Toyota Motor purchase, Toyota constructed a concrete hollow block

(CHB) perimeter fence around its alleged property.

Philippines Another part of the parcelled Delta I (Lot 1) was

purchased by Sun Valley from APT. Petitioner then

Corporation v. filed a case against APT for the reformation of the

Deed of Sale executed between them alleging that the

CA (G.R. instrument failed to reflect the true intention of the

parties as the title failed to include 723 square meters

No. 102881) strip of land. On the other hand, Sun Valley, filed a
case for recovery of possession of the disputed 723
square meters relying upon the title description of its
Date: June 3,
2016Author: jaicdn0 Comments property and the surveys it has commissioned.

Facts: Through legal maneuverings, the parties have

succeeded in muddling up the vital issues of the case
and getting the lower courts embroiled in numerous
This case involves a boundary dispute between
appeals over technicalities. Hence, the three appellate
petitioner Toyota Motor Phil. Corporation (Toyota)
decisions/resolutions before the Court for review and
and private respondent Sun Valley Manufacturing
conflicting orders issued by lower courts as a result
and Development Corporation (Sun Valley). Both
of the separate cases filed by the parties.
Toyota and Sun Valley are the registered owners of
two (2) adjoining parcels of land which they
purchased from the Asset Privatization Trust (APT). Issue:

The properties in question formerly belonged to Delta

Motors Corporation (DMC) which were foreclosed Whether or not Judge Tensuan had jurisdiction to

by the Philippine National Bank (PNB) and later take cognizance of the case for reformation of

transferred to the national government through the instrument.

APT for disposition. APT then proceeded to classify

the DMC properties, called the GC III-Delta Motors Ruling:

Corporation, and divided into Delta I, Delta II, and

Delta III. Further subdivisions for the separate Attention must first be brought to the fact that the

catalogues were made for each division e.g. Delta I contract of sale executed between APT and Toyota

into Lots 1, 2 and 3. After this classification, APT provides an arbitration clause which states that:

parcelled out and catalogued the properties for

bidding and sale. 5. In case of disagreement or conflict arising out of
this Contract, the parties hereby undertake to

Part of the duly parcelled Delta I property (Lot 2) submit the matter for determination by a

