CD: Catholic Vicar Apostolic v. CA

CATHOLIC VICAR APOSTOLIC v. CA
G.R. No. L-80294-95 September 21, 1988
Gancayco, J.

Doctrine:
The bailees' failure to return the subject matter of commodatum to the bailor does not mean adverse possession on the part of the borrower. The bailee held in trust the property subject matter of commodatum.


Facts:
Catholic Vicar Apostolic of the Mountain Province (VICAR for brevity) filed an application for registration of title over Lots 1, 2, 3, and 4, said Lots being the sites of the Catholic Church building, convents, high school building, school gymnasium, school dormitories, social hall, stonewalls, etc. The Heirs of Juan Valdez and the Heirs of Egmidio Octaviano filed their Answer/Opposition on Lots Nos. 2 and 3, respectively, asserting ownership and title thereto since their predecessors' house was borrowed by petitioner Vicar after the church and the convent were destroyed.. After trial on the merits, the land registration court promulgated its Decision confirming the registrable title of VICAR to Lots 1, 2, 3, and 4.

The Heirs of Juan Valdez appealed the decision of the land registration court to the then Court of Appeals, The Court of Appeals reversed the decision. Thereupon, the VICAR filed with the Supreme Court a petition for review on certiorari of the decision of the Court of Appeals dismissing his application for registration of Lots 2 and 3.


Issue:
Whether or not the failure to return the subject matter of commodatum constitutes an adverse possession on the part of the owner


Held:
No. The bailees' failure to return the subject matter of commodatum to the bailor did not mean adverse possession on the part of the borrower. The bailee held in trust the property subject matter of commodatum.

Petitioner repudiated the trust by declaring the properties in its name for taxation purposes.

CD: Commissioner of Internal Revenue v. Mc.George Food Industries, Inc.

CIR v. MC.GEORGE FOOD INDUSTRIES, INC.
G.R. No. 174157 October 20, 2010
Carpio, J.

Doctrine:
Pursuant to the general rule on the prospective application of laws, the 1997 NIRC operates to govern the conduct of corporate taxpayers the moment it took effect on 1 January 1998.


Facts:
On 15 April 1998, respondent filed with the BIR its final adjustment income tax return for the calendar year ending 31 December 1997. The return indicated a net overpayment of P4,736,188. Exercising its option to either seek a refund of this amount or carry it over to the succeeding year as tax credit, respondent chose the latter, indicating in its 1997 final return that it wished the amount "to be applied as credit to next year."

On 15 April 1999, respondent filed its final adjustment return for the calendar year ending 31 December 1998, indicating a tax liability of P5,799,056. Instead of applying to this amount its unused tax credit carried over from 1997 (P4,736,188), respondent merely deducted from its tax liability the taxes withheld at source for 1998 and paid the balance of P5,581,877.

On 14 April 2000, respondent simultaneously filed with the BIR and the Court of Tax Appeals (CTA) a claim for refund of its overpayment in 1997 of P4,736,188. The CTA held that refund was proper because respondent complied with the requirements of timely filing of the claim and its substantiation.

Petitioner sought reconsideration, contending that respondent is precluded from seeking a refund for its overpayment in 1997 after respondent opted to carry-over and apply it to its future tax liability, following Section 76 of the 1997 NIRC. Petitioner claimed that Section 76 applies to respondent because by the time respondent filed its final adjustment return for 1997 on 15 April 1998, the 1997 NIRC was already in force, having taken effect on 1 January 1998.

The CTA denied reconsideration, holding that the 1997 NIRC only covers transactions done after 1 January 1998.

The Court of Appeals affirmed the CTA, ruling that the right to claim for refund or tax credit must be governed by the law in effect at the time the excess credits were earned. Thus, the pertinent law applicable to the case at bar is Section 69 of the old Tax Code.


Issue:
Whether or not the 1997 NIRC is the governing law


Held:
Yes. Section 76 of the 1997 NIRC controls.

Section 76 should be applied following the general rule on the prospective application of laws such that they operate to govern the conduct of corporate taxpayers the moment the 1997 NIRC took effect on 1 January 1998.

The lower courts grounded their contrary conclusion on the fact that respondent’s overpayment in 1997 was based on transactions occurring before 1 January 1998. This analysis suffers from the twin defects of missing the gist of the present controversy and misconceiving the nature and purpose of Section 76. None of respondent’s corporate transactions in 1997 is disputed here. Nor can it be argued that Section 76 determines the taxability of corporate transactions. To sustain the rulings below is to subscribe to the untenable proposition that, had Congress in the 1997 NIRC moved the deadline for the filing of final adjustment returns from 15 April to 15 March of each year, taxpayers filing returns after 15 March 1998 can excuse their tardiness by invoking the 1977 NIRC because the transactions subject of the returns took place before 1 January 1998. A keener appreciation of the nature and purpose of the varied provisions of the 1997 NIRC cautions against sanctioning this reasoning.

