Case Digest 464k13

Republic of the Philippines vs. Alaminos Ice Plant and Cold Storage, Inc. G.R. No. 189723, July 11, 2018 Third Division, J. Martires FACTS: Alaminos Ice Plant and Cold Storage, Inc., a domestic corporation, filed an application for the original registration, under the Torrens system, of a 10,000square meter piece of land located at Barangay Pogo, Alaminos City. The RTC, sitting as Land Registration Court, granted the application. On appeal, the Office of the Solicitor General raised the issue that respondent failed to submit in evidence a certification that the subject land was alienable and disposable. Upon compliance with the CA’s order to submit proof that the Office of the Solicitor General received a copy of the appellant’s brief, the respondent appended in the same document a certification from the CENRO identifying the land as alienable and disposable. It was on this certification that the appellate court affirmed the ruling of the RTC. The Republic assails the Decision through a petition for review on certiorari. ISSUE: Whether a certification presented for the first time on appeal may be given evidentiary value. RULING: No. The Court held that “At any rate, the subject CENRO certification had not been formally offered. As petitioner correctly pointed out, a formal offer of evidence is necessary as courts must base their findings of fact and judgment solely on evidence formally offered at trial. Absent formal offer, no evidentiary value can be given to the evidence. Moreover, as said certification had surfaced only during appeal, the appellate court based its ruling on a document not previously scrutinized by the lower court. We note, too, that the CENRO officer who had issued the certification had of course not been able to testify in open court as to the identity of the document and the veracity of its contents. In the conduct of review proceedings, an appellate court cannot rightly appreciate firsthand the genuineness of an unverified and unidentified document; much less, accord it evidentiary value. Further, to allow a party to attach any document to his pleading and then expect the court to consider it as evidence, as what happened in this case, would draw unwarranted consequences; for instance, the opposing party would be deprived of the chance to examine the document and to object to its issibility. It is for such reasons that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal.”

Encarnacion vs. Johnson G.R. No. 192285, July 11, 2018 First Division, J. Jardelaza FACTS: Thomas Johnson filed an action for breach of contract with prayer for damages and costs against spouses Narvin Edwarson (Narvin) and Mary Mitchie Edwarson (also known as Mary Encarnacion; hereinafter shall be referred to as Mary), Mateo's daughter, before the Vancouver Registry of the Supreme Court of British Columbia, Canada. The Supreme Court of British Columbia issued a Mareva injunction and authorized Johnson, among others, to obtain orders in foreign jurisdictions which would permit its enforcement in those jurisdictions. Thereafter, the Supreme Court of British Columbia issued a Default Judgement finding Narvin and Mary liable to Johnson. Subsequently, Johnson filed an action for recognition and enforcement of foreign judgment with prayer for the recognition of the Mareva injunction with Branch 72 of the RTC of Olongapo City, docketed as Civil Case No. 110-0-2003. The RTC issued an Order restraining Narvin and Mary from disposing or encumbering their assets, as well as those belonging to, or controlled by, the Zambales-Canada Foundation, the 5-E Foundation, and those belonging to Mateo (for being properties transferred in fraud of creditors). In addition, the RTC ordered the of Deeds of Zambales and the Provincial Assessor to annotate its restraining order on the titles and tax declarations of all properties owned by Narvin and Mary, as well as those belonging to Mateo. Thereafter, the RTC ordered the service of summonses by publication upon Narvin and Mary. Despite publication, Narvin and Mary still failed to file their answer. Accordingly, the RTC declared them in default, and subsequently rendered a judgment in default in accordance with the judgment of the Supreme Court of British Columbia. A writ of execution was issued and was amended to include the properties under the name of Mateo whose title and tax declarations were previously annotated. Well along, Johnson filed a motion for clarificatory order seeking further amendment of the writ of execution to expressly authorize the levy of the properties in the name of Mateo whose title and tax declarations were previously annotated. Two years after the issuance of the amended writ of execution, Mateo filed a petition for annulment of judgement before the CA. He alleged that he is the owner of 18 properties levied in Civil Case No. 110-0-2003; that he was not made a party to the case; and that the inclusion of his properties in the levy and execution sale were made without notice to him. Mateo, nonetheless, itted before the CA that he has no standing to question the proceedings on the action for recognition and enforcement of judgment. He asserts that he is only questioning the amended writ of execution which deprived him of his properties. Sadly, Mateo died during the pendency of the proceedings before the CA. his

