Addendum: deed of donation; acceptance; condition.

[G.R. No. 140487.  April 2, 2001]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and ILDEFONSA MANGUBAT, respondents.

X x x.

Petitioner contends that the Court of Appeals erred in declaring the donation null and void for the reason that the acceptance was not allegedly done in accordance with Articles 745[1] and 749[2] of the New Civil Code.

We agree.

Donations, according to its purpose or cause, may be categorized as: (1) pure or simple; (2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous.  A pure or simple donation is one where the underlying cause is plain gratuity.[3] This is donation in its truest form. On the other hand, a remuneratory or compensatory donation is one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt.[4] A conditional or modal donation is one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation given.[5] Finally, an onerous donation is that which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated.[6]

Of all the foregoing classifications, donations of the onerous type are the most distinct.  This is because, unlike the other forms of donation, the validity of and the rights and obligations of the parties involved in an onerous donation is completely governed not by the law on donations but by the law on contracts.  In this regard, Article 733 of the New Civil Code provides:

Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed.

The donation involved in the present controversy is one which is onerous since there is a burden imposed upon the donee to build a school on the donated property.[7]

The Court of Appeals held that there was no valid acceptance of the donation because:

xxx

Under the law the donation is void if there is no acceptance.  The acceptance may either be in the same document as the deed of donation or in a separate public instrument.  If the acceptance is in a separate instrument, "the donor shall be notified thereof in an authentic form, and his step shall be noted in both instruments.

"Title to immovable property does not pass from the donor to the donee by virtue of a deed of donation until and unless it has been accepted in a public instrument and the donor duly noticed thereof.  (Abellera vs. Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA 245).  If the acceptance does not appear in the same document, it must be made in another.  Solemn words are not necessary; it is sufficient if it shows the intention to accept, But in this case, it is necessary that formal notice thereof be given to the donor and the fact that due notice has been given it must be noted in both instruments (that containing the offer to donate and that showing acceptance).  Then and only then is the donation perfected.  (11 Manresa 155-11, cited in Vol. II, Civil Code of the Philippines by Tolentino.)."

This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" to determine whether there was acceptance of the donation.  This Court found none.  We further examined the record if there is another document which embodies the acceptance, we found one.  Although the Court found that in the offer of exhibits of the defendants, a supposed affidavit of acceptance and/or confirmation of the donation, marked as exhibit "8" appears to have been offered.

However, there is nothing in the record that the exhibits offered by the defendants have been admitted nor such exhibits appear on record.

Assuming that there was such an exhibit, the said supposed acceptance was not noted in the Deed of Donation as required under Art. 749 of the Civil Code.  And according to Manresa, supra, a noted civilist, the notation is one of the requirements of perfecting a donation.  In other words, without such a notation, the contract is not perfected contract.  Since the donation is not perfected, the contract is therefore not valid.[8]

xxx

We hold that there was a valid acceptance of the donation.

Sections 745 and 749 of the New Civil Code provide:

ART. 745.  The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufficient power; otherwise the donation shall be void.

ART. 749.  In order that the donation of an immovable may be laid, it must be made in a public document, specifying therein the property donated and the value of the charge which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments.

Private respondents, as shown above, admit that in the offer of exhibits by the defendants in the trial court, an affidavit of acceptance and/or confirmation of the donation, marked as Exhibit "8," was offered in evidence.  However, private respondents now question this exhibit because, according to them "there is nothing in the record that the exhibits offered by the defendants have been admitted nor such exhibit appear on record."

Respondents' stance does not persuade.  The written acceptance of the donation having been considered by the trial court in arriving at its decision, there is the presumption that this exhibit was properly offered and admitted by the court.

Moreover, this issue was never raised in the Court of Appeals.  Nowhere in their brief did respondents question the validity of the donation on the basis of the alleged defect in the acceptance  thereof.  If there was such a defect, why did it take respondents more than ten (10) years from the date of the donation to question its validity?  In the very least, they are guilty of estoppel.[9]

Respondents further argue that assuming there was a valid acceptance of the donation, the acceptance was not noted in the Deed of Donation as required in Article 749 of the Civil Code, hence, the donation is void.