CD: Roa v. Heirs of Santiago Ebora

ROA v. HEIRS OF SANTIAGO EBORA
G.R. No. 161137 March 15, 2010
Corona, J.

Doctrine:
Any right acquired by one buyer over a disputed property cannot prevail over, but must yield to, any superior right possessed by another buyer. The spring cannot rise higher than its source.


Facts:
A parcel of land, which was continuously, openly and adversely possessed by Santiago Ebora, was mistakenly included by Chacon Enterprises in its application for original registration. As a result, litigation arose between the heirs of Ebora and Chacon Enterprises.

During the case’s pendency, the heirs of Ebora sold the land to their co-heir Josefa Ebora Pacardo (Josefa) and her husband Rosalio Pacardo. On the same day, the spouses Pacardo assigned the property to Digno Roa, married to petitioner Lydia Roa. The corresponding deeds of absolute sale and assignment were inscribed on original certificate of title (OCT) and a transfer certificate of title was issued in the name of Digno Roa.

The case was resolved against Chacon Enterprises and in favor of the heirs of Ebora.

Thereafter the heirs of Ebora again adjudicated the land among themselves, pro indiviso. That same day, a deed of confirmation of a prior conveyance by Josefa to respondent Samuel Sonnie Lim of a portion was likewise inscribed on TCT No. T-48097. The issuance of new TCTs in the name of Alejandro Ebora was likewise inscribed in the same. The lots were thereafter sold to various respondents which resulted in the issuance of new TCTs in the names of the respective vendees.

All these transactions occurred without petitioner’s knowledge and consent.

In view of the death of her husband, petitioner filed a petition for annulment and cancellation of TCT No. 48097 and its derivative titles. The RTC ruled against the petitioner. Hence, this petition for review on certiorari.


Issue:
Whether or not the petitioner has a superior right over the land as against the respondents


Held:
Yes. From the moment the disputed land was sold to the spouses Pacardo, the heirs of Ebora lost all their rights and interest over the property.

Thus, the heirs of Ebora had nothing to adjudicate among themselves. Neither did they have anything to transfer to the vendees or successors-in-interest. As such, the transferees of the heirs of Ebora acquired no better right than that of the transferors. The spring cannot rise higher than its source.

Whatever right a buyer, notwithstanding the fact that he is an innocent purchaser for value, may have acquired over the disputed property cannot prevail over, but must yield to, the superior right possessed by another buyer.

CD: Continental Steel v. Montaño

Continental Steel v. Montaño
G.R. No. 182836 October 13, 2009
Chico-Nazario, J.

Doctrines:
Life is not synonymous with civil personality. One need not acquire civil personality first before he/she could die. Even a child inside the womb already has life.

In case of doubt in the interpretation of any law or provision affecting labor, such should be interpreted in favor of labor.


Facts:
Hortillano, an employee of petitioner Continental Steel Manufacturing Corporation (Continental Steel) filed a claim for Paternity Leave, Bereavement Leave and Death and Accident Insurance for dependent, pursuant to the Collective Bargaining Agreement (CBA).

The claim was based on the death of Hortillano’s unborn child. Hortillano’s wife had a premature delivery while she was in the 38th week of pregnancy. The female fetus died during labor due to fetal Anoxia secondary to uteroplacental insufficiency.

Petitioner immediately granted Hortillano’s claim for paternity leave but denied his claims for bereavement leave and other death benefits.

It was maintained by Hortillano, through the Labor Union, that the provisions of the CBA did not specifically state that the dependent should have first been born alive or must have acquired juridical personality so that his/her subsequent death could be covered by the CBA death benefits.

Petitioner argued that the express provision of the CBA did not contemplate the death of an unborn child, a fetus, without legal personality. It claimed that there are two elements for the entitlement to the benefits, namely: (1) death and (2) status as legitimate dependent, none of which existed in Hortillano’s case. Continental Steel contended that only one with civil personality could die, relying on Articles 40, 41 and 42 of the Civil Code which provides:

Article 40. Birth determines personality; but the conceived child shall be considered born for all purposes that are favorable to it, provided it be born later with the conditions specified in the following article.

Article 41. For civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother’s womb. However, if the fetus had an
intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four hours after its complete delivery from the maternal womb.

Article 42. Civil personality is extinguished by death. The effect of death upon the rights and obligations of the deceased is determined by law, by contract and by will.

Hence according to the petitioner, the unborn child never died because it never acquired juridical personality. Proceeding from the same line of thought, Continental Steel reasoned that a fetus that was dead from the moment of delivery was not a person at all. Hence, the term dependent could not be applied to a fetus that never acquired juridical personality.

