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Archive for the ‘Cases’ Category

Conversion of Municipalities into Cities

Posted by lexforiphilippines on October 13, 2010

Section 10, Article X of the 1987 Constitution states that “(n)o province, city, municipality, or barangay shall be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.”

Applying this provision, the Supreme Court, in the case of League of Cities of the Philippines (LCP), et al. vs. Commission on Elections, et al. (G.R. No. 176951, G.R. No. 177499 & G.R. No. 178056; 24 August 2010), held that the creation of local government units must follow the criteria established in the Local Government Code and not in any other law.  The High Court stressed that Congress could not write such criteria in any other law, like laws creating cities or converting municipalities into cities.  The clear intent of the Constitution, said the High Court, was to insure that the creation of cities and other political units follow the same uniform, non-discriminatory criteria found solely in the Local Government Code.  Consequently, when Congress enacted cityhood laws which exempted 16 municipalities from the increased income requirement under the Local Government Code, as amended by Republic Act No. 9009 (RA 900), the exemption was held to be in violation of Section 10, Article X of the 1987 Constitution.  That the 16 municipalities had pending cityhood bills in Congress before the income requirement was increased was of no moment.  To be valid, said the High Court, such exemption must be written in the Local Government Code and not in any other law, including the cityhood laws.

To know more about said case, click on Digested Cases under Tools.

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Posted in Cases, constitutional Law, Notes, Political Law | Tagged: , , | Leave a Comment »

Can there be Immediate Disconnection of Electric Service?

Posted by lexforiphilippines on September 30, 2010

  • MERALCO is within its rights to immediately disconnect the electric service of the consumer after due notice, upon discovery of a tampered, broken, or fake seal on, the meter, provided the discovery was personally witnessed and attested to by an officer of the law or a duly authorized representative of the Energy Regulatory Board.  It is only when the discovery is witnessed by such government representatives will it constitute prima facie evidence of illegal use of electricity by the person who benefits from the illegal use.  (Section 4, Republic Act No. 7832 or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994)

An “officer of the law” is one “who, by direct supervision of law or by election or by appointment by competent authority, is charged with the maintenance of public order and the protection and security of life and property, such as barangay captain, barangay chairman, barangay councilman, barangay leader, officer or member of Barangay Community Brigades, barangay policeman, PNP policeman, municipal councilor, municipal mayor and provincial fiscal.”  (Section 1, Rule III, Rules and Regulations Implementing RA 7832)

The presence of the consumer during the MERALCO inspection cannot be a substitute for the presence of the government representatives.

  • MERALCO is authorized to immediately disconnect the electric service of its consumers without the need of a court or administrative order when: (1) the consumer, or someone acting on his behalf, is caught in the very act of committing any of the acts enumerated in Section 4(a) of RA 7832; or (2) when any of the circumstances so enumerated in Section 4(a) of RA 7832, constituting prima facie evidence of illegal use of electricity, is discovered for the second time. (Section 6, RA 7832)

Section 4(a) of RA 7832 enumerates the following circumstances, which will constitute prima facie evidence of illegal use of electricity by the person benefited by such illegal use, if the discovery of such circumstances is personally witnessed and attested to by an officer of the law or a duly authorized representative from Energy Regulatory Board:

(i) The presence of a bored hole on the glass cover of the electric meter, or at the back or any other part of said meter;

(ii) The presence inside the electric meter of salt, sugar and other elements that could result in the inaccurate registration of the meter’s internal parts to prevent its accurate registration of consumption of electricity;

(iii) The existence of any wiring connection which affects the normal operation or registration of the electric meter;

(iv) The presence of a tampered, broken, or fake seal on the meter, or mutilated, altered or tampered meter recording chart or graph, or computerized chart, graph, or log;

(v) The presence in any part of the building or its premises which is subject to the control of the consumer or on the electric meter, of a current reversing transformer, jumper, shorting and/or shunting wire, and/or loop connection or any other similar device;

(vi) The mutilation, alteration, reconnection, disconnection, bypassing or tampering of instruments, transformers, and accessories;

(vii) The destruction of, or attempt to destroy, any integral accessory of the metering device box which encases an electric meter, or its metering accessories; and

(viii) The acceptance of money and/or other valuable consideration by any officer of employee of the electric utility concerned or the making of such an offer to any such officer or employee for not reporting the presence of any of the foregoing circumstances.