The purpose of the formal requirement for acceptance of a donation is to ensure that such acceptance is duly communicated to the donor.  Thus, in Pajarillo vs. Intermediate Appellate Court,[10] the Court held:

There is no question that the donation was accepted in a separate public instrument and that it was duly communicated to the donors.  Even the petitioners cannot deny this.  But what they do contend is that such acceptance was not "noted in both instruments," meaning the extrajudicial partition itself and the instrument of acceptance, as required by the Civil Code.

That is perfectly true.  There is nothing in either of the two instruments showing that "authentic notice" of the acceptance was made by Salud to Juana and Felipe.  And while the first instrument contains the statement that "the donee does hereby accept this donation and does hereby express her gratitude for the kindness and liberality of the donor,"  the only signatories thereof were Felipe Balane and Juana Balane de Suterio.  That was in fact the reason for the separate instrument of acceptance signed by Salud a month later.

A strict interpretation of Article 633 can lead to no other conclusion that the annulment of the donation for being defective in form as urged by the petitioners.  This would be in keeping with the unmistakable language of the above-quoted provision.  However, we find that under the circumstances of the present case, a literal adherence to the requirement of the law might result not in justice to the parties but conversely a distortion of their intentions.  It is also a policy of the Court to avoid such as interpretation.

The purpose of the formal requirement is to insure that the acceptance of the donation is duly communicated to the donor.  In the case at bar, it is not even suggested that Juana was unaware of the acceptance for she in fact confirmed it later and requested that the donated land be not registered during her lifetime by Salud.  Given this significant evidence, the Court cannot in conscience declare the donation ineffective because there is no notation in the extrajudicial settlement of the donee's acceptance.  That would be placing too much stress on mere form over substance.  It would also disregard the clear reality of the acceptance of the donation as manifested in the separate instrument dated June 20, 1946, and as later acknowledged by Juan.

In the case at bar, a school building was immediately constructed after the donation was executed.  Respondents had knowledge of the existence of the school building put up on the donated lot through the efforts of the Parents-Teachers Association of Barangay Kauswagan.  It was when the school building was being dismantled and transferred to the new site and when Vice-Mayor Wilfredo Palma was constructing a house on the donated property that respondents came to know of the Deed of Exchange.  The actual knowledge by respondents of the construction and existence of the school building fulfilled the legal requirement that the acceptance of the donation by the donee be communicated to the donor.

On respondents' claim, which was upheld by the Court of Appeals, that the acceptance by BPS District Supervisor Gregorio Buendia of the donation was ineffective because of the absence of a special power of attorney from the Republic of the Philippines, it is undisputed that the donation was made in favor of the Bureau of Public Schools.  Such being the case, his acceptance was authorized under Section 47 of the 1987 Administrative Code which states:

SEC. 47.  Contracts and Conveyances. -  Contracts or conveyances may be executed for and in behalf of the Government or of any of its branches, subdivisions, agencies, or instrumentalities, whenever demanded by the exigency or exigencies of the service and as long as the same are not prohibited by law.

Finally, it is respondents' submission that the donee, in exchanging the donated lot with a bigger lot, violated the condition in the donation that the lot be exclusively used for school purposes only.

What does the phrase "exclusively used for school purposes" convey? "School" is simply an institution or place of education.[11] "Purpose" is defined as "that which one sets before him to accomplish or attain; an end, intention, or aim, object, plan, project.  Term is synonymous with the ends sought, an object to be attained, an intention, etc."[12] "Exclusive" means "excluding or having power to exclude (as by preventing entrance or debarring from possession, participation, or use); limiting or limited to possession, control or use.[13]

Without the slightest doubt, the condition for the donation was not in any way violated when the lot donated was exchanged with another one.  The purpose for the donation remains the same, which is for the establishment of a school.  The exclusivity of the purpose was not altered or affected.  In fact, the exchange of the lot for a much bigger one was in furtherance and enhancement of the purpose of the donation.  The acquisition of the bigger lot paved the way for the release of funds for the construction of Bagong Lipunan school building which could not be accommodated by the limited area of the donated lot.

x x x.

---

[1] Art. 745. The donee must accept the donation personally, or through an authorized person with a special power for the purpose, or with a general and sufficient power; otherwise the donation shall be void.

[2] Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charge which the donee must satisfy.

            The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is done during the lifetime of the donor.

            If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments.

[3] Art.725, New Civil Code.

[4] Art. 726, New Civil Code.

[5] Arts. 726 and 733, New Civil Code.

[6] Art. 733, New Civil Code.

