De Castro v. Judicial and Bar Council
Legal standing is a peculiar concept in constitutional law because in some
Facts:
This case involves several petitions filed either for the prohibition of or
mandamus for the Judicial and Bar Council (JBC) to submit to the President
its list of nominees for the position of Chief Justice. The case also raised the
issue on whether the appointment of the next Chief Justice by the
incumbent President GMA is a midnight appointment prohibited by the
Constitution.
The controversy arose from the forthcoming compulsory retirement of Chief
Justice Puno on May 17, 2010 or seven days after the presidential election.
On 22 December 2009, Congressman Matias Defensor, an ex-officio
member of the JBC, addressed a letter to the JBC and requested that the
process for nominations to the office of the Chief Justice be commenced
immediately. Consequently, the JBC passed a resolution unanimously
agreeing to start the process of filling up the position of Chief Justice. The
process has already begun, however, the JBC is not yet decided on when to
submit to the President its list of nominees due to controversy in this case
being unresolved.
The parties frequently cited the case of In Re Appointments of Valenzuela
and Vallarta (Valenzuela) as a precedent, which held that the prohibition of
the President to make “midnight appointments” under Section 15, Article
VII applies to appointments in the judiciary.
Held:
Locus Standi
1. Locus standi is defined as “a right of appearance in a court of justice on a
given question.”
2. It has been held that the interest of a person assailing the
constitutionality of a statute must be direct and personal. He must be able
to show, not only that the law or any government act is invalid, but also that
he sustained or is in imminent danger of sustaining some direct injury as a
result of its enforcement, and not merely that he suffers thereby in some
definite way.
3. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by reason of the statute
or the act complained of.
4.
cases, suits are not brought by parties who have been personally injured by
the operation of law or any other government act but by concerned citizens,
taxpayers or voters who actually sue in the public interest.
Taxpayer’s Suit vs. Citizen’s Suit
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5. In Beauchamp v. Silk, it was held that “in a taxpayer’s suit, the plaintiff is
affected by the expenditure of public funds, while in a citizen’s suit, the
plaintiff is but a mere instrument of the public concern.”
6. Terr v. Jordan held that “the right of a citizen and a taxpayer to maintain
an action in courts to restrain the unlawful use of public funds to his injury
cannot be denied.”
Transcendental Importance
7. The Court retains the broad discretion to waive the requirement of legal
standing in favor of any petitioner when the matter involved has
transcendental importance, or otherwise requires a liberalization of the
requirement.
Justiciable Issue
8. Although the position is not yet vacant, the fact that the JBC began the
process of nomination pursuant to its rules and practices, although it has yet
to decide whether to submit the list of nominees to the incumbent outgoing
President or to the next President, makes the situation ripe for judicial
determination.
9. There is no need to wait for the occurrence of the vacancy in order for the
principal issue to be ripe for judicial determination by the Court. It is enough
that one alleges conduct arguably affected with a constitutional interest,
but seemingly proscribed by the Constitution.
10. A reasonable certainty of the occurrence of the perceived threat to a
constitutional interest is sufficient to afford a basis for bringing a challenge,
provided the Court has sufficient facts before it to enable to intelligently
adjudicate the issues.
Midnight Appointment Ban
11. The prohibition against presidential appointments under Section 15,
Article VII does not extend to appointments in the Judiciary.
12. Article VII is devoted to the Executive Department. Specifically, the
presidential power of appointment is dealt with in Sections 14, 15 and 16 of
the Article. On the other hand, Article VIII is dedicated to the Judicial
Department. Section 4(1) and Section 9 specifically provide for the
appointment of the Supreme Court Justices.
13. Had the framers intended to extend the prohibition contained in Section
15, Article VII to the appointment of Members of the Supreme Court, they
could have explicitly done so. They could not have ignored the meticulous
ordering of the provisions.
Statutory Construction
14. The usage in Section 4(1), Article VIII of the word “shall” constitutes an
imperative duty on the President to make an appointment of a Member of
the Supreme Court within 90 days from the occurrence of the vacancy.
15. It is the intent of the Constitutional Commission to have Section 4(1),
Article VIII stand independently of any other provision, least of all one found
in Article VII. The two provisions had no irreconcilable conflict, regardless of
Section 15, Article VII being couched in the negative.
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16. The enactment should be construed with reference to its intended scope
and purpose, and the court should seek to carry out this purpose rather
than to defeat it.
Rationale for the Prohibition
17. One of the reasons underlying the adoption of Section 15, Article VII was
to eliminate midnight appointments, or appointments made for partisan
considerations, from being made by an outgoing Chief Executive.
18. In contrast, the appointments to the Judiciary made after the
establishment of the JBC would not be suffering from such defects because
of the JBC’s prior processing of candidates.
Judicial and Bar Council
19. The creation of the JBC was precisely intended to depoliticize the
Judiciary by doing away with the intervention of the Commission on
Appointments.
20. The intervention of the JBC eliminates the danger that appointments to
the Judiciary can be made for the purpose of buying votes in a coming
presidential election, or of satisfying partisan considerations because any
recommended candidate first had to undergo the vetting of the JBC and
pass muster there.
21. It is mandatory for the JBC to submit to the President the list of
nominees to fill a vacancy in the Supreme Court in order to enable the
President to appoint one of them within the 90-day period from the
occurrence of the vacancy.
22. The JBC has no discretion to submit the list of nominees to fill a vacancy
in the Supreme Court to the President after the vacancy occurs, because
that shortens the 90-day period allowed by the Constitution for the
President to make the appointment.
Valenzuela Ruling Reversed
23. Valenzuela arbitrarily ignored the express intent of the Constitutional
Commission to have Section 4(1), Article VIII stand independently of any
other provision, least of all one found in Article VII.
24. Valenzuela was weak, because it relied on interpretation to determine
the intent of the framers rather than on the deliberations of the
Constitutional Commission.
25. To hold like the Court did in Valenzuela that Section 15 extends to
appointments to the Judiciary further undermines the intent of the
Constitution of ensuring the independence of the Judicial Department from
the Executive and Legislative Departments.
Appointment to the Supreme Court
26. The Supreme Court is composed of a Chief Justice and 14 Associate
Justices, who all shall be appointed by the President from a list of at least
three nominees prepared by the JBC for every vacancy, which appointments
require no confirmation by the Commission on Appointments.
27. With reference to the Chief Justice, he or she is appointed by the
President as Chief Justice, and the appointment is never in an acting
capacity.
28. The framers intended the position of Chief Justice to be permanent, not
one to be occupied in an
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acting or temporary capacity.
“Acting” Chief Justice under the Judiciary Act of 1948
29. Section 12 of the Judiciary Act of 1948 only responds to a rare situation
in which the new Chief Justice is not yet appointed, or in which the
incumbent Chief Justice is unable to perform the duties and powers of the
office.
30. It is to be noted, however, that the Judiciary Act was enacted because
the Chief Justice appointed under the 1935 Constitution was subject to the
confirmation of the Commission on Appointments, and the confirmation
process might take longer than expected.
Chief Justice
31. The Chief Justice, as the head of the entire Judiciary, performs functions
absolutely significant to the life of the nation.The lack of any appointed
occupant of the office of Chief Justice harms the independence of the
Judiciary.