heirs amended their argument to aver that all the proceedings in Civil Case No. 110-0-2003 should be annulled on the ground of lack of jurisdiction and extrinsic fraud. The CA denied the petition pointing out that Mateo is not the proper party to file the petition, as he had already transferred the properties to Mary by virtue of a deed of quitclaim executed before the commencement of the action with the Supreme Court of British Columbia. ISSUE: 1. Whether an action for annulment of judgment is the proper remedy of a third-party claimant of properties levied and sold under execution sale; and 2. Whether an alien may own private lands by virtue of an execution sale. RULING: 1. The Court ruled in this wise “The proper party to file a petition for annulment of judgment or final order need not be a party to the judgment sought to be annulled. Nevertheless, it is essential that he is able to prove by preponderance of evidence that he is adversely affected by the judgment. A person not adversely affected by a decision in the civil action or proceeding cannot bring an action for annulment of judgment under Rule 47 of the Rules of Court. The exception is if he is a successor in interest by title subsequent to the commencement of the action, or if the action or proceeding is in rem, in which case the judgment is binding against him.” Thus, the Court held that “Considering the foregoing, Mateo is not a party who could be adversely affected by the outcome of Civil Case No. 110-0-2003. To begin with, he was not an indispensable party to the action for recognition whose interest in the controversy is such that a final decree will necessarily affect his rights, as he was not the judgment debtor in the action. Neither is Mateo a real party in interest in Civil Case No. 110-0-2003, as aptly noted by the CA, having already transferred his interest in the properties to Mary. Lastly, he is not a successor in interest of Narvin and Mary.” Furthermore, the Court ruled that “In this case, the proper recourse for petitioners is to vindicate and prove their ownership over the properties in a separate action as allowed under Section 16, Rule 39 of the Rules of Court. This is the more prudent action since respondent also asserts that the properties claimed were owned by Mary, and the CA upheld such assertion. At this juncture, we note that if we grant the petition, we would be nullifying the whole proceeding in Civil Case No. 110-0-2003 which is more than what is necessary to address the remedy being sought by petitioners. 2. No. Citing Matthews vs Taylor, 590 SCRA 394, the Court held that “The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines, save only in constitutionally recognized exceptions. There is no rule more settled than this constitutional prohibition, as

more and more aliens attempt to circumvent the provision by trying to own lands through another. In a long line of cases, we have settled issues that directly or indirectly involve the above constitutional provision. We had cases where aliens wanted that a particular property be declared as part of their father's estate; that they be reimbursed the funds used in purchasing a property titled in the name of another; that an implied trust be declared in their (aliens') favor; and that a contract of sale be nullified for their lack of consent.” Thus, the Court held that “In this case, it is undisputed that respondent is a Canadian citizen. Respondent neither denied this, nor alleged that he became a Filipino citizen. Being an alien, he is absolutely prohibited from acquiring private and public lands in the Philippines. Concomitantly, respondent is also prohibited from participating in the execution sale, which has for its object, the transfer of ownership and title of property to the highest bidder. What cannot be legally done directly cannot be done indirectly.

