G.R. No. L-21383 – Patrick O’Leary vs. Macondray & Co., Inc.
Date Decided: October 31, 1966
Ponente: Justice J.B.L. Reyes
Court: Supreme Court of the Philippines
Parties Involved:
● Petitioner: Patrick O’Leary – an American national and long-time employee of
Macondray & Co., Inc., working as Marine Superintendent.
● Respondent: Macondray & Co., Inc. – a Philippine shipping and trading company.
Facts:
● Patrick O’Leary had worked for Macondray & Co., Inc. for over 11 years in a
high-level managerial position.
● On October 4, 1961, he was summarily dismissed from service without any prior
formal notice or investigation.
● The company claimed the dismissal was due to loss of confidence, citing alleged
inefficiency, repeated absences, and unauthorized travels abroad.
● O’Leary refuted these allegations, asserting that his travels had prior company
approval, and that no prior complaints had been raised about his performance.
● He filed a case for illegal dismissal and damages, claiming his right to procedural due
process was violated.
Issues:
1. Was O’Leary’s dismissal justified based on loss of confidence?
2. Did Macondray & Co. observe due process in the termination?
Decisions of the Courts:
● Court of First Instance (CFI):
○ Ruled in favor of O’Leary.
○ Held that the dismissal was unjust and made without proper inquiry or notice.
○ Awarded damages and back wages to the petitioner.
● Court of Appeals:
○ Reversed the CFI decision.
○ Found that Macondray had just cause to terminate O’Leary based on
managerial trust issues.
○ Held that no damages were due, as employers had discretion in terminating
trusted managerial employees.
● Supreme Court:
○ Reversed the Court of Appeals and reinstated the CFI ruling.
○ Held that:
■ Allegations must be substantiated by clear and convincing evidence.
■ Even managerial employees are entitled to due process, including
notice and an opportunity to be heard.
■ No proper investigation or formal notice was given to O’Leary.
■ The alleged grounds for dismissal were not properly established.
○ Concluded that the dismissal was illegal and awarded O’Leary:
■ Back wages
■ Moral and exemplary damages
■ Attorney’s fees
Final Ruling:
● The Supreme Court ruled that O’Leary’s termination was without just cause and
without due process.
● Macondray & Co., Inc. was held liable for damages, reinstating the original CFI
decision.
G.R. No. 72405 – Pacmac, Inc. vs. Intermediate Appellate Court
Date Decided: May 29, 1987
Ponente: Justice Hugo E. Gutierrez, Jr.
Court: Supreme Court of the Philippines
Parties Involved:
● Petitioner: Pacmac, Inc. – a distributor company that had business dealings with
Vulcan Manufacturing.
● Respondents:
○ Intermediate Appellate Court (IAC)
○ Vulcan Industrial and Mining Corporation (formerly Vulcan Manufacturing Co.,
Inc.) – a manufacturer and supplier of industrial chemical products.
Facts:
● Since 1953, Pacmac, Inc. acted as the exclusive distributor of Vulcan's products
(especially sodium silicates and adhesives).
● In 1962, both parties entered into a formal written contract for an exclusive
distributorship, valid for two years.
● After the contract expired in 1964, they continued business without a new written
contract but maintained the same distributorship arrangement.
● On August 3, 1965, Vulcan unilaterally terminated the business relationship, citing
unpaid obligations by Pacmac.
● Pacmac sued Vulcan, claiming the existence of an implied exclusive distributorship
agreement, and that the sudden termination violated their agreed one-year prior
notice clause.
● Pacmac sought damages for breach of contract, including lost profits and moral
damages.
Issues:
1. Was there an implied continuation of the exclusive distributorship agreement after
1964?
2. Was Vulcan justified in unilaterally terminating the business relationship without
notice?
Decisions of the Courts:
● Court of First Instance (CFI):
○ Ruled in favor of Pacmac.
○ Held that despite the expiration of the 1962 written agreement, a new implied
contract existed based on continued dealings.
○ Found that Vulcan violated the one-year notice rule, which was part of the
original agreement and practice.
