survival kit sec 10

8/16/2019 Survival Kit Sec 10

1/13

Abella v. NLRC

FACTS:PETITIONER Abella leased a farmland from Ramona for a period of 10 years

and renewable for another 10 years at the option of the former. Abella hired the

private respondents Quitco and Dionele. Abella renewed the lease for another tenyears. At the expiration of the lease, she dismissed both private respondents and

turned over the hacienda to the owners. Private respondents filed a complaint against

petitioner. for overtime pay, reinstatement, and illegal dismissal. The Labor Arbiter

ruled that the dismissal was warranted by the cessation of business, but the

respondents are entitled to separation pay, invoking Art. 284 of the Labor Code, as

amended.

ISSUEWhether or not private respondents are entitled to separation pay.

RULINGThe Court upheld the ruling of the Labor Arbiter that Article 284 is the

applicable law in this case. Art 284, as amended refers to employment benefits to

farm hands who were not parties to petitioner's lease contract with the owner of

Hacienda Danao-Ramona. That contract cannot have the effect of annulling

subsequent legislation designed to protect the interest of the working class.It is well-

settled that in the implementation and interpretation of the provisions of the Labor

Code and its implementing regulations, the workingman's welfare should be the

primordial and paramount consideration. It is the kind of interpretation which gives

meaning and substance to the liberal and compassionate spirit of the law as provided

for in Article 4 of the New Labor Code which states that "all doubts in the

implementation and interpretation of the provisions of this Code including its

implementing rules and regulations shall be resolved in favor of labor." The policy is to

extend the applicability of the decree to a greater number of employees who can avail

of the benefits under the law, which is in consonance with the avowed policy of the

State to give maximum aid and protection to labor.

Art. 284. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to

the installation of labor-saving devices, redundancy, retrenchment toprevent losses or the closing or cessation of operation of the establismentor undertaking unless the closing is for the purpose of circumventing theprovisions of this title, by serving a ritten notice on the orkers and the!inistry of "abor and #mployment at least one $%& month before theintended date thereof. 'n case of termination due to the installation of labor-saving devices or redundancy, the orker a(ected thereby shall beentitled to a separation pay e)uivalent to at least his one $%& month pay orto at least one $%& month pay for every year of service, hichever ishigher. 'n case of retrenchment to prevent losses and in cases of closure orcessation of operations of establishment or undertaking not due to serious


2/13

business losses or *nancial reverses, the separation pay shall bee)uivalent to one $%& month pay or at least one-half $%+2& month pay forevery year of service hichever is higher. A fraction of at least si $&months shall be considered one $%& hole year.

etitioner then contends that the afore)uoted provision violates the constitutional guaranteeagainst impairment of obligations and contracts, because hen she leased /acienda 0anao-

1amona on une 23, %5, neither she nor the lessor contemplated the creation of the obligation topay separation pay to orkers at the end of the lease.6uch contention is untenable. This issue has been laid to rest in the case of Anucension v. 7ational "abor nion $85 691A :8-:;%33asa vs.?ederacion @brera de la 'ndustria Taba)uera y @tros Trabaadores de ?ilipinas;?@'TA?< ;"-23%%:


3/13

to labor. $6armiento v. #mployees 9ompensation 9ommission, %44 691A 422 ;%8< citing 9ristobalv. #mployees 9ompensation 9ommission, %5: 691A :2B Acosta v. #mployees 9ompensation9ommission, %5 691A 25&.1#!'6#6 9@76'0#1#0, the instant petition is hereby 0'6!'66#0

resley v. >AGAENEDINA PE!"E#$ petitioner$vs.%E"&AI 'I""A(E A!!)*IATI)N$ IN*.$ and T+E +)N. *),T )- APPEA"!$respondents.Aleandro dela osa or petitioner.

/. 'icente (. !ison or private respondent.

