NUCCIO SAVERIO AND NS INTERNATIONAL, INC. (NSI) v. ALFONSO G. PUYAT, G.R. No. 186433, November 27, 2013

Commercial Law; Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stocks of the corporation is not, by itself, a sufficient ground for disregarding the separate corporate personality. The Court ruled that mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stocks of the corporation is not, by itself, a sufficient ground for disregarding the separate corporate personality. Before the corporate fiction can be disregarded, alter-ego elements must first be proven. Following Hi-Cement Corporation v. Insular Bank of Asia and America, the following circumstances should be established: (1) the stockholders had control or complete domination of the corporation’s finances and that the latter had no separate existence with respect to the act complained of; (2) they used such control to commit a wrong or fraud; and (3) the control was the proximate cause of the loss or injury.

It was not shown that Saverio had control or domination over NSI’s finances. The mere fact that it was Saverio who, in behalf of NSI, signed the MOA regarding the loan contract with Puyat is not sufficient to prove that he exercised control over its finances. Nor do the absence of a board resolution authorizing Saverio to contract the loan and NSI’s failure to object to his acts prove the same thing.  

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ROLANDO E. CAWALING v. NAPOLEON M. MENESE ET AL., A.C. No. 9698, November 13, 2013

Labor law; Appeal. The rules are explicit that the filing of a bond for the perfection of an appeal by an employer is mandatory and jurisdictional. It is also imperative that in case of a surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court. The requirement that employers post a cash or surety bond to perfect their appeal is apparently intended to assure workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the former’s appeal.  If the bond is invalid due to the surety company’s expired accreditation, the purpose of filing of a bond would be defeated.

Labor law; The filing of a supersedeas bond by a surety who no longer has accreditation has no legal bearing. Section 6, Rule VI of the Rules of Procedure of the NLRC provides that “upon the verification by the Commission that the bond is irregular of genuine, the Commission shall cause the immediate dismissal of appeal.”

In the case at bar, at the time of filing of the supersedeas bond on behalf of Bacman, Intra Strata was no longer an accredited surety company as it itself admitted that it was valid only until 31 January 2012. The defense of good faith does not render valid an otherwise invalid bond. Consequently, without an approval of the Court, the bond defeats the purpose of the law to protect the litigants from spurious surety companies.

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RAY PETER O. VIVO v. PHILIPPINE AMUSEMENT AND GAMING CORP., G.R. No. 187854, November 12, 2013

Administrative law; Right to counsel. A right to counsel is not indispensable in an administrative proceeding “because administrative investigations are themselves inquiries conducted only to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service.” In any case, it was held in Gonzales v. Civil Service Commission (G.R. No. 156253) that “any defect in the observance of due process is cured by the filing of a motion for reconsideration, and that denial of due process cannot be successfully invoked by a party who was afforded opportunity to be heard.”

Petitioner cannot claim that he was denied due process and deprived of his right to counsel when he was assisted by a counsel during the initial stage of the administrative proceedings. Petitioner’s counsel filed in behalf of petitioner the letter-requests to be furnished documents, answer to memorandum of charges, the letter-request for re-setting of the conference, and even the motion to reconsider the decision of the Board of Directors to dismiss him from the service. The Court finds nothing legally objectionable to PAGCOR’s denial of petitioner’s request to re-schedule the conference because his counsel would not be able to attend.

Administrative law; Right to due process. In administrative due process, “[t]he essence of due process is to be heard, and, as applied to administrative proceedings this means a fair and reasonable opportunity to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of. Administrative due process cannot be fully equated with due process in its strict legal sense, for in the former a formal or trial-type hearing is not always necessary, and technical rules of procedure are not strictly applied.” CA correctly found that petitioner’s pleadings explicitly admitted his dismissal was effected through board resolutions. Assuming arguendo that there was no board resolution approving his dismissal, such absence did not render the dismissal illegal but rather unauthorized that can be subject of ratification.

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PEOPLE OF THE PHILIPPINES v. P/SUPT. ARTEMIO E. LAMASEN, ET AL., G.R. No. 198338, November 13, 2013

Criminal law; Recantation of testimony. The Court looks with disfavor upon retractions of testimonies previously given in court. It is settled that an affidavit of desistance made by a witness after conviction of the accused is not reliable, and deserves only scant attention. Only when there exists special circumstances in the case which when coupled with the retraction raise doubts as to the truth of the testimony or statement given, can retractions be considered and upheld.

