rendered, a voluntary donation in consideration of services which admit of no compensation in money. Section 15
of R.A. No. 9184 uses the word "may" which signifies that the honorarium cannot be demanded as a matter of
right.

The government is not unmindful of the tasks that may be required of government employees outside of their
regular functions. It agrees that they ought to be compensated; thus, honoraria are given as a recompense for
their efforts and performance of substantially similar duties, with substantially similar degrees of responsibility
and accountability. However, the payment of honoraria to the members of the BAC and the TWG must be
circumscribed by applicable rules and guidelines prescribed by the DBM, as provided by law. Section 15 of R.A.
No. 9185 is explicit as it states: "For this purpose, the DBM shall promulgate the necessary guidelines." The word
"shall" has always been deemed mandatory, and not merely directory. Thus, in this case, petitioners should
have first waited for the rules and guidelines of the DBM before payment of the honoraria. As the
rules and guidelines were still forthcoming, petitioners could not just award themselves the straight amount of
25% of their monthly basic salaries as honoraria. This is not the intendment of the law.