○ Awarded Pacmac:
■ P30,000 in compensatory damages
■ P20,000 in exemplary damages
■ P5,000 in attorney’s fees
● Intermediate Appellate Court (IAC):
○ Reversed the CFI ruling.
○ Held that the 1962 contract was limited in scope and time, and no new
binding agreement existed.
○ Applied the parol evidence rule, barring oral evidence to alter the terms of the
expired written contract.
○ Declared that Vulcan’s termination was valid and lawful.
● Supreme Court:
○ Reversed the IAC and reinstated the CFI decision.
○ Held that:
■ The parol evidence rule does not apply to agreements entered into
after the written contract had expired.
■ The parties’ continuous conduct and dealings created an implied
renewed distributorship contract.
■ Vulcan's unilateral termination without giving the agreed one-year
notice was a clear breach of this implied contract.
○ Affirmed the damages awarded by the CFI.
Final Ruling:
● The Supreme Court ruled that Pacmac, Inc. and Vulcan had an implied exclusive
distributorship agreement following the expiration of the written contract.
● Vulcan's unilateral termination without proper notice constituted breach of contract.
● The Court reinstated the CFI decision awarding damages to Pacmac.
G.R. No. 115117 – Integrated Packaging Corporation vs. Court of Appeals and
Fil-Anchor Paper Co., Inc.
Date Decided: June 8, 2000
Ponente: Justice Leonardo A. Quisumbing
Court: Supreme Court of the Philippines, Second Division
Parties Involved:
● Petitioner: Integrated Packaging Corporation (IPC) – a company engaged in printing
services.
● Respondents: Court of Appeals and Fil-Anchor Paper Co., Inc. (Fil-Anchor) – a
supplier of printing paper.
Facts:
● On May 5, 1978, IPC and Fil-Anchor entered into an order agreement wherein
Fil-Anchor agreed to deliver 3,450 reams of printing paper to IPC, with payments to
be made within 30 to 90 days from each delivery.
● IPC had a separate contract with Philippine Appliance Corporation (Philacor) to print
volumes of "Philacor Cultural Books."
● By July 30, 1979, Fil-Anchor had delivered only 1,097 reams. IPC requested
immediate delivery of the remaining balance, citing potential prejudice to its business.
● Between June 5, 1980, and July 23, 1981, Fil-Anchor delivered additional printing
paper worth ₱766,101.70.
● IPC made partial payments totaling ₱97,200.00, which were applied to previous
accounts.
● On August 14, 1981, Fil-Anchor filed a collection suit before the Regional Trial Court
(RTC) of Caloocan City for the unpaid amount of ₱766,101.70.
● IPC counterclaimed, alleging that Fil-Anchor failed to deliver the remaining teams as
agreed, causing IPC to breach its contract with Philacor and suffer damages.
Decisions of the Courts:
Regional Trial Court (RTC):
● Ordered IPC to pay Fil-Anchor ₱763,101.70 for the delivered printing paper.
● Granted IPC's counterclaim, awarding:
○ ₱790,324.30 as compensatory damages for unrealized profits.
○ ₱100,000.00 as moral damages.
○ ₱30,000.00 for attorney’s fees.
Court of Appeals (CA):
● Reversed the RTC's decision.
● Ordered IPC to pay Fil-Anchor ₱763,101.70 with legal interest from the date of filing
until fully paid.
● Deleted the awards for compensatory damages, moral damages, and attorney’s fees,
citing lack of factual and legal basis.
Supreme Court:
● Affirmed the CA's decision.
● Key Findings:
○ The agreement between IPC and Fil-Anchor was a contract of sale with
reciprocal obligations, meaning each party's obligation was dependent on the
other's performance.
○ Fil-Anchor's obligation to deliver was conditioned upon IPC's timely payment.
IPC failed to pay within the agreed period, justifying Fil-Anchor's suspension
of further deliveries.
○ Fil-Anchor was not liable for IPC's breach of contract with Philacor, as it was
not a party to that contract, and the principle of relativity of contracts applies.
○ The claims for unrealized profits were deemed speculative, and there was
insufficient evidence to support the awards for moral damages and attorney’s
fees.
Legal Principles:
● Reciprocal Obligations: In contracts where obligations are reciprocal, the
performance of one party is conditioned upon the performance of the other. Failure
by one party to perform justifies the other party's suspension of their obligation.