32. The appointment of the next Chief Justice by the incumbent President is
preferable to having the Associate Justice who is first in precedence take
over.
Mandamus
33. Mandamus shall issue when any tribunal, corporation, board, officer or
person unlawfully neglects the performance of an act that the law
specifically enjoins as a duty resulting from an office, trust, or station.
34. Mandamus is not available to direct the exercise of a judgment or
discretion in a particular way.
35. For mandamus to lie, the following must be complied with: (a) the
plaintiff has a clear legal right to the act demanded; (b) it must be the duty
of the defendant to perform the act, because it is mandated by law; (c) the
defendant unlawfully neglects the performance of the duty enjoined by law;
(d) the act to be performed is ministerial, not discretionary; and (e) there is
no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law.
Ministerial Act vs. Discretionary Act
36. A purely ministerial act or duty is one which an officer or tribunal
performs in a given state of facts, in a prescribed manner, in obedience to
the mandate of a legal authority, without regard to or the exercise of his
own judgment upon the propriety or impropriety of the act done. The duty
is ministerial only when the discharge of the same requires neither the
exercise of official discretion or judgment.
37. A discretionary act or duty is one in which the law imposes a duty upon a
public officer and gives the right to decide how or when the duty shall be
performed.
38. The duty of the JBC to submit a list of nominees before the start of the
President’s mandatory 90-day period to appoint is ministerial, but its
selections of the candidates whose names will be in the list to be submitted
to the President lies within the discretion of the JBC.
TALA REALTY SERVICES CORP., INC., PEDRO B. AGUIRRE, REMEDIOS A.
DUPASQUIER, DOLLY LIM, RUBENCITO M. DEL MUNDO AND ELIZABETH H.
PALMA, PETITIONERS, VS. BANCO FILIPINO SAVINGS & MORTGAGE BANK,
RESPONDENT.
2016-06-22 | G.R. No. 181369
DECISION
JARDELEZA, J.:
In G.R. No. 188302[1] (2012) and the consolidated cases of G.R. Nos.
130088, 131469, 155171, 155201 and 166608[2] (2009), we applied the rule
of stare decisis to deny Banco Filipino's claims for reconveyance of various
real properties based on a trust agreement that we previously declared void
in G.R. No. 137533[3] (2002). This case raises the question of whether Banco
Filipino Savings & Mortgage Bank's (Banco Filipino) complaint for
reconveyance in the proceedings below is likewise precluded by stare
decisis and conclusiveness of judgment.
I
On September 5, 1995, Banco Filipino filed a complaint[4] with the Regional
Trial Court (RTC) of Manila against Tala Realty Services Corporation, Inc.
(Tala Realty) and the individual petitioners. This was one of the 17
reconveyance cases instituted by Banco Filipino against Tala Realty covering
properties located in different parts of the Philippines.[5] The complaint
alleged that the properties were covered by a trust agreement between
Banco Filipino, as trustor-beneficiary, and Tala Realty, as trustee. The trust
agreement was essentially a sale and lease-back arrangement wherein
Banco Filipino sold various properties to Tala Realty, including the one
located in Sta. Cruz, Manila, while the latter concurrently leased to Banco
Filipino the same property for a period of 20 years, renewable for another
20 at the option of Banco Filipino.[6] Banco Filipino admitted that the
purpose of the trust agreement was to "allow more flexibility in the opening
of branches and to enable the bank to acquire new branch [sites]," since at
that time, Banco Filipino was concerned about keeping within the 50%
capital asset threshold for banks under the General Banking Act.[7]
However, sometime in August 1992, Tala Realty claimed the property for
itself and threatened to eject Banco Filipino.[8] Petitioners moved to
dismiss[9] the complaint based on the following grounds: forum shopping,
lack of cause of action, and pari delicto. The RTC initially denied[10] the
motion to dismiss but later reversed itself.[11] It ordered the dismissal of
the complaint against herein petitioners except Tala Realty and ordered the
suspension of the proceedings in view of our decision in G.R. No.
137533.[12] Banco Filipino moved for reconsideration which the RTC
denied.[13] Consequently, Banco Filipino elevated the case to the Court of
Appeals (CA) via Rule 65. The CA granted the petition,[14] finding that the
RTC should have hypothetically admitted the truth of the factual allegations
in the complaint—including the validity of the trust agreement—when it
ruled on the motion to dismiss.[15] The CA also said that the proceedings
should not have been suspended because the matter resolved in G.R. No.
137533, which originated from an ejectment suit, is distinct and separate
from the subject matter of the case for reconveyance.[16] The CA
subsequently denied petitioners' motion for reconsideration.[17] Hence,
this appeal under Rule 45 where petitioners principally claim that Banco
Filipino's action for reconveyance is already barred by stare decisis and
conclusiveness of judgment considering the en banc decision in G.R. No.
137533, as reiterated in the April 7, 2009 consolidated decision in G.R. Nos.
130088, 131469, 155171, 155201, and 166608[18] and the June 27, 2012
decision in G.R No. 188302.[19] They also argue that Banco Filipino availed
of the wrong remedy when they filed a petition for certiorari with the CA
instead of an ordinary appeal. In response,[20] Banco Filipino insists that it
availed of the correct mode of
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review and counters that G.R. No. 137533 cannot apply because it involved
an ejectment suit, which is distinct from its action for reconveyance. It cites
the final rulings in G.R. Nos. 144700,[21] 130184,[22] 139166,[23]
167255[24] and 144705[25]—which commonly held that the elements of
forum shopping, litis pendentia and res judicata were not present in Banco
Filipino's various reconveyance cases—as the controlling precedents.
II
In resolving this case, the sole determinative issue is whether Banco Filipino
can recover the Sta. Cruz property based on the same trust agreement
which we declared void in G.R. No. 137533.[26] The issue, however, is not
novel and has already been conclusively resolved in both G.R. No.
188302[27] and the consolidated cases of G.R. Nos. 130088, 131469,
155171, 155201, and 166608.[28] The facts of the present case, save for the
specific parcel of land being disputed, are identical to those obtaining in
these two decisions. Therefore, the doctrines of stare decisis and
conclusiveness of judgment warrant the granting of the petition.
A
In G.R. No. 188302[29] and G.R. Nos. 130088, 131469, 155171, 155201, and
166608,[30] we applied and extensively quoted the ruling in G.R. No.
137533[31] that the trust agreement between Banco Filipino and Tala
Realty is void and cannot be enforced, thus:
The Bank alleges that the sale and twenty-year lease of the disputed
property were part of a larger implied trust "warehousing agreement."
