MAY 2011 CASES PENNED BY ASSOCIATE JUSTICE LEONARDO-DE

CASTRO

BANAHAW BROADCASTING CORPORATION vs. CAYETANO PACANA III, et

al.
[G.R. No. 171673. May 30, 2011.]
DOCTRINE: A GOCC that is sued in relation to its governmental functions may
be, under appropriate circumstances, exempted from the payment of appeal
fees.
FACTS: Respondents in the case at bar, are supervisory and rank and file
employees of the DXWG-Iligan City radio station which is owned by petitioner
Banahaw Broadcasting Corporation (BBC), a corporation managed by
Intercontinental Broadcasting Corporation (IBC). The DXWG personnel filed with
the Sub-regional Arbitration, a complaint for illegal dismissal, unfair labor
practice, reimbursement of unpaid Collective Bargaining Agreement (CBA)
benefits, and attorney's fees against IBC and BBC. Labor Arbiter Alug rendered
his Decision in favor of the DXWG personnel. A Motion to Dismiss, Release,
Waiver and Quitclaim, was jointly filed by IBC and the DXWG personnel based
on the latter's admission that IBC is not their employer as it does not own DXWGIligan City. The NLRC granted the Motion and dismissed the case with respect to
IBC.
Both BBC and respondents appealed to the NLRC anew. In their appeal, the
DXWG personnel reasserted their claim for the remaining CBA benefits not
awarded to them, and alleged error in the reckoning date of the computation of
the monetary award. BBC challenged the monetary award itself, claiming that
such benefits were only due to IBC, not BBC, employees. In the same
Memorandum of Appeal, BBC incorporated a Motion for the Recomputation of
the Monetary Award (of the Labor Arbiter), in order that the appeal bond may be
reduced. The NLRC denied the Motion for the Recomputation of the Monetary
Award. The NLRC ordered BBC to post the required bond within 10 days from
receipt of said Order, with a warning that noncompliance will cause the dismissal
of the appeal for non-perfection. Instead of complying with the Order to post the
required bond, BBC filed a Motion for Reconsideration, alleging this time that
since it is wholly owned by the Republic of the Philippines, it need not post an
appeal bond. The NLRC denied the Motion for Reconsideration of BBC. BBC
filed with the Court of Appeals a Petition for Certiorari but it was denied. Hence,
this Petition for Review.
ISSUE: Whether or not BBC is exempt from posting an appeal bond.

HELD: NO. As a general rule, the government and all the attached agencies with
no legal personality distinct from the former are exempt from posting appeal
bonds, whereas government-owned and controlled corporations (GOCCs) are
not similarly exempted. This distinction is brought about by the very reason of the
appeal bond itself: to protect the presumptive judgment creditor against the
insolvency of the presumptive judgment debtor. When the State litigates, it is not
required to put up an appeal bond because it is presumed to be always
solvent. This exemption, however, does not, as a general rule, apply to GOCCs
for the reason that the latter has a personality distinct from its shareholders.
Thus, while a GOCC's majority stockholder, the State, will always be presumed
solvent, the presumption does not necessarily extend to the GOCC itself. Thus, a
GOCC that is sued in relation to its governmental functions may be, under
appropriate circumstances, exempted from the payment of appeal fees. It is
therefore crystal clear that BBC's function is purely commercial or proprietary and
not governmental. As such, BBC cannot be deemed entitled to an exemption
from the posting of an appeal bond.
Consequently, the NLRC did not commit an error, and much less grave abuse of
discretion, in dismissing the appeal of BBC on account of non-perfection of the
same. In doing so, the NLRC was merely applying Article 223 of the Labor Code.
The posting of the appeal bond within the period provided by law is not merely
mandatory but jurisdictional. The failure on the part of BBC to perfect the appeal
thus had the effect of rendering the judgment final and executory.

VALLACAR TRANSIT, INC. vs. JOCELYN CATUBIG

[G.R. No. 175512. May 30, 2011.]
DOCTRINE: The presumption that employers are negligent under Article
2180 of the Civil Code flows from the negligence of their employees.
FACTS: Petitioner is engaged in the business of transportation and the franchise
owner of a Ceres Bulilit bus. Cabanilla is employed as a regular bus driver of
petitioner. Respondent's husband, Quintin Catubig, Jr. (Catubig), was on his way
home from Dumaguete City riding in tandem on a motorcycle with his employee,
Teddy Emperado (Emperado). Catubig was the one driving the motorcycle. While
approaching a curve at kilometers 59 and 60, Catubig tried to overtake a slow
moving ten-wheeler cargo truck by crossing-over to the opposite lane, which was
then being traversed by the Ceres Bulilit bus driven by Cabanilla, headed for the
opposite direction. When the two vehicles collided, Catubig and Emperado were
thrown from the motorcycle. Catubig died on the spot where he was thrown,
while Emperado died while being rushed to the hospital. Cabanilla was charged
with reckless imprudence resulting in double homicide in Criminal Case before
the Municipal Circuit Trial Court (MCTC) The MCTC dismissed the criminal

