Proposed divorce law in the Philippines

philippine law blogPhilippine divorce lawsImage via WikipediaBy Rey Cartojano
For a predominantly Catholic country as the Philippines, the refiling by the Gabriela women's party-list group of a controversial bill to legalize divorce in the country drew mixed reactions.

The refiled measure, now renamed House Bill No. 1799 (An Act Introducing Divorce in the Philippines), lists down five grounds for the filing of a petition for divorce:
1. Petitioner has been separated de facto (in fact) from his or her spouse for at least five years at the time of the filing of the petition and reconciliation is highly improbable;
2. Petitioner has been legally separated from his or her spouse for at least two years at the time of the filing of the petition and reconciliation is highly improbable;
3. When the spouses suffer from irreconcilable differences that have caused the irreparable breakdown of the marriage;
4. When one or both spouses are psychologically incapacitated to comply with the essential marital obligations;
5. Any of the grounds for legal separation that has caused the irreparable breakdown of the marriage.
Under the present law, particularly Article 36 of the Family Code of the Philippines, only psychological incapacity is the only ground for annulment of marriage, and the process of securing annulment is not only tedious but expensive as well, making the provision biased in favor of those who have the financial means to sustain costly litigation.
Under the proposed divorce bill, separation in fact (de facto) for five (5) years and legal separation for two (2) years are already grounds for divorce, as long as reconciliation of the spouses is highly improbable.  Separation in fact is a widespread phenomenon in the Philippines, especially for couples who could not afford the legal process of annulment, thus providing these separated couples a ground to formally and legally severe their marital ties.  On the other hand, legal separation for two (2) years is thought by the proponents of the divorce bill enough basis to proceed to divorce, considering that the spouses already passed the ordeal and process of legal separation.
The third ground is irreconcilable differences that caused irreparable breakdown of marriage.  What these irreconcilable differences are not clear, for as long as they caused irreparable breakdown of marriage, again without sufficiently defining what irreparable breakdown of marriage means.  The third ground provides possible judicial interpretation based on the facts of the case, which can be questioned as unwarranted delegation of legislative authority, i.e., judicial legislation, or simply unconstitutional for being vague.
The fourth ground of psychological incapacity is feared to be a useless provision if the proposed divorce bill is passed into law, as the other grounds will be easier to establish and less costly for the parties. In fact, the existence of the third ground of irreconcilable differences, which is broader in scope, will be sufficient to absorb this ground of psychological incapacity.

The last ground for divorce, which can be any of the grounds of legal separation under existing law that caused irreparable breakdown of marriage, provides an opening for the broadening in the scope of the coverage for divorce in the Philippines. The Family Code provides the following as grounds for legal separation:
[1] Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner;
[2] Physical violence or moral pressure to compel the petitioner to change religious or political affiliation;
[3] Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of the petitioner, to engage in prostitution, or connivance in such corruption or inducement;
[4] Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned;
[5] Drug addiction or habitual alcoholism of the respondent;
[6] Lesbianism or homosexuality of the respondent;
[7] Contracting by the respondent of a subsequent bigamous marriage, whether in the Philippines or abroad;
[8] Sexual infidelity or perversion;
[9] Attempt by the respondent against the life of the petitioner; or
[10] Abandonment of petitioner by respondent without justifiable cause for more than one year.
In effect, the proposed divorce bill added ten (10) more specific grounds for divorce as enumerated above, as long as the said grounds caused irreparable breakdown of marriage, again without clearly defining what irreparable breakdown means. 
The Philippine Daily Inquirer reported that the refiling of the bill quickly elicited an objection from Parañaque Rep. Roilo Golez, who said, “That is like giving a married couple a weapon of mass destruction that they can use against each other even for petty, solvable marital problems.”   

Buhay party-list Rep. Erwin Tieng also said his group was against divorce because it was tantamount to giving troubled marriages an “exit clause from a very important union.”   He suggested “preempting” the dissolution of marriages by effective counseling or “better family relations” programs from the Church, government and volunteer groups.
The bill’s authors, however, said a divorce law would address the issue of domestic violence. Police statistics in 2009 showed that 19 women a day fell victim to marital violence.  Gabriela Representatives Luzviminda Ilagan and Emerenciana De Jesus stressed legalizing divorce would give “married couples in irreparable marriages another legal remedy that they can resort to in addition to the country’s existing laws on legal separation and annulment.”
Ilagan and De Jesus said a divorce law could help put an end to domestic violence still prevalent among married Filipino couples.  The Philippines is one of only two countries in the world (excluding the Vatican) that has not legalized divorce.  “For women in abusive marital relationships, the need for a divorce law is real. It is high time that we give Filipino couples, especially the women, this option,” said Ilagan and De Jesus in the bill’s explanatory note.
It appears that the proponents of the divorce bill anchor principally their arguments on domestic violence, citing several alarming statistics to establish convincingly their points.  However, the grounds being proposed under the divorce law encompass areas outside of domestic violence, as for instance the addition of the ten (10) grounds under legal separation as grounds also for the filing of divorce.
Although it is really high time that the Philippines takes a second very serious look on our outdated and unresponsive law on annulment, the proposed bill on divorce appears too revolutionary and unwieldy for most Filipinos.  While we are cognizant that our various tribal and cultural communities had already indigenous customs and practices similar to the divorce being practiced by the Muslims especially in southern Philippines which ALL predated the advent of Spanish, American and Japanese colonizers, we have to face the reality that a revolutionary and unwieldy divorce bill as proposed now may not pass into law especially with the strong opposition of the Catholic hierarchy.  

But tempering and limiting its provisions, and making it cover only to very specific and defined grounds, such as for instance repeated domestic violence, may probably cause a rethinking by the local Catholic hierarchy of its position on the issue.  After all, if Italy and Spain, which are supposed to be centers of global Catholicism have their own versions of divorce laws, why can't we have here also in the Philippines?