GUTI!!", #!., #.$

-A*T!0

A complaint for speci*c performance and damages ith preliminary inunction as *led byplainti(-appellee, >el-Air Gillage Association, 'nc. $>AGA for short& against

Teo*loAlmendras and 1ollo Almendras $no both deceased and substituted by defendant-appellant #nedina resley& for violation of the 0eed 1estrictions of >el-Air 6ubdivision thatthe subect house and lot shall be used only for residential and not for commercialpurposes and for non-payment of association dues to plainti( >AGA amounting to:,85:.HH.resley, as lessee of the property, is the oner and operator of F/ot an de 6al 6toreFlocated in the same address. At the time the Almendrases bought their property in)uestion from !akati 0evelopment 9orporation, the 0eed 1estrictions $#h. I9I& asalready annotated in their title $#h. I>I& providing $among others& Fthat the lot must beused only for residential purposeF $#h. I>-%I and I>-2I&.Chen >AGA came to kno of the eistence of the Fan de salF store, it sent a letter to thedefendants asking them to desist from operating the store $#h. I0I&.nder the eisting 0eed 1estrictions aforesaid, the entire >el-Air 6ubdivision is classi*ed

as a purely residential area, particularly upiter 1oad hich is oned by and registered inthe name of >AGA. 0uring the pendency of the case ith this 9ourt, petitioner #nedina ?o resleydied on anuary 4, %%. 6he as substituted by her to daughters as heirs, namely @liviaG. iJJaro and 9onsuelo G. "acson. The issues raised in the instant petition have alreadybeen dealt ith in the consolidated cases decided by this 9ourt promulgated on0ecember 22, %88 entitled 6angalang 0octrine.

I!!,E!0


4/13

K 0oes the 6angalang 0octrine can be consider in the case at barLK 0oes the 0eed of 1estrictions entirely rongL

+E"D0

Ce have carefully eamined the pleadings but have found no reason to

reconsider the 6angalang doctrine $ Inon-impairmentI guaranty of the9onstitution, hich, as e have declared, is secondary to themorecompelling interests of general elfare.&. 'n assailing the 9ourtFs decision, the private respondent has come out ith mereassertions and allegations. 't failed to present any proofs or convincing arguments tosubstantiate its claim that upiter 6treet is still classi*ed as a residential Jone. $6ee?ilinvest v. 9ourt of Appeals, %82 691A 4 ;%5ut they are, like all contracts, subect to the overriding demands,needs, and interests of the greater number as the 6tate maydetermine in the legitimate eercise of police poer. @ur urisdiction guarantees sanctity of contract and is said to be theFla beteen the contracting parties,F $9ivil 9ode, supra, art.%%H& but hile it is so, it cannot contravene Fla, morals, goodcustoms, public order, or public policy.F $supra, art. %:5&. Aboveall, it cannot be raised as a deterrent to police poer, designedprecisely to promote health, safety, peace, and enhance thecommon good, at the epense of contractual rights, henevernecessary.


5/13

Miners assoc v. factoran

MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner,

vs.HON. FULGENCIO S. FACTORAN, JR., Secretar of Environ!ent an" Nat#ra$ Reso#rces, an" JOEL %. MU&CO,

%irector of Mines an" Geosciences '#rea#, respondentsG.R. No. ()**+ Jan#ar -, (( ROMERO, J.:

Facts:

Former President Cory Aquino, exercising legislative power, issued EO2 prescri!ing t"e interim procedures in t"e

processing and approval o# exploration, development and utili$ation o# minerals. %o implement t"e act, &ecretary o# 'E() promulgated AO (o. *+ and 2. On 2* -uly + t"e t"en President Aquino issued EO2+ aut"ori$ing t"e 'E()

&EC)E%A)/ to negotiate and conclude 0oint venture, co1production, production s"aring, development and t"ose agreementsinvolving tec"nical or #inancial assistance !y #oreign owned corporations #or large scale E'.

Pursuant to &ec 3 o# EO 2+, t"e 'E() issued AO (o.*+ w"ic" provides t"at all existing mining leases or agreements w"ic"

were granted AF%E) t"e a##ectivity o# t"e + Constitution, except small scale mining leases and t"ose pertaining to sandand gravel and quarry resources covering an area o# 24 "ectares or less, s"all !e converted into production s"aring agreement

wit"in one year #rom t"e e##ectivity o# t"e guidelines.