was sold to Toyota through public bidding. After its committee of experts, acting as arbitrators, the
composition of which shall be as follows: a) One
 member to be appointed by the VENDOR; b)
One member to be appointed by the VENDEE;
c) One member, who shall be a lawyer, to be
appointed by both of the aforesaid parties;
The contention that the arbitration clause has become
dysfunctional because of the presence of third parties
is untenable.
Toyota filed an action for reformation of its contract
with APT, the purpose of which is to look into the
real intentions/agreement of the parties to the contract
and to determine if there was really a mistake in the
designation of the boundaries of the property as
alleged by Toyota. Such questions can only be
answered by the parties to the contract themselves.
This is a controversy which clearly arose from the
contract entered into by APT and Toyota. Inasmuch
as this concerns more importantly the parties APT
and Toyota themselves, the arbitration committee is
therefore the proper and convenient forum to settle
the matter as clearly provided in the deed of sale.
Having been apprised of the presence of the
arbitration clause in the motion to dismiss filed by
APT, Judge Tensuan should have at least suspended
the proceedings and directed the parties to settle their
dispute by arbitration. Judge Tensuan should have
not taken cognizance of the case.
In view of all the foregoing, the petition is hereby
dismissed for failure to show reversible error, much
less grave abuse of discretion, on the part of the
respondent court.
Heirs of Augusto L. Salas, Jr. vs. Laperal Realty
Corporation, et al., 320 SCRA 610, G.R. No.
135362, December 13, 1999 Facts: Salas Jr. was
the registered owner of a vast tract of land in
Lipa City, Batangas spanning 1,484,354 square
meters. On May 15, 1987, he entered into an
Owner-Contractor Agreement with respondent
Laperal Realty Corporation to render and
provide complete (horizontal) construction
services on his land. On September 23, 1988,
Salas, Jr. executed a Special Power of Attorney
in favor of respondent Laperal Realty to
exercise general control, supervision and
management of the sale of his land, for cash or
on installment basis. On June 10, 1989, Salas, Jr.
left his home in the morning for a business trip
to Nueva Ecija. He never returned. After 7
years, Teresita Diaz Salas filed with the Regional
Trial Court of Makati City a verified petition for
the declaration of presumptive death of her
husband, Salas, Jr., who had then been missing
for more than seven (7) years. It was granted on
December 12, 1996. Meantime, respondent
Laperal Realty subdivided the land of Salas, Jr.
and sold subdivided portions thereof to
respondents Rockway Real Estate Corporation
and South Ridge Village, Inc.; to respondent
spouses Abrajano and Lava and Oscar Dacillo;
and to respondents Eduardo Vacuna, Florante
de la Cruz and Jesus Vicente Capalan (all of
whom are hereinafter referred to as
respondent lot buyers). On February 3, 1998,
petitioners as heirs of Salas, Jr. filed in the
Regional Trial Court of Lipa City a Complaint 6
for declaration of nullity of sale, reconveyance,
cancellation of contract, accounting and
damages against herein respondents which was
docketed as Civil Case No. 98-0047. On April 24,
1998, respondent Laperal Realty filed a Motion
toDismiss on the ground that petitioners failed
to submit their grievance to arbitration as
required under Article VI of the Agreement of
their arbitration clause. Issue: Whether or not
rescission is an arbitrable? Rulings: Yes The
petitioners' contention is without merit. For
while rescission, as a general rule, is an
arbitrable issue, they impleaded in the suit for
rescission the respondent lot buyers who are
neither parties to the Agreement nor the
latter's assigns or heirs. Consequently, the right
to arbitrate as provided in Article VI of the
Agreement was never vested in respondent lot
buyers. Respondent Laperal Realty, as a
contracting party to the Agreement, has the
right to compel petitioners to first arbitrate
before seeking judicial relief. However, to split
the proceedings into arbitration for respondent
Laperal Realty and trial for the respondent lot
buyers, or to hold trial in abeyance pending
arbitration between petitioners and respondent
Laperal Realty, would in effect result in
multiplicity of suits, duplicitous procedure and
unnecessary delay. On the other hand, it would
be in the interest of justice if the trial court
hears the complaint against all herein
respondents and adjudicates petitioners' rights
as against theirs in a single and complete
proceeding.
LUCAS ADAMSON vs. COURT OF APPEALSFACTS:
A deficiency tax assessment was issued against
Petitioners relating to their payment of capital
gains tax and VAT on theirsale of shares of stock
and parcels of land. Subsequent to the preliminary
conference, the CIR filed with the Departmentof
Justice her Affidavit of Complaint against
Petitioners. The Court of Appeals ultimately ruled
that, in a criminalprosecution for tax evasion,
