Sumifru (Philippines) Corporation vs.
Baya, 822 SCRA 564, April 17, 2017
Doctrine:
One of the effects of a merger is that the
surviving company shall inherit not only the
assets, but also the liabilities of the corporation it
merged with.
Section 80 of the Corporation Code of the
Philippines clearly states that one of the effects of
a merger is that the surviving company shall
inherit not only the assets, but also the liabilities
of the corporation it merged with.
Doctrine: To justify the grant of the
extraordinary remedy of certiorari, the petitioner
must satisfactorily show that the court or quasi-
judicial authority gravely abused the discretion
conferred upon it.
Grave abuse of discretion connotes a capricious
and whimsical exercise of judgment, done in a
despotic manner by reason of passion or personal
hostility, the character of which being so patent
and gross as to amount to an evasion of positive
duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of
law.
Doctrine: Constructive dismissal is aptly called
a dismissal in disguise, or an act amounting to
dismissal but made to appear as if it were not.
Constructive dismissal exists if an act of clear
discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of
the employee that it could foreclose any choice by
him except to forego his continued employment.
It exists where there is cessation of work,
because ‘continued employment is rendered
impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in
pay’ and other benefits.
Doctrine:
The burden is on the employer to prove that the
transfer or demotion of an employee was a valid
exercise of management prerogative and was not
a mere subterfuge to get rid of an employee;
failing in which, the employer will be found liable
for constructive dismissal
In case of a constructive dismissal, the employer
has the burden of proving that the transfer and
demotion of an employee are for valid and
legitimate grounds such as genuine business
necessity.
For a transfer not to be considered a constructive
dismissal, the employer must be able to show
that such transfer is not unreasonable,
inconvenient, or prejudicial to the employee.
It should not involve a demotion in rank or a
diminution of his salaries, privileges and other
benefits.
Failure of the employer to overcome this burden
of proof, the employee’s demotion shall no doubt
be tantamount to unlawful constructive dismissal.
Doctrine: Under the doctrine of strained
relations, the payment of separation pay is
considered an acceptable alternative to
reinstatement when the latter option is no longer
desirable or viable.
Application:
Here, it is clear that an atmosphere of animosity
and antagonism now exists between Baya on the
one hand, and AMSFC and DFC on the other
It calls for the application of the doctrine of
strained relations.
Under that doctrine, the payment of separation
pay is considered an acceptable alternative to
reinstatement, when the latter option is no longer
desirable or viable.
On one hand, such payment liberates the
employee from what could be a highly oppressive
work environment.
On the other hand, it releases the employer from
the grossly unpalatable obligation of maintaining
in its employ a worker it could no longer trust.”
Thus, it is more prudent that Baya be awarded
separation pay, instead of being reinstated.
Bureau of Internal Revenue vs. Lepanto
Ceramics, Inc. 824 SCRA 125 , April 24, 2017
Doctrine: The creditors must ventilate their
claims before the rehabilitation court.
Any attempt to seek legal or other resource
against the distressed corporation shall be
sufficient to support a finding of indirect contempt
of court.
Doctrine:
The creditors of the distressed corporation
are not without remedy. They may still submit
their claims to the rehabilitation court for proper
consideration.
In this way, they may participate in the
proceedings.
This is in keeping with the general policy of
the law which is “to ensure or maintain certainty
and predictability in commercial affairs, and
respect creditors’ rights and priority of claims,
among
In other words, the creditors must ventilate
their claims before the rehabilitation court
Any attempt to seek legal or other resource
against the distressed corporation shall be
sufficient to support a finding of indirect contempt
of court.
Doctrine: Corporate rehabilitation is an
attempt to conserve and administer the assets of
an insolvent corporation in the hope of its
eventual return from financial stress to solvency.
It contemplates the continuance of
corporate life and activities, in an effort to restore
and reinstate the corporation to its former
position of successful operation and liquidity.
Doctrine: The purpose of rehabilitation is to
find ways and means to minimize the expenses of
the distressed corporation during the
rehabilitation period
It is accomplished by providing the best
possible framework for the corporation to
gradually regain or achieve a sustainable
operating form.
It enables the company to gain a new lease
in life and thereby allow creditors to be paid their
claims from its earnings.
