Labor Law: Elements of Employer-Employee Relationship

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What are the elements of employer-employee relationship?

The Supreme Court has repeatedly enunciated in its cases, such as in Lirio vs. Genova (G.R. No. 169757, November 23, 2011) the elements of employer-employee relationship, to wit:

Before a case for illegal dismissal can prosper, it must first be established that an employer-employee relationship existed between petitioner and respondent.

The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employees conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.

The determination of the existence of employer-employee relationship is very important, as it also affects the issue on jurisdiction on the part of Labor Arbiter, and the claims that the parties are praying for.

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Case Brief: MWSS vs Ombudsman

G.R. No. 109113    January 25, 1995

CONCERNED OFFICIALS OF THE METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM (MWSS), petitioners, 

vs.

HON. OMBUDSMAN CONRADO M. VASQUEZ AND MEMBERS OF THE PHILIPPINE LARGE DIAMETER PRESSURE PIPE MANUFACTURERS ASSOCIATION (PLDPPMA), respondents.

Facts:

Private respondent Philippine Large Diameter Pressure Pipes Manufacturer’s Association (PLDPPMA) filed a complaint before the Office of the Ombudsman on the public bidding conducted by MWSS for projects APM-01 and APM-02 of its Angat Water Supply Optimization Project (AWSOP), which aims to provide 1.3 million liters of water daily to about 3.8 million residents in the metropolitan area.  The  letter of complaint accused the MWSS of an apparent plan even before the bidding to favour suppliers of fiberglass pipes and urged the Ombudsman to conduct an investigation to hold in abeyance the award of contracts.

The Fact finding and Intelligence Bureau of the Office of the Ombudsman issued an injunction directed to the Board of Trustees of the MWSS  (1) to set aside the recommendation of its Pre-qualification, Bids, and Awards Committee for Construction Services and Technical Equipment (PBAC-CSTE) that contract no. APM-01 be given to a contractor offering fiberglass pipes  and (2) to instead award the contract to a complying and responsive bidder.

Petitioner MWSS assailed the order of the Ombudsman for lack of jurisdiction of the Ombudsman over  PLDPPMA’s complaint and for issuing the challenged order contrary to PD 1818 prohibiting the issuance of restraining orders/injunctions in cases involving government infrastructure projects.

Issue:    

Whether or not the Ombudsman has jurisdiction over PLDPPMA’s complaint and has the power to issue orders directing the Board of Trustees of the MWSS to set aside the recommendation of PBAC-CSTE and to instead award the contract to a complying and responsive bidder.

Held:   

No.  While recognizing the investigatory and public assistance duties of the Ombudsman, the assailed orders were an undue interference in the adjudicatory responsibility of the MWSS Board of Trustees rather than a mere directive requiring the proper observance of and compliance with the law.  The Fact finding and Intelligence Bureau of the Office of the Ombudsman reveals a predisposition against the use of fiberglass pipes, a technical, rather than a legal matter.

As a GOCC, MWSS is charged with the construction, maintenance, and operation of waterwork system to insure uninterrupted and adequate supply and distribution of potable water. Therefore, it is the agency that should be in the best position to evaluate the feasibility of the projections of the bidders and to decide which bid is compatible with its development plans.     The exercise of this discretion to reject a bid and to award contracts, which is a purely technical matter, is vested in the MWSS entrusted with such function that even courts or the Ombudsman cannot unduly interfere from. 

Case Brief: Cheng vs Donini

Serafin Cheng

vs

Spouses Vittorio and Ma. Helen Donini

GR 167017   June 22, 2009

Facts:

In an oral lease agreement, Cheng agreed to lease his property to Donini, who intended to put up a restaurant thereon. Donini then proceeded to introduce improvements in the premises.

However, before respondents’ business could take off and before any final lease agreement could be drafted and signed, the parties began to have serious disagreements regarding its terms and conditions. Cheng wrote to Donini, demanding payment of the deposit and rentals, and signifying that he had no intention to continue with the agreement should Donini fail to pay. Donini ignored the demand, and continued to occupy the premises, until in April 17, 1991, when their caretaker voluntarily surrendered the property to the petitioner.

Note that the CA made the following findings and conclusions: 1.) There was no agreement that the deposit and rentals accruing to petitioner would be deducted from the costs of repairs and renovation incurred by respondents; 2.). Respondents committed a breach in the terms and conditions of the agreement when they failed to pay the rentals; 3) There was no valid rescission on the part of petitioner; 4). Respondents were entitled to reimbursement for the cost of improvements under the principle of equity and unjust enrichment; and 5) The award of damages in favor of petitioenr had no basis in fact and law.