On 24 (ovem!er 4, &ec o# 'E() issued EO (o. 2 laying down t"e Procedural 5uidelines on t"e award o# mineralProduction s"aring agreement. %"is order provides t"e person or entities required to su!mit a 6E%%E) OF 7(%E(% and

87(E)A6 P)O'C%7O( &9A)7(5 A5)EE8E(% wit"in 2 years #rom t"e e##ectivity o# AO (o.*+ or until + -uly .

Failure to do so wit"in t"e prescri!ed period s"all cause t"e a!andonment o# mining, quarry, gravel and sand.%"e 8iners Association 7nc assailed t"e validity o# t"e a!ove1mentioned issuances and alleged t"e #ollowing:

. %"e orders violate t"e non1impairment o# contracts provision under t"e !ill o# rig"ts on t"e ground t"e AO*+ unduly pre1terminates existing mining leases and ot"er mining agreements and automatically converts t"em into production1s"aring

agreements wit"in one year #rom its e##ectivity date.


6/13

On (ovem!er , Continental 8ar!le Corp soug"t to intervene in t"e cases alleging t"at t"e %)O issued !y t"e Court,t"e 'E() )egional O##ice in &an Fernando Pampanga re#used to renew its 8ines %emporary Permit and claimed #urt"er t"at

its rig"ts and interest are pre0udicially a##ected !y AO (o.*+ and 2.Iss#e/

. ;O( %"e orders violate t"e non1impairment o# contracts provision under t"e !ill o# rig"ts on t"e ground t"e AO*+ unduly

pre1terminates existing mining leases and ot"er mining agreements and automatically converts t"em into production1s"aringagreements wit"in one year #rom its e##ectivity date.

He$"/ (o.P' (o. y virtue o# t"is constitutional mandate and its implementing laws, t"e provisions dealing wit" license, concession or leases ceased to operate as t"e governing laws. 7n ot"erwords, in all areas o# administration and management o# mineral lands, t"e provision o# P'


7/13

may thereby be affected< for such matter can not be placed by contract beyond the po)er of the State shallre(ulates and control them. 22

In Ramas v. CAR and Ramos 23 )here the constitutionality of Section -9 of Republic Act No. --++ authori5in( thetenants to char(e from share to leasehold tenancy )as challen(ed on the (round that it impairs the obli(ation ofcontracts, the /ourt ruled that obli(ations of contracts must yield to a proper e%ercise of the police po)er )hensuch po)er is e%ercised to preserve the security of the State and the means adopted are reasonably adapted to

the accomplishment of that end and are, therefore, not arbitrary or oppressive.

2he economic policy on the e%ploration, development and utili5ation of the country=s natural resources under Article 3II, Section $ of the -+#" /onstitution could not be any clearer. As enunciated in Article 3II, Section - ofthe -+#" /onstitution, the e%ploration, development and utili5ation of natural resources under the ne) systemmandated in Section $, is (eared to)ards a more euitable distribution of opportunities, income, and )ealth< asustained increase in the amount of (oods and services produced by the nation for the benefit of the people< andan e%pandin( productivity as the 'ey to raisin( the uality of life for all, especially the underprivile(ed.

2he e%ploration, development and utili5ation of the country=s natural resources are matters vital to the publicinterest and the (eneral )elfare of the people. 2he reco(nition of the importance of the country=s natural resources)as e%pressed as early as the -+#9 /onstitutional /onvention. In connection there)ith, the -+#* >.P. /onstitutionPro6ect observed: ?2he -+#9 /onstitutional /onvention reco(ni5ed the importance of our natural resources notonly for its security and national defense. ur natural resources )hich constitute the e%clusive herita(e of the

@ilipino nation, should be preserved for those under the soverei(n authority of that nation and for their prosperity.2his )ill ensure the country=s survival as a viable and soverei(n republic.?

Accordin(ly, the State, in the e%ercise of its police po)er in this re(ard, may not be precluded by the constitutionalrestriction on non&impairment of contract from alterin(, modifyin( and amendin( the minin( leases or a(reements(ranted under Presidential Decree No. 9*8, as amended, pursuant to E%ecutive rder No. $--. Police Po)er,bein( co&e%tensive )ith the necessities of the case and the demands of public interest< e%tends to all the vitalpublic needs. 2he passa(e of E%ecutive rder No. $"+ )hich superseded E%ecutive rder No. $-- provided le(albasis for the DENR Secretary to carry into effect the mandate of Article 3II, Section $ of the -+#" /onstitution.