charge against Cabanilla because there was no negligence, not even

contributory, on Cabanilla's part.
Thereafter, respondent filed before the RTC a Complaint for Damages against
petitioner, seeking actual, moral, and exemplary damages, in the total amount of
P484,000.00, for the death of her husband, Catubig, based on Article 2180, in
relation to Article 2176, of the Civil Code. The RTC ruled in favor of the petitioner.
Respondent appealed to the Court of Appeals. The Court of Appeals ruled in
favor of the respondent. Hence, the instant Petition for Review.
ISSUE: Whether or not petitioner should be held liable for Catubig's death
HELD: YES. There is merit in the argument of the petitioner that Article 2180 of
the Civil Code imputing fault or negligence on the part of the employer for the
fault or negligence of its employee does not apply to petitioner since the fault
or negligence of its employee driver, Cabanilla, which would have made the latter
liable for quasi-delict under Article 2176 of the Civil Code, has never been
established by respondent. To the contrary, the totality of the evidence presented
during trial shows that the proximate cause of the collision of the bus and
motorcycle is attributable solely to the negligence of the driver of the motorcycle,
Catubig. Proximate cause is defined as that cause, which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred. The RTC concisely
articulated and aptly concluded that Catubig's overtaking of a slow-moving truck
ahead of him, while approaching a curve on the highway, was the immediate and
proximate cause of the collision which led to his own death.
The evidence shows that the driver of the bus, Cabanilla, was driving his vehicle
along the proper lane, while the driver of the motorcycle, Catubig, had overtaken
a vehicle ahead of him as he was approaching a curvature on the road, in
disregard of the provision of the law on reckless driving, at the risk of his life and
that of his employee, Emperado.
The presumption that employers are negligent under Article 2180 of the Civil
Code flows from the negligence of their employees. Having adjudged that the
immediate and proximate cause of the collision resulting in Catubig's death was
his own negligence, and there was no fault or negligence on Cabanilla's part,
then such presumption of fault or negligence on the part of petitioner, as
Cabanilla's employer, does not even arise. Thus, it is not even necessary to
delve into the defense of petitioner that it exercised due diligence in the selection
and supervision of Cabanilla as its employee driver.

RODOLFO LUNA vs. ALLADO CONSTRUCTION CO., INC., and/or

RAMON ALLADO
[G.R. No. 175251. May 30, 2011.]
DOCTRINE: The NLRC shall, in cases of perfected appeals, limit itself to
reviewing those issues which are raised on appeal. As a consequence thereof,
any other issues which were not included in the appeal shall become final and
executory.
FACTS: Respondent Allado Construction Co., Inc. is a juridical entity engaged in
the construction business; respondent Ramon Allado is the President of the said
corporation. Petitioner filed a complaint before the Executive Labor Arbiter
Gamolo alleging that he was an employee of herein respondents, having been a
part of respondents' construction pool of personnel. He had continuously
rendered services as a warehouseman and a timekeeper in every construction
project undertaken by respondents. Sometime in the afternoon of November 24,
2001, while at respondents' construction site in Maasim, Sarangani Province, he
was given a travel order dated November 24, 2001 to proceed to respondents'
main office in Davao City for reassignment. Upon arrival at the office of
respondents on November 26, 2001, he was told by one Marilou Matilano,
personnel manager of respondents, to sign several sets of "Contract of Project
Employment". He refused to sign the said contracts. Because of his refusal, he
was not given a reassignment or any other work. These incidents prompted him
to file the complaint.
Respondents, on the other hand, alleged that on November 29, 2001, petitioner
applied for a leave of absence until December 6, 2001, which was granted. Upon
expiration of his leave, petitioner was advised to report to the company's project
in Kablacan, Sarangani Province. However, he refused to report to his new
assignment and claimed instead that he had been dismissed illegally.
Finding that petitioner should be deemed to have resigned, the Labor Arbiter
dismissed petitioner's complaint for illegal dismissal against respondents, but
ordered the latter to pay the former the amount of P18,000.00 by way of financial
assistance. Only respondents interposed an appeal with the National Labor
Relations Commission (NLRC), purely for the purpose of questioning the validity
of the grant of financial assistance made by the Labor Arbiter. The NLRC
reversed the Decision of the Labor Arbiter and declared respondents guilty of
illegal dismissal and ordered them to pay petitioner one-month salary for every
year of service as separation pay. Respondents moved for reconsideration but
their motion was denied. Respondents elevated their cause to the Court of
Appeals via a petition for certiorari. The Court of Appeals granted respondents'
petition for certiorari and held that it was grave abuse of discretion for the NLRC
to rule on the issue of illegal dismissal when the only issue raised to it on appeal
was the propriety of the award of financial assistance. The Court of Appeals