SC declared that because there was never an absence of law or judicial rules of procedure, petitioner cannot invoke the concept of equity.

 

Issue:

Rule on the right of Cheng and Donini as to the improvements, the right to be reimbursed for the expenses, and the right to retain the property.

 

Held:

The relationship between petitioner and respondents was explicitly governed by the Civil Code provisions on lease, which clearly provide for the rule on reimbursement of useful improvements and ornamental expenses after termination of a lease agreement. Article 1678 states:

“If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary.

With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished.”

Contrary to respondents position, Articles 448 and 546 of the Civil Code did not apply. Under these provisions, to be entitled to reimbursement for useful improvements introduced on the property, respondents must be considered builders in good faith. Articles 448 and 546, which allow full reimbursement of useful improvements and retention of the premises until reimbursement is made, apply only to a possessor in good faith or one who builds on land in the belief that he is the owner thereof. A builder in good faith is one who is unaware of any flaw in his title to the land at the time he builds on it.

But respondents cannot be considered possessors or builders in good faith. As early as 1956, in Lopez v. Philippine & Eastern Trading Co., Inc., the Court clarified that a lessee is neither a builder nor a possessor in good faith. “This principle of possessor in good faith naturally cannot apply to a lessee because as such lessee he knows that he is not the owner of the leased property. Neither can he deny the ownership or title of his lessor. Knowing that his occupation of the premises continues only during the life of the lease contract and that he must vacate the property upon termination of the lease or upon the violation by him of any of its terms, he introduces improvements on said property at his own risk in the sense that he cannot recover their value from the lessor, much less retain the premises until such reimbursement.”

Under Article 1678 of the Civil Code, the lessor has the primary right (or the first move) to reimburse the lessee for 50% of the value of the improvements at the end of the lease. If the lessor refuses to make the reimbursement, the subsidiary right of the lessee to remove the improvements, even though the principal thing suffers damage, arises. Consequently, on petitioner rests the primary option to pay for one-half of the value of the useful improvements. It is only when petitioner as lessor refuses to make the reimbursement that respondents, as lessees, may remove the improvements. Should petitioner refuse to exercise the option of paying for one-half of the value of the improvements, he cannot be compelled to do so. It then lies on respondents to insist on their subsidiary right to remove the improvements even though the principal thing suffers damage but without causing any more impairment on the property leased than is necessary.

As regards the ornamental expenses, respondents are not entitled to reimbursement. Article 1678 gives respondents the right to remove the ornaments without damage to the principal thing. But if petitioner appropriates and retains said ornaments, he shall pay for their value upon the termination of the lease.

The fact that petitioner will benefit from the improvements introduced by respondents is beside the point. In the first place, respondents introduced these improvements at their own risk as lessees. Respondents were not forced or obliged to splurge on the leased premises as it was a matter of necessity as well as a business strategy. In fact, had respondents only complied with their obligation to pay the deposit/rent, there would have been no dispute to begin with. If they were able to shell out more than a million pesos to improve the property, the measly P34,000 deposit demanded by petitioner was a mere drop in the bucket, so to speak. More importantly, the unequivocal terms of Article 1678 of the Civil Code should be the foremost consideration.

Case Brief: American Tobacco Company, et. al. vs Director of Patents

G.R. No. L-26803 .  October 14, 1975

AMERICAN TOBACCO COMPANY, CARNATION COMPANY, CURTISS CANDY COMPANY, CUDAHY PACKING CO., CLUETT, PEABODY & CO., INC., CANNON MILLS COMPANY, FORMICA CORPORATION, GENERAL MOTORS CORPORATION, INTERNATIONAL LATEX CORPORATION, KAYSER-ROTH CORPORATION, M and R DIETETIC LABORATORIES, INC., OLIN MATHIESON, PARFUM CIRO, INC., PROCTER and GAMBLE COMPANY, PROCTER and GAMBLE PHILIPPINE MANUFACTURING CORPORATION, PARFUMS PORVIL DENTRIFICES DU DOCTEUR PIERRE REUNIS SOCIETE ANONYME, R.J. REYNOLDS TOBACCO COMPANY, SWIFT AND COMPANY, STERLING PRODUCTS INTERNATIONAL, THE CLOROX COMPANY, WARNER LAMBERT PHARMACEUTICALS COMPANY and ZENITH RADIO CORPORATION, petitioners,

vs.

THE DIRECTOR OF PATENTS, ATTYS. AMANDO L. MARQUEZ, TEOFILO P. VELASCO, RUSTICO A. CASIA and HECTOR D. BUENALUZ, respondents.

FACTS:

Petitioners are parties to various “inter partes” cases before the Philippine Patent Office.