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BANKERS ASSOCIATION OF THE PHILIPPINES and PERRY L. PE v. THE COMMISSION ON ELECTIONS, G.R. No. 206794, November 26, 2013

Remedial law; Exceptions to moot and academic principle. While the Court has recognized exceptions in applying the “moot and academic” principle, these exceptions relate only to situations where: (1) there is a grave violation of the Constitution; (2) the situation is of exceptional character and paramount public interest is involved; (3) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public; and (4) the case is capable of repetition yet evading review.

The Comelec’s Money Ban Resolution lacks the fourth requirement. We note that the Comelec did not make any parallel move on or about the May 13, 2013 elections to address the evil that its Money Ban Resolution sought to avoid and, in fact, it did not issue a similar resolution for the October 28, 2013 barangay elections. If the May 13, 2013 elections had come and gone without any need for the measures the assailed Resolution put in place and if no such measure was necessary in the elections that immediately followed (i.e., the October 28, 2013 barangay elections), we believe that it is now premature for the Court to assume that a similar Money Ban Resolution would be issued in the succeeding elections such that we now have to consider the legality of the Comelec measure that is presently assailed.

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BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG v. PHILIPPINE SHOE EXPO MARKETING CORPORATION, G.R. No. 194307, November 20, 2013

Intellectual property; Declaration of Actual Use (DAU). Failure to file the DAU within the requisite period results in the automatic cancellation of registration of a trademark. In turn, such failure is tantamount to the abandonment or withdrawal of any right or interest the registrant has over his trademark.

Trademark registration. Under Section 2 of RA 166, which is also the law governing the subject applications, in order to register a trademark, one must be the owner thereof and must have actually used the mark in commerce in the Philippines for two (2) months prior to the application for registration. Section 2-A of the same law sets out to define how one goes about acquiring ownership thereof. Under the same section, it is clear that actual use in commerce is also the test of ownership but the provision went further by saying that the mark must not have been so appropriated by another. Significantly, to be an owner, Section 2-A does not require that the actual use of a trademark must be within the Philippines. Thus, under RA 166, one may be an owner of a mark due to its actual use but may not yet have the right to register such ownership here due to the owner’s failure to use the same in the Philippines for two (2) months prior to registration.

Registration not a mode of acquiring ownership. It must be emphasized that registration of a trademark, by itself, is not a mode of acquiring ownership. If the applicant is not the owner of the trademark, he has no right to apply for its registration. Registration merely creates a prima facie presumption of the validity of the registration, of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof. Such presumption, just like the presumptive regularity in the performance of official functions, is rebuttable and must give way to evidence to the contrary.

It is not the application or registration of a trademark that vests ownership thereof, but it is the ownership of a trademark that confers the right to register the same. A trademark is an industrial property over which its owner is entitled to property rights which cannot be appropriated by unscrupulous entities that, in one way or another, happen to register such trademark ahead of its true and lawful owner. The presumption of ownership accorded to a registrant must then necessarily yield to superior evidence of actual and real ownership of a trademark.

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THE PROVINCE OF AKLAN v. JODY KING CONSTRUCTION AND DEVELOPMENT CORP., G.R. Nos. 197592 & 202623, November 27, 2013

Remedial law; Doctrine of primary jurisdiction. The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training and knowledge of the proper administrative bodies, relief must first be obtained in an administrative proceeding before a remedy is supplied by the courts even if the matter may well be within their proper jurisdiction. It applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice. The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.

Exceptions to the rule on primary jurisdiction. There are established exceptions to the doctrine of primary jurisdiction, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot; (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings. However, none of the foregoing circumstances is applicable in the present case. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. All the proceedings of the court in violation of the doctrine and all orders and decisions rendered thereby are null and void.

Administrative law; The Commission on Audit (COA) has primary jursidiction over money claims against the government. It is the COA and not the RTC which has primary jurisdiction to pass upon petitioner’s money claim against respondent local government unit. Such jurisdiction may not be waived by the parties’ failure to argue the issue nor active participation in the proceedings. Respondent’s collection suit being directed against a local government unit, such money claim should have been first brought to the COA. Hence, the RTC should have suspended the proceedings and refer the filing of the claim before the COA. Moreover, petitioner is not estopped from raising the issue of jurisdiction even after the denial of its notice of appeal and before the CA.

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