Concomitant with this Court's factual finding that the 20-year contract
governs the relations between the parties, we find the Bank's allegation of
circumstances surrounding its execution worthy of credence; the Bank and
Tala entered into contracts of sale and lease back of the disputed property
and created an implied trust "warehousing agreement" for the
reconveyance of the property. In the eyes of the law, however, this implied
trust is inexistent and void for being contrary to law. x x x
An implied trust could not have been formed between the Bank and Tala as
this Court has held that "where the purchase is made in violation of an
existing statute and in evasion of its express provision, no trust can result in
favor of the party who is guilty of the fraud." x x x
x x x [T]he Bank cannot use the defense of nor seek enforcement of its
alleged implied trust with Tala since its purpose was contrary to law. As
admitted by the Bank, it "warehoused" its branch site holdings to Tala to
enable it to pursue its expansion program and purchase new branch sites
including its main branch in Makati, and at the same time avoid the real
property holdings limit under Sections 25(a) and 34 of the General Banking
Act which it had already reached. x x x
Clearly, the Bank was well aware of the limitations on its real estate holdings
under the General Banking Act and that its "warehousing agreement" with
Tala was a scheme to circumvent the limitation. Thus, the Bank opted not to
put the agreement in writing and call a spade a spade, but instead phrased
its right to reconveyance of the subject property at any time as a "first
preference to buy" at the "same transfer price." This arrangement which the
Bank claims to be an implied trust is contrary to law. Thus, while we find the
sale and lease of the subject property genuine and binding upon the parties,
we cannot enforce the implied trust even assuming the parties intended to
create it. In the words of the Court in the Ramos case, "the courts will not
assist the payor in achieving his improper purpose by enforcing a resultant
trust for him in accordance with the 'clean hands' doctrine." The Bank
cannot thus demand reconveyance of the property based on its alleged
implied trust relationship with Tala.
xxx
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The Bank and Tala are in part delicto, thus, no affirmative relief should be
given to one against the other. The Bank should not be allowed to dispute
the sale of its lands to Tala nor should Tala be allowed to further collect rent
from the Bank. The clean hands doctrine will not allow the creation or the
use of a juridical relation such as a trust to subvert, directly or indirectly, the
law. Neither the Bank nor Tala came to court with clean hands; neither will
obtain relief from the court as one who seeks equity and justice must come
to court with clean hands.[32] (Citations omitted; emphases supplied.)
In both cases, we applied the time-honored principle of stare decisis et non
quieta movere, which literally means "to adhere to precedents, and not to
unsettle things which are established," to settle the issue of whether Banco
Filipino can recover the properties subject of the void trust agreement. The
rule of stare decisis is a bar to any attempt to re-litigate the same issue
where the same questions relating to the same event have been put
forward by parties similarly situated as in a previous case litigated and
decided by a competent court.[33] Thus, the Court's ruling in G.R. No.
137533[34] regarding the nullity of the trust agreement—the very same
agreement which Banco Filipino seeks to enforce in the proceedings a quo
—applies with full force to the present case. Consequently, Banco Filipino's
action for reconveyance of the Sta. Cruz property based on the void trust
agreement cannot prosper and must be dismissed for lack of cause of
action.
It is the Court's duty to follow the precedents laid down in G.R. No.
137533,[35] G.R. No. 188302[36] and G.R. Nos. 130088, 131469, 155171,
155201 and 166608.[37] The doctrine of stare decisis is one of policy
grounded on the necessity for securing certainty and stability of judicial
decisions. As well stated by Justice Cardozo in his book, The Nature of the
Judicial Process:
x x x It will not do to decide the same question one way between one set of
litigants and the opposite way between another. "If a group of cases
involves the same point, the parties expect the same decision. It would be a
gross injustice to decide alternate cases on opposite principles. If a case was
decided against me yesterday when I was defendant, I shall look for the
same judgment today if I am plaintiff. To decide differently would raise a
feeling of resentment and wrong in my breast; it would be an infringement,
material and moral, of my rights." x x x Adherence to precedent must then
be the rule rather than the exception if litigants are to have faith in the
even-handed administration of justice in the courts.[38] (Emphasis
supplied.)
B
In addition to the principle of stare decisis, the doctrine of collusiveness of
judgment, otherwise known as "preclusion of issues" or "collateral
estoppel,"[39] bars the re-litigation of Banco Filipino's claim based on the
void trust agreement. This concept is embodied in the third paragraph of
Rule 39, Section 47 of the Rules of Civil Procedure:
Section 47. Effect of judgments or final orders.—The effect of a judgment or
final order rendered by a court of the Philippines, having jurisdiction to
pronounce the judgment or final order, may be as follows: x x x
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment
or final order which appears upon its face to have been so adjudged, or
which was actually and necessarily included therein or necessary thereto.
(Emphasis supplied.)
Conclusiveness of judgment is a species of res judicata and it applies where
there is identity of parties in the first and second cases, but there is no
identity of causes of action.[40] Any right, fact, or matter in issue directly
adjudicated or necessarily involved in the determination of an action before
a competent court in which judgment is rendered on the merits is
conclusively settled by the judgment therein, and cannot again be litigated
between the parties and their privies whether or not the claim, demand,
purpose, or subject matter of
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the two actions is the same.[41] Thus, if a particular point or question is in
issue in the second action, and the judgment will depend on the
determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the
second if that same point or question was in issue and adjudicated in the
first suit. Identity of cause of action is not required but merely identity of
issue.[42] In this case, the rule on conclusiveness of judgment is squarely
applicable because Banco Filipino's action for reconveyance is solely based
on a trust agreement which, it cannot be overemphasized, has long been
declared void in a previous action that involved both Tala Realty and Banco
Filipino, i.e., G.R. No. 137533. In other words, the question on the validity of
the trust agreement has been finally and conclusively settled. Hence, this
question cannot be raised again even in a different proceeding involving the
same parties. Although the action instituted in this case is one for
reconveyance, which is technically different from the ejectment suit
originally instituted by Tala Realty in G.R. No. 137533, "the concept of
conclusiveness of judgment still applies because under this principle, the
identity of causes of action is not required but merely identity of issues.
Simply put, conclusiveness of judgment bars the relitigation of particular
facts or issues in another litigation between the same parties on a different
claim or cause of action."[43] Banco Filipino cannot rely on G.R. Nos.
144700,[44] 130184,[45] 139166,[46] 167255[47] and 144705.[48] In these
cases, we ruled that Banco Filipino did not violate the rule against forum
shopping when it filed separate cases for reconveyance in different trial
courts. These rulings were based on the Court's finding that the elements of
litis pendentia and res judicata were not present. However, the concept of
res judicata referred to in these cases is the one commonly understood as
"bar by prior judgment," which is enunciated in Rule 39, Section 47(b).[49]
Bar by prior judgment is the traditional formulation of res judicata, which
requires the identity of parties, subject matter, and causes of action.[50] It is
this concept which is used in determining whether litis pendentia or forum
shopping exists. In contrast, and as previously discussed, res judicata as
conclusiveness of judgment requires only identity of parties and of issues.
These two kinds of res judicata are legally distinct.
Accordingly, under the doctrine of res judicata as bar by prior judgment,
Banco Filipino could not be prevented from filing separate actions for
reconveyance because each action involved a different subject matter, i.e.,
a different parcel of land. Nonetheless, res judicata as conclusiveness of
judgment would still apply to these different cases, as it does here, insofar
as they involve material facts or questions which were in issue and which
have been adjudicated in a former action.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. SP No. 89155 are REVERSED and SET
ASIDE. Civil Case No. 95-75214 before Branch 47 of the Regional Trial Court
of Manila is DISMISSED.
SO ORDERED.