 Rehabilitation shall be undertaken when it is
shown that the continued operation of the
corporation is economically more feasible and its
creditors can recover more, in accordance to the
structured plan, if it is allowed to continue rather
than if it is liquidated immediately.
CASE Ubas, Sr. vs. Chan 816 SCRA 659 ,
February 06, 2017
Doctrine: Section 16 of the Negotiable
Instruments Law (NIL) provides that when an
instrument is no longer in the possession of the
person who signed it, and it is complete in its
terms, “a valid and intentional delivery by him is
presumed until the contrary is proved.”
Doctrine: Cause of action is defined as
the act or omission by which a party violates a
right of another.
The the existence of a cause of action is
determined by the allegations in the complaint.
Doctrine: Where the plaintiff-creditor
possesses and submits in evidence an instrument
showing the indebtedness, a presumption that the
credit has not been satisfied arises in his favor.
The plaintiff creditor has the burden of proof
to show that defendant had not paid.
But where the plaintiff-creditor possesses,
and submits in evidence, an instrument showing
the indebtedness, a presumption that the credit
has not been satisfied arises in his favor.
The defendant thereafter is required to
overcome the said presumption and present
evidence to prove the fact of payment, so that no
judgment will be entered against him.
This presumption stems from Section 24 of
the NIL, which provides that: Every negotiable
instrument is deemed prima facie to have been
issued for a valuable consideration; and every
person whose signature appears thereon to have
become a party thereto for value.
National Association of Electricity Consumers
for Reforms (NASECORE) vs. Manila Electric
Company (MERALCO) 805 SCRA 501 , October
10, 2016
Doctrine: An issue or case is considered
moot and academic when it ceases to present a
justiciable controversy by virtue of supervening
events, so that an adjudication of the case or a
declaration on the issue would be of no practical
value or use.
Application: The ERC’s shift from the RORB
to the PBR methodology should be deemed as a
supervening circumstance that rendered
inconsequential the Court’s provisional approval of
the rate increases applied for by MERALCO in
Lualhati which was made under the context of the
now-defunct RORB system.
Accordingly, the issue of whether or not the
ERC should have first took into account the
findings in the COA audit before approving
MERALCO’s applications has become moot and
acadaminc
Doctrine: An administrative regulations
enacted by administrative agencies to implement
and interpret the law, which they are entrusted to
enforce have the force of law, and enjoy the
presumption of constitutionality and legality, until
they are set aside with finality in an appropriate
case by a competent court.
As such, they “cannot be attacked
collaterally.
Unless such rule is annulled in a direct
proceeding, the legal presumption of its validity
stands
Doctrine: The general rule is that in a
petition for review under Rule 45, only questions
of law may be raised.
The resolution of this petition entails a
determination of factual matters which is
proscribed in petitions for review on certiorari
under Rule 45 of the Rules of Court.
Doctrine: The test of whether a question
is one of law or of fact is not the appellation given
to such question by the party raising the same.
Rather, it is whether the appellate court can
determine the issue raised without reviewing or
evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact.
Application:
Here, in order to assess the reasonableness
of the rates approved by the ERC, there is a
glaring need to scrutinize the veracity of the
adverse allegations of both parties, which, in turn,
necessitates an examination of the evidence in
support thereof.
Therefore, the issue on reasonableness
posed in the petition inevitably treads the
territory of questions of fact, which is generally
proscribed from review in a Rule 45 petition, as in
this case.
Doctrine: Rate-fixing calls for a technical
examination and a specialized review of specific
details which the courts are ill-equipped to enter.
Such matters are primarily entrusted to the
administrative or regulating authority.
Hence, the factual findings of administrative
officials and agencies that have acquired expertise
in the performance of their official duties and the
exercise of their primary jurisdiction are generally
accorded not only respect but, at times, even
finality, if such findings are supported by
substantial evidence.
Absent any of the exceptions laid down by
jurisprudence, such factual findings of quasi-
judicial agencies, especially when affirmed by the
CA, are binding on this Court.
Doctrine: There is a legal presumption
that the fixed rates are reasonable.
The fixing of rates by the
Government, through its authorized agents,
involves the exercise of reasonable discretion.
Unless there is an abuse of that
discretion, the courts will not interfere.
Here, petitioners failed to sufficiently show
that the rates approved in the proceedings below
were unreasonable as they claimed to be.