Right of minority representation in local Philippine legislative bodies

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By Rey Cartojano
After partisan politics was supposed to be settled in the last May 10 elections, the next order of the day especially for local officials is the process of formulating and passing ordinances and other legislative work.
Section 50 of the Local Government Code sets the tone of this process by requiring the concerned legislative body, or Sanggunian, to adopt or update its existing internal rules of procedure starting its first regular session and within ninety (90) days thereafter. The adoption or updating of the internal rules of procedure is a critical process in local legislative work as it prescribes assignments in chairmanships and memberships of committees where most legislative work take place.  In addition, the internal rules of procedure can decisively prescribe the manner on how local legislative business will be conducted especially to favor the dominant political party or grouping.
A question of controversial impression is whether the internal rules of procedure can prescribe the process of appointments of committee chairmanships and memberships to favor only a dominant political party or grouping.  Stated directly, is it legal and in accordance with parliamentary practice to limit chairmanship and membership of all committees to the members of a dominant political party?
In answering queries for legal opinions especially covering issues in the interpretation of internal rules of procedures, the Department of Interior and Local Government (DILG) has always outlined the hierarchy of sources of authorities as follows: (1) 1987 Constitution; (2) Laws, especially the Local Government Code; (3) Court decisions; (4) Internal Rules of Procedures of the concerned Sanggunian; and (5) Parliamentary customs, usage and authors.
Suffice it to state at this stage that in international parliamentary customs and usage, and even bolstered by multitude of scholars and authors, the rule is settled that in a parliamentary set-up working through many committees, apportionment of committee chairmanships and memberships is allocated in proportion to the percentage of minority representatives vis-a-vis the total elected representatives. In fact, this formula is even followed by the present Philippine Congress in the distribution of committee assignments, which means that a congressman coming from minority parties and groups is always assured of a committee assignment, with or without him asking for it.
If we follow the hierarchy of authorities stated in many DILG legal opinions, it seems that minority representation in local legislative committees is doomed if the internal rules of procedure will favor committee appointments of chairmen and members highly dependent on the will of the majority, as the Philippine Constitution, laws and court decisions which are supposed to occupy higher level of authorities on the matter on minority representation do not yet have a clear coverage and resolution.
However, the International Parliamentary Union (IPU), a global organization of various state parliaments of which the Philippines is a member, cited Article 25 of the International Convention on Civil and Political Rights, which the Philippines ratified last 1986, on the right of the citizens to be heard through their elected representatives.  The right of the citizens to be heard through their elected representatives is interpreted to include the right of the said representatives to be given fair representation in parliamentary committees, which almost all parliaments in the world already are adopting.
By the doctrine of incorporation found in Article 2, Section 2 of the 1987 Constitution (where the Philippines adopts by incorporation international laws as part of our domestic laws), the International Convention on Civil and Political is already part and parcel of the laws of the land.  As such, then, it is submitted that any internal rules of procedure of any local legislative assembly in the Philippines which infringe on the right of minority political groups to be represented in parliamentary committees, for that matter, is not only illegal but not in accordance with internationally accepted parliamentary customs and practices.
At the end of the day, representative democracy is not all about what the majority wills government to be as it is about giving the right of other elected representatives to be heard, participate and check the process of legislation. 
 

A GRASP ON SUCCESSION

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By Beverly Caboteja
I’m looking through my notes at home , and I remember one subject, which a lot of people say , one of the most difficult yet boring subjects. It is SUCCESSION. I had no clear idea though of what kind of animal is this (not until I have studied it) because at one point, I know I have no property or rights to transfer, neither do I have the inheritance to succeed. But nobody knows what lies ahead. Maybe in the future, God willing, I can use this.
One author says that , Civil Law has and always will be one of the stabilizing factors in our daily lives. Part of this is succession. When we mention the word “succession” , some people get excited, some get nervous because basically we talk about inheritance and death, respectively. Of course, up to a certain degree we need to know about succession because the only way we can learn is through discussing it. Seldom do people talk about it because they say this is only for the rich and famous. True or not, the need still arises.
Art 777 of the Civil Code states that “ the rights to the succession are transmitted from the moment of the death of the decedent. At the moment of the decedent’s death , the heirs start to own the property , subject to the decedent’s liabilities. In fact, they may dispose of the same even while the property is under administration.”
In its generic or general sense, succession is defined as the transmission of rights and properties from one person to another. In this sense, succession may be intervivos (where transfer is effective during lifetime of the giver) or mortis causa (after his death).
Succession in its legal definition, is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the value of the inheritance , of a person are transmitted through his death to another or others either by his will or by operation of law (Art. 774, New Civil Code). In brief, someone gets something from another who has died.
It is true that death transfers the rights to the succession- but only if the following conditions are present, namely:
1. That indeed there has been a death (either actual or presumed)
The law is silent in determining as to when a person is deemed considered dead. Technically, a person is considered dead when all its sensory faculties, bodily activities, heart and brain systems cease to function. Yet, under the law death is not limited to natural or physical demise. It includes presumed death occasioned by prolonged legal absence.
Legally, there are two (2) kinds of presumed death: the ordinary presumption caused by ordinary absence there being no danger or idea of death and an extraordinary presumption caused by an extraordinary or qualified absence. Here in the first presumption, if a person disappears, at the end of ten (10) years, he shall be presumed dead for the purpose of opening his succession (Art 390 of the Civl Code).
On the other hand, if he disappears after the age of 75, absence of five (5) years is enough in order that his succession may be opened. Note that death takes place on the last day of the period of absence required by law.
Moreover, under Art 391 of the Civil Code, there is extraordianary presumption because of great probability of death. The law says that the following shall be presumed dead for all purposes including the division of the estate among the heirs:
a. A person on board a vessel lost during a sea voyage or an aeroplane which is missing, who has not been heard for four years since the loss of the vessel or aeroplane;
b. A person in the armed forces who has taken part in war, and has been missing for four years;
c. A person who has been in danger of death under other circumstances and his existence has not been known for four years.
Under these conditions, it has been held that the person is presumed to have died at the time of the disappearance, that is at the time the calamity took place and not at the end of four years. In other words, at the end of four years, the presumption will arise that death had occurred four (4)years before.
Furthermore, in both absences, succession is only of provisional character because there is always a chance that the absentee may still be alive. As such, it may be rebutted or proved as to when death actually occurred.
The problem here is, what if the absentee appears or returns? Knowingly, if the absentee appears or without appearing his existence is proved, “he shall recover his property in the condition in which it may be found and the price of any property that may have been alienated or the property acquired therewith; but he cannot claim either fruits or rent. “
2. That the rights or properties are indeed transmissible or descendible
As mentioned, inheritance includes all the property , rights and obligations of a person which are not extinguished by his death. Some rights are extinguished by death, some are not. To name few of those rights which are extinguished by death (and which therefore are not part of the estate), these include: family rights, marital and parental authorrity, support, action for legal separation, right to hold public office or private office or job. These rights have no inheritability , hence not transmissible mortis causa.
Thus, rights and obligations are generally transmissible unless purely personal.
3. That the transferee is still alive (no predecease), willing (no repudiation) and is capacitated to inherit.
It is noteworthy that if the heir instituted is incapacitated, repudiates the inheritance, or predeceases the testator, said heir inherits NOTHING. The same conclusion is reached when although the heir is ready, willling and able- the right is not transmissible or descindible- as for instance the right to support.
While it is true that a person has the right to transfer his or her inheritance but this only takes place by virtue of his will (i.e testamentary succession )or by operation of law (i.e. legal or intestate). Still, the act of such person is moderated by the law so as not to defeat the real intent or purpose of the law. So long as all the requisties concur or all requirements are complied with, succession may transpire.