Under the Trademark Law (R.A. No. 166), the Director of Patents have original jurisdiction over “inter partes” proceedings. This Rule, however, was subsequently amended by the Director of Patents, with the Approval of the Secretary of Agriculture and Commerce, authorizing any ranking official designated by the Director of said office to hear “inter partes” proceedings.

In accordance with the amended Rule, the Director of Patents delegated the hearing of petitioners’ cases to hearing officers Attys. Amando Marquez, Teofilo Velasco, Rustico Casia and Hector Buenaluz, the other respondents herein.

Petitioners filed their objections to the Authority of the hearing officers to hear their cases, alleging that the amendment of Rule is illegal and void because under the law, the Director must personally hear and decide “inter partes” cases. Said objections were overruled by the Director of Patents. Hence, this petition.

ISSUE:

Whether the designation of hearing offices other than the Director of Patents is a violation of due process.

HELD:

No. The Supreme Court ruled that the power to decide resides solely in the administrative agency vested by law, this does not preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be made.

The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decisions.   It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law. Neither does due process of law nor the requirements of fair hearing require that the actual taking of testimony be before the same officer who will make the decision in the case. As long as a party is not deprived of his right to present his own case and submit evidence in support thereof, and the decision is supported by the evidence in the record, there is no question that the requirements of due process and fair trial are fully met.   In short, there is no abnegation of responsibility on the part of the officer concerned as the actual decision remains with and is made by said officer. It is, however, required that to “give the substance of a hearing, which is for the purpose of making determinations upon evidence the officer who makes the determinations must consider and appraise the evidence which justifies them.”

Case Brief: Dream Village vs Bases Development Authority; WHO OWNS FORT BONIFACIO IN TAGUIG?

This case is lengthy and heavily fact-based.  The author had a hard time distinguishing which information should be removed as most of them looked very important in the discussion of the factual backdrop in relation to the arguments of the parties.  Nonetheless, the case tackles the origin of Fort Bonifacio, Taguig, so he found it to be quite engaging.

 

G.R. No. 192896               July 24, 2013

DREAM VILLAGE NEIGHBORHOOD ASSOCIATION, INC., represented by its Incumbent President, GREG SERIEGO, Petitioner,

vs.

BASES DEVELOPMENT AUTHORITY, Respondent.

Facts:

Dream Village claims to represent more than 2000 families who have been occupying a 78,466-square meter lot in Western Bicutan, Taguig City since 1985 “in the concept of owners continuously, exclusively, and notoriously.”

The lot used to be part of Hacienda de Maricaban, owned by Dolores Casal y Ochoa and registered under OCT 291. Following the purchase of Maricaban by the government of USA, it was converted into the military reservation known as Fort William Mckinley. TCT 192 was issued in the name of USA to cancel OCT 291. USA later transferred 30 has. of Maricaban to Manila Railroad Company, for which TCT 192 was cancelled by TCT 1218 and 1219, the first in the name of Manila Railroad Company, and the second in the name of USA.

TCT 1219 was cancelled and replaced by TCT 1688, and was then replaced by TCT 2288, both in the name of USA. USA formally ceded Fort William Mckinley to the Republic of the Philippines, and it was documented by cancelling TCT 2288 and replacing it with TCT 61524. Pres. Garcia issued Proclamation No. 423, withdrawing from sale or settlement the tracts of land within Fort William Mckinley, now renamed Fort Bonifacio, and reserving them for military purposes.

Pres. Marcos issued Proclamation No. 2476, declaring portions of Fort Bonifacio alienable and disposable, thus allowing the sale to the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and Western Bicutan.

Pres. C. Aquino issued Proclamation 172, amending Proclamation 2476, by limiting to Lots 1 and 2 in Western Bicutan as open for disposition.

RA 7227 was passed, creating the Bases Conversion and Development Authority (BCDA) to oversee and accelerate the conversion of Clark and Subic military reservations and their extension camps (John Hay Station, Wallace Air Station, O’Donnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station) to productive civilian uses. Section 820 of the said law provides that the capital of the BCDA will be provided from sales proceeds or transfers of lots in nine (9) military camps in Metro Manila, including 723 has. of Fort Bonifacio. The law, thus, expressly authorized the President of the Philippines “to sell the above lands, in whole or in part, which are hereby declared alienable and disposable pursuant to the provisions of existing laws and regulations governing sales of government properties,” specifically to raise capital for the BCDA. Titles to the camps were transferred to the BCDA for this purpose,22 and TCT No. 61524 was cancelled on January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460, 23889, 23890, and 23891, now in the name of the BCDA.23

Excepted from disposition by the BCDA are: a) approximately 148.80 has. reserved for the National Capital Region (NCR) Security Brigade, Philippine Army officers’ housing area, and Philippine National Police jails and support services (presently known as Camp Bagong Diwa); b) approximately 99.91 has. in Villamor Air Base for the Presidential Airlift Wing, one squadron of helicopters for the NCR and respective security units; c) twenty one (21) areas segregated by various presidential proclamations; and d) a proposed 30.15 has. as relocation site for families to be affected by the construction of Circumferential Road 5 and Radial Road 4, provided that the boundaries and technical description of these exempt areas shall be determined by an actual ground survey.

Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully subjecting its members to summary demolition, resulting in unrest and tensions among the residents, on November 22, 1999, the latter filed a letter-complaint with the COSLAP to seek its assistance in the verification survey of the subject 78,466-sq m property, which they claimed is within Lot 1 of Swo-13-000298 and thus is covered by Proclamation No. 172. They claim that they have been occupying the area for thirty (30) years “in the concept of owners continuously, exclusively and notoriously for several years,” and have built their houses of sturdy materials thereon and introduced paved roads, drainage and recreational and religious facilities. Dream Village, thus, asserts that the lot is not among those transferred to the BCDA under R.A. No. 7227, and therefore patent applications by the occupants should be processed by the Land Management Bureau (LMB).

On August 15, 2000, Dream Village formalized its complaint by filing an Amended Petition in the COSLAP. Among the reliefs it sought were:

  1. DECLARING the subject property as alienable and disposable by virtue of applicable laws;
  2. Declaring the portion of Lot 1 of subdivision Plan SWO-13-000298, situated in the barrio of Western Bicutan, Taguig, Metro Manila, which is presently being occupied by herein petitioner as within the coverage of Proclamation Nos. 2476 and 172 and outside the claim of AFP-RSBS INDUSTRIAL PARK COMPLEX and/or BASES CONVESION DEVELOPMENT AUTHORITY.
  3. ORDERING the Land Management Bureau to process the application of the ASSOCIATION members for the purchase of their respective lots under the provisions of Acts Nos. 274 and 730.

Respondent BCDA in its Answer dated November 23, 2000 questioned the jurisdiction of the COSLAP to hear Dream Village’s complaint, while asserting its title to the subject property pursuant to R.A. No. 7227. It argued that under Executive Order (E.O.) No. 561 which created the COSLAP, its task is merely to coordinate the various government offices and agencies involved in the settlement of land problems or disputes, adding that BCDA does not fall in the enumeration in Section 3 of E.O. No. 561, it being neither a pastureland-lease holder, a timber concessionaire, or a government reservation grantee, but the holder of patrimonial government property which cannot be the subject of a petition for classification, release or subdivision by the occupants of Dream Village.

In its Resolution dated April 28, 2004, the COSLAP narrated that it called a mediation conference on March 22, 2001, during which the parties agreed to have a relocation/verification survey conducted of the subject lot. On April 4, 2001, the COSLAP wrote to the Department of Environment and Natural Resources (DENR)-Community Environment and Natural Resources Office-NCR requesting the survey, which would also include Swo-00-0001302, covering the adjacent AFP-RSBS Industrial Park established by Proclamation No. 1218 on May 8, 1998 as well as the abandoned Circumferential Road 5 (C-5 Road).

On April 1, 2004, the COSLAP received the final report of the verification survey and a blueprint copy of the survey plan from Atty. Rizaldy Barcelo, Regional Technical Director for Lands of DENR. Specifically, Item No. 3 of the DENR report states:

  1. Lot-1, Swo-000298 is inside Proclamation 172. Dream Village Neighborhood Association, Inc. is outside Lot-1, Swo-13-000298 and inside Lot-10, 11 & Portion of Lot 13, Swo-00-0001302 with an actual area of 78,466 square meters. Likewise, the area actually is outside Swo-00-0001302 of BCDA.

COSLAP (Commission on the Settlement of Land Problems) Ruling: On the basis of the DENR’s verification survey report, the COSLAP resolved that Dream Village lies outside of BCDA, and particularly, outside of Swo-00-0001302, and thus directed the LMB of the DENR to process the applications of Dream Village’s members for sales patent, noting that in view of the length of time that they “have been openly, continuously and notoriously occupying the subject property in the concept of an owner, x x x they are qualified to apply for sales patent on their respective occupied lots pursuant to R.A. Nos. 274 and 730 in relation to the provisions of the Public Land Act.”

In its Motion for Reconsideration filed on May 20, 2004, the BCDA questioned the validity of the survey results since it was conducted without its representatives present, at the same time denying that it received a notification of the DENR verification survey. It maintained that there is no basis for the COSLAP’s finding that the members of Dream Village were in open, continuous, and adverse possession in the concept of owner, because not only is the property not among those declared alienable and disposable, but it is a titled patrimonial property of the State. COSLAP denied BCDA’s motion for reconsideration.