Philippine Health Care Providers vs. CIR (2009)
Minute resolutions are issued for the prompt dispatch of the actions of the
Court. While they are the results of the deliberations by the Justices of the
Court, they are promulgated by the Clerk of Court or his assistants whose
duty is to inform the parties of the action taken on their cases by quoting
verbatim the resolutions adopted by the Court. Neither the Clerk of Court
nor his assistants take part in the deliberations of the case. They merely
transmit the Courts action in the form prescribed by its Internal Rules.
Facts:
This is a Motion for Reconsideration (MR) of the Supreme Court’s decision.
Petitioner Philippine Health Care Providers (PHCP) is a domestic corporation
whose primary purpose is “to establish, maintain, conduct and operate a
prepaid group practice health care delivery system or a health maintenance
organization to take care of the sick and disabled persons enrolled in the
health care plan and to provide for the administrative, legal, and financial
responsibilities of the organization.” Its members pay an annual
membership fee and are entitled to various preventive, diagnostic and
curative medical services.
CIR assessed PHCP deficiency DST for the years 1996 and 1997 and these
were imposed on the health care agreement with its members. VAT was
also assessed. PHCP protested but because the CIR did not act on it,
petitioner filed a petition for review with the Court of Tax Appeals (CTA)
seeking cancellation of the deficiency VAT and DST.
CTA ruled that PHCP was liable for VAT but DST was cancelled. CIR appealed
in so far as the cancellation of the DST claiming that PHCP’s health care
agreement was a contract of insurance subject to DST under Sec. 185 of the
1997 Tax Code.
SC ruled that petitioner’s health care agreement during the pertinent period
was in the nature of non-life insurance which is a contract of indemnity, and
that it is liable for DST, because DST is not a tax on the business transacted
but an excise on the privilege, opportunity or facility offered at exchanges
for the transaction of the business.
In its MR, petitioner reveals for the first time that it availed of a tax amnesty
under RA 9480.
Held:
Statutory Construction; Surplusages
1. It is a cardinal rule in statutory construction that no word, clause,
sentence, provision or part of a statute shall be considered surplusage or
superfluous, meaningless, void and insignificant. To this end, a construction
which renders every word operative is preferred over that which makes
some words idle and nugatory. This principle is expressed in the maxim Ut
magis valeat quam pereat, that is, we choose the interpretation which gives
effect to the whole of the statute – its every word.
Health Maintenance Organization (HMO) is not engaged in the insurance
business
2. Applying the “principal object and purpose test,” there is significant
American case law supporting the argument that a corporation (such as an
HMO, whether or not organized for profit), whose main object is to provide
the members of a group with health services, is not engaged in the
insurance business.
3. The functions of such an organization are not identical with those of
insurance or indemnity companies. The latter are concerned primarily, if not
exclusively, with risk and the consequences of its descent, not with service,
or its extension in kind, quantity or distribution; with the unusual
occurrence, not the daily routine of living. Hazard is predominant. On the
other hand, the cooperative is concerned principally with getting service
rendered to its members and doing so at lower prices made possible by
quantity purchasing and economies in operation. Its primary purpose is to
reduce the cost rather than the risk of medical care; to broaden the service
to the individual in kind and quantity; to enlarge the number receiving it; to
regularize it as an everyday incident of living, like purchasing food and
clothing or oil and gas, rather than merely protecting against the financial
loss caused by extraordinary and unusual occurrences, such as death,
disaster at sea, fire and tornado. It is, in this instance, to take care of colds,
ordinary aches and pains, minor ills and all the temporary bodily discomforts
as well as the more serious and unusual illness. To summarize, the
distinctive features of the cooperative (HMO) are the rendering of service,
its extension, the bringing of physician and patient together, the preventive
features, the regularization of service as well as payment, the substantial
reduction in cost by quantity purchasing in short, getting the medical job
done and paid for; not, except incidentally to these features, the
indemnification for cost after the services is rendered. Except the last, these
are not distinctive or generally characteristic of the insurance arrangement.
There is, therefore, a substantial difference between contracting in this way
for the rendering of service, even on the contingency that it be needed, and
contracting merely to stand its cost when or after it is rendered.
| Page 3 of 4
4. American courts have pointed out that the main difference between an
HMO and an insurance company is that HMOs undertake to provide or
arrange for the provision of medical services through participating
physicians while insurance companies simply undertake to indemnify the
insured for medical expenses incurred up to a pre-agreed limit.
Concept of Insurance
5. Section 2 (1) of the Insurance Code defines a contract of insurance as an
agreement whereby one undertakes for a consideration to indemnify
another against loss, damage or liability arising from an unknown or
contingent event. An insurance contract exists where the following
elements concur:
(a) The insured has an insurable interest;
(b) The insured is subject to a risk of loss by the happening of the designed
peril;
(c) The insurer assumes the risk;
(d) Such assumption of risk is part of a general scheme to distribute actual
losses among a large group of persons bearing a similar risk and
(e) In consideration of the insurer’s promise, the insured pays a premium
6. Not all the necessary elements of a contract of insurance are present in
petitioner’s agreements. To begin with, there is no loss, damage or liability
on the part of the member that should be indemnified by petitioner as an
HMO. Under the agreement, the member pays petitioner a predetermined
consideration in exchange for the hospital, medical and professional
services rendered by the petitioner’s physician or affiliated physician to him.
Documentary Stamp Tax (DST)
7. From the language of Section 185 of the Tax Code, it is evident that two
requisites must concur before the DST can apply, namely: (1) the document
must be a policy of insurance or an obligation in the nature of indemnity
and (2) the maker should be transacting the business of accident, fidelity,
employer’s liability, plate, glass, steam boiler, burglar, elevator, automatic
sprinkler, or other branch of insurance (except life, marine, inland, and fire
insurance).
8. When the law imposing the DST was first passed, HMOs were yet
unknown in the Philippines. However, when the various amendments to the
DST law were enacted, they were already in existence in the Philippines and
the term had in fact already been defined by RA 7875. The fact that the
NIRC contained no specific provision on the DST liability of health care
agreements of HMOs at a time they were already known as such, belies any
legislative intent to impose it on them.
VICENTE FLORENTINO, Petitioner, vs. MARIANO, CYNTHIA, ADELFA, all
surnamed RIVERA and TEOFILA, MAXIMO, CIRIACO, NORBERTO,
FELICIANO, JUAN GENEROSO, ANGEL, NOLASCO and MARCOSA, all
surnamed MENDOZA, Respondents.
2006-01-23 | G.R. No. 167968
FIRST DIVISION
DECISION
YNARES-SANTIAGO, J.:
This petition for review under Rule 45 of the Rules of Court assails the
February 10, 2005 Decision[1] of the Court of Appeals in CA-G.R. SP No.
62080 as well as its April 26, 2005 Resolution[2] denying the motion for
reconsideration.
The issue for resolution is whether the Court of Appeals overstepped the
bounds of judicial discretion in reversing the orders of the trial court which
substantially amended the dispositive portion of its final and executory
judgment by reducing the damages awarded to respondents.