assessment of tax deficiency is not required
because the offense of tax evasion is completeor
consummated when the offender has knowingly
and willfully filed a fraudulent return with intent
to evade the tax.
Lucas Adamson and AMC sold 131,897 common
shares of stock in Adamson and Adamson, Inc.
(AAI) to APACHolding Limited (APAC). The shares
were valued at P7,789,995.00.[1] On June 22,
1990, P159,363.21 was paidas capital gains tax for
the transaction.
AMC sold to APAC Philippines, Inc. another
229,870 common shares of stock in AAI for
P17,718,360.00. AMCpaid the capital gains tax of
P352,242.96.
The Commissioner issued
a “Notice of Taxpayer” to AMC, Lucas G. Adamson,
Therese June D. Adamson and Sara
S. de los Reyes, informing them of deficiencies on
their payment of capital gains tax and Value
Added Tax (VAT).The notice contained a schedule
for preliminary conference.
G.R. No. 120935
Lucas G. Adamson, Therese June D. Adamson and
Sara S. de los Reyes were charged before the
Regional TrialCourt (RTC) of Makati, Branch 150
in Criminal Case Nos. 94-1842 to 94-1846. They
filed a Motion to Dismiss orSuspend the
Proceedings. They invoked the grounds that there
was yet no final assessment of their tax
liability,and there were still pending relevant
Supreme Court and CTA cases.
Initially, the trial court denied the motion. A
Motion for Reconsideration was however filed,
this time assailing
the trial court’s lack of jurisdiction over the nature
of the subject cases.
On August 8, 1994, the trial court granted the
Motion. It ruled that the complaints for tax
evasion filed by theCommissioner should be
regarded as a decision of the Commissioner
regarding the tax liabilities of Lucas G.Adamson,
Therese June D. Adamson and Sara S. de los Reyes,
and appealable to the CTA. It further held that
thesaid cases cannot proceed independently of the
assessment case pending before the CTA, which
has jurisdictionto determine the civil and criminal
tax liability of the respondents therein.
Court of Appeals reversed the trial court’s
decision and reinstated the criminal complaints.
o
The appellate court held that, in a criminal
prosecution for tax evasion, assessment of tax
deficiency isnot required because the offense of
tax evasion is complete or consummated when the
offender hasknowingly and willfully filed a
fraudulent return with intent to evade the tax.
o
It ruled that private respondents filed false and
fraudulent returns with intent to evade taxes, and
actingthereupon, petitioner filed an Affidavit of
Complaint with the Department of Justice, without
anaccompanying assessment of the tax deficiency
of private respondents, in order to commence
criminalaction against the latter for tax evasion.
G.R. No. 124557
AMC, Lucas G. Adamson, Therese June D. Adamson
and Sara S. de los Reyes filed a letter request for
re-
investigation with the Commissioner of the
“Examiner’s Findings” e
arlier issued by the Bureau of InternalRevenue
(BIR), which pointed out the tax deficiencies.
On March 15, 1994 before the Commissioner
could act on their letter-request, AMC, Lucas G.
Adamson, ThereseJune D. Adamson and Sara S. de
los Reyes filed a Petition for Review with the CTA.
They assailed the
Commissioner’s finding of tax evasion against
them.
The Commissioner moved to dismiss the petition,
on the ground that it was premature, as she had
not yetissued a formal assessment of the tax
liability of therein petitioners.
On September 19, 1994, the CTA denied the
Motion to Dismiss. It considered the criminal
complaint filed by theCommissioner with the DOJ
as an implied formal assessment, and the filing of
the criminal informations with the
RTC as a denial of petitioners’ protest regarding
the tax deficiency.
The Commissioner repaired to the Court of
Appeals on the ground that the CTA acted with
grave abuse of discretion. She contended that,
with regard to the protest provided under Section
229 of the NIRC, there mustfirst be a formal
assessment issued by the Commissioner, and it
must be in accord with Section 6 of
RevenueRegulation No. 12-85. She maintained
that she had not yet issued a formal assessment of
tax liability, and thetax deficiency amounts
mentioned in her criminal complaint with the DOJ
were given only to show thedifference between
the tax returns filed and the audit findings of the
revenue examiner.
The Court of Appeals sustained the CTA’s denial of
the Commissioner’s Motion to Dismiss.
Hence, this petition.
ISSUES:
(1) Dis the CIR issue an assessment?(2) Must a
criminal prosecution for tax evasion be preceded
by a deficiency tax assessment?(3) Does the CTA
have jurisdiction on the case?
HELD:
(1) NO. The recommendation letter of the
Commissioner cannot be considered a formal
assessment as (a) it was notaddressed to the
taxpayers; (b) there was no demand made on the
taxpayers to pay the tax liability, nor a period
forpayment set therein; (c) the letter was never
mailed or sent to the taxpayers by the
Commissioner. It was only anaffidavit of the
computation of the alleged liabilities and thus