Writ of Kalikasan, hello anyone?

Writ of Kalikasan

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I had this rare opportunity of revisiting my law blog after a month of hiatus this lazy Saturday afternoon. I read and heard about this new and rare legal specie called writ of kalikasan. Even to seasoned lawyers, this writ sounds exotic simply because this is new, and ignorance breeds fear as well as silence.
Unknown to many, the Philippine Supreme Court recently approved the ground breaking Rules of Procedure for Environmental Cases which took effect only last 29 April 2010. The Philippines takes pride in having a number of laws protecting the environment but the record of unabated and literally massive rape of natural and environmental resources is equaled only by the magnitude of corruption in government offices. With this backdrop, the recent procedural rules crafted and passed by the Supreme Court are meant to stop these onslaughts on environment destruction, hopefully.
As I read the Rules, I was amused that there is a specific law, particularly Act No. 3572 of several decades ago, possibly of World War II vintage, that prohibits cutting of Molave trees, and even now rare sounding trees such as Tindalo and Akli!
And beware, lest you do not know yet, including myself, that R.A. No. 3571 specifically prohibits the cutting, destroying or injuring of planted or growing trees,flowering plants and shrubs or plants of scenic value along public roads, in plazas, parks, school premises or in any other public ground. As the law is worded, you can be imprisoned for uprooting what seems to be a colorful grass or vine of scenic value in a public street.
Of course, during the Martial Law years, the late dictator Marcos should be credited in passing a number of environmental laws and presidential decrees, namely: (1) P.D. No. 705, Revised Forestry Code; (2) P.D. No. 856, Sanitation Code; (3) P.D. No. 979, Marine Pollution Decree; (4) P.D. No. 1067, Water Code; (5) P.D. No. 1151, Philippine Environmental Policy of 1977; (6) P.D. No. 1433, Plant Quarantine Law of 1978; and (7) P.D. No. 1586, Establishing an Environmental Impact Statement System Including Other Environmental Management Related Measures.
Of recent vintage are the following environment laws: (1)R.A. No. 6969, Toxic Substances and Hazardous Waste Act; (2) R.A. No. 7076, People’s Small-Scale Mining Act; (3) R.A. No. 7586, National Integrated Protected Areas System Act including all laws, decrees, orders, proclamations and issuances establishing protected areas;
(4) R.A. No. 7942, Philippine Mining Act; (5) R.A. No. 8550, Philippine Fisheries Code; (6) R.A. No. 8749, Clean Air Act; (7) R.A. No. 9003, Ecological Solid Waste Management Act; (8) R.A. No. 9072, National Caves and Cave Resource Management Act; (9) R.A. No. 9147, Wildlife Conservation and Protection Act; (10) R.A. No. 9175, Chainsaw Act; (11) R.A. No. 9275, Clean Water Act; and (12) R.A. No. 9483, Oil Spill Compensation Act of 2007; (13) R.A. No. 7308, Seed Industry Development Act; (14) R.A. No. 7900, High-Value Crops Development Act; (15) R.A. No. 8048, Coconut Preservation Act; (16) R.A. No. 8435, Agriculture and Fisheries Modernization Act of 1997; (17) R.A. No. 9522, The Philippine Archipelagic Baselines Law; (18) R.A. No. 9593, Renewable Energy Act of 2008; and (19) R.A. No. 9637, Philippine Biofuels Act, among others.
While we have many of these environment laws are in place, prosecution of violators was stifled on account of the fact that the regular Rules of Court may not have the muscle and teeth for effective and expeditious enforcement. In addition, the environmental Rules will introduce and adopt innovations and best practices ensuring the effective enforcement of remedies and redress for violation of environmental laws.
While the provisions of the regular Rules of Court are applicable, there are many new and innovative provisions under the environmental rules. Firstly, there is the consent decree which refers to a judicially-approved settlement between concerned parties based on public interest and public policy to protect and preserve the environment. Secondly, there is the continuing mandamus which is a writ issued by a court in an environmental case directing any agency or instrumentality of the government or officer thereof to perform an act or series of acts decreed by final judgment which shall remain effective until judgment is fully satisfied. Thirdly, there is the environmental protection order (EPO) refers to an order issued by the court directing or enjoining any person or government agency to perform or desist from performing an act in order to protect, preserve or rehabilitate the environment. Fourthly, there is the precautionary principle which states that when human activities may lead to threats of serious and irreversible damage to the environment that is scientifically plausible but uncertain, actions shall be taken to avoid or diminish that threat. Fifthly, there is the innovative strategic lawsuit against public participation (SLAPP) which refers to an action whether civil, criminal or administrative, brought against any person, institution or any government agency or local government unit or its officials and employees, with the intent to harass, vex, exert undue pressure or stifle any legal recourse that such person, institution or government agency has taken or may take in the enforcement of environmental laws, protection of the environment or assertion of environmental rights.
One very interesting provision is the citizen's suit where any Filipino citizen in representation of others, including minors or generations yet unborn, may file an action to enforce rights or obligations under environmental laws. Take note that you can file an action involving an environment case by alleging that you represent minors or even generations yet unborn.
And what about that strange writ of kalikasan? Especially for prospective Philippine Bar examinees, the writ of kalikasan is a remedy available to a natural or juridical person, entity authorized by law, people’s organization, non-governmental organization, or any public interest group accredited by or registered with any government agency, on behalf of persons whose constitutional right to a balanced and healthful ecology is violated, or threatened with violation by an unlawful act or omission of a public official or employee, or private individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of inhabitants in two or more cities or provinces.
Although it is too early to tell, the passage of the new environment rules is a welcome development in preserving our natural resources and in prosecuting violators of our environmental laws.

