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Substitute or risk dismissal of action

In this case, a lawyer filed a motion for reconsideration without first being properly substituted as counsel of record. The Supreme Court affirmed the decision of the Court of Appeals denying the motion for reconsideration, and reiterated Section 26, Rule 138 of the Rules of Court, that a valid substitution of counsel has the following requirements: (1) the filing of a written application for substitution; (2) the client’s written consent; (3) the consent of the substituted lawyer if such consent can be obtained; and, in case such written consent cannot be procured, (4) a proof of service of notice of such motion on the attorney to be substituted in the manner required by the Rules.

Heirs of Retuya v. CA, et al., G.R. No. 163039, April 6, 2011, Second Division

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No refund of salaries even if reinstatement is reversed

In this case, the Labor Arbiter ruled the dismissal of an employee and ordered reinstatement pending appeal. The employer‘s appeal was denied by the NLRC. However the Court of Appeals declared the dismissal valid, but allowed the employee to receive salaries up to the time the court reversed the Labor Arbiter and the NLRC.

The employer went to the Supreme Court to annul the award of salaries, and to order the refund the salaries the employee received pendente lite.

The Supreme Court ruled against the employer. The Supreme Court reiterated the principle that reinstatement pending appeal necessitates that it must be immediately self-executory without need for a writ of execution during the pendency of the appeal, if the law is to serve its noble purpose, and any attempt on the part of the employer to evade or delay its execution should not be allowed.  Furthermore, the high tribunal likewise restated its ruling that an order for reinstatement entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received.

Pfizer v. Velasco, G.R. No. 177467, March 9, 2011.

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An adverse claim is not proper to protect an easement

To be registrable, an adverse claim must allege a claim of ownership or title on the land subject of the claim. Protecting an easement via the registration of an adverse claim is not allowed. However, while non-registrable, the subject of the adverse claim itself, that is, the existence of an easement of subjacent and lateral support may be judicially recognized and enforceable without need of annotation.

An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner. There are two kinds of easements according to source. An easement is established either by law or by will of the owners. The courts cannot impose or constitute any servitude where none existed. They can only declare its existence if in reality it exists by law or by the will of the owners. There are therefore no judicial easements.

Article 684 of the Civil Code provides that no proprietor shall make such excavations upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. An owner, by virtue of his surface right, may make excavations on his land, but his right is subject to the limitation that he shall not deprive any adjacent land or building of sufficient lateral or subjacent support. Between two adjacent landowners, each has an absolute property right to have his land laterally supported by the soil of his neighbor, and if either, in excavating on his own premises, he so disturbs the lateral support of his neighbor’s land as to cause it, or, in its natural state, by the pressure of its own weight, to fall away or slide from its position, the one so excavating is liable.

(Castro v. Monsod, G.R. No. 183719, February 2, 2011)

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Requirements to justify a judicial confirmation of imperfect titles

Existing law and jurisprudence provides that an applicant for judicial confirmation of imperfect title must prove compliance with Section 14 of Presidential Decree (P.D.) No. 1529 or the Property Registration Decree.  The pertinent portions of Section 14 provide:

“SEC. 14. Who may apply.—The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provisions of existing laws.xxx”

A CENRO certification that the land is within the alienable and disposable zone is sufficient to prove classification (Limcoma Multi-Purpose Cooperative v. Republic, G.R. No. 167652, July 10, 2007, 527 SCRA 233, 243-244, citing Republic v. Carrasco, G.R. No. 143491, December 6, 2006, 510 SCRA 150; Bureau of Forestry v. Court of Appeals, No. L-37995, August 31, 1987, 153 SCRA 351, 357 and Republic v. Court of Appeals,440 Phil. 697 (2002).

Open, continuous, exclusive and notorious possession and occupation of the land in question on or before June 12, 1945 may be proved by testimonial and documentary evidence, such as tax declarations which are good indicia of possession in the concept of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession (Llanes v. Republic,G.R. No. 177947, November 27, 2008, 572 SCRA 258).

The thirty (30)-year period of prescription for purposes of acquiring ownership and registration of public land under Section 14 (2) of P.D. No. 1529 only begins from the moment the State expressly declares that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial, and there must be an express declaration by the State that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

In this case, the application was denied because the applicant failed to show proof of possession prior to 1945, or a congressional or presidential proclamation that the land is no longer intended for public service or for the development of the national wealth tolling the period of acquisitive prescription.

(Republic v. Rizalvo, G.R. No. 172011, March 7, 2011)

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How to distinguish between cases of “forcible entry” and “unlawful detainer”?

An action for “forcible entry” must contain allegation that one is in possession of the property and was ousted therefrom either by force, intimidation, threat, strategy, or stealth, an element of that kind of eviction suit.

On the other hand, an action is for unlawful detainer if the complaint sufficiently alleges the following: (1) initially, the defendant has possession of property by contract with or by tolerance of the plaintiff; (2) eventually, however, such possession became illegal upon plaintiff’s notice to defendant, terminating the latter’s right of possession; (3) still, the defendant remains in possession, depriving the plaintiff of the enjoyment of his property; and (4) within a year from plaintiff’s last demand that defendant vacate the property, the plaintiff files a complaint for defendant’s ejectment. If the defendant had possession of the land upon mere tolerance of the owner, such tolerance must be present at the beginning of defendant’s possession.

(Dionisio v. Linsangan, G.R. No. 178159, March 2, 2011)

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What is the difference between “facilities” and “supplements” in computing wages?

In SLL v. NLRC, G.R. No. 172161, March 2, 2011, citing Atok-Big Wedge Assn. v. Atok-Big Wedge Co.,[22] “facilities” and “supplements” were distinguished from one another in this wise:

“Supplements,” therefore, constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. “Facilities,” on the other hand, are items of expense necessary for the laborer‘s and his family’s existence and subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.