further ruled that financial assistance may not be awarded in cases of voluntary
resignation. Hence, this Petition for Review.
ISSUE: Whether or not the NLRC could still review issues not brought during
the appeal.
HELD: NO. Section 4 (c), Rule VI of the 2002 Rules of Procedure of the NLRC,
which was in effect at the time respondents appealed the Labor Arbiter's
decision, expressly provided that, on appeal, the NLRC shall limit itself only to the
specific issues that were elevated for review.
As a testament to its effectivity and the NLRC's continued implementation of this
procedural policy, the same provision was retained as Section 4 (d), Rule VI of
the 2005 Revised Rules of Procedure of the NLRC.
In the case at bar, the NLRC evidently went against its own rules of procedure
when it passed upon the issue of illegal dismissal although the question raised by
respondents in their appeal was concerned solely with the legality of the labor
arbiter's award of financial assistance despite the finding that petitioner was
lawfully terminated.
To reiterate, the clear import of the aforementioned procedural rule is that the
NLRC shall, in cases of perfected appeals, limit itself to reviewing those issues
which are raised on appeal. As a consequence thereof, any other issues which
were not included in the appeal shall become final and executory.

PHILIPPINE NATIONAL BANK vs. MERELO B. AZNAR, ET AL.

[G.R. No. 171805. May 30, 2011.]
DOCTRINE: The creation of an express trust must be manifested with
reasonable certainty and cannot be inferred from loose and vague declarations
or from ambiguous circumstances susceptible of other interpretations.
FACTS: In 1958, RISCO ceased operation due to business reverses. In plaintiffs'
desire to rehabilitate RISCO, they contributed a total amount of P212,720.00
which was used in the purchase of the three (3) parcels of land. After the
purchase of the above lots, titles were issued in the name of RISCO. The amount
contributed by plaintiffs constituted as liens and encumbrances on the
aforementioned properties as annotated in the titles of said lots. Such annotation
was made pursuant to the Minutes of the Special Meeting of the Board of
Directors of RISCO (hereinafter referred to as the "Minutes"). Thereafter,

various subsequent annotations were made on the same titles, including the
Notice of Attachment and Writ of Execution both dated August 3, 1962 in favor of
herein defendant PNB.
As a result, a Certificate of Sale was issued in favor of Philippine National Bank,
being the lone and highest bidder of the three (3) parcels of land Thereafter, a
Final Deed of Sale dated May 27, 1991 in favor of the Philippine National Bank
was also issued and Transfer Certificate of Title.
This prompted the respondents to file the instant complaint seeking the quieting
of their supposed title to the subject properties, declaratory relief, cancellation of
TCT and reconveyance with temporary restraining order and preliminary
injunction.
Aznar, et al., filed a Manifestation and Motion for Judgment on the Pleadings on
October 5, 1998. Thus, the trial court rendered a decision, which ruled against
PNB on the basis that there was an express trust created over the subject
properties whereby RISCO was the trustee and the stockholders, Aznar, et al.,
were the beneficiaries or the cestui que trust.
PNB appealed the adverse ruling to the Court of Appeals which set aside the
judgment of the trial court. Although the Court of Appeals agreed with the trial
court that a judgment on the pleadings was proper, the appellate court opined
that the monetary contributions made by Aznar, et al., to RISCO can only be
characterized as a loan secured by a lien on the subject lots, rather than an
express trust.
Both parties moved for reconsideration but these were denied by the Court of
Appeals. Hence, each party filed with this Court their respective petitions for
review on certiorari.
ISSUE: Whether or not there was an express trust contract between RISCO and
Aznar, et al.
HELD: NO. At the outset, the Court agrees with the Court of Appeals that the
agreement contained in the Minutes of the Special Meeting of the RISCO Board
of Directors held on March 14, 1961 was a loan by the therein named
stockholders to RISCO.
Careful perusal of the Minutes relied upon by plaintiffs-appellees in their claim,
showed that their contributions shall constitute as lien or interest on the
property. The term lien as used in the Minutes is defined as "a discharge on
property usually for the payment of some debt or obligation. Hence, from the
use of the word "lien" in the Minutes, We find that the money contributed
by plaintiffs-appellees was in the nature of a loan, secured by their liens and
interests duly annotated on the titles. The annotation of their lien serves only as
collateral and does not in any way vest ownership of property to plaintiffs.