Hacienda luisita v. parc

. Facts

In 1958, Tarlac Development Corporation (Tadeco), assisted by the Central Bank o the !hilippines, p"rchased #acienda $"isitaand the Central %&"carera de Tarlac, the s"'ar mill o the hacienda, rom the panish oners o Compa*ia +eneral de Tabacos de ilipinas(Tabacalera)- Tadeco as then oned and controlled by the .ose Co/"an'co r- +ro"p- %lso, the +I e0tended a !h!5-911 million loan inavor o Tadeco to pay the peso price component o the sale, ith the condition that “the lots comprising the Hacienda Luisita be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist warranting suchaction under the provisions of the Land Tenure Act. Tadeco hoever did not comply ith this condition-

n 2ay 3, 1984, the martial la administration iled a s"it beore the 2anila TC a'ainst Tadeco, et al-, or them to s"rrender#acienda $"isita to the then 2inistry o %'rarian eorm (2%) so that the land can be distrib"ted to armers at cost- Tadeco alle'ed that#acienda $"isita is not covered by e0istin' a'rarian reorm le'islations or it does not have tenants- The ar'"ment did not convince the2anila TC, th"s rendered /"d'ment orderin' Tadeco to s"rrender #acienda $"isita to the 2%- Tadeco appealed the case to the C%-

n 2arch 13, 1988, the ice o the olicitor +eneral (+) moved to ithdra the 'overnment6s case a'ainst Tadeco, etal- By esol"tion o 2ay 18, 1988, the C% dismissed the case the 2arcos 'overnment initially instit"ted and on a'ainst Tadeco, et al- Thedismissal action as, hoever, made s"b/ect to the obtention by Tadeco o the !%C6s approval o a stock distrib"tion plan (D!) that m"stinitially be implemented ater s"ch approval shall have been sec"red- n %"'"st 7, 1988, Tadeco or'ani&ed a spino corporation, hereinpetitioner #$I, as vehicle to acilitate stock ac:"isition by the armorkers- or this p"rpose, Tadeco conveyed to #$I the a'ric"lt"ral landportion (;,915-35 hectares) and other armrelated properties o #acienda $"isita in e0chan'e or #$I shares o stock-

n 2ay 9, 1989, some 9< o the then armorkerbeneiciaries (=Bs) complement o #acienda $"isita si'niied in areerend"m their acceptance o the proposed #$I6s tock Distrib"tion ption !lan (D!)- n 2ay 11, 1989, the D% as ormallyentered into by Tadeco, #$I, and the 5,8;8 :"aliied =Bs- This attested to by then D% ecretary !hilip ."ico- The D% embodied the


8/13

basis and mechanics o #$I6s D!, hich as event"ally approved by the !%C ater a ollo"p reerend"m cond"cted by the D% onctober 1;, 1989, in hich 5,113 =Bs, o"t o 5,15 ho participated, opted to receive shares in #$I-

n %"'"st 15, 1995, #$I applied or the conversion o 544 hectares o land o the hacienda rom a'ric"lt"ral to ind"strial "se,p"rs"ant to ec- >5 o % >>53- The D% approved the application on %"'"st 1;, 199>, s"b/ect to payment o three percent (, #$I, in e0chan'e or s"bscription o 17,444,444 shares o stocks o Centennary #oldin's, Inc- (Centennary), ceded

44 hectares o the converted area to the latter- Conse:"ently, #$I6s Transer Certiicate o Title (TCT) ?o- 783914 as canceled and TCT?o- 797491 as iss"ed in the name o Centennary- #$I transerred the remainin' 744 hectares covered by TCT ?o- 783949 to $"isitaealty Corporation ($C) in to separate transactions in 1993 and 1998, both "niormly involvin' 144 hectares or !h! 754 million each-"bse:"ently, Centennary sold the entire 44 hectares or !h!354 million to $"isita Ind"strial !ark Corporation ($I!C), hich "sed it indevelopin' an ind"strial comple0- $ater, $I!C transerred these 7 parcels to the i&al Commercial Bankin' Corporation (CBC) inpayment o $I!C6s !h!;1,>95,37-14 loan obli'ations to CBC- $I!C6s titles ere cancelled and ne ones ere iss"ed to CBC-%part rom the 544 hectares, another 84-51 hectares ere later detached rom #acienda $"isita and ac:"ired by the 'overnment as part othe "bicClarkTarlac @0pressay (CT@A) comple0- Th"s, ;,5-35 hectares remained o the ori'inal ;,915 hectares Tadeco ceded to#$I-