The facts[3] as found by the appellate court are not disputed:
The petition stemmed from a complaint filed before the RTC by Mariano,
Cynthia and Adelfa, all surnamed Rivera (hereinafter Riveras) against
Vicente Florentino (hereinafter private respondent) and the latter as third-
party plaintiff against Teofila Mendoza, et al., as third-party defendants
(hereinafter Mendozas), for rescission, annulment, redemption,
reconveyance and damages, docketed as Civil Case No. 5761-M.
On October 20, 1986, the RTC rendered a decision, the dispositive portion of
which reads:
PREMISES CONSIDERED, judgment is hereby rendered for the plaintiffs
Riveras and third parties defendants Mendozas and adversely to the
defendant and third-party plaintiff Florentino
(aa) declaring the lease contract (Exh. 'G' also marked Exh. '2') terminated;
(bb) ordering the defendant Florentino to turn over the possession of the
leased premises to the Riveras, with Florentino being permitted to take all
removable improvements at his expense in accordance with the lease
contract;
(cc) ordering Florentino to pay the Riveras annual lease rental of P500.00 for
the year 1982 up to the time possession had been delivered to the Riveras
and to compensate in cash or in kind the Riveras' claim for damage for
unrealized annual harvest of 100 cavans from 1978 up to the present;
(dd) ordering further Florentino to pay the Riveras and the Mendozas
attorney's fees in the amount of P20,000.00;
(ee) dismissing for lack of merit the counterclaims in the original complaint
and the
| Page 2 of 7
third-party complaint of Florentino.
SO ORDERED.[4]
Aggrieved, private respondent appealed the foregoing decision to the Court
of Appeals (CA), docketed as CA-G.R. CV No. 15784, which affirmed the
same in a decision dated March 29, 1996. Undaunted, private respondent
filed a petition for review on certiorari before the Supreme Court (SC),
docketed as G.R. No. 140927, which the latter denied in its Resolution dated
February 9, 2000. Per entry of judgment[5] issued by the Supreme Court,
the said Resolution became final and executory on June 1, 2000 and was
recorded in the Book of Entries of Judgment[s].
Consequently, petitioners filed before the RTC a Motion for Execution[6] of
its decision dated October 20, 1986 which the latter granted on August 14,
2000.[7] Dissatisfied, the private respondent moved for a reconsideration[8]
on the ground that the decision sought to be enforced is vague and contrary
to the pronouncement made by the CA in the body of its decision that the
petitioners were deprived of only an area of 1,650 square meters or an
annual harvest of 16.5 cavans.
On September 13, 2000, the RTC granted the said motion, the decretal
portion of which reads:
"All told, going by the explanation enunciated by the Court of Appeals,
which this Court must pay obeisance to, paragraph (cc) of the decision
rendered by this Court on October 20, 1986 is hereby CLARIFIED to such
extent that the quantity of the damages which defendant Florentino must
pay the Riveras for unrealized annual harvest is 16.5 (instead of 100) cavans
from 1978 onwards.
SO ORDERED."[9]
Petitioners' motion for reconsideration of the afore-quoted order was
denied in the Order dated October 31, 2000.
On appeal, the appellate court reversed the trial court's ruling thus:
WHEREFORE, premises considered, the instant petition is GRANTED. The
assailed Orders dated September 13, 2000 and October 31, 2000 of the
Regional Trial Court of Malolos, Branch 9, are REVERSED and SET ASIDE. The
RTC is ordered to enforce its Decision dated October 20, 1986 in accordance
with its terms and conditions.
SO ORDERED.[10]
The Court of Appeals found that the trial court gravely abused its discretion
in modifying the dispositive portion of a final and executory judgment, since
the modification substantially reduced the amount of damages awarded to
herein respondents, i.e., from 100 cavans to only 16.5 cavans of palay,
annually.
A motion for reconsideration was subsequently denied by the Court of
Appeals in a Resolution dated April 26, 2005.[11]
Dissatisfied, petitioner filed the instant petition insisting that the challenged
judgment and resolution of the appellate tribunal is not in accordance with
law or applicable decisions of the Court because there existed an ambiguity
in the dispositive portion of the trial court's decision and the text of the
appellate court's judgment. According to petitioner, the orders of the trial
court "merely clarified and quantified" the
| Page 3 of 7
decision sought to be executed.
Considering that the crux of the controversy centers on a perceived
vagueness in the fallo of the trial court's decision, it is necessary to restate
the guidelines on the contents of a proper dispositive portion enunciated in
Velarde v. Social Justice Society,[12] viz:
In a civil case as well as in a special civil action, the disposition should state
whether the complaint or petition is granted or denied, the specific relief
granted, and the costs. The following test of completeness may be applied.
First, the parties should know their rights and obligations. Second, they
should know how to execute the decision under alternative contingencies.
Third, there should be no need for further proceedings to dispose of the
issues. Fourth, the case should be terminated by according the proper relief.
The "proper relief" usually depends upon what the parties seek in their
pleadings. It may declare their rights and duties, command the performance
of positive prestations, or order them to abstain from specific acts. The
disposition must also adjudicate costs.
In sum, petitioner argues that in substantially reducing the amount of
damages, by way of unrealized income, from 100 cavans to 16.5 cavans of
palay annually, the trial court was merely 'clarifying' an ambiguity between
the appellate tribunal's pronouncements in the body of its decision in CA-
G.R. CV No. 15784 which states that
While it may be true that the only portion of the adjacent riceland that was
affected by the waste water coming from the piggery is only 150 square
meters, it must be noted, however, that this 150 square meters was
counted from the peripheral fence of the piggery and poultry farm which is
occupying 5,000 square meters of prime agricultural land. In the final
analysis, the Mendozas, and later the Riveras, were deprived of an
opportunity to cultivate 1,500 square meters of "encroached" land plus 150
square meters of land contaminated with decaying piggery sludge.[13]
and paragraph (cc) of the dispositive portion of the trial court's judgment
which, among others, dictates that it is
(cc) ordering Florentino to pay the Riveras annual lease rental of P500.00 for
the year 1982 up to the time possession had been delivered to the Riveras
and to compensate in cash or in kind the Riveras' claim for damage for
unrealized annual harvest of 100 cavans from 1978 up to the present.[14]
We disagree.