● Relativity of Contracts: Contracts bind only the parties who entered into them. Third
parties cannot be held liable or benefit from a contract unless it is expressly
stipulated (contract pour autrui).
Final Ruling:
● The Supreme Court held that Fil-Anchor did not violate the order agreement and was
justified in suspending deliveries due to IPC's failure to pay on time.
● Fil-Anchor was not liable for IPC's breach of contract with Philacor.
● The awards for compensatory damages, moral damages, and attorney’s fees were
deleted due to lack of factual and legal basis.
● IPC was ordered to pay Fil-Anchor ₱763,101.70 with legal interest from the date of
filing until fully paid.
G.R. No. 118972 – Home Development Mutual Fund vs. Court of Appeals and Dr. Cora
J. Virata (CONVIR) and Associates, Inc.
Date Decided: April 3, 1998
Ponente: Justice Jose A. R. Melo
Court: Supreme Court of the Philippines, Third Division
Parties Involved:
● Petitioners:
○ Home Development Mutual Fund (HDMF) – a government agency.
○ Marilou O. Adea-Proctor – Deputy Chief Executive Officer of HDMF.
● Respondents:
○ Court of Appeals
○ Dr. Cora J. Virata – President of CONVIR and Associates, Inc.
○ CONVIR and Associates, Inc. – a consultancy firm providing medical
services.
Facts:
● On January 1, 1985, HDMF and CONVIR entered into a Consultancy Agreement
wherein CONVIR would provide medical services to HDMF employees. The contract
was effective until December 31, 1985, with a stipulation that either party could
terminate the agreement by providing a 30-day written notice.
● On December 16, 1985, Dr. Virata wrote to HDMF, indicating that due to the absence
of a termination notice, she assumed the contract was renewed for another year.
● On December 23, 1985, HDMF responded, stating that the contract would terminate
on December 31, 1985, due to the appointment of a full-time physician. This notice
was received by CONVIR on January 9, 1986.
● CONVIR filed a complaint on January 15, 1986, alleging that HDMF failed to provide
the required 30-day notice, resulting in financial losses. They sought ₱500,000 in
unrealized income, ₱400,000 in exemplary damages, ₱100,000 in litigation
expenses, and attorney’s fees.
● HDMF contended that the contract naturally expired on December 31, 1985, and
thus, no termination notice was necessary.
Decisions of the Courts:
Regional Trial Court (RTC):
● Ruled in favor of CONVIR, ordering HDMF to pay:
○ ₱50,000 as compensatory damages.
○ ₱20,000 as attorney’s fees.
Court of Appeals (CA):
● Affirmed the RTC's decision but deleted the award for compensatory damages, citing
insufficient evidence to support the claim.
Supreme Court:
● Affirmed the CA's decision in full, emphasizing that:
○ The 30-day termination notice was an integral part of the contract, and
HDMF's failure to provide such notice constituted a breach.
○ The late delivery of the termination notice, especially during the holiday
season, was unreasonable and unfair to CONVIR.
○ HDMF's actions demonstrated bad faith, justifying the award of attorney’s
fees.
Legal Principles:
● Contractual Obligations: Contracts must be performed in good faith, and the terms
agreed upon by the parties must be strictly followed.
● Termination Notice: The requirement for advance notification in contract termination
is pivotal and should align with the agreement specifics for its validity.
● Mutuality of Contracts: Article 1308 of the New Civil Code underscores that contracts'
obligations and stipulations bind both parties, not permitting unilateral decisions
without the other's consent.
Final Ruling:
● The Supreme Court held that HDMF's failure to provide the required 30-day notice
before terminating the Consultancy Agreement was a breach of contract.
● HDMF was ordered to pay ₱20,000 as attorney’s fees to CONVIR.