"ch, as the state o thin's hen to separate petitions reached the D% in the latter part o 744- The irst as iled by the"pervisory +ro"p o #$I ("pervisory +ro"p), prayin' or a rene'otiation o the D%, or, in the alternative, its revocation- The secondpetition, prayin' or the revocation and n"lliication o the D% and the distrib"tion o the lands in the hacienda, as iled by Alyansa ngmga !anggagawang "u#id ng Hacienda Luisita (%2B%$%)- The D% then constit"ted a pecial Task orce (T) to attend to iss"esrelatin' to the D! o #$I- %ter investi'ation and eval"ation, the T o"nd that #$I has not complied ith its obli'ations "nder % >>53

despite the implementation o the D!- n December 77, 7445, the !%C iss"ed the assailed esol"tion ?o- 7445741,recallin'revokin' the D plan o Tadeco#$I- It "rther resolved that the s"b/ect lands be orthith placed "nder the comp"lsory covera'eor mandated land ac:"isition scheme o the C%!-

rom the ore'oin' resol"tion, #$I so"'ht reconsideration- Its motion notithstandin', #$I also iled a petition beore the"preme Co"rt in li'ht o hat it considers as the D%6s hasty placin' o #acienda $"isita "nder C%! even beore !%C co"ld r"le oreven read the motion or reconsideration- !%C o"ld event"ally deny #$I6s motion or reconsideration via esol"tion ?o- 744>;41dated 2ay , 744>-

@n another but related issue, the /"' foists on the 9ourt the argument that subecting itslandholdings to compulsory distribution after its approved 60 has been implemented ould impair

the contractual obligations created under the 60@A.

The broad seep of /"'Ns argument ignores certain established legal precepts and must, therefore,be reected.

A la authoriJing interference, hen appropriate, in the contractual relations beteen or amongparties is deemed read into the contract and its implementation cannot successfully be resisted byforce of the non-impairment guarantee. There is, in that instance, no impingement of theimpairment clause, the non-impairment protection being applicable only to las that derogate prioracts or contracts by enlarging, abridging or in any manner changing the intention of the parties.'mpairment, in *ne, obtains if a subse)uent la changes the terms of a contract beteen theparties, imposes ne conditions, dispenses ith those agreed upon or ithdras eisting remediesfor the enforcement of the rights of the parties.%55 7ecessarily, the constitutional proscription ouldnot apply to las already in e(ect at the time of contract eecution, as in the case of 1A H3, inrelation to 0A@ %5, vis-O-vis /"'Ns 60@A. As held in 6errano v. Eallant !aritime 6ervices, 'nc.=

The prohibition ;against impairment of the obligation of contracts< is aligned ith the generalprinciple that las nely enacted have only a prospective operation, and cannot a(ect acts orcontracts already perfectedB hoever, as to las already in eistence, their provisions are read intocontracts and deemed a part thereof. Thus, the non-impairment clause under 6ection %5, Article '';of the 9onstitution< is limited in application to las about to be enacted that ould in any ayderogate from eisting acts or contracts by enlarging, abridging or in any manner changing theintention of the parties thereto.%5% $#mphasis supplied.&

http://www.lawphil.net/judjuris/juri2011/jul2011/gr_171101_2011.html#fnt100http://www.lawphil.net/judjuris/juri2011/jul2011/gr_171101_2011.html#fnt101http://www.lawphil.net/judjuris/juri2011/jul2011/gr_171101_2011.html#fnt101http://www.lawphil.net/judjuris/juri2011/jul2011/gr_171101_2011.html#fnt100


9/13

7eedless to stress, the assailed 1esolution 7o. 255H-:2-5% is not the kind of issuance ithin theambit of 6ec. %5, Art. ''' of the 9onstitution providing that I;n


10/13

--#,8+-,+"*.#! shares sub6ect to the SDP approved by PAR/ substantially fall short of the $+!,--$,-- shares needed by the@7;s to acuire control over BI.