Corporate Recovery Act of the Philippines

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Corporate Recovery Act of the Philippines

For almost a century, the Philippines did not have a clear legislative base for insolvency, suspension of payments and corporate rehabilitation.
Our insolvency law last was passed way back last 1909(!) when the Philippines was still under American tutelage, while our suspension of payments and corporate rehabilitation are still of martial law vintage under Presidential Decree No. 902-A.
With the passage this week of the Corporate Recovery Act, our insolvency, suspension of payments and corporate rehabilitation laws are now updated, and hopefully to be at par with the realities of the global market and business conditions.
As explained by the authors --
"While SEC has recently adopted rules for governing petitions for suspension of payment and rehabilitation, it nevertheless has remained hampered by this inadequate legislative base.
"Further, and perhaps of most immediate concern, the recently passed Securities Regulation Code (Act 8799) will transfer SEC's quasi-judicial jurisdiction over suspension of payments cases to the Regional Trial Courts. These courts, lacking a set of procedural rules to govern these cases, may have no choice but to apply the antiquated procedures of the Insolvency Law. This would radically change the rules of the game for companies that need the relief offered by rehabilitation and suspension of payments.
"In short, the Philippine has long needed to modernize and clarify its rules for rehabilitation and insolvency. This need has now become urgent with transfer of SEC's quasi-judicial jurisdiction over suspension payments and rehabilitation cases to the Regional Trial Courts.
According to the authors of the law, the Corporate Recovery Act, or the CRA, represents a comprehensive approach to the complex problems faced by enterprises when they, for whatever reason, can no longer pay their debts as they come due. It combines the creation substantive rights with relatively detailed procedural guidelines that move cases through court-supervised proceeding quickly. It emphasizes the survival of the enterprise while at the same time keeping paramount the rights of creditors with duly registered liens against the enterprise's assets.
The CRA clarifies the rights of debtors and creditors to initiate formal debt relief proceedings. A financially distressed enterprise may petition the court if it cannot pay its debts as they are coming due, regardless if it is insolvent. By contrast, P.D. 902-A allows SEC to take jurisdiction only when the distressed enterprise's assets exceed its liabilities. This has often led to time consuming litigation over whether the debtor is solvent or not at the onset of the proceedings. In the meantime, the debtor languishes. The CRA avoids this problem by allowing enterprises in the door regardless of their solvency or insolvency.
The authors of legislative measure said that once a case begins, the CRA offers four different means of relief: Pre-Negotiated Rehabilitation, Fast Track Rehabilitation, Court-Supervised Rehabilitation, and Dissolution-Liquidation.
Pre-Negotiated Rehabilitation
In the wake of the Asian crisis, banks have been diligently working with debtors to restructure loans whose payment terms are no longer practical. Numerous such agreements have been reached over the past several years. Two obstacles, however, stand in the way of a successful "work out". The first could be called the "maverick creditor problem" (where one creditor seeks to lay claim in the debtor's assets while others negotiate). The other is the "free-riding creditor problem" (where a creditor refuses to compromise knowing that the other creditors will). Both problems arise often. They undermine the trust patience needed to collectively restructure an enterprise's debts.
Pre-Negotiated Rehabilitation under CRA solves these problems. It allows a debtor that has worked out a rehabilitation plan with its creditors to go to court for official approval. While the plan awaits approval (expected time would be several weeks to hear technical objections, etc.), the claims and lawsuits of creditors, such as that of the maverick creditor mentioned above, are suspended. When the court approves that plan, all the creditors are bound by it, even the minority creditors who were trying to free ride on the good faith negotiations of the other creditors.
This remedy would be open to my enterprise that can develop a rehabilitation plan that is supported by a majority of its creditors. The experience of other countries, as well as some limited experience in the Philippines indicates that it is the most efficient and likely-to-succeed route to rehabilitation. It is thus one of the mainstays of the proposed legislation.
Fast-Track Rehabilitation
But what happens if the debtor cannot develop a pre-negotiated rehabilitation plan? The usual result has been for the debtor to petition SEC to initiate suspension of payments or rehabilitation proceedings. While various SEC cases involving large industrial companies are moving forward, few would deny that it has been a grueling experience and that success is not necessarily assured.
The challenge of the traditional rehabilitation approach is that it tries to do two things at the same time: (1) to figure out how to fix the debtor's business, and (2) to determine who gets what out of the proceedings. This one-two combination is the reason why many rehabilitations fail. The parties to the proceeding, seeking to minimize their losses, have move than the long-term interest of the enterprise in mind. The result is strategic bargaining, strategic lawsuits, and endless proceedings. And time, unfortunately, is the number one enemy of a successful outcome.
Fast-Track Rehabilitation under the proposed legislation stems from the assumption that the persons with the best incentives to fix an enterprise are owners with long-term outlook. These individuals will gain or lose depending on the ultimate outcome of the rehabilitation. To get to this point, Fast-Track Rehabilitation:
* creates a new, debt-free enterprise based on the assets of the debtor;
* transfers the shares of the new enterprise to the debtor in exchange for the debtor's assets;
* allows for the auctioning of the shares of the new enterprise with an eye toward maximizing revenues from the sale;
* gives shareholders and creditors of the debtor various preferred rights in bidding for the shares of the new enterprise if they so choose;
* allocates the proceeds from the shares sales to creditors and shareholders of the debtor according to pre-established priorities.
Fast-Track Rehabilitation keeps the enterprise together (albeit under a new corporate entity) while significantly reducing its debt in a very short period of time. While there are no guarantees of success, the enterprise, under new corporate trappings and management, has a far better chance of rehabilitating itself under these circumstances rather than trying to do it through endless rehabilitation proceedings. Workers benefit from this. So do the high priority creditors.
The legislation essentially makes Fast-Track Rehabilitation mandatory if the enterprise has not already petitioned for Pre-Negotiated Rehabilitation.
Court-Supervised Rehabilitation
As experienced in the Philippines and elsewhere teaches, traditional rehabilitation, even under the most progressive legislation, is drawn out process with few guarantees of success. Nonetheless, the CRA does provide it as a form of relief. It is only available, however, to non-stock corporations, or in instances where the secured creditors submit a motion to the court to convert the proceedings from Fast-Track Rehabilitation.
The CRA allows for the drafting of a rehabilitation plan while claims of creditors are suspended. The creditors then decide to support the plan or not. If the majority of a particular class of creditors opposes the plan, the case is converted to liquidation.
Court-Supervised Rehabilitation under CRA differs from current practice in several respects. The CRA puts the onus on the shareholders (through the debtor's board of directors) in drafting and selling a rehabilitation plan. The shareholders have the most to win or lose depending on whether a plan is approved. They should be the ones to take the first crack at the plan. Further, while the shareholders can hire experts to help in formulating the plan, the cost of hiring such experts are borne by the shareholders rather than the creditors.
This is contrast with current practice where the interim rehabilitation negotiates and balances the competing demands of the creditors and the shareholders. While some individuals have been able to rise to this challenge, even they concede it is very difficult to wear several hats at once. It is better to split the job into two roles: the court-appointed administrator (called the "conservator") conserves the assets (for the general benefit of all creditors) while the shareholders and their rehabilitation planner make their pitch for adjusting creditor's claims, minimizing shareholder dilution, and saving the enterprise.
Dissolution-Liquidation
The proposed legislation makes Dissolution-Liquidation the relief of last resort. It will most often be used when other forms of relief fail or when a debtor seeks to liquidate itself when it has insufficient assets to cover its debts.
The liquidation proceedings under the CRA are rather straightforward. They closely resemble the approach currently adopted by SEC. The major change is the modification of the ranking and prioritization of creditors currently found in the Civil Code. Several practitioners and commentators have argued that the Civil Code rankings massively complicate both liquidations and rehabilitations.
Conclusion
The CRA presents several options to a distressed enterprise. First, it gives it the chance to negotiate a rehabilitation plan agreed to by the majority of its creditors. Upon court approval, the plan would bind all creditors, even the dissenting ones.
If this effort fails, and an enterprise goes into formal rehabilitation proceedings, the CRA focuses on restructuring the claims against the enterprise while getting it out of debt quickly. The task of improving the enterprise's operations falls upon the new owners.
Traditional Court-Supervised Rehabilitation is available under the CRA, but only under limited circumstances, due to its inherent delay, cost, and risk. Finally, traditional dissolution and liquidation available, but only when a debtor voluntarily consents to it or when other rehabilitation approaches fail.
The CRA thus is both an evolution and an innovation in terms of current practice. It emphasizes workable solutions and de-emphasizes court-led approaches. Above all, it emphasizes the preservation of an enterprise while allowing its ownership to be restructured and its creditors to be treated fairly. In this sense, the CRA is pro-worker, pro-market, and pro-creditor at the same time.