G.R. No. 122166 – Cresente Y. Llorente, Jr. vs. Sandiganbayan and Leticia G. Fuertes
Date Decided: March 11, 1998
Ponente: Justice Artemio V. Panganiban
Court: Supreme Court, First Division
Parties Involved:
● Cresente Y. Llorente, Jr. – Petitioner; Municipal Mayor of Sindangan, Zamboanga del
Norte
● Sandiganbayan – Respondent; Anti-Graft Court
● Leticia G. Fuertes – Respondent; Assistant Municipal Treasurer of Sindangan
Facts:
● Between July 1990 and October 1991, Mayor Llorente refused to sign payrolls and
disbursement vouchers for the salaries and benefits of Leticia G. Fuertes.
● Fuertes filed a petition for mandamus with damages before the Regional Trial Court.
● A compromise agreement was reached, where Llorente agreed to sign all pending
payrolls and vouchers related to Fuertes’ unpaid salaries and emoluments.
● Despite receiving full payment through the compromise, Fuertes filed a criminal case
against Llorente for violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and
Corrupt Practices Act), claiming that she suffered undue injury from the delay.
Issue:
● Whether Mayor Llorente's refusal to sign payrolls and vouchers constituted evident
bad faith, manifest partiality, or gross inexcusable negligence resulting in undue
injury, in violation of Section 3(e) of R.A. No. 3019.
Ruling of the Sandiganbayan:
● The Sandiganbayan found Mayor Llorente guilty of violating Section 3(e) of R.A. No.
3019.
Ruling of the Supreme Court:
● The Supreme Court reversed the Sandiganbayan’s decision and acquitted Llorente.
● It held that for a violation of Section 3(e), the prosecution must establish:
○ That the accused is a public officer;
○ That the act was committed through manifest partiality, evident bad faith, or
gross inexcusable negligence;
○ That the act caused undue injury to any party or gave unwarranted benefits to
another.
● The Court found that:
○ No actual and quantifiable injury was proven.
○ Fuertes’ claim of financial difficulty was speculative and unsupported by
evidence.
○ All her monetary claims were eventually satisfied.
○ There was no proof of evident bad faith or gross negligence.
Disposition:
● The Supreme Court granted the petition.
● The decision of the Sandiganbayan was reversed.
● Mayor Llorente was acquitted of the charge.
Key Legal Doctrines:
● “Undue injury” under Section 3(e) of R.A. No. 3019 must be proven by clear and
convincing evidence.
● Delay in administrative acts, in the absence of bad faith or negligence, does not
constitute a criminal violation.
● Actual damage or injury must be demonstrated, not merely presumed.
G.R. No. 133107 – Rizal Commercial Banking Corporation vs. Court of Appeals and
Felipe Lustre
Date Decided: March 25, 1999
Ponente: Justice Santiago M. Kapunan
Court: Supreme Court, First Division
Parties Involved:
● Petitioner: Rizal Commercial Banking Corporation (RCBC)
● Respondents: Court of Appeals and Atty. Felipe Lustre
Facts:
● On March 10, 1991, Atty. Felipe Lustre purchased a Toyota Corolla from Toyota
Shaw, Inc., paying a down payment of ₱164,620.00.
● The remaining balance was to be paid in 24 monthly installments of ₱14,976.00
each, secured by a promissory note and a chattel mortgage containing an
acceleration clause.
● Lustre issued 24 postdated checks corresponding to the monthly installments.
● Toyota Shaw, Inc. assigned its rights under the chattel mortgage to RCBC on March
14, 1991.
● All checks were encashed by RCBC except for the one dated August 10, 1991, which
was unsigned. RCBC initially debited the amount but later re-credited it to Lustre's
account.
● Due to RCBC's procedures, the last two checks (dated February and March 1993)
were not presented for payment.
● On January 21, 1993, RCBC demanded full payment of the remaining balance,
invoking the acceleration clause due to the unsigned check.
● Lustre refused, leading RCBC to file an action for replevin and damages. Lustre
counterclaimed for damages.
Procedural History:
● Regional Trial Court (RTC):
○ Dismissed RCBC's complaint for lack of cause of action.
○ Ordered RCBC to accept payment of ₱44,938.00 (equivalent to three
installments) and release the chattel mortgage.
○ Awarded Lustre ₱200,000.00 in moral damages, ₱100,000.00 in exemplary
damages, and ₱50,000.00 in attorney's fees.
