Zuellig Freight vs. NLRC

[Civil Law: when are attorney’s fees recoverable]

                                            Zuellig Freight and Cargo Systems,  

                                                                         vs. 

                 National Labor Relations Commission and Ronaldo V. San Miguel

G.R. No. 157900;  July 22, 2013

Facts:   This is a petition appealing the decision of CA, whereby it dismissed its petition for certiorari and upheld the adverse decision of the NLRC finding San Miguel to have been illegally dismissed. San Miguel, employed as checker/custom representative, brought a complaint for unfair labor practice, illegal dismissal, non-payment of salaries and moral damages against petitioner, formerly known as Zeta Brokerage Corporation (Zeta). He contended that amendments of the articles of incorporation of Zeta were for the purpose of changing the corporate name, broadening the primary functions, and increasing the capital stock; and that such amendments could not mean that Zeta had been thereby dissolved. Petitioner countered that San Miguel’s termination from Zeta had been for a cause authorized by the Labor Code; that its non-acceptance of him had not been by any means irregular or discriminatory; that its predecessor-in-interest had complied with the requirements for termination due to the cessation of business operations and that it had no obligation to employ San Miguel in the exercise of its valid management prerogative.

NLRC and CA rendered its decision holding San Miguel to have been illegally dismissed ordering Zuellig to pay San Miguel his back wages and Attorney’s fees equivalent to ten percent (10%) of the total award.

Issue: Whether or not the awarding of attorney’s fees had basis in fact and in law.

Ruling:  Yes, the court upheld the CA, NLRC and Labor Arbiter unanimous decision, where the  amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight and Cargo Systems, Inc. did not produce the dissolution of the former as a corporation, therefore not giving them the license to terminate employees without just or authorized cause and considering that that San Miguel had been compelled to litigate and to incur expenses to protect his rights and interest entitles him to recover attorney’s fees.

In Producers Bank of the Philippines v. Court of Appeals, the Court ruled that attorney’s fees could be awarded to a party whom an unjustified act of the other party compelled to litigate or to incur expenses to protect his interest.

Dacudao vs. DOJ

[Civil Law: Effectivity of laws; general rule: no retroactive effect; exception: when law is procedural in nature]

Spouses Augusto G. Dacudao and Ofelia R. Dacudao, Petitioners, vs. Secretary of Justice Raul M. Gonzales of the Department of Justice, Respondent

G.R. No. 188056; January 8, 2013

Facts:  The petitioners filed a case of syndicated estafa against Celso Delos Angeles and his associates after the petitioners were defrauded in a business venture. Thereafter, the DOJ Secretary issued Department Order 182 which directs all prosecutors in the country to forward all cases already filed against Celso Delos Angeles, Jr. and his associates to the secretariat of DOJ in Manila for appropriate action. However, in a separate order which is Memorandum dated March 2009, it was said that cases already filed against Celso Delos Angeles et. al of the Legacy Group of Companies in Cagayan De Oro City need not be sent anymore to the Secretariat of DOJ in Manila. Because of such DOJ orders, the complaint of petitioners was forwarded to the secretariat of the Special Panel of the DOJ in Manila. Aggrieved, Spouses Dacudao filed this petition for certiorari, prohibition and mandamus assailing to the respondent Secretary of justice grave abuse of discretion in issuing the department Order and the Memorandum, which according to the violated their right to due process, right to equal protection of the law and right to speedy disposition of the cases. The petitioners opined that orders were unconstitutional or exempting from coverage cases already filed and pending at the Prosecutor’s Office of Cagayan De Oro City. They contended that the assailed issuances should cover only future cases against Delos Angeles, Jr., et al, not those already being investigated. They maintained that DO 182 was issued in violation of the prohibition against passing laws with retroactive effect.

Issue:     Whether or not the assailed issuances can be given retroactive effect.

Ruling:     Yes. As a general rule, laws shall have no retroactive effect. However, exceptions exist, and one such exception concerns a law that is procedural in nature. The reason is that a remedial statute or a statute relating to remedies or modes of procedure does not create new rights or take away vested rights but operates only in furtherance of the remedy or the confirmation already existing rights. The retroactive application is not violative of any right of a person who may feel adversely affected, for, no vested right generally attaches to or arises from procedural law.