Why It Pays To Stay Out Of Court

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Staying Out Of Court: DISPUTE RESOLVED.CASE CLOSED.
By Beverly Caboteja
Everybody wants justice. Justice maybe right next door but it takes a while to find it. It demands patience. Some people are better at it than others. Some people just give up.
That is why a lot of people run after litigations and seek for the best lawyers in town to only get what is due them. But oftentimes letting go of the idea to be in trial to acquire justice is not passivity. It is not the same thing as simply resigning oneself to whatever circumstances come along. Rather, it is simply embracing the possibility that everything can be settled without laying too much burden on oneself. And this is how suggestive amicable settlement is.
Amicable Settlement, as defined, is the most common form of dispute resolution between contending parties. This is a discussion or negotiation process between the parties involved with a view to find a commonly accepted solution for the disputes that have arisen and one which satisfies both parties. The resolution through amicable settlement presumes that the parties are willing to proceed with mutual concessions in order to bring about a win - win situation.
While the court will work for harmonizing views among the two sides, both parties are expected to make utmost, sincere and serious efforts and come together to elude costly litigation and arrive at a just and peaceful solution to teething troubles. With this, procrastinations caused by trial resulting to complexities between parties, are deemed bunged.
So why one would opt an amicable settlement rather than exhaust himself from the rigors of an arduous or backbreaking trial? Few of the reasons would say so. Amicable Settlement as a method of dispute resolution is characterized by the following advantages:
1. Lesser expenses, more savings
One effect of an amicable settlement of a lawsuit is a reduction in expenses associated with ones case. By reducing expenses, you come to save more of your money. The quicker it concludes, the lesser time, one will be in court.
A lawsuit that ends up going to trial oftentimes hinge on the courts for years. Certainly, months will pass before a lawsuit makes its way to a trial stage. An effect and benefit of an amicable settlement of a case is that it concludes quicker. The disputes are resolved within a shorter period of time. Rather than spending months or even years in court, you are able to conclude the matter and have your settlement payment in hand in a fraction of the time.
2. Everybody goes home happy.
Well settled is the rule that settlement in civil cases is encouraged to save time and expense. One party gets from the other and vice versa. Such agreement will be submitted in court. And it is noteworthy that one positive effect of an amicable settlement is that you know you will be getting at least some type of recovery. Neither of the parties wins nor loses. So everybody goes home happy.
3. Limits emotional hang-ups
Lawsuit may be a legal matter, but it may also have a brunt of your life and will affect you personally. Undeniably, almost every lawsuit attaches emotional elements, not only to the counsel but most especially to litigant parties. The longer a lawsuit meanders onward, the greater the toll it takes on one’s personal life. One lawyer says that “a sometimes-overlooked benefit of an amicable settlement--but nonetheless an important one--is that a negotiated resolution restores a sense of balance to your personal life. It also allows the preservation of the good relations between the two parties since amicable settlement is based on the intention of the parties to resolve their disputes in cooperation.”
There may be a lot of reasons still left construed, but that’s how I see amicable settlement in its laudable purpose. And as I have learned throughout this study, it’s not about the bulk of cases you’ve lost but rather the number of cases you’ve settled before taking the recourse of trial.
On the other hand, being able to resolve disputable matters in an amicable settlement also separates good lawyers from the bad ones.
One article says that one of the best gauges of a good lawyer is not that he has many cases, but that he knows how to settle a case before he saves his client from a lot of trouble. While a bad lawyer is one whose cases always ends up in trial. He has many cases and he does not have time anymore to study each cases. So he ends up inefficient.
True, indeed, that others bog down in the procedural trenches and that is often intentional. Why? Well, some lawyers don’t do anything but the trial. Maybe they are accustomed of doing that. Or perhaps, some think that the idea of practicing law is in there, while some treat it as a training ground honing them to become the best they know. But the worst is, they know that prolonged litigation leads to considerable expense, which translates into fees for lawyers.
Abraham Lincoln, who was once a lawyer and became one of the best presidents of the United States, gave an advice to lawyers: “Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser in fees, expenses and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man there will still be business enough.” Meaning if you are a lawyer, you have a strong influence to convince your client to settle problem with his opponent. You do not have to worry about losing fees for there are still cases to come. Even if you will come out the winner in the case, you are still the loser in terms of waste of time, money and effort.

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Is there legal basis for declaration of martial law in Maguindanao?

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Martial Law In Maguindanao

Early today, 05 December 2009, President Gloria Macapagal-Arroyo issued Proclamation No. 1959 placing the province of Maguindanao under martial law.

Article VII, Section 18 of the 1987 Constitution provides that the President as Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion.

In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Obviously, there is no invasion in Maguindanao to warrant the declaration of martial law which leaves only rebellion as the basis for its declaration.

Article 134 of the Revised Penal Code, as amended by Republic Act No. 6968, states that rebellion or insurrection is committed by rising publicly and taking arms against the Government for the purpose of removing from the allegiance to said Government or its laws, the territory of the Philippine Islands or any part thereof, of any body of land, naval or other armed forces, depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives.

Prior to the declaration of martial law, a sizable arms cache was recovered near the residence of the Ampatuan clan enough to arm more than a thousand men. Yesterday, the Ampatuans were able to secure a favorable ruling from the Court of Appeals in Cagayan De Oro City granting their application for a writ of amparo. Government forces also took into custody the patriarch of the Ampatuan clan, Andal Sr., and the ARMM Governor Zaldy Ampatuan. Subsequently, the government received intelligence reports that allegedly armed men started to group in various part of Maguindanao.