  • Courts are prohibited from issuing injunctions or restraining orders against electric utilities over the exercise of their authority to disconnect service unless the disconnection is attended by bad faith or grave abuse of authority.  (Section 9, RA 7832)

In view of MERALCO’s dominance over its market and the customers’ relatively weak bargaining position as against MERALCO, and in view too of the serious consequences and hardships a customer stands to suffer upon service disconnection, MERALCO’s failure to strictly observe the legal requirements for instant disconnection can be equated to the bad faith or abuse of right that the law speaks of.

  • The presence of a defect in the meter, whether inherent, intentional or unintentional, including meter-tampering, which has existed for a considerable length of time, will create a presumption of constructive notice of such defect or tampering on the part of MERALCO.  MERALCO’s failure to discover such defect or tampering, considering the length of time, will amount to inexcusable negligence that will bar it from collecting its differential billing against the consumers.
  • Electricity is a basic necessity whose generation and distribution is imbued with public interest, and its provider is a public utility subject to strict regulation by the State in the exercise of police power. In view of the serious consequences resulting from immediate disconnection of electric service, the law provides strict requisites that MERALCO must follow before it can be granted authority to undertake instant disconnection of electric service due to its consumers.

These are legal precepts applied by the Supreme Court in deciding the case of Manila Electric Company (MERALCO) vs. Spouses Edito and Felicidad Chua and Josefina Paqueo (G.R. No. 160422; 5 July 2010).

For a digest of the case, click on Digested Cases under Tools.



Posted in Cases, Energy and Environment, Laws and Implementing Rules, Notes, Remedial Law | Tagged: , , , | Leave a Comment »

Who Should Perform Drug-Testing?

Posted by lexforiphilippines on September 28, 2010

In Nacague vs. Sulpicio Lines, Inc. (G.R. No. 172589; 8 August 2010), the Supreme Court considered as doubtful basis for termination of employment, the results of a dangerous drug test performed by a medical clinic which was not accredited by the Department of Health.  The High Court cited Section 36 of Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002) which provides that drug tests should be performed only by any government forensic laboratories or any of the drug testing laboratories accredited and monitored by the Department of Health, to safeguard the quality of test results.

To know more about the case and the Court’s ruling, click on Digested Cases under Tools.

Posted in Cases, Labor Law, Law School | Tagged: , | Leave a Comment »

Withholding Agent’s Right to File a Claim for Tax Refund

Posted by lexforiphilippines on September 21, 2010

In Commissioner of Internal Revenue vs. Smart Communications, Inc. (G.R. No. 179045-46; 25 August 2010), the Supreme Court held that the person entitled to claim a tax refund is the taxpayer [Sections 204(c) and 229 of the National Internal Revenue Code (NIRC)], but in case the taxpayer does not file a claim for refund, the withholding agent has the right to file the claim, even when it is unrelated to, or is not a wholly owned subsidiary of, the principal taxpayer.  The High Court cited two reasons: (1) “(the withholding agent) is considered a ‘taxpayer” under the NIRC as he is personally liable for the withholding tax as well as for deficiency assessments, surcharges, and penalties, should the amount of the tax withheld be finally found to be less than the amount that should have been withheld under law,” and (2) “as an agent of the taxpayer, his authority to file the necessary income tax return and to remit the tax withheld to the government impliedly includes the authority to file a claim for refund and to bring an action for recovery of such claim.”  The Supreme Court stressed, however, that as an agent of the taxpayer, it is the duty of the withholding agent to return to the principal taxpayer what he has recovered, otherwise, he would be unjustly enriching himself at the expense of the principal taxpayer from whom the taxes were withheld, and from whom he derives his legal right to file a claim for refund.

