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Legal Ethics – Code of Judicial Conduct

Code of Judicial Conduct

Preamble

An honorable, competent and independent judiciary exists to administer justice and thus promote the unity of the country, the stability of government, and the well being of the people.

CANON 1- A judge should uphold the integrity and independence of the judiciary

Rule 1.01 – A judge should be the embodiment of competence, integrity, and independence.

Rule 1.02 – A judge should administer justice impartially and without delay.

Rule 1.03 – A judge should be vigilant against any attempt to subvert the independence of the judiciary and resist any pressure from whatever source.

Judges should avoid even the slightest infraction of the law.
Must be models of uprightness, fairness and honesty
Should not relax in his study of the law and court decisions.
Should not be swayed by public clamor or considerations of personal popularity
Must decide motions without delay.
Should also appear impartial.

CANON 2 – A judge should avoid impropriety and the appearance of impropriety in all activities.

Rule 2.01 – A judge should so behave at all times as to promote public confidence in the integrity and impartiality of the judiciary.

Rule 2.02 – A judge should not seek publicity for personal vainglory.

Rule 2.03 – A judge shall not allow family, social, or other relationships to influence judicial conduct or judgment. The prestige of judicial office shall not be used or lent to advance the private interests of others, nor convey or permit others to convey the impression that they are in a special position to influence the judge.

Rule 2.04 – A judge shall refrain from influencing in any manner the outcome of litigation or dispute pending before another court of administrative agency.

A judge must be beyond suspicion. He has the duty not only to render a just and impartial decision but also to render it in such a manner as to be free from any suspicion as to its fairness and impartiality, and also as to his integrity.
Every litigant is entitled to nothing short of the cold neutrality of an independent, wholly free, disinterested and impartial tribunal.
A judge must be temperate in his language and must not lose his cool.
A judge is prohibited from making public statements in the media regarding a pending case so as not to arouse public opinion for or against a party (violates the Principle of Subjudice)
Judges must not use or permit the use of any undignified/self-laudatory statement regarding their qualifications or legal services.
A judge must not allow anyone to ride on his prestige. He should not create the impression that someone or some people are so close to him to enjoy his favor.

CANON 3 - A judge should perform official duties honestly, and with impartiality and diligence.

ADJUDICATIVE RESPONSIBILITIES

Rule 3.01 – A judge shall be faithful to the law and maintain professional competence.

Judge should be conversant with the law and its amendments.

Rule 3.02 – In every case, a judge shall endeavor diligently to ascertain the facts and the applicable law unswayed by partisan interest, public opinion or fear of criticism.

Finding of facts must be based not on the personal knowledge of the judge but upon the evidence presented.
If the personal view of the judge contradicts the applicable doctrine promulgated by the Supreme Court, nonetheless, he should decide the case in accordance with that doctrine and not in accordance with his personal views. He is however not prohibited from stating his own opinion on the matter if he wants to invite constructive attention thereto.

Rule 3.03 – A judge shall maintain order and proper decorum in the courts.

Rule 3.04 – A judge should be patient, attentive, and courteous to lawyers, especially the inexperienced, to litigants, witnesses, and others appearing before the court. A judge should avoid unconsciously falling into the attitude of mind that the litigants are made for the courts, instead of the courts for the litigants.

Conduct of trial must not be attended with fanfare and publicity; not permit pictures or broadcasting.
Must use temperate language; should not make insulting remarks.

Rule 3.05 – A judge shall dispose of the court’s business promptly and decide cases within the required periods.

Rule 3.06 – While a judge may, to promote justice, prevent waste of time or clear up some obscurity, properly intervene in the presentation of evidence during the trial, it should always be borne in mind that undue interference may prevent the proper presentation of the cause of the ascertainment of the truth.

Rule 3.07 – A judge should abstain from making public comments on any pending or impending case and should require similar restraint on the part of court personnel.

Judge should take notes and rely on transcripts.
Judge is not excused if stenographer is overloaded. He is excused for delay on grounds of multifarious motions; appellate court enjoins judge from further proceeding; heavy caseload.

ADMINISTRATIVE RESPONSIBILITIES

Rule 3.08 – A judge should diligently discharge administrative responsibilities, maintain professional competence in court managements, and facilitate the performance of the administrative functions of other judges and court personnel.

Rule 3.09 – A judge should organize and supervise the court personnel to ensure the prompt and efficient dispatch of business, and require at all times the observance of high standards of public service and fidelity.

Rule 3.10 – A judge should take or inititate appropriate disciplinary measures against lawyers or court personnel for unprofessional conduct of which the judge may have become aware.

Rule 3.11 – A judge should appoint commissioners, receivers, trustees, guardians, administrators and others strictly on the basis of merit and qualifications, avoiding nepotism, and favoritism. Unless otherwise allowed by law, the same criteria should be observed in recommending appointment of court personnel. Where the payment of compensation is allowed, it should be reasonable and commensurate with the fair value of services rendered.

Ascertain that the records of all cases are properly kept and managed.
Maintain a checklist on the cases submitted for decision with a view to know exactly the specific deadlines for the resolution/decision of the said cases.
Loss of records: gross negligence
Should be a good manager.
May not summarily suspend a lawyer for indirect contempt.
Judge has the power to appoint, but the power to dismiss court employees is vested in the Supreme Court.
If knowingly nominate or appoint to any public office any person lacking the legal qualification therefor, shall be guilty of unlawful appointment punishable with imprisonment and fine (Art 244, RPC).

DISQUALIFICATIONS

Rule 3.12 – A judge should take no part in proceeding where the judge’s impartiality might reasonably be questioned. These cases include, among others, proceedings where;

the judge has personal knowledge of disputed evidentiary facts concerning the proceeding;
the judge served as executor, administrator, guardian, trustee or lawyer in the case or matters in controversy, or a former associate of the judge served as counsel during their association, or the judge or lawyer was a material witness therein;
the judge’s ruling in a lower court is subject of review
the judge is related by consanguinity or affinity to a party litigant within the 6^thdegree or to counsel within the 4^thdegree;
the judge knows that the judge’s spouse or child has a financial interest, as heir, legatee, creditor, fiduciary, or otherwise, in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding.

In every instance the judge shall indicate the legal reason for inhibition.

Petition to disqualify judge must be filed before rendition of judgment by the judge; can’t be raised first time on appeal.
If a judge denies petition for disqualification, the ultimate test: is whether or not the complaint was deprived of a fair and impartial trial. Remedy: seek new trial.

REMITTAL OF DISQUALIFICATION

Rule 3.13 – A judge disqualified by the terms of Rule 3.12 may, instead of withdrawing from the proceeding, disclose on the record the basis of disqualification. If, based on such disclosure, the parties and lawyers independently of the judge’s participation, all agree in writing that the reason for the inhibition is immaterial or insubstantial, the judge may then participate in the proceeding. The agreement, signed by all parties and lawyers, shall be incorporated in the record of the proceeding.

CANON 4 – A judge may, with due regard to official duties, engage in activities to improve the law, the legal system and the administration of justice.

Rule 4.01 – A judge may, to the extent that the following activities do not impair the performance of judicial duties or case doubt on the judge’s impartiality:

speak, write, lecture, teach or participate in activities concerning the law, the legal system and the administration of justice;
appear at a public hearing before a legislative or executive body on matters concerning the law, the legal system or the administration of justice and otherwise consult with them on matters concerning the administration of justice;
serve on any organization devoted to the improvement of the law, the legal system or the administration of justice.

Decision to engage in these activities depends upon the sound judgement of the judge.
If has not enough time to spare (such as when caseload is too heavy) prudence dictates, he must concentrate on his judicial duties.
If a judge has time to spare, the best attitude to take is to participate in activities which are closely related to the performance of his duties and which do not consume much of his time and energy.

CANON 5 – A judge should regulate extra-judicial activities to minimize the risk of conflict with judicial activities.

VOCATIONAL, CIVIC AND CHARITABLE ACTIVITIES

Rule 5.01 – A judge may engage in the following activities provided that they do not interfere with the performance of judicial duties or detract from the dignity of the courts:

write, lecture, teach and speak on non-legal subjects;
engage in the arts, sports, and other special recreational activities;
participate in civic and charitable activities;
serve as an officer, director, trustee, or non-legal advisor of a non-profit or non-political, educational, religious, charitable, fraternal, or civic organization.

If they opt to engage in such activities, they must learn how to manage their time in such manner that their judicial responsibilities do not falter and suffer.

FINANCIAL ACTIVITIES

Rule 5.02 – A judge shall refrain from financial and business dealings that tends to reflect adversely on the court’s impartiality, interfere with the proper performance of judicial activities, or increase involvements with lawyers or persons likely to come before the court. A judge should so manage investments and other financial interests as to minimize the number of cases giving grounds for disqualification.

Rule 5.03 – Subject to the provisions of the proceeding rule, a judge may hold and manage investments but should not serve as an officer, director, manager, advisor, or employee of any business except as director of a family business of the judge.

Rule 5.04 – A judge or any, immediate member of the family, shall not accept a gift, bequest, favor or loan from anyone except as may be allowed by law.

Rule 5.05 – No information acquired in a judicial capacity shall be used or disclosed by a judge in any financial dealing or for any other purpose not related to judicial activities.

Prohibitions under the Revised Penal Code:

Art 215. Prohibited Transaction. The penalty of prision correccional in its minimum period or a fine ranging from P200 to P1000 or both, shall be imposed upon any appointive public officer who, during his incumbency, shall directly or indirectly become interested in any transaction of exchange or speculation within the territory subject to his jurisdiction.

Art 216. Possession of prohibited interest by a public officer. The penalty of arresto mayorin its medium period to prision correccional in its minimum period, or a fine ranging from P200 to P1000, or both, shall be imposed upon a public officer who directly and indirectly, shall become interested in any contract or business which it is his official duty to intervene.

Sec 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

XXX

(h) Directly or indirectly having financial or pecuniary interest in any business, or contract or transaction in connection with which here intervenes or takes part in his official capacity or in which he is prohibited by the Constitution or by any law from having any interest, (Sec. 3(h), RA 3019)

General Rule: Avoid taking or receiving loans from litigants.
Exception(AGCPA): Unsolicited gifts or presents of small value offered or given as a mere ordinary token of gratitude or friendship according to local custom or usage.

FIDUCIARY ACTIVITIES

Rule 5.06 – A judge should not serve as the execution administrator, trustee, guardian, or other fiduciary, except for the estate, trust, or person of a member of the immediate family and then only if such service will not interfere with the proper performance of judicial duties. “member of immediate family” shall be limited to the spouse and relatives within the second degree of consanguinity. As a family fiduciary, a judge shall not:

serve in proceedings that might come before the court of said judge; or
act as such contrary to Rule 5.02 to 5.05

PRACTICE OF LAW AND OTHER PROFESSION

Rule 5.07 – A judge shall not engage in the private practice of law. Unless prohibited by the Constitution or law, a judge may engage in the practice of any other profession provided that such practice will not conflict or tend to conflict with judicial functions.

Includes preparation of pleadings or papers in anticipation of litigation, and giving of legal advice to clients or persons needing the same.
Not engage in notarial work. Exception: “Notaries public ex-oficio” – may engage only in notarization of documents connected with the exercise of their official functions. Provided, all notarial fees on account of the government and certification attesting to lack of any lawyer or Notary Public.
Sworn statement of assets and liabilities including statement of amounts and services of income, the amount of personal and family expenses and the amount of income tax is paid for the next preceding calendar year.

FINANCIAL DISCLOSURE

Rule 5.08 – A judge shall make full financial disclosure as required by law.

EXTRA-JUDICIAL APPOINTMENTS

Rule 5.09 – A judge shall not accept appointment or designation to any agency performing quasi-judicial or administrative functions.

POLITICAL ACTIVITIES

Rule 5.10 – A judge is entitled to entertain personal views on political questions. But to avoid suspicion of political partisanship, a judge shall not make political speeches, contribute to party funds, publicly endorse candidates for political office or participate in other partisan political activities.

COMPLIANCE WITH THE CODE OF JUDICIAL CONDUCT

All judges shall strictly comply with this code

DATE OF EFFECTIVITY

This code, promulgated on 5 September 1989, shall take effect on 20 October 1989.

An administrative case against a judge is not necessarily dismissed by the withdrawal by or desistance of the complainant.
Retirement, resignation or promotion of a judge does not necessarily render moot and academic all the cases against him.
Civil Liabilities Re Official Functions:

obstructs, defeats, violates or in any manner impedes or impairs the civil rights.
Willful or negligent rendition of a decision which causes damages to another
For damages: rendering/neglecting to decide a case causing loss to a party.

Civil Code Disabilities:

Rule: Can’t purchase properties subject of litigation is his court.

Exception: Does not apply where the subject property was not acquired from any of the parties to the case, nor will it apply when the litigation is already finished.

But… while in a technical sense, the judge may not have acquired the property in litigation in a case before him, nevertheless, it is improper for him to have done so under the canons of judicial ethics.

Donations made to a judge by reason of his office are void.
Taking advantage of his position to boost his candidacy amounts to gross misconduct.
Cannot serve as officers or advisers of political groups.

Criminal Liabilities of Judges

Malfeasance under the RPC:

Knowingly Rendering Unjust Judgment (Art. 204, RPC)

The elements are:

that the officer is a judge;
that he renders judgment in a case submitted to him for decision;
that the judgment is unjust;
the judge knows that his judgment is unjust.
Judgment Rendered Through Negligence (Art. 205, RPC)

The elements are:

that the offender is a judge;
that he renders judgment in a case submitted to him for decision
that the judgment is manifestly unjust;
that is due to his inexcusable negligence or ignorance.

Notaries Public

Powers and Duties of a Notary Public

Section 241 of the Revised Administrative Act enumerates the General Powers of a Notary Public:

To administer all oaths and affirmations provided for by law:
1. in all matters incident to his notarial office;
2. in the execution of:
  1. affidavits
  2. depositions
  3. other documents requiring an oath
3. To receive proof or acknowledgment of all writings relating to commerce, such as
  1. ships, vessels or boats:
    1. Bills of Exchange
    2. Bottomries
    3. Mortgages
    4. Hypothecations
    5. charter parties or affreightments
    6. letters of attorney
    7. land/buildings or interest therein:
      1. deeds
      2. mortgages
      3. transfers and assignments
      4. other writings as are commonly provided or acknowledged before notaries.

3. To act as magistrate in the writing of affidavits or depositions

4. To make declarations and certify the truth thereof under his seal of office, concerning all matters done by him in virtue of his office.

The law imposes on the notary public two kinds of duties:

execution of formalities required by law; and
verification of the capacity and identity of the parties as well as the legality of the act executed.

Extent of Jurisdiction of a Notary Public:

Under the Notarial Law, the jurisdiction of a notary public in general, used to be CO-EXTENSIVE with the province for which he was commissioned; and for the notary public in the City of Manila, the jurisdiction is CO-EXTENSIVE with said city. Circular 8 of 1985 however, clarified further that the notary public may be commissioned for the same term only by one court within the Metro Manila region.

Q: Must a Notary Public always be a LAWYER?

A: General Rule: Only those admitted to the practice of law are qualified to be notaries public.

Exception: When there are no persons with the necessary qualifications OR where there are qualified persons but refuse appointment. In which case, the following persons may be appointed as notaries:

those who have passed the studies of law in a reputable university
a clerk or deputy clerk of court for a period of not less than two years

Effects of NOTARIZATION

The notary, in effect, proclaims to the world:
1. that all the parties therein personally appeared before him
2. that they are personally known to him
3. that they are the same persons who executed the instrument
4. that he inquired into the voluntariness of the execution of the instrument; and
5. that they acknowledged personally before him that they voluntarily and freely executed the same
6. Converts a private document into a public one and renders it admissible in court without further proof of its authenticity. (Joson vs. Baltazar)
7. Documents enjoy a presumption of regularity. It constitutes prima facie evidence of the facts which give rise to their execution and of the date of said execution, but not of the truthfulness of the statements. The reason for the former presumption is that the law assumes that the act which the officer witnesses and certified to or the date written by him are not shown to be false since notaries are public officers.

Legal Ethics – Special Disabilities of Lawyers and Judicial Ethics

Special Disabilities of Lawyers

The following persons are prohibited from acquiring property under litigation by reason of the relation of trust or their peculiar control either directly or indirectly and even at a public or judicial auction:

guardians;
agents
administrators
public officers and employees
judicial officers and employees
prosecuting attorneys and lawyers (Art 1491, NCC)
those specially disqualified by law (Rubias vs. Batilles, 31 SCRA 120)

Elements of Article 1491 (Civil Code; Laig vs. CA, 82 SCRA 294)

there must be an attorney-client relationship
the property or interest of the client must be in litigation
the attorney takes part as counsel in the case
the attorney by himself or through another purchases such property or interest during the pendency of the litigation.

General Rule: A lawyer may not purchase, even at a public or judicial auction, in person or through the mediation of another, any property or interest involved in any litigation in which he may take part by virtue of his profession. This prohibition is entirely independent of fraud and such need not be alleged or proven.

Effects:

malpractice on the part of the lawyer and may be disciplined for misconduct
transaction is null and void

Exceptions:

property is acquired by lawyer through a contingent fee arrangement
any of the 4 elements of Art. 1491 is missing

Judicial Ethics

Sources of Judicial Ethics:

Code of Judicial Conduct
Constitution (Art VIII, Art IX and Art III)
New Civil Code (Articles 9, 20, 27, 32, 35, 739, 1491, 2005, 2035, 2046)
Revised Rules of Court (Rules 71, 135, 137, 139B, 140)
Revised Penal Code (Articles 204, 205, 206, 207)
Anti-Graft and Corrupt Practices Act (RA 3019)
Canons of Judicial Ethics (Adm. Order No. 162)
Code of Professional Responsibility
Judiciary Act of 1948 (RA 296)

10. Judiciary Reorganization Act of 1930 (BP129)

11. Supreme Court Decisions

12. Foreign Decisions

13. Opinions of authorities

14. Other Statutes

15. SC Circulars

Court –a board or other tribunal which decides a litigation or contest (Hidalgo v. Manglapus, 64 OG 3189)
Judge –a public officer who, by virtue of his office, is clothed with judicial authority, a public officer lawfully appointed to decide litigated questions in accordance with law.
De Jure Judge –one who is exercising the office of judge as a matter of right; and officer of a court who has been duly and legally appointed, qualified and whose term has not expired.
De Facto Judge –an officer who is not fully vested with all the powers and duties conceded to judges, but is exercising the office of a judge under some color of right.
Qualification of Supreme Court Members:

Natural born citizen of the Philippines;
At least 40 years of age;
Must have been at least for 15 years, a judge of a lower court or engaged in the practice of law (Sec 7(2), Art. VIII, 1987 Constitution).

Legal Ethics – Liabilities of Lawyers

Liabilities of Lawyers

Civil Liability

Client is prejudiced by lawyer’s negligence or misconduct
Breach of fiduciary obligation
Civil liability to third persons
Libelous words in pleadings; violation of communication privilege
Liability for costs of suit (treble costs) – when lawyer is made liable for insisting on client’s patently unmeritorious case or interposing appeal merely to delay litigation

Criminal Liability

Prejudicing client through malicious breach of professional duty
Revealing client’s secrets
Representing adverse interests
Introducing false evidence
Misappropriating client’s funds (estafa)

Contempt of Court

Kinds of Contempt:
1. Direct – consists of misbehavior in the presence of or so near a court or judge as to interrupt or obstruct the proceedings before the court or the administration of justice; punished summarily.
2. Indirect – one committed away from the court involving disobedience of or resistance to a lawful writ, process, order, judgment or command of the court, or tending to belittle, degrade, obstruct, interrupt or embarrass the court.
3. Civil- failure to do something ordered by the court which is for the benefit of a party.
4. Criminal – any conduct directed against the authority or dignity of the court.

b. Acts Constituting Contempt:

Misbehavior
Disobedience
Publication concerning pending litigation
Publication tending to degrade the court; disrespectful language in pleadings
Misleading the court or obstructing justice
Unauthorized practice of law
Belligerent attitude
Unlawful retention of client’s funds

Administrative Liabilities of lawyers

Main Objectives of Disbarment and Suspension:

to compel the attorney to deal fairly and honestly with his clients;
to remove from the profession a person whose misconduct has proved him unfit to be entrusted with the duties and responsibilities belonging to the office of an attorney;
to punish the lawyer;
to set an example or a warning for the other members of the bar;
to safeguard the administration of justice from incompetent and dishonest lawyers;
to protect the public

Characteristics of Disbarment Proceedings:

Neither a civil nor criminal proceedings;
Double jeopardy cannot be availed of in a disbarment proceeding;
It can be initiated motu propioby the SC or IBP. It can be initiated without a complaint;
It is imprescriptible;
Conducted confidentially;
It can proceed regardless of the interest of the lack thereof on the part of the complainant;
It constitutes due process.

Grounds for Disbarment or Suspension:

deceit;
malpractice or other gross misconduct in office;
grossly immoral conduct;
conviction of a crime involving moral turpitude;
violation of oath of office;
willful disobedience of any lawful order of a superior court;
corrupt or willful appearance as attorney for a party to case without authority to do so(Sec. 27, Rule 138, RRC)

Procedure for Disbarment

Institution either by:
1. the Supreme Court, motu proprio, or
2. the IBP, motu proprio, or
3. upon verified complaint by any person
Six copies of the verified complaint shall be filed with the Secretary of the IBP or Secretary of any of its chapter and shall be forwarded to the IBP Board of Governors.
Investigation by the National Grievance Investigators.
Submission of investigative report to the IBP Board of Governors.
Board of Governors decides within 30 days.
Investigation by the Solicitor-General
SC renders final decision for disbarment/suspension/dismissal.

Quantum of Proof Required: CLEAR, CONVINCING & SATISFACTORY evidence.

Burden of Proof: Rests on the COMPLAINANT, the one who instituted the suit

Officers authorized to investigate Disbarment cases:

Supreme Court
IBP through its Commission on Bar Discipline or authorized investigator
Office of the Solicitor General

Mitigating Circumstances in Disbarment:

Good faith in the acquisition of a property of the client subject of litigation (In re: Ruste, 70 Phil. 243)
Inexperience of the lawyer (Munoz v. People, 53 SCRA 190)
Age (Lantos v. Gan, 196 SCRA 16)
Apology (Munoz v. People, 53 SCRA 190)
Lack of Intention to slight or offend the Court (Rhum of the Philippines, Inc. v. Ferrer, 20 SCRA 441).

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Legal Ethics Chapter IV – The Lawyer and the Client

Chapter IV

The Lawyer and the Client

CANON 14 – A Lawyer shall not refuse his services to the needy.

Rule 14.01 – A lawyer shall not decline to represent a person solely on account of the latter’s race, sex, creed or status of life, or because of his own opinion regarding the guilt of said person.

Rule 14.02 – A lawyer shall not decline, except for serious and sufficient cause, an appointment as counsel de oficio or as amicus curae or a request from the Integrated Bar of the Philippines or any of its chapters for rendition of free legal aid.

Rule 14.03 – A lawyer may refuse to accept representation of a client if:

He is not in position to carry out the work effectively and competently.
He labors under conflict of interest between him and the prospective client or between a present client and the prospective client.

Rule 14.04 – A lawyer who accepts the cause of a person unable to pay his professional fees shall observe the same standard of conduct governing his relations with paying clients.

Duties to Client:

owe utmost learning and ability
maintain inviolate the confidence of the client
disclose all circumstances/interest regarding the controversy
undivided loyalty
not reject cause of defenseless and oppressed
candor, fairness and loyalty
hold in trust money or property
respond with zeal to the cause of the client

Appointment ofAmicus Curae

by application to the judge
the judge on his own initiative may invite the lawyer
no right to interfere with or control the condition of the record, no control over the suit

Cannot refuse on the ground of insufficient of compensation or lack of it

CANON 15 – A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his client.

Rule 15.01 – A lawyer in conferring with a prospective client, shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so, shall forthwith inform the prospective client.

Rule 15.02 – A lawyer shall be bound by the rule on privilege communication in respect of matters disclosed to him by a prospective client.

Rule on Revealing Client’s Identity

General Rule: A lawyer may not invoke privilege communication to refuse revealing a client’s identity. (Regala vs. Sandiganbayan, 262 SCRA 122, September 20, 1996)

Exceptions:

When by divulging such identity, it would implicate the client to that same controversy for which the lawyer’s services were required.
It would open client to civil liability
The disclosure of such identity will provide for the only link in order to convict the accused, otherwise, the government has no case.

Requisites of Privileged Communication:

-client relationship (or a kind of consultancy relationship with a prospective client
Communication made by client to lawyer in the course of lawyer’s professional employment
Communication is intended to be confidential (see Rule 130, Sec. 21(b), Rules of Court)

When communication is not privileged:

after pleading has been filed
communication intended by the client to be sent to a third person through his counsel (it loses its confidential character as soon as it reaches the hands of third person)

Even if the communication is unprivileged, the rule of ethics prohibits him from voluntarily revealing or using to his benefit or to that of a third person, to the disadvantage of the client, the said communication unless the client consents thereto.
This is applicable to students under the Student Practice Law Program

Rule 15.03 – A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

Rule on Conflicting Interest

It is generally the rule based on sound public policy that an attorney cannot represent adverse interest. It is highly improper to represent both sides of an issue. The proscription against representation of conflicting interest finds application where the conflicting interest arises with respect to the same general matter and is applicable however slight such adverse interest may be. It applies although the attorney’s intention and motives were honest and he acted in good faith. However, representation of conflicting interest may be allowed where the parties consent to the representation after full disclosure of facts. (Nakpil vs. Valdez, 286 SCRA 758).

General Rule:An attorney cannot represent adverse interest.
Exception:Where the parties consent to the representation after full disclosure of facts.
The TEST in determining Conflicting Interest: The test is whether or not the acceptance of a new relation will prevent an attorney from the full discharge of his duty of individual fidelity and loyalty to his client or invite suspicion of unfaithfulness in double-dealing in the performance thereof.(Tiana vs. Ocampo)

Rule 15.04 – A lawyer may, with the written consent of all concerned, act as mediator, conciliator or arbitrator in settling disputes.

Rule 15.05 – A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the client’s case, neither overstating nor understating the prospects of the case.

Rule 15.06 – A lawyer shall not state nor imply that he is able to influence any public official, tribunal or legislative body.

Rule 15.07 – A lawyer shall impress upon his client compliance with the laws and the principles of fairness.

Rule 15.08 – A lawyer who is engaged in another profession or occupation concurrently with the practice of law shall make clear to his client whether he is acting as a lawyer or in another capacity.

Lawyers should refrain from giving any advice unless they have obtained sufficient understanding of their client’s cause. A careful investigation and examination of the facts must first be had before any legal opinion be given by the lawyer to the client.
To avoid breach of legal ethics, a lawyer should keep any business, in which is engaged in concurrently with the practice of law, entirely separate and apart from the latter.

CANON 16 – A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.

Rule 16.01 – A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.02 – A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for the Rules of Court.

Attorneys’ Liens – an attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such finds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgements for the payment of money, and executions issued in pursuance of such judgements which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgement, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his fees and disbursements. (Sec, 37, Rule 138, RRC)

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s interests are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in the legal matter he is handling for the client.

Attorney’s lien is not an excuse for non-rendition of accounting
Cannot disburse client’s money to client’s creditors without authority.
Failure to deliver upon demand gives rise to the presumption that he has misappropriated the funds for his own use to the prejudice of the client and in violation of the trust reposed in him.
Notify client if retaining lien shall be implemented
When a lawyer enforces a charging lien against his client, the client-lawyer relationship is terminated.
The principle behind Rule 16.04 is to prevent the lawyer from taking advantage of his influence over the client or to avoid acquiring a financial interest in the outcome of the case.

CANON 17 – A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.

No fear of judicial disfavor or public popularity should restrain him from full discharge of his duty.
It is the duty of the lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties and any interest in, or connection with, the controversy which might influence the client in the selection of counsel.
The lawyer owes loyalty to his client even after the relation of attorney and client has terminated. It is not good practice to permit him afterwards to defend in another case other persons against his former client under the pretext that the case is distinct from and independent of the former case.

CANON 18 – A lawyer shall serve his client with competence and diligence.

Rule 18.01 – A lawyer shall not undertake a legal service which he knows or should know that he is not qualified to render. However, he may render such service if, with the consent of his client, he can obtain as collaborating counsel a lawyer who is competent on the matter.

Rule 18.02 – A lawyer shall not handle any legal matter without adequate preparation.

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.

Rule 18.04 – A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client’s request for information.

Competence: sufficiency of lawyer’s qualification to deal with the matter in question and includes knowledge and skill and the ability to use them effectively in the interest of the client.
A lawyer must keep himself constantly abreast with the trend of authoritative pronouncements and developments in all branches of law.
There must be extraordinary diligence in prosecution or defense of his client’s cause.
If a lawyer errs like any other human being, he is not answerable for every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge.
Lawyer is not an insurer of the result in a case where he is engaged in the counsel.

CANON 19 – A lawyer shall represent his client with zeal within the bounds of the law.

Rule 19.01 – A lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to present unfounded criminal charges to obtain an improper advantage in any case or proceeding.

Rule 19.02 – A lawyer who has received information that his client has, in the course of the representation, perpetuated a fraud upon a person or tribunal, shall promptly call upon the client to rectify the same, and failing which he ha to terminate the relationship with such client in accordance with the Rules of Court.

Rule 19.03 – A lawyer shall not allow his client to dictate the procedure in handling the case.

General Rule: Negligence binds client

Exception: Reckless imprudence (deprives client of due process)

Results in outright deprivation of one’s property through technicality

Must not present in evidence any document known to be false; nor present a false witness.
Negative pregnant is improper since it is an ambiguous pleading (improper if in bad faith and the purpose is to confuse the other party)

In defense: present every defense the law permits.

Lawyer should do his best efforts to restrain and to prevent his clients from perpetrating acts which he himself ought not to do. Or else, withdraw. But lawyer shall not volunteer the information about the client’s commission of fraud to anyone – counter to duty to maintain client’s confidence and secrets.

CANON 20 – A lawyer shall charge only fair and reasonable fees.

Rule 20.01 – A lawyer shall be guided by the following factors in determining his fees:

The time spent and the extent of the services rendered or required.
The novelty and difficulty of the questions involved;
The importance of the subject matter;
The skill demanded;
The probability of losing other employment as a result of acceptance of the proffered case;
The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;
The amount involved in the controversy and the benefits resulting to the client from the services;
The contingency or certainty of compensation;
The character of the employment, whether occasional or established; and
The professional standing of the lawyer.

Kinds of Payment which may be stipulated upon:

a fixed or absolute fee which is payable regardless of the result of the case
a contingent fee that is conditioned to the securing of a favorable judgment and recovery of money or property and the amount of which may be on a percentage basis
a fixed fee payable per appearance
a fixed fee computed by the number of hours spent
a fixed fee based on a piece of work

Attorney’s Fees

Ordinary attorney’s fee-the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis for this compensation is the fact of his employment by and his agreement with the client.
Extraordinary attorney’s fee– an indemnity for damages ordered by the court to be paid by the losing party in litigation. The basis for this is any of the cases provided for by law where such award can be made, such as those authorized in Article 2208 of the Civil Code, and is payable NOT to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.

How attorney’s fees may be claimed by the lawyer:

It may be asserted either in the very action in which the services of a lawyer had been rendered or in a separate action.
A petition for attorney’s fees may be filed before the judgment in favor of the client is satisfied or the proceeds thereof delivered to the client.
The determination as to the propriety of the fees or as to the amount thereof will have to be held in abeyance until the main case from which the lawyer’s claim for attorney’s fees may arise has become final. Otherwise, the determination of the courts will be premature.