It bears stressing that a decision that has acquired finality, as in this case,
becomes immutable and unalterable.[15] A final judgment may no longer be
modified in any respect, even if the modification is meant to correct
erroneous conclusions of fact or law.[16] In short, once a judgment
becomes final and executory, it can no longer be disturbed no matter how
erroneous it may be[17] and nothing further can be done therewith except
to execute it.[18]
It is settled rule that "the operative part in every decision is the dispositive
portion or the fallo, and where there is conflict between the fallo and the
body of the decision, the fallo controls. This rule rests on the theory that the
fallo is the final order while the opinion in the body is merely a statement,
ordering nothing."[19] We expounded on the underlying reason behind this
rule in Republic v. Nolasco[20] where, reiterating the earlier
pronouncements made in Contreras v. Felix,[21] we said:
More to the point is another well-recognized doctrine, that the final
judgment of the court as rendered in the judgment of the court irrespective
of all seemingly contrary statements in the
| Page 4 of 7
decision. "A judgment must be distinguished from an opinion. The latter is
the informal expression of the views of the court and cannot prevail against
its final order or decision. While the two may be combined in one
instrument, the opinion forms no part of the judgment. So, ... there is a
distinction between the findings and conclusions of a court and its
Judgment. While they may constitute its decision and amount to the
rendition of a judgment, they are not the judgment itself. They amount to
nothing more than an order for judgment, which must, of course, be
distinguished from the judgment." (1 Freeman on Judgments, p. 6). At the
root of the doctrine that the premises must yield to the conclusion is
perhaps, side by side with the needs of writing finis to litigations, the
recognition of the truth that "the trained intuition of the judge continually
leads him to right results for which he is puzzled to give unimpeachable
legal reasons." "It is an everyday experience of those who study judicial
decisions that the results are usually sound, whether the reasoning from
which the results purport to flow is sound or not." (The Theory of Judicial
Decision, Pound, 36 Harv. Law Review, pp. 9, 51). It is not infrequent that
the grounds of a decision fail to reflect the exact views of the court,
especially those of concurring justices in a collegiate court. We often
encounter in judicial decisions, lapses, findings, loose statements and
generalities which do not bear on the issues or are apparently opposed to
the otherwise sound and considered result reached by the court as
expressed in the dispositive part, so called, of the decision.
Succinctly stated, "where there is a conflict between the dispositive portion
of the decision and the body thereof, the dispositive portion controls
irrespective of what appears in the body of the decision."[22] While the
body of the decision, order or resolution might create some ambiguity in the
manner the court's reasoning preponderates, it is the dispositive portion
thereof that finally invests rights upon the parties, sets conditions for the
exercise of those rights, and imposes the corresponding duties or
obligations.[23]
More emphatically, Light Rail Transit Authority v. Court of Appeals[24]
declares that "it is the dispositive part of the judgment that actually settles
and declares the rights and obligations of the parties, finally, definitively,
and authoritatively, notwithstanding the existence of inconsistent
statements in the body that may tend to confuse." In this regard, it must be
borne in mind "that execution must conform to that ordained or decreed in
the dispositive part of the decision; consequently, where the order of
execution is not in harmony with and exceeds the judgment which gives it
life, the order has pro-tanto no validity."[25]
It bears noting that in the foregoing cases cited, the perceived
inconsistencies referred to alleged ambiguities found in the body of the
same judgments. It is worse in this case because what the trial court did was
to amend paragraph (cc) of the dispositive portion of its final and executory
October 20, 1986 verdict in order that the same would conform to the
disquisitions contained in the body of the appellate court's judgment which
had affirmed in full in the decretal portion of the decision dated March 29,
1996 in CA-G.R. CV No. 15784, the lower court's ruling. Suffice it to state
that this is anathema to the above-mentioned rules. Hence, the Court of
Appeals could not be faulted for setting aside the trial court's assailed
orders of September 13, 2000 and October 31, 2000 and ordering said court
"to enforce its Decision dated October 20, 1986 in accordance with its terms
and conditions."[26]
It has not escaped our attention that this is the second time this case has
reached us. As pointed out by the Court of Appeals in its March 29, 1996 in
CA-G.R. CV No. 15784 Decision, the case at that time had already "been
dragging for almost two decades."[27] What should have been a simple
implementation of an October 20, 1986 judgment in 2000 was delayed by
the filing of a motion for reconsideration questioning the computation of
damages which petitioner insists should be 16.5 instead of 100 cavans each
year. This issue had already been long settled with the issuance of the April
12, 2000 Resolution[28] in G.R. No. 140927 denying with finality petitioner's
motion for reconsideration.
It is to the interest of the public that there should be an end to litigation by
the parties over a subject fully and fairly adjudicated. The doctrine of res
judicata is a rule which pervades every well-regulated system
| Page 5 of 7
of jurisprudence and is founded upon two grounds embodied in various
maxims of the common law, namely: (1) public policy and necessity, which
makes it to the interest of the State that there should be an end to litigation
- republicae ut sit litium, and (2) the hardship on the individual that he
should be vexed twice for the same cause - nemo debet bis vexari et eadem
causa. A contrary doctrine would subject the public peace and quiet to the
will and neglect of individuals and prefer the gratification of the litigious
disposition on the part of suitors to the preservation of the public tranquility
and happiness.[29]
It is almost trite to say that execution is the fruit and end of the suit and is
the life of the law. A judgment, if left unexecuted, would be nothing but an
empty victory for the prevailing party.[30] Litigation must end sometime
and somewhere. An effective and efficient administration of justice requires
that once a judgment has become final, the winning party be not deprived
of the fruits of the verdict. Courts must, therefore, guard against any
scheme calculated to bring about that result. Constituted as they are to put
an end to controversies, courts should frown upon any attempt to prolong
them.[31]
WHEREFORE, the petition is DENIED. The February 10, 2005 Decision of the
Court of Appeals in CA-G.R. SP No. 62080, and its April 26, 2005 Resolution,
are AFFIRMED.
SO ORDERED.
ROMUALDO PAGSIBIGAN, Petitioner, versus PEOPLE OF THE PHILIPPINES
and ELEAZAR CABASAL,Respondents.
2009-06-04 | G.R. No. 163868
RESOLUTION
CARPIO, J.:
The Case
This is a petition[1] for review under Rule 45 of the Rules of Court. The
petition challenges the 30 January 2004 Decision[2] and 26 May 2004
Resolution[3] of the Court of Appeals in CA-G.R. CV No. 76291. The Court of
Appeals affirmed in toto the 26 February 2002 Decision[4] of the Regional
Trial Court (RTC), Judicial Region 3, Branch 16, Malolos, Bulacan in Criminal
Case No. 1149-M-2000.
The Facts
On 29 November 1982, Elizabeth Hinal (Hinal) and the Government Service
Insurance System (GSIS) entered into a deed[5] of conditional sale over a
piece of property located at 1399 Kadena de Amor Street, Alido Heights
Subdivision, Malolos, Bulacan. Under the deed, GSIS sold the property to
Hinal payable in 25 years.
Eleazar M. Cabasal (Cabasal) was a depositor, while Romualdo A. Pagsibigan
(Pagsibigan) was the manager, of the Rural Bank of Guiguinto, Bulacan
(Rural Bank). Aside from being the manager of the Rural Bank, Pagsibigan
acted as a real estate agent, usually to bank depositors. A certain Liza
Geronimo informed Cabasal that there was a property for sale which he
might like. Cabasal approached Pagsibigan and, in 1991, Pagsibigan offered
for sale Hinal's property to Cabasal for P215,000 plus assumption of the
outstanding obligation with GSIS. Cabasal agreed to buy the property. In a
receipt[6] dated 30 January 1992, Pagsibigan acknowledged receipt of
P215,000 from Cabasal. Cabasal occupied the property and spent P400,000
on renovation.
In 1992, Cabasal received from GSIS a notice directing Hinal to settle her
outstanding obligation of P535,000. Alarmed, Cabasal referred the matter to
Pagsibigan. Pagsibigan accompanied Cabasal to the house of Hinal and
asked Hinal to sign a deed of sale and transfer of rights over the property in
favor of Cabasal. Hinal refused to sign the deed because she did not (1) sell
the property, (2) authorize Pagsibigan to sell the property, and (3) receive
P215,000. Pagsibigan assured Cabasal that he would settle the problem.