CA Ruling: The BCDA argued that the dispute is outside the jurisdiction of the COSLAP because of the land’s history of private ownership and because it is registered under an indefeasible Torrens title; that Proclamation No. 172 covers only Lots 1 and 2 of Swo-13-000298 in Western Bicutan, whereas Dream Village occupies Lots 10, 11 and part of 13 of Swo-00-0001302, which also belongs to the BCDA; that the COSLAP resolution is based on an erroneous DENR report stating that Dream Village is outside of BCDA, because Lots 10, 11, and portion of Lot 13 of Swo-00-0001302 are within the DA; that the COSLAP was not justified in ignoring BCDA’s request to postpone the survey to the succeeding year because the presence of its representatives in such an important verification survey was indispensable for the impartiality of the survey aimed at resolving a highly volatile situation; that the COSLAP is a mere coordinating administrative agency with limited jurisdiction; and, that the present case is not among those enumerated in Section 3 of E.O. No. 56145.

The COSLAP, on the other hand, maintained that Section 3(2)(e) of E.O. No. 561 provides that it may assume jurisdiction and resolve land problems or disputes in “other similar land problems of grave urgency and magnitude,” and the present case is one such problem.

The CA in its Decision dated September 10, 2009 ruled that the COSLAP has no jurisdiction over the complaint because the question of whether Dream Village is within the areas declared as available for disposition in Proclamation No. 172 is beyond its competence to determine, even as the land in dispute has been under a private title since 1906, and presently its title is held by a government agency, the BCDA, in contrast to the case of Bañaga relied upon by Dream Village, where the disputed land was part of the public domain and the disputants were applicants for sales patent thereto.

 

Issue:

Whether or not Dream Village holds title to lots in Fort Bonifacio.

Held:

No.  SC found no merit in Dream Village’s petition. In fact, it is the BCDA that holds title to Fort Bonifacio.

That the BCDA has title to Fort Bonifacio has long been decided with finality. In Samahan ng Masang Pilipino sa Makati, Inc. v. BCDA, it was categorically ruled as follows: “First, it is unequivocal that the Philippine Government, and now the BCDA, has title and ownership over Fort Bonifacio. xxx”

The facts in Samahan ng Masang Pilipino sa Makati are essentially not much different from the controversy below. There, 20,000 families were long-time residents occupying 98 has. of Fort Bonifacio in Makati City, who vainly sought to avert their eviction and the demolition of their houses by the BCDA upon a claim that the land was owned by the USA under TCT No. 2288. The Supreme Court found that TCT No. 2288 had in fact been cancelled by TCT No. 61524 in the name of the Republic, which title was in turn cancelled on January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460, 23889, 23890, and 23891, all in the name of the BCDA. The Court ruled that the BCDA’s aforesaid titles over Fort Bonifacio are valid, indefeasible and beyond question, since TCT No. 61524 was cancelled in favor of BCDA pursuant to an explicit authority under R.A. No. 7227, the legal basis for BCDA’s takeover and management of the subject lots.

Dream Village sits on the abandoned C-5 Road, which lies outside the area declared in Proclamation Nos. 2476 and 172 as alienable and disposable. xxx However, the survey plan for Western Bicutan, Swo-13-000298, shows that Lots 3, 4, 5 and 6 thereof are inside the area segregated for the Libingan ng mga Bayani under Proclamation No. 208, which then leaves only Lots 1 and 2 of Swo-13-000298 as available for disposition. For this reason, it was necessary to amend Proclamation No. 2476. Thus, in Proclamation No. 172 only Lots 1 and 2 of Swo-13-000298 are declared alienable and disposable.

The DENR verification survey report states that Dream Village is not situated in Lot 1 of Swo-13-000298 but actually occupies Lots 10, 11 and part of 13 of Swo-00-0001302. xxx The area is actually outside SWO-00-0001302 of BCDA.” Inexplicably and gratuitously, the DENR also states that the area is outside of BCDA, completely oblivious that the BCDA holds title over the entire Fort Bonifacio, even as the BCDA asserts that Lots 10, 11 and 13 of SWO-00-0001302 are part of the abandoned right-of-way of C-5 Road. This area is described as lying north of Lot 1 of Swo-13-000298 and of Lots 3, 4, 5 and 6 of Swo-13-000298 (Western Bicutan) inside the Libingan ng mga Bayani, and the boundary line of Lot 1 mentioned as C-5 Road is really the proposed alignment of C-5 Road, which was abandoned when, as constructed, it was made to traverse northward into the Libingan ng mga Bayani. Dream Village has not disputed this assertion.