● Court of Appeals:
○ Affirmed the RTC's decision, emphasizing that the unsigned check did not
constitute a deliberate default and that RCBC acted in bad faith by not
notifying Lustre.
Issues:
1. Whether Lustre defaulted on his obligations, justifying RCBC's invocation of the
acceleration clause.
2. Whether RCBC acted in bad faith by demanding the entire balance and filing for
replevin without proper notice.
3. Whether the interpretation of contracts of adhesion should automatically be against
the drafter in the absence of ambiguity.
4. The appropriateness of the damage awards granted by the RTC.
Ruling of the Supreme Court:
● On Default and Acceleration Clause:
○ The Supreme Court found that Lustre's failure to sign the August 10, 1991
check was inadvertent and not a deliberate default.
○ RCBC's invocation of the acceleration clause was unjustified, especially since
they failed to notify Lustre and took no steps to rectify the situation.
● On Bad Faith:
○ RCBC acted in bad faith by not informing Lustre about the unsigned check
and immediately resorting to legal action without attempting simple remedies.
● On Contracts of Adhesion:
○ While contracts of adhesion are generally enforceable, any ambiguity should
be construed against the drafter.
○ RCBC's mechanical reliance on the contract's provisions without considering
fairness was unwarranted.
● On Damages:
○ The Supreme Court affirmed the award of damages but reduced the amounts:
■ Moral damages: from ₱200,000.00 to ₱100,000.00
■ Exemplary damages: from ₱100,000.00 to ₱75,000.00
■ Attorney's fees: from ₱50,000.00 to ₱30,000.00
Disposition:
● The Supreme Court affirmed the decision of the Court of Appeals with modifications
on the awarded damages.
Key Legal Doctrines:
● Contracts of Adhesion:
○ Such contracts are not inherently void but are construed strictly against the
drafter in cases of ambiguity.
● Good Faith in Contractual Obligations:
○ Parties must act in good faith and fairness in fulfilling contractual duties, as
emphasized by Article 19 of the Civil Code.
G.R. No. 141910 – FGU Insurance Corporation vs. G.P. Sarmiento Trucking
Corporation and Lambert M. Eroles
Date Decided: August 6, 2002
Ponente: Justice Jose C. Vitug
Court: Supreme Court, First Division
Parties Involved:
● FGU Insurance Corporation – Petitioner
● G.P. Sarmiento Trucking Corporation (GPS) – Respondent
● Lambert M. Eroles – Respondent, driver of the truck
Facts:
● On June 18, 1994, GPS undertook to deliver 30 units of Condura S.D. white
refrigerators from Concepcion Industries, Inc. in Alabang to Central Luzon
Appliances in Dagupan City.
● While traversing the McArthur Highway in Bamban, Tarlac, the truck, driven by
Eroles, collided with an unidentified vehicle and fell into a canal, damaging the cargo.
● FGU, the insurer of the shipment, paid ₱204,450.00 to Concepcion Industries and
sought reimbursement from GPS as subrogee.
● GPS refused to pay, claiming it was not a common carrier but an exclusive hauler for
Concepcion Industries, and that the accident was purely incidental.
● FGU filed a complaint for damages and breach of contract of carriage against GPS
and Eroles before the RTC, Makati City.
Procedural History:
● RTC Decision:
○ Dismissed the complaint via demurrer to evidence.
○ Ruled that GPS was not a common carrier, so the presumption of negligence
did not apply.
● Court of Appeals:
○ Affirmed the RTC’s ruling.
● Supreme Court:
○ Reversed the lower courts’ rulings as to GPS.
○ Affirmed the dismissal regarding Eroles.
Issues:
● Whether GPS is a common carrier and subject to the presumption of negligence
under Article 1735 of the Civil Code
● Whether GPS can be held liable under the contract of carriage despite not being a
common carrier
● Whether Eroles can be held personally liable for the damages
Ruling:
● On GPS’s Status:
○ GPS is not a common carrier because it exclusively served Concepcion
Industries.
○ The presumption of negligence does not apply.
● On Liability:
○ GPS admitted the existence of the contract and the loss of cargo.
○ Under the principle of culpa contractual, GPS is liable for failing to safely
deliver the goods.
○ GPS failed to prove that it exercised due diligence to prevent the loss.