2hus, the /ourt H unanimously this time H directed immediate land distribution to the ualified @7;s. n the finepoints, ho)ever, a(ain the /ourt failed to have one voice.

2he ma6ority maintained its ar(ument that the operative fact doctrine applies in this case since, contrary to thesu((estion of the minority, the doctrine is not limited only to invalid or unconstitutional la)s but also applies to decisions made by

the President or the administrative a(encies that have the force and effect of la)s. Prior to the nullification or recall of saiddecisions, they may have produced acts and conseuences that must be respected. It is on this score that the operative factdoctrine should be applied to acts and conseuences that resulted from the implementation of the PAR/ Resolution approvin(the SDP of BI. 2he ma6ority stressed that the application of the operative fact doctrine by the /ourt in its 4uly !, $-- decision)as in fact favorable to the @7;s because not only )ere they allo)ed to retain the benefits and homelots they received under the stoc' distribution scheme, they )ere also (iven the option to choose for themselves )hether they )ant to remain asstoc'holders of BI or not.

2he ma6ority also maintained that the /ourt is N2 compelled to rule on the constitutionality of Sec. 8- of RA **!",reiteratin( that it )as not aised at te ealiest o**otunit+ and that the resolution thereof is not te lis $ota of the case.Moreover, the issue has been rendered $oot and acade$ic since SD is no lon(er one of the modes of acuisition under RA+". 2he ma6ority clarified that in its 4uly !, $-- decision, it made no rulin( in favor of the constitutionality of Sec. 8- of RA**!", but found nonetheless that there )as no apparent (rave violation of the /onstitution that may 6ustify the resolution of theissue of constitutionality. n the other hand, the ma6ority li'e)ise reiterated its holdin( that those portions of acienda Buisitathat have been validly converted to industrial use and have been acuired by intervenors Ri5al /ommercial ;an'in( /orporation0R/;/1 and Buisita Industrial Par' /orporation 0BIP/1 should be e%cluded from the covera(e of the assailed PAR/ resolutionsince the said intervenors are innocent purchasers for value.

@inally, the ma6ority maintained that for the purpose of determinin( 6ust compensation, the date of ta'in(J is November $-, -+#+ 0the date )hen PAR/ approved BICs SDP1 since this is the time that the @7;s )ere considered to o)n and possessthe a(ricultural lands in acienda Buisita. 2o be precise, these lands became sub6ect of the a(rarian reform covera(e throu(hthe stoc' distribution scheme only upon the approval of the SDP, that is, on November $-, -+#+. Such approval is a'in to anotice of covera(e ordinarily issued under compulsory acuisition. n the contention of the minority 04ustice Sereno1 that thedate of the notice of covera(e after PAR/Cs revocation of the SDPF, that is, 4anuary $, $*, is determinative of the 6ustcompensation that BI is entitled to receive, the ma6ority noted that none of the cases cited to 6ustify this position involved thestoc' distribution scheme. 2hus, said cases do not suarely apply to the instant case. 2he fore(oin( not)ithstandin(, it bearsstressin( that the DAR=s land valuation is only preliminary and is not, by any means, final and conclusive upon the lando)ner.2he lando)ner can file an ori(inal action )ith the R2/ actin( as a special a(rarian court to determine 6ust compensation. 2hecourt has the ri(ht to revie) )ith finality the determination in the e%ercise of )hat is admittedly a 6udicial function.

'e se*aate o*inions in te esolution

7hile the /ourt is unanimous on the matter of the distribution of acienda Buisita to the @7;s, the minority stilldisa(reed )ith several aspects of the resolution of the ma6ority.

2hus, /hief 4ustice /orona reiterated in his ,Dissentin" O*inion-that Section 8- of RA **!" is invalid andunconstitutional. A(rarian reformCs underlyin( principle is the reco(nition of the ri(hts of farmers )ho are landless to o)n, directlyor collectively, the lands they till. >nder the /onstitution, actual land distribution to ualified a(rarian reform beneficiaries ismandatory. Anythin( that promises somethin( other than land, such the stoc' distribution option in Sec. 8-, must be struc' do)nfor bein( unconstitutional.