The last alleged event of armed men grouping apparently ignited the declaration of martial. Whether that alleged event constitutes "rising publicly and taking arms against the Government for the purpose of removing from the allegiance to said Government" is a question of fact that goes into the basis for the declaration of martial law. Simply put, was there a state of rebellion as defined under the law to justify martial rule?
The declaration of martial law appears to be, first and foremost, a clever political decision, even with very minimal legal basis. When the President visited General Santos City last Thursday to condole with the victims of the massacre, she was faced with grieving families who communicated to the President their sentiments and disappointments on how the government has treated the suspects with kid's gloves, considering the scale and barbarism of the incident.

By declaring martial law, the President, who is least concerned now with popularity, has deflected serious criticisms on her anemic responses to the massacre, as most critical of her handling of the incident are now focused on whether there is legal basis to her declaration or not. In effect, the declaration is a classic political maneuver to silence mounting criticisms of the massacre, and shift public attention to the legal basis of the declaration of martial law, as the latter appears to have profound impact on a national scale more than the massacre.

The shift in attention and media focus will be clearer in the coming days as the President will submit a report in Congress within forty-eight (48) hours from the declaration of martial law. The debates will be in Congress, voting jointly, by a vote of at least a majority of all its members, to revoke such declaration or even extend it for such period if the invasion or rebellion shall persist and public safety requires it.

We just hope that the declaration of martial law will not muffle the cries for justice of those massacred, or that justice be sidelined in the arena of political convenience.

The Maguindanao massacre and Philippine law on terror

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Maguindanao Massacre

With the unprecedented scale of barbaric violence in the recent Maguindanao massacre, the question arises if the situation calls for the applicability of Republic Act No. 9372 otherwise known as the Human Security Act of 2007 which imposes stiffer penalties than the common crime of murder.


Under Section 2 of the above-named law, it is declared a policy of the State to protect life, liberty, and property from acts of terrorism, to condemn terrorism as inimical and dangerous to the national security of the country and to the welfare of the people, and to make terrorism a crime against the Filipino people, against humanity, and against the law of nations.

Terrorism is defined under Section 3 thereof as any act of any person who commits an act punishable under any of the following provisions of the Revised Penal Code:

1. Article 122 (Piracy in General and Mutiny in the High Seas or in the Philippine Waters);
2. Article 134 (Rebellion or Insurrection);
3. Article 134-a (Coup d‘Etat), including acts committed by private persons;
4. Article 248 (Murder);
5. Article 267 (Kidnapping and Serious Illegal Detention);
6. Article 324 (Crimes Involving Destruction,

or under

1. Presidential Decree No. 1613 (The Law on Arson);
2. Republic Act No. 6969 (Toxic Substances and Hazardous and Nuclear Waste Control Act of 1990);
3. Republic Act No. 5207, (Atomic Energy Regulatory and Liability Act of 1968);
4. Republic Act No. 6235 (Anti-Hijacking Law);
5. Presidential Decree No. 532 (Anti-piracy and Anti-highway Robbery Law of 1974); and,
6. Presidential Decree No. 1866, as amended (Decree Codifying the Laws on Illegal and Unlawful Possession, Manufacture, Dealing in, Acquisition or Disposition of Firearms, Ammunitions or Explosives)

thereby sowing and creating a condition of widespread and extraordinary fear and panic among the populace, in order to coerce the government to give in to an unlawful demand shall be guilty of the crime of terrorism and shall suffer the penalty of forty (40) years of imprisonment, without the benefit of parole as provided for under Act No. 4103, otherwise known as the Indeterminate Sentence Law, as amended.

One of the elements of the crime of terrorism is the creation of condition of widespread and extraordinary fear and panic among the populace which clearly the Maguindanao massacre is squarely situated. Unfortunately, the qualifying clause thereof is "in order to coerce the government to give in to an unlawful demand" is not applicable, as there was no coercion at all on the government on the part of the perpetrators. In fact, the suspects appeared to be local government leaders, policemen and their armed civilian militias.

The latest moves from government prosecutors appear to be not to prosecute the perpetrators under the anti-terror law, as public pronouncements point to a 36-hour deadline in the filing of case in court in contrast to the 72-hour deadline under Section 18 of the anti-terror law.

Assuming that prosecutors will invoke the anti-terror law, the same will be a costly legal mistake as the move will only help the perpetrators resulting in the latter's possible, if not, inevitable acquittal.

In addition, with the clamor of speedy resolution of the dastardly crime, the invocation of the anti-terror law may be further delayed with the advent of the May 2010 elections as the accused may request for suspension of the proceedings or trial as the provisions of the said anti-terror law are deemed suspended one month before and two (2) month after the holding of any election.

Can Jingoy Substitute For Erap?

Case of Political Substitution

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With the start of filing of certificates of candidacies for the 2010 presidential elections, a question arises whether Senator Jingoy Estrada can substitute for his father, the former President Erap Estrada, in the event of the latter's disqualification, especially in the light of the Constitutional provision prohibiting elected Presidents from seeking reelection.

Stated in political terms, will it be wise to create an initial bandwagon for Erap by letting him file his certificate of candidacy so that Jingoy can ride eventually on the possible 'ground swell' of votes as a substitute candidate in the event of Erap's disqualification? This scenario is a possibility as the younger Estrada has declared his readiness to fill in the shoes of his father in the event that the COMELEC and the Supreme Court rule that latter is no longer eligible to seek the presidency.

The answer to the legal issue was settled by the Supreme Court ten (10) years ago, in G.R. No. 136351 promulgated in July 28, 1999, in the case of JOEL G. MIRANDA vs. ANTONIO M. ABAYA and the COMMISSION ON ELECTIONS.

In the above-named case, Jose “Pempe” Miranda, then incumbent mayor of Santiago City, Isabela, filed his certificate of candidacy for the same mayoralty post for the synchronized May 11, 1998 elections. Antonio M. Abaya filed a Petition to Deny Due Course to and/or Cancel Certificate of Candidacy of Miranda, which the COMELEC granted.

After the deadline for filing a certificate of candidacy, Joel G. Miranda filed his certificate of candidacy for the mayoralty post, supposedly as a substitute for his father, Jose “Pempe” Miranda.
During the May 11, 1998 elections, Joel Miranda won by only 1,666 votes against Antonio Abaya. Abaya filed a Petition to Declare Null and Void Substitution of Joel Miranda as he sought nullification of Miranda’s certificate of candidacy for being void ab initio because the certificate of candidacy of Jose “Pempe” Miranda, whom petitioner was supposed to substitute, had already been canceled and denied due course. The COMELEC thereafter nullified the substitution of Joel Miranda of his father as mayoralty candidate.
In the Supreme Court, Miranda insists that the substitution is allowed under Section 77 of the Omnibus Election Code which provides:
SEC. 77. Candidates in case of death, disqualification or withdrawal. — If after the last day for the filing of certificates of candidacy, an official candidate of a registered or accredited political party dies, withdraws or is disqualified for any cause, only a person belonging to, and certified by, the same political party may file a certificate of candidacy to replace the candidate who died, withdrew or was disqualified. The substitute candidate nominated by the political party concerned may file his certificate of candidacy for the office affected in accordance with the preceding sections not later than mid-day of the day of the election. If the death, withdrawal or disqualification should occur between the day before the election and mid-day of election day, said certificate may be filed with any board of election inspectors in the political subdivision where he is a candidate, or, in the case of candidates to be voted for by the entire electorate of the country, with the Commission.