The mere fact that the original plan for C-5 Road to cross Swo-00-0001302 was abandoned by deviating it northward to traverse the southern part of Libingan ng mga Bayani does not signify abandonment by the government of the bypassed lots, nor that these lots would then become alienable and disposable. They remain under the title of the BCDA, even as it is significant that under Section 8(d) of R.A. No. 7227, a relocation site of 30.5 has. was to be reserved for families affected by the construction of C-5 Road. It is nowhere claimed that Lots 10, 11 and 13 of Swo-00-0001302 are part of the said relocation site. These lots border C-5 Road in the south, making them commercially valuable to BCDA, a farther argument against a claim that the government has abandoned them to Dream Village.

While property of the State or any of its subdivisions patrimonial in character may be the object of prescription, those “intended for some public service or for the development of the national wealth” are considered property of public dominion and therefore not susceptible to acquisition by prescription.

Article 1113 of the Civil Code provides that “property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription.” Articles 420 and 421 identify what is property of public dominion and what is patrimonial property:

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

 

Issue 2:

Whether the area occupied by Dream Village is susceptible of acquisition by prescription.

Held 2:

No.  The area is not susceptible of acquisition by prescription.

In Heirs of Mario Malabanan v. Republic, it was pointed out that from the moment R.A. No. 7227 was enacted, the subject military lands in Metro Manila became alienable and disposable. However, it was also clarified that the said lands did not thereby become patrimonial, since the BCDA law makes the express reservation that they are to be sold in order to raise funds for the conversion of the former American bases in Clark and Subic. The Court noted that the purpose of the law can be tied to either “public service” or “the development of national wealth” under Article 420(2) of the Civil Code, such that the lands remain property of the public dominion, albeit their status is now alienable and disposable. The Court then explained that it is only upon their sale to a private person or entity as authorized by the BCDA law that they become private property and cease to be property of the public dominion:

For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public dominion if when it is “intended for some public service or for the development of the national wealth.”

Thus, under Article 422 of the Civil Code, public domain lands become patrimonial property only if there is a declaration that these are alienable or disposable, together with an express government manifestation that the property is already patrimonial or no longer retained for public service or the development of national wealth. Only when the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run. Also under Section 14(2) of Presidential Decree (P.D.) No. 1529, it is provided that before acquisitive prescription can commence, the property sought to be registered must not only be classified as alienable and disposable, it must also be expressly declared by the State that it is no longer intended for public service or the development of the national wealth, or that the property has been converted into patrimonial. Absent such an express declaration by the State, the land remains to be property of public dominion.

Since the issuance of Proclamation No. 423 in 1957, vast portions of the former Maricaban have been legally disposed to settlers, besides those segregated for public or government use. Proclamation No. 1217 (1973) established the Maharlika Village in Bicutan, Taguig to serve the needs of resident Muslims of Metro Manila; Proclamation No. 2476 (1986), as amended by Proclamation No. 172 (1987), declared more than 400 has. of Maricaban in Upper and Lower Bicutan, Signal Village, and Western Bicutan as alienable and disposable; Proclamation No. 518 (1990) formally exempted from Proclamation No. 423 the Barangays of Cembo, South Cembo, West Rembo, East Rembo, Comembo, Pembo and Pitogo, comprising 314 has., and declared them open for disposition.

The above proclamations notwithstanding, Fort Bonifacio remains property of public dominion of the State, because although declared alienable and disposable, it is reserved for some public service or for the development of the national wealth, in this case, for the conversion of military reservations in the country to productive civilian uses. Needless to say, the acquisitive prescription asserted by Dream Village has not even begun to run.

Ownership of a land registered under a Torrens title cannot be lost by prescription or adverse possession.  It is a settled rule that lands under a Torrens title cannot be acquired by prescription or adverse possession. Section 47 of P.D. No. 1529, the Property Registration Decree, expressly provides that no title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. And, although the registered landowner may still lose his right to recover the possession of his registered property by reason of laches, nowhere has Dream Village alleged or proved laches, which has been defined as such neglect or omission to assert a right, taken in conjunction with lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar in equity. Put any way, it is a delay in the assertion of a right which works disadvantage to another because of the inequity founded on some change in the condition or relations of the property or parties. It is based on public policy which, for the peace of society, ordains that relief will be denied to a stale demand which otherwise could be a valid claim.

 

Issue 3: 

Whether or not COSLAP has jurisdiction over the case.

Held 3:

No.  The subject property having been expressly reserved for a specific public purpose, the COSLAP cannot exercise jurisdiction over the complaint of the Dream Village settlers.