4ustice ;ersamin, )ho fully concurred in the 4uly -!, $-- decision, )rote a ,Concuin" and Dissentin" O*inion.- eopined that 0-1 the rec'onin( date for purposes of determinin( 6ust compensation should be left to the DAR and Band ;an', and,ultimately, to the Special A(rarian /ourt 0SA/1 to determine< and 0$1 the lando)ner should be compensated for the value of thehomelots (ranted to the farm)or'ers&beneficiaries 0@7;s1 pursuant to the discredited stoc' distribution plan 0SDP1. Accordin( to4ustice ;ersamin, the determination of )hen the ta'in( occurred is an inte(ral part of the determinationof 6ust compensation.2he nature and character of land at the time of its ta'in( are the principal criteria to determine 6ust compensation to thelando)ner< thus, the factual issue of )hen the ta'in( had ta'en place should not be separated from the determination of 6ustcompensation by DAR, Band ;an' and SA/. n the other hand, it appeared that the homelots (ranted to the @7;s under theSDP do not form part of the total area of the a(ricultural lands to be turned over to DAR for distribution to the ualified @7;s for

)hich the lando)ner )ill be 6ustly compensated. Should the lando)ner not be 6ustly compensated for the value of the homelots,the ta'in( )ill be confiscatory and unconstitutional.

4ustice Sereno this time )rote a ,Concuin" and Dissentin" O*inion.- She disa(reed )ith the ma6orityCs choice of November $-, -+#+ as the rec'onin( date of the ta'in(J of the lands ordered to be distributed for the purpose of eventuallydeterminin( 6ust compensation. er thesis: 2he ta'in( of private lands under the a(rarian reform pro(ram parta'es of the natureof an e%propriation proceedin(. @or purposes of ta'in( under the a(rarian reform pro(ram, the o)ners of the land should notreceive less than the mar'et value for their e%propriated properties. 2here is ta'in( of private property by the State ine%propriation proceedin(s )hen the o)ner is ousted from his property and deprived of his beneficial en6oyment thereof. 2hetime of ta'in(J is the moment )hen lando)ners are deprived of the use and benefit of the property. No ta'in( of a(riculturallands can thus be considered either at the time the SDA )as si(ned 0May --, -+#+, as proposed by 4ustice ;rion1 or at thetime PAR/ approved it 0November $-, -+#+, as held by the ma6ority1 since petitioner BI retained full o)nership and use of the

http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_corona.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_bersamin.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_sereno.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_sereno.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_corona.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_bersamin.htmhttp://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101_sereno.htm


11/13

lands thereafter. Despite the chan(e in stoc'holders, petitioner )as never ousted from or deprived of the beneficial en6oyment of the a(ricultural lands in acienda Buisita. /itin( the rulin(s of the /ourt in a(rarian reform cases, 4ustice Sereno noted that thenotice of covera(e commences the process of acuirin( private a(ricultural lands covered by the /ARP. 2he date of the notice of covera(e H 4anuary $, $* H is therefore determinative of the 6ust compensation that petitioner BI is entitled to.

()"DEN1A# 2E*+ANDI!IN( *)P)ATI)N '! E3,ITA%"E P*I %AN4

Nature0 1edemption of !ortgagePonente0 GillaramaDate0 !arch %:, 25%:

D)*TINE0 !ection 56 did not divest uridical persons o the right to redee7their oreclosed properties but onl8 7odi9ed the ti7e or the e:ercise o suchright b8 reducing the one&8ear period originall8 provided in Act No. ;


12/13

@n 7ovember 2, %8H, petitioner Eoldenay !erchandising 9orporation eecuted a 1eal#state !ortgage in favor of #)uitable 9' >ank over three parcels of land as security for ahp2,555,555 loan granted to the petitioner. etitioner eventually failed to settles its loanobligation, leading respondent to etraudicially foreclose the mortgage on 0ecember %:,2555. 6ubse)uently, a 9erti*cate of 6ale as issued to respondent on anuary 2, 255%.