Petitioner capitalizes on the fact that the Comelec ruled to disqualify Jose “Pempe” Miranda in the May 5, 1998 resolution and he heavily relies upon the above-quoted provision allowing substitution of a candidate who has been disqualified for any cause.

While there is no dispute as to whether or not a nominee of a registered or accredited political party may substitute for a candidate of the same party who had been disqualified for any cause, this does not include those cases where the certificate of candidacy of the person to be substituted had been denied due course and cancelled under Section 78 of the Code.

Expressio unius est exclusio alterius. While the law enumerated the occasions where a candidate may be validly substituted, there is no mention of the case where a candidate is excluded not only by disqualification but also by denial and cancellation of his certificate of candidacy. Under the foregoing rule, there can be no valid substitution for the latter case, much in the same way that a nuisance candidate whose certificate of candidacy is denied due course and/or cancelled may not be substituted. If the intent of the lawmakers were otherwise, they could have so easily and conveniently included those persons whose certificates of candidacy have been denied due course and/or cancelled under the provisions of Section 78 of the Code.
More importantly, under the express provisions of Section 77 of the Code, not just any person, but only “an official candidate of a registered or accredited political party” may be substituted. In Bautista vs. Comelec (G.R. No. 133840, November 13, 1998) this Court explicitly ruled that “a cancelled certificate does not give rise to a valid candidacy” (p.13).
A person without a valid certificate of candidacy cannot be considered a candidate in much the same way as any person who has not filed any certificate of candidacy at all can not, by any stretch of the imagination, be a candidate at all.
The law clearly provides:
SEC. 73. Certificate of candidacy — No person shall be eligible for any elective public office unless he files a sworn certificate of candidacy within the period fixed herein.
By its express language, the foregoing provision of law is absolutely mandatory. It is but logical to say that any person who attempts to run for an elective office but does not file a certificate of candidacy, is not a candidate at all. No amount of votes would catapult him into office. In Gador vs. Comelec (95 SCRA 431 [1980]), the Court held that a certificate of candidacy filed beyond the period fixed by law is void, and the person who filed it is not, in law, a candidate. Much in the same manner as a person who filed no certificate of candidacy at all and a person who filed it out of time, a person whose certificate of candidacy is cancelled or denied due course is no candidate at all. No amount of votes should entitle him to the elective office aspired for.
The evident purposes of the law in requiring the filing of certificates of candidacy and in fixing the time limit therefor are: (a) to enable the voters to know, at least sixty days before the regular election, the candidates among whom they are to make the choice, and (b) to avoid confusion and inconvenience in the tabulation of the votes cast. For if the law did not confine the choice or election by the voters to the duly registered candidates, there might be as many persons voted for as there are voters, and votes might be cast even for unknown or fictitious persons as a mark to identify the votes in favor of a candidate for another office in the same election. (Monsale vs. Nico, 83 Phil. 758 [1949])
It is at once evident that the importance of a valid certificate of candidacy rests at the very core of the electoral process. It cannot be taken lightly, lest there be anarchy and chaos. Verily, this explains why the law provides for grounds for the cancellation and denial of due course to certificates of candidacy.
After having considered the importance of a certificate of candidacy, it can be readily understood why in Bautista we ruled that a person with a cancelled certificate is no candidate at all. Applying this principle to the case at bar and considering that Section 77 of the Code is clear and unequivocal that only an official candidate of a registered or accredited party may be substituted, there demonstrably cannot be any possible substitution of a person whose certificate of candidacy has been cancelled and denied due course.
Also, under ejusdem generis rule, where a general word or phrase (such as “disqualification for any cause” in this case) follows an enumeration of particular and specific words of the same class (such as the words “dies” and “withdraws” in the instant case) or where the latter follow the former, the general word or phrase is to be construed to include, or to be restricted to persons, things or cases akin to, resembling, or of the same kind or class as those specifically mentioned (see: Vera vs. Cuevas, 90 SCRA 379 [1979]). A deceased candidate is required to have duly filed a valid certificate of candidacy, otherwise his political party would not be allowed to field a substitute candidate in his stead under Section 77 of the Code. In the case of withdrawal of candidacy, the withdrawing candidate is required to have duly filed a valid certificate of candidacy in order to allow his political party to field a substitute candidate in his stead. Most reasonable it is then, under the foregoing rule, to hold that a valid certificate of candidacy is likewise an indispensable requisite in the case of a substitution of a disqualified candidate under the provisions of Section 77 of the Code, just as it is in the two previous instances.
Furthermore, interpretatio talis in ambiguis semper freinda est, ut eviatur inconveniens et absurdum, meaning, where there is ambiguity, such interpretation as will avoid inconvenience and absurdity shall in all cases be adopted. To include those disqualified candidates whose certificate of candidacy had likewise been denied due course and/or cancelled among those who may be substituted under Section 77 of the Omnibus Election Code, leads to the absurdity where a substitute is allowed to take the place of somebody who had not been a candidate in the first place—a person who did not have a valid certificate of candidacy prior to substitution. Nemo dat quod non habet. What right can a non-candidate pass on to his substitute? Clearly, there is none because no one can give what he does not have.
Even on the most basic and fundamental principles, it is readily understood that the concept of a substitute presupposes the existence of the person to be substituted, for how can a person take the place of somebody who does not exist or who never was. The Court has no other choice but to rule that in all the instances enumerated in Section 77 of the Omnibus Election code, the existence of a valid certificate of candidacy seasonably filed is a requisite sine qua non.
All told, a disqualified candidate may only be substituted if he had a valid certificate of candidacy in the first place because, if the disqualified candidate did not have a valid and seasonably filed certificate of candidacy, he is and was not a candidate at all. If a person was not a candidate, he cannot be substituted under Section 77 of the Code. Besides, if we were to allow the so-called “substitute” to file a “new” and “original” certificate of candidacy beyond the period for the filing thereof, it would be a crystalline case of unequal protection of the law, an act abhorred by our Constitution.
From the foregoing discussion it is evident that the controversy at hand is not a simple case of hair-splitting. A candidate may not be qualified to run for election but may have filed a valid certificate of candidacy. Another candidate may likewise be not qualified and at the same time not have a valid certificate of candidacy, for which reason, said certificate of candidacy is also canceled and/or denied due course. Or, a third candidate may be qualified but, his certificate of candidacy may be denied due course and/or canceled. This is possible because the grounds for disqualification (see: Omnibus Election Code, Section 68 — Disqualifications) are totally separate and distinct from the grounds for cancellation and/or denying due course to a certificate of candidacy (Ibid., Section 69— nuisance candidates; and Section 78 — material misrepresentation). Only the candidate who had a valid certificate of candidacy may be substituted.
The question to settle next is whether or not aside from Joel “Pempe” Miranda being disqualified by the Comelec in its May 5, 1998 resolution, his certificate of candidacy had likewise been denied due course and canceled.
The Supreme Court ruled that it was.
Summary and Comments
In short, the rule on substitution under the Omnibus Election Code allows for replacement in case the official candidate “dies, withdraws or disqualified for any cause.” It does not allow substitution when the certificate of candidacy is void from the start, as what happened in the above-cited Miranda case, where the Supreme Court stressed that substitution does not apply in cases where the CoC of the candidate to be replaced has been denied due course and canceled under Section 78 of the Omnibus Election Code.
Section 78 states that, in case a person who has filed his certificate of candidacy has committed false misrepresentation, a petition to cancel the certificate of candidacy may be filed against the candidate. A disqualified candidate can only be substituted if he had a valid certificate of candidacy, and if he did not have a valid certificate of candidacy, he is and was not a candidate at all.
According to noted election lawyer Romulo Macalintal, a candidate whose CoC has been cancelled “due to material misrepresentation,” was not a candidate to begin with and therefore cannot be substituted. In Estrada’s case, the CoC can be the subject of a cancellation for misrepresentation since he is not eligible to run for president in the first place. Hence, if it was as if no CoC was filed, so there is nobody to be substituted. If Estrada files his CoC for president, the Comelec, as part of its ministerial duty, has to accept his application. However, a petition to deny due course to his CoC should be in order, considering the constitutional issues surrounding his case.
Unfortunately, it may take time before the Supreme Court may finally rule on the validity of the substitution of Jingoy, and in the meantime, the name of Erap may still appear in the list of candidates for President to be voted. It is also possible that the Supreme Court may have a change of heart on the issue, as the above-cited case of Miranda had four (4) dissenting Justices which included the incumbent Chief Justice Reynato Puno.