Labor arbiter Montaño argued that the fetus had the right to be supported by the parents from the very moment he/she was conceived. The fetus had to rely on another for support; he/she could not have existed or sustained himself/herself without the power or aid of someone else, specifically, his/her mother.

Petitioner appealed with the CA, who affirmed the Labor Arbiter’s resolution. Hence this petition.


Issues:
1. Whether or not only one with juridical personality can die
2. Whether or not a fetus can be considered as a dependent
3. Whether or not any ambiguity in CBA provisions shall be settled in favor of the employee


Held:
1. No. The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the legal definition of death is misplaced. Article 40 provides that a conceived child acquires personality only when it is born, and Article 41 defines when a child is considered born. Article 42 plainly states that civil personality is extinguished by death. The issue of civil personality is not relevant in this case.

The above provisions of the Civil Code do not provide at all a definition of death. Moreover, while the Civil Code expressly provides that civil personality may be extinguished by death, it does not explicitly state that only those who have acquired juridical personality could die.

Life is not synonymous with civil personality. One need not acquire civil personality first before he/she could die. Even a child inside the womb already has life.

No less than the Constitution recognizes the life of the unborn from conception, that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation thereof even prior to the child being delivered, qualifies as death.

2. Yes. Even an unborn child is a dependent of its parents. Hortillano’s child could not have reached 38-39 weeks of its gestational life without depending upon its mother, Hortillano’s wife, for sustenance. The CBA did not provide a qualification for the child dependent, such that the child must have been born or must have acquired civil personality. Without such qualification, then child shall be understood in its more general sense, which includes the unborn fetus in the mother’s womb.

3. Time and again, the Labor Code is specific in enunciating that in case of doubt in the interpretation of any law or provision affecting labor, such should be interpreted in favor of labor. In the same way, the CBA and CBA provisions should be interpreted in favor of labor. As decided by this Court, any doubt concerning the rights of labor should be resolved in its favor pursuant to the social justice policy. (Terminal Facilities and Services Corporation v. NLRC [199 SCRA 265 (1991)])

Bereavement leave and other death benefits are granted to an employee to give aid to, and if possible, lessen the grief of, the said employee and his family who suffered the loss of a loved one. It cannot be said that the parents’ grief and sense of loss arising from the death of their unborn child, who, in this case, had a gestational life of 38-39 weeks but died during delivery, is any less than that of parents whose child was born alive but died subsequently.

CD: Commissioner of Internal Revenue v. Eastern Telecommunications Philippines

Commissioner of Internal Revenue v. Eastern Telecommunications Philippines
G.R. No. 163835 July 7, 2010
Brion, J.

Doctrine:
Lapses in the literal observance of a rule of procedure may be overlooked when they have not prejudiced the adverse party and especially when they are more consistent with upholding settled principles in taxation.

The burden of strict compliance with statutory and administrative requirements by the person claiming for a tax refund cannot be offset by the non-observance of procedural technicalities by the government’s tax agents when the non-observance of the remedial measure addressing it does not in any manner prejudice the taxpayer’s due process rights.


Facts:
Eastern filed with the CIR a written application for refund or credit of unapplied input taxes it paid on the imported equipment purchased during 1995 and 1996 amounting to P22,013,134.00. To toll the running of the two-year prescriptive period under the same provision, Eastern filed an appeal with the CTA. The CTA found that Eastern has a valid claim for the refund/credit of the unapplied input taxes, declaring it entitled to a tax refund of P16,229,100.00.

The CIR filed a motion for reconsideration of the CTA’s decision. Subsequently, it filed a supplemental motion for reconsideration. The CTA denied the CIR’s motion for reconsideration. The CIR then elevated the case to the CA, who affirmed the CTA ruling and likewise denied the subsequent motion for reconsideration. Hence, the present petition.

The CIR posits that, applying Section 104(A) of the Tax Code on apportionment of tax credits, Eastern is entitled to a tax refund of only a portion of the amount claimed. Since the VAT returns clearly reflected income from exempt sales, the CIR asserts that this constitutes as an admission on Eastern’s part that it engaged in transactions not subject to VAT. Hence, the proportionate allocation of the tax credit to VAT and non-VAT transactions provided in Section 104(A) of the Tax Code should apply.

Eastern objects to the arguments raised in the petition, alleging that these have not been raised in the Answer filed by the CIR before the CTA and was only raised. In fact, the CIR only raised the applicability of Section 104(A) of the Tax Code in his supplemental motion for reconsideration of the CTA’s ruling. Eastern claims that for the CIR to raise such an issue now would constitute a violation of its right to due process; following settled rules of procedure and fair play, the CIR should not be allowed at the appeal level to change his theory of the case.