Kinds of Retainer Agreements on Attorney’s fees:

General Retaineror Retaining Fee – it is the fee paid to a lawyer to secure his future services as general counsel for any ordinary legal problem that may arise in the ordinary business of the client and referred to him for legal action;
Special Retainer – that is a fee for a specific case or service rendered by the lawyer for a client

Quantum Meruit -it means “as much as he deserves”, and is used as the basis for determining the lawyer’s professional fees in the absence of a contract, but recoverable by him from his client.
Quantum Meruit is resorted to where:

there is no express contract for payment of attorney’s fees agreed upon between the lawyer and the client;
when although there is a formal contract for attorney’s fees, the stipulated fees are found unconscionable or unreasonable by the court.
When the contract for attorney’s fees is void due to purely formal matters or defects of execution
When the counsel, for justifiable cause, was not able to finish the case to its conclusion
When lawyer and client disregard the contract for attorney’s fees.

Skill: length of practice is not a safe criterion of professional ability.

Rule 20.02 – A lawyer shall, in cases of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed.

Rule 20.03 – A lawyer shall not, without the full knowledge and consent of the client, accept any fee, reward, costs, commission, interest, rebate or forwarding allowance or other compensation whatsoever related to his professional employment from anyone other than the client.

Rule 20.04 – A lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

Unauthorized counsel: Not entitled to attorney’s fees.
Stipulation regarding payments of attorney’s fees is not illegal/immoral and is enforceable as the law between the parties provided such stipulation does not contravene law, good morals, etc.
When counsel cannot recover full amount despite written contract for attorneys’ fees:

When he withdraws before the case is finished
justified dismissal of attorney (payment: in quantum meruitonly)

The reason for the award of attorney’s fees must be stated in the text of the decision; otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal.
Even though the interest or property involved is of considerable value, if the legal services rendered do not call for much efforts there is no justification for the award of high fees.
Champertous Contracts (void)– Lawyer stipulates with his client that in the prosecution of the case, he will bear all the expenses for the recovery of things or property being claimed by the client and the latter agrees to pay the former a portion of the thing/property recovered as compensation.
Compensation to an attorney for merely recommending another lawyer is improper (agents)
Attorney’s fees for legal services shared or divided to non-lawyer is prohibited. Division of fees is only for division of service or responsibility.
A lawyer should try to settle amicably any differences on the subject. A lawyer has 2 options. Judicial action to recover attorney’s fees:

In same case: Enforce attorney’s fees by filing an appropriate motion or petition as an incident to the main action where he rendered legal services.
In a separate civil action.

CANON 21 – A lawyer shall preserve the confidences and secrets of his client even after the attorney-client relation is terminated.

Confidence – refers to information protected by the attorney-client privilege (RRC)
Secret –refers to other information gained in the professional relationship that the client has regulated to be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client.
An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment; nor can an attorney’s secretary, stenographer, or clerk be examined, without the consent of the client and his employees, concerning any fact the knowledge of which has been acquired in such capacity (Rule 130, Sec. 21 (b), RRC)
The mere establishment of a client-lawyer relationship does not raise a presumption of confidentiality. There must be an intent or that the communication relayed by the client to the lawyer be treated as confidential.

Rule 21.01 – A lawyer shall not reveal the confidences or secrets of his client except:

When authorized by the client after acquainting him of the consequences of the disclosure:
When required by law;
When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.

When properly authorized after having been fully informed of the consequences to reveal his confidences/secrets, then there is a valid waiver.
209. Betrayal of Trust by an Attorney or Solicitor. Revelation of secrets.In addition to the proper administrative action, the penalty of prision correccionalin its minimum period, or a fine ranging from P200 to P1000, or both, shall be imposed upon any attorney at law or solicitor who, by any malicious break of professional duty as inexcusable negligence or ignorance, shall prejudice his client, or reveal any of the secrets of the latter learned by him in his professional capacity.

The same penalty shall be imposed upon an attorney at law or solicitor who, having undertaken the defense of a client, or having received confidential information from said client in a case, shall undertake the defense of the opposing party in the same case, without the consent of his first client (Rule 209, RPC)

General Rule: Obligation to keep secrets covers only lawful purposes
Exceptions:

announcements of intention of a client to commit a crime
client jumped bail and lawyer knows his whereabouts; or client is living somewhere under an assumed name
communication involves the commission of future fraud or crime but crimes/frauds “already committed” falls within the privilege.

Rule 21.02 – A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto.

Rule 21.03 – A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any other similar purposes.

Rule 21.04 – A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless prohibited by the client.

Rule 21.05 – A lawyer shall adopt such measures as may be required to prevent those whose services are utilized by him, from disclosing or using confidences or secrets of the client.

Rule 21.06 – A lawyer shall avoid indiscreet conversation about a client’s affairs even with members of his family.

Rule 21.07 – A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interest.

Avoid committing calculated indiscretion – accidental revelation of secrets obtained in his professional employment.
Prohibition applies, even if the prospective client did not thereafter actually engage the lawyer.

CANON 22 – A lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances.

Rule 22.01 – A lawyer may withdraw his services in any of the following cases:

When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;
When the client insists that the lawyer pursue conduct violative of these canons and rules;
When his inability to work with co-counsel will not promote the best interest of the client;
When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;
When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement;
When the lawyer is elected or appointed to a public office, and
Other similar cases

Rule 22.02 – A lawyer who withdraws or is discharged shall subject to a retaining lien, immediately turn over all papers and property to which the client is entitled, and shall cooperate with his successor in the orderly transfer of the matter, including all information necessary for the proper handling of the matter.

	Retaining Lien	Charging Lien
1. Nature	Passive Lien: It cannot be actively enforced. It is a general lien	Active Lien: It can be enforced by execution. It is a special lien.
2. Basis	Lawful possession of papers, documents, property belonging to client.	Securing of a favorable money judgment for the client.
3. Coverage	Covers only papers, documents and property in the lawful possession of the attorney by reason of his professional employment	Covers all judgments for the payment of money and executions issued in pursuance of such judgments.
4. When Lien takes effect	As soon as the attorney gets possession of the papers documents or property	As soon as the claim for attorney’s fees had been entered into the records of the case
5. Notice	Client need not be notified to make it effective	Client and adverse party must be notified to make it effective
6. Applicability	May be exercised before judgment or execution or regardless thereof.	Generally, it is exercisable only when the attorney had already secured a favorable judgment for his client

In withdrawal as counsel for a client, an attorney may only retire from a case either by written consent of his client or by permission of the court after due notice and hearing, in which event the attorney should see to it that the name of the new attorney is recorded in the case.
An attorney who could not get the written consent of his client must make an application to the court, for the relation does not terminate formally until there is a withdrawal of record. Counsel has no right to presume that the court would grand his withdrawal and therefore must still appear on the date of hearing.
Requirements for the Substitution of Counsel in a Case:

written application
written consent of client
written consent of attorney to be substituted
if the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution has been served upon him, in the manner prescribed by the rules.

A lawyer cannot recover compensation from one who did not employ or authorize his employment, however valuable the results of his services may have been to such person. In similar cases, no compensation when:

client conducts himself in a manner which tends to degrade his attorney;
client refuses to extend cooperation;
client stops having contact with him.

The right of a client to terminate a lawyer is absolute. Such termination may be with or without cause.

Legal Ethics Chapter III – The Lawyer and the Courts

Chapter III

The Lawyer and the Courts

CANON 10 – A Lawyer owes candor, fairness and good faith to the court.

Rule 10.01 – A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall he mislead or allow the court to be mislead by any artifice.

Rule 10.02 – A lawyer shall not knowingly misquote or misrepresent the contents of the paper, the language or the argument of opposing counsel, or the text of a decision of authority, or knowingly cite as law a provision already rendered inoperative by repeal or amendment, or assert as a fact that which has not been approved.

Rule 10.03 – A lawyer shall observe the rules of procedure and shall not misuse them to defeat the ends of justice.

Judge-lawyer relationship: based on independence and self-respect.
Lawyer’s duty to the court:

respect and loyalty
fairness, truth and candor
no attempt to influence courts

Cases of falsehood:

stating in the Deed of Sale that property is free from all liens and encumbrances when not so
encashing check payable to a deceased cousin by signing the latter’s name on the check
falsifying a power of attorney and using it in collecting the money due to the principal
alleging in one pleading that the clients were mere lessees and in another pleading that the same clients were owners
presenting falsified documents in court which he knows to be false
filing false charges on groundless suits
using in pleadings the IBP number of another lawyer
unsolicited appearances
use of fictitious residence certificate
misquotation/misrepresentation
citing a repealed or amended provision
asserting a fact not proved
verbatim reproductions down to the last word and punctuation mark
slight typo mistake: not sufficient to place him in contempt

CANON 11 – A lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others.

Rule 11.01 – A lawyer shall appear in court properly attired.

A lawyer may NOT wear outlandish or colorful clothing to court.
As an officer of the court and in order to maintain the dignity and respectability of the legal profession, a lawyer who appears in court must be properly attired. Consequently, the court can hold a lawyer IN CONTEMPT of court if he does not appear in proper attire. Any deviation from the commonly accepted norm of dressing in court (barong or tie, not both) is enough to warrant a citing for contempt.

Rule 11.02 – A lawyer shall punctually appear at court hearings.

Rule 11.03 – A lawyer shall abstain from scandalous, offensive, or menacing language or behavior before the courts.

Rule 11.04 – A lawyer shall not attribute to a judge motives not supported by the record or having no materiality to the case.

Rule 11.05 – A lawyer shall submit grievances against a judge to the proper authorities already.

A lawyer is an officer of the court. He occupies a quasi-judicial office with a tripartite obligation to the courts, to the public and to his clients.
The public duties of the attorney take precedence over his private duties. His first duty is to the courts. Where duties to the courts conflict with his duties to his clients, the latter must yield to the former.
Lawyers must be respectful not only in actions but also in the use of language whether in oral arguments or in pleadings.
Must exert efforts that others (including clients, witnesses) shall deal with the courts and judicial officers with respect.
Obedience to court orders and processes.
Criticisms of courts must not spill the walls of decency. There is a wide difference between fair criticism and abuse and slander of courts and judges. Intemperate and unfair criticism is a gross violation of the duty to respect the courts. It amounts to misconduct which subjects the lawyer to disciplinary action.
A mere disclaimer of any intentional disrespect by appellant is not a ground for exoneration. His intent must be determined by a fair interpretation of the languages employed by him. He cannot escape responsibility by claiming that his words did not mean what any reader must have understood them to mean.
Lawyer can demand that the misbehavior of a judge be put on record.
Lawyers must be courageous enough to expose arbitrariness and injustice of courts and judges.
A lawyer may submit grievances against judges in the Supreme Court, Ombudsman, or Congress (for impeachment of SC judges only).

CANON 12 – A lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient administration of justice.

Rule 12.01 – A lawyer shall not appear for trial unless he has adequately prepared himself with the law and the facts of his case, the evidence he will adduce and the order of its preference. He should also be ready with the original documents for comparison with the copies.

Newly hired counsel: must acquaint himself with all the antecedent proceedings and processes that have transpired in the record prior to his takeover.
If presenting documentary exhibits, he must be ready with the originals for the purpose of comparison with copies thereof.

Rule 12.02 – A lawyer shall not file multiple actions arising from the same cause.

Forum shopping– omission to disclose pendency of appeal or prior dismissal of his case by a court of concurrent jurisdiction.
Forum shopping exists when as a result of an adverse opinion in one forum:

a party seeks favorable opinion (other than by appeal or certiorari) in another; or
when he institutes two or more actions or proceedings grounded on the same cause, on the gamble that one or the other would make a favorable disposition (Benguet Electric Corp. vs. Flores, 287 SCRA 449, March 12, 1998).

The most important factor in determining the existence of forum-shopping is the VEXATION caused the courts and party-litigants by a party who asks different courts to rule on the same related causes, asking the same relief.
Forum shopping constitutes DIRECT CONTEMPT of court and may subject the offending lawyer to disciplinary action.

Rule 12.03 – A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so.

Asking for extension of time must be in good faith.

Rule 12.04 – A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse court processes.

Rule 12.05 – A lawyer shall refrain from talking to his witness during a break or recess in the trial, while the witness is still under examination.

Rule 12.06 – A lawyer shall not knowingly assist a witness to misrepresent himself or to impersonate another.

Rule 12.07 – A lawyer shall not abuse, browbeat or harass a witness nor needlessly inconvenience him.

Rights and obligations of a witness – a witness must answer questions, although his answer may tend to establish a claim against him. However, it is the right of a witness:

to be protected from irrelevant, improper, or insulting questions and from harsh or insulting demeanor;
not to be detained longer than the interest of justice requires;
not to be examined except only as to matters pertinent to the issue;
not to give any answer which will tend to subject him to a penalty for an offense unless otherwise provided by law, or
nor to give answer which will tend to degrade his reputation, unless it be to the very fact at issue or to a fact from which the fact in issue would be presumed. But a witness must answer to the fact of his previous final conviction for an offense. (Rule 132, Sec. 3, RRC)

Rule 12.08 – A lawyer shall avoid testifying in behalf of his client, except:

on formal matters, such as the mailing, authentication or custody of an instrument and the like:
on substantial matters, in cases where his testimony is essential to the ends of justice, in which event he must, during his testimony, entrust the trial of the case to another counsel.

CANON 13 – A lawyer shall rely upon the merits of his cause and refrain from any impropriety which tends to influence, or gives the appearance of influencing the court.

Rule 13.01 – A lawyer shall not extend extraordinary attention or hospitality to, nor seek opportunity for, cultivating familiarity with judges.

Rule 13.02 – A lawyer shall not make public statements in the media regarding a pending case tending to arouse public opinion for or against a party.

Rule 13.03 – A lawyer shall not brook or invite interference by another branch or agency of the government in the normal course of judicial proceedings.

The judge has the corresponding duty not to convey or permit others to convey the impression that they are in a special position to influence the judge.
Discussing cases with the judge privately should be avoided.
Test when public statement is contemptuous: The character of the act done and its direct tendency to prevent and obstruct the discharge of official duty.
To warrant a finding of “prejudicial publicity”, there must be an allegation and proof that the judges have been unduly influenced, not simply that they might be, by the “barrage” of publicity.
Lawyer is equally guilty as the client if he induces the latter to cause the publicity.

Legal Ethics Chapter II – Lawyer and Society

Chapter II

The Lawyer and the Legal Profession

CANON 7 – A lawyer shall at all times uphold the integrity and dignity of the legal profession, and support the activities of the integrated bar.

Rule 7.01 – A lawyer shall be answerable for knowingly making false statements or suppressing a material fact, in connection with his application for admission to the bar.

Rule 7.02 – A lawyer shall not support application for admission to the bar by any person known to him or be unqualified in respect to character, education, or other relevant attribute.

Rule 7.03 – A lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor should he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession.

Upright character; not mere absence of bad character.
A lawyer must at all times conduct himself properly as not to put into question his fitness to practice law.
Avoid scandalous conduct; not only required to refrain from adulterous relationships or the keeping of mistress but must also behave himself as to avoid scandalizing the public by creating the belief that he is flouting those moral standards.

CANON 8 – A lawyer shall conduct himself with courtesy, fairness and candor towards his professional colleagues, and shall avoid harassing tactics against opposing counsel.

Rule 8.01 – A lawyer shall not, in his professional dealings, use language which is abusive, offensive or otherwise improper.

Rule 8.02 – A lawyer shall not, directly or indirectly, encroach upon the professional employment of another lawyer; however, it is the right of any lawyer without fear or favor, to give proper advice and assistance to those seeking relief against unfaithful or neglectful counsel.

It is the duty of a lawyer to inform the SC or the IBP of such malpractice to the end that the malpractitioner be properly disciplined.
Not to use in pleadings and in practice the following: disrespectful, abusive and abrasive language, offensive personalities, unfounded accusations or intemperate words tending to obstruct, embarrass or influence the court in administering justice.
Want of intention: not an excuse for the disrespectful language used. It merely extenuates liability.

CANON 9 – A lawyer shall not directly or indirectly assist in the unauthorized practice of law.

Rule 9.01 – A lawyer shall not delegate to any unqualified person the performance of any task which by law may only be performed by a member of the bar in good standing.

Rule 9.02 – A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except:

Where there is a pre-existing agreement, with a partner or associate that , upon the latter’s death, money shall be paid over a reasonable period of time to his estate or to the persons specified in the agreement; or
Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer; or
Where a lawyer or law firm includes non-lawyer employees in a retirement plan, even if the plan is based in whole or in part of a profit sharing arrangements.

Lawyer shall not negotiate with the opposite party who is represented by a counsel. Neither should lawyer attempt to interview the opposite party and question him as to the facts of the case even if the adverse party is willing to do so.
Lawyer should deal only with counsel, even if there’s a fair agreement.
Lawyer may however interview any witness or prospective witness for the opposing side. Limitation: avoid influencing witness in recital and conduct.
A lawyer must not take as partner or associate one who:

is not a lawyer
is disbarred
has been suspended from the practice of law
foreign lawyer, unless licensed by the SC.

A lawyer cannot delegate his authority without client’s consent even to a qualified person.

Legal Ethics Chapter I – Lawyer and Society

LEGAL ETHICS – is a branch of moral science, which treats of the duties which an attorney owes to the court, to the client, to his colleagues in the profession and to the public as embodied in the Constitution, Rules of Court, the Code of Professional Responsibility, Canons of Professional Ethics, jurisprudence, moral laws and special laws.

Original Bases of Legal Ethics:

Canons of Professional Ethics
Supreme court Decisions
Statistics
Constitution
Treatises and publications

Present Basis of the Philippine Legal System: Code of Professional Responsibility.

BAR V. BENCH

BAR – Refers to the whole body of attorneys and body of judges.

BENCH – denotes the whole body of counselors, collectively the members of

the legal profession.

Practice of Law – any activity, in or out of court which requires the application of law, legal procedure, knowledge, training and experience. To engage in the practice of law is to give notice or render any kind of service, which or devise or service requires the use in any degree of legal knowledge or skill (Cayetano v. Monsod, 201 SCRA 210).

Attorney-at-law/Counsel-at-law/Attorney/Counsel/ Abogado/Boceros: that class of persons who are licensed officers of the courts, empowered to appear prosecute and defend and upon whom peculiar duties, responsibilities, and liabilities are developed by law as a consequence (Cui v. Cui, 120 Phil. 729).

Attorney in fact – an agent whose authority is strictly limited by the instrument appointing him, though he may do things not mentioned in his appointment necessary to the performance of the duties specifically required of him by the power of attorney appointing him, such authority being necessarily implied. He is not necessarily a lawyer.

Counsel de Oficio – a counsel, appointed or assigned by the court, from among members of the Bar in good standing who, by reason of their experience and ability, may adequately defend the accused.

Note: In localities where members of the Bar are not available, the court may appoint any person, resident of the province and good repute for probity and ability, to defend the accused. Sec. 7, Rule 116, Rules of Court.

Attorney ad hoc – a person named and appointed by the court to defend an absentee defendant in the suit in which the appointment is made (Bienvenu v. Factor’s of Traders Insurance Cp., 33 La.Ann.209)

Attorney of Record – one who has filed a notice of appearance and who hence is formally mentioned in court records as the official attorney of the party. Person whom the client has named as his agent upon whom service of papers may be made.

(Reynolds v. Reynolds, Cal.2d580).

Of Counsel – to distinguish them from attorneys of record, associate attorneys are referred to as “of counsel” (5 Am. Jur. 261).

Lead Counsel – The counsel on their side of a litigated action who is charged with the principal management and direction of a party’s case.

House Counsel – Lawyer who acts as attorney for business though carried as an employee of that business and not as an independent lawyer.

Bar Association – an association of members of the legal profession.

Advocate – The general and popular name for a lawyer who pleads on behalf of someone else.

Barrister (England) – a person entitled to practice law as an advocate or counsel in superior court.

Proctor (England) – Formerly, an attorney in the admiralty and ecclesiastical courts whose duties and business correspond to those of an attorney at law or solicitor in Chancery.

Titulo de Abogado – it means not mere possession of the academic degree of Bachelor of Laws but membership in the Bar after due admission thereto, qualifying one for the practice of law.

Admission to the Practice of Law

The Supreme Court has the power to control and regulate the practice of law. Thus, the Constitution, under Article VIII, Sec. 5 (5) provides:

Sec. 5. The Supreme Court shall have the following powers:

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the under privileged.

The Supreme Court acts through a Bar Examination Committee in the Exercise of his judicial function to admit candidates to the legal profession.

The Bar Examination Committee:

Composed of (1) member of the Supreme Court who acts as Chairman and eight (8) members of the bar.
The 8 members act as examiners for the 8 bar subjects with one subject assigned to each.
The Bar Confidant acts as a sort of liason officer between the court and the Bar Chairman on the other hand, and the individual members of the committee on the other. He is at the same time a deputy clerk of court.
Admission of examinees is always subject to the final approval of the court.

Practice of Law

The practice of law is a privilege granted only to those who possess the STRICT INTELLECTUAL AND MORAL QUALIFICATIONS required of lawyers who are instruments in the effective and efficient administration of justice. (In Re: Argosino, 1997).

Requirements for admission to the Bar:

citizen of the Philippines
at least 21 years old
of good moral character
Philippine resident
Production before the supreme court satisfactory evidence of:
1. good moral character
2. no charges against him, involving moral turpitude, have been filed or are pending in any court in the Philippines.

Requirement of Good Moral Character: a continuing requirement; good moral character is not only a condition precedent for admission to the legal profession, but it must also remain intact in order to maintain one’s good standing in that exclusive and honored fraternity. (Tapucar vs. Tapucar, 1998)

Academic Requirements for Candidates:

a bachelor’s degree in arts and sciences (pre-law course)
a completed course in:
1. civil law
2. commercial law
3. remedial law
4. public international law
5. private international law
6. political law
7. labor and social legislation
8. medial jurisprudence
9. taxation
10. legal ethics

Non-lawyers who may be authorized to appear in court:

Cases before the MTC: Party to the litigation, in person OR through an agent or friend or appointed by him for that purpose ( 34, Rule 138, RRC)
Before any other court: Party to the litigation, in person ()
Criminal case before the MTC in a locality where a duly licensed member of the Bar is not available: the judge may appoint a non-lawyer who is:
1. resident of the province
2. of good repute for probity and ability to aid the accused in his defense (Rule 116, Sec. 7, RRC).
Legal Aid Program – A senior law student, who is enrolled in a recognized law school’s clinical education program approved by the supreme Court may appear before any court without compensation, to represent indigent clients, accepted by the Legal Clinic of the law school. The student shall be under the direct supervision and control of an IBP member duly accredited by the law school.
Under the Labor code, non-lawyers may appear before the NLRC or any Labor Arbiter, if
1. they represent themselves, or if
2. they represent their organization or members thereof (Art 222, PO 442, as amended).
Under the Cadastral Act, a non-lawyer can represent a claimant before the Cadastral Court(Act no. 2259, Sec. 9).

Public Officials who cannot engage in the private practice of Law in the Philippines:

Judges and other officials as employees of the Supreme Court (Rule 148, Sec. 35, RRC).
Officials and employees of the OSG (Ibid.)
Government prosecutors (People v. Villanueva, 14 SCRA 109).
President, Vice-President, members of the cabinet, their deputies and assistants (Art. VIII Sec. 15, 1987 Constitution).
Members of the Constitutional Commission (Art IX-A, Sec. 2, 1987 Constitution)
Ombudsman and his deputies (Art. IX, Sec. 8 (2^ndpar), 1987 Constitution)
All governors, city and municipal mayors (R.A. No. 7160, Sec. 90).
Those prohibited by special law

Public Officials with Restrictions in the Practice of Law:

No Senator as member of the House of Representative may personally appear as counsel before any court of justice as before the Electoral Tribunals, as quasi-judicial and other administration bodies (Art. VI, Sec. 14, 1987 Constitution).
Under the Local Government Code (RA 7160, Sec. 91)Sanggunian members may practice their professions provided that if they are members of the Bar, they shall not:
1. appear as counsel before any court in any civil case wherein a local government unit or any office, agency, or instrumentality of the government is the adverse party;
2. appear as counsel in any criminal case wherein an officer or employee of the national or local government is accused of an offense committed in relation to his office;
3. collect any fee for their appearance in administrative proceedings involving the local government unit of which he is an official;
4. use property and personnel of the government except when the Sanggunian member concerned is defending the interest of the government.
Under RA 910, Sec. 1, as amended, a retired justice or judge receiving pension from the government, cannot act as counsel in any civil case in which the Government, or any of its subdivision or agencies is the adverse party or in a criminal case wherein an officer or employee of the Government is accused of an offense in relation to his office.

Attorney’s Oath:

“I, __________________, do solemnly swear that I will maintain allegiance to the Republic of the Philippines; I will support its constitution and obey the laws as well as the legal orders of the duly constituted authorities therein; I will do no falsehood, nor consent to the doing of any in court; I will not willingly nor wittingly promote or sue any groundless, false or unlawful suit, or give aid nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion, with all good fidelity as well to the court as to my clients; and I impose upon myself this voluntary obligations without any mental reservation or purpose of evasion. So help me God.” (Form 28, RRC)

Nature of Lawyer’s Oath

The lawyer’s oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld and kept inviolable. (Sebastian vs. Calis, 1999)
It is NOT a mere ceremony or formality for practicing law. Every lawyer should at all times weigh his actions according to the sworn promises he made when taking the lawyer’s oath. (In Re: Argosino, 1997, In Re: Arthur M. Cuevas, 1998).

Code of Professional Responsibility

Chapter 1:

Lawyer and Society

CANON 1 – A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes

Duties of Attorneys:

to maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines;
to observe and maintain the respect due to the courts of justice and judicial officers;
to counsel or maintain such actions or proceedings only as appear to him as just, and such defenses only as he believes to be honestly debatable under the laws;
to employ, for the purpose of maintaining the causes confided to him, such means only as are consistent with truth and honor, and never seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law;
to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client’s business except from him or with his knowledge and approval;
to abstain from all offensive personality and to advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which he is charged;
not to encourage either the commencement or the continuance of an action or proceeding, or delay any man’s cause for any corrupt motive or interest;
never to reject, for any consideration personal to himself, the cause of the defenseless or oppressed;
in the defense of a person accused of a crime, by all fair and honorable means, regardless of his personal opinion as to the guilt of the accused, to present every defense that the law permits, to the end that no person may be deprived of life or liberty, but by due process of law.

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Conviction for crimes involving moral turpitude – a number of lawyers have been suspended or disbarred for conviction of crimes involving moral turpitude such as:

estafa
bribery
murder
seduction
abduction
smuggling
falsification of public documents

Morality as understood in law -This is a human standard based on natural moral law which is embodied in man’s conscience and which guides him to do good and avoid evil.
Moral Turpitude:any thing that is done contrary to justice, honesty, modesty or good morals.
Immoral Conduct:that conduct which is willful, flagrant, or shameless and which shows a moral indifference to the opinion of the good and respectable members of the community(Arciga vs. Maniwag, 106 SCRA 591).
Grossly Immoral Conduct:One that is so corrupt and false as to constitute a criminal act or so unprincipled or disgraceful as to be reprehensible to a high degree; it is a WILLFUL, FLAGRANT or SHAMELESS ACT which shows a MORAL INDIFFERENCE to the opinion of respectable members of the community. (Narag vs. Narag, 1998)

Rule 1.02 – A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system.

Rule 1.03 – A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man’s cause.

Rule 1.04 – A lawyer shall encourage his clients to avoid, end or settle the controversy if it will admit of a fair settlement.

If a lawyer finds that his client’s cause is defenseless, it is his burden/duty to advise the latter to acquiesce and submit, rather than traverse the incontrovertible.
It is unprofessional for a lawyer to volunteer advice to bring a lawsuit, except in rare cases where the blood, relationship or trust makes it his duty to do so.
Temper client’s propensity to litigate.
Should not be an instigator of controversy but a mediator for concord and conciliator for compromise.
The law violated need not be a penal law. “Moral Turpitude” – everything which is done contrary to justice, honesty, modesty or good morals.
Give advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law.
Until a statute shall have been construed and interpreted by competent adjudication, he is free and is entitled to advise as to its validity and as to what he conscientiously believes to be its just meaning and extent.
A lawyer has the obligation not to encourage suits. This is so as to prevent barratry and ambulance chasing.
Barratry –offense of frequently exciting and stirring up quarrels and suits, either at law or otherwise; Lawyer’s act of fomenting suits among individuals and offering his legal services to one of them.
Ambulance Chasing –Act of chasing victims of accidents for the purpose of talking to the said victims (or relatives) and offering his legal services for the filing of a case against the person(s) who caused the accident(s).

CANON 2 – A lawyer shall make his legal services available in an efficient and convenient manner compatible with the independence, integrity and effectiveness of the profession.

Rule 2.01 – A lawyer shall not reject, except for valid reasons, the cause of the defenseless or oppressed.

Rule 2.02 – In such a case, even if a lawyer does not accept a case, he shall not refuse to render legal advise to the person concerned if only to the extent necessary to safeguard latter’s rights.

Rule 2.03 – a lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

Primary characteristics which distinguish the legal profession from business;

duty of service, of which the emolument is a by product, and in which one may attain the highest eminence without making such money;
a relation as an ‘officer of court’ to the administration of justice involving thorough sincerity, integrity and reliability;
a relation to clients in the highest degree of fiduciary;
a relation to colleagues at the bar characterized by candor, fairness and unwillingness to resort to current business methods of advertising and encroachment on their practice or dealing with their clients.

Defenseless– not in the position to defend themselves due to poverty, weakness, ignorance or other similar reasons.
Oppressed –victims of acts of cruelty, unlawful exaction, domination or excessive use of authority.

Rule on Advertisements

General Rule: No advertisements allowed. The most worthy and effective advertisement possible is the establishment of a well-merited reputation for professional capacity and fidelity to trust.

Lawyers may not advertise their services or expertise nor should not resort to indirect advertisements for professional employment, such as furnishing or inspiring newspaper comments, or procuring his photograph to be published in connection with causes in which the lawyer has been engaged or concerning the manner of their conduct, the magnitude of the interest involved, the importance of the lawyer’s position, and all other self-laudation.

Exceptions/ Permissible advertisements:

Reputable law lists, in a manner consistent with the standards of conduct imposed by the canons, of brief biographical and informative data, are allowed.
Ordinary simple professional Card. It may contain only a statement of his name, the name of the law firm which he is connected with, address, telephone number and the special branch of law practiced.
A simple announcement of the opening of a law firm or of changes in the partnership, associates, firm name or office address, being for the convenience of the profession, is not objectionable.
Advertisements or simple announcement of the existence of a lawyer or his law firm posted anywhere it is proper such as his place of business or residence except courtrooms and government buildings.
Advertisements or announcement in any legal publication, including books, journals, and legal magazines.

Rule 2.04 – A lawyer shall not charge rates lower than those customarily or prescribed, unless circumstances so warrant.

A lawyer cannot delay the approval of a compromise agreement entered into between parties, just because his attorney’s fees were not provided for in the agreement.
Rule: A lawyer cannot compromise the case without client’s consent (special authority). Exception: Lawyer has exclusive management of the procedural aspect of the litigation (e.g. Submission for decision on the evidence so far presented. But in case where lawyer is confronted with an emergency and prompt/urgent action is necessary to protect clients interest and there’s no opportunity for consultation, the lawyer may compromise.
Rule: Refrain from charging rates lower than the customary rates.

Valid Justification: relatives, co-lawyers, too poor

CANON 3 – A lawyer in making known is legal services shall use only true, honest, fair dignified and objective information or statement of facts.

Rule 3.01 – A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-auditory or unfair statement or claim regarding his qualifications or legal services.

Violation of Rule 3.01 is unethical, whether done by him personally or through another with his permission.

Rule 3.02 – In the choice of a firm name, no false, misleading, or assumed name shall be used. The continued use of the name of a deceased partner is permissible provided that the firm indicates in all its communication that said partner is deceased.

Rule 3.03 – Where a partner accepts public office, he shall withdraw from the firm and his name shall be dropped from the firm name unless the law allows him to practice law concurrently.