merely served as prima facie basis for filing
criminalinformations.(2) YES. When fraudulent
tax returns are involved as in the cases at bar,
a proceeding in court after the collection of such
tax may be begun without assessment
considering that upon investigation of the
examiners of the BIR, there wasa preliminary
finding of gross discrepancy in the computation of
the capital gains taxes due from the transactions.
TheTax Code is clear that the remedies may
proceed simultaneously.(3) NO. While the laws
governing the CTA have expanded the jurisdiction
of the Court, they did not change the jurisdiction
of the CTA to entertain an appeal only from a final
decision of the Commissioner, or in cases of
inactionwithin the prescribed period. Since in the
cases at bar, the Commissioner has not issued an
assessment of the tax liabilityof the Petitioners,
the CTA has no jurisdiction
Chung Fu Industries (Phils) v. Court of Appeals
FACTS:
- May 17, 1989: petitioner Chung Fu
Industries and private respondents
Roblecor Philippines forged a reconsideration of the judgment award
construction agreement wherein
Roblecor committed to construct and
finish on Dec. 31, 1989, Chung Fu’s
industrial/factory complex in Tanawan,
Cavite in consideration of P42M
- It was stipulated also that in the event of
disputes, the parties will be subjected to
an arbitration resolution, wherein the
arbitrator will be chosen by both parties
- Apart from the construction agreement,
the parties also entered into ancillary
contracts for the construction of a
dormitory and support facilities with a
contract price of 3, 875, 285.00 to be
completed on or before October 31, 1989
and the other dated Aug. 12, 1989 for the
installation of electrical, water and
hydrant systems at the plant site, priced
at 12.1M and requiring completion
thereof one month after civil works have
been finished
- However, Roblecor failed to complete the
work despite the extension allowed by
Chung Fu
- Subsequently, Chung Fu had to take over
the construction when it had become
evident that Roblecor was not in a
position to fulfill the obligation
- Claiming an unsatisfied account of P10,
500, 000 and unpaid progress billings of P
2, 370, 179.23, Roblecor filed a petition
for Compulsory Arbitration with prayer
for TRO before respondent RTC , pursuant
to the arbitration clause in the
construction agreement
- Chung Fu moved to dismiss the petition
and further prayed for the quashing of the
restraining order
- Subsequent negotiations between the
parties eventually led to the formulation
of an arbitration agreement which
includes that the “decision of the
arbitrator shall be final and unappealable,
therefore, there shall be no further
judicial recourse if either party disagrees
with the whole or any part of the
arbitrator’s award”
- RTC approved the arbitration agreement
and Asuncion was appointed as the sole
arbitrator
- Arbitrator ruled in favor of the contractor
Roblecor
- Chung Fu moved to remand the case for
further hearing and asked for a
claiming that Asuncion committed 12
instances of grave error by disregarding
the provisions of the parties’ contract
- RTC denied Chung Fu’s Motion to Remand
and approved Roblecor’s Motion for
Confirmation of Award
- Chung Fu elevated the case to CA which
denied the petition
- Hence, this petition to the Supreme Court
ISSUES:
1. WON the subject arbitration award is
beyond the ambit of the court’s power of
judicial review
2. WON respondent court committed grave
abuse of discretion
HELD/RATIO:
- No
- It’s stated explicitly under Art.
2044 of the Civil Code that the
finality of the arbitrator’s award
is not absolute and without
exceptions
- Where the conditions described
in Arts. 2038, 2039 and 2040
applicable to both compromises
and arbitrations are obtaining,
the arbitrators’ award may be
annulled or rescinded.
- Additionally, Sections 24 and 25
of the Arbitration Law provide
grounds for vacating, Modifying
or rescinding an arbitrator’s
award.
- Even decisions of administrative
agencies which are declared
“final” by law are not exempt
from judicial review when so
warranted
- SC finds that Chung Fu has amply
made out a case where the
voluntary arbitrator failed to
apply the terms and provisions of
the Construction Agreement
which forms part of the law
applicable as between the
parties, thus committing a grave
abuse of discretion.
- Furthermore, in granting
unjustified extra compensation to
responded for several items, he
 exceeded his powers – all of
which would have constituted
ground for vacating the award
under Section 24(d) of the
Arbitration Law
- Yes
- The refusal to look into the
merits of the case, despite prima
facie showing of the existence of
grounds warranting judicial
review effectively deprived
Chung Fu of their opportunity to
prove or substantiate their
allegations. Such constitutes
grave abuse of discretion.
- Likewise, the Court of Appeals in
not giving due course to the
petition, committed grave abuse
of discretion.
- Respondent courts should not
shirk from exercising their power
to review, where under the
applicable laws and