Is leaking court decision ground for administrative sanction?

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Leaking Of Court Decisions

Is leaking court decision ground for administrative sanction? The answer to this query involves the fate of retired Supreme Court Justice Ruben Reyes.

In the case of Justice Reyes, the Supreme Court found him leaking an un-promulgated election decision on an election case involving the citizenship of Negros Oriental Rep. Jocelyn Limkaichong. As Justice Reyes already retired, he was suspended indefinitely from law practice.

Eight of the 15 justices voted to impose the penalty on Reyes after finding him guilty of gross misconduct for violating his oath as member of the Bar as well as the Code of Professional Responsibility. It was the first time the SC has penalized a retired justice with indefinite suspension, which is considered second only to disbarment in severity.

In addition to lifetime disqualification, the Supreme Court also impose a fine of P500,000.00 on Justice Reyes. The cash penalty was deducted from the retirement benefits to be received by Reyes, which reportedly amount to some P4.45 million.

The Supreme Court pointed out the “evident undue interest of Justice Reyes to circulate a draft ponencia (decision) of the case soonest even before the memoranda of all the parties fell due… It was Justice Reyes himself who leaked a photocopy (of the decision),” the decision stated.

The administrative sanction even on a Justice of the the Supreme Court is seen by members of the Philippine Bar as a very positive development in cleansing the judiciary of misfits and scalawags.

Is it required that an agreement be notarized involving real property in order that it can be enforced?

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Notarization of agreements involving real property

Is it required that an agreement be notarized involving real property in order that it can be enforced? Stated otherwise, can you enforced a private agreement involving a piece of land?

The above issues were settled by the Supreme Court in its latest Decision (as of this writing) in ESTATE OF PEDRO C. GONZALES and HEIRS OF PEDRO C. GONZALES vs. THE HEIRS OF MARCOS PEREZ, G.R. No. 169681 promulgated last November 5, 2009.

In the above-cited case, a deed of sale was executed covering a real property but the same was not notarized. When the parties to the said deed of sale both died, the heirs representing the vendee sought for the reconveyance of the sold property but the heirs representing the vendor refused.

The trial court ruled that since the deed of sale was not notarized, the same is considered void and of no effect. The said ruling was reversed by the Court of Appeals which ruled that a sale of real property, though not consigned in a public instrument, is nevertheless valid and binding among the parties and that the form required in Article 1358 of the Civil Code is not essential to the validity or enforceability of the transactions but only for convenience.

The issue of whether an agreement which is not notarized covering a real property is valid or not is a common talk especially among real estate practitioners who consider the transaction as null and void, as what the trial court did in this case.

In resolving the issue, the Supreme Court agreed with the Court of Appeals. The SC said that Article 1358 of the Civil Code enumerates the acts and contracts that should be embodied in a public document, to wit:
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403, No. 2 and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains;
(3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person; and
(4) The cession of actions or rights proceeding from an act appearing in a public document.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by Articles 1403, No. 2 and 1405.

On the other hand, the SC said that pertinent portions of Article 1403 of the Civil Code provide as follows:
Art. 1403. The following contracts are unenforceable, unless they are ratified:
x x x x
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
x x x x
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; x x x[27]
Under Article 1403(2), the sale of real property should be in writing and subscribed by the party charged for it to be enforceable. In the present case, the deed of sale is in writing and subscribed by the vendor and his wife; hence, it is enforceable under the Statute of Frauds.

However, not having been subscribed and sworn to before a notary public, the deed of sale is not a public document and, therefore, does not comply with Article 1358 of the Civil Code.
Nonetheless, it is a settled rule that the failure to observe the proper form prescribed by Article 1358 does not render the acts or contracts enumerated therein invalid. It has been uniformly held that the form required under the said Article is not essential to the validity or enforceability of the transaction, but merely for convenience.

The SC said that a sale of real property, though not consigned in a public instrument or formal writing, is, nevertheless, valid and binding among the parties, for the time-honored rule is that even a verbal contract of sale of real estate produces legal effects between the parties. Stated differently, although a conveyance of land is not made in a public document, it does not affect the validity of such conveyance. Article 1358 does not require the accomplishment of the acts or contracts in a public instrument in order to validate the act or contract but only to insure its efficacy.