Rule 3.04 – A lawyer shall not pay or give anything of value to representatives of the mass media in anticipation of, or in return for, publicity to attract legal business.

It is unethical to use the name of a foreign firm.
Death of a partner does not extinguish attorney-client relationship with the law firm.
Negligence of a member in the law firm is negligence of the firm.

CANON 4 – A lawyer shall participate in the improvement of the legal system by initiating or supporting efforts in law reform and in the administration of justice.

Examples: Presenting position papers or resolutions for the introduction of pertinent bills in congress; Petitions with the Supreme Court for the amendment of the Rules of Court.

CANON 5 – A lawyer shall keep abreast of legal developments, participate in continuing legal education programs, support efforts to achieve high standards in law schools as well as in the practical training of students and assist in disseminating information regarding the law and jurisprudence.

Objectives of integration of the Bar

To elevate the standards of the legal profession
To improve the administration of justice
To enable the Bar to discharge its responsibility more effectively.

The three-fold obligation of a lawyer

First, he owes it to himself to continue improving his knowledge of the laws;
Second, he owes it to his profession to take an active interest in the maintenance of high standards of legal education;
Third, he owes it to the lay public to make the law a part of their social consciousness.

CANON 6 – These canons shall apply to lawyers in government service in the discharge of their official tasks.

Public Officials– include elective and appointive officials and employees, permanent or temporary, whether in the career or non-career service, including military and police personnel, whether or not they receive compensation, regardless of amount. (Sec. 3 (b), RA 6713).
The law requires the observance of the following norms of conduct by every public official in the discharge and execution of their official duties:

commitment to public interest
professionalism
justness and sincerity
political neutrality
responsiveness to the public
nationalism and patriotism
commitment to democracy
simple living ( 4, RA 6713)

Rule 6.01 – The primary duty of a lawyer engaged in public prosecution is not to convict but to see that justice is done. The suppression of facts or the concealment of witnesses capable of establishing the innocence of the accused is highly reprehensible and is cause of disciplinary action.

Rule 6.02 – A lawyer in the government service shall not use his public position to promote or advance his private interest, nor allow the latter to interfere with his public duties.

Rule 6.03 – A lawyer shall not, after leaving government service, accept engagements or employment in connection with any matter in which he had intervened while in said service.

Various ways a government lawyer leaves government service:

retirement
resignation
expiration of the term of office
dismissal
abandonment

Q: What are the pertinent statutory provisions regarding this Rule?

A: Sec. 3 (d) RA 3019 as amended and Sec. 7 (b), RA 6713

Sec 3. Corrupt practice of Public Officers. In addition to acts or omission of public officers already penalized by existing law, the following shall constitute corrupt practice of any public officer and are hereby declared to be unlawful:

(d) accepting or having any member of his family accept employment in a private enterprise which has pending official business with him during the pendency thereof or within one year after termination.

Section 7 (b) of RA 6713 prohibits officials from doing any of the following acts:

own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law.

These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from public office, except in the case of subparagraph (b) (2) above, but the professional concerned cannot practice his profession in connection with any matter before the office he used to be with, in which case the one year prohibition shall likewise apply.

Lawyers in the government service are prohibited to engage in the private practice of their profession unless authorized by the constitution or law, provided that such practice will not conflict or tend to conflict with their official functions.
Misconduct in office as a public official may be a ground for disciplinary action (if of such character as to affect his qualification as lawyer or to show moral delinquency).
Should recommend the acquittal of the accused whose conviction is on appeal, IF he finds no legal basis to sustain the conviction.
Includes restriction is representing conflicting interest (e.g. Accepting engagements vs. former employer, PNB)
The OSG is not authorized to represent a public official at any state of a criminal case.

Reference: Legal Ethics Reviewer

Estoppel (Article 1431)

Estoppel (Article 1431)

An admission;
Is rendered conclusive
Upon the person making it; and
Cannot be denied or disproved against the person relying thereon

Concept of Estoppel

Estoppel is a bar which precludes a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative officers or by his own deed or representation, either expressed or implied.

It concludes the truth in order to prevent fraud and falsehood, and imposes silence on a party only when in conscience and honesty he should not be allowed to speak.

Distinguished from Waiver

A waiver is a voluntary and intentional abandonment or relinquishment of a known right. It carries no implication of fraud. It involves the act or conduct of only one of the parties.

An equitable estoppel may arise, however, even where there is no intention on the part of the person estopped to relinquish any existing right and frequently carries the implication of fraud. It involves the conduct of both parties.

In Lopez v. Ochoa (L- 7955, May 30, 1958), the Supreme Court held that waiver and estoppel are frequently used as convertible terms. The doctrine of waiver belongs to the family of, is of the nature of, is based on, estoppel. The essence of waiver is estoppel and where there is no estoppel, there is no waiver. This is especially true where the waiver relied upon is constructive or implied from the conduct of a party.

Distinguished from Ratification

In ratification, the party is bound because he intended to be bound; in estoppel, the party is bound notwithstanding the fact that there was no such intention because the other party will be prejudiced and defrauded by his conduct unless the law treats him as legally bound.

Distinguished from Fraud

Estoppel exists with or without a contract; fraud presupposes an attempt to enter into a valid agreement or contract.

While estoppel may raised as a defense, fraud may properly be a cause of action on account of the vitiated consent that it produces.

Admissions

A party may be estopped to insist upon a claim, assert an objection, or take a position which is inconsistent with an admission which he had previously made and in reliance upon which the other party has changed his position.

Silence or Inaction

This is sometimes referred to as estoppel by “standing by” or “laches.” Mere innocent silence will not work an estoppel. There must also be some element of turpitude or negligence connected with the silence by which another is misled to his injury. But one who invokes this doctrine of estoppel must show not only unjustified inaction but also some unfair injury would result to him unless the action is held barred.

Estoppel by acquiescence is closely related to estoppel by silence. In the former, a person is prevented from maintaining a position inconsistent with one in which he has acquiesced.

Nature of Laches

Laches is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned or declined to assert it.

Elements of Laches

Conduct on the part of the defendant or of one under whom he claims, giving rise to the situation complained of;
Delay in asserting complainant’s rights after he had knowledge of the defendant’s conduct and after he has had an opportunity to sue;
Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit;
Injury or prejudice to the defendant in the event relief is accorded to the complainant.

Laches and Prescription Distinguished

PRESCRIPTION	LACHES
Concerned with the fact of delay	Concerned with the fact of delay
A matter of time	Principally a question of inequity founded on some change in the condition of the property or the relation of the parties
Statutory	Not statutory
Applies to law	Applies to equity
Based on a fixed time	Not based on a fixed time

Kinds of Estoppel

1. Technical Estoppels

Estoppel by record – the preclusion to deny the truth of matters set forth in a record, whether judicial or legislative, and also to deny the facts adjudicated by a court of competent jurisdiction

Example: the conclusiveness of a judgment on the parties to a case

Estoppel by deed – a bar which precludes one party to a deed and his privies from asserting as against the other party and his privies any right or title in derogation of the deed, or from denying the truth of any material facts asserted in it; a written instrument is necessary for there to be estoppel by deed

Æ Some doctrines:

If the deed or instrument is null and void because of the contract, there is no estoppel
Ordinarily, the person estopped must be capacitated; but a minor is clever enough to deceive others, estoppel may result
If a person, who is not a party to the instrument, notarizes the same, he is not in estoppel

2. Equitable Estoppel or Estoppel in Pais

It arises when one by his acts, representations or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist, and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts. It takes place in a situation where because if a party’s action or omission, he is denied the right to plead or prove an otherwise important fact.

This may be estoppel:

by conduct or by acceptance of benefits
by representation or concealment
by silence
by omission
by laches

Æ Some doctrines:

Conduct because of ignorance or mistake does not result in estoppel
Estoppel by laches bars an action to create a vested right (executory interest) but does not bar an action to protect a vested right (executed interest)
Just because a person is silent does not necessarily mean that he will be in estoppel; there should have been a duty or obligation to speak
A mere promise to perform or to omit at some future time does not necessarily result in estoppel (promissory estoppel); for this to exist, the promise must have been relied upon and prejudice would result unless estoppel is applied

Elements of Estoppel in Pais

In relation to the party sought to be estopped:

Conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than and consistent with those which the party subsequently attempts to assert;
Intent or at least expectation that this conduct shall be acted upon by at least influence the other party;
Knowledge, actual or constructive, of the real facts

In relation to the party claiming the estoppel:

Lack of knowledge or of the means of knowing the truth as to the facts in question;
Reliance, in good faith, upon the conduct or statement as to the facts in question;
Action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel to his injury, detriment, or prejudice

Estoppel against Owner

When in a contract between third persons concerning immovable property, one of them is misled by a person with respect to the ownership of real right over the real estate, the latter is precluded from asserting his legal title or interest therein, provided all these requisites are present:

There must be fraudulent representation or wrongful concealment of facts known to the party estopped;
The party precluded must intend that the other should act upon the facts as misrepresented;
The party misled must have been unaware of the true facts; and
The party defrauded must have acted in accordance with the misrepresentation.

Æ An estoppel operates on the parties to the transaction out of which it arises and their privies.

Æ The government is not estopped by mistake or error on the part of its officials or agents; the erroneous application and enforcement of the law by public officers does not prevent a subsequent correct application of the statute.

Natural Law

Immutable and independent of all human regulations
Includes those rules which are neither written nor promulgated, but are derived from reason and nature

Types of Obligations:

Moral obligations – duties of conscience completely outside the field of law
Natural obligations – not sanctioned by any action but have a relative juridical effect
Civil obligations – juridical obligations which apparently are in conformity with positive law but are contrary to juridical principles and susceptible of being annulled
Mixed obligations – have full juridical effect

Conditions Necessary for Natural Obligation to Arise:

Juridical tie which is not prohibited by law
This tie is not given effect by law

Æ When a debtor offers a guarantor for his natural obligation, he impliedly accepts the coercive remedies to enforce the guaranty, and therefore, the transformation of the natural obligation into a civil obligation.

CRIMINAL PROCEDURE

CRIMINAL PROCEDURE

Rule 110 PROSECUTION of Offenses

1. General Rule: MTC and RTC courts gain jurisdiction over the offense upon the filing of complaint by a complainant or an information by the prosecuting officer

* Court gains jurisdiction over the person of the accused upon arrest or surrender; such jurisdiction once gained cannot be lost even if accused escapes (Gimenez vs. Nazareno)

* Jurisdiction of the court over the offense is determined at the time of the institution of the action and is retained even if the penalty for the offense is later lowered or raised (People vs. Lagon)

2. Complaint – sworn written statement charging a person with an offense, subscribed by the offended party, any peace officer or other public official charged with the enforcement of the law violated

Information – accusation in writing charging a person with an offense, subscribed by the fiscal and filed with the court

3. Complaint and Information distinguished:

Complaint	Information
A sworn statement	Need not be sworn to
Subscribed by the offended party, any peace officer or other officer charged with the enforcement of the law violated	Subscribed to by the fiscal
May be filed either with the court or in the fiscal’s office generally to commence the preliminary investigation of the charges made	Filed with the court

4. Cases where civil courts of equal rank are vested with concurrent jurisdiction:

Features stated in Art. 2, RPC

* Cognizable by proper court in which charge is first filed

Continuing crimes committed in different judicial regions
Offenses wherein any of the essential elements were committed in different territorial jurisdictions
Offenses committed aboard a train, vehicle, aircraft or vessel (see R110, §15)

i. Railroad, train, aircraft

(1) Territory or municipality where vehicle passed

(2) Place of departure

(3) Place of arrival

ii. Vessel

(1) First port of entry

(2) Thru which it passed during voyage

e. Libel and written defamation

5. Remedies of offended party when fiscal unreasonably refuses to file an information or include a person therein as an accused

In case of grave abuse of discretion, action formandamus
Lodge a new complaint against the offenders
Take up matter with the Secretary of Justice
Institute administrative charges against the erring fiscal
File criminal charges under Art. 208, RPC (prosecution of offenses)
File civil action under Art. 27, NCC for damages (PO refuses or neglects to perform official duty)
Secure appointment of another fiscal
Institute another criminal action if no double jeopardy is involved

6. Writs of injunction or prohibition to restrain a criminal prosecution are not available, EXCEPT

To afford adequate protection to constitutional rights of accused
Necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions
Pre-judicial question which is sub judice
Acts of the officer are without or in excess of authority
Prosecution is under an invalid law, ordinance or regulation
Double jeopardy is clearly apparent
Court has no jurisdiction over the case
Case of persecution rather than prosecution
Charges are manifestly false and motivated by lust for vengeance
Clearly no prima faciecase against the accused and MTQ on that ground had been denied

7. Institution of Criminal Actions:

a. In RTC:

* By filing a complaint with the appropriate officer for the purpose of conducting requisite preliminary investigation therein.

b. In Municipal Trial Courts and Municipal Circuit Trial Courts:

* By filing the complaint or information directly with said courts, or a complaint with the fiscal’s office

c. In Metropolitan Trial Courts

* By filing the complaint ONLY with the office of the fiscal

* In all 3 above cases, such institution shall interrupt the period of prescription of the offense charged (Rule 110, §1)

d. Offenses subject to summary procedure

[i.e. (1) violation of traffic laws; (2) violation of rental laws; (3) violation of municipal or city ordinances; and (4) criminal cases where the penalty does not exceed 6 months or fine of P1000 or both, irrespective of other imposable penalties and civil liabilities]

* The complaint or information shall be filed directly in court without need of a prior preliminary examination or preliminary investigation.

* Zaldivia vs. Reyes – since a criminal case covered by the Rules of Summary Procedure shall be deemed commenced only when it is filed in court, then the running of the prescriptive period shall be halted on the date the case is actually filed in court and not on any date before that.

* Reodica vs. CA – [clarifies Zaldivia above] Under Art. 91 of the RPC, the period of prescription shall be interrupted by the filing of the complaint or information. It does not distinguish whether the complaint is filed for preliminary examination or investigation only, or for an action on the merits. Thus, the filing of the complaint even with the fiscal’s office should suspend the running of the Statute of Limitations. The ruling in Zaldivia is not applicable to all cases subject to the Rules on Summary Procedure, since that particular case involved a violation of an ordinance. Therefore, the applicable law therein was not Art. 91 of the RPC, but Act No. 3326 (“An Act to Establish Periods of Prescription for Violations Penalized by Special Acts and Municipal Ordinances and to Provide when Prescription Shall Begin to Run”), §2 of which provides that period of prescription is suspended only when judicial proceedings are instituted against the guilty party.

8. Contents of information

a. Name of the accused

* Information may be amended as to the name of the accused, but such amendment cannot be questioned for the first time on appeal (People vs. Guevarra)

* Error of name of the offended party: if material to the case, it necessarily affects the identification of the act charged. Conviction for robbery cannot be sustained if there is a variance between the allegation and the proof as to the ownership of the property stolen.

b. Designation of offense by statute (or of section/subsection of statute violated)

* Only one offense charged, EXCEPT where law prescribes a single punishment for various offenses.

* If facts do not completely allege all the elements of the crime charged, the info may be quashed; however, the prosecution is allowed to amend the info to include the necessary facts (People vs. Purisima)

c. Acts or omissions complained of constituting the offense

* Information need only allege facts, not include all the evidence which may be used to prove such facts (Balitaan vs. CFI)

d. Name of offended party

e. Approximate time of commission

* Approximation of time is sufficient; amendment as to time is only a formal amendment; no need to dismiss case (People vs. Molero)

* A significant discrepancy in the time alleged cannot be sustained since such would allow the prosecution to prove an offense distantly removed from the alleged date, thus substantially impairing the rights of the accused to be informed of the charges against him (People vs. Reyes)

f. Place of commission

* Conviction may be had even if it appears that the crime was committed not at the place alleged, provided that the place of actual commission was within the court’s jurisdiction and accused was not surprised by the variance between the proof and the information

* Qualifying and inherent aggravating circumstances need to be alleged as they are integral parts of the crime. If proved, but not alleged, become only generic aggravating circumstances.

9. Amendment of information and Substitution of information, distinguished

Amendment	Substitution
Involves either formal or substantial changes	Necessarily involves a substantial change
Without leave of court if before plea	Needs leave of court as original information has to be dismissed
Where only as to form, there is no need for another preliminary investigation and retaking of plea of accused	Another preliminary investigation is entailed and accused has to plead anew
Refers to the same offense charged or which necessarily includes or is necessarily included in original charges, hence, substantial amendments to info after plea taken cannot be made over objections of accused for if original info is withdrawn, accused could invoke double jeopardy	Requires or presupposes that new info involves a different offense which does not include or is not included in the original charge, hence, accused cannot claim double jeopardy

10. After plea, amendment only as to matters of form, provided

Leave of court is obtained; and
Amendment is not prejudicial to rights of accused

11. When amendment is only as to form

Neither affects or alters nature of offense charged
Charge does not deprive accused of a fair opportunity to present his defense
Does not involve a change in basic theory of prosecution

12. Exceptions to rule on venue

Felonies in Art. 2, RPC (cognizable by proper court in which charge is first filed)
Continuing offenses
Piracy which is triable anywhere
Libel (residence; or where first published)
In exceptional cases, to ensure fair trial and impartial inquiry

13. Special cases (who may prosecute)

a. Adultery and concubinage

* Only offended spouse can be complainant

* Both guilty parties must be included in complaint

b. Crimes against chastity

* With consent of the offended party, offended spouse, grandparents, guardian, or state as parens patriae, in that order

* Offended party, even if minor, has right to initiate the prosecution of the case independently of parents, grandparents or guardian, unless she is incompetent/incapable on grounds other than minority.

* If offended party who is a minor fails to file the complaint, her parents, grandparents or guardian may do so.

* In crimes against chastity, the consent of the victim is a jurisdictional requirement–retraction renders the information void (People vs. Ocapan)

* If complexed with a public crime, the provincial fiscal may sign the complaint on his own

c. Defamation (consisting of imputation of offenses in [a] or [b])

* Complainant must be offended party

* The offended party may intervene in the prosecution of the criminal case because of her interest in it (Banal vs. Tadeo)

14. Procedure

Complaint filed in MTC or info filed in RTC where an essential ingredient of the crime took place (territorial jurisdiction)
1. Amendment as a matter of right before plea
2. Amendment upon discretion of the court after plea

* Inclusion of other accused is only a formal amendment which would not be prejudicial to the accused and should be allowed (People vs. CA)

d. After plea and before judgment, if it appears there was a mistake in charging proper offense, court shall dismiss original info upon the filing of a corrected one, provided that the accused will not be placed in double jeopardy (substitution)

* Fiscal determines direction of prosecution; complainant must ask fiscal if he wants to dismiss the case; the motion to dismiss must be addressed to the court which has discretion over the disposition of the case (Republic vs. Sunga)

* Objection to the amendment of an information or complaint must be raised at the time the amendment is made; otherwise, deemed to have consented thereto.

15. Remedies

a. Motion to quash

* May be filed after arraignment but before plea on the grounds provided by the rules (generally, a flaw in the info)

* If duplicity of offense charged is not raised in trial through a motion to quash info, the right to question it is waived (People vs. Ocapan)

b. Motion to dismiss

* May be filed after plea but before judgment on most of grounds for motion to quash

16. Duplicity of Offense (in information or complaint)

* Defined as the joinder of separate and distinct offenses in one and the same information/complaint

* Remedy: file a motion to quash; failure is equivalent to a waiver

* Exception: when existing laws prescribe a single punishment (complex crimes)

Rule 111 Prosecution of Civil Action

1. General Rule: The injured party may file a civil action independent of the criminal proceeding to recover damages from the offender.

* Article 32 is a valid cause of a civil action for damages against public officers who impair the Constitutional rights of citizens (Aberca vs. Ver)

* Even if the private prosecutor participates in the prosecution, if he is not given the chance to prove damages, the offended party is not barred from filing a separate civil action

2. Civil action for recovery of civil liability impliedly instituted, EXCEPT

Waiver
Reservation of right to institute separate action
Institution of civil action prior to criminal action

* NOTE: Under SC Circular 57-97, all criminal actions for violations of BP Blg. 22 shall be deemed to necessarily include the corresponding civil action, and no reservation to file such civil action separately shall be allowed or recognized.

* San Ildefonso Lines vs. CA – past pronouncements of the SC that the requirement in Rule 111 that a reservation be made prior to the institution of an independent civil action is an “unauthorized amendment” to substantive law is now no longer controlling. Far from altering substantive rights, the primary purpose of the reservation requirement is to avoid multiplicity of suits, to prevent delays, to clear congested dockets, to simplify the work of the trial court, and in short, the attainment of justice with the least expense and vexation to parties-litigants.

3. Civil action suspended when criminal action filed, EXCEPT

Independent civil action (Arts. 32, 33, 34 and 2176 of NCC)
Prejudicial civil action
Civil case consolidated with criminal action
Civil action not one intended to enforce civil liability arising from the offense (g., action for legal separation against a spouse who committed concubinage)

4. Prejudicial question arises when

The civil action involves an issue similar or intimately related to the issue raised in the criminal action
The resolution of such issue will determine whether the criminal action will proceed or not

* Requisites for a prejudicial question:

The civil action involves an issue similar or intimately related to the issue raised in the criminal action: and
The resolution of such issue determines whether or not the criminal action may proceed

* Petition for suspension of criminal action is to be filed at any time before prosecution rests.

5. Remedies

a. Reservation of right to institute separate civil proceedings to recover civil liability arising from crime

* Must be made before prosecution presents evidence

* Action instituted only after final judgment in criminal action

b. Petition to suspend the criminal action

* May be filed upon existence of a prejudicial question in a pending civil action

* Filed at any time before the prosecution rests

6. Extinction of penal action does not carry with it extinction of the civil unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist.

* Final judgment in civil absolving defendant from civil liability not a bar to criminal action

7. Filing fees:

Actual or compensatory damages – filing fees not required
Moral, temperate and exemplary – filing fees required
If alleged, fees must be paid by offended party upon filing of complaint or information
1. If not alleged, filing fees considered a first lien on the judgment

Rule 112 Preliminary Investigation

1. Preliminary investigation – inquiry or proceeding to determine if there is sufficient ground to engender a well-founded belief that a crime cognizable by the RTC has been committed, and that the respondent is probably guilty thereof, and should be held for trial

* A preliminary investigation is only necessary for an information to be filed with the RTC; complaints may be filed with the MTC without need of an information, which is merely recommendatory (Tandoc vs. Resultan)

* Absence of a preliminary investigation is NOT a ground for a motion to quash the information; an information filed without a preliminary investigation is defective but not fatal; in its absence, the accused may ask for one; it is the fiscal’s refusal to conduct a preliminary investigation when the accused demands one which is a violation of the rights of the accused (Doromal vs. Sandiganbayan). Court should not dismiss the info, but hold the case in abeyance and either: (1) conduct its own investigation; or (2) require the fiscal to hold a reinvestigation.

2. GENERAL RULE: The fiscal conducts the preliminary investigation before filing an information with the RTC, EXCEPT where the accused is lawfully arrested without a warrant and an inquest is conducted.

3. Right to Preliminary Investigation

* A personal right and may be waived

* Waived by failure to invoke the right prior to or at least at the time of the plea

4. Who conducts Preliminary Investigation

Provincial or city fiscals and their assistants
Judges of MTC and MCTC
National and regional state prosecutors
Such other officers as may be authorized by law
Duly authorized legal officers of COMELEC
1. The Ombudsman
2. The PCGG, in cases of ill-gotten wealth

5. Procedure

a. If conducted prior to arrest

i. Complainant files complaint with

(a) Provincial or city fiscal

(b) Regional or state prosecutor

(d) Other offices authorized by law

Investigating officer either dismisses complaint or asks by subpoena complainant and respondent to submit affidavits and counter-affidavits
1. If the investigating officer finds prima facieevidence, he prepares an information and a resolution

* i.e., if fiscal finds reasonable ground to believe that a crime has been committed and accused is probably guilty thereof

* Prima facie evidence is that evidence which, standing alone, unexplained and uncontradicted, would be enough to merit a conviction of the accused

iv. Otherwise, he recommends the dismissal of the complaint

* If the investigating officer is an MTC judge, and he finds that probable cause exists and that there is a need to place the accused under custody, then he may issue a warrant of arrest

* Flores vs. Sumaling – What differentiates the present rule from the previous one is that while before, it was mandatory for the investigating judge to issue a warrant for the arrest of the accused if he found probable cause, the rule now is that the investigating judge’s power to order the arrest of the accused is limited to instances in which there is a necessity for placing him in custody “in order not to frustrate the ends of justice.” It is therefore error for the investigating judge to order the issuance of a warrant of arrest solely on his finding of probable cause, without making any finding of a necessity to place the accused in immediate custody to prevent a frustration of justice.

Investigating officer forwards records to the city fiscal or chief state prosecutor
1. City fiscal or state prosecutor either dismisses the complaint or files the information in court

* Decision prevails over decision of the MTC judge

vii. Records will not form records of the case proper

* Court on its own or on motion may order production of record

b. If conducted after warrantless arrest

If accused waives Art. 125, RPC and asks for a preliminary investigation, with the assistance of counsel, then the procedure for one prior to arrest is followed
1. Inquest conducted as follows

(a) Fiscal determines the validity of the arrest

(b) Fiscal determines existence of prima facie evidence based on the statements of the complainant, arresting officer and witnesses

(c) Fiscal either dismisses the complaint and orders the immediate release of the accused, OR prepares and files an information

* While fiscal has quasi-judicial discretion whether or not to file an information, once it is filed with the court, the court acquires jurisdiction giving it discretion over the disposition of the case and the Sec. of Justice should refrain from entertaining petitions for review or appeals from the decision of fiscal (Crespo vs. Mogul; Velasquez vs. Undersecretary of Justice)

NOTE: Information may be filed by offended party, peace officer or fiscal without preliminary investigation.

6. Remedies

a. Motion for preliminary investigation

* Filed when accused is arrested without warrant

* Must be with assistance of counsel and after waiving Art. 125, RPC

b. Motion for preliminary investigation

* Filed within 5 days after accused learns an information against him has been filed without a preliminary investigation

c. Motion for re-investigation

d. Appeal to DOJ

* Filed upon denial of his motion for a preliminary investigation, on the ground that his rights to due process of law were violated, ousting the court of jurisdiction

e. Petition for prohibition

* Filed with appellate court to stop the criminal proceedings

* Ordinarily, injunction will not lie but may be granted in certain cases

* When prohibition proper to restrain criminal proceedings:

When strong-arm tactics are used for vindictive purposes (Salonga vs. Cruz-Pano)
When the accused is deprived of his rights
When the statute on which the charge is based is null and void
When it will aid the administration of justice (Tatad vs. Sandiganbayan)
When multiplicity of suits will be avoided (Guingona vs. City Fiscal)

Rule 113 Arrest

1. Arrest – taking a person into custody in order that he may be bound to answer for the commission of some offense, made by an actual restraint of the person or by his submission to custody

2. General Rule: No person may be arrested without a warrant.

* Not all persons detained are arrested; only those detained to answer for an offense.

* “Invitations” are not arrests and are usually not unconstitutional, but in some cases may be taken as commands (Babst vs. NBI); however, the practice of issuing an “invitation” to a person who is investigated in connection with an offense he is suspected to have committed is considered as placing him under “custodial investigation.” (RA 7438)

* Warrants of arrest remain valid until arrest is effected, or the warrant is lifted

* Arrest may be made at any time of the day or night

3. Warrantless arrests by a peace officer or a private person

a. When person to be arrested is committing, attempting or has committed an offense

b. When an offense has just been committed and the person making the arrest has personal knowledge that the person to be arrested committed it

* Warrantless arrest anytime for a continuing offense like rebellion, subversion (Umil vs. Ramos)

* The continuing crime, not the crime finally charged, needs only be the cause of the arrest (Umil vs. Ramos)

c. When person to be arrested is an escaped detainee (either serving sentence or with case pending)

When a person lawfully arrested escapes
Bondsman, for purpose of surrendering the accused
Accused attempts to leave country without court permission

4. Procedure

a. With warrant

Complainant files application with affidavits attached
Judge conducts ex partepreliminary examination to determine probable cause

* In determining probable cause, judge must:

(1) Personally examine witness

(2) Witness must be under oath

(3) Examination must be reduced to writing (Luna vs. Plaza)

* In determining probable cause, the judge may rely on findings by responsible officer (Lim vs. Felix)

iii. Judge issues warrant of arrest

* If without preliminary examination, considered irregular (Bagcal vs. Villaraza)

iv. If peace officer is unable to serve warrant 10 days after issuance, he must file a report and explanation with judge within 10 days

v. If warrant served

(1) Person informed that he is being arrested

(2) Informed of cause of his arrest

(3) Officer may break door or window if admission to building is refused

(4) Person physically restrained

* For private citizens making an arrest

* May not do so except to do some service to humanity or justice

(5) No violence or unnecessary force may be used

(6) Officer may summon assistance

(7) Person who escapes after arrest may be immediately pursued

vi. Person arrested is brought to nearest police station or jail

b. Without warrant:

Person is arrested
1. Person arrested may waive right to Art. 125, RPC and ask for preliminary investigation or inquest

* Fiscal is not judicial authority contemplated under Art. 125 (Sayo vs. Chief of Police)

Fiscal files info

5. Requisites for a warrant of arrest:

Probable cause
Signed by judge
Specifically naming or particularly and sufficiently describing person to be arrested

* John Doe warrants are void for being general warrants (Pangandaman vs. Cesar)

6. Remedies

a. Petition for writ of habeas corpus

* Filed with any court, to effect immediate release of the person detained

* Filed when a person is being illegally detained (without judicial process), or was illegally arrested (void warrant or unlawful warrantless arrest, or warrantless arrest beyond period with no information filed)

* Habeas corpus is not allowed when:

The person is in custody of an officer under process of law, and
The court had jurisdiction to issue the process (Luna vs. Plaza)

* If an arrest is improper, the remedy is a motion for quashal of the warrant of arrest and/or a motion to quash the information, not habeas corpus (Ilagan vs. Enrile)

* Habeas corpus is no longer available after an information has been filed, the information being the judicial process required by law (Ilagan vs. Enrile)

* Habeas corpus is proper when a person is being restrained illegally, e.g., imprisoned past maximum penalty allowed by law (Gumabon vs. Director of Prisons)

b. Quashal of warrant of arrest

* Filed with court which issued the warrant of arrest when the warrant of arrest is fatally flawed

c. Motion to quash information

* Filed with court when information against the person arrested has been filed

* Must be made in a “special appearance” before the court questioning only its lack of jurisdiction over the person of the accused

* Otherwise, the voluntary appearance of the person arrested by filing a motion before the court would be deemed a submission to the authority of the court, thus granting it whatever jurisdiction it lacked over the person

* Any irregularity in the arrest is cured when the petitioner submits himself to the jurisdiction of the court, e.g., by filing for bail (Bagcal vs. Villaraza)

7. V.V. Mendoza, “Rights to Counsel in Custodial Investigation”

* Evolution of rights of the accused under custodial investigation

All involuntary confession were inadmissible; accused had to prove involuntariness
1. Involuntary confessions were inadmissible only if they were false
2. Revert to exclusionary rule: any involuntary confession is inadmissible
  1. Miranda rule: the accused must be informed of his rights
    1. To remain silent
    2. Against self-incrimination
    3. To counsel
    4. Definition of custodial investigation questioned
      1. It begins only after arrest
      2. Police investigations prior to arrest are not covered
      3. The rights may be waived, but the rights to be informed of these rights, e., to warning, may not be waived
      4. Warning must not only be said, officer must make sure the person arrested understands them specifically
      5. Present rules
        
        Voluntary confessions are admissible
        
        Test of voluntariness determined on a case-to-case basis
        
        Waiver of rights must not only be with counsel but must be in writing

* Confessions made without assistance of counsel are inadmissible as evidence to incriminate the accused, but they may be used to impeach the credibility of the accused, or they may be treated as verbal admission of the accused through the testimony of the witnesses (People vs. Molas)