[7] Central Philippine University vs. Court of Appeals, 246 SCRA 511, 517 (1995); De Luna vs. Abrigo, 181 SCRA 150 (1990); City of Manila vs. Rizal Park Co., 53 Phil 515, 526 (1929).

[8] Rollo, pp. 7-8.

[9] Estoppel by laches, or the negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it (Ochagabra vs. CA, 304 SCRA 587 (1999).

[10] 176 SCRA 340 (1989).

[11] BLACK'S  LAW DICTIONARY, Sixth Edition, p. 1344.

[12] Id., at 1236.

[13] Webster's Third New International Dictionary.

Deed of donation; acceptance by donee; defective notarial acknowledgment.

[G.R. No. 132681.  December 3, 2001]

RICKY Q. QUILALA, petitioner, vs. GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondents.

x x x.

Under Article 749 of the Civil Code, the donation of an immovable must be made in a public instrument in order to be valid,[7] specifying therein the property donated and the value of the charges which the donee must satisfy.  As a mode of acquiring ownership, donation results in an effective transfer of title over the property from the donor to the donee,[8] and is perfected from the moment the donor knows of the acceptance by the donee,[9] provided the donee is not disqualified or prohibited by law from accepting the donation.  Once the donation is accepted, it is generally considered irrevocable,[10] and the donee becomes the absolute owner of the property.[11] The acceptance, to be valid, must be made during the lifetime of both the donor and the donee.[12] It may be made in the same deed or in a separate public document,[13] and the donor must know the acceptance by the donee.[14]

In the case at bar, the deed of donation contained the number of the certificate of title as well as the technical description as the real property donated.  It stipulated that the donation was made for and in consideration of the “love and affection which the DONEE inspires in the DONOR, and as an act of liberality and generosity.”[15] This was sufficient cause for a donation.  Indeed, donation is legally defined as “an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.”[16]

The donee’s acceptance of the donation was explicitly manifested in the penultimate paragraph of the deed, which reads:

That the DONEE hereby receives and accepts the gift and donation made in her favor by the DONOR and she hereby expresses her appreciation and gratefulness for the kindness and generosity of the DONOR.[17]

Below the terms and stipulations of the donation, the donor, donee and their witnesses affixed their signature.  However, the Acknowledgment appearing on the second page mentioned only the donor, Catalina Quilala.  Thus, the trial court ruled that for Violeta’s failure to acknowledge her acceptance before the notary public, the same was set forth merely on a private instrument, i.e., the first page of the instrument.  We disagree.

The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which states:

Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments, whether affecting registered or unregistered land, executed in accordance with law in the form of public instruments shall be registrable: Provided, that, every such instrument shall be signed by the person or persons executing the same in the presence of at least two witnesses who shall likewise sign thereon, and shall be acknowledged to be the free act and deed of the person or persons executing the same before a notary public or other public officer authorized by law to take acknowledgment.  Where the instrument so acknowledged consists of two or more pages including the page whereon acknowledgment is written, each page of the copy which is to be registered in the office of the Register of Deeds, or if registration is not contemplated, each page of the copy to be kept by the notary public, except the page where the signatures already appear at the foot of the instrument, shall be signed on the left margin thereof by the person or persons executing the instrument and their witnesses, and all the pages sealed with the notarial seal, and this fact as well as the number of pages shall be stated in the acknowledgment.  Where the instrument acknowledged relates to a sale, transfer, mortgage or encumbrance of two or more parcels of land, the number thereof shall likewise be set forth in said acknowledgment.” (underscoring ours).

As stated above, the second page of the deed of donation, on which the Acknowledgment appears, was signed by the donor and one witness on the left-hand margin, and by the donee and the other witness on the right-hand margin.  Surely, the requirement that the contracting parties and their witnesses should sign on the left-hand margin of the instrument is not absolute.  The intendment of the law merely is to ensure that each and every page of the instrument is authenticated by the parties.  The requirement is designed to avoid the falsification of the contract after the same has already been duly executed by the parties.  Hence, a contracting party affixes his signature on each page of the instrument to certify that he is agreeing to everything that is written thereon at the time of signing.