In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; and when said benefit or privilege is part of the laborers’ basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item (food, lodging, bonus or sick leave) given, but in the purpose for which it is given.

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Instances when a writ of execution may be appealed

A final and executory judgment may be modified to prevent an inequitable or unjust execution.

The RTC should have determined via hearing if Danilo’s allegation were true and accordingly modified the period Danilo is to be held accountable for monthly rentals. Unjustified delay in the enforcement of a judgment sets at naught the role of courts in disposing justiciable controversies with finality.  Once a judgment becomes final and executory, all the issues between the parties are deemed resolved and laid to rest. All that remains is the execution of the decision which is a matter of right. Banaga v. Majaducon (G.R. No. 149051, June 30, 2006, 494 SCRA 153, 162-163), however, enumerates the instances where a writ of execution may be appealed: (1) the writ of execution varies the judgment; (2) there has been a change in the situation of the parties making execution inequitable or unjust; (3) execution is sought to be enforced against property exempt from execution; (4) it appears that the controversy has never been subject to the judgment of the court; (5) the terms of the judgment are not clear enough and there remains room for interpretation thereof; or (6) it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ was issued without authority. In these exceptional circumstances, considerations of justice and equity dictate that there be some mode available to the party aggrieved of elevating the question to a higher court. That mode of elevation may be either by appeal (writ of error or certiorari), or by a special civil action of certiorari, prohibition, or mandamus.

The instant case falls under one of the exceptions cited above. The fact that Danilo has left the property under dispute is a change in the situation of the parties that would make execution inequitable or unjust. Moreover, there are exceptions that have been previously considered by the Court as meriting a relaxation of the rules in order to serve substantial justice. These are:  (1) matters of life, liberty, honor or property; (2) the existence of special or compelling circumstances; (3) the merits of the case; (4) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (5) a lack of any showing that the review sought is merely frivolous and dilatory; and (6) the other party will not be unjustly prejudiced thereby.  We find that Danilo’s situation merits a relaxation of the rules since special circumstances are involved; to determine if his allegation were true would allow a final resolution of the case.

Applicable, too, is what Sec. 5, Rule 135 of the Rules of Court states as one of the powers of a court:

Section 5. Inherent powers of the courts. Every court shall have power: xxx (g) To amend and control its process and orders so as to make them conformable to law and justice. Thus, the Court ruled in Mejia v. Gabayan (G.R. No. 149765,  April 12, 2005, 455 SCRA 499, 512): xxx The inherent power of the court carries with it the right to determine every question of fact and law which may be involved in the execution. The court may stay or suspend the execution of its judgment if warranted by the higher interest of justice. It has the authority to cause a modification of the decision when it becomes imperative in the higher interest of justice or when supervening events warrant it. The court is also vested with inherent power to stay the enforcement of its decision based on antecedent facts which show fraud in its rendition or want of jurisdiction of the trial court apparent on the record.

The writ of execution sought to be implemented does not take into consideration the circumstances that merit a modification of judgment. Given that there is a pending issue regarding the execution of judgment, the RTC should have afforded the parties the opportunity to adduce evidence to determine the period within which Danilo should pay monthly rentals before issuing the writ of execution in the instant case.  Should Danilo be unable to substantiate his claim that he vacated the premises in April 1994, the period to pay monthly rentals should be until June 19, 2007, the date he informed the CA that he had already left the premises.

(Parel v. Heirs of Prudencio, G.R. No. 192217, March 2, 2011)

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Corporate officers not liable for illegal dismissal

In a dismissal from employment which the courts ruled to be illegal, the employee sought to hold the President of the company solidarily liable for his backwages and separation pay. Reiterating its decision in MAM Realty Development Corporation v. National Labor Relations Commission (314 Phil. 838 [1995]), the Supreme Court ruled that “obligations incurred by [corporate officers], acting as such corporate agents, are not theirs but the direct accountabilities of the corporation they represent.” As such, they should not be generally held jointly and solidarily liable with the corporation. The Court, however, cited circumstances when solidary liabilities may be imposed, as exceptions:

1. When directors and trustees or, in appropriate cases, the officers of a corporation –

(a) vote for or assent to [patently] unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;

(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons.

2. When the director or officer has consented to the issuance of watered stock or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.

3. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the corporation.

4. When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.

The general rule is grounded on the theory that a corporation has a legal personality separate and distinct from the persons comprising it. To warrant the piercing of the veil of corporate fiction, the officer’s bad faith or wrongdoing must be established clearly and convincingly as bad faith is never presumed.

(Harpoon Marine Services, Inc. v. Francisco, G.R. No. 167751, March 2, 2011)

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Land Bank may challenge DAR’s land valuation in court

Land Bank of the Philippines has the legal personality to challenge DAR’s valuation of land in court said the Supreme Court denied the petition of Davao Fruits Corporation. Citing its decisions in Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, G.R. No. 166461, 30 April 2010, 619 SCRA 609, and Heirs of Roque F. Tabuena v. Land Bank of the Philippines, G.R. No. 180557, 26 September 2008, 566 SCRA 557, 565-566, the Supreme Court ruled that LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of Republic Act (RA) No. 3844 and Section 64 of RA No. 6657. It is vested with the primary responsibility and authority in the valuation and compensation of covered landholdings to carry out the full implementation of the Agrarian Reform Program. It may agree with the DAR and the land owner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination.

(Davao Fruits Corporation v. Land Bank of the Philippines, G.R. Nos. 181566 and 181570, March 9, 2011)

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