In fine, it is apparent that the COSLAP acted outside its jurisdiction in taking cognizance of the case. It would have been more prudent if the COSLAP has [sic] just referred the controversy to the proper forum in order to fully thresh out the ramifications of the dispute at bar. As it is, the impugned Resolution is a patent nullity since the tribunal which rendered it lacks jurisdiction. Thus, the pronouncements contained therein are void.

SC added that Fort Bonifacio has been reserved for a declared specific public purpose under R.A. No. 7227, which unfortunately for Dream Village does not encompass the present demands of its members. Indeed, this purpose was the very reason why title to Fort Bonifacio has been transferred to the BCDA, and it is this very purpose which takes the dispute out of the direct jurisdiction of the COSLAP. A review of the history of the COSLAP will readily clarify that its jurisdiction is limited to disputes over public lands not reserved or declared for a public use or purpose.

Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and, as such, could wield only such as are specifically granted to them by the enabling statutes.

Under the law, E.O. No. 561, the COSLAP has two options in acting on a land dispute or problem lodged before it, namely, (a) refer the matter to the agency having appropriate jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter is one of those enumerated in paragraph 2(a) to (e) of the law, if such case is critical and explosive in nature, taking into account the large number of the parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action. In resolving whether to assume jurisdiction over a case or to refer the same to the particular agency concerned, the COSLAP has to consider the nature or classification of the land involved, the parties to the case, the nature of the questions raised, and the need for immediate and urgent action thereon to prevent injuries to persons and damage or destruction to property. The law does not vest jurisdiction on the COSLAP over any land dispute or problem.

 

Case Brief: San Miguel Corporation and Andres vs. Secretary of Labor, NLRC, and Yanglay

G.R. No. L-39195   May 16, 1975

THE SAN MIGUEL CORPORATION and FRANCISCO ANDRES, petitioners, 

vs.

THE HONORABLE SECRETARY OF LABOR, NATIONAL LABOR RELATIONS COMMISSION and GREGORIO YANGLAY, JR., respondents.

Facts:

Yanglay, a thirty-year old married man residing at Cavite City, after leaving the plant at three o’clock in the afternoon of April 22, 1972, was apprehended by Patrolman E. Reyes of the Manila Police Department outside the company compound. Yanglay was carrying a bagful of drugs.  He admitted that he was caught in possession of the said drugs which he had bought from his coworkers and which had been given to them free of charge so as to keep them in the “pink of health”.

At the investigation on June 27, Yanglay denied that he was trafficking illegally in drugs of the company. He said that he bought the drugs from his coworkers in the same way that some workers bought the rice rations of their coworkers.

On the basis of that investigation, Yanglay was dismissed on July 19, 1972.  At the meeting of the union and management panels on September 22, 1972 to thresh out Yanglay’s grievance, the union representative contended that there was no company rule against trafficking in drugs, which were no longer owned by the company after having been issued to its workers, and that the sale of the drugs was like the sale of rice rations which sale was allegedly tolerated by the company officials. The union conceded that suspension should be the proper disciplinary action but not dismissal. Yanglay had been in the service of the company for nine years.

The management panel countered that it is evident that Yanglay’s dismissal was not due to union activities; that the sale of the drugs was a subversion of the company’s efforts to give medical benefits to its workers and that trafficking in rice rations cannot be cited as a justification because the value of the rice is reflected in the workers’ income tax returns.

On December 4, 1972 Yanglay filed a complaint with the NLRC alleging that there was no evidence to justify his dismissal, that the truth was that he owned the medicines in question and that he was dismissed because of his union activities as a “militant shop steward of the Ilaw at Buklod ng Manggagawa”, the union representing the workers of the corporation (NLRC Case No. MC-180).

The case was scheduled for mediation on January 10, 1973. The record does not show what transpired on that date. On January 12, 1973 the corporation filed a memorandum wherein it contended (1) that Yanglay’s case was outside the NLRC’s jurisdiction which extends only to disputes and grievances occurring after September 21, 1972; (2) that Yanglay’s dismissal was justified and (3) that, if the dismissal was not justified, his remedy was to ask for separation pay under the Termination Pay Law.  Yanglay did not submit any memorandum. On February 21, 1973 the mediator submitted a report wherein he concluded that Yanglay “was dismissed on a shaky ground” because the employer had not shown any violation of any company rule or regulation and that the persons to be penalized should be those who sold or delivered the drugs to Yanglay.

As such, the mediator recommended Yanglay’s reinstatement with backwages, and the NLRC adopted the same.

The San Miguel Corporation moved for the reconsideration of the decision on the ground that it was premature because section 14 of the NLRC’s Rules and Regulations requires that the mediator’s factfinding report be passed upon by an arbitrator. The motion was treated as an appeal by the Secretary of Labor. As already stated, he denied it in his resolution dated July 9, 1974. Thereafter, the company, instituted this certiorari proceeding.