Simply put, the specification of the location of the signature is merely directory.  The fact that one of the parties signs on the wrong side of the page, that does not invalidate the document.  The purpose of authenticating the page is served, and the requirement in the above-quoted provision is deemed substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public does not 

also render the donation null and void.  The instrument should be treated in its entirety.  It cannot be considered a private document in part and a public document in another part.  The fact that it was acknowledged before a notary public converts the deed of donation in its entirety a public instrument.  The fact that the donee was not mentioned by the notary public in the acknowledgment is of no moment.  To be sure, it is the conveyance that should be acknowledged as a free and voluntary act.  In any event, the donee signed on the second page, which contains the Acknowledgment only.  Her acceptance, which is explicitly set forth on the first page of the notarized deed of donation, was made in a public instrument.

It should be stressed that this Court, not being a trier of facts, can not make a determination of whether Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta.  These issues should be ventilated in the appropriate probate or settlement proceedings affecting the respective estates of Catalina and Violeta.  Suffice it to state that the donation, which we declare herein to be valid, will still be subjected to a test on its inofficiousness under Article 771,[18] in relation to Articles 752, 911 and 912 of the Civil Code.  Moreover, property donated inter vivos is subject to collation after the donor’s death,[19] whether the donation was made to a compulsory heir or a stranger,[20] unless there is an express prohibition if that had been the donor’s intention.[21]

x x x.

[1] Rollo, p. 94.

[2] Ibid., p. 95.

[3] CA Rollo, pp. 33-34; penned by Judge Catalino Castañeda, Jr.

[4] Penned by Associate Justice Maximiano C. Asuncion, concurred in by Associate Justices Jesus M. Elbinias and Ramon A. Barcelona; CA Rollo, pp. 175-178.

[5] Penned by Associate Jesus M. Justice Elbinias, concurred in by Associate Justices Minerva G. Reyes and Ramon A. Barcelona; CA Rollo, p. 196.

[6] Rollo, p. 25.

[7] Duque v. Domingo, 80 SCRA 654 [1977].

[8] Civil Code, Article 712.

[9] Civil Code, Article 734.

[10] Vda. de Arceo v. Court of Appeals, 185 SCRA 489 [1990]. The exceptions to irrevocability are: officiousness, failure of the donee to comply with charges, and ingratitude.

[11] Tanpingco v. IAC, 207 SCRA 652 [1992]; Quijada v. CA, 299 SCRA 695 [1998].

[12] Civil Code, Article 746.

[13] Civil Code, Article 749, second par.

[14] Abellera v. Balanag, 37 Phil. 865 [1918]; Alejandro v. Geraldez, 78 SCRA 295 [1977].

[15] Rollo, p. 94.

[16] Civil Code, Article 725.

[17] Ibid.

[18] Donations which in accordance with the provisions of Article 752, are inofficious, bearing in mind, the estimated net value of the donor’s property at the time of his death, shall be reduced with regard to the excess; but this reduction shall not prevent the donations from taking effect during the life of the donor, nor shall it bar the donee from appropriating the fruits.

            For the reduction of donations the provisions of this Chapter and of Articles 911 and 912 of this Code shall govern.

[19] Civil Code, Book III, Title IV, Chapter 4, Section 5.

[20] Vda.  de Tupas v. Regional Trial Court of Negros Occidental, 144 SCRA 622 [1986].

[21] De Roma v. Court of Appeals, 152 SCRA 205 [1987].

Back to Metro Manila law practice

As the founder of Las Pinas City Bar Assn Inc. (LPBA), as a 2005-07 vice pres of IBP PPLM Ch. (southern Metro Manila district), and as a retired FEU law professor (1985-2006), I have resumed and re-focused my active law practice back to Las Pinas City and Metro Manila as a whole after a year of unproductive experimental law practice in Tacloban City in the Eastern Visayas Region (where I re-married last year). I thank the local bar leaders of Las Pinas City and other cities in the southern district of Metro Manila for welcoming me back.

 

 

March 2011 Philippine Supreme Court Decisions on Political Law « LEXOTERICA: A PHILIPPINE BLAWG

March 2011 Philippine Supreme Court Decisions on Political Law « LEXOTERICA: A PHILIPPINE BLAWG

March 2011 Philippine Supreme Court Decisions on Political Law

April 26, 2011
Vicente D. Gerochi IV

Here are selected March 2011 rulings of the Supreme Court of the Philippines on political law.