In 1999, Cabasal received another notice[7] from GSIS directing Hinal to
settle her outstanding obligation of P752,157.10, otherwise the deed of
conditional sale would be cancelled. Cabasal referred the matter to a certain
Atty. Reyes. Upon the advice of Atty. Reyes, Cabasal made an initial
payment of P50,000 to GSIS to forestall the cancellation of the deed of
conditional sale.
Atty. Reyes sent a demand letter to Pagsibigan asking him to return
Cabasal's P215,000. Because Pagsibigan failed to return the money, Atty.
Reyes initiated a criminal case against him. In an Information[8] dated 3
April 2000, Second Assistant Provincial Prosecutor Alfredo L. Geronimo
charged Pagsibigan with estafa. Pagsibigan pleaded not guilty.
The RTC's Ruling
In its 26 February 2002 Decision, the RTC did not find Pagsibigan guilty
beyond reasonable doubt of estafa. However, the RTC ordered Pagsibigan to
pay Cabasal P215,000 civil liability, P20,000 attorney's fees and expenses of
litigation. The RTC held that:
In the prosecution for estafa under Art. 315, paragraph 2(a) of the Revised
Penal Code, it is indispensable that the element of deceit, consisting in the
false statement or fraudulent representation of the accused, be made prior
to, or, at least simultaneously with, the delivery of the thing by complainant,
it being essential that such false statement or fraudulent representation
constitutes the very cause or the only motive which induces the
complainant to part with the thing. If there be no such prior or simultaneous
false statement or fraudulent representation, any subsequent act of the
accused, cannot serve as a basis for prosecution for that class of estafa.
(People vs. Gines, et al., C.A. 61 O.G. 1365).
In this case it was complainant who approached accused Pagsibigan with
respect to the sale of the subject property and he had known that accused
was involved in realty sale, through a certain Liza Geronimo. In fact Liza
Geronimo had informed him that "there was a house open for sale" which
would meet his qualifications, and he was told to see Mr. Pagsibigan. (TSN
dated January 18, 2001, Cabasal on Direct, p. 6).
As testified to by complainant, the lot was offered for sale by accused
Pagsibigan but there is no evidence that accused Pagsibigan made false
statement or fraudulent representation that he is the owner of the property
or that he had the power to transfer such property to complainant,
convincing enough to induce complainant to part with his P215,000.00.
When accused had made a reputation with respect to realty sale, it shows
that he was good at it and that he could be relied upon, otherwise Liza
Geronimo would not have referred complainant Cabasal to him. Evidence
also shows that accused Pagsibigan tried to transfer the property to
complainant Cabasal. Moreover, had the accused from the very beginning
conceived an evil plan to deceive complainant he would no longer inform
complainant about the status of the subject property with the GSIS.
"In the absence of proof that the representation of the accused was actually
false, criminal intent to deceive cannot be inferred" (People vs. Urpiano,
C.A., 60 O.G. 6009, citing the ruling in the cases of People vs. Lagasca, G.R.
No. 4230-R, June 5, 1960, and U.S. vs. Adriatico, 7 Phil. 187. [sic]
However, the evidence presented shows that accused Pagsibigan received
the amount of P215,000.00 from complainant Cabasal and he failed to
return or pay the same, upon receipt of the demand letter. Hence, though
the accused is not criminally liable, he is under obligation to return the same
to complainant Cabasal, with legal interest from the time of demand to pay
the same.
"An acquittal based on reasonable doubt that the accused committed the
crime charged does not necessarily exempt him from civil liability where a
mere preponderance of evidence is required." (Manahan, Jr., vs. Court of
Appeals, 255 SCRA 202)
However, the other expenses incurred by complainant in repairing the
house same [sic] as well as the amount of P50,000.00 he remitted to the
GSIS same [sic] cannot be recovered from the accused, since those are
considered useful expenses for the convenience of the complainant.
WHEREFORE, premises considered, the prosecution evidence having failed
to prove the guilt of the accused beyond reasonable doubt, his acquittal of
the offense charged is hereby rendered.
| Page 3 of 7
However, the prosecution having proven with clear and convincing evidence
that accused received the amount of P215,000.00 from complainant Cabasal
and had not paid the same, he is therefore adjudge [sic] civilly liable to pay
such amount to complainant with legal interest from the time of demand up
to full payment of the same to complainant.
Accused is also ordered to pay attorney's fees in the amount of P20,000.00
to complainant and costs of this suit.[9] (Emphasis supplied)
Aggrieved, Pagsibigan appealed to the Court of Appeals. In his
memorandum[10] dated 1 August 2001, he claimed that the RTC erred in
finding him civilly liable for P215,000 and in ordering him to pay P20,000
attorney's fees. Pagsibigan claimed that he was not civilly liable because
Hinal transferred her rights over the property to Cabasal.
The Court of Appeals' Ruling
In its 30 January 2004 Decision, the Court of Appeals affirmed in toto the 26
February 2002 Decision of the RTC. The Court of Appeals held that there
was sufficient evidence to show that Pagsibigan was civilly liable and that
the transfer of rights over the property did not extinguish Pagsibigan's civil
liability. The Court of Appeals held that:
Contrary to the protestations of appellant, evidence adduced by the
prosecution is preponderant enough to sustain his civil liability. As a matter
of fact, on the strength of the affidavit of Elizabeth Hinal alone, who is the
registered owner of the property in question, ample evidence is provided to
prove the civil liability of the appellant. In this affidavit, Hinal declared the
she never authorized appellant to sell her property nor did she receive the
amount of Php215,000.00 which is the alleged consideration of the sale.
From this declaration alone, it is clear already that appellant received the
amount of Php215,000.00 from Cabasal on account of his misrepresentation
that he has the authority to sell the house and lot of Hinal, when in fact
there is no such authority. At the very least, appellant's obligation to return
the money to Cabasal is sourced from Quasi-contract, particularly solutio
indebiti, viz:
Art. 2154. If something is received when there is no right to demnd it, and it
was unduly delivered through mistake, the obligation to return arises.
Art. 2159. Whoever in bad faith accepts an undue payment shall pay legal
interest if a sum of money is involved, or shall be liable for fruits received or
which should have been received if the thing produces fruits.
xxxx
Neither had the execution of the Deed of Transfer of Rights between Hinal
and Cabasal extinguished the civil liability of appellant. It should be noted
that Hinal declared in open court that she did not receive any consideration
for executing the Deed of Transfer of Rights to Cabasal. Thus:
Q So you said the transfer to Cabasal was for a consideration?
A None, sir.
xxxx
Q Are you aware that Mr. Pagsibigan sold your house and lot?
| Page 4 of 7
A No, sir.
Q You have not received any consideration for this sale?
A No, sir.
xxxx
Q This house and lot was transferred to Mr. Cabasal because "naawa rin ako
sa kanila dahil matagal na silang nakatira doon".
A Yes, sir.
Q And you are not claiming any consideration from Cabasal when you
executed the transfer of right?
A Yes, sir.