To know more about said case and the Supreme Court’s ruling, click on Digested Cases under Tools.

Posted in Cases, Law School, Taxation | Tagged: , , | Leave a Comment »

Promotion Only in Nomenclature

Posted by lexforiphilippines on September 16, 2010

When an employee’s position is converted to a higher job grade level but he is not given additional functions or responsibilities, can he be considered as “promoted” and claim conversion and promotion increase?

In SCA Hygiene Products Corporation Employees Association-FFW vs. SCA Hygiene Products Corporation (G.R. No. 182877; 9 August 2010), the Supreme Court held that of primordial consideration is not the nomenclature or title given to the employee, but the nature of his functions.  In this case, the employees concerned, although given a higher job grade level following a company-wide job evaluation, continued to occupy the same positions they were occupying before the job evaluation.  Their job titles remained the same and they were not given additional duties and responsibilities.  Like their previous job grade level, their new job grade level was also categorized as rank-and-file.  What transpired, said the High Court, was only a promotion in nomenclature, and the employees were not entitled to conversion or promotion increase.

For a digest of the case, click on Digested Cases under Tools.

Posted in Cases, Labor Law, Law School | Tagged: | Leave a Comment »

Bank’s General Lien on Deposits

Posted by lexforiphilippines on September 14, 2010

Is a stipulation in bank-loan documents giving the bank a right to set-off or apply the borrower’s loan (including interest) against his bank deposits, valid?

Yes.  In Metropolitan Bank and Trust Company vs. Mariñas (G.R. No. 179105; 26 July 2010), the Supreme Court sustained the bank’s authority to make deductions from a borrower’s deposits and apply them to his loans and stipulated interest, pursuant to the Deeds of Assignment with Power of Attorney executed by the borrower, giving the bank such authority.  The Court cited Article 1159 of the Civil Code which states that “obligations arising from contract have the force of law between the contracting parties and should be complied with in good faith.”  Not being contrary to law, such agreement between the bank and the borrower must be respected and given the force of law between them, said the Court.  The Court, however, ruled that, considering the total amounts of said borrower’s deposits inclusive of interest earned vis-à-vis his total obligations, the total depletion of his accounts was unwarranted.  The bank was ordered to account for whatever excess deductions made on the borrower’s accounts and to return them with earned interest.  The Court stressed that “(a)s a business affected with public interest, and because of the nature of their functions, banks are under obligation to treat the accounts of their depositors with meticulous care, always having in mind the fiduciary nature of their relationship.”

To know more about said case and the Court’s ruling, click on Digested Cases under Tools.

Posted in Banking Laws, Cases, Civil Law, Corporate Law, Law School | Tagged: , , , , | 1 Comment »

Joint Ventures; Sharing in Profits and Losses

Posted by lexforiphilippines on September 6, 2010

If parties to a joint venture agreed on how the profits from the joint venture would be divided, but did not specify how losses would be split, how should the losses be distributed?

A joint venture, being a form of partnership, is to be governed by the laws on partnership.  Under the laws on partnership, particularly Article 1797 of the Civil Code, the losses and profits shall be distributed in accordance with the partnership agreement; if only the share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion. So said the Supreme Court in the consolidated cases of Marsman Drysdale Land, Inc. vs. Philippine Geoanalytics, Inc. and Gotesco Properties, Inc. (G.R. No. 183374; 29 June 2010) and Gotesco Properties, Inc. vs. Marsman Drysdale Land, Inc. and Philippine Geoanalytics, Inc. (G.R. No. 183376; 29 June 2010).

For a digest of said cases, click on Digested Cases under Tools.

Posted in Cases, Civil Law, Corporate Law, Law School, Notes | Tagged: , | Leave a Comment »

A Sense of Fair Play in Upholding an Immunity Agreement

Posted by lexforiphilippines on August 20, 2010

“More than any one, the government should be fair.” – The Supreme Court concluded its opinion in the case of Disini vs. Sandiganbayan (G.R. No. 180564; 22 June 2010) with this statement.