Constitutional Law

COMELEC; House of Representatives Electoral Tribunal; Jurisdiction. The Supreme Court held in this case that despite recourse to it, it cannot rule on the issue of citizenship of petitioner Gonzalez. Subsequent events showed that Gonzalez had not only been duly proclaimed, he had also taken his oath of office and assumed office as Member of the House of Representatives. Once a winning candidate has been proclaimed, taken his oath, and assumed office as a member of the House of Representatives, COMELEC’s jurisdiction over election contests relating to the candidate’s election and qualifications ends, and the HRET’s own jurisdiction begins. Fernando V. Gonzalez v. Commission on Elections, et al., G.R. No. 192856, March 8, 2011.

Equal Protection. The main issue in this case is whether or not PAGCOR is still exempt from corporate income tax and VAT with the enactment of R.A. No. 9337. The Supreme Court held that under Section 1 of R.A. No. 9337, amending Section 27 (c) of the National Internal Revenue Code of 1977, petitioner is no longer exempt from corporate income tax as it has been effectively omitted from the list of GOCCs that are exempt from it. The burden of proof rests upon the party claiming exemption to prove that it is, in fact, covered by the exemption so claimed. In this case, PAGCOR failed to prove that it is still exempt from the payment of corporate income tax, considering that Section 1 of R.A. No. 9337 amended Section 27 (c) of the National Internal Revenue Code of 1997 by omitting PAGCOR from the exemption. PAGCOR cannot find support in the equal protection clause of the Constitution, as the legislative records of the Bicameral Conference Meeting dated October 27, 1997, of the Committee on Ways and Means, show that PAGCOR’s exemption from payment of corporate income tax, as provided in Section 27 (c) of R.A. No. 8424, or the National Internal Revenue Code of 1997, was not made pursuant to a valid classification based on substantial distinctions and the other requirements of a reasonable classification by legislative bodies, so that the law may operate only on some, and not all, without violating the equal protection clause. The legislative records show that the basis of the grant of exemption to PAGCOR from corporate income tax was PAGCOR’s own request to be exempted. Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue, G.R. No. 172087, March 15, 2011.

Impeachment; Initiation. The Supreme Court reiterated its previous ruling that the term “initiate” as used in Section 3, Article XI of the Constitution refers to the filing of the impeachment complaint coupled with Congress’ taking initial action on said complaint. The initial action of the House of Representatives on the complaint is the referral of the same to the Committee on Justice. Ma. Merceditas C. Gutierrez v. The House of Representatives Committee on Justice, et al., G.R. No. 193459, March 8, 2011.

Impeachment; Promulgation of Rules. When the Constitution uses the word “promulgate,” it does not necessarily mean to publish in the Official Gazette or in a newspaper of general circulation. Promulgation, as used in Section 3(8), Article XI of the Constitution, suitably takes the meaning of “to make known” as it should be generally understood. Ma. Merceditas C. Gutierrez v. The House of Representatives Committee on Justice, et al., G.R. No. 193459, March 8, 2011.

Non-impairment Clause. Petitioner PAGCOR, in this case, states that the private parties/investors transacting with it considered the tax exemptions, which inure to their benefit, as the main consideration and inducement for their decision to transact/invest with it. Petitioner argues that the withdrawal of its exemption from corporate income tax by R.A. No. 9337 has the effect of changing the main consideration and inducement for the transactions of private parties with it; thus, the amendatory provision is violative of the non-impairment clause of the Constitution. The SC held that a franchise partakes of the nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. Under Section 11, Article XII of the Constitution, PAGCOR’s franchise is subject to amendment, alteration or repeal by Congress such as the amendment under Section 1 of R.A. No. 9377. Hence, the provision in Section 1 of R.A. No. 9337, amending Section 27 (c) of R.A. No. 8424 by withdrawing the exemption of PAGCOR from corporate income tax, which may affect any benefits to PAGCOR’s transactions with private parties, is not violative of the non-impairment clause of the Constitution. Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue, G.R. No. 172087, March 15, 2011.