● On Eroles’s Liability:
○ Eroles was not a party to the contract, so he cannot be held liable under culpa
contractual.
○ There was no sufficient evidence to establish personal negligence under
culpa aquiliana.
Disposition:
● GPS was ordered to pay FGU ₱204,450.00.
● The case against Eroles was dismissed for lack of proof of fault.
Key Legal Doctrines:
● A party rendering transport services solely for a specific client is not a common
carrier.
● Culpa contractual holds a party liable for breach of contractual obligations once the
contract and its breach are established.
● Culpa aquiliana requires proof of fault or negligence independent of contract.
● An insurer, after indemnifying the insured, is subrogated to the rights of the insured
against the party responsible for the loss.
G.R. Nos. 160867 & 160886 – Bonifacio Nakpil vs. Manila Towers Development
Corporation
Date Decided: September 20, 2006
Ponente: Justice Cancio C. Garcia
Court: Supreme Court, First Division
Parties Involved:
● Petitioner in G.R. No. 160867: Atty. Bonifacio Nakpil
● Petitioner in G.R. No. 160886: Manila Towers Development Corporation (MTDC)
Facts:
● A 14-storey building located at 777 Ongpin St., Sta. Cruz, Manila, was leased to
various tenants, including Atty. Bonifacio Nakpil, who used Room 204 as his law
office.
● The building was mortgaged to the Government Service Insurance System (GSIS).
Upon foreclosure, GSIS acquired the property and subsequently sold it to
Centertown Marketing Corporation, which assigned its rights to MTDC.
● Tenants formed the House International Building Tenants Association, Inc. (HIBTAI)
and protested the sale, asserting their priority right to purchase under P.D. No. 1517.
● In 1981, the City Engineer's office identified structural defects in the building and
requested MTDC to undertake repairs.
● MTDC's efforts to repair were hindered by legal actions initiated by HIBTAI, leading to
delays.
● On July 19, 1996, the City Engineer's office commenced demolition activities on the
building.
● Atty. Nakpil, who was abroad at the time, claimed that his office was destroyed and
personal belongings were lost during the demolition.
● He filed a complaint against MTDC for damages, alleging breach of contract and
failure to maintain the premises.
Procedural History:
● Regional Trial Court (RTC):
○ Dismissed Nakpil's complaint, ruling that MTDC was not liable as the
demolition was conducted by the City Engineer's office.
● Court of Appeals (CA):
○ Reversed the RTC's decision, holding MTDC liable for nominal damages of
₱50,000.00 for failing to maintain the premises.
● Supreme Court:
○ Consolidated the petitions from both parties and reviewed the CA's decision.
Issues:
1. Whether MTDC is liable for actual, moral, and exemplary damages to Atty. Nakpil.
2. Whether the award of ₱50,000.00 nominal damages to Atty. Nakpil has factual and
legal basis.
Ruling:
● On Liability for Damages:
○ MTDC was not found liable for actual, moral, or exemplary damages. The
demolition was executed by the City Engineer's office, and there was no
evidence linking MTDC directly to the destruction of Nakpil's office or loss of
his belongings.
● On Nominal Damages:
○ The Supreme Court found no factual and legal basis for the award of
₱50,000.00 nominal damages. MTDC's inability to maintain the premises was
due to legal impediments and actions by HIBTAI, which prevented necessary
repairs.
Disposition:
● The petition in G.R. No. 160867 filed by Atty. Nakpil was denied.
● The petition in G.R. No. 160886 filed by MTDC was granted.
● The decision of the Court of Appeals was reversed and set aside, and the RTC's
decision dismissing the complaint was affirmed.
Key Legal Doctrines:
● Obligations of the Lessor (Article 1654, Civil Code):
○ The lessor is obliged to maintain the lessee in peaceful and adequate
enjoyment of the lease for the duration of the contract.
● Breach of Contract:
○ A breach occurs when there is a failure without legal excuse to comply with
the terms of a contract.
● Liability for Acts of Third Parties:
○ A lessor is not liable for disturbances caused by third parties unless it is
shown that the lessor had a role in or failed to prevent such disturbances.