Palencia vs. Linsangan A.C. No. 10557, July 10, 2018 En Banc, Per Curiam FACTS: Jerry Palencia was an overseas Filipino worker seafarer who was seriously injured during work when he fell into the elevator shaft of the vessel M/T “Panos G” flying a Cyprus flag. After initial treatment in Singapore, Palencia was discharged and flown to the Philippines to continue his medical treatment and rehabilitation. While confined, paralegals and Atty. Pedro Linsangan were able to convince Palencia to engage their services in order to file a suit against the latter’s employers for indemnity. An Attorney-Client Contract was executed which reads, in part, “We/I hereby voluntarily agree and bind ourselves, our heirs and assigns to pay Atty. Pedro L. Linsangan and his collaborating Singapore counsels, the sum equivalent to thirty-five [35%] of any recovery or settlement obtained.” In addition, a Special Power of Attorney was also executed where he engaged the legal services of Linsangan’s law firm and Gurbani & Co., a law firm based in Singapore, and agreed to pay attorney’s fees of 35% of any recovery or settlement for both. Through the efforts of Atty. Linsangan, Palencia was paid US$60,000 as indemnity and US$20,000 under the collective bargaining agreement. From these, 35% attorney’s fees was charged. Atty. Linsangan and Gurbani & Co. filed a tort case against the employer before the High Court of Singapore, negotiations led to a settlement award in favor of Palencia in the amount of US$95,000. Gurbani & Co. remitted to Atty. Linsangan the amount of US$59,608.40. From this amount, Atty. Linsangan deducted: US$5,000 for Justice Gancayco for his expert opinion; their 35% attorney’s fees; and other expenses, leaving the net amount of US$18,132.43 for Palencia. The amount of US$20,756.05 (representing the net amount) was tendered but was refused by Palencia contesting the amount of expenses and attorney’s fees that was deducted. Atty. Linsangan filed an action for preliminary mandatory injunction to compel Palencia to receive the amount. The case was dismissed and upheld by the Supreme Court. On the other hand, Palencia filed an action for ing, remittance of settlement amount and damages. The RTC ruled in favor of Palencia. The CA affirmed the RTC’s ruling but reduced the rate of attorney’s fees to 10%. The Supreme Court affirmed the CA’s ruling and attained finality on August 2013. Meanwhile, Palencia filed a complaint with the IBP against Atty. Linsangan for commiting the following acts: (1) refusing to remit the amount collected in the Singapore case worth US$95,000.00, and in offering only US$20,756.05; (2) depositing complainant's money into their own ; and (3) engaging in "ambulance chasing" by deploying their agents to convince

complainant to hire respondents' services while the former was still bedridden in the hospital. The IBP-CBD, in its Report and Recommendation, ruled that Atty. Linsangan has violated the canons of the Code of Professional Responsibility. The IBP Board of Governors adopted the Report and Recommendation ISSUE: Whether the IBP was correct in finding Attys. Linsangan liable under the Code of Professional Responsibility. RULING: Yes. The Court held that “The practice of law is a profession and not a business. Lawyers are reminded to avoid at all times any act that would tend to lessen the confidence of the public in the legal profession as a noble calling, including, among others, the manner by which he makes known his legal services. A lawyer in making known his legal services must do so in a dignified manner. They are prohibited from soliciting cases for the purpose of gain, either personally or through paid agents or brokers. The R explicitly states that "[a] lawyer shall not do or permit to be done any act designed primarily to solicit legal business." Corollary to this duty is for lawyers not to encourage any suit or proceeding for any corrupt motive or interest. Thus, "ambulance chasing," or the solicitation of almost any kind of business by an attorney, personally or through an agent, in order to gain employment, is proscribed.” The Court further held that “The relationship between a lawyer and his client is highly fiduciary. This relationship holds a lawyer to a great degree of fidelity and good faith especially in handling money or property of his clients.47 Thus, Canon 16 and its rules remind a lawyer to: (1) hold in trust all moneys and properties of his client that may come into his possession; (2) deliver the funds and property of his client when due or upon demand subject to his retaining lien; and (3) for all money or property collected or received for or from his client. Money collected by a lawyer on a judgment rendered in favor of his client constitutes trust funds and must be immediately paid over to the client. As he holds such funds as agent or trustee, his failure to pay or deliver the same to the client after demand constitutes conversion. Thus, whenever a lawyer collects money as a result of a favorable judgment, he must promptly report and the money collected to his client. It is the lawyer's duty to give a prompt and accurate to his client. Upon the collection or receipt of property or funds for the benefit of the client, his duty is to notify the client promptly and, absent a contrary understanding, pay or remit the same to the client, less only proper fees and disbursements, as soon as reasonably possible. He is under absolute duty to give his client a full, detailed, and accurate of all money and property which has been received and handled by him, and must justify all transactions and dealings concerning them. And while he is in possession of the client's funds, he should not

commingle it with his private property or use it for his personal purposes without his client's consent.” Lastly, the Court held that “The practice of law is a profession, a form of public trust, the performance of which is entrusted to those who are qualified and who possess good moral character. Thus, the violation of the lawyer's oath and/or breach of the ethics of the legal profession embodied in the R may, depending on the exercise of sound judicial discretion based on the surrounding facts, result in the suspension or disbarment of a member of the Bar.