Senate Ethics Committee; Due Process. This case refers to the ethics complaint filed against Sen. Manny Villar on the alleged double insertion of Php200 million for the C-5 Road Extension Project in the 2008 General Appropriations Act. Petitioners allege that the adoption of the Rules of the Ethics Committee by the Senate Committee of the Whole is violative of Senator Villar’s right to due process. The SC did not agree. The Constitutional right of the Senate to promulgate its own rules of proceedings has been recognized and affirmed by this Court. The only limitation to the power of Congress to promulgate its own rules is the observance of quorum, voting, and publication when required. As long as these requirements are complied with, according to the SC, the Court will not interfere with the right of Congress to amend its own rules. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate Ethics Committee; Equal Protection. Petitioners allege that the Senate Committee of the Whole was constituted solely for the purpose of assuming jurisdiction over the complaint against Senator Villar. Petitioners further allege that the act was discriminatory and removed Senator Villar’s recourse against any adverse report of the Ethics Committee to the Senate as a body. The SC did not agree with this. The Rules of the Ethics Committee provide that “all matters relating to the conduct, rights, privileges, safety, dignity, integrity and reputation of the Senate and its Members shall be under the exclusive jurisdiction of the Senate Committee on Ethics and Privileges.” However, in this case, the refusal of the Minority to name its members to the Ethics Committee stalled the investigation. In short, while ordinarily an investigation about one of its members’ alleged irregular or unethical conduct is within the jurisdiction of the Ethics Committee, the Minority effectively prevented it from pursuing the investigation when they refused to nominate their members to the Ethics Committee. Even Senator Villar called the Ethics Committee a kangaroo court and declared that he would answer the accusations against him on the floor and not before the Ethics Committee. Given the circumstances, the referral of the investigation to the Committee of the Whole was an extraordinary remedy undertaken by the Ethics Committee and approved by a majority of the members of the Senate. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate; Publication of Rules. Petitioners assail the non-publication of the Rules of the Senate Committee of the Whole. Respondent counters that publication is not necessary because the Senate Committee of the Whole merely adopted the Rules of the Ethics Committee which had been published in the Official Gazette on 23 March 2009. Respondent alleges that there is only one set of Rules that governs both the Ethics Committee and the Senate Committee of the Whole. The SC held that the Constitution does not require publication of the internal rules of the House or Senate. Since rules of the House or the Senate that affect only their members are internal to the House or Senate, such rules need not be published, unless such rules expressly provide for their publication before the rules can take effect. In this particular case, the Rules of the Senate Committee of the Whole itself provide that the Rules must be published before the Rules can take effect. Thus, even if publication is not required under the Constitution, publication of the Rules of the Senate Committee of the Whole is required because the Rules expressly mandate their publication. To comply with due process requirements, the Senate must follow its own internal rules if the rights of its own members are affected. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate; Quorum and Voting. If the Senate is constituted as a Committee of the Whole, a majority of the Senate is required to constitute a quorum to do business pursuant to Section 16(2), Article VI of the Constitution. Otherwise, there will be a circumvention of this express provision of the Constitution on quorum requirement. Obviously, the Rules of the Senate Committee of the Whole require modification to comply with requirements of quorum and voting which the Senate must have overlooked in this case. In any event, in case of conflict between the Rules of the Senate Committee of the Whole and the Constitution, the latter will of course prevail. . Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Unlawful Expenditure for being Excessive; Factors. Price is considered “excessive” if it is more than the 10% allowable price variance between the price paid for the item bought and the price of the same item per canvass of the auditor. In determining whether or not the price is excessive, the following factors may be considered: (a) supply and demand forces in the market; (b) government price quotations; (c) warranty of products or special features; (d) brand of products. In this case, the issue was whether the computer units bought by Cooperative Development Authority (CDA) from Tetra were overpriced. The records showed that while the respondents found nothing wrong per se with the criteria adopted by the CDA in the overall evaluation of the bids, the technical aspect was seriously questioned. The final technical evaluation report was apparently manipulated to favor Tetra, which offered a Korean-made brand as against Microcircuits which offered a US-made brand said to be more durable, at a lower price. The SC concluded that the price per item of the PC units, laptop and UPS were overpriced by almost 50%. This comparison was based on the initial purchase of 23 PC units with the bid price by Tetra of Php1,269,630.00 (23 PC units, 1 unit 386 Tower and 1 unit 386 Notebook) under Disbursement Voucher No. 01-92-12-2399. There was an additional (repeat) purchase of 21 PC units for Php929,649.00 (same price per item of Php44,269.00) and one unit UPS for Php86,000.00. The total contract price obtained by Tetra was Php2,285,279.00, of which COA disallowed the amount of Php881,819.00 representing the overprice per the auditor’s findings. Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