jurisprudence, such power may
be rightfully exercised
DECISION: petition granted. Case remanded to the
court of origin for further hearing
National Steel
Corporation v.
RTC of Lanao
Del Norte (G.R.
No. 127004)
Date: June 3,
2016Author: jaicdn0 Comments
Facts:
Respondent Edward Willkom Enterprises Inc.
(EWEI) and Ramiro Construction executed a contract
with petitioner National Steel Corporation (NSC)
whereby the former jointly undertook the Contract
for Site Development for the latter’s Integrated Iron
and Steel Mills Complex. Sometime in 1983, the
services of Ramiro Construction was terminated and
EWEI took over the contractual obligation. Due to
this and to other causes deemed sufficient by EWEI,
extensions of time for the termination of the project
were granted by NSC. Differences later arose, EWEI
filed a case before the RTC praying essentially for
payments with interest from the time of delay; the
price adjustment as provided by PD 1594; and
exemplary damages and attorney’s fees. NSC filed an
answer with counterclaim to plaintiffs complaints.
The court upon joint motion of both parties had
issued an order dismissing the said complaint and
counterclaim in view of the desire of both parties to
implement Sec. 19 of the contract, providing for a
resolution of any conflict by arbitration. In
accordance with the aforesaid order and pursuant to
Sec. 19 of the Contract, herein parties constituted an
Arbitration Board after which of a series of hearings,
rendered the decision directing NSC to pay EWEI.
The RTC affirmed and confirmed the award of the
arbitrators. NSC’s Motion for Reconsideration was
denied, hence has come to this court via the present
petition.
Issue:
Whether or not the lower court acted with grave
abuse of discretion in not vacating the arbitrator’s
award.
Ruling:
Thus, in a Petition to Vacate Arbitrator’s Decision
before the trial court, regularity in the performance of
official functions is presumed and the complaining
party has the burden of proving the existence of any
of the grounds for vacating the award, as provided for
by Sections 24 of the Arbitration Law, to wit: (a) The
award was procured by corruption, fraud or other
undue means; (b) That there was evident partiality or
corruption in the arbitrators of any of them; or (c)
That the arbitrators were guilty of misconduct in
refusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence pertinent
and material to the controversy; that one or more of
the arbitrators was disqualified to act as such under
section nine hereof, and wilfully refrained from
disclosing such disqualification or of any other
misbehavior by which the rights of any party have
been materially prejudiced; or (d) That the arbitrators
exceeded their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the
subject matter submitted to them was not made. . . .
The grounds relied upon by the petitioner were the
following (a) That there was evident partiality in the
assailed decision of the Arbitrators in favor of the
respondent; and (b) That there was mistaken
appreciation of the facts and application of the law by
the Arbitrators.
Petitioner’s allegation that there was evident
partiality is untenable. It is anemic of evidentiary
support. In the case of Adamson vs. Court of Appeals,
in upholding the decision of the Board of Arbitrators,
this Court ruled that the fact that a party was
disadvantaged by the decision of the Arbitration
Committee does not prove evident partiality. Proofs
other than mere inference are needed to establish
evident partiality. Here, petitioner merely averred
evident partiality without any proof to back it up.
Petitioner was never deprived of the right to present
evidence nor was there any showing that the Board
showed signs of any bias in favor of EWEI.
Parentethically, and in the light of the record above-
mentioned, this Court hereby holds that the Board of
Arbitrators did not commit any “evident partiality”
imputed by petitioner NSC. Above all, this Court
must sustain the said decision for it is a well-settled
rule that the actual findings of an administrative body
should be affirmed if there is substantial evidence to
support them and the conclusions stated in the
decision are not clearly against the law and
jurisprudence, similar to the instant case, Henceforth,
every reasonable intendment will be indulged to give
effect such proceedings and in favor of the regulatory
and integrity of the arbitrators act. Indeed, the
allegation of evident partiality is not well-taken
because the petitioner failed to substantiate the same.
WHEREFORE, the awards made by the Board of
Arbitrators which the trial court adopted in its
decision are modified.
Asset Privatization Trust vs CA
FACTS
Pursuant to a Mortgage Trust
Agreement, the Development Bank of
the Philippines and the Philippine
National Bank foreclosed the assets of
the Marinduque Mining and Industrial
Corporation. The assets were sold to Hence, this petition for review on
Philippine National Bank and later certiorari.
transferred to the Asset Privatization
Trust (APT). ISSUE