People of the Philippines vs. Binasing G.R. No. 221439, July 4, 2018 First Division, J. Del Castillo FACTS: Rashid Binasing was charged for violation of Section 5, Article II of R.A. No. 9165. The prosecution failed to explain the non-compliance that the taking of the photograph of the seized items were not done in the presence of insulating witnesses. The prosecution’s witnesses also failed to categorically state that the marking and the physical inventory were done in the presence of the accused or his representative or counsel. The RTC convicted the accused of the crime charged. The CA affirmed the Judgement in toto. ISSUES: Whether non-compliance with the requirements of Section 21, RA 9165 casts doubt on the integrity of the seized items and creates reasonable doubt on the guilt of the accused. RULING: Yes. Non-compliance with the requirements of Section 21, Republic Act (RA) No. 9165 casts doubt on the integrity of the seized items and creates reasonable doubt on the guilt of the accused. The Court held that “The said provision clearly requires the apprehending team to mark and conduct a physical inventory of the seized items and to photograph the same immediately after seizure and confiscation in the presence of the accused or his representative or counsel and the insulating witnesses, namely, any elected public official and a representative of the National Prosecution Service or the media. The law mandates that the insulating witnesses be present during the marking, the actual inventory, and the taking of photographs of the seized items to deter [possible planting of] evidence. Failure to strictly comply with this rule, however, does not ipso facto invalidate or render void the seizure and custody over the items as long as the prosecution is able to show that "(a) there is justifiable ground for noncompliance; and (b) the integrity and evidentiary value of the seized items are properly preserved." However, in case of non-compliance, the prosecution must be able to "explain the reasons behind the procedural lapses, and that the integrity and value of the seized evidence had nonetheless been preserved xxx because the Court cannot presume what these grounds are or that they even exist. xxx The Court has ruled that the failure of the prosecution to offer any justifiable explanation for its non-compliance with the mandatory requirements of Section 21 of RA 9165 creates reasonable doubt in the conviction of the accused for violation of Section 5, Article II of RA 9165.”

The Court has also held that “As a rule, inconsistencies or discrepancies in the testimonies of witnesses on minor details do not impair the credibility of the witnesses. However, irreconcilable inconsistencies on material facts diminish, or even destroy, the veracity of their testimonies.” Thus, the Court finally held that “Considering the non-compliance of the apprehending team with the procedural safeguards laid down in Section 21, Article II of RA 9165 and considering further the conflicting testimonies of the prosecution's witnesses on material facts, the Court finds that the prosecution failed to prove its case. Accordingly, the Court is constrained to acquit appellant based on reasonable doubt.”

The City Government of Baguio vs. Atty. Brain Masweng G.R. No. 195905, July 4, 2018 Third Division, J. Martires FACTS: NCIP-CAR Hearing Officer, Atty. Brain Masweng, issued a 72-Hour TRO on the Gumangan and Ampaguey Petition in NCIP Case Nos. 29-CAR-09 and 31-CAR-09, respectively. The TRO was sought to en the City of Baguio from enforcing its demolition orders over the properties of Gumangan and Ampaguey located at the Busol Forest Reserve. Subsequently, NCIP-CAR Hearing Officer issued a writ of preliminary injunction in said cases. Aggrieved, the City of Baguio filed a petition for certiorari before the CA assailing the TRO and preliminary injunction issued by Atty. Masweng in the above NCIP cases. The CA dismissed the petition for being procedurally flawed because they did not file a motion for reconsideration before the NCIP. Thus, the City of Baguio filed its petition for review on certiorari. respondents argue that petitioners erred in relying on City Government of Baguio vs. Atty. Masweng, 597 Phil. 668, in that res judicata did not arise considering that they were not parties to the said case and that only parties may be bound by the decision. ISSUE: Whether res judicata differs from stare decisis. RULING: Yes. The Court held that “Nevertheless, while res judicata may be inapplicable, the ruling in City Government of Baguio still finds relevance under stare decisis. The said doctrine states that when the Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where facts are substantially the same, regardless whether the parties and property are the same. Stare decisis differs from res judicata in that the former is based upon the legal principle or rule involved while the latter is based upon the judgment itself.” The Court also held, citing The Baguio Regreening Movement, Inc. vs Masweng, 705 Phil. 103, that “While res judicata does not apply on of the different subject matters of the case at bar and G.R. No. 180206 (they assail different writs of injunction, albeit issued by the same hearing officer), we are constrained by the principle of stare decisis to grant the instant petition.”