Said case involved an immunity agreement between petitioner and the State whereby petitioner agreed to testify for, and provide information and documents to, the State in two cases involving the contract for the construction of the Bataan Nuclear Power Plant, believed to have been brokered by one of his second cousin’s companies and attended by anomalies.  Under the same agreement, petitioner would not be compelled to testify in any other case which the state may bring against his said cousin.  Eighteen years after the immunity agreement was forged, and after petitioner complied with his undertaking, the State, through the PCGG, revoked its guarantee not to compel petitioner to testify against his second cousin.

Upholding petitioner’s immunity from testifying against his second cousin in other cases, the Supreme Court, in part, held:

“x x Trusting in the Government’s honesty and fidelity, (petitioner) agreed and fulfilled his part of the bargain.  Surely, the principle of fair play, which is the essence of due process, should hold the Republic on to its promise.”

“A contract is the law between the parties.  It cannot be withdrawn except by their mutual consent.  This applies with more reason in this case where (petitioner) had already complied with the terms and conditions of the Immunity Agreement. To allow the Republic to revoke the Agreement at this late stage will run afoul of the rule that a party to a compromise cannot ask for a rescission after it had enjoyed its benefits.”

To know more about the case and the Court’s ruling, click on Digested Cases under Tools and look for the digest of Disini vs. Sandiganbayan (G.R. No. 180564; 22 June 2010).

Posted in Cases, Civil Law, Law School, Political Law | Tagged: , , | 1 Comment »

When Preventive Suspension Will Give Rise to Constructive Dismissal

Posted by lexforiphilippines on August 11, 2010

The Supreme Court, in the case of Mandapat vs. Add Force Personnel Services, Inc. and Court of Appeals (G.R. No. 180285; 6 July 2010), stated that constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego his continued employment. 

In the same case, the High Court explained that preventive suspension may be legally imposed on employee whose alleged violation is the subject of an investigation.  The purpose of his suspension is to prevent him from causing harm or injury to the company as well as to his fellow employees (Section 8, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, Series of 1997).  No preventive suspension shall last longer than 30 days and the employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker (Section 9, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9, Series of 1997).  When preventive suspension exceeds the maximum period allowed without reinstating the employee either by actual or payroll reinstatement or when preventive suspension is for an indefinite period, only then will constructive dismissal set in.

Click on Digested Cases under Tools for a digest of Mandapat vs. Add Force Personnel Services, Inc. and Court of Appeals (G.R. No. 180285; 6 July 2010).

Posted in Cases, Labor Law, Law School | Tagged: , , | 9 Comments »

Can the Courts Compel Re-correction of Board Examination?

Posted by lexforiphilippines on July 27, 2010

In the recent consolidated cases of Antolin vs. Domondon, et al. (G.R. No. 165036; 5 July 2010) and Antolin vs. Fortuna-Ibe (G.R. No. 175705; 5 July 2010), involving a CPA Board examinee’s prayer for re-correction of her examination by the Board of Accountancy, the Supreme Court held that any claim for re-correction or revision of her examination cannot be compelled by the court.  The High Court reiterated its previous ruling in the case of Agustin Ramos vs. Sandoval (G.R. No. 84470, 2 February 1989), where it dismissed an action to compel the Medical Board of Examiners and the Professional Regulation Commission to re-correct the petitioning examinees’ ratings, explaining that the function of reviewing and re-assessing the answers to the examination questions was a discretionary function of the Medical Board, not a ministerial and mandatory one.

Click on Digested Cases under Tools to find a digest of the consolidated cases of Antolin vs. Domondon, et al. (G.R. No. 165036; 5 July 2010) and Antolin vs. Fortuna-Ibe (G.R. No. 175705; 5 July 2010).

Posted in Cases, Civil Law, Political Law, Uncategorized | Leave a Comment »