Unlawful Expenditure; Liability of Public Officers. The SC held the petitioner liable personally and solidarily for the disallowed amount of Php881,819.00. The doctrine of separate personality of a corporation finds no application because the Cooperative Development Authority is not a private entity but a government agency created by virtue of Republic Act No. 6939 in compliance with the provisions of Section 15, Article XII of the 1987 Constitution. Moreover, respondents satisfactorily established that petitioner acted in bad faith when he prevailed upon the Development Academy of the Philippines-Technical Evaluation Committee (DAP-TEC) to modify the initial result of the technical evaluation of the computers by imposing an irrelevant grading system that was intended to favor one of the bidders, after the bids had been opened. Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

Administrative Law

Administrative Proceeding; Doctrine of Primary Jurisdiction. This case refers to the ethics complaint filed against Sen. Manny Villar on the alleged double insertion of Php200 million for the C-5 Road Extension Project in the 2008 General Appropriations Act. Respondent avers that primary recourse of petitioners should have been to the Senate and that the Supreme Court must uphold the separation of powers between the legislative and judicial branches of the government. The SC held that the doctrine of primary jurisdiction does not apply to this case. The issues presented here do not require the expertise, specialized skills and knowledge of respondent for their resolution. On the contrary, the issues here are purely legal questions which are within the competence and jurisdiction of the Court, and not for an administrative agency or the Senate to resolve. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Agrarian Law

Agrarian Reform; Qualifications of Beneficiary. DAR Administrative Order No. 3, series of 1990, enumerated the qualifications of a beneficiary: (1) Landless; (2) Filipino citizen; (3) Actual occupant/tiller who is at least 15 years of age or head of the family at the time of filing application; and (4) Has the willingness, ability and aptitude to cultivate and make the land productive. The SC found that petitioner Lebrudo does not qualify as a beneficiary because of (1) and (3). First, Lebrudo is not landless. According to the records, Municipal Agrarian Reform Officer Amelia Sangalang issued a certification dated 28 February 1996 attesting that Lebrudo was awarded by the DAR with a home lot consisting of an area of 236 square meters situated at Japtinchay Estate, Bo. Milagrosa, Carmona, Cavite. Next, Lebrudo is not the actual occupant or tiller of the lot at the time of the filing of the application. Loyola and her family were the actual occupants of the lot at the time Loyola applied to be a beneficiary under the CARP. Julian S. Lebrudo and Reynaldo L. Lebrudo v. Remedios Loyola, G.R. No. 181370, March 9, 2011.

Agrarian Reform; Role of Land Bank of the Philippines. In this case, the issue was whether the Land Bank of the Philippines has the personality to file a petition for determination of just compensation before the Special Agrarian Court. The SC held that LBP did. The LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of RA 3844 or the Agricultural Reform Code and Section 64 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988. In the previous case of Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, the SC held that LBP is not merely a nominal party in the determination of just compensation, but an indispensable participant in such proceedings. It is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate. Davao Fruits Corporation v. Land Bank of the Philippines, G.R. Nos. 181566 & 181570. March 9, 2011.

Agrarian Reform; Sale or Conveyance of Land. It is clear from Section 27 of RA 6657 that lands awarded to beneficiaries under the Comprehensive Agrarian Reform Program (CARP) may not be sold, transferred or conveyed for a period of 10 years. The law enumerated four exceptions: (1) through hereditary succession; (2) to the government; (3) to the Land Bank of the Philippines (LBP); or (4) to other qualified beneficiaries. In short, during the prohibitory 10-year period, any sale, transfer or conveyance of land reform rights is void, except as allowed by law, in order to prevent a circumvention of agrarian reform laws. In this case, petitioner Lebrudo insists that he is entitled to one-half portion of the lot awarded to Loyola under the CARP as payment for shouldering all the expenses for the transfer of the title of the lot from respondent Loyola’s mother, Cristina Hugo, to Loyola’s name. Lebrudo used the two Sinumpaang Salaysay executed by Loyola alloting to him the one-half portion of the lot as basis for his claim. In other words, waiver of rights and interests over landholdings awarded by the government is invalid for being violative of agrarian reform laws. Julian S. Lebrudo and Reynaldo L. Lebrudo v. Remedios Loyola, G.R. No. 181370, March 9, 2011.