We are not persuaded by the contention of Aznar, et al., that the language of
the subject Minutes created an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is
vested in another. It is fiduciary relationship that obliges the trustee to deal with
the property for the benefit of the beneficiary. Express trusts are intentionally
created by the direct and positive acts of the settlor or the trustor - by some
writing, deed, or will or oral declaration. It is created not necessarily by some
written words, but by the direct and positive acts of the parties.
The creation of an express trust must be manifested with reasonable
certainty and cannot be inferred from loose and vague declarations or from
ambiguous circumstances susceptible of other interpretations.
At most, what Aznar, et al., had was merely a right to be repaid the amount
loaned to RISCO. Unfortunately, the right to seek repayment or reimbursement of
their contributions used to purchase the subject properties are already barred by
prescription.
BERNABE L. NAVIDA, et al. vs. HON. TEODORO A. DIZON, JR., et al.
[G.R. No. 125078. May 30, 2011.]
DOCTRINE: The rule is that the active participation of the party against whom
the action was brought, coupled with his failure to object to the jurisdiction of the
court or administrative body where the action is pending, is tantamount to an
invocation of that jurisdiction and a willingness to abide by the resolution of the
case and will bar said party from later on impugning the court or bodys
jurisdiction.
FACTS: These are two civil cases that were filed in different courts but whose
factual background and issues are closely intertwined.
NAVIDA, et al., filed a complaint against the defendants before the RTC of
General Santos City which was docketed as Civil Case No. 5617, for the
payment of damages in view of the illnesses and injuries to the reproductive
systems which they allegedly suffered because of their exposure to DBCP. They
claimed, among others, that they were exposed to this chemical during the early
1970's up to the early 1980's when they used the same in the banana plantations
where they worked at; and/or when they resided within the agricultural area
where such chemical was used. NAVIDA, et al., claimed that their illnesses and
injuries were due to the fault or negligence of each of the defendant companies
in that they produced, sold and/or otherwise put into the stream of commerce
DBCP-containing products. According to NAVIDA, et al., they were allowed to be
exposed to the said products, which the defendant companies knew, or ought to
have known, were highly injurious to the former's health and well-being.

Another joint complaint for damages was filed by the ABELLA, et al., against the
defendants before the RTC of Davao City, which was docketed as Civil Case No.
24,251-96.
Similar to the complaint of NAVIDA, et al., ABELLA, et al., alleged that, as
workers in the banana plantation and/or as residents near the said plantation,
they were made to use and/or were exposed to nematocides, which contained
the chemical DBCP.
Both RTC of General Santos City and the RTC of Davao City dismissed the
cases on the ground of lack of jurisdiction since the substance of the cause of
action as stated in the complaint against the defendant foreign companies cites
activity on their part which took place abroad and had occurred outside and
beyond the territorial domain of the Philippines.
ISSUE: Whether or not the RTC of General Santos City and the RTC of Davao
City have jurisdiction over the cases.
HELD: YES. The RTC of General Santos City and the RTC of Davao City have
jurisdiction over Civil Case Nos. 5617 and 24,251-96, respectively.
Remarkably, none of the parties to this case claims that the courts a quo are
bereft of jurisdiction to determine and resolve the above-stated cases. All parties
contend that the RTC of General Santos City and the RTC of Davao City have
jurisdiction over the action for damages, specifically for approximately P2.7
million for each of the plaintiff claimants.
The rule is settled that jurisdiction over the subject matter of a case is conferred
by law and is determined by the allegations in the complaint and the character of
the relief sought, irrespective of whether the plaintiffs are entitled to all or some of
the claims asserted therein. Once vested by law, on a particular court or body,
the jurisdiction over the subject matter or nature of the action cannot be
dislodged by anybody other than by the legislature through the enactment of a
law.
Moreover, the injuries and illnesses, which NAVIDA, et al., and ABELLA, et
al., allegedly suffered resulted from their exposure to DBCP while they were
employed in the banana plantations located in the Philippines or while they were
residing within the agricultural areas also located in the Philippines. The factual
allegations in the Amended Joint-Complaints all point to their cause of action,
which undeniably occurred in the Philippines. The RTC of General Santos City
and the RTC of Davao City obviously have reasonable basis to assume
jurisdiction over the cases.