Thus, even if there had been a transfer of the right over the property from
Hinal to Cabasal, the amount of Php215,000.00 which was given to
appellant was never the consideration of the said transfer but the sympathy
of Hinal to Cabasal. In all probability, it is not far-fetch [sic] that Hinal will
later on demand from Cabasal the payment of the consideration for the
transfer of her right, perhaps, when the latter had already collected from
appellant.[11] (Emphasis supplied)
Pagsibigan filed a motion for reconsideration. In its 26 May 2004 Resolution,
the Court of Appeals denied the motion.
Hence, the instant petition. Pagsibigan claims that (1) he did not receive
P215,000 from Cabasal, and (2) the lower courts erred in ordering him to
pay P20,000 attorney's fees and expenses of litigation.
The Court's Ruling
The petition is partly meritorious.
A petition for review under Rule 45 of the Rules of Court should cover only
questions of law. Questions of fact are not reviewable. A question of law
exists when the doubt centers on what the law is on a certain set of facts. A
question of fact exists when the doubt centers on the truth or falsity of the
alleged facts.[12]
There is a question of law if the issue raised is capable of being resolved
without need of reviewing the probative value of the evidence. The issue to
be resolved must be limited to determining what the law is on a certain set
of facts. Once the issue invites a review of the evidence, the question posed
is one of fact.[13] In Paterno v. Paterno,[14] the Court held that:
Such questions as whether certain items of evidence should be accorded
probative value or weight, or rejected as feeble or spurious, or whether or
not the proofs on one side or the other are clear and convincing and
adequate to establish a proposition in issue, are without doubt questions of
fact. Whether or not the body of proofs presented by a party, weighed and
analyzed in relation to contrary evidence submitted by adverse party, may
be said to be strong, clear and convincing; whether or not certain
documents presented by one side should be accorded full faith and credit in
the face of protests as to their spurious character by the other side; whether
or not inconsistencies in the body of proofs of a party are of such gravity as
to justify refusing to give said proofs weight - all these are issues of fact.
Questions
| Page 5 of 7
like these are not reviewable by this Court which, as a rule, confines its
review of cases decided by the Court of Appeals only to questions of law
raised in the petition and therein distinctly set forth.
Whether Pagsibigan received P215,000 from Cabasal is a question of fact. It
can only be resolved after reviewing the probative value of the evidence.
Thus, it is not reviewable.
The factual findings of the trial court, especially when affirmed by the Court
of Appeals, are binding on the Court. The exceptions to this rule are (1)
when there is grave abuse of discretion; (2) when the findings are grounded
on speculations; (3) when the inference made is manifestly mistaken; (4)
when the judgment of the Court of Appeals is based on a misapprehension
of facts; (5) when the factual findings are conflicting; (6) when the Court of
Appeals went beyond the issues of the case and its findings are contrary to
the admissions of the parties; (7) when the Court of Appeals overlooked
undisputed facts which, if properly considered, would justify a different
conclusion; (8) when the findings of the Court of Appeals are contrary to
those of the trial court; (9) when the facts set forth by the petitioner are not
disputed by the respondent; and (10) when the findings of the Court of
Appeals are premised on the absence of evidence and are contradicted by
the evidence on record.[15] After a careful review of the records, the Court
finds that none of these circumstances is present.
The award of attorney's fees and expenses of litigation must have factual
and legal justification, which must be stated in the body of the decision.
Otherwise, the award is disallowed. In Consolidated Bank & Trust
Corporation v. Court of Appeals,[16] the Court held that:
The award of attorney's fees lies within the discretion of the court and
depends upon the circumstances of each case. However, the discretion of
the court to award attorney's fees under Article 2208 of the Civil Code of
the Philippines demands factual, legal and equitable justification, without
which the award is a conclusion without a premise and improperly left to
speculation and conjecture. It becomes a violation of the proscription
against the imposition of a penalty on the right to litigate (Universal
Shipping Lines, Inc. v. Intermediate Appellate Court, 188 SCRA 170 [1990]).
The reason for the award must be stated in the text of the court's decision.
If it is stated only in the dispositive portion of the decision, the same shall be
disallowed. As to the award of attorney's fees being an exception rather
than the rule, it is necessary for the court to make findings of fact and law
that would bring the case within the exception and justify the grant of the
award (Refractories Corporation of the Philippines v. Intermediate Appellate
Court, 176 SCRA 539 [1989]).
In the instant case, the lower courts totally failed to justify the award of
attorney's fees and expenses of litigation. There was no factual or legal
justification stated in the texts of the lower courts' decisions. The RTC
merely stated in the dispositive portion of its 26 February 2002 Decision
that, "Accused is also ordered to pay attorney's fees in the amount of
P20,000.00 to complainant and costs of suit." Thus, the award is disallowed.
WHEREFORE, we GRANT in part the petition. We AFFIRM with
MODIFICATION the 30 January 2004 Decision and 26 May 2004 Resolution
of the Court of Appeals in CA-G.R. CV No. 76291. The award of P20,000
attorney's fees and expenses of litigation is DELETED. SO ORDERED.
EDNA DIAGO LHUILLIER, petitioner, vs. BRITISH AIRWAYS, respondent
G.R. No. 171092. March 15, 2010.
FACTS: On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint
for damages against respondent British Airways before the Regional Trial
Court (RTC) of Makati City. The tortuous conduct by the flight attendants of
said Airways, which prompted petitioner to file a case for damages,
allegedly transpired when petitioner boarded respondent’s flight 548 from
London, United Kingdom to Rome, Italy. On May 30, 2005, respondent, by
way of special appearance through counsel, filed a Motion to Dismiss on
grounds of lack of jurisdiction over the case and over the person of the
respondent. Respondent alleged that only the courts of London, United
Kingdom or Rome, Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention, Article 28(1) of which provides:
“An action for damages must be brought at the option of the plaintiff, either
before the court of domicile of the carrier or his principal place of business,
or where he has a place of business through which the contract has been
made, or before the court of the place of destination.”

ISSUE: Whether or not Philippines, a signatory to the Warsaw Convention,

should adhere to the provision of the Warsaw Convention in the
determination of its jurisdiction with respect to a case for damages involving
a tortuous conduct committed by an airline personnel while in an
international carrier against a Filipino citizen.

HELD: Yes. It is settled that the Warsaw Convention has the force and effect
of law in this country. In Santos III v. Northwest Orient Airlines, 210 SCRA
256 (1992), we held that: The Republic of the Philippines is a party to the
Convention for the Unification of Certain Rules Relating to International
Transportation by Air, otherwise known as the Warsaw Convention. It took
effect on February 13, 1933. The Convention was concurred in by the
Senate, through its Resolution No. 19, on May 16, 1950. The Philippine
instrument of accession was signed by President Elpidio Quirino on October
13, 1950, and was deposited with the Polish government on November 9,
1950. The Convention became applicable to the Philippines on February 9,
1951. On September 23, 1955, President Ramon Magsaysay issued
Proclamation No. 201, declaring our formal adherence thereto, “to the end
that the same and every article and clause thereof may be observed and
fulfilled in good faith by the Republic of the Philippines and the citizens
thereof.” The Convention is thus a treaty commitment voluntarily assumed
by the Philippine government and, as such, has the force and effect of law in
this country.