Rule 114 Bail

1. Bail – security given for the release of a person in custody of law, furnished by him or a bondsman, conditioned upon his appearance before any court as required under the following conditions:

Undertaking effective upon approval and remains in force at all stages until promulgation of judgment, unless sooner cancelled
Accused shall appear before court when required
Failure to appear despite notice to him or the bondsman will waive his right to be present and trial shall proceed in absentia
Bondsman shall surrender accused for execution of judgment

* Bail applies to all persons detained, not just to those charged with the offense (Herras vs. Teehankee)

* Court has power to prohibit person out on bail from leaving the country (Manotoc, Jr. vs. CA)

* Bail implies delivery of the accused to the sureties who, though not holding him prisoner, may seize him and imprison him until they can deliver him to court (US vs. Bonoan)

2. General Rule: All persons are entitled to bail as a matter of right, except those charged with capital offenses.

* Right to bail traditionally unavailable to military personnel facing court martial, who are not in the same class as civilians (Comendador vs. de Villa)

* Bail should be available regardless of other circumstances or the merits of the case, if the health or the life of the detainee is in danger (Dela Rama vs. People’s Court)

* Excessive bail is tantamount to denial of bail, which is unconstitutional (Dela Camara vs. Enage)

3. When bail is a matter of right

* Before or after conviction by MTC, MCTC, MJC

* Before conviction by the RTC of an offense not punishable by death, reclusion perpetuaor life imprisonment

4. When bail is discretionary (application filed with court where case is pending)

Upon conviction by RTC of an offense not punishable by death, reclusion perpetuaor life imprisonment
Provisional liberty under same circs. but during period to appeal subject to consent of bondsman
In case he has applied for probation after final judgment, he may be allowed temporary liberty under his bail or recognizance

5. Procedure

a. Offense charged is not capital:

i. Accused applies for bail

(1) Where information against him was filed or where case is pending

(2) Absent (1), in another branch of the same court within the province or city where he is held

(3) If arrested in another province, city or municipality, file with the RTC

(4) Absent (3), with the MTC

Judge sets bail
1. Accused may move to reduce bail, and hearing will be set
2. Accused posts bail and deposits the same with the Municipal/City/Provincial Treasurer or, if cash, with the Collector of Internal Revenue
3. Accused is released

b. Offense charged is capital:

Accused petitions for bail
Judge sets hearing to determine whether evidence of guilt is strong

* Ex-parte hearing on bail is arbitrary and unacceptable (Herras vs. Teehankee)

Prosecution presents evidence
1. Court may not force fiscal to produce evidence (Herras vs. Teehankee)
2. If evidence is strong, bail is denied
  1. Otherwise, judge sets bail and procedure for non-capital offense is followed

* In capital crimes, judge’s discretion is limited to determining strength of evidence and does not cover determining whether bail should be allowed (Herras vs. Teehankee)

* Evidence must be strong that the accused is guilty of the capital offense charged, not just of any offense (Bernardez vs. Valera)

6. Bail bond – an obligation under seal given by accused with one or more sureties and made payable to proper officer with the condition to be void upon performance by the accused of such acts as he may legally be required to perform

7. Recognizance

Obligation of record entered into before some court of magistrate duly authorized to take it, with the condition to do some particular act, the most usual condition in criminal cases being the appearance of the accused for trial
Does not require signature of accused for trial
Does not require signature of accused to be valid

8. Prosecution witnesses may be required to post bail to ensure their appearance at the trial, except:

Substitution of info (see R110, §14)
Court believes that material witness may not appear at the trial

9. When bail required under RA 6036 (violation of ordinance, light felony, criminal offense – not higher that 6 month imprisonment and/or P2000 fine, or both)

Caught in flagrante
Confessed to commission of offense unless repudiated (force and intimidation)
Previously escaped, evaded sentence or jumped bail
Violation of Sec. 2 (fails to report to clerk of court periodically under his recognizance)
Recidivist, habitual delinquent previously convicted for an offense to which the law or ordinance attaches an equal or greater penalty or for 2 or more offenses to which it attaches a lighter penalty
Committed offense while on parole or under conditional pardon
Previously pardoned by municipal or city mayor for violation of ordinance for at least 2 times

10. Instances when accused may be released on recognizance:

Offense charged is a violation of an ordinance, a light felony or criminal offense the imposable penalty to which does not exceed 6 months and or P2000 fine
Person has been in custody for a period equal to or more than the minimum of the imposable principal penalty, without application of the Indeterminate Sentence Law or any modifying circumstance
Accused has applied for probation and before the same has been resolved, but NO BAIL was filed or accused is incapable of filing one
Youthful offender held for physical and mental examination, trial or appeal, if unable to furnish bail

11. Cancellation of bail

a. Upon application with the court and due notice to the fiscal

Accused surrenders back to custody
1. Accused dies

b. Automatic cancellation

Case is dismissed
1. Accused is acquitted
2. Accused is convicted and surrenders for execution of judgment

12. When bail cancelled or denied: after RTC imposes imprisonment exceeding 6 years, but not more than 20 years, and:

Accused is a recidivist, quasi-recidivist, habitual delinquent or guilty of the aggravating circumstance of reiteration;
Provisionally escaped, evaded sentence, violated provisions of bail;
Committed offense while on probation, parole, or conditional pardon;
Probability of flight; or
Undue risk that during appeal, he may commit another crime

13. When bail is forfeited

a. Accused fails to appear before court when required

* 30 days for bondsman to show cause why judgment should not be rendered against him

b. Bondsman fails to produce him within 30 days

c. Bondsman fails to satisfactorily explain to the court why accused did not appear when first required to do so

* Sureties guarantee only appearance of the accused, not his conduct (US vs. Bonoan)

* Sureties exonerated if appearance made impossible by an act of God, the obligee or the law (US vs. Bonoan)

14. Provisional forfeiture

Within 30 days, produce the body or give reason for non-production AND
Explain satisfactorily the absence of the accused when first required to appear

15. Remedies

Application for bail, when bail can be availed of as a matter of right
Petition for bail, when the offense charged is a capital offense

* For judge to set hearing for the determination of strength of evidence of guilt

16. Circumstances to be considered in fixing amount of bail:

Financial ability of accused to give bail;
Nature and circumstances of offense;
Penalty of offense charged;
Character and reputation of accused;
Age and health of accused
Weight of evidence against accused
Probability of accused appearing for trial;
Forfeiture of other bonds;
Fact that accused was a fugitive from justice when arrested; and
Pendency of other cases in which the accused is under bond

17. Notes:

Posting bail waives the right to question any irregularity attending the arrest of a person (Callanta vs. Villanueva). However, this does not result in waiver of the inadmissibility of the articles seized incidentally to such illegal arrest.
Accused waived the right to question any irregularity in the conduct of the preliminary investigation when he failed to do so before entering his plea (People vs. Dela Cerna)
Accused out on bail may be re-arrested if he attempts to depart from the Philippines without prior court permission (warrantless arrest allowed).

Rule 115 Rights of Accused

1. Right of the accused under the Rules

a. To be presumed innocent until proven guilty beyond reasonable doubt

* In an appeal from a conviction, the accused shall again be presumed innocent until and unless his conviction is affirmed (Castillo vs. Felix)

b. To be informed of the nature and cause of charges

* The right must be substantially complied with; arraignment and later proceedings must be in a language the accused understands (People vs. Crisologo)

c. To be present at every stage of proceedings, subject to waiver by bail

* If an accused escapes, he waives this right and merits a trial in absentia; the accused forfeits his rights to be notified of proceedings in the future and to adduce evidence in his behalf (People vs. Salas)

To testify as witness on his own behalf, subject to cross-examination on matters covered by direct examination; not to be prejudiced by his silence
Not to be compelled to be a witness against himself
To confront and examine the witnesses against him, including the right to use in evidence testimony of a witness
Who is deceased, out of or cannot with due diligence be found in the RP
1. Given in another proceeding
2. With the same parties
3. Same subject matter
4. Opportunity to cross-examine

* Prosecution has no privilege to withhold the identity of informers when such informer was crucial in the operation itself; failure to present the informer is a denial of the right to confront the witness which merits the reversal of the conviction (People vs. Bagano)

g. To have compulsory process to secure witnesses and evidence in his behalf

h. To have a speedy, impartial and public trial

* Unreasonable postponements of trial amounts to a denial of the right to a speedy trial, entitling the accused to mandamus to compel dismissal of the case, or to habeas corpus if he is detained

i. To have the right of appeal

2. Rights of the accused under the Constitution

a. To due process

b. Against self-incrimination

* Right is limited to testimonies; ocular inspection of the body may be allowed (Villaflor vs. Summers)

* Being informed of rights means a meaningful transmission of information, without which confession made by the accused is inadmissible (People vs. Nicandro)

* Confessions obtained through coercion are inadmissible (People vs. Opida)

* Right against self-incrimination and to counsel do not apply during custodial investigation (People vs. Ayson)

* During trial, the right against self-incrimination takes the following form:

Accused may refuse to testify
If he testifies, he may refuse to answer those questions which may incriminate him in ANOTHER offense

c. Against double jeopardy

d. To be heard by himself and counsel

3. Double jeopardy

First jeopardy must have attached prior to the first
First jeopardy attached and terminated
Valid complaint or information
1. Competent court with jurisdiction
2. Accused had pleaded
3. Action ended in conviction, acquittal or termination without the consent of the accused

c. Offense charged in later case is:

Same as that in previous case
1. Necessarily includes or is included in the previous case
2. An attempt or frustration of the offense in previous case
  1. An offense lesser than that charged to which the accused pleaded guilty with the consent of the fiscal and the offended party

4. Exceptions to double jeopardy

The offense was made graver by supervening events
The facts constituting the graver offense were only discovered after the filing of the earlier information

* No double jeopardy if the new fact which justified the new charge arose only after arraignment and conviction (People vs. City Court)

* No double jeopardy where the trial was a sham since there was no competent court (Galman vs. Sandiganbayan)

* No double jeopardy if first case was dismissed with consent of the accused (Caes vs. IAC)

* There is double jeopardy if a person is charged twice under different penal statutes for the same acts (People vs. Relova)

c. Plea of guilty to a lesser offense without the consent of the fiscal and the offended party

5. Remedies

Motion to quash
Motion to dismiss

* Both filed on the ground of violation of accused’s rights, thereby ousting the court of jurisdiction

6. NOTES:

* Constitution, Art. III, Sec. 1

No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws.

* Constitution, Art. III, Sec. 14

No person shall be held to answer for a criminal offense without due process of law.
In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and shall enjoy the right to be informed of the nature and cause of the accusations against him, to have a speedy, impartial and public trial, to meet the witnesses face to face, and to have compulsory process to secure the attendance of witnesses and the production of evidence in his behalf.

However, after arraignment, trial may proceed notwithstanding the absence of the accused provided that he has been duly notified and that his failure to appear is unjustifiable.

* Constitution, Art. III, Sec. 16

All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies.

* Constitution, Art. III, Sec. 17

No person shall be compelled to be a witness against himself.

* Constitution, Art. III, Sec. 21

No person shall be twice put in jeopardy of punishment for the same offense.

If an act is punished by a law or ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.

Rule 116 Arraignment and Plea

1. Procedure

Court informs accused of his right to counsel and asks him if he wants one
Court appoints counsel de oficioif accused has none

* If no such member of the available, any person who is a resident of the province, of good repute for probity and ability to defend accused

c. Court gives counsel time to confer with accused at least an hour before arraignment

* Period allowed for counsel de oficio to confer with accused must be substantially complied with; if not, case may be remanded for re-arraignment (People vs. Gonzaga)

Accused given a copy of the information, which is read to him in a language he understands
Accused is asked whether he pleads guilty or not guilty
Accused files a motion to quash or makes plea
Accused personally makes his plea
Plea is entered into record
If accused makes plea of not guilty, counsel has at least 2 days to prepare for trial

* People vs. Agbayani – the right for 2 days to prepare must be expressly demanded. Only when so demanded does denial thereof constitute reversible error and ground for new trial. Further, such right may be waived, expressly or impliedly.

* NOTE, HOWEVER, under SC Circular 38-98 (implementing “Speedy Trial Act of 1997”), accused must be given at least 15 days to prepare for trial, which shall commence within 30 days from receipt of Pre-Trial Order.

j. Case proceeds to pre-trial, trial or hearing, depending on the plea

* Statement in the judgment that the accused was arraigned and pleaded is sufficient; the manner of statement of such fact is immaterial (People vs. Cariaga)

2. Kinds of plea

No plea – a plea of not guilty shall be entered
Conditional plea of guilt – a plea of not guilty shall be entered
Not guilty – case proceeds to trial or pre-trial
Guilty to a lesser offense – if fiscal and offended party consents, conviction under offense charged for purposes of double jeopardy
Info may be amended
1. Case goes to trial
2. Even if info is not amended, and even if lesser offense is not included in offense charged, court may still find the accused guilty of that lesser offense

e. Guilty to a capital offense

* Court conducts searching inquiry to determine if accused was aware of the charges, of his plea, and its consequences

* Court requires prosecution to present evidence to prove guilt of accused and determine his degree of culpability, and accused may still establish presence of mitigating circumstances in his favor

f. Guilty to a non-capital offense

* Court receives evidence from the parties to determine penalty to impose

* Plea of guilty not necessarily followed by conviction. Upon receipt of exculpatory evidence (if accused pleaded guilty), trial court should consider the plea withdrawn and in its place, order the plea of not guilty

* Plea of guilty waives only defects which may be taken advantage of by motion to quash or by plea in abatement; cannot cure jurisdictional defects.

3. Effects

a. Entry of plea will waive

Right to question illegality of the arrest
Right to question any irregularity in the preliminary investigation
Right to file a motion to quash

b. Improvident plea of guilty may be changed to not guilty any time before judgment is rendered

c. A plea of not guilty may not be changed to guilty, as doing so would only spare the prosecution of presenting evidence and still result in the conviction of the accused.

4. Remedies

a. Motion for specification

* May be filed any time before plea, even after a MTQ

* Filed when the information is insufficient in form or is generally worded, that a Bill of Particulars is necessary to clarify the acts for which the accused is being charged

b. Motion to quash

* May be filed at anytime before plea is entered

* Based on grounds provided by the rules

c. Motion to suspend arraignment

* Filed when the accused seems mentally unsound or if there is a prejudicial question in a pending civil case

d. Motion to withdraw an improvident plea of guilt

* May be filed at any time before judgment of conviction becomes final, when it can be shown that the accused was not aware of the significance of pleading guilty to the charges

Rule 117 Motion to Quash

1. Motion to quash – a hypothetical admission that even if all the facts alleged were true, the accused still cannot be convicted due to other reasons

2. When to file Motion to Quash

General Rule: Before entering plea; all grounds not raised deemed waived

Exception: The following grounds may be used in MTQ even after plea

No offense charged
Lack of jurisdiction over the offense charged
Extinction of the offense or of the penalty
Double jeopardy

3. Grounds

a. Information does not conform to prescribed form

* For the info to charge a complex crime, it is not necessary that it be defined by law, only that it alleges that one offense was necessary to commit the other (People vs. Alagao)

b. Court has no jurisdiction

No territorial jurisdiction
No jurisdiction over offense charged may be raised at any time; no waiver considered even upon failure to move to quash on such ground
No jurisdiction over person of the accused

* The court gained jurisdiction over the person of the accused when he voluntarily appeared for the pre-suspension hearing (Layosa vs. Rodriguez)

c. Accused would be put in double jeopardy

* Bars another prosecution

* No waiver

* No double jeopardy if first case was dismissed with the consent of the accused (Que vs. Cosico), unless ground for dismissal is: (a) denial of right to speedy trial; or (b) insufficiency of evidence.

* If the first case was dismissed due to a deficient information, then there was no valid information and there could be no double jeopardy (Caniza vs. People)

* Cudia vs CA – it should be the Provincial Prosecutor of Pampanga, not the City Prosecutor, who should prepare informations for offenses committed within Pampanga but outside Angeles City. An information must be prepared and presented by the prosecuting attorney or someone authorized by law. If not, the court does not acquire jurisdiction. Although failure to file a motion to quash the information is a waiver of all objections to it insofar as formal objections to pleadings are concerned, questions relating to want of jurisdiction may be raised at any stage of the proceedings. Moreover, since the complaint or information was insufficient because it was so defective in form or substance that conviction upon it could not have been sustained, its dismissal without the consent of the accused cannot be pleaded as prior jeopardy, and will not be a bar to a second prosecution.

d. More than one offense was charged, EXCEPT where law prescribes single punishment for various offenses

e. Facts alleged do not constitute an offense

* May be raised at any time

* No waiver

* For charge to be complete, it is necessary to state that it was exempted from any amnesty existing at the time

f. Criminal action or liability has been extinguished

g. Information contains allegations which, if true, would be a legal excuse or justification

h. Officer who filed the information had no authority

* Presentation of evidence cannot cure an invalid information (People vs. Asuncion)

NOTE: Court will consider no other grounds other than those raised, EXCEPT lack of jurisdiction over offense charged.

4. Requisites of Double jeopardy

a. Valid information or complaint, sufficient in form and substance

b. Before court of competent jurisdiction

* Doctrine of “Jurisdiction by Estoppel”: depends upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred on appeal, from assailing such jurisdiction, for the same ‘must exist as a matter of law, and may not be conferred by consent of the parties or by estoppel’. However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent position — that the lower court had jurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is conferred by law, and does not depend upon the will of the parties, has no bearing thereon.

c. Accused had pleaded

d. Conviction, acquittal, or dismissal or termination of case without consent of accused

e. Bar to offense charged, attempt to commit the same or necessarily includes or is necessarily included

* Conviction for physical injuries through reckless imprudence constitutes double jeopardy to the charge of damage to property through reckless imprudence.

5. Procedure

MTQ filed
If based on defect in info which can be cured, court shall order its amendment
Quashing the info shall NOT be a bar to subsequent prosecution (accused has not pleaded yet), EXCEPT when the ground is:
1. Double jeopardy OR
2. Extinction of criminal liability

6. Remedies

Motion to dismiss – if certain grounds were not raised or denied in a MTQ
Trial

* If there was really no basis for the info, then such could be proved in the trial

* Upon denial of a MTQ, the proper remedy is to go on trial and later to appeal, if necessary; mandamus or certiorari will only be granted if there is not other plain, simple and adequate remedy

7. Failure to move to quash or to allege any ground therefor deemed a waiver of such grounds, except:

Failure to charge an offense
Lack of jurisdiction over the offense charged
Extinction of the offense or of the penalty
Double jeopardy

Rule 118 Pre-Trial

1. Plea bargaining – process whereby the accused and the prosecution in a criminal case work out a mutually satisfactory disposition of the case subject to court approval. It usually involves the defendant’s pleading guilty to a lesser offense or to only some of the counts of a multi-count indictment in return for a lighter sentence than that for the greater charge.

* Under “Speedy Trial Act of 1997”, in all criminal cases cognizable by the MTC, MCTC, MeTC, RTC and Sandiganbayan, pretrial is mandatory.

* Under SC Circular 38-98, implementing the “Speedy Trial Act of 1997”, an accused may plea guilty to a lesser offense only if said offense is necessarily included in the offense charged.

2. Stipulation of facts

* Facts which both parties and respective counsels agree on as evidenced by their signatures; these facts need not be proved by evidence in trial

* Stipulation is inadmissible if unsigned by either accused or counsel; a later memo of confirmation, signed only by counsel, cannot cure defect (Fule vs. CA)

3. Pre-trial order – binds the parties, limits the trial to matters not yet disposed of, and controls the course of action during the trial

4. Procedure

Judge must calendar pre-trial
Either party may waive the pre-trial
If court appoints counsel de oficio, counsel has at least 2 days to prepare
In the pre-trial conference
Plea bargaining
Stipulation of facts
Marking of evidence (does not imply conceding to its admissibility or credibility)
Waiver of objections to admissibility of evidence
Other matters which will promote a fair and expeditious trial

e. Judge issues pre-trial order

Rule 119 Trial

1. In trial, the defense tries

To assail the admissibility of evidence which prove the elements of the offense charged
To assail the credibility of such evidence
To prove another version, possibly admitting certain evidence of the prosecution and adding other evidence to cast reasonable doubt

* Even in summary procedure, the judge cannot base his decision simply on affidavits; he must give the defendant the chance to cross-examine (Combate vs. San Jose)

2. Procedure

a. Parties notified of date of trial 2 days before trial date (R119, §1)

* HOWEVER, under SC Circular 38-98, accused must be given at least 15 days to prepare for trial, which shall commence within 30 days from receipt of Pre-Trial Order.

Accused may move that his witnesses be examined
Defense witnesses examined by any judge or lawyer
Prosecution witnesses, if they would be unable to attend trial, may be examined by the judge handling the case
Trial continues from day to day, unless postponed for a just cause
Prosecution presents evidence

* Presentation

* Testimonies: direct examination

* Cross-examination

* Re-cross

* Offer

Accused may move for discharge
Prosecution rests
Defense may, with or without leave of court, file a demurrer to evidence
Defense presents evidence
Defense rests
Prosecution presents rebuttal evidence
Defense presents rebuttal evidence
Trial is closed; case is submitted for judgment

3. When mistake made in charging proper offense

If Accused cannot be convicted of offense charged or offense necessarily included therein
Accused detained, not discharged
Original case dismissed upon filing of proper information

* Example: Charged with theft. At trial, appears that offense is estafa. The prosecution can ask for the dismissal of the info in order to file a new one for estafa. No Double Jeopardy because no valid info in the first case.

4. Application for examination of witnesses for accused before trial

Sick or infirm; unable to attend trial
Resides more than 100 km. from means of trial; no means to attend

5. Application (prosecution)

Sick or infirm
Has to leave the RP with indefinite date of returning

6. Requisites for postponement due to absence of a witness

Witness is really material and appears to the court to be so
Party who applies for postponement has not been guilty of neglect
Witness can be had at the time to which the trial has been deferred
No similar evidence could be obtained

7. Requisites to discharge of an accused as State Witness

Testimony of accused absolutely needed
No other direct evidence available EXCEPT his testimony
Testimony can be corroborated on material points
Accused does not appear to be most guilty
Accused has never been convicted of offense involving moral turpitude

* Discharge of accused, when not all the requisites were met, cannot be revoked as long as he testified according to what was expected of him (People vs. Aninon)

8. Remedies

a. Motion for separate trials

* Filed by the fiscal to try several accused separately

* Granted at the court’s discretion

* May also be ordered by the court motu proprio

b. Motion to consolidate

* Upon the court’s discretion, separate charges may be tried in one single case if the offenses charged arise form the same facts or form part of a series of similar offenses

* Court allowed consolidation of rape cases substantially committed in the same manner (People vs. David)

c. Motion for continuance – filed to postpone trial for just cause

d. Motion to exclude public

* Excluding parties, counsels and court personnel

* May also be ordered by court motu proprio

e. Motion for discharge

* Filed before the prosecution rests

* Hearing to determine existence of requisites for discharge

* Prosecution will present evidence and the sworn statement of the proposed state witness

* Evidence adduced in this said hearing automatically form part of trial; however, if court denies motion for discharge, his sworn statement shall be inadmissible in evidence.

* Discharge of the accused has the effect of acquittal, unless accused fails or refuses to testify against his co-accused in accordance with his statement (which formed the basis for his discharge)

f. Demurrer to evidence

* May be made after the prosecution rests its case

* If the court finds the prosecution’s evidence insufficient, the case will be dismissed

* Otherwise, if demurrer denied

If the demurrer was made with leave of court, defense gets to present evidence
If the demurrer was made without leave of court, defense is deemed to have waived the right to present evidence and the case is submitted for judgment

* Case may also be dismissed motu proprio

g. Motion to reopen

* Filed after the case is submitted for judgment but before judgment is actually rendered

* To allow either side to present additional evidence, if such could not be found before

* Granted on discretion of the judge

* The accused cannot move to reopen the case to allow him to adduce evidence in his behalf when his failure to adduce them during the trial was his own fault (People vs. Cruz)

Rule 120 Judgment

1. Judgment – adjudication by the court that the accused is guilty or not guilty of the offense charged, and the imposition of the proper penalty and civil liability provided by law on the accused

2. General Rule: If the accused is found not guilty, he will be acquitted and the acquittal immediately becomes final and executory. If the accused is found guilty, penalty and civil liability will be imposed on him.

3. Accused may be convicted of

The offense charged
A lesser offense necessarily included in the offense charged

* Accused cannot be convicted for an offense graver than that charged (People vs. Guevarra)

4. Contents

Written in official language
Personally prepared and signed by the judge
Contains facts proved
Contains law upon which judgment is based

* In case of conviction, judgment must state:

Legal qualification of offense and aggravating and mitigating circumstances
Level of participation
Penalty imposed
Civil liability for damages, unless right to separate civil action has been reserved

* In case of acquittal, judgment must state:

Civil liability for damages, unless acts alleged clearly did not exist
Basis of liability

5. Procedure

Judge reads judgment in presence of accused
If judgment is of acquittal
It becomes final and executory
It bars subsequent prosecution for the same offense

c. If judgment is of conviction, remedy is to file:

Motion for reconsideration
Motion for new trial
Notice of appeal

* Or else, judgment becomes final and is entered in the book of Judgments

6. When judgment in a criminal case becomes final:

After lapse of period for perfecting an appeal; or
When sentence partially or totally satisfied or served; or
Accused has expressly waived in writing his right to appeal, EXCEPT in cases of automatic review where death penalty is imposed
Accused has applied for probation

7. Only a judgment in conviction can be modified or set aside

Before judgment had been final (otherwise double jeopardy);
Before appeal had been perfected; or
To correct clerical errors in the judgment

8. Remedies

a. Appeal

* Filed within 15 days of promulgation of judgment

* Period is interrupted by filing of a motion for new trial or reconsideration

* On motion of accused or at its own instance with consent of the accused

b. Motion for reconsideration

* Filed when there are errors of law or fact in the judgment

* Shall require no further proceedings

* Notice should be given to the fiscal

c. Motion for new trial

* Notice should be given to the fiscal

* Filed on the following grounds:

Error of law or irregularities have been made during trial which are prejudicial to the substantial rights of the accused

ii. New evidence has been found which could not have been found before and which could change the judgment

9. Procedure for new trial

Hearing shall be set and held
All evidence not alleged to be in error shall stand
New evidence will be introduced
Old judgment may be set aside and a new one rendered

10. Notes:

* Suspension of sentence for youthful offenders – after conviction, minor is committed to custody and care of DSWD or any training institution until reaches 21 years of age, or a shorter period

* Probation – disposition under which a defendant after conviction and sentences, is released subject to conditions imposed by the court and to the supervision of a probation officer

* Parole – the conditional release of an offender from a penal or correctional institution after he has served the minimum period of his prison sentence under the continued custody of the state and under conditions that permit his reincarceration if he violated the conditions of his release

Rule 121 New Trial or Reconsideration

1. Reopening of the case

Made by the court before judgment is rendered in the exercise of sound discretion
Does not require consent of accused
May be made at the instance of either party who can thereafter present additional evidence

2. Motion for new trial

Filed after judgment is rendered but before the finality thereof
At the instance or with the consent of the accused
The prosecution can move only for the reconsideration of the judgment but cannot present additional evidence

3. Motion for New Trial is denied if:

Only impeaching evidence is sought to be introduced as the court had already passed upon issue of credibility
Only corroborative evidence is offered
Prisoner admits commission of crime with which accused is charged (facility with which such confession can be obtained and fabricated)
Alleged new evidence is inherently improbable and could easily be concocted
Alleged new evidence consists of recantations of prosecution witness, due to unreliability of such recantations, EXCEPT if no other evidence to sustain conviction aside from recanted testimony

4. New Trial vs. Reconsideration

* Motion for recon is based on the grounds of errors of law in the judgment is court is not asked to reopen the case for further proceedings, but to reconsider its findings or conclusions of law and make them conformable to the law applicable to the case on the judgment the court has to render anew.

5. New Trial vs. Modification of Judgment

* In New Trial, irregularities are expunged from the record and/or new evidence is introduced. In modification of judgment, no new hearings or proceedings of any kind or change in the record or evidence. A simple modification is made on the basis of what is on the record.

6. New Trial vs. Reopening of the Case

* New trial presupposes that existence of a judgment to be set aside upon the granting of a new trial

* In reopening, no judgment has yet been rendered, although the hearing may have already been closed

7. Motion for Reconsideration

* Grounds are errors of law or fact in judgment, which require no further proceedings.

8. Effects of Granting Motion for New Trial or Reconsideration

a. Based on error of law or irregularities during trial:

* Proceedings and evidence not affected by irregularities stand, and those affected are set aside. Court may allow introduction of new evidence

b. Based on newly discovered evidence:

* Evidence already taken shall stand; new evidence taken with the old

Rule 122 Appeal

1. Procedure

a. Filed with RTC, if original case was with MTC

* Notice served to lower court and to adverse party

b. Filed with the CA or SC, if original case was with RTC

i. With CA: notice of appeal with court, and with copy on adverse party

* If CA is of opinion that penalty should be reclusion perpetua or higher, it shall render judgment imposing said penalty, but refrain from entering judgment and then certify the case and the entire record thereof to the SC for review (R124, §13)

* CA may reverse, affirm, or modify judgment of RTC, or remand case for new trial or re-trial, or dismiss the case

* If RTC decided case in appellate jurisdiction: Petition for Review

ii. With SC: notice of appeal where penalty imposed is life imprisonment, or lesser penalty involving offenses committed on the same occasion, or arising out of same occurrence where graver penalty of death is available but life imprisonment is imposed; all other cases, by petition for review on certiorari

* If death penalty, automatic review

iii. Withdrawal of appeal

* May be made at any time before judgment on the appeal is rendered

* Lower court judgment becomes final

* Case remanded for execution of judgment

* Once notice of appeal is filed, cannot be validly withdrawn to give way for a Motion for Recon or a Motion for New Trial, since the filing of the notice perfected the appeal, and the trial court loses its power to modify or set aside the judgment. The only valid withdrawal of an appeal is where the accused decides to serve his sentence.

2. Effect of appeal by any of several accused

Shall not affect those who did not appeal, EXCEPT if favorable and applicable to them
Civil appeal by offended party shall not affect criminal aspect of judgment
Execution of judgment on appellant will be stayed upon perfection of appeal

3. When appeal by prosecution from order of dismissal of criminal case will not result in double jeopardy

Dismissal made upon motion or with express consent of the accused
Dismissal is not an acquittal nor based upon consideration of the evidence or merits of the case
Question to be passed upon by the appellate court is purely legal so that if the dismissal is found incorrect, the case has to be remanded to the court of origin to determine the guilt or innocence of the accused

4. When serving sentence, remedy is to petition for habeas corpus

Filed when the law under which the accused was convicted is repealed or declared unconstitutional
When a later judgment is rendered acquitting others for similar circumstances

* Otherwise, equal protection is violated

When penalty is lowered and convict has already served more than the maximum period of the new penalty

* Habeas corpus is available when a person is imprisoned beyond the maximum penalty imposed by law (Gumabon vs. Dir. of Prisons)

NOTE: When dismissal is capricious, certiorari lies and no double jeopardy since validity and not correctness of dismissal is being challenged.

Rule 126 Search and Seizure

1. Search warrant – an order in writing issued in the name of the People of the Philippines, signed by a judge and directed to a peace officer, commanding him to search for personal property described therein and bring it before the court

* Cannot be issued to look for evidence (Uy Khetin vs. Villareal)

* Seizing objects to be used as evidence is equivalent to forcing one to be a witness against himself (Uy Khetin vs. Villareal)

* For a warrant to be valid, it must meet the requirements set by law (Burgos vs. Chief of Staff)

* Tapping conversations is equivalent to a search and seizure (US vs. Katz)

2. General Rule: No search or seizure can be conducted unless it is authorized by a search warrant. Evidence gathered from an illegal search and seizure is inadmissible.