PEOPLE OF THE PHILIPPINES vs. EDGARDO OGARTE Y OCOB

[G.R. No. 182690. May 30, 2011.]
DOCTRINE: Although under the Death Penalty Law, the crime of qualified rape is
punishable by death, Republic Act No. 9346, which took effect on June 24, 2006,
prohibits the imposition of the death penalty.
FACTS: Two separate Information were filed before the RTC, charging Ogarte
with two separate counts of Rape. According to AAA, the first instance of rape
happened at around ten o'clock in the evening of November 1, 1996, in their
home in . . . AAA claimed that while she was sleeping beside her four younger
sisters, Ogarte woke her up, held her hands, grabbed her head, and brought her
to the kitchen wherein she was forced to lie down on the floor. AAA said that her
struggles were no match for Ogarte's strength who proceeded to take off her
pants and underwear, climb on top of her, and insert his penis into her vagina.
AAA averred that she cried in pain and pleaded with her father "not to do it" but
Ogarte told her "to be silent because he will do it slowly" and "not to worry
because nothing will happen to [her]." AAA said that after Ogarte ejaculated
which she knew because of the white fluid she saw on his penis after he
removed it from her vagina he threatened to kill her if she told her mother, who
was at that time in Guinabucan, Zamboanga del Sur, or anybody else of what
had happened. For fear that Ogarte is capable of carrying out his threats, AAA
kept her silence even when her mother arrived the following day.
At around nine o'clock in the morning of November 3, 1996, AAA alleged that she
was again raped by Ogarte. This occurred when, upon her mother's order, she
reluctantly obeyed to help Ogarte gather some firewood in the wooded area near
their house. AAA narrated that upon carrying some of the wood pieces Ogarte
had cut, Ogarte, still carrying the bolo he used to cut the wood, pulled her
shoulders and told her not to make any noise as he missed her very much. AAA
recounted how Ogarte then went on to remove her undergarments, and ignoring
her cries, once again placed himself on top of her and with a "push and pull
motion," consummated his sexual desires. After Ogarte was done, he again
warned and threatened AAA against breaking her silence. On March 20, 1997,
AAA told her grandmother BBB her ordeal in the hands of her own father. On
April 2, 1997, AAA and BBB went to the National Bureau of Investigation (NBI) in
Dipolog City where they executed the sworn affidavits that were used as bases
for the charges against Ogarte.
The RTC found Ogarte guilty as charged in both criminal cases and imposed on
him the supreme penalty of death for each count of rape. The Court of Appeals
affirmed the RTCs decision with modification that the penalty imposed upon
Ogarte shall be reclusion perpetua for each count of rape.

ISSUES: 1. Whether or not Ogarte is guilty of the crime of rape

2. Whether or not the RTC was correct in imposing upon
Ogarte the penalty of death
HELD: 1. YES. Ogarte was convicted of two counts of rape by using force and
intimidation, qualified by the concurrent circumstances of AAA's minority and
Ogarte's relationship with AAA. In an effort to escape the penalty of death, as
imposed by Article 335 of the Revised Penal Code when the crime of simple rape
is qualified, Ogarte claims that the courts below erred in appreciating AAA's
minority as a qualifying circumstance, because it was never duly proven by the
prosecution. We disagree. The qualifying circumstances of age and relationship
were not only properly alleged in the information but were also duly established
by the prosecution during the trial of the cases against Ogarte.
The RTC was "convinced, without reservation" in AAA's credibility especially
since her testimony was "clear, straightforward, credible and truthful." We also
agree with the RTC's assessment that the ill motive Ogarte imputed on his
daughter is baseless and concocted only to escape liability
As we have established that AAA was a credible witness, her clear, positive, and
probable, uncorroborated testimony is enough to convict Ogarte of the crime of
rape. As the Court held in People v. Tayaban:
[I]t is settled jurisprudence that testimonies of child-victims are given full
weight and credit, since when a woman or a girl-child says that she has
been raped, she says in effect all that is necessary to show that rape was
indeed committed.
2. YES. The RTC was correct in imposing upon Ogarte the penalty of death as it
found Ogarte guilty beyond reasonable doubt of two counts of qualified rape,
AAA being Ogarte's 16-year-old daughter when the rapes were committed.
However, although under the Death Penalty Law, the crime of qualified rape is
punishable by death, Republic Act No. 9346, which took effect on June 24, 2006,
prohibits the imposition of the death penalty. Under this Act, the proper penalty to
be imposed upon Ogarte in lieu of the death penalty is reclusion perpetua,
without eligibility for parole.