G.R. No. L-4816 – Francisco Gonzalez y Quiros vs. Carlos Palanca Tan-Guinlay
Date Decided: January 27, 1909
Ponente: Justice Willard
Court: Supreme Court of the Philippines
Parties Involved:
● Plaintiff-Appellant: Francisco Gonzalez y Quiros
● Defendant-Appellee: Carlos Palanca Tan-Guinlay
Facts:
● On April 18, 1906, the Court of First Instance of Manila rendered a judgment in favor
of Quiros against Tan-Guinlay for ₱7,981.80, plus interest from January 1, 1894.
● Quiros sought to apply a claimed debt of ₱7,741.17 owed by Germann & Co. to
Tan-Guinlay against the judgment amount.
● The evidence presented included the books of Germann & Co. from 1893, which
indicated that Tan-Guinlay owed them ₱7,358.83, contradicting Quiros's claim.
● Documents seized during a legal attachment against Tan-Guinlay, such as
promissory notes and bills of exchange, were also presented.
● Expert bookkeepers testified, but their opinions were based on secondary evidence
and were not deemed conclusive.
Procedural History:
● Court of First Instance: Dismissed Quiros's claim, ruling that the evidence did not
support the existence of the alleged debt.
● Supreme Court: Affirmed the lower court's decision, concluding that Quiros failed to
prove that Germann & Co. owed Tan-Guinlay the claimed amount.
Issues:
1. Whether the books of Germann & Co. from 1893 accurately reflected Tan-Guinlay's
indebtedness.
2. Whether the seized documents and expert testimonies sufficiently established the
existence of the alleged debt.
Ruling:
● The Supreme Court ruled that the evidence presented was insufficient to establish
that Germann & Co. owed Tan-Guinlay ₱7,741.17.
● The Court emphasized the importance of direct evidence and the limitations of expert
opinions based on secondary sources.
● The judgment of the Court of First Instance was affirmed, and the appeal was denied.
Disposition:
● The appeal was denied, and the decision of the Court of First Instance was
affirmed.
Key Legal Doctrines:
● Evidentiary Standards: The necessity of presenting direct and conclusive evidence
to support claims, especially in matters involving financial transactions.
● Limitations of Expert Testimony: Expert opinions based on secondary evidence
are not conclusive and must be corroborated by direct evidence.
● Burden of Proof: The party asserting a claim bears the burden of proving its validity
through competent and sufficient evidence.
G.R. No. L-39380 – Lualhati L. Lina vs. Hon. Amante P. Purisima, Philippine Veterans
Bank, and Esteban Cabanos
Date Decided: April 14, 1978
Ponente: Justice Barredo
Court: Supreme Court of the Philippines
Parties Involved:
● Petitioner: Lualhati L. Lina
● Respondents:
○ Hon. Amante P. Purisima, Presiding Judge of the Court of First Instance of
Manila
○ Philippine Veterans Bank
○ Esteban Cabanos, President of the Philippine Veterans Bank
Facts:
● Lualhati L. Lina, a bookkeeper at the Philippine Veterans Bank, was dismissed from
her position for being "notoriously undesirable" pursuant to Letters of Instruction Nos.
14 and 19-A.
● She filed a petition for mandamus with the Court of First Instance of Manila to restore
her to her position.
● The initial petition was dismissed due to lack of sufficient factual basis and necessary
documents.
● An amended petition was also dismissed, with the court citing General Order No. 3,
which removed the issue of the validity or legality of presidential decrees from the
jurisdiction of the judiciary.
● During the pendency of the case, the respondents issued Administrative Order No. 6,
reinstating Lina and offering back salaries and reimbursement of expenses.
Procedural History:
● Court of First Instance of Manila: Dismissed Lina's petitions for mandamus, citing
General Order No. 3.
● Supreme Court: Reversed the lower court's decision, ruling that General Order No.
3 was inoperative and that the case could be decided on its merits.
Issues:
1. Whether General Order No. 3, which removed the judiciary's power to review the
validity of presidential decrees, is valid.
2. Whether the Supreme Court can decide the case on its merits without remanding it to
the lower court.