* Warrantless searches are illegal, unreasonable and unconstitutional (Alvarez vs. CFI)

* It is not the police action which is impermissible, but the procedure and unreasonable character by which it is exercised (Guazon vs. de Villa)

* Court gains jurisdiction over items seized by a valid search warrant and returned to it, and such is not an unconstitutional deprivation of property (Villanueva vs. Querubin)

* Evidence from an illegal search may be used as evidence, if no objection is raised (Stonehill vs. Diokno)

* Right against unreasonable search and seizure may be waived, but for the waiver to be effective:

The right must exist
Person must be aware of the right
Person clearly shows the intent to relinquish such right

* No waiver against unreasonable search and seizure when one compromises the criminal proceedings (Alvarez vs. CFI)

* There is no waiver of right when evidence of coercion is present (Roan vs. Gonzales)

3. Requisites of a valid search warrant

a. Issued upon probable cause

* Probable cause – such facts and circumstances which would lead a reasonably prudent man to believe that a crime has been committed and the thing to be searched for and seized is in the place to be searched

b. Probable cause is personally determined by the issuing judge

* Hence, signed by him

* By any RTC, to be served anywhere in the country, for an offense which occurred anywhere in the country (Malaloan vs. CA)

c. Issuing judge personally examined, in the form of searching questions, the appellant and his witness and took down their written depositions

d. Search warrant particularly describes or identifies the property to be seized

* Property which men may lawfully possess may not be the object of a search warrant (Uy Khetin vs. Villareal)

* Nature of goods may allow description to be general or not too technical (Alvarez vs. CFI)

e. Particularly describes the place to be searched

f. It shall issue only for one specific offense

* Otherwise, cannot be said to have issued upon probable cause (Asian Surety vs. Herrera)

* Absence of specific offense makes impossible determination of probable cause (Stonehill vs. Diokno)

g. Was not issued for more than 10 days prior to a search made pursuant thereto (search warrant becomes void after 10 days)

h. Indicates time, if to be served at night

4. When a search warrant may be said to particularly describe the thing to be seized

Description is as specific as circumstances allow
Expresses a conclusion of fact by which the warrant officer may be guided
Things described are limited to those which bear a direct relation to the offense for which the warrant is issued

5. Procedure

a. Complainant files application, attaches affidavits

* Oath requires that the person taking it personally knows the facts of the case (People vs. Sy Juco)

* Affidavits submitted must state that the premises is occupied by the person against whom the warrant is issued, that the objects to be seized are fruits or means of committing a crime, and that they belong to the same person, thus, not affecting third persons (People vs. Sy Juco)

* When complainant’s knowledge is hearsay, affidavits of witnesses are necessary (Alvarez vs. CFI)

b. Judge conducts ex parte preliminary examination of complainant and witnesses under oath to determine probable cause

* Judge must ask probing questions, not just repeat facts in the affidavit (Roan vs. Gonzales)

c. Judge issues search warrant good for 10 days

d. Peace officer in presence of occupant, members of the family OR 2 witnesses of sufficient age and discretion residing in the same locality

* Search may last for more than a day as long as it is part of the same search for the same purpose and of the same place (Uy Khetin vs. Villareal)

e. Peace officer leaves receipt with occupant at place searched

f. Peace officer files return of search warrant and inventory, and surrenders items seized to receiving court (not necessarily court which issued the warrant)

* Items seized illegally must remain in custodia legis pending resolution of the case (Roan vs. Gonzales)

6. Remedies from an unlawful search

MTQ the warrant
Motion to suppress as evidence the objects illegally taken
Return of property illegally seized

7. When a search may be validly conducted without a warrant

Without consent of person searched
When the search is incident to a lawful arrest
Personal knowledge of the arresting person (Posadas vs. CA)
Limited to:

(1) Immediate time of arrest

(2) Immediate vicinity of the arrest

(3) Weapons and things which may be used as proof of offense charged (Nolasco vs. Pano)

iii. Subject in an offense which is mala prohibita cannot be summarily seized (Roan vs. Gonzales)

iv. May extend beyond arrestee to include premises and surrounding under his immediate control

Border searches (customs, mail and airport)
Vessels and aircrafts for violation of Tariff and Customs Code, EXCEPT dwelling houses
Plain view
Moving vehicle
Hot pursuit
Stop-and-frisk, reasonable check-points
Private searches with no state action (People vs. Marti)
Inspection of building and premises for enforcement of fire, sanitary and building regulations

8. Person making the arrest may take from the arrestee

Properties used in the commission of the crime
Fruits or proceeds thereof
Property which may furnish the arrestee with a weapon against the arresting person
Property which may be used as evidence at the trial

9. NOTES:

* Constitution, Art. III, Sec. 2

The right of the people to be secure in their persons, papers, houses and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.

* Constitution, Art. III, Sec. 3

The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise as prescribed by law.
Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in the proceeding.

Rule 127 Provisional Remedies in Criminal Cases

1. Attachment as provisional remedy in criminal cases

Accused is about to abscond from RP
Criminal action is based on a claim for money or property embezzled or fraudulently misapplied or converted to the use of the accused who is a public officer, or any officer of a corporation, or an attorney, factor, broker, agent or clerk in a fiduciary capacity, in willful violation of duty
Accused has concealed, removed or disposed of his property, or is about to do so
Accused resides outside the RP

Reference:

Remedial Law (Criminal Procedure) Memory Aid

Ateneo Central Bar Operations 2001

Criminal Procedure Memory Aid – Annex A

Salient changes in the Revised Rules on Criminal Procedure

Rule 110 Prosecution of Offenses

The institution of all criminal actions, including cases governed by the Rule on Summary Procedure, shall now be the same.
1. Preliminary investigation is now required for an offense punishable by imprisonment of at least 4 years, 2 months and 1 day.

* Except lawful warrantless arrests provided for under Section 7.

* Thus, preliminary investigation is required for all offenses cognizable by the RTC and for some cases cognizable by the MTC.

3. The institution of the criminal action shall interrupt the running of the prescriptive period of the offense except for offenses punishable by special laws.

* This is in accordance with the ruling in Zaldivia vs. Reyes, which stated that the Rules of Court cannot amend special laws, and under Act no. 3326**, the prescriptive period for violation of special laws and municipal ordinances was interrupted only upon the filing of the complaint or information in court.

Qualifying and aggravating circumstances is now required to be alleged in the complaint or information.

* The failure to specifically allege either circumstance, even if proved, cannot be taken into account.

Rape is removed from the list of private offenses since it is now classified as a crime against persons under R.A. 8353.
Any amendment before plea, which
1. Downgrades the nature of the offense charged in the complaint or information OR
2. Excludes any accused from the complaint or information

* can only be made upon motion by the prosecutor, with

Notice to the offended party AND

ii. With leave of court

* The court shall state its reasons in resolving the motion and copies of its order shall be furnished all parties, especially the offended party.

* This amendment is intended to prevent the prosecution from abusing the process of amendment before plea by dropping any of the accused from the information or reducing the offense charged, whether the accused had been arraigned or not and whether it was due to a reinvestigation of the fiscal or a review by the Secretary of Justice (Crespo vs. Mogul).

Rule 111 Prosecution of Civil Action

1. Only the civil liability arising from the offense charged is deemed instituted (not merely“impliedly”) with the criminal unless the offended party:

Waives the civil action
Reserves his right to institute it separately OR
Institutes the civil action prior to the criminal action.

2. The independent civil actions under Articles 32, 33, 34 and 2176 are no longer deemed or impliedly instituted with the criminal action or considered as waived

* Even if there is no reservation.

* They may proceed independently of the criminal action and shall require only a preponderance of evidence.

3. The reservation applies only to the civil liability arising from the offense charged.

* The employer may not longer be held civilly liable for quasi-delict in the criminal action as ruled in Maniago vs. Court of Appeals since quasi-delict is not deemed instituted with the criminal.

* If at all, the only civil liability of the employer in the criminal action would be hissubsidiary liability under the Revised Penal Code.

4. The present rule has also done away with third-party complaints and counterclaims in criminal actions. These claims must have to be ventilated in a separate civil action.

* Thus, even if a counterclaim or cross-claim of the accused arises out of or is connected with the transaction or occurrence which is the subject matter of the offended party’s claim, it is NOT compulsory.

5. The extinction of the civil liability refers exclusively to civil liability arising from crime;

* Whereas, the civil liability for the same act considered as quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.

* Both actions may proceed separately, the only limitation is the prohibition to recover damages twice based on the same act or omission.

6. Except for civil actions provided for in Articles 32, 33, 34 and 2176 of the Civil Code, the civil action which has been reserved cannot be instituted until final judgment has been rendered in the criminal action.

* The action contemplated herein is a civil action arising from a crime if reserved or filed separately and if a criminal case is filed, it has to be suspended.

* During the pendency of the criminal action, the period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall not run.

7. The death of the accused after arraignment and during the pendency of the criminal action shall extinguish the civil liability arising from the delict.

* This rule would only apply if any of the civil actions under section 3 is consolidated with the criminal action, otherwise, since the actions under section 3 are purely civil actions, the effects of death of a party are to be governed by the Rules on Civil Procedure.

8. A prejudicial question is limited to a “previously instituted civil action” in order to minimize possible abuses by the subsequent filing of a civil action as an after thought for the purpose of suspending the criminal action.

Rule 112 Preliminary Investigation

Preliminary investigation now includes offenses punishable by at least 4 years, 2 months and 1 day, even if the same is cognizable by the Municipal Trial Court.
The complaint should be accompanied by affidavits of the complainant and his witnesses as well as other supporting papers relied upon by the complainant to establish probable cause.
A motion to dismiss is now a prohibited pleading during preliminary investigation.
The respondent is now required to submit counter-affidavits and other supporting documents relied upon by him for his defense.
The respondent now has the right to examine the evidence submitted by the complainant of which he may not have been furnished and to obtain copies thereof at his expense.

* If the records are voluminous, the complainant may be required to identify those which he intends to present to support his charge and these shall be made available for examination, copying or photographing by respondent at his expense.

The prosecutor is required to resolve the complaint based on the evidence presented by the complainant, in the event that:
1. The respondent cannot be subpoenaed OR
2. The respondent, if subpoenaed, does not submit a counter-affidavit within the 10-day period.
3. The clarificatory hearing shall only to limited to facts and issues which the investigating officer believes need to be clarified.

* The clarificatory hearing shall be held within 10 days from:

The submission of the counter-affidavit and other documents, OR
The expiration of the period for their submission.

* The clarificatory hearing shall be terminated within 5 days.

After the clarificatory hearing:

* The investigation shall be deemed concluded AND

* The hearing officer shall determine whether there is sufficient ground to hold the respondent for trial upon the evidence adduced, within 10 days.

Whether the recommendation of the investigating officer is to file or dismiss the case, he shall, within 5 days from his resolution, forward the records to:
1. The provincial or city prosecutor or chief state prosecutor
2. The ombudsman or his deputy, for offenses cognizable by the Sandiganbayan in the exercise of its original jurisdiction

* Who shall taken appropriate action within 10 days from receipt and immediately inform the parties of said action.

A party has the right to appeal to the Secretary of Justice and require that the parties be notified of the recommendation of the action to be taken therefrom.
The judge must determine the existence of probable cause within 10 days from the filing of the information.

* If the accused has already been arrested, the judge must determine within 10 days the existence of probable cause and issue an order of commitment.

* The judge may disregard the prosecutor’s report and require the submission of additional evidence to determine the existence of provable case. If he still finds no probable cause, he shall dismiss the case.

Two types of offenses may be filed in the Municipal Trial Court for preliminary investigation:
1. A case is cognizable by the RTC may be filed with the MTC for preliminary investigation.
2. Even if it is cognizable by the MTC because it is an offense where the penalty prescribed by law is at least 4 years, 2 months and 1 day without regard to the fine.

* The MTC is authorized in either case to issue a warrant of arrest if there is necessity of placing the respondent under immediate custody, in order not to frustrate the ends of justice.

Outline on Issuance of Warrants of Arrest by Municipal Trial Judge
1. During preliminary investigation

* Searching questions and answers is mandatory.

In exercise of its original jurisdiction, distinguish:
1. Cases which require Preliminary Investigation even if it falls within its original jurisdiction

* After searching questions and answers, determine probable cause and necessity of placing accused in custody in order not to frustrate the ends of justice.

Cases investigated by MTC but remanded by the prosecutor

* The necessity rule inapplicable

iii. No warrants:

(1) If one already issued OR

(2) The complaint or information filed under Section 7 (order of detention must be issued) OR

(3) Offenses punishable by fine.

Cases which do not require preliminary investigation
1. Evaluate evidence OR

ii. Conduct searching questions or answers or require additional evidence.

No warrants
1. If the judge is satisfied that there is no necessity for placing the accused under custody (issues summons instead)

ii. Cases under the Revised Rules on Summary Procedure (no warrants except for failure to appear)

iii. Rule on necessity

* It is only in the issuance of warrants of arrest during preliminary investigation and in cases which do not require preliminary investigation, that the Municipal Trial Judge is called upon to apply the principle of necessity. The principle does not apply to cases remanded by the Prosecutor.

In case a person is arrested without a warrant, a complaint or information may only be filed after an inquest conducted in accordance with existing rules.

* Provided that in the absence or unavailability of an inquest prosecutor, the complaint may be filed by the offended party or a peace officer directly with the proper court on the basis of the affidavit of the offended party or arresting officer or person.

Before the filing of a complaint or information, the person arrested without a warrant may ask for a preliminary investigation by a proper officer, but he must sign a waiver of the provisions of Article 125 of the Revised Penal Code.

* The waiver may be made only in the presence of his counsel pursuant to R.A. no. 7438.

* In case the case has been filed in court without a preliminary investigation, the accused may, within 5 days from the time he learns of its filing, ask for a preliminary investigation with the same right to adduce evidence in his defense.

* The request for preliminary investigation must be made before plea, otherwise the right to ask for a preliminary investigation shall be deemed waived.

The court must evaluate the resolution of the investigating prosecutor and the supporting evidence adduced during the preliminary investigation, and such evidence must be included in filing the information.
Issuance of warrants of arrest by the MTC for actions filed in the exercise of its original jurisdiction provides for two distinct situations: Case may be filed
1. Directly in the MTC OR
2. By the prosecutor in Metro Manila or other chartered cities.
3. If complaint is filed with the prosecutor for offenses which do not require a preliminary investigation, the procedure is as follows:
  1. The complaint shall state the known address of the respondent
  2. Accompanied by:
    1. Affidavits of the complainant and his witness AND
    2. Other supporting documents relied upon by the complainant to establish probable cause
    3. Affidavits must be sworn before any prosecutor, state prosecutor or government official authorized to administer oath, or a notary public (in their absence or unavailability)
    4. The prosecutor, al., must certify that he personally examined the affiants and that he is satisfied that they voluntarily executed and understood their affidavits.
    5. The prosecutor shall take appropriate action based on the affidavits and other supporting documents submitted by the complainant within 10 days from its filing.

* He may either dismiss the case or file it in court

If complaint is filed directly with the MTC for an offense punishable by less than 4 years, 6 months and 1 day, the procedure is similar to (18).

* The judge should then personally examine in writing and under oath the complainant.

No warrant of arrest shall issue for cases covered by the Revised Rules on Summary Procedure.

Rule 113 Arrest

Instances of valid warrantless arrests:
1. When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense;
2. When an offense has just been committed and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; AND
3. When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or is temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another.
4. 1(b) removed the requirement that an offense must have in fact been committed and clarified that probable cause to believe based on personal knowledge of “facts and circumstances” that the person to be arrested has committed it would be sufficient to justify a warrantless arrest for an offense that has just been committed.
5. Indubitable existence of a crime is not necessary to justify a warrantless arrest and that ‘personal knowledge of facts’ in arrests without warrant must be based uponprobable cause,which means an actual belief or reasonable grounds of suspicion.

* The grounds of suspicion are reasonable when, in the absence of actual belief of the arresting officers, the suspicion that the person to be arrested is probably guilty of committing the offense, is based on actual facts, i.e., supported by circumstances sufficiently strong in themselves to create the probable cause of guilt of the person to be arrested.

* A reasonable suspicion therefore must be founded on probable cause, coupled “with good faith on the part of the peace officers making the arrest.”

Rule 114 Bail

Bail is a matter of right
1. Before or after conviction by the MTC AND
2. Before conviction by the RTC of an offense not punishable by death, reclusion perpetua or life imprisonment
3. Bail is a matter of discretion after conviction by the RTC of an offense not punishable by death, reclusion perpetua or life imprisonment.
4. Photos taken ‘recently’ means photos taken within the last six months.
5. The application for bail may be filed and acted upon by the trial court despite the filing of a notice of appeal, provided it has not transmitted the original record to the appellate court.

* However, if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed with and resolved by the appellate court.

Æ This provision modified the ruling in Obosa vs. Court of Appeals in the sense that except for decisions which changed the nature of an offense from bailable to non-bailable cases, the trial court may still act on the application of bail even if a notice of appeal have been filed.

Æ Even if there is no notice of appeal if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed with and resolved by the appellate court.

5. Bail may be filed with:

The court where the case is pending OR
Another judge of the same court within the province or city

* In the absence or unavailability of the judge thereof.

6. When the presence of the accused is required by the court or these Rules, his bondsmen shall be notified to produce him before the court on a given date and time.

7. An application for bail by the accused shall NOT be considered as a waiver of his right to challenge the legality of his arrest or the absence of a preliminary investigation.

* Provided such objections are raised before plea.

Rule 116 Arraignment and Plea

When the accused pleads guilty but presents exculpatory evidence, his plea shall be deemed withdrawn and a plea of not guilty shall be entered for him.

* This refers to a situation where an accused pleads guilty but invokes the mitigating circumstance of incomplete self-defense under Article 13, paragraph 1 of the Revised Penal Code as amended.

Æ If the accused, after being allowed to present evidence, however adduces proof, not only to establish incomplete self-defense, but that he acted with complete legal justification, his earlier plea of guilty shall be deemed withdrawn and a plea of not guilty shall be entered for him.

While R.A. No. 8493 or the Speedy Trial Act provides that the accused shall be arraigned within 30 days from the time a court acquires jurisdiction over his person, Rule 116, §1(e) provides for a shorter time within which an accused who is under preventive detention should be arraigned.

* Where an accused is detained, his case should be raffled within 3 days from the filing of the information or complaint against him, and the judge to whom his case is raffled shall have him arraigned within 10 days from receipt by the judge of the records of the case.

* The pre-trial conference shall be held within 10 days after the arraignment.

The consent of boththe prosecutor and the offended party is required before an accused may be allowed by the court to plead guilty to a lesser offense.

* The conviction for the lower offense would not give rise to double jeopardy if the plead of guilty for the lower offense was without the consent of the offended party.

The presence of the offended party is now required at the arraignment and also to discuss the matter of accused’s civil liability.

* In case the offended party fails to appear despite due notice, the trial court may allow the accused to plead guilty to a lower offense with solely the conformity of the trial prosecutor.

The arraignment shall be held within 30 days from the date the court acquires jurisdiction over the person of the accused.

* Unless a shorter period is provided by special law or Supreme Court circular.

* The time of the pendency of a motion to quash or for a bill of particulars or other causes justifying suspension of the arraignment shall be excluded in computing the period.

Certain laws and SC Circulars provide for a shorter time within which the accused should be arraigned:
1. Republic Act no. 4908

* In criminal cases where the complainant is about to depart form the Philippines with no definite date of return, the accused should be arraigned without delay and his trial should commence within 3 days from the arraignment and that no postponement of the initial hearing should be granted except on the ground of illness on the part of the accused or other grounds beyond the control of the court.

Republic Act no. 7610 or the Child Abuse Act

* The trial of cases falling under said law shall be commenced within 3 days from arraignment.

Dangerous Drugs Law
Cases falling under the SC Admin Order No. 104-96, e.,heinous crimes, violations of the Intellectual Property Rights Law

* These cases must be tried continuously until terminated within 60 days from commencement of the trial and to be decided within 30 days from the submission of the case.

A plea of guilty to a lesser offense may be allowed only if the lesser offense is necessarily included in the offense charged.

* Consent of the prosecutor and offended party must be obtained.

A counsel de oficio who is appointed to defend the accused at the arraignment is given a reasonable time to consult with the accused as to his plea before proceeding with the arraignment.

Rule 117 Motion to Quash

Grounds for motion to quash a complaint or information:
1. The facts charged do not constitute an offense
2. The court has no jurisdiction over the offense charged
3. The court has no jurisdiction over the person of the accused
4. The officer who filed the information had no authority to do so
5. It does not conform substantially to the prescribed form
6. More than one offense is charged

* Except when a single punishment for various offenses is prescribed by law.

The criminal action or liability has been extinguished
It contains averments which, if true, would constitute a legal excuse or justification AND
The accused has been previously convicted or acquitted of the offense charged, or the case against him was dismissed or otherwise terminated without his express consent.
Conviction of an accused shall not be a bar to another prosecution for an offense which necessarily includes the offense charged in the former complaint or information under the following instances:
1. The graver offense developed due to supervening facts arising from the same act or omission constituting the former charge
2. The facts constituting the graver charge became known or were discovered only after a plea was entered in the former complaint or information OR
3. The plea of guilty to the lesser offense was made without the consent of the prosecutor and of the offended party except as provided in §1(f) of Rule 116.
4. A case may not be provisionally dismissed without:
  1. The express consent of the accused AND
  2. Notice to the offended party
  3. The provisional dismissal of offenses punishable by imprisonment not exceeding 6 years shall become final after 1 year from the issuance of the order without the case being revived.
  4. The provisional dismissal of offenses punishable by imprisonment exceeding 6 years shall become permanent 2 years from the issuance of the order without the case having been revived.

Rule 118 Pre-Trial

1. In all criminal cases cognizable by the (1) Sandiganbayan, (2) Regional Trial Court, (3) Metropolitan Trial Courts, (4) Municipal Trial Court in Cities, (5) Municipal Trial Court and (6) Municipal Circuit Trial Court

* The court shall order a pre-trial conference (this must be held within 30 days from the date the court acquires jurisdiction over the person of the accused, unless a shorter period is provided for in special laws or circulars of the Supreme Court)

2. The following shall be considered during the pre-trial conference:

Plea bargaining
Stipulation of facts
Marking for identification of evidence of the parties
Waiver of objections to admissibility of evidence
Modification of the order of trial if the accused admits the charge but interposes a lawful defense; AND
Such matters as will promote a fair and expeditious trial of the criminal and civil aspects of the case

3. All agreements or admissions made or entered during the pre-trial conference shall be:

Reduced to writing and
Signed by the accused and counsel

* Otherwise, they cannot be used against the accused.

* The agreements covering the matters referred to in section 1 of this Rule shall be approved by the court.

4. If the counsel for the accused or the prosecutor does not appear at the pre-trial conference and does not offer an acceptable excuse for his lack of cooperation

* The court may impose proper sanction or penalties.

Rule 119 Trial

1. After a plea of not guilty is entered

* The accused shall have at least 15 days to prepare for trial

2. The trial shall commence within 30 days from receipt of the pre-trial order.

3. Other laws, rules and regulations prescribe speedy trial for a shorter period for other offenses:

Criminal cases covered by the Rule on Summary Procedure or where the penalty prescribed by law does not exceed 6 months imprisonment, or a fine of P1,000 or both, irrespective of other imposable penalties

* Governed by Rule 123

A. No. 4908, An Act Requiring Judges of Courts to Speedily Try Criminal Cases Wherein the Offended Party is a Person About to Depart from the Philippines with No Definite Date of Return

* Requires such cases to take precedence over all other cases before our courts except election and habeas corpus cases

* The trial in these cases shall commence within 3 days from the date the accused is arraigned and no postponement of the initial hearing shall be granted except on the ground of illness on the part of the accused, or other grounds beyond the control of the accused

Speedy Trial of Child Abuse cases

* The trial of child abuse cases shall take precedence over all other cases before our courts except election and habeas corpus cases

* The trial in these cases shall commence within 3 days from the date the accused is arraigned and no postponement of the initial hearing shall be granted except on account of the illness of the accused or other grounds beyond his control (Sec. 21, Rules and Regulations on the Reporting and Investigation of Child Abuse cases issued pursuant to Sec. 32 of R.A. No. 1610, The Child Abuse Act)

Violations of the Dangerous Drugs Law
Under Administrative Order No. 104-96

4. Trial once commenced

* Shall continue from day to day as far as practicable until terminated

* May be postponed for a reasonable period of time for good cause

5. After consultation with the prosecutor and defense counsel

* The court shall set the case for continuous trial on a weekly or other short term trial calendar at the earliest possible time so as to ensure speedy trial

6. In no case shall the entire trial period exceed 180 days from the first day of trial, except as otherwise authorized by the Supreme Court.

7. The time limitations provided under this section and the preceding section shall not apply where special laws or circulars of the Supreme Court provide for a shorter period of trial.

8. The following periods of delay shall be excluded in computing the time within which trial must commence:

a. Any period of delay resulting from other proceedings concerning the accused, including but not limited to the following:

Delay resulting from an examination of the physical and mental condition of the accused;
Delay resulting from proceedings with respect to other criminal charges against the accused;
Delay resulting from extraordinary remedies against interlocutory orders;
Delay resulting from pre-trial proceedings; provided, that the delay does not exceed 30 days;
Delay resulting from order of inhibition, or proceedings relating to change of venue of cases or transfer from other courts;
Delay resulting from a finding of the existence of a prejudicial question; and
Delay reasonably attributable to any period, not to exceed 30 days, during which any proceeding concerning the accused is actually under advisement.

b. Any period of delay resulting from the absence or unavailability of an essential witness. (An essential witness shall be considered absent when his whereabouts are unknown or his whereabouts cannot be determined by due diligence. He shall be considered unavailable whenever his whereabouts are known but his presence for trial cannot be obtained by due diligence.)

Any period of delay resulting from the mental incompetence or physical inability of the accused to stand trial.
If the information is dismissed upon motion of the prosecution and thereafter a charge is filed against the accused for the same offense

* Any period of delay from the date the charge was dismissed to the date the time limitation would commence to run as to the subsequent charge had there been no previous charge

A reasonable period of delay when the accused is joined for trial with a co-accused over whom the court has not acquired jurisdiction; or, as to whom the time for trial has not run and no motion for separate trial has been granted.
Any period of delay resulting from a continuance granted by any court motu proprio, or on motion of either the accused or his counsel, or the prosecution, if the court granted the continuance on the basis of its findings set forth in the order that the ends of justice served by taking such action outweigh the best interest of the public and the accused in a speedy trial.

9. The following factors, among others, shall be considered by a court in determining whether to grant continuance under section 3(f) of this Rule.

Whether or not the failure to grant a continuance in the proceeding would likely make a continuation of such proceeding impossible or result in a miscarriage of justice; and
Whether or not the case taken as a whole is so novel, unusual and complex, due to the number of accused or the nature of the prosecution, or that it is unreasonable to expect adequate preparation within the periods of time established therein

10. No continuance under section 3(f) of this Rule shall be granted because of

Congestion of the court’s calendar or
Lack of diligent preparation or
Failure to obtain available witnesses on the part of the prosecutor

11. The general rule is that motions for postponement are granted only upon meritorious grounds and no party has the right to assume that his motion will be granted. The grant or denial of a motion for postponement is addressed to the sound discretion of the court. Unless grave abuse of discretion is shown, such discretion will not be interfered with either by mandamus or appeal.

12. If the accused is to be tried again pursuant to an order for a new trial

* The trial shall commence within 30 days from notice of the order (provided that if the period becomes impractical due to unavailability of witnesses and other factors, the court may extend it but not to exceed 180 days from notice of said order for a new trial

13. Notwithstanding the provisions of section 1(g), Rule 116 and the preceding section 1, for the first twelve-calendar-month period following its effectivity on September 15, 1998

* The time limit with respect to the period from arraignment to trial imposed by said provision shall be 180 days. For the second twelve-month period, the time limit shall be 120 days, and for the third twelve-month period, the time limit shall be 80 days.

14. If the public attorney assigned to defend a person charged with a crime knows that the latter is preventively detained, either because he

Is charged with a bailable crime but has no means to post bail, or
Is charged with a non-bailable crime, or
Is serving a term of imprisonment in any penal institution

* It shall be his duty to do the following:

Shall promptly undertake to obtain the presence of the prisoner for trial or cause a notice to be served on the person having custody of the prisoner requiring such person to so advise the prisoner of his right to demand trial.
Upon receipt of that notice, the custodian of the prisoner shall promptly advise the prisoner of the charge and of his right to demand trial. If at anytime thereafter the prisoner informs his custodian that he demands such trial, the latter shall cause notice to that effect to be sent promptly to the public attorney.
Upon receipt of such notice, the public attorney shall promptly seek to obtain the presence of the prisoner for trial.
When the custodian of the prisoner receives from the public attorney a properly supported request for the availability of the prisoner for purposes of trial, the prisoner shall be made available accordingly.

15. In any case in which private counsel for the accused, the public attorney, or the prosecutor:

Knowingly allows the case to be set for trial without disclosing that a necessary witness would be unavailable for trial;
Files a motion solely for delay which he knows is totally frivolous and without merit;
Makes a statement for the purpose of obtaining continuance which he knows to be false and which is material tot he granting of a continuance; or
Willfully fails to proceed to trial without justification consistent with the provisions hereof

* The court may punish such counsel, attorney, or prosecutor, as follows:

By imposing on a counsel privately retained in connection with the defense of an accused, a fine not exceeding P20,000.
By imposing on any appointed counsel de oficio, public attorney, or prosecutor a fine not exceeding P5,000; and
By denying any defense counsel or prosecutor the right to practice before the court trying the case for a period not exceeding 30 days. The punishment provided for by this section shall be without prejudice to any appropriate criminal action or other sanction authorized under these Rules.

16. If the accused is not brought to trial within the time limit required by section 1(g), Rule 116 and section 1, as extended by section 6 of this Rule

*The information may be dismissed on motion of the accused on the ground of denial of his right to speedy trial

17. The accused shall have the burden of proving the motion but the prosecution shall have the burden of going forward with the evidence to establish the exclusion of time under section 3 of this Rule.

18. The dismissal shall be subject to the rules on double jeopardy.

19. No provision of law on speedy trial and no rule implementing the same shall be interpreted as a bar to any charge of denial of the right to speedy trial guaranteed by section 14(2) , Article III, of the 1987 Constitution.

20. After the prosecution rests its case

* The court may dismiss the action on the ground of insufficiency of evidence

On its own initiative after giving the prosecution the opportunity to be heard or
Upon demurrer to evidence filed by the accused with or without leave of court

21. If the court denies the demurrer to evidence filed with leave of court

* The accused may adduce evidence in his defense

22. When the demurrer to evidence is filed without leave of court

* The accused waive the right to present evidence and submits the case for judgment on the basis of the evidence for the prosecution

23. The motion for leave of court to file demurrer to evidence

* Shall specifically state its grounds and shall be filed within a non-extendible period of 5 days after the prosecution rests its case

* Prosecution may oppose the motion within a non-extendible period of 5 days from its receipt

24. If leave of court is granted

* The accused shall file the demurrer to evidence within a non-extendible period of 10 days from notice

* Prosecution may oppose the demurrer to evidence within a similar period from its receipt

25. The order denying the motion for leave of court to file demurrer to evidence or the demurrer itself

* Shall not be reviewable by appeal or by certiorari before judgment

26. The present rule liberally deviates from the rigid structures of Rule 119 of the 1985 Rules on Criminal Procedure denying the accused the chance to present evidence by considering a defendant’s motion to dismiss a waiver of his right to present evidence.

27. The current rule allows the accused in a criminal case to present evidence even after a motion to dismiss provided the demurrer was made within the express consent of the court.

28. At any time before finality of the judgment of conviction

* The judge may, motu proprio or upon motion, with hearing in either case, reopen the proceedings to avoid a miscarriage of justice

* The proceedings shall be terminated within 30 days from the order granting it.