Election Law

Cancellation of Certificate of Candidacy; Disqualification of Candidate; Period for Filing Petition. Petitioner Fernando V. Gonzalez and private respondent Reno G. Lim both filed certificates of candidacy for the position of Representative of the 3rd congressional district of the Province of Albay in the May 10, 2010 elections. On March 30, 2010, a Petition for Disqualification and Cancellation of Certificate of Candidacy (COC) was filed by Stephen Bichara [SPA No. 10-074 (DC)] on the ground that Gonzalez is a Spanish national, being the legitimate child of a Spanish father and a Filipino mother, and that he failed to elect Philippine citizenship upon reaching the age of majority in accordance with the provisions of Commonwealth Act (C.A.) No. 625. The SC explained the difference between Cancellation under Section 78 of the Omnibus Election Code and Disqualification under Section 68 of the OEC. A petition to cancel a candidate’s COC may be filed under Section 78 of the OEC exclusively on the ground that any material representation contained therein as required by law is false. On the other hand, a petition for disqualification of a candidate may also be filed pursuant to Section 68 for committing prohibited acts referred to in said section. As to the ground of false representation in the COC under Section 78, the Court in a previous case elaborated that the misrepresentation must be material, i.e. misrepresentation regarding age, residence and citizenship or non-possession of natural-born Filipino status. In this case, the petition in SPA No. 10-074 (DC) based on the allegation that Gonzalez was not a natural-born Filipino which was filed before the elections is in the nature of a petition filed under Section 78. The recitals in the petition in said case, however, state that it was filed pursuant to Section 4 (b) of COMELEC Resolution No. 8696 and Section 68 of the OEC to disqualify a candidate for lack of qualifications or possessing some grounds for disqualification. The COMELEC treated the petition as one filed both for disqualification and cancellation of COC, with the effect that Section 68, in relation to Section 3, Rule 25 of the COMELEC Rules of Procedure, is applicable insofar as determining the period for filing the petition. This Rule provides the prescriptive period of filing to be not later than the date of proclamation. On the other hand, the procedure for filing a petition for cancellation of COC is covered by Rule 23 of the COMELEC Rules of Procedure, which provides as the prescriptive period to be within five (5) days following the last day for the filing of certificate of candidacy. Section 4(B) of Resolution No. 8696 represents another attempt to modify by a mere procedural rule the statutory period for filing a petition to cancel COC on the ground of false representation therein regarding a candidate’s qualifications. Section 4(B) of Resolution No. 8696 would supplant the prescribed period of filing of petition under Section 78 with that provided in Section 68 even if the latter provision does not at all cover the false representation regarding age, residence and citizenship which may be raised in a petition under Section 78. If the purpose behind this rule promulgated by the COMELEC – allowing a petition to cancel COC based on the candidate’s non-compliance with constitutional and statutory requirements for elective office, such as citizenship, to be filed even beyond the period provided in Section 78 – was simply to remedy a perceived “procedural gap” though not expressly stated in Resolution No. 8696, the Court, in a previous case, had already rejected such justification. Fernando V. Gonzalez v. Commission on Elections, et al., G.R. No. 192856, March 8, 2011.

AM No. 11-3-6-SC; new rule on service of summons on foreign juridical entities.

AM. No. 11-3-6-SC

AMENDMENT OF SECTION 12, RULE 14 •
OF THE RULES OF COURT ON SERVICE UPON
FOREIGN PRIVATE JURIDICAL ENTITY
Section 12, Rule 14 of the Rules of Court is hereby amended to read
as follows:

"SEC. 12. Service upon foreign private juridical entity. —
When the defendant is a foreign private juridical entity which
has transacted business in the Philippines, service may be made
on its resident agent designated in accordance with law for that
purpose, or, i f there be no such agent, on the government
official designated by law to that effect, or on any of its officers
or agents within the Philippines.

If the foreign private juridical entity is not registered in
the Philippines or has no resident agent, service may, with leave
of court, be effected out of the Philippines through any of the
following means:

a) B y personal service coursed through the
appropriate court in the foreign country with the
assistance of the Department of Foreign Affairs;

b) B y publication once in a newspaper of general
circulation in the country where the defendant may be
found and by serving a copy of the summons and the
court order by-registered mail at the last known address
of the defendant;

c) B y facsimile or any recognized electronic
means that could generate proof of service; or

d) B y such other means as the court may in its
discretion direct."

This rule shall take effect fifteen (15) days after publication in a
newspaper of general circulation in the Philippines.

March 15, 2011