Republic vs. Encelan

[Civil Law: marriage; psychological incapacity]

Republic of the Philippines, Petitioner vs. Cesar Encelan, Respondent

G.R. No. 170022; January 09, 2013

Facts:     Cesar Married Lolita, and they had two children. To support the family, Cesar went abroad and worked as an OFW in Saudi Arabia. After two years of working abroad, Cesar learned that Lolita is having an illicit affair with Alvin Perez, and thereafter, left the conjugal dwelling together with the two children. But even with such circumstances, Cesar never failed to send financial support for the family. On June 1995, Cesar filed a petition against Lolita for the declaration of the nullity of his marriage based on Lolita’s psychological incapacity. Cesar, during a hearing even presented a psychological evaluation report on Lolita with the finding that “Lolita was not suffering from any form of psychiatric illness, but had been unable to provide the expectations expected of her for a good and lasting marital relationship.... and her transferring from one job to another depicts some interpersonal problem with co-workers as well as her impatience in attaining her ambitions .... and her refusal to go with her husband abroad signifies her reluctance to work out a good marital and family relationship...”  Cesar found ally in RTC as it gave him a favourable decision which declared his marriage to Lolita null and void. The court of Appeals also affirmed the decision of RTC, and thereafter, the case was elevated to the Supreme Court, thus, this case.

Issue:      Whether or not psychological incapacity is indeed present in the person of Lolita as to nullify a valid marriage.

Ruling:    No. Marriage is an inviolable social institution protected by the State and any doubt should be resolved in favour of its existence and continuation against its dissolution and nullity. In this case, sexual infidelity and abandonment of the conjugal dwelling do not necessarily constitute psychological incapacity; these are simply grounds for legal separation. To constitute psychological incapacity, it must be shown that the unfaithfulness and abandonment are manifestations of a disordered personality that actually prevented the erring spouse from discharging the essential marital obligations, which the court found not present in the person of Lolita.

Cacayorin vs. AFPMBAI

[Civil Law: Obligations and Contracts; consignation; judicial in character]

Spouses Oscar and Thelma Cacayorin, Petitioners, vs.

Armed Forces and Police Mutual Benefit Association, Inc. (AFPMBAI), Respondent.

G.R. No. 171298; April 15, 2013

Facts:  Oscar Cacayorin  filed an application with AFPMBAI to purchase a property which the latter owned through a loan facility. Oscar and his wife, Thelma, and the Rural Bank of San Teodoro executed a Loan and Mortgage Agreement with the former as borrowers and the Rural Bank as lender, under the auspices of PAG-IBIG. On the basis of the Rural Bank's letter of guaranty, AFPMBAI executed in petitioners' favor a Deed of Absolute Sale, and a new title was issued in their name. Then, the PAG-IBIG loan facility did not push through and the Rural Bank closed. Meanwhile, AFPMBAI somehow was able to take possession of petitioners' loan documents and the TCT, while petitioners were unable to pay the loan for the property. AFPMBAI made written demands for petitioners to pay the loan for the property. Then, petitioners filed with the RTC a complaint for consignation of loan payment, recovery of title and cancellation of mortgage annotation against AFPMBAI, PDIC and the Register of Deeds of Puerto Princesa City. AFPMBAI filed a motion to dismiss claiming that petitioners' Complaint falls within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB), as it was filed by petitioners in their capacity as buyers of a subdivision lot and it prays for specific performance of contractual and legal obligations decreed under Presidential Decree No. 957(PD 957). It added that since no prior valid tender of payment was made by petitioners, the consignation case was fatally defective and susceptible to dismissal.

Issue: Whether or not the case falls within the exclusive jurisdiction of the HLURB.

Ruling:  No. Unlike tender of payment which is extrajudicial, consignation is necessarily judicial; hence, jurisdiction lies with the RTC, not with the HLURB. Under Article 1256 of the Civil Code, the debtor shall be released from responsibility by the consignation of the thing or sum due, without need of prior tender of payment, when the creditor is absent or unknown, or when he is incapacitated to receive the payment at the time it is due, or when two or more persons claim the same right to collect, or when the title to the obligation has been lost. The said provision clearly precludes consignation in venues other than the courts.

Nameal, Bonrostro vs. Luna

[Civil Law: Obligation; consignation; judicial in character]

Spouses Nameal and Lourdes Bonrostro, Petitioners,   

vs.  

Spouses Juan and Constancia Luna, Respondents.