Rule 120 Judgment

1. Judgment

* Adjudication by the court that the accused is guilty or not guilty of the offense charged and the imposition on him of the proper penalty and civil liability, if any

* Must

Be written in the official language
Personally and directly prepared by the judge and signed by him and
Contain clearly and distinctly a statement of the facts and the law upon which it is based

2. If the judgment is of conviction

* It shall state

The legal qualification of the offense constituted by the acts committed by the accused and the aggravating or mitigating circumstances which attended its commission
The participation of the accused in the offense, whether as principal, accomplice, or accessory
The penalty imposed upon the accused and
The civil liability or damages caused by his wrongful act or omission to be recovered from the accused by the offended party, if there is any, unless the enforcement of the civil liability by a separate civil action has been reserved or waived

3. In case the judgment is of acquittal

* It shall state whether the evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable doubt ( in either case, the judgment shall determine if the act or omission from which the civil liability might arise did not exist)

4. The judgment is promulgated by reading it in the presence of the accused and any judge of the court in which it was rendered.

5. If the conviction is for a light offense

* The judgment may be pronounced in the presence of his counsel or representative

6. When the judge is absent or outside the province or city

* The judgment may be promulgated by the clerk of court

7. If the accused is confined or detained in another province or city

* The judgment may be promulgated by the executive judge of the Regional Trial Court having jurisdiction over the place of confinement or detention upon request of the court which rendered the judgment

8. The court promulgating the judgment shall have authority to accept the notice of appeal and to approve the bail bond pending appeal; provided, that if the decision of the trial court convicting the accused changed the nature of the offense from non-bailable to bailable, the application for bail can only be filed and resolved by the appellate court.

9. The proper clerk of court shall give notice to the accused personally or through his bondsman or warden and counsel, requiring him to be present at the promulgation of the decision.

10. If the accused was tried in absentia because he

Jumped bail or
Escaped from prison

* The notice to him shall be served at his last known address.

11. In case the accused fails to appear at the scheduled date of promulgation of judgment despite notice

* The promulgation shall be made by recording the judgment in the criminal docket and serving him a copy thereof at his last known address or thru his counsel

12. If the judgment is for conviction and the failure of the accused to appear was without justifiable cause, he shall

Lose the remedies available in these Rules against the judgment and
The court shall order his arrest

13. However, within 15 days from promulgation of judgment

* The accused may surrender and file a motion for leave of court to avail of these remedies

* He shall state the reasons for his absence at the scheduled promulgation and if he proves that his absence was for a justifiable cause, he shall be allowed to avail of said remedies within 15 days from notice

14. Under the former rule, even if the accused fails to appear without justifiable cause, he shall be allowed to appeal within 15 days from notice of the decision to him or his counsel.

15. Under the new rule, if the judgment is of conviction and the failure of the accused to appear was without justifiable cause, he shall lose not only his right to appeal but also other legal remedies against the judgment as well and the court shall order his arrest.

Rule 124 Procedure in the Court of Appeals

1. The provisions of Rules 42, 44 to 46 and 48 to 56 relating to procedure in the Court of Appeals and in the Supreme Court in original and appealed cases

* Shall be applied to criminal cases insofar as they are applicable and not inconsistent with the provisions of this Rule

2. The provisions of Rule 47 of the Rules of Court (Annulment of Judgments of Final Judgment and Resolutions) are no longer applicable in criminal cases. The appropriate remedy for lack of jurisdiction or extrinsic fraud being either:

Certiorari under Rule 65 or
Habeas corpusunder Rule 102

Rule 126 Search and Seizure

1. An application for search warrant shall be filed with the following:

Any court within whose territorial jurisdiction a crime was committed.
For compelling reasons stated in the application, any court within the judicial region where the crime was committed if the place of the commission of the crime is known, or any court within the judicial region where the warrant shall be enforced.

2. If the criminal action has already been filed

* The application shall only be made in the court where the criminal action is pending

3. Section 2, Rule 126 is new. It fixes the venue in the filing of applications for the issuance of a search warrant.

* Section 2 modifies the Malaloan guidelines (Malaloan vs. CA) which allow any judge to issue a search warrant prior to the filing of a criminal action, and even if one had already been filed, any judge for compelling reasons may still issue a search warrant.

4. The officer must forthwith deliver the property seized to the judge who issued the warrant, together with a true inventory thereof duly verified under oath.

5. 10 days after issuance of the search warrant

* The issuing judge shall ascertain if the return has been made, and if none, shall summon the person to whom the warrant was issued and require him to explain why no return was made

6. If the return has been made

* The judge shall

Ascertain whether section 11 of this Rule has been complied with and
Require that the property seized be delivered to him

7. The return on the search warrant shall be filed and kept by the custodian of the log book on search warrants who shall enter therein the date of the return, the result, and other actions of the judge.

* A violation of this section shall constitute contempt of court.

8. A motion to quash a search warrant and/or to suppress evidence obtained thereby

* May be filed in and acted upon only by the court where the action has been instituted

9. If no criminal action has been instituted

* The motion may be filed in and resolved by the court that issued the search warrant (if such court failed to resolve the motion and a criminal case is subsequently filed in another court, the motion shall be resolved by the latter court

10. Section 14 is intended to resolve what is perceived as conflicting decisions on where to file a motion to quash a search warrant or to suppress evidence seized by virtue thereof.

* The following pages are culled from Justice Oscar Herrera’s book on the relevant amendments in the Revised Rules of Criminal Procedure and from Justice Jose Feria’s article in the Lawyer’s Review (February, 2001) on the Notable Amendments in Revised Rules of Criminal Procedure.

** An Act To Establish Periods of Prescription for Violations Penalized By Special Laws and Municipal Ordinances and to Provide When Prescription Shall Begin To Run.

Reference:

Remedial Law (Criminal Procedure)

Memory Aid – Annex A

Ateneo Central Bar Operations

CODE OF COMMERCE

CODE OF COMMERCE

COMMERCE – branch of human activity; purpose is to bring products to the consumer through operations habitually and with intent of gain

COMMERCIAL LAW – branch of private law which regulates the juridical relations arising from commercial acts

CHARACTERISTICS OF COMMERCIAL LAW:

universal
uniform
equitable
customary
progressive

PORTIONS OF CODE OF COMMERCE STILL APPLICABLE:

merchants; book of merchants and general provision of contracts
joint account association
commercial barter
transfers of non-negotiable credits
commercial contracts of overland transportation
letters of credit
maritime commerce

OTHERS:

Commerce – bringing products from the manufacturers to the consumers
Characteristics of Commerce:
1. habituality
2. rapidity – if period is fixed, debtor in delay without need of demand; if contract does not fix period, 10 days
3. intent to join
Merchant:
1. Individuals – legal capacity, 21 years, or subject to parental authority, habitually engaged in commerce
2. Juridical Persons – commercial and industrial company organized in accordance with law, habitually engaged in business
General Rule: Minors cannot engage in commerce

Exceptions:

to continue business of deceased parents through guardian
court authorizes guardian to place minor and property in business
minor is an alien and his national law allows him to be a merchant
Which persons are not allowed to engage in commerce?
1. suffering accessory penalty of civil interdiction (reclusion perpetuaandreclusion temporal)
2. those judicially declared insolvent until they can obtain their discharge
3. prohibited by Constitution and special laws
Aliens
1. capacitated under his national law to engage in business
2. engaged in the business in the Philippines not reserved for the Filipinos
3. after securing license and BOI certificate
Family Code: Either spouse may engage in business; when objected to by the other, court will look into valid grounds, i.e. serious and moral grounds
BOI Certificate must be obtained by:
1. alien
2. foreign firm
Meaning of Philippine National
1. citizen
2. domestic corporation wholly owned and organized by Filipinos in the Philippines
3. Filipino corporation where Filipino capital entitled to vote is at least 60%
Query: If a corporation is a shareholder of another corporation, how do you determine whether the latter corporation is a Filipino national?

Answer: The following must concur -

At least 60% of the outstanding capital stock and entitled to vote of both corporations are held by citizens of the Philippines
At least 60% of the Board of Directors of both corporations are Filipinos
Tenor of BOI Certificate
1. Business or activity to be engaged is consistent with the Investment Priorities Plan
2. Business will contribute to the sound and balanced development of the national economy in a self-sustaining basis
3. Business will not conflict with the Constitution and local laws
4. Business is not adequately exploited by Filipino nationals
5. No danger of monopolies/combinations in restraint of trade
Basic Principles/Conditions laid down by BOI
1. resident agent of foreign firm is a Filipino citizen
2. establishment of office in the Philippines
3. bringing assets tot he Philippine office as capital
4. complete set of accounting records
Merger and Consolidation subject to BOI requirements for the issuance of certificate:

When merger and consolidation result in ownership and control of non-Filipino nationals over more than 40% of the capital of a consolidated corporation.

SEC License issued upon compliance with the following requirements:
1. proof of compliance with principle of reciprocity
2. BOI certificate
3. Applicant for license gives required information

n articles of incorporation

n by-laws

n names and addresses of resident agents

n principal place of business in the Philippines

proof of solvency
deposit acceptable securities to protect future creditors

RETAIL TRADE NATIONALIZATION LAW

(Note: Material on the Retail Trade Liberalization Law will not be included in this reviewer. Supplement to follow)

Retail Trade – any act, occupation, or calling of habitually selling direct to the general public, merchandise, commodities, or goods for consumption

Jurisprudence has held that the term “retail” should be associated with and limited to goods for personal, family or household use, consumption and utilization. The Retail Trade Nationalization Law refers to “consumption goods” or “consumer goods” which directly satisfy human wants and desires and are needed for home and daily life. Excluded from the law are those goods which are considered generally raw material used in the manufacture of other goods, or if not, as one of the component raw material, or at least as elements utilized in the process of production and manufacturing.

Elements of What Constitutes Retail Trade:
1. The seller habitually engages in selling;
2. The sale is direct to the general public; and
3. The object of the sale is limited to merchandise, commodities or goods for consumption.
General Rule: After 1964, only Filipinos or corporations whose capital is 100% Filipino may engage in retail trade.
Exceptions, that is, instances when aliens may engage in retail trade in the Philippines:
1. manufacturer or processor if capital does not exceed P5,000.00;
2. farmer or agriculturist when selling his products;
3. manufacturer or processor selling to industrial or commercial users or consumers who use the produce to render service to the general public or to produce or manufacture goods which are sold by them to the public;
4. hotel owners or keepers of restaurants included or incidental to the hotel business;
5. sale by a manufacturer or processor to the Government or its agencies, including government owned and controlled corporations.
Query: How to determine citizenship of shares of the corporation when they are not held directly by individuals, but in turn held by another entity?

Answer: apply the GRANDFATHER RULE, to wit:

Shares belonging to corporations or partnerships at least 60% of the capital of which is owned by Filipino citizens shall be considered as Philippine nationality, but if the percentage of Filipino ownership in the corporation or partnership is less than 60%, only the number of shares corresponding to such percentage shall be counted as of Philippine nationality. Thus, if 100,000 shares are registered in the name of a corporation or partnership at least 60% of the capital stock or capital respectively, of which belong to Filipino citizens, all of the said shares shall be recorded as owned by Filipinos. But, if let’s say, 50% of the capital stock belongs to Filipino citizens, only 50,000 shares shall be counted as owned by Filipinos and the other 50,000 shares shall be recorded as belonging to aliens.

However, while a corporation with 60% Filipino and 40% foreign equity ownership is considered a Philippine national for purposes of investment, it is not qualified to invest in or enter into a joint venture agreement with corporations or partnerships, the capital or ownership of which under the Constitution or other special laws are limited to Filipino citizens only. Hence, for purposes of the law, whatever the percentage of Filipino ownership in the owning corporation, the foreign ownership would always render a portion of its holding in the company as foreign equity and would disqualify the corporation to engage in retail trade.

ANTI-DUMMY ACT

The Act penalizes Filipinos who permit aliens to use them as nominees or dummies to enjoy privileges reserved for Filipinos or Filipino corporations. Criminal sanctions are imposed on the president, manager, board member or persons in charge of the violating entity and causing the latter to forfeit its privileges, rights and franchises.
Disqualified aliens cannot intervene in the management, operation, administration or control of the business reserved to Filipinos whether as an officer, employee or laborer, with or without remuneration, except when:
1. alien takes part in technical aspects;
2. provided that no Filipino can do such technical work; and
3. with express authority from the President, upon the recommendation of the department head concerned.
By way of exception, the following may participate in management:
1. Aliens may be elected to the Board of Directors to the extent of their allowable share in the capital of the corporation (in partially nationalized industries).
2. A registered enterprise may employ foreign nationals in supervisory, technical, and advisory positions for a period of 5 years subject to extension.
3. Where majority of stocks of a pioneer enterprise is owned by foreign investors, the following positions may be held by foreign nationals:

n president

n treasurer

n general manager

n equivalent positions

A Filipino common-law wife of an alien is not barred from engaging in the retail business provided she uses capital exclusively derived from her paraphernal properties; however, allowing her common-law alien husband to take part in the management of the retail business would be a violation of the law.
What doing business means:
1. soliciting orders, purchases, service contracts;
2. opening offices whether called liaison offices or branches;
3. appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the country for a period totaling 180 days or more;
4. participating in the management or supervision or control of any domestic firm, entity or corporation in the Philippines;
5. any other act or acts that imply continuity in commercial dealings
When commissioned merchants/investors or commercial brokers act in their own name in selling foreign products, the foreign firm manufacturing these products is not doing business in the Philippines.
When a local corporation or person acts in the name of a foreign firm, the latter is doing business in the Philippines.
The following are NOT doing business:
1. mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business;
2. exercise of rights as such investor;
3. having a nominee director or officer to represent interests in such corporation;
4. appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own accounts.
Purpose:
1. to encourage use of and to promote transactions based on trust receipts;
2. to regulate the use of trust receipts

TRUST RECEIPTS LAW

Definition:

A written/printed document signed by the ENTRUSTEE in favor of the ENTRUSTER whereby the latter releases the goods, documents or instruments tot he possession of the former upon the ENTRUSTEE’S promise to hold said goods in trust for the ENTRUSTER, and to sell the goods, etc. WITH THE OBLIGATION TO TURN OVER THE PROCEEDS THEREOF TO THE EXTENT OF WHAT IS OWING TO THE ENTRUSTER; or to return the goods if UNSOLD, or for other purposes.

Trust receipts are denominated in Philippine currency or acceptable and eligible foreign currency.
ENTRUSTER is not liable as principal or vendor under any sale or contract to sell made by the ENTRUSTEE.
Risk of loss is borne by the ENTRUSTEE.
Pending the duration of the trust agreement, the ENTRUSTER’S security interest cannot be prejudiced by claims of creditors of the ENTRUSTEE.
Loss of goods pending the dispossession shall not extinguish the obligation to the ENTRUSTER for the value thereof.

LETTERS OF CREDIT

Kinds:
1. Commercial Letters of Credit
2. Traveler’s Letters of Credit
No protest required in case of dishonor.
Issued to definite persons and not to order, thus, non-negotiable.
Limited to a fixed account.

PRICE TAGS LAW

It requires articles of commerce sold at retail to bear prices.

JOINT ACCOUNTS

It exists when a merchant interests himself in the transaction of another merchant, contributing thereto the amount of capital they may agree upon, and participating in the favorable or unfavorable results thereof in the proportion they may determine.
Joint accounts do not adopt a firm name.
No suit may be maintained – investor and third persons dealing with the merchant conducting business.
It is not subject to any formal requirement for validity; it may be oral.

BULK SALES LAW

Purpose: meant to protect creditors of businessmen against preferential or fraudulent transfers
The law covers all transactions, whether done in good faith or not, or whether or not the seller is in a state of insolvency, that fall within the description of what is a “bulk sale.”
Types of transactions which are treated as “bulk sales”:
1. Sale, transfer, mortgage or assignments of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade;
2. Sale transfer, mortgage or assignments of all, or substantially all, of the business of the vendor, mortgagor, transferor, or assignor;
3. Sale, transfer, mortgage, or assignment of all, or substantially all, of the fixtures and equipment used in the business of the vendor, mortgagor, transferor, or assignor.
Only creditors at the time of the sale in violation of the law are within the protection of the laws and creditors subsequent to the sale are not covered.
Even if the transaction falls within the definition of “bulk sale”, the following are not deemed covered by the law:
1. If the vendor, mortgagor, transferor or assignor produces and delivers a written waiver of the provisions of the law from his creditors as shown by verified statements;
2. The law does not apply to executors, administrators, receivers, assignees in insolvency, or public officers, acting under process.
Obligations when transaction is a bulk sale:
1. The vendor must deliver to such vendee a written statement of:

n names and addresses of all creditors to whom said vendor or mortgagor may be indebted;

n amount of indebtedness due or owing to each of said creditors

The vendor must apply the purchase money to the pro-rata payment of bona fide claims of the creditors as shown in the verified statement.
The seller, at least 10 days before the sale, shall:

n make a full detailed inventory of the goods, merchandise, etc., cost price of each article to be included in the sale

n notify every creditor at least 10 days before transferring possession of the goods, of the price, terms and conditions of the sale

Consequences of Violation of Requirements under #6 above stated:
1. When 6(a) above is not complied with, the sale itself is void; the seller will be criminally liable.
2. When 6(b) above is not complied with, the sale itself is also void; seller is also criminally liable.
3. When 6(c) is not complied with, the sale is not void; no criminal liability on the seller.

INSURANCE LAW

Laws applicable to insurance in the order of priority:
1. Insurance Code
2. Civil Code
3. General Principles prevailing on the subject in the US
Contract of Insurance – an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown contingent event.
Contract of Suretyship – deemed to be an insurance contract within the meaning of the Insurance Code, only if made by a surety who or which, as such, is doing an insurance business
Definition of “doing an insurance business”:
1. making or proposing to make, as insurer, any insurance contract;
2. making or proposing to make as a surety, any contract of suretyship as a vocation and not merely incidental to any other legitimate business or activity of the surety;
3. doing reinsurance business;
4. doing or proposing to do any business in the substance equivalent to any of the foregoing in a manner designed to evade the provisions of the Insurance Code.
Requisites of Insurance:
1. existence of an insurable interest;
2. risk of loss;
3. assumption of risk;
4. scheme to distribute losses; and
5. payment of premiums

Note: If only a, b, and c are present, it is not a contract of insurance but a risk shifting device.

Characteristics of an insurance contract:
1. consensual
2. voluntary
3. aleatory – depends upon some contingent event; however, it is not a wagering nor a gambling contract
4. executed as to the insured after payment of the premium
5. executory as to insurer – not executed until payment for a loss
6. personal – each party takes into account the character, credit and the conduct of the other
7. conditional – liability is based on the happening of the event insured against
Parties to a contract of Insurance:
1. insurer – party who assumes the risk or undertakes to indemnify the insured or to pay a certain sum on the happening of a specified contingency
2. insured – person in whose favor the contract is operative, and who is indemnified against, or is to receive a certain sum upon the happening of a specified contingency
3. beneficiary – may or may not be the same as the insured

What perils may be insured?

(a) any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest; or

(b) any contingent or unknown event, whether past or future, which may create a liability against the person insured.

Every person has an insurable interest in the life and health of:
1. himself, his spouse and his children
2. any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest
3. any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might prevent the performance or delay it
4. any person upon whose life any estate or any interest vested in him depends
Insurable Interest in Property may consist of:
1. an existing interest
2. an inchoate interest, founded on an existing interest
3. an expectancy, coupled with an existing interest out of which the expectancy arises

Definition of Insurable Interest in Property: Interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured.

Instances when Insurable Interest must exist:
1. Interest in Property insured must exist when the insurance takes effect and when the loss occurs, but need not exist in the meantime.
2. Interest in the Life or Health of a Person Insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.
3. Beneficiaries of Life Insurance need not have insurable interest in the life of the insured.
4. Beneficiaries of Property Insurance must have insurable interest in the property insured.

Category	Insurable Interest in Life Insurance	Insurable Interest in Property
1. basis	may be based on pecuniary interest, affinity, or consanguinity	based purely on pecuniary interest
2. when interest must exist	at the time the policy takes effect EXCEPT: life insurance taken by the creditor on the life of the debtor wherein interest must also exist at the time of the loss	at the time the policy takes effect and at the time of the loss
3. amount of insurable interest	no limit EXCEPT: if insurable interest is based on creditor-debtor relationship (only to the extent of the credit or debt)	limited to the actual value of damage/injury/loss

General Rule: A change of interest in any part of a thing insured unaccompanied by a corresponding change in interest in the insurance suspends the insurance to an equivalent extent, until the interest in the thing and the interest in the insurance are vested in the same person.

Exceptions: a. In case of life, health, and accident insurance

when the change in interest results after the occurrence of an injury which results in a loss
a change of interest in one or more several distinct things, separately insured by one policy
a change in the interest by will or succession on the death of the insured (interest passes to the heirs)
a transfer of interest by one of several partners, joint owners in common who are jointly insured to the others (even though it has been agreed that the insurance shall seize upon the alienation of the thing insured)
Revocation of Beneficiaries

General Rule: Insurance contracts are revocable.
Exception: Any person who is forbidden to receive any donation under Article 739 of the Civil Code cannot be named beneficiary of a life insurance policy by the person who cannot make the donation to him.
The following donations shall be void:

those made between persons who were guilty of adultery or concubinage at the time of the donation;
those made by persons found guilty of the same criminal offense, in consideration thereof;
those made to a public officer or his wife, descendants, ascendants, by reason of his office.

Other Pertinent Provisions on Revocation:

(a) The termination of a subsequent marriage shall allow the innocent spouse to revoke the designation of the other spouse who acted in bad faith as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable.

(b) After the finality of the decree of legal separation, the innocent spouse may revoke the donations as well as the designation of the latter as a beneficiary in any insurance policy, even if such designation is irrevocable. The revocation of or change in the designation shall take effect upon written notification thereof to the insured. The action to revoke the donation under this article must be brought within 5 years from the time the decree of legal separation has become final.

(c) The interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice or accessory in willfully bringing about the death of the insured, in which event, the nearest relative of the insured shall receive the proceeds of said insurance if not otherwise disqualified.

Suspension – a change of interest in any part of a thing insured unaccompanied by a corresponding change of interest in the insurance suspends the insurance to an equivalent extent until the interest in the thing and the interest in the insurance are vested in the same person.
Concealment – a neglect to communicate that which the party knows or ought to communicate

General Rule: The insured is not required to communicate the nature (or kind) or the amount of his insurable interest in the life or property insured to the insurer.
Exception: a. When the insurer makes inquiry from the insured of the nature or amount of the latter’s insurable interest, whether in life or property insurance;

insurance policy must specify the interest of the insured in the property insured, if he is not the absolute owner thereof.

A concealment, whether intentional or not, entitles the injured party to rescind a contract of insurance.
Requisites:

(a) the party concealing must have knowledge of the facts concealed;

(b) the facts concealed must be material to the risk;

(d) the party concealing makes no warranty as to the facts concealed;

(e) the other party has no other means of ascertaining the facts concealed.

Note: An insured need not die of the very disease he failed to reveal to the insurer. It is sufficient that the non-revelation has misled the insurer in forming his estimate of the disadvantages of the proposed policy or in making his inquiries in order to entitle the insurance company to avoid the contract.
Note: The insured is under an obligation to disclose not only such material facts as are known to him, but also those known to his agent where:

it was the duty of the agent to acquire and communicate information of the facts in question;
it was possible for the agent, in the exercise of reasonable diligence, to have made the communication before the making of the insurance contract.

n Failure on the part of the insured to disclose such facts known to his agent, or wholly due to the fault of the agent, will avoid the policy, despite the good faith of the insured.

Neither party to the insurance contract is bound to communicate information on the following matters except in answer to the inquiries of the other:
1. those of which the other knows;
2. that which, in the exercise of ordinary care, the other ought to know and of which the former has no reason to suppose his ignorance, i.e. political situation, general usages of trade;
3. those of which the other waives communication;
4. those which prove or tend to prove the existence of the risk excluded by a warranty and which are not otherwise material;
5. those which relate to a risk excepted from the policy and which are not otherwise material.

Neither party is bound to communicate his mere opinion, even upon inquiry, because such opinion would add nothing to the appraisal of the application.
Waiver of material facts may be:

(a) by the terms of the insurance; or

(b) by the neglect to make inquiry as to such facts, where they are distinctly implied in other facts which information is communicated

Materiality is to be determined not by the events but solely upon the probable and reasonable influence of the facts on the party to whom the communication is due in forming his estimate of the disadvantages of the proposed contract or in making his inquiries.
Concealment, whether intentional or not, entitles the other party to rescind the contract.

Representation

It is a factual statement made by the insured at the time of, or prior to, the issuance of the policy, to give information to the insurer and otherwise induce him to enter into the insurance contract.

It may be made orally or in writing.
It may be made at the time of, or before, the issuance of the policy.
It may be altered or withdrawn before the insurance is effected, but not afterwards.
A representation cannot qualify an express provision in a contract of insurance but it may qualify an implied warranty.
A representation as to the future is to be deemed a promise unless it appears that it was merely a statement of belief or an expectation. (must be susceptible of present, actual knowledge)
The statement of an erroneous opinion, belief or information, or of an unfulfilled intention, will not avoid the contract of insurance, unless fraudulent.
Right to rescind because of false representation:

must be exercised previous to the commencement of an action on the contract (the action referred to is that to collect a claim on the contract)
misrepresentation, whether intentional or not, gives the right to rescind

Incontestable Clause: After a policy of life insurancemade payable on the death of the insuredshall have been in force during the lifetime of the insured for a period of 2 years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent.
Exceptions: (a) absence of insurable risk

(b) cause of loss is an unexpected risk

(d) non-payment of premium

(e) violation of conditions relating to naval or military services

(f) failure to comply with conditions subsequent to the occurrence of the loss

Warranties:

General Rule: Non-performance of a promissory warranty avoids a contract of insurance.
Exceptions:

when before the time for performance of the promissory warranty, a loss insured against occurs;
when before the time of the performance of the warranty, the act becomes unlawful;
when before the time of the performance of the warranty, said performance becomes impossible.

A statement or a promise set forth in the policy or by reference incorporated therein, the non-fulfillment of which in any respect and without reference to whether the insurer was in fact prejudiced by such non-fulfillment, renders the policy voidable by the insurer, wholly irrespective of the materiality of such statement or promise.

Warranty	Representation
part of the insurance contract	collateral inducement
always written on the policy	maybe oral or written
conclusively presumed material	materiality must be proved
must be strictly complied with	requires substantial truth
made by the insured	may be made by insurer or insured

Note: If there is a breach of warranty, even if the cause of the loss is a different risk, the insurer is entitled to rescind the contract of insurance.
Breach must refer to a material warranty, whether intentional or not.

Policy

What is a Rider? It is an additional provision in a policy not part of the body of the printed form.
Cover Note: written memorandum of the most important terms of a preliminary contract of insurance, intended to give temporary protection pending the investigation of the risk by the insurer, or until the issuance of a formal policy.
General Rule: Cover notes bind insurer temporarily pending the issuance of the policy.
Exception: Where it is merely an acknowledgment on behalf of the company that the latter’s branch office had received from the applicant the insurance premium and accepted the application subject for processing by the insurance company and that the latter will either approve or reject the same.
Kinds of Policies:

Open – the value of the thing insured is not agreed upon, but is left to be ascertained at the time of the loss
Valued – expresses on its face an agreement that the thing insured shall be valued at a specific sum
Running – contemplates successive insurance which provides that the object of the policy may be from time to time defined especially as to the subject of insurance by additional statements or endorsements

n Note: If an amount is written on the face of an open policy, it is merely a determination of the maximum limit of recovery and not as the value of the policy.

Category	Open Policy	Valued Policy
what needs to be proven in order to be able to claim	value of property upon loss	no need for proof of value of property upon loss
determining value of loss	value of property is to be ascertained upon loss	value of property upon loss is conclusively stipulated to a specified amount

Period for commencing an action against the policy: Within 1 year from the time the cause of action accrues, i.e., from the time of rejection of the claim by the insurer. Any condition, stipulation, or agreement limiting the time to less than 1 year is void.
Grounds for Cancellation of a Policy by the Insurer:

For Policies Other than Life:

(1) prior notice of the cancellation to insured

(2) notice must be based on the ff. occurrences after effective date of the policy

(a) non-payment of premiums

(b) conviction of a crime arising out of acts increasing the hazard insured against

(d) discovery of willful or reckless acts or omissions increasing the hazard insured against

(e) physical changes in the property insured which results in the property becoming uninsurable

(f) determination by the Commissioner that the continuation of the policy would violate or would place the insurer in violation of the Insurance Code

(3) notice must be in writing

(4) it must be mailed or delivered to the insured at the address shown in the policy

(5) notice must state the ground relied upon and that upon written request of the insured, the insurer will furnish facts on which the cancellation is based

Renewal of the Policies Other than Life:

Insurer must mail or deliver to the insured notice of its intention not to renew the policy or to condition its renewal upon reduction of limits or elimination of coverages within 45 days before the policy ends. Otherwise, insured entitled to renew the policy upon payment of the premium due on the effective date of the renewal.

Premium

General Rule: No policy is binding until the premium thereof has been paid.
Exceptions: (a) in case of life or industrial life policy, whenever the grace period applies

(b) in case of estoppel

Insurer is entitled to payment of premiums as soon as the thing insured is exposed to the perils insured against.
When insurer entitled to Return of Premiums

when the contract is voidable on account of fraud or misrepresentation of the insurer;
when on account of facts, the existence of which the insured was ignorant without his fault
when by any default of the insured other than actual fraud, the insurer never incurred any liability under the policy
when the insured has become a public enemy and the policy automatically canceled (on the ground of equity)
in case of over-insurance by several insurers (ratable return of premiums, proportioned to the amount by which the aggregate sum insured in all policies exceed the insurable value of the thing at risk)
Loss

When Insurer is Liable:

where the peril insured against was the proximate cause, although a peril not contemplated by the contract may have been the remote cause or even the immediate cause of the loss
where the thing insured is rescued from the peril insured against that would otherwise have caused a loss, if, in the course of such rescue, the thing is exposed to a peril not insured against, which permanently deprives the insured of its possession in whole or in part
where loss is caused by efforts to rescue the thing insured from a peril insured against
insurer is not exonerated by a loss caused by simple negligence of the insured if the proximate cause of the loss is a peril insured against
loss, the immediate cause of which is a peril insured against except when the proximate cause is an excepted peril

When Insurer Not Liable:

where the peril insured against was only a remote cause
where the peril is specifically excepted, a loss which would not have occurred but for such peril is thereby excepted
loss caused by the connivance of the insured
loss caused by the willful act of insured
loss caused by insured’s negligence, if it amounts to bad faith

General Rule: The insurer is not liable for a loss caused by the willful act of the insured.
Exception: Suicide Clause in Life Insurance: Insurer liable in case insured committed suicide after the policy has been in force for a period of 2 years from the date of its issue or last reinstatement. If insured kills himself within a period of 2 years, insurer is not liable.
Exception to Exception: If suicide is committed in a state of insanity, regardless of the time of commission, the insurer is liable.

Double Insurance – exists where the same person is insured by several insurers separately in respect to the same subject and interest

Requisites: a. person insured must be the same

existence of several insurers
subject matter insured must be the same
interest the same
risk insured against also the same

Over Insurance	Double Insurance
may be only one insurer	must be 2 or more insurers
insurance covers more than the value of insurable interest	insurance may or may not exceed the value of insurable interest

The Code prohibits double insurance without the consent of the insurer.
Liability of Insurer:

Insurance taken

from each insurer

———————————- x value of property received = liability of insurer total insurance

Reinsurance: A process by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance.

The original insured cannot recover from this insurance unless there is a specific grant, or assignment of, the reinsurance contract in favor of the insured, or a manifest intention of the contracting parties to the reinsurance contract to favor the insured.