Eastern further argues that there is no evidence on record that would evidently show that respondent is also engaged in other transactions that are not subject to VAT.


Issue:
Whether or not the rule in Section 104(A) of the Tax Code on the apportionment of tax credits can be applied in appreciating Eastern’s claim for tax refund, considering that the matter was raised by the CIR only when he sought reconsideration of the CTA ruling


Held:
Yes. The question of the applicability of Section 104(A) of the Tax Code was already raised but the tax court did not rule on it. This failure should not be taken against the CIR. The mere declaration of exempt sales in the VAT returns, whether based on Section 103 of the Tax Code or some other special law, should have prompted for the application of Section 104 (A) of the Tax Code to Eastern’s claim.

The general rule is that appeals can only raise questions of law or fact that (a) were raised in the court below, and (b) are within the issues framed by the parties therein (People v. Echegaray, G.R. No. 117472). An issue which was neither averred in the pleadings nor raised during trial in the court below cannot be raised for the first time on appeal.

The rule against raising new issues on appeal is not without exceptions; it is a procedural rule that the Court may relax when compelling reasons so warrant or when justice requires it. What constitutes good and sufficient cause that would merit suspension of the rules is discretionary upon the courts (CIR v. Mirant Pagbilao Corporation, G.R. No. 159593). Another exception is when the question involves matters of public importance.

“Taxes are the lifeblood of the government.” For this reason, the right of taxation cannot easily be surrendered; statutes granting tax exemptions are considered as a derogation of the sovereign authority and are strictly construed against the person or entity claiming the exemption. Claims for tax refunds, when based on statutes granting tax exemption or tax refund, partake of the nature of an exemption; thus, the rule of strict interpretation against the taxpayer-claimant similarly applies (CIR v. Fortune Tobacco Corporation, G.R. Nos. 167274-75).

The taxpayer is charged with the heavy burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. This burden cannot be offset by the non-observance of procedural technicalities by the government’s tax agents when the non-observance of the remedial measure addressing it does not in any manner prejudice the taxpayer’s due process rights.

Lapses in the literal observance of a rule of procedure may be overlooked when they have not prejudiced the adverse party and especially when they are more consistent with upholding settled principles in taxation.

CD: Republic v. Philippine Resources Development Corporation

REPUBLIC v. PHILIPPINE RESOURCES DEVELOPMENT CORPORATION
G.R. No. L-10141 January 31, 1958
Padilla, J.

Doctrine:
Article 1458 provides that the purchaser may pay “a price certain in money or its equivalent,” which means that the price need not be in money.


Facts:
The Bureau of Prisons instituted a complaint against Macario Apostol for the latter’s failure to pay the unpaid balance for logs purchased. Apostol, who was then the president of the respondent corporation, delivered goods belonging to the corporation and without the knowledge or consent of the stockholders thereof, to the Bureau of Prisons in an attempt to settle his personal debts with the latter entity. The corporation demanded the Bureau of Prisons for the return of the goods. Upon the refusal of the Bureau, the corporation filed a motion to intervene.


Issue:
Whether or not “price” is limited only to be paid in money


Held:
No. Article 1458 provides that the purchaser may pay “a price certain in money or its equivalent,” which means that they meant of the price need not be in money. In this case, the materials have been assessed and evaluated and their price equivalent in terms of money have been determined and that said materials for whatever price they have been assigned were considered as tokens of payment.

CD: Leabres v. CA

LEABRES v. CA
G.R. No. L-41847 December 12, 1986
Paras, J.

Doctrine:
A receipt can neither be regarded as a contract of sale nor a promise to sell. In here, there is an absence of the essential requisites of a contract of sale.


Facts:
Plaintiff purchased a portion of a subdivision from the surviving husband of the deceased owner, evidenced by a receipt. The Philippine Trust Co relieved the surviving husband as administrator and advertised the sale of the subdivision. Since no adverse claim or interest over the subdivision or any portion thereof was ever presented by any person, the Philippine Trust Co. executed the Deed of Absolute Sale of the subdivision in favor of the Manotok Realty, Inc.. The deed was judicially approved and recorded immediately in the Register of Deeds which issued the corresponding Certificates of Title.


Issue:
Whether or not a receipt is a valid basis of a contract of sale


Held:
No. An examination of the receipt reveals that the same can neither be regarded as a contract of sale or a promise to sell. There was merely an acknowledgment of the sum of One Thousand Pesos (P1,000.00). The requisites of a valid Contract of Sale, namely 1) consent or meeting of the minds of the parties; 2) determinate subject matter; 3) price certain in money or its equivalent, are lacking in the said receipt.