In February 1985, Jesus Cabarrus, Sr., WHETHER THE RESPONDENT

together with other stockholders of JUDGE COMMITTED GRAVE ABUSE
Marinduque Mining and Industrial OF DISCRETION AND ACTED
Corporation, filed a derivative suit WITHOUT OR IN EXCESS OF
against Development Bank of the JURISDICTION, IN ISSUING THE
Philippines and Philippine National Bank QUESTIONED ORDERS CONFIRMING
before the Regional Trial Court of THE ARBITRAL AWARD AND
Makati for Annulment of Foreclosures, DENYING THE MOTION FOR
Specific Performance and Damages. In RECONSIDERATION OF ORDER OF
the course of the trial, Marinduque AWARD.
Mining and Industrial Corporation and
Asset Privatization Trust as successor in HELD
interest of Development Bank of the
As a rule, the award of an arbitrator
Philippines and Philippine National
cannot be set aside for mere errors of
Bank, agreed to submit the case to
judgment either as to the law or as to
arbitration by entering into a
the facts.[29] Errors of law and fact, or
Compromise and Arbitration Agreement.
an erroneous decision of matters
This agreement was approved by the
submitted to the judgment of the
trial court and the complaint was
arbitrators, are insufficient to invalidate
corollarily dismissed.
an award fairly and honestly
made.[32] Judicial review of an arbitration
Thereafter, the Arbitration Committee
is, thus, more limited than judicial review
rendered a decision ordering Asset
of a trial.[33]
Privatization Trust to pay Marinduque
Mining and Industrial Corporation Nonetheless, the arbitrators awards
damages and arbitration costs in the is not absolute and without
amount of P2.5 Billion, P13,000,000.00 exceptions. The arbitrators cannot
of which is for moral and exemplary resolve issues beyond the scope of the
damages. submission agreement.[34]

On motion of Cabarrus and the other While a court is precluded from

stockholders of Marinduque Mining and
Industrial Corporation, the trial court
confirmed the Arbitration Committee’s
award. Its motion for reconsideration
having been denied, Asset Privatization
Trust filed a special civil action for
certiorari with the Court of Appeals. It
was likewise denied.
overturning an award for errors in
determination of factual issues,
nevertheless, if an examination of the
record reveals no support whatever for
the arbitrators determinations, their
award must be vacated.[40] In the same
manner, an award must be vacated if it
was made in manifest disregard of the
law.[41]
 HI-PRECISION STEEL CENTER INC. v clear showing is made that, in reaching its
LIM KIM STEEL BUILDERS INC. factual conclusions, the Arbitral Tribunal
G.R No. 110434 December 13, 1993 committed an error so hurtful to one party
FACTS: as to constitute a grave abuse of discretion
Hi-Precision (Petitioner) entered into resulting on lack or loss of jurisdiction.
a contract with Steel Builders (Private
Respondent) under which the latter as
Contractor was to complete a 21 Million
Pesos construction project owned by Hi-
Precision with a period of 153 days. The
said completion of the project was then
moved, however, when the date came, only
75.8674% of the project was actually
completed. Petitioner attributed this non-
completion to Steel Builders which allegedly
incurred delays both during the original
contract and period of extension. On the
other hand, the Steel Builders claimed that
the said non-completion of the project was
either excusable or was due to Hi-
Precision’s own fault and issuance of
change orders. The said project was taken
over and completed by Hi-Precision.
Steel Builders requested for an
adjudication with CIAC (Public Respondent)
and sought payment of its unpaid billings,
alleged unearned profits and other
receivables. Hi-Precision on the other hand
claimed for damages and reimbursement of
alleged additional costs. The CIAC formed
an Arbitral Tribunal with 3 members and
such tribunal rendered a decision in favor of
Steel Builders Inc ordering Hi-Precision to
pay Steel Builders their claim. Hi-Precision
then asks the court to set aside the award
on the basis of misapprehension of facts.
ISSUE:
Whether or not it was correct should
set aside the ruling of the Arbitral Tribunal.
RULING:
No. The court said that it will not
assist one or the other or even both parties
in an effort to subvert or defeat the objective
for their private purposes and also, that it
will not review the factual findings of an
arbitral tribunal upon the allegation that
such body misapprehended facts. The court
will not, therefore, permit the parties to
relitigate before it the issues of facts
previously presented and argued before the
Arbitral Tribunal, save only where a vey