G.R. No. 172346, July 24, 2013

Facts:  Constancia Luna, as buyer, entered into a contract to sell with Bliss Development Corporation involving a house located in Quezon City. A year after, Luna sold it to Lourdes Bonrostro under the ff. terms:

The stipulated price of P1,250,000.00 shall be paid by the VENDEE to the VENDOR in the following manner:
(a)  P200,000.00 upon signing x x x [the] Contract To Sell,
(b)  P300,000.00 payable on or before April 30, 1993,
(c)  P330,000.00 payable on or before July 31, 1993,
(d)  P417,000.00 payable to the New Capitol Estate, for 15 years at [P6,867.12] a month,

x x x [I]n the event the VENDEE fails to pay the second installment on time, [t]he VENDEE will pay starting May 1, 1993 a 2% interest on the P300,000.00 monthly.  Likewise, in the event the VENDEE fails to pay the amount of P630,000.00 on the stipulated time, this CONTRACT TO SELL shall likewise be deemed cancelled and rescinded and x x x 5% of the total contract price [of] P1,250,000.00 shall be deemed forfeited in favor of the VENDOR.  Unpaid monthly amortization shall likewise be deducted from the initial down payment in favor of the VENDOR. After execution of the contract, Bonrostro took possession of the property. However, except for P200,000.00 downpayment, she failed to pay subsequent amortization. Luna then filed before the RTC a Complaint for Rescission of Contract and Damages. This is a petition for review on certiorari assailing the decision of CA affirming with modification the decision of RTC in favor herein respondents.

Issue:  Whether or not delay in the payment of installment is a substantial breach of obligation as to warrant its rescission.

Ruling:   No, in a contract to sell, payment of the price is a positive suspensive condition. Failure of which is not a breach of contract warranting rescission under Article 1191 of the Civil Code, but rather just an event that prevents the supposed seller from being bound to convey title to the supposed buyer. The contract to sell entered by the parties refers to real property on installment basis, in which Art. 1191 cannot apply since they are governed by the Maceda Law. However, there being no breach, Bonrostro is still not excused from being made liable for interest on the installments due from the date of default until fully paid. Tender of payment, a manifestation by the debtor of a desire to comply with or pay an obligation, asserted by Bonrostro for the accrual of interest to be suspended is not a valid defense because for a tender of payment to take effect it must be accompanied by the means of payment and debtor must take immediate step to make a consignation, the deposit of the proper amount with a judicial authority, then interest is suspended from the time of such tender.

Sandoval Shipyards vs. Philippine Merchant Marine Academy

[Civil Law: Obligations and Contract; Rescission]

Sandoval Shipyards, Inc., Petitioner, vs.

Philippine Merchant Marine Academy (PMMA), Respondent

GR No. 188633, April 10, 2013

Facts:  The PMMA entered into Ship Building Contract with Sandoval Shipyards, Inc. with the latter obliging itself to construct two units of lifeboats to be used by the students of PMMA for training.  The parties agreed on the specifications of the boats, the date of delivery and the amount of payment as stated in the contract.  However, upon inspection by the PMMA, it found that the construction being done by the petitioner was not in conformity with the approved plan.  Because of this, respondent’s dean submitted a report and recommendation for ratification of the contract to its President.  A meeting was held in order to settle the issue.  Sandoval asked for extension of the time of delivery of the lifeboats which was granted by PMMA.  However, Sandoval was not able to comply with the agreed specifications for the boats and the agreed time of delivery despite repeated demands from PMMA.  As a result, PMMA filed a Complaint for Rescission of Contract with damages against the petitioners.

The RTC held that although the caption for the complaint filed by PMMA was for Rescission for Contract, the allegations in the body were for breach of contract. Thus, the respondents were made jointly and severally liable for actual damages plus attorney’s fees plus cost of suits.  The petitioners appealed the case to the CA where it found that indeed the petitioners committed a clear substantial breach of contract which warranted its rescission.  However, since rescission requires mutual restoration of benefits received, the respondents cannot be compelled to return what it does not possess - the lifeboats which the petitioners failed to deliver.  A motion for reconsideration was filed by the petitioners but was denied by the CA hence the petition for certiorari filed under rule 45.

Issue:  Whether or not the case is for rescission and not for damages due to breach of contract.

Ruling: No, the case is for damages due to breach of contract.  It held that the RTC was correct in determining whether there was a breach of contract and if such breach would warrant rescission and or damages.  In this case, it found that the breach was found to be substantial and sufficient to warrant a rescission of the contract.  However, since rescission entails a mutual restitution of benefits received and the factual circumstances rendered this mutual restitution impossible, an injured party who has chosen rescission is also entitled to the payment of damages.  

Coverage of Real Estate Mortgage Law

What is covered under the real estate mortgage law?

Section 1 of Act No. 3135 – AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES, provides:

“When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following election shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in the power.”

This covers sales with a special authority annexed to a mortgage involving real estate as a security for the payment or obligation.  Notwithstanding the presence or absence of any provision for sale and redemption, the law shall be controlling as to how the sale and redemption shall be made or effected.  The intendment of the law is the regulation of the sale made extra-judicially and how the property may be redeemed in instances wherein the mortgagee was vested special or expressed authority for such.