General Rule: The insurer who obtains reinsurance must communicate:

all the representations of the original insured; and
all the knowledge and information he possesses, whether previously or subsequently acquired which are material to the risk

Exception: under automatic reinsurance treaties

Reinsurance

Double Insurance

1. 1. insurer becomes the insured

2. 2. subject matter is the insured risk or liability

3. 3. different risks and interests of insured

4. 4. there must be consent of original

5. 5. one who is original insured has no interest in the contract of reinsurance which is independent of the original contract of insurance

6. 1. insurer remains the insurer

7. 2. subject matter is property

8. 3. the same interest and risk are insured

9. 4. insured has to give his consent

10. 5. insured is the party in interest in all contracts

Marine Insurance: insures against perils of the sea, not of the ship

Perils of the Sea

Perils of the Ship

covered by marine insurance

not covered by marine insurance

denote nature accidents peculiar to the sea which do not happen by intervention of man nor are to be prevented by human prudence

damage or losses resulting from:

1. 1. natural and inevitable action of the sea

2. 2. ordinary wear and tear of a ship, or

3. 3. negligent failure of the ship owner to provide the vessel with proper equipment to convey the cargo under ordinary conditions

Owner of the Ship has Insurable Interest:

in the ship even if it has been chartered by one who promises to pay him in value in case of loss (insurer is liable for what insured cannot recover from the charterer), even when hypothecated by bottomry (only the excess of its value over the amount secured by bottomry) and
in the freightage, which according to the ordinary and probable course of things he would have earned but for the intervention of a peril insured against or other peril incident to the voyage

Charterer has insurable interest in the ship to the extent that he is liable to be damnified by its loss.
Barratry: Any willful misconduct on the part of the masters or crew, in pursuance of some unlawful or fraudulent purpose, without the consent of the owners and to the prejudice of the owner’s interest.
Jettison: Intentional casting overboard of any part of a venture exposed to a peril, whether it be of the cargo, or the ship’s furniture or tackle, in the hope of saving the rest of the venture.
Insurable Interest in Marine Insurance: Determined when one will sustain loss from the destruction of the subject matter or derive benefit from its preservation.
Charter Party: Contract by virtue of which the owner or the agent of a vessel binds himself to transport merchandise or persons for a fixed price. It has also been defined as a contract by virtue of which the owner or the agent of the vessel for the transportation of goods or persons from one port to another.
Loan on Bottomry: Contract in the nature of a mortgage whereby the owner of a ship borrows money for the use, equipment or repair of the vessel for a definite term, and pledges the ship as a security for repayment, with maritime or extraordinary interest on the account of the maritime risks to be borne by the lender. It is stipulated in such a contract that if the ship be lost in the course of the specific voyage or during a specified limited time caused by any of the perils enumerated in the contract, the lender shall resolutely lose his money.
Loan on Respondentia: Contract akin to that of mortgage made on the goods on board the ship, and which are to be sold or exchanged in the course of the voyage. The goods serve as the principal security.
Freightage: Signifies all the benefits derived by the owner, carriage of his own goods, or those of others.
Concealment: In marine insurance, information or the belief or expectation of a 3^rdperson, in reference to a material fact is material.

n Concealment of the following merely exonerates the insurer from the resulting loss therefrom:

national character of the insured
liability of the thing insured to capture and detention
liability to seizure from breach of foreign laws of trade
want of necessary documents
use of false and simulated papers

Implied Warranties:

that the ship is seaworthy – complied with if the ship is seaworthy at the time of commencement of risk, except: (a) insurance for a specified length of time – at the commencement of every voyage it undertakes during that time; (b) cargo to be transshipped at indeterminate port – each vessel upon which cargo is shipped is seaworthy at the commencement of each particular voyage
that the vessel shall not engage in illegal venture
that the vessel shall not deviate from the course of the voyage insured
where the nationality or neutrality of a ship or cargo is expressly warranted, it is implied that the ship will carry the requisite documents to show such nationality or neutrality and that it will not carry any documents which may cast reasonable suspicion thereon

Seaworthiness depends on:

nature of the ship
nature of the voyage
nature of the service

n Seaworthiness of the vessel is required only at the commencement of the risk

n Exceptions:

in a Time Policy – commencement of every voyage that must be undertaken
in a Cargo Policy – commencement of each particular voyage
in a Voyage Policy – commencement of each portion of the voyage

Deviation

a departure from the course of the voyage insured
unreasonable delay in pursuing the voyage
commencement of an entirely different voyage

When is Deviation proper?

when caused by circumstances over which neither the master not the owner of the ship has any control
when necessary to comply with a warranty or to avoid a peril whether it is insured against or not
when made in good faith for the purpose of saving human life or relieving another vessel in distress
when made in good faith and upon reasonable grounds of belief in its necessity to avoid a peril

Loss

Actual Total Loss

n a total destruction of the thing insured

n the irretrievable loss of the thing by sinking or by being broken up

n any damage to the thing which renders it valueless tot he owner for which he held it

n any other event which effectively deprives the owner of possession, at the port of destination, of the thing insured

Constructive Total Loss – gives to the person insured the right to abandon

Average – any extraordinary or additional expense incurred during the voyage for the preservation of the vessel, cargo, or both and all damages to the vessel and cargo from the time it is loaded and the voyage commenced until it ends and the cargo unloaded
General Average – an expense or damage suffered deliberately in order to save the vessel, its cargo, or both from the real or known risk
Abandonment – act of the insured by which, after a constructive total loss, he declares the relinquishment to the insured of his interest in the thing insured (where the cause of loss is a peril insured against)

(a) more than ¾ thereof in value is actually lost or would have been expended to recover it from the peril

(b) it is injured to such an extent as to reduce its value by more than ¾

(c) if the thing insured is the ship and the voyage cannot be lawfully performed without incurring an expense of more than ¾ of the whole, or a risk which a prudent man would not undertake under the circumstances

(d) if the thing insured is cargo or freightage, and the voyage cannot be performed on another ship procured by the master within a reasonable time and with reasonable diligence to forward the cargo without incurring an expense or a risk as stated above

Freightage cannot be abandoned unless ship is also abandoned.
Requisites of a Valid Abandonment:

must be total and conditional
made within a reasonable time
explicit notice
coupled with actual abandonment

Requisites for Valid Valuation in the Valued Marine Policy:

insured must have interest at risk
there must be no fraud on the insured’s part

Notice of Abandonment:

may be oral or in writing (if oral, written notice must be submitted within 7 days from oral notice)
must be explicit
must specify the particular cause for abandonment
need not be accompanied by proof of interest or loss

Acceptance of Abandonment

may be express or implied (i.e. silence for unreasonable length of time)
conclusive upon the parties and admits the loss and sufficiency of abandonment
irrevocable, unless the ground on which it is made is proved to be unfounded

If insurer refuses to accept a valid abandonment – liable as upon actual total loss
Upon actual abandonment

freightage earned before loss – belongs to the insurer of freightage
freightage earned after loss – belongs to insurer of ship

Co-insurance: form of insurance in which the person who insures his property for less than the entire value is understood to be his own insurer for the difference which exists between the true value of the property and the amount of insurance
Co-insurance applies only where the:

insurance taken is less than the actual value of the thing insured
loss is partial

Primage – increase in freightage

Fire Insurance

Insurer is liable for loss or damage caused by hostile fire (fire that escapes from the place where it was intended to burn and ought to be in) and not that caused by friendly fire (fire which burns in a place where it is intended to burn).

Scope of Fire Insurance:

fire
lightning
windstorms
tornado
earthquake
other allied risks

When does alteration in the use or condition entitle the insurer to rescind the contract?

such alteration violates a provision in the policy
it was made without the insurer’s consent
it is done within the insured’s control, and it increases the risk of loss or damage

Rules:

policy shall not protect the insured from injury consequent upon his negligent use or management of fire, so long as it is confined to the place where it ought to be
if it escapes, even though the insured was negligent, the insurer is liable
even though a fire may remain in its proper place, it may become hostile if it by accident, becomes so extensive as to be beyond control

Options of the Insurer

purchase the property at appraised valuation
restore the property damaged – contract of insurance is discharged and parties enter into a new contract of insurance
Casualty Insurance: Any injury that is intended, unexpected and unusual, even though it results from an act or even which was intelligently done.

Insurer is Liable for death/injury to insured:

by his own hand while insane
by taking poison by mistake
by overdoes of drugs administered or taken by mistake, by ignorance or material pathological conditions
by unexpected bacterial infection consequent upon doing acts, even though such acts were intentionally done
by unprovoked violence of others

Compulsory Motor Vehicle Liability Insurance

Persons subject to CMVLI:

motor vehicle owner or one who is the actual legal owner of a motor vehicle in whose name such vehicle is registered with the LTO
land transport operator or one who is the owner of a motor vehicle or vehicles being used for conveying passengers for compensation (including school buses)

No Fault Indemnity Clause: The insurance company shall pay any claim for death or bodily injuries sustained by a passenger or 3^rdparty without the necessity of proving fault or negligence of any kind subject to certain conditions. This does not apply to property damage.

Suretyship – an agreement whereby the surety guarantees the performance of the principal or obligor of an obligation or undertaking in favor of a 3^rdparty called the obligee
Life Insurance: an insurance in human life and insurance appertaining thereto or connected therewith may be payable:
1. on the death of the insured
2. on his surviving a specified period
3. otherwise, contingently on the continuance or cessation of life

(b and c refer to endowment or annuities)

Uses and Common Kinds of Life Insurance:

Whole Life or Ordinary Policies – here, the insured agrees to pay annual, semi-annual or quarterly premiums while he lives. The insurer agrees to pay the face value of the policy upon the death of the insured.
Limited Payment Life Policy – premiums paid only for a specified period of years.
Term Policy – insurer’s liability arises only upon the death of the insured within the agreed term as period. If the latter survives the period, the contract terminates and the insurer is not liable
Endowment Policy – insurer agrees to pay a certain sum to the insured if the latter outlives a designated period; if he dies before that time, the proceeds are paid to the beneficiary
Life Annuity – debtor binds himself to pay an annual pension or income during the life of one or more persons in consideration of a capital consisting of money or other property, whose ownership is transferred to him with the burden of income
The Business of Insurance
1. Life or Endowment Policies

Grace Period – 30 days for the payment of any premium due after the first premium has been paid

Period of Incontestability – after the lapse of 2 years from the date of issue or date of approval of last reinstatement

Reinstatement of Policy – within 3 years from the date of default of premium, upon:

production of evidence of insurability, and
payment of all overdue premiums and any indebtedness to the company upon said policy

Exceptions:

if cash surrender value has been paid
if period of extension has expired
Claims Settlement

Unfair Claims Settlement Practices:

(a) knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverage at issue

(b) failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies

(d) no attempt in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear

(e) compelling policy holders to institute suits to recover the amount due under its policies by offering with no justifiable reason an amount substantially less than that ultimately recovered in suits brought by them

Proceeds of Life Insurance – payable within 60 days after:

(a) presentation of claims, and

(b) filing of proof of death (upon failure to pay interest, at the rate of 2 times the ceiling prescribed by the Monetary Board unless based on the ground that the rate is fraudulent)

Proceeds of Policies other than Life – payable:

(a) upon proof of loss

(b) upon ascertainment of loss or damage (if not made within 60 days of proof of loss, payable in 90 days)

Power of Commissioner to Suspend/Revoke License

(a) if insurance contract is in unsound condition

(b) if it has failed to comply with the provisions of law or regulations obligatory upon it

(c) its conditions or methods of business s such as to render its proceedings hazardous to the public or to its policy holders

(d) that its paid up capital stock, or its available cash assets, or its security deposits, as the case may be, is impaired or deficient

(e) that the margin of solvency required of each company is deficient

Insurance Agent – any person who for compensation solicits or obtains insurance on behalf of any insurance company or transacts for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in negotiating of such insurance. He must be first licensed as such before doing any acts as insurance agent.

Insurance Broker – any person for any compensation, commission or any other thing of value, acts, or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself. A license is required.

WAREHOUSE RECEIPTS LAW

Warehouse – a building or place where goods are deposited and stored for profit.
Warehouseman – person lawfully engaged in the business of storing goods for profit.

Only a warehouseman may issue warehouse receipts.

Warehouse Receipt – written acknowledgment by a warehouseman that he has received and holds certain goods therein described in store for the person to whom it is issued.
Non-negotiable Receipt – receipt deliverable to a specified person.
Negotiable Receipt – receipt deliverable to order or to bearer.
Essential Terms which MUST be embodied in a Warehouse Receipt:
1. location of the warehouse
2. date of the issue of the receipt
3. consecutive number of the receipt
4. statement whether the goods received will be delivered to bearer, or a specified person, or his order
5. rate of storage charges
6. description of the goods or packages containing them for identification purposes
7. signature of the warehouseman
8. statement of the amount of advances made and of liabilities incurred for which the warehouseman claims as lien
Effect of omission of any of the essential terms:
1. The validity of the warehouse receipt is not affected.
2. The warehouseman shall be held liable for damages to those injured by his omission.
3. The negotiability of the warehouse receipt is not affected.
4. The issuance of a warehouse receipt in the form provided by the law is merely permissive and directory and not mandatory in the sense that if the requirements are not observed, then the goods delivered for storage become ordinary deposits.
Terms which may be inserted in a Warehouse Receipt: Any other terms except (a) those contrary to the provisions of this Act; (b) those that would impair a warehouseman’s obligation to exercise that degree of care in the safekeeping of the goods entrusted to him
Marks to be made on a warehouse receipt:
1. A non-negotiable receipt must be clearly marked non-negotiable or not negotiable, otherwise, the holder of the receipt who purchased it for value and who supposed it to be negotiable, may treat it as negotiable.
2. Duplicate receipts must be so marked, otherwise, the warehouseman is held liable for all damages suffered by a holder believing the same to be the original.
Warranties of a warehouseman as to duplicate receipts:
1. The duplicate is an accurate copy of the original receipt.
2. Such original receipt is uncancelled at the date of the issue of the duplicate.
Effects of alteration on the liability of the warehouseman:
1. If the alteration is IMMATERIAL (the tenor of the receipt is not changed), whether fraudulent or not, authorized or not, the warehouseman is liable on the altered receipt according to its original tenor.
2. If the alteration is MATERIAL but AUTHORIZED, the warehouseman is liable according to the terms of the altered receipt.
3. If the alteration is MATERIAL, UNAUTHORIZED but INNOCENTLY MADE, the warehouseman is liable on the altered receipt according to its original tenor.
4. If the alteration is MATERIAL and FRAUDULENTLY MADE, the warehouseman is liable:

(1) to the purchaser of the receipt for value and without notice of the alteration according to the tenor of the altered receipt

(2) to the alterer, according to the terms of the original receipt

(3) to subsequent purchasers with notice of the alteration, according to the terms of the original receipt

Effects of misdescription of goods:
1. A warehouseman is under the obligation to deliver the identical property stored with him and if he fails to do so, he is liable directly to the owner.
2. As against a bona fide purchaser of a warehouse receipt, the warehouseman is estopped from denying that he has received the goods described in the receipt.
3. If the description consists merely of marks or label upon the goods or upon the packages containing them, the warehouseman is not liable even if the goods are not of the kind as indicated in the marks or labels.
Principal Obligations of a Warehouseman:
1. To take care of the goods entrusted to his safekeeping

General Rule: A warehouseman is required to exercise such degree of care which a reasonable careful owner would exercise over similar goods of his own. He shall be liable for any loss or injury to the goods caused by his failure to exercise such care.
Exception: He shall not be liable for any loss or injury which could not have been avoided by the exercise of such care.
Exception to the Exception: He may limit his liability to an agreed value of the property received in case of loss. He cannot stipulate that he will not be responsible for any loss caused by his negligence.

To deliver the goods to the holder of the receipt or the depositor upon demand, provided demand is accompanied with:

(1) an offer to satisfy the warehouseman’s lien;

(2) an offer to surrender the negotiable receipt properly endorsed. If the receipt is non-negotiable, any person lawfully entitled to the possession of the goods may be entitled to delivery without surrender of the receipt.

(3) a readiness and willingness to sign an acknowledgment that the goods have been delivered if such is requested by the warehouseman.

Persons to whom goods must be delivered:
1. Persons lawfully entitled to the possession of the goods or his agent:

a. persons to whom a competent court has ordered the delivery of the goods

(1) where a negotiable instrument has been lost or destroyed, the court may order delivery to a person upon satisfactory proof of such loss or destruction and upon proper posting of a bond to protect the warehouseman from any liability or expense which he may incur by reason of the original receipt remaining outstanding.

(2) where more than one person claims title or possession of the goods the warehouseman may require all claimants to interplead. The court will then order delivery to the person having a better right.

an attaching creditor – Goods, while in the possession of the warehouseman and covered by a negotiable receipt, cannot be attached or levied upon under an execution unless:

(I) the negotiable receipt is first surrendered to the warehouseman, or

(ii) its negotiation is enjoined, or

(iii) the receipt is impounded by the court

c. to the purchaser in case of sale of the goods by the warehouseman to enforce his lien

to the purchaser where perishable or hazardous goods are sold at private or public sale
If goods are covered by a non-negotiable receipt:
1. a person entitled to the delivery by the terms of the receipt, or
2. one who has written authority from letter a
If goods are covered by a negotiable receipt, a person in possession of the receipt, the terms of which the goods are deliverable:
1. to him or order
2. to bearer
3. indorsed to him
4. indorsed in blank by the person whom delivery was promised
When is there Misdelivery?

When the warehouseman delivers the goods to a person who is not in fact lawfully entitled to the possession of the goods because:

the person does not fall under letter B or C above; or
the person falls under letter B or C but prior to delivery, the warehouseman had either:

(1) been requested by the person lawfully entitled to the delivery not to make such delivery, or

(2) had information that the delivery about to be made was to one not lawfully entitled to the possession of the goods

Effects of Misdelivery:

The warehouseman shall be liable for conversion to all having a right to property or possession of the goods.

What happens if there is proper delivery or partial delivery but the warehouseman fails to cancel the receipt or record on the receipt of such partial delivery?
1. If goods covered by a negotiable warehouse receipt are delivered by a warehouseman but he fails to take the receipt and cancel it, then he is still liable to one who purchases for value and in good faith such receipt.
2. If he makes partial delivery of the goods but fails to record the partial delivery on the receipt then he may still be held liable for the entire receipt to one who purchases for value and in good faith such receipt.
Lawful excuses for refusal to deliver goods:
1. The warehouseman can refuse to deliver the goods if he has acquired title or right to the possession of the goods:

(1) directly or indirectly from a transfer made by the depositor at the time of the deposit for storage or subsequent thereto; or

(2) from the warehouseman’s lien

If someone other than the depositor or person claiming under the depositor has a claim to the title or possession of the goods and the warehouseman has information of such claim, the warehouseman shall be excused from liability for refusing to deliver the goods either to the depositor or person claiming under him until he has had a reasonable time to ascertain the validity of the adverse claim or to bring legal proceedings to compel all claimants to interplead.
The warehouseman will not be required to deliver the goods if such had been lost. But this is without prejudice to liabilities which may be incurred by him due to such loss.
The warehouseman having a valid lien against the person demanding the goods may refuse to deliver the goods to him until the lien is satisfied.
If goods have been lawfully sold or disposed of because of their perishable or hazardous nature, the warehouseman shall not be liable for failure to deliver the goods.
A warehouseman cannot refuse to deliver goods to the depositor or to a person claiming under him on the ground that adverse title to the goods belongs to a third person.
Rules as regards Co-mingling of Deposited Goods:

General Rule: A warehouseman may not co-mingle goods belonging to different depositors or belonging to the same depositor for which separate receipts had been issued.
Exception: A warehouseman may co-mingle fungible goods of the same kind and grade provided he is authorized by agreement or by custom.

Effect of Co-mingling of Goods:
1. The different owners become co-owners of the whole mass.
2. The warehouseman shall be severally liable to each depositor for the care and redelivery of his share of such mass to the same extent and under the same circumstances as if the goods had been kept separate.
Remedies of a Creditor: (the debtor being the owner of the negotiable receipt)

Creditors of the depositors, before negotiation, may protect themselves by obtaining a writ of preliminary injunction and serve the same on the depositor before he has a chance to negotiate the receipt. Once enjoined, there will be no longer a danger that a 3^rd person will be prejudiced so the goods may now be attached, levied upon, or that the vendor’s lien or the right of stoppage in transit be exercised.

Warehouseman’s Lien

Extent of Warehouseman’s Lien:

A warehouseman shall have a lien on goods deposited or on the proceeds thereof in his hands for:

all lawful charges for storage and preservation of the goods
all lawful claims for money advances, interest, insurance, transportation, labor, weighing, cooperating and other charges and expenses in relation to such goods
all reasonable charges and expenses for notice and advertisements of sale and for sale of the goods where default has been made in satisfying the warehouse lien

Goods Subject to lien:

goods belonging to the depositor who is liable to the warehouseman as debtor whenever such goods are deposited and
goods belonging to other persons stored by the depositor who is liable to the warehouseman as debtor with authority to make a valid pledge

How is a lien enforced?

by refusing to deliver the goods until the lien is satisfied
by causing the extrajudicial sale of the property and applying the proceeds to the value of the lien
by filing a civil action for unpaid charges or by way of counterclaim in an action to recover the property from him

How is a lien lost?

when the warehouseman voluntarily surrenders possession of the goods without requiring payment of his lien; or
when the warehouseman wrongfully refuses to deliver the goods when a demand is made with which he is bound to comply
Negotiation and Transfer of Receipts

How do we negotiate a receipt deliverable to order?

by indorsing it in blank thereby making it deliverable to bearer or
by special indorsement – which would require further indorsements for further negotiations.

In both cases, the indorsements must be coupled with delivery.

How do we negotiate a receipt deliverable to bearer?

There is no need to indorse for negotiation. Physical delivery of the instrument will suffice. But if the instrument is indorsed specially, the bearer character of the receipt is destroyed and for further negotiation, there will be a need for indorsement.

Who may negotiate warehouse receipts?

the owner of the receipt, or
the person to whom possession of the receipt was entrusted to by the owner

Rights acquired by a person to whom the receipt has been negotiated:

the title of the person negotiating the receipt over the goods covered by the receipt
the title of the person (depositor or owner) to whose order by the terms of the receipt the goods were to be delivered
the direct obligation of the warehouseman to hold possession of the goods for him, as if the warehouseman directly contracted with him

May non negotiable receipts be negotiated?

No, even if the receipt is indorsed, the transferee acquires no additional right. That is why they are called non negotiable receipts. But they may be transferred or assigned by delivery.

Rights of a person to whom a non negotiable receipt has been transferred:

the title to the goods as against the transferor
the right to notify the warehouseman of the transfer thereof and
the right thereafter to acquire the obligation of the warehouseman to hold the goods for him

Distinction between a non negotiable receipt from a negotiable receipt with regard to attachment or execution upon goods:

Non-negotiable Receipt	Negotiable Receipt
Prior to notification of the warehouseman by the transferor or transferee, the warehouseman is not bound to the transferee whose right may be defeated by a levy of an attachment or execution upon the goods by the creditor of the transferor or by a notification to such warehouseman of the subsequent sale of the goods.	The goods cannot be attached or levied under an execution unless the receipt be first surrendered to the warehouseman or its negotiation enjoined.

Rights of a person to whom a negotiable receipt has been transferred, not indorsed:

the right to the goods as against the transferor
the right to compel the transferor to indorse the receipt. But if the intention of the parties is that the receipt should merely be transferred, the transferee has no right to require the transferor to indorse the receipt.

Note: Negotiation takes effect as of the time when the indorsement is actually made.

Warranties of a person negotiating or transferring a receipt:

the receipt is genuine
he has a legal right to negotiate or transfer it
he has knowledge that would impair the validity or worth of the receipt and
he has a right to transfer the title to the goods and that the goods are merchantable

A holder for security of a receipt (mortgagee or pledgee) who in good faith accepts payment of the debt from a person does not warrant the genuineness of the receipt not the quality or quantity of the goods therein described.
It is the duty of the purchaser, mortgagee or pledgee of goods for which a negotiable receipt has been issued to require the negotiation of the receipt to him, otherwise his failure will have the same effect as an express authorization on his part to the seller, mortgagor, or pledgor in possession of such receipt to make any subsequent negotiation. The subsequent purchaser must have taken the receipt in good faith and for value.
A bona fide purchaser of a negotiable warehouse receipt acquires title to the goods where he purchases from the owner’s agent within the actual or apparent scope of his authority. In sum, negotiation is valid despite having been made in breach of trust.
Distinctions between a negotiable instrument and a negotiable warehouse receipt:

Negotiable Instrument	Negotiable Warehouse Receipt
When a negotiable instrument is altered deliberately, it becomes null and void.	When a warehouse receipt is altered, it is still valid but it may be enforced only in accordance with its original tenor.
If a negotiable instrument is originally payable to bearer, it will always remain so payable regardless of the way it is indorsed, whether specially or in blank.	If a warehouse receipt, payable to bearer, is indorsed specially, it will be converted into a receipt deliverable to order and can only be negotiated further by indorsement and delivery.
A holder in due course may be able to obtain a title better than that which the party who negotiated the instrument to him had.	An indorsee even if a holder in due course obtains only such title as the person negotiating has over the goods.
The indorsement of a negotiable instrument has a double effect. It is at the same time a conveyance of the instrument and a contract the indorser has with the indorsee that on certain conditions, the indorser will pay the instrument if the party primarily liable fails to do so.	The indorsement of a warehouse receipt amounts merely to a conveyance by the indorser. Accordingly, an indorser of a receipt shall not be liable to the holder if, for example, the warehouseman fails to deliver the goods because they were lost due to his fault or negligence.

GENERAL BONDED WAREHOUSE LAW

Any warehouseman receiving commodities for (a) storage; (b) milling; (c) co-mingling must:

obtain prior license from the Bureau of Commerce
file a bond in an amount equivalent to 33 1/3 % of the capacity of the warehouse against which bond depositors may sue directly
open to the public, no discrimination allowed
liable for double market value should he accept goods in excess of the capacity of warehouse if goods are damaged or destroyed

Note: for palay and corn license, a bond with the National Grains Authority is required; also an insurance cover is required.

Uniform Currency Law

Obligations Null and Void
1. obligations payable in gold/foreign currency
2. obligations payable in Philippine currency but measured in gold/foreign currency
Exempt Transactions
1. government to government transactions or with international banking institutions
2. transactions affecting high priority economic projects
3. forward exchange transactions between banks
4. import and export and other international banking, financial, investment and industrial transactions
Merchants and Commercial Transactions

Classes of Investments:

Permitted – one allowed without need of prior authority from the Philippine Government. If registered status, invest up to extent as not to affect its registered status. If enterprise not registered, investment not to exceed 40%.
Permissible – invest in excess of 40% in unregistered enterprise but with prior approval of BOI
Pioneer Area – (a) involves manufacturing, processing, production of product not produced at all/produced in non-commercial scale; (b) uses a design, scheme, formula that is new and untried in the Phils.; (c) agricultural activities/services essential to the attainment of food sufficiency; (d) produces non-conventional fuels/utilizes non-conventional sources of energy (all others are non-pioneer)
Absolutely Disqualified to become Merchants
1. serving penalty of civil interdiction
2. insolvent
3. absolutely disqualified by special laws
Relatively Disqualified
1. judicial and prosecuting officials in active service
2. administrative, economic, military chiefs
3. government collection agents and custodian of funds
4. stock and commercial brokers
5. by special laws cannot trade in specified territories
Books a Merchant must keep
1. book of inventories and balances, statement of assets, liabilities and capital
2. journal of day to day operations
3. ledger for classifying accounts
4. copying book for letters and telegrams; if juridical person, include book of minutes and stock and transfer book
Probative Value of Merchant’s Book
1. evidence against merchants themselves
2. in case of conflicts between 2 books – that which s properly kept prevails
3. if one keeps books and the other does not and cannot explain why, the former prevails
4. if both books are properly kept and there is a conflict, other proofs can be resorted to
Commercial Contracts by Correspondence are perfected from the moment the offeree accepts the offer, even before knowledge of said acceptance by the offeror. This does not apply to deposit, guaranty, sales, loan, agency, partnership.
Joint Account Partnership – business arrangement whereby 2 or more persons interest themselves in the business of another by making contributions thereto and participating in the results thereof
1. only one member is ostensible, others are silent
2. no common name
3. only ostensible partners can sue/be sued
4. no juridical personality

Transportation Law

Contract of Transportation – contract whereby a certain person or association of persons obligate themselves to transport persons, things, news, from one place to another for a fixed price
Parties to the Contract of Transportation:
1. Shipper – one who gives rise to the contract of transportation by agreeing to deliver the things or news to be transported, or to present his own person or those of other or others in the case of transportation of passengers
2. Carrier/Conductor – one who binds himself to transport persons, things, or news, as the case may be, or one employed in or engaged in the business of carrying goods for others for hire
Common Carrier – person, corporation, firm, association engaged in the business of carrying or transporting passengers, goods or both, by land, water, air, for compensation, offering services to the public; must exercise extraordinary diligence

Private Carrier – not engaged in the business of carrying; no public employment; undertakes to deliver goods/passengers for compensation; requires only ordinary diligence

4. Requisites of Caso Fortuito

event independent of human will
occurrence makes it impossible for debtor to perform in normal manner
debtor free from aggravation/participation
impossible to foresee or avoid
Contributory negligence does not entitle passengers to recover moral/exemplary damages.
Bill of Lading – written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or his carrier

It is not indispensable to the creation of a contract of carriage. The contract itself arises from the moment goods are delivered by shipper to carrier and the carrier agrees to carry them.

The function of the Bill of Lading: the legal basis of the contract between the shipper and carrier shall be the bills of lading, by the contents of which all disputes which may arise with regard to their execution and fulfillment shall be decided, no exceptions being admissible other than forgery or material errors in the drafting thereof.

Carrier’s responsibility starts from the moment he receives unconditionally the merchandise personally or through an agent and lasts until he delivers them actually or constructively to the consignee or his agent.

Mere delay in the delivery of goods to consignee does not give right to refuse goods – only breach of contract, ergo damages. If delay is unreasonable, then he may refuse to accept and make carrier liable for conversion.

Vessels – those engaged in navigation, whether coastwise or on the high seas, including floating docks, pontoons, dredges, scows and any other floating apparatus destined for the services of the industry or maritime commerce
Persons Participating in Maritime Commerce:
1. ship owner and/or ship agent
2. captain or master
3. other officers of the vessel
4. supercargo
Liability of Ship owners and Ship agents:
1. civil liability for the acts of the captain
2. civil liability for contracts entered into by the captain to repair, equip and provision the vessel, provided that the amount claimed was invested for the benefit of the vessel
3. civil liability for indemnities in favor of 3^rdpersons which may arise from the conduct of the captain in the care of the goods which the vessel carried, as well as for the safety of the passengers transported

Ship owner/ship agent not liable for the obligations contracted by the captain if the latter exceeds his powers and privileges inherent in his position of those which may have been conferred upon him by the former. However, if the amount claimed were made use of for the benefit of the vessel, the ship owner or ship agent is liable.

Doctrine of Limited Liability – liability of shipowners is limited to amount of interest in said vessel because of the real and hypothecary nature of maritime law such that where the vessel is entirely lost, the obligation is extinguished.

Exceptions: (1) vessel is not abandoned

(2) claims under workmen’s compensation

(3) injury/damage due to shipowner’s fault

(4) vessel is insured

The doctrine also applies for claims due to death or injuries to passengers, aside from claims for goods.
In abandoning the vessel, there is no procedure to be followed. There is neither a prescriptive period within which the ship owner can make the abandonment. He may do so for so long as he is not estopped from invoking the same or do acts inconsistent with abandonment.