Yanglay raised a jurisdictional question which was not brought up by respondent public officials. He contends that this Court has no jurisdiction to review the decisions of the NLRC and the Secretary of Labor “under the principle of separation of powers” and that judicial review is not provided for in Presidential Decree No. 21.

Issue:

Whether or not the Court has a jurisdiction over the decision of the NLRC and the Secretary of labor under the “Principle of Separation of powers” and judicial review is not provided under Presidential Decree 21 (Creating a National Labor Relations Commission)

Held:

The Court has jurisdiction over the case.

It is generally understood that as to administrative agencies exercising quasi-judicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute. The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect substantial rights of parties affected by its decisions, It is part of the system of checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications.

Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion, error of law, fraud or collusion.

The courts may declare an action or resolution of an administrative authority to be illegal (1) because it violates or fails to comply with some mandatory provision of the law or (2) because it is corrupt, arbitrary or capricious.

Issue:

Whether or not Yanglay’s dismissal is proper.

Held:

No.  Yanglay’s dismissal is not proper.

That was the first time he was caught trafficking in company-supplied drugs. He confessed that necessity forced him to buy the drugs. He promised not to do it again. His impression was that, like the rice rations whose sale was tolerated by the company officials, he could engage in the buy-and-sell of the drugs. He argued that his co-workers, who gave or sold to him the drugs, were equally culpable in sabotaging the company’s practice of rendering free medical assistance to its employees.

The misconduct of employees or workers in misrepresenting to the company that they needed medicines when in fact their purpose was to sell the same should not be tolerated. For such misrepresentations or deceptions, appropriate disciplinary action should be taken against them. On the other hand, in view of the high cost of living and the difficulties of supporting a family it is not surprising that members of the wage-earning class would do anything possible to augment their small income.

Taking into account the circumstances of the case, particularly Yanglay’s initial attitude of confessing that his error was dictated by necessity and his promise not to repeat the same mistake, we are of the opinion that his dismissal was a drastic punishment. He should be reinstated but without back wages because the company acted in good faith in dismissing him.  He has been sufficiently penalized by the loss of his wages from July 19, 1972 up to this time.

Case Brief: Philippine Association of Colleges and Universities vs Secretary of Education

PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES, ETC., petitioner,
vs.
SECRETARY OF EDUCATION and the BOARD OF TEXTBOOKS, respondents.
G.R. No. L-5279 October 31, 1955

Facts:

Philippine Association of Colleges and Universities assailed the constitutionality of Act No. 2706, known as the “Act making the Inspection and Recognition of private schools and colleges obligatory for the Secretary of Public Instruction.”

As contended by PACU,  the Act is unconstitutional because of the following reasons: 1) The act deprives the owner of the school and colleges as well as teachers and parents of liberty and property without due process of law; 2) it will also deprive the parents of their natural rights and duty to rear their children for civic efficiency; and 3) its provisions conferred on the Secretary of Education unlimited powers and discretion to prescribe rules and standards constitute towards unlawful delegation of legislative powers.

Additionally, the association contended that the Constitution guaranteed every citizen the right to own and operate a school and any law requiring previous governmental approval or permit before such person could exercise the said right.

On the contrary, the Department of Education maintained that 1) the matters does not contain justiciable controversy and thus does not need court decision or intervention; 2) petitioners are inestoppels to challenge the validity of the said act; and 3) the Act is constitutionally valid.

Section 1 of Act No. 2706 provides that “It shall be the duty of the Secretary of Public Instruction to maintain a general standard of efficiency in all private schools and colleges of the Philippines so that the same shall furnish adequate instruction to the public, in accordance with the class and grade of instruction given in them, and for this purpose said Secretary or his duly-authorized representative shall have authority to advise, inspect, and regulate said schools and colleges in order to determine the efficiency of instruction given in the same.”

Issue:

Whether or not Act No. 2706 is unconstitutional.

Held:

No, Act No. 2706 is constitutional.

The organic law provides that the state has the power to regulate private schools for the development of morals, civic efficiency, and scientific aptitude of students. The court found no justiciable controversy. The power of the courts to declare a law unconstitutional arises only when the interest of litigant require the use of judicial authority for their protection against actual interference. As such, judicial power is limited to the decision of actual cases and controversies. Thus, the court does not sit to adjudicate a mere academic question, such as that provided by the petitioner. On this phase of the litigation, the court conclude that there has been no undue delegation of legislative power even if the petitioners appended a list of circulars and memoranda issued by the Department of Education.