Ruling:
● On General Order No. 3: The Supreme Court held that General Order No. 3 and its
amendments were inoperative, as they were inconsistent with the Constitution's grant
of judicial power to the courts.
● On Deciding the Case on the Merits: The Court decided the case on its merits,
finding that Lina was entitled to reinstatement and back salaries.
● On Moral and Exemplary Damages: The Court denied the claim for moral and
exemplary damages, noting that Lina had not reported for work despite the offer of
reinstatement.
Disposition:
● The petition for certiorari and mandamus was granted.
● The orders of dismissal issued by the Court of First Instance of Manila were
reversed.
● Lina was reinstated to her former position as Bookkeeper at the Philippine Veterans
Bank, effective upon her assumption of duty.
● She was entitled to back salaries from the date of her dismissal until her
reinstatement.
● The claim for moral and exemplary damages was denied.
Key Legal Doctrines:
● Judicial Review: The judiciary has the power to review the validity of executive
actions, and any executive order that removes this power is inconsistent with the
Constitution.
● Reinstatement and Back Salaries: An employee wrongfully dismissed is entitled to
reinstatement and back salaries, provided they comply with the offer of
reinstatement.
● Damages: The refusal to report for work after an offer of reinstatement negates the
entitlement to moral and exemplary damages.
G.R. No. L-49678 – Allied Investigation Bureau, Inc. vs. Hon. Blas F. Ople, et al.
Date Decided: June 29, 1979
Ponente: Justice Fernando
Court: Supreme Court of the Philippines
Parties Involved:
● Petitioner: Allied Investigation Bureau, Inc.
● Respondents:
○ Hon. Blas F. Ople, Minister of Labor
○ Hon. Amado G. Inciong, Deputy Minister of Labor
○ National Labor Relations Commission (NLRC)
○ Labor Arbiter Apolonio L. Reyes
○ Victoriano Velasquez
Facts:
● Victoriano Velasquez was employed by Allied Investigation Bureau, Inc. since May
1953.
● Upon reaching the age of sixty, Velasquez applied for retirement benefits under Rule
1, Book VI of the Implementing Rules and Regulations of the Labor Code.
● The company approved his retirement application in May 1976, offering him a
retirement check of ₱675.00, computed at one-half month salary for every year of
service from November 1, 1974, the effective date of the Labor Code.
● Velasquez disputed this computation, asserting that his retirement benefits should be
based on his entire duration of service since 1953.
● He filed a complaint with the Department of Labor for non-payment of retirement
benefits.
● The Labor Arbiter ruled in favor of Velasquez, awarding him ₱7,762.50, calculated at
one-half month salary for every year of service from 1953.
● The National Labor Relations Commission and the Minister of Labor affirmed the
decision.
● Allied Investigation Bureau, Inc. filed a petition for certiorari with the Supreme Court,
challenging the computation of retirement benefits.
Issues:
1. Whether the retirement benefits should be computed from the effective date of the
Labor Code (November 1, 1974) or from the start of Velasquez's employment in
1953.
2. Whether the application of the Labor Code to existing contracts impairs the obligation
of contracts.
Ruling:
● On Computation of Retirement Benefits: The Supreme Court upheld the decision
of the Labor Arbiter and the National Labor Relations Commission, ruling that
Velasquez's retirement benefits should be computed from the start of his employment
in 1953, not from the effective date of the Labor Code.
● On Impairment of Contracts: The Court held that the application of the Labor Code
to existing contracts does not impair the obligation of contracts, as the constitutional
guarantee of non-impairment is limited by the exercise of the police power of the
State in the interest of public health, safety, morals, and general welfare.
Disposition:
● The petition for certiorari was dismissed for lack of merit.
● The decision of the National Labor Relations Commission was affirmed.
Key Legal Doctrines:
● Social Justice and Protection to Labor: The Constitution mandates the promotion
of social justice and the protection of labor, which includes ensuring fair and just
retirement benefits for employees.
● Police Power Legislation: The application of police power legislation, such as the
Labor Code, to existing contracts is valid and does not impair the obligation of
contracts, as it is in the interest of public welfare.
● Retirement Benefits: Employees are entitled to retirement benefits based on the
total duration of their service, not limited to the period after the enactment of the
Labor Code.