Roles of the Captain:
1. general agent of the ship owner
2. technical director of the vessels
3. represents the government of the country under whose flag he navigates
Loan on Bottomry – made by shipowner/ship agent guaranteed by vessel itself, repayable upon arrival at destination
Loan In Respondentia – taken on security of the cargo repayable upon the safe arrival at cargo destination
Accidents and Damages in Maritime Commerce:
1. Averages
2. Arrivals Under Stress
3. Collisions
4. Shipwrecks
Average:
1. all extraordinary or accidental expenses which may be incurred during the voyage for the preservation of the vessel or cargo or both
2. all damages or deterioration which the vessel may suffer from the time it puts to sea at the port of departure until it casts anchor at the port of destination, and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment
Simple Average – expenses/damages caused to the vessel/cargo not inured to common benefit and profit of all the persons interested in the vessel and her cargo; borne by respective owners
General Average – expenses/damages deliberately caused in order to save the vessel, its cargo or both from a real and known risk

Requisites:

deliberately incurred
intended to save vessel and cargo or both
from real and known risk
there is success
Formalities for Incurring Gross Average:
1. there must be an assembly of the sailing mate and other officers with the captain including those with interests in the cargo
2. there must be a resolution of the captain
3. the resolution shall be entered in the log book, with the reasons and motives and the votes for and against the resolution
4. the minutes shall be signed by the parties
5. within 24 hours upon arrival at the first port the captain makes, he shall deliver one copy of these minutes to the maritime judicial authority thereat
Arrivals under Stress – arrival of the vessel at a port not of destination on account of (a) lack of provisions; (b) well-founded fear of seizure; (c) by reason of accident of the sea disabling it to navigate

When Not Lawful:

lack of provisions due to negligence to carry according to usage and customs
risk of enemy not well known or manifest
defect of vessel due to improper repair
malice, negligence, lack of foresight or skill of captain
Collision – impact of 2 vessels both of which are moving
Allision – striking of a moving vessel against one that is stationary
Cases of Collision:
1. due to the fault, negligence or lack of skill of the captain, sailing mate or the complement of the vessel – ship owner liable for the losses and damages (Culpable Fault)
2. due to fortuitous event or force majeure – each vessel and its cargo shall bear its own damages (Fortuitous)
3. it cannot be determined which of the 2 vessels caused the collision – each vessel shall suffer its own damages, and both shall be solidarily responsible for the losses and damages occasioned to their cargoes (Inscrutable Fault)
Error in Extremis – sudden movement made by a faultless vessel during the 3^rdzone of collision with another vessel which is at fault, even if the said movement is wrong, no responsibility will fall on said vessel
Shipwreck – denotes all types of loss/ wreck of a vessel at sea either by being swallowed up by the waves, by running against another vessel or thing at sea or on coast where the vessel is rendered incapable of navigation
Salvage – the compensation allowed to persons by whose voluntary assistance a ship at sea or her cargo or both have been saved in whole or in part from an impending peril, or such property recovered from actual peril or loss, in cases of shipwrecks, derelict or recapture; a service which one person renders to the owner of a ship or goods by his own labor, preserving the goods or ship which the owner or those entrusted with the care of them either abandoned in distress at sea or are unable to protect and secure; a permit is required to engage in the salvage business
Derelict – a ship or cargo which is abandoned and deserted at sea by those who are in charge of it, without any hope of recovering it, or without any intention of returning it
Elements of a Valid Salvage:
1. a marine peril
2. service voluntarily rendered when not required as an existing duty or from special contract
3. success, in whole or in part, or that the services rendered contributed to such success
Contract of Towage – contract whereby a vessel usually motorized pulls another from one place to another for compensation. It is a contract of services.
Difference between Towage and Salvage:

Salvage	Towage
crew of salvaging ship is entitled to salvage, and can look to the salvaged vessel for its share	crew of the towing ship does not have any interest or rights with the remuneration pursuant to the contract
salvor takes possession and may retain possession until he is paid	tower has no possessory lien; only an action for recovery of sum of money
court has power to reduce the amount of remuneration if unconscionable	court has no power to change amount in towage even if unconscionable

Carriage of Goods by Sea Act

When Applicable:
1. contracts for the carriage of goods
2. by sea
3. to and from Philippine ports
4. in foreign trade
Notice of Loss or damage must be given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery. If the loss or damage is not apparent, the notice must be given within 3 days of delivery. However, the carrier shall be discharged from all liability in respect of loss or damage of goods unless suit is brought within 1 year after delivery of the goods or the date when the goods should have been delivered. Notice of loss, if not given, that fact shall not affect or prejudice the right of the shipper to bring suit within the 1 year prescriptive period.

Warsaw Convention

When Applicable:
1. international transport by air
2. transport of persons, baggage, or goods
Liabilities under the Convention:
1. damage sustained in the event of the death or wounding of a passenger taking place on board the aircraft or in the course of any of the operations of embarking or disembarking
2. loss or damage to any check baggage or goods sustained during the transport by air
3. delay in the transport by air of passengers, baggage, or goods

Enumeration of causes of action as above stated is not an exclusive list. (Northwest Airlines vs. Cancer)

Meaning of Transport by Air – period during which the baggage or goods are in charge of the carrier, whether in an airport or on board an aircraft, or in the case of landing outside an airport, in any place whatsoever
Action for damages must be brought at the option of the plaintiff, either:
1. before the court of the domicile of the carrier;
2. court of principal place of business of carrier;
3. court where he has a place of business through which the contract has been made;
4. before the court at the place of destination
Convention provides for a limitation of liability:
1. for each passenger – limited to 125,000 francs
2. for goods and checked in baggage – limited to 250 francs per kilogram
3. for hand carry – limited to 5,000 francs per passenger

When can you not avail of this limitation?

(1) willful misconduct

(2) default amounting to willful misconduct

(3) accepting passengers without ticket

(4) accepting goods without airway bill or baggage without baggage chec

The right to damages shall be extinguished if an action is not brought within 2 years from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped.
Notice requirement: damage to baggage : within 3 days from receipt

damage to goods: within 7 days from receipt

delay: within 21 days from receipt

Failure to file written notice, no action shall lie against the carrier, save in the case of fraud on his part.

Notice Requirements:

	COGSA	Code of Commerce	Warsaw Convention
loss/damage apparent	protest at time of receipt of goods	protest at time of receipt of goods
loss/damage not apparent	protest within 3 days from delivery	protest within 24 hours after receipt
damage of baggage			protest within 3 days from receipt
damage of goods			within 7 days from receipt
delay			within 21 days from receipt

Public Service Act

Every person that may own, operate, manage, control in the Philippines, for hire/compensation with general/limited clientele whether permanent, occasional, accidental, and done for a general business purpose any common carrier, shipyard, electric light, heat and power and public utility.
Public Utility – business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service.
Prior Operator Rule – before permitting a new operator to invade the territory of another already established, the prior operator must be given an opportunity to extend its service to meet the public needs in the matter of transportation.
Prior Applicant Rule – presupposes a situation where two interested persons apply for a CPC in the same community over which no person has yet been granted a CPC to operate. If both applicants equal, then the applicant who applied first will be given the CPC.
Distinctions between CPCs and CPCNs

Certificate of Public Convenience	Certificate of Public Convenience and Necessity
any authorization to operate a public service issued by the appropriate government agency	issued by the appropriate government agency to a public service to which any political subdivision has granted a franchise
an authorization issued by the proper government agency for the operation of public services for which no franchise, either municipal or legislative is required by law	an authorization issued by the proper government agency for the operation of public services for which a franchise is required by law

Requirements of CPC and franchise:
1. Filipino citizenship
2. financial capacity
3. public convenience

Corporation Law

Doctrine of Corporate Opportunity – a director is made to account to his corporation, gains and profits from transactions entered into by him/another competing corporation in which he has substantial interest, which should have been a transaction undertaken by the corporation. This s a breach of fiduciary relationship.
Doctrine of Piercing the Veil of Corporate Entity – it is to disregard for justifiable reasons by the state the fiction of juridical personality of the corporation separate and distinct from the persons composing it
De Jure Corporation – corporation formed with all the requirements of law
De Facto Corporation – corporation defectively formed from a bona fide attempt to incorporate under the existing law and exercises corporate powers
Corporation by Estoppel – a group of persons which holds itself out as a corporation and enters into a contract with 3^rdpersons on the strength of such appearance cannot be permitted to deny its existence in an action under said contract
Corporation by Prescription – body not lawfully organized as a corporation but has been recognized by immemorial usage as a corporation with rights and duties maintainable by law (ex. Roman Catholic)
Trust Fund Doctrine – the subscribed capital stock of the corporation is a trust fund for the payment of debts of the corporation which the creditors have the right to look up to satisfy their credits. Corporations may not dissipate this and the creditors may sue the stockholders directly for their unpaid subscriptions
Voting Shares
1. Founders Shares – given rights and privileges not enjoyed by owners of other stocks; right to vote/be voted in the election of directors shall not exceed 5 years

Non-Voting Shares

Preferred Shares – issued only with par value; given preference in distribution of assets in liquidation and in payment of dividends and other preferences stated in the articles of incorporation
Redeemable Shares – expressly provided in articles; have to be purchased/taken up upon expiration of period of said shares purchased whether or not there is unrestricted retained earnings
Treasury Stocks – stocks previously issued and fully paid for and reacquired by the corporation through lawful means (purchase, donation, etc.)
Exceptions where holders of non-voting shares may vote:
1. amendments of articles of incorporation
2. adoption/amendment of by-laws
3. increase/decrease of bonded indebtedness
4. increase/decrease of capital stock
5. sale/disposition of all/substantially all corporate property
6. merger/consolidation of corporation
7. investment of funds in another corporation/another business purpose
8. corporate dissolution
Preferred Cumulative Participating Share of Stock – share entitling its holder to preference in the payment of dividends ahead of common stockholders and to be paid the dividends ahead of common stockholders and to be paid the dividends due for prior years and to participate further with common stockholders in dividend declarations
Promotion Stock for Services Rendered Prior to Incorporation Escrow Stock – stock deposited with a 3^rdperson to be delivered to stockholder/assignor after complying with certain conditions – usually payment of full subscription price
Over-issued Stock – stock issued in excess of authorized capital stock; null and void
Watered Stock – stock issued gratuitously, money/property less than par value, services less than par value, dividends where no surplus profits exist
Certificate of Stock – written acknowledgment by the corporation of the stockholder’s interest in the corporation. It is the personal property and may be mortgaged/pledged. Transfer binds the corporation when it is recorded in the corporate books. A stockholder who does not pay his subscription is not entitled to the issue of a stock certificate. The total par value of the stocks subscribed by him should first be paid.
Chattel mortgage of shares registered with the Registrar of Deeds need not be registered in corporate books to bind third parties because corporate books only cover absolute transfers. But the pledgee/mortgagee may not have voting rights unless stated in the contract and registered in the corporate name.
Methods of Collection of Unpaid Subscription
1. call, delinquency and sale at public auction of delinquent shares
2. ordinary civil action
3. collection from cash dividends and other amounts due to stockholders if allowed by by-laws/agreed to by him
A corporation can reacquire stocks in the following cases:
1. eliminate fractional shares
2. corporate indebtedness arising from unpaid subscriptions
3. purchase delinquent shares
4. exercise of appraisal right
Right of Appraisal
1. amending articles, changing, restricting, enlarging stockholder’s rights/extending, shortening corporate life
2. sale/disposition of all/substantially all of corporate assets
3. merger and consolidation
4. investment of funds in another corporation/for a different purpose
Grounds for Rejection of Registration
1. not in prescribed form
2. purpose illegal, inimical
3. treasurer’s affidavit false
4. non-compliance with required Filipino stock ownership
Corporation must organize within 2 years from issuance of certificate of incorporation.

How to organize?

adoption of by-laws
election of Board of Directors
election of officers

But from issuance of certificate, it acquires juridical personality

Merger – one corporation absorbs the other and remains in existence while the other is dissolved
Consolidation – a new corporation is created and the consolidating corporations are extinguished
Theory of General Capacity – a corporation is said to hold such powers as are not prohibited/withheld from it by general law
Theory of Special Capacity – the corporation cannot exercise powers except those expressly/impliedly given
Concession Theory – a group of persons wanting to create a corporation will have to execute documents and comply with requirements set by the state before being given corporate personality; merely a privilege; state may provide causes for which the privilege may be withdrawn
Acts requiring majority vote of stockholder:
1. filing of issue value of no par value share
2. adoption, amendment, repeal of by-laws
3. compensation and other per diems for directors
Where similar acts have been approved by the directors as a matter of general practice, custom and policy, the general manager may bind the company even without formal authorization of the board of directors
Powers of stockholders:
1. a direct participation in management – where his vote is needed to approve certain corporate actions
2. indirect participation in management to vote or remove directors
3. proprietary rights
4. remedial rights
Voting Trust Agreement – an agreement between a group of stockholders and trustee for a term not exceeding 5 years in which control over the stocks is lodged in the trustee. The purpose is for controlling the voting.
1. in writing, notarized and filed with the SEC and the corporation
2. period not exceeding 5 years
3. cannot be entered into to circumvent the laws against monopolies, illegal combinations in restraint of trade in fraud
Cumulative Voting – the number of votes that a shareholder’s number of shares multiplied by the number of directors may give all said votes to one candidate or he may distribute them as he may deem fit. Cumulative voting is a matter of right in a stock corporation. In a non-stock corporation, it cannot be utilized unless allowed by the by-laws/articles
The power of removal of directors that may be exercised with or without cause cannot apply to the director representing the minority shareholders. He may only be removed with cause.
General Rule: If surplus profits exceed the requirements the corporation shall declare dividends. This is compulsory if the surplus is equal/or more than the paid-up capital.

Exceptions:

justified by approved expansion projects
prohibited by creditor to declare dividends
retention is necessary under existing circumstances
Business Judgment Rule – decisions made by a corporation’s management body shall not be interfered with even by the courts unless such acts are oppressive/unconscionable as to violate the rights of the minority
Individual Suit – one brought to assert a right of a stockholder peculiar to himself
Representative Suit – brought by the stockholder in his own behalf and in behalf of other stockholders similarly situated, having common cause against the corporation
Derivative Suit – brought by a stockholder for and in behalf of the corporation to protect/vindicate corporate rights after he has exhausted intra-corporate remedies

Requisites:

cause of action in favor of the corporation
refusal of corporation to sue
injury to the corporation

Although corporations dissolved have 3 years to wind up, they can convey their properties to a trustee who can continue the suit beyond the 3 year period. The lawyer who handled the case in the trial court may be considered as trustee for the dissolved corporation with respect to the matter in litigation only even if no appointment was extended to him. (Selano vs. CA)
In a case filed before dissolution, it may continue even beyond the 3 year period until final determination of litigation. Otherwise, the corporation in liquidation would lose what justly belongs to them/be exempt from payment of obligations because of a technicality.

Foreign Corporations
1. Doing Business – continuity of commercial dealings incident to prosecution of purpose and object of the organization. Isolated, occasional or casual transactions do not amount to engaging in business. But where the isolated act is not incidental/casual but indicates the foreign corporation’s intention to do other business, said single act constitutes engaging in business in the Philippines
2. Instances when unlicensed foreign corporations can sue:

(1) isolated transactions

(2) action to protect good name, goodwill, and reputation of a foreign corporation

(3) contracts provide that Phil. Courts will be venue to controversies

(4) license subsequently granted enables foreign corporation to sue on contracts executed before the grant of the license

(5) recovery of misdelivered property

(6) where the unlicensed foreign corporation has a domestic corporation

Religious Corporations
1. Corporation Sole – special form of corporation; associated with the clergy and consists of 1 person only and his successors; incorporated by law giving them legal capacity and advantage
2. Close Corporations – one whose articles provide that its shares shall not be held by more than 20 persons; its issued stock shall be subject to one or more restrictions on transfer and shall not be listed in any stock exchange/make public offering
3. Non-stock Corporation – one where no part of its income is distributable to its members and shall be used in furtherance of the purpose of which it was organized
SEC Jurisdiction
1. original and exclusive jurisdiction

(1) fraudulent devices and schemes employed by directors detrimental to public interest

(2) intra-corporate disputes and with the state in relation to their franchise and right to exist as such

(3) controversies in the election, appointment of directors, trustees, etc.

(4) petition to be declared in a state of suspension of payments

Grounds for Suspension/Revocation of Certificate of Registration

(1) fraud in procuring registration

(2) serious misrepresentation as to objectives of corporation

(3) refusal to comply with lawful order of SEC

(4) continuous inoperation for at least 5 years

(5) failure to file by-laws within the required period

(6) failure to file reports

(7) other similar grounds

Revised Securities Act

(Material on the Securities Regulation Code of 2000 to follow)

General Rule: All securities before being offered for sale/actual sale to the public must first be registered and have the proper permit.

Exception:

exempt securities
securities emanating from exempt transactions
Exempt Securities
1. issued by the government subdivisions/instrumentalities
2. issued by foreign government which the Philippines has diplomatic relations
3. issued by receiver/trustee of an insolvent approved by the court
4. issued by building and loan association
5. issued by receiver/trustee of an insolvent approved by the court
6. policy of insurance issued by insurance corporation supervised by the insurance commission
7. security/right/interest in real property including subdivision lot/condominium supervised by the Ministry of Human Settlements
8. pension plans regulated by BIR/Insurance Commission
Exempt Transactions
1. judicial sale by execution, etc. in insolvency
2. sale of pledged property/foreclosed property to liquidate an obligation
3. isolated transactions on securities done by owner/agent
4. stock transfers emanating from mergers and consolidations
5. pre-incorporation subscription
6. securities issued by public service operator to broaden equity base
Grounds for Rejection of Registration
1. application incomplete/untruthful/omits to state a material fact
2. issuer/registrant insolvent, violated code/ SEC rules, engages in fraudulent transactions
3. issuer’s business not sound
4. officer, director, stockholders of issuers is disqualified
5. issue would prejudice the public
Grounds for Revocation
1. issuer insolvent
2. violated of Code/SEC rules
3. fraudulent transaction
4. dishonesty by issuer/misrepresented prospectus
5. does not conduct business in accordance with law
Acts Prohibited
1. manipulation of security prices
2. manipulation of deceptive devices
3. artificial measures of price control
4. fraudulent transactions
5. insider trading
6. false prospectus, communications, reports

Secrecy if Back Deposits

Deposits in banks, including government banks, may not be inquired into by any person, except:
1. if depositor agrees in writing
2. impeachment cases
3. by court order in cases of bribery and dereliction of duty against public officials
4. deposit is subject of litigation
5. anti-graft cases
6. general and special examination of bank order of the Monetary Board of bank fraud or serious irregularity
7. re-examination made by an independent auditor hired by a bank to conduct its regular trust

Laws on Intellectual Creation

Copyright

What Works are not Protected:
1. any idea, procedure, system, method or operation, concept, principle, discovery, or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day or other miscellaneous facts, having the character of mere items of press information, or any official text of a legislative, administrative or legal nature as well as any official translation thereof
2. works of the government
3. statutes, rules, and regulations of government agencies and offices
4. speeches, lectures, sermons, addresses and dissertations, pronounced or rendered in courts of justices or nay administrative agencies in deliberative assemblies and meetings of public character
Fair Use of a Copyrighted Work is not Infringement
1. for criticism, comment, news reporting, teaching, research, scholarship, and similar purposes
2. decompilation: the reproduction of the code and translation of the forms of the computer program with other programs
Factors to Consider in Determining Fair Use:
1. purpose and character of the use, including whether such use is of a commercial nature or for no profit or educational purposes
2. nature of the copyrighted work
3. amount and substantiality of the portion used in relation to the copyrighted work as a whole
4. effect of use upon the potential market for a value of the copyrighted work
Terms of the Protection
1. copyrighted work: lifetime of creator plus 50 years after death (to be computed on the 1^stday of January of the year following the death)
2. performances not incorporated in recordings: 50 years from end of year in which the performance took place
3. sound or image and sound recordings and performances incorporated therein: 50 years from end of the year in which the recording took place
4. broadcasts: 20 years from the date the broadcast took place
Remedies for Infringement
1. injunction
2. actual damages, including legal costs and other expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement
3. impounding of articles during pendency of the action
4. destruction of all infringing copies and/or devices
5. moral and exemplary damages
Criminal Penalties
1. imprisonment of 1 to 3 years plus fine of P50,000 to P150,000 for the first offense
2. imprisonment of 3 years and 1 day to 6 years plus fine ranging from P150,000 to P500,000 for the 2^ndoffense
3. imprisonment of 6 years and 1 day to 9 years plus fine of P500,000 to P1,000,000 for the 3^rd/subsequent offenses

IN ALL CASES, subsidiary imprisonment in cases of insolvency

Presumptions:
1. Presumption of copyright in the work of other subject matter to which the action related
2. Plaintiff is presumed to be the owner of the copyright
3. The natural person whose name is indicated on a work in the usual manner as the author shall, in the absence of proof to the contrary, be presumed to be the author of the work. This is applicable even if the name is a pseudonym, where the pseudonym leaves no doubt as to the identity of the author.
Prescription: No damages may be recovered after 4 years from time the cause of action arose.

Patents

Patentable Inventions – any technical solution of a problem in any field o human activity that is new, involve an inventive step and is industrially applicable shall be patentable. It may be or may relate to as product, or process or an improvement of any of the foregoing.
Non-Patentable Inventions
1. discoveries, scientific theories and mathematical methods
2. schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers
3. methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body

Exception: products and composition for use in any of these methods

plant varieties or animal breeds or essentially biological process for the production of plants and animals

Exception: micro-organisms and non-biological and micro-biological processes

aesthetic creations
contrary to public order or morality
Requisites of Patentability
1. new, novelty
2. involves an inventive step;
3. is industrially applicable
Novelty

The novelty requirement in the Code is absolute. Thus, an invention is not considered new if it forms part of a prior art. A prior art consists of:

anything which has been made available to the public anywhere in the world before the filing date or the priority date of the application, or
the whole contents of an application for a patent, utility model, or industrial design registration, published in the IPO gazette, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application, provided that the application which has validly claimed the filing date of an earlier application (priority date) is prior art with effect as of the filing date of such earlier application, and provided further, that the applicant and the inventor identified in both applications are not one and the same
Inventive Step – an invention involves an inventive step, if having regard to the prior art, it is not obvious to a person skilled in the art at the time of the filing date of priority date of the application claiming the invention
Industrial Applicability – an invention is considered industrially applicable if it can be produced and used in the industry
The First-to-File System – if 2 or more persons have made the invention separately and independently of each other, the right to the patent belongs to the person who filed an application for such invention, or where 2 or more applications are filed for the same invention, the right of the patent belongs to the person who has the earliest filing date or the earliest priority date

Under this system, the patent is granted to the inventor who filed his patent application earlier than others thus simplifying the determination of who is entitled to own the patent.

The First-to-File System increases the rights of the inventor by:

guaranteeing the confidentiality of the application prior to its publication
giving the inventor inchoate rights against an infringer after the publication of the application and before the grant of the patent and
expanding the rights of the inventor to institute cancellation proceedings for the duration of the term of the patent. Cancellation proceedings may be filed at any time during the term of the patent.

Under this system, the applicant declared by final court order as having the right to the patent may:

prosecute the application as his own application in place of the original applicant
file a new patent application in respect of the same invention
request that the application be refused or
seek the cancellation of the patent, if one has already been issued
What is the difference between novelty in patents and originality in copyright?

Novelty in Patents – even if you do not know of any previous creation, as long as a patent on the same creation has already been published anywhere in the world, you cannot claim novelty. No access tot he other creation is no defense.

Originality in Copyright – even if there is same creation, as long as you do not copy your own creation, it is still considered an original creation. No access to the previous creation is a defense.

Non-Prejudicial Disclosure

The disclosure of information contained in the application during the 12 months preceding the filing date or the priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such disclosure was made by (a) inventor; (b) a patent office and the information was contained

Term of Patent – 20 years from the filing date of the application
Grounds for Compulsory Licensing:
1. national emergency or other circumstances of extreme urgency
2. where public interest, national security, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the government so requires
3. where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive
4. in case of public non-commercial use of the patent by the patentee, without satisfactory reason
5. if not being worked in the Philippines on a commercial scale
In case of Compulsory Licensing of Patents involving Semi-conductor Technology, the license may be granted only in case of public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive
Utility Models – an invention qualifies for registration as a utility model if it is new and industrially applicable

- no inventive step required for registration

- no search and examination required

Term Protection – 7 years after the filing date of application without possibility of renewal
Industrial Design – any composition of lines or colors or any 3 dimensional form, whether or not associated with lines or colors

Industrial Designs essentially dictated by technical or functional considerations to obtain a technical result or those that are contrary to public order, health or morals shall not be protected

Term of Protection – 5 years from filing date of application, renewable for not more than 2 consecutive periods of 5 years each

Insolvency Law

Distinguish Suspension of Payment and Insolvency

Suspension of Payment	Insolvency
debtor has enough assets to meet liabilities but cannot meet them as they fall due	debtor has more liabilities than assets
always initiated by debtor	initiated by creditors/other persons if involuntary; initiated by debtor if voluntary

Fraudulent Preference – any act of insolvent which gives rise/has tendency to give preference to a creditor to the assets of the insolvent prejudicial to the right of other creditors of said insolvent
Effect on Actions Upon Adjudication of Insolvency
1. suits pending in court

(1) secured obligations suspended until assignee appointed

(2) unsecured obligations terminated except to fix amount of obligation

(3) foreclosure suits pending continue

suit not yet filed – cannot be filed anymore, but claims may be presented to assignee
Debts and Obligations not Affected by Discharge of Insolvent
1. assessments due to national and local government
2. debts due to fraud/embezzlement
3. debts in which he is bound solidarily
4. alimony
5. corporate debts
6. debts not included in the schedule submitted by debtor

Chattel Mortgage Law

The law primarily governs chattel mortgage. Provisions on pledge of NCC in so far as not in conflict with CML also govern chattel mortgages.
Chattel Mortgage may be rescinded for being in fraud of creditors.
Growing fruits are covered by chattel mortgage but they may not be pledged.
Machinery placed on plant or building owned by another can be the object of chattel mortgage.
General Rule: Chattel Mortgage cannot cover debts subsequently contracted.
Rules: Chattel Mortgage cannot cover debts subsequently contracted
1. registered in place where mortgagor resides and where property (chattel) is located. If mortgagor resides abroad, register in place where property is located.
2. Motor Vehicles: register also in Land Transportation Office
3. Shares of Stock: place of domicile of corporation and shareholder. No need for notation in books of corporation
4. Vessels: Phil. Coastguard
To be valid against 3^rdpersons:
1. affidavit of good faith
2. contract must be registered
General Rule: In Chattel Mortgage, there is recovery of deficiency judgment.

Exception: when Recto Law applies

Requisites of CML:
1. constituted to secure the fulfillment of principal obligation
2. mortgagor is absolute owner of the thing mortgaged
3. persons constituting the mortgage have the free disposal of the property and in the absence thereof, they be legally authorized for the purpose
4. recorded to bind 3^rdpersons
Formal Requisites of CM:
1. substantial compliance with form in Sec. 5 of CML
2. signed by at least 2 witnesses
3. must contain an affidavit of good faith
4. certificate of oath (notarial acknowledgment)
Affidavit of Good Faith – where the parties severally swear that the mortgage is made for the purpose of securing the obligation specified and for no other purpose and that the same is a just and valid obligation and not one entered into for fraud

- property given in CM must be described to enable the parties or any other person after reasonable inquiry and investigation to identify it

Future property may not be covered by CM but when such property is a:
1. renewal of, or in substitution for goods on hand when the mortgage was executed, or
2. purchased with proceeds (not of your own money) of said goods, said property may be covered by CM
Criminal Acts – removal of chattel to another city or province without written consent of mortgagee, selling property already pledged, or mortgaged without written consent of mortgagee
A chattel mortgage may be foreclosed judicially or extra-judicially, in the latter case, before a notary or sheriff, or creditor or mortgagee when stipulated, even without need of notice (when mortgagee forecloses)

15. Pactum Commissorium applies to Chattel Mortgage.

Reference:

Commercial Law Memory Aid

Ateneo Central Bar Operations 2001

Posted in Commercial Law

Pre-Bar Quizzer in Political Law – Part I: Constitution of Government 111-118

Pre-Bar Quizzer in Political Law – Part I: Constitution of Government 111-118

111. May a school punish its students for illegal acts committed outside the school premises and beyond school hours but within the semester where they are enrolled?

Yes because they still carry the name of the school and their actuations affect the reputation of the school. ( ANGELES VS. SISON, 112 SCRA 26) This rule was reiterated in the cased of DE LA SALLE UNIVERSITY VS. CA (2008) where a rumble between two fraternities took place outside the school campus but the students involved were EXPELLED by the school. The Supreme Court, however, while conceding the power of the school over its students held that the penalty of expulsion is too harsh a penalty. It should be EXCLUSION, meaning, they are not allowed to enroll at the De La sale but they should be given transfer credentials so that they may enroll in another school.

112. What are the underlying principles behind the constitutional proscription that the State cannot be sued without its consent?

By reason of public policy (if every citizen is allowed to sue the government, it will be distracted from performing its functions to serve the people and it will be left just answering cases in court), by reason of sovereignty (the people shall not be allowed to sue the very entity that gives it said right;) and by reason of consent (when the people ratified the Constitution which includes the provision that the State cannot be sued without its consent, it has consented or waived said right to sue).

113. How may the State gives its consent to be sued?

Expressly when there is a law allowing it and impliedly when it enters into a contract with an individual because in the latter, it descended to the level of an individual making it susceptible to counterclaims or suits.

114. May the government be sued in the exercise of its governmental functions?

Yes if the government agency has a charter which allows it to be sued. (RAYO VS. CFI OF BULACAN, 110 SCRA 456). Also, the government is not allowed to invoke its immunity from suit if by doing so, it will be causing an injustice to its citizens. (MINISTERIO VS. CFI of Cebu, 40 SCRA and SANTIAGO VS. REPUBLIC, 87 SCRA 294)

115. Is the US Government also immune from suit in the Philippines in connection with the exercise of its governmental functions?

Yes. This was the ruling in U.S. VS. RUIZ, 136 SCRA where it was held that even if there is a contract entered into by the US Government but the same involves its “jusre imperii” functions (governmental functions”, it cannot be sued. It is only when the contract involves its “jus gestiones” or business or proprietary functions that it may be sued.

116. Are local governments also entitled to invoke immunity from suit?

Yes.

117. May a municipality be held liable for damages as a result of the death of a person arising from the collapse of a stage constructed by the local government in connection with its town fiesta?

No, a town fiesta I a business or proprietary function since no law requires any town, city, province or barangay to hold an annual fiesta. (TORIO VS. FONTANILLA, 85 SCRA 599)

118. May the government still be held liable to a private individual if the contract it entered into is void but the other party had already complied with his obligations under said agreement?

Yes, because the government shall not enrich itself at the expense of its citizens.(DEPARTMENT OF HEALTH VS. C.V. CANCHELA, et al., 475 SCRA 218)

Reference:

Pre-Bar Quizzer in Political Law (Doctrinal Rulings, Requisites and Definitions)

PLEDGE	MORTGAGE
Constituted on movables	Constituted on immovables
Property is delivered to the pledgee, or by common consent to a 3^rd person	Delivery not necessay
Not valid against 3^rd persons unless a description of the thing pledged and the date of the pledge appear in a public instrument	Not valid against 3^rd persons if not registered

CHATTEL MORTGAGE	PLEDGE
Involves movable property	Involves movable property
Delivery of the personal property is NOT necessary	Delivery of the personal property is necessary
Registration is necessary for validity	Registration is NOT necessary for validity
Procedure : Sec 14 of Act no 1508, as amended	Procedure: Art 2112 of Civil Code
If the property is foreclosed, the excess over the amount due goes to the debtor	If the property is sold, the debtor is not entitled to the to the excess UNLESS it is otherwise agreed or in case of legal pledge
Creditor is entitled to deficiency from the debtor EXCEPT if it is a security for the purchase of personal property in installments	Creditor is not entitled to recover deficiency notwithstanding any stipulation to the contrary

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