'n a letter dated !arch 3, 255%, petitioner o(ered to redeem the foreclosed properties by

tendering a check. etitioner and respondent met on !arch %2, 255%. /oever, petitioneras told that redemption as no longer possible since the certi*cate of sale had alreadybeen registeredB the title to the foreclosed properties ere consolidated in favor of therespondent on !arch , 255%.

etitioner *led a complaint for speci*c performance and damages contending that the %-year period of redemption under Act :%:H should apply, and not the shorter redemptionperiod under 1A 83% as applying 1A 83% ould result in the impairment of obligationsof contracts and ould violate the e)ual protection clause under the constitution.

The 1T9 dismissed the action of the petitioner ruling that redemption as made belatedlyand that there as no redemption made at all.

The 9ourt of Appeals aQrmed the 1T9.

I!!,E0'hether or not the redemption period should be the ()year period pro!ided under $ct *(*+, and not the shorter period under $ -/( as the parties expressly agreed that foreclosure would be in accordance with $ct *(*+,"IN(0 The shorter period under A >6?< should appl8.

The one-year period of redemption is counted from the date of the registration of thecerti*cate of sale. 'n this case, the parties provided in their real estate mortgage contractthat upon petitionerNs default and the latterNs entire loan obligation becoming due,respondent may immediately foreclose the mortgage udicially in accordance ith the1ules of 9ourt, or etraudicially in accordance ith Act 7o. :%:H, as amended.

>ut under 6ec 43 of 1A 83%, an eception is thus made in the case of uridical personshich are alloed to eercise the right of redemption only Iuntil, but not after, theregistration of the certi*cate of foreclosure saleI and in no case more than three $:&months after foreclosure, hichever comes *rst.

6ection 43 did not divest uridical persons of the right to redeem their foreclosedproperties but only modi*ed the time for the eercise of such right by reducing the one-year period originally provided in Act 7o. :%:H. The ne redemption period commencesfrom the date of foreclosure sale, and epires upon registration of the certi*cate of sale orthree months after foreclosure, hichever is earlier. There is likeise no retroactiveapplication of the ne redemption period because 6ection 43 eempts from its operationthose properties foreclosed prior to its e(ectivity and hose oners shall retain theirredemption rights under Act 7o. :%:H.

Ce agree ith the 9A that the legislature clearly intended to shorten the period of redemption for uridical persons hose properties ere foreclosed and sold in accordanceith the provisions of Act 7o. :%:H.

The di(erence in the treatment of uridical persons and natural persons as based on thenature of the properties foreclosed P hether these are used as residence, for hich themore liberal one-year redemption period is retained, or used for industrial or commercialpurposes, in hich case a shorter term is deemed necessary to reduce the period of uncertainty in the onership of property and enable mortgagee-banks to dispose soonerof these ac)uired assets. 't must be underscored that the Eeneral >anking "a of 2555,crafted in the aftermath of the %3 6outheast Asian *nancial crisis, sought to reform theEeneral >anking Act of %4 by fashioning a legal frameork for maintaining a safe and


13/13

sound banking system. 'n this contet, the amendment introduced by 6ection 43embodied one of such safe and sound practices aimed at ensuring the solvency andli)uidity of our banks. 't cannot therefore be disputed that the said provision amendingthe redemption period in Act :%:H as based on a reasonable classi*cation and germaneto the purpose of the la.

The right of redemption being statutory, it must be eercised in the manner prescribed by

the statute, and ithin the prescribed time limit, to make it e(ective. ?urthermore, as ithother individual rights to contract and to property, it has to give ay to police poereercised for public elfare. The concept of police poer is ell-established in this

urisdiction. 't has been de*ned as the Istate authority to enact legislation that mayinterfere ith personal liberty or property in order to promote the general elfare.I 'tsscope, ever-epanding to meet the eigencies of the times, even to anticipate the futurehere it could be done, provides enough room for an eQcient and Reible response toconditions and circumstances thus assuming the greatest bene*ts.

The freedom to contract is not absoluteB all contracts and all rights are subect to thepolice poer of the 6tate and not only may regulations hich a(ect them be establishedby the 6tate, but all such regulations must be subect to change from time to time, as thegeneral ell-being of the community may re)uire, or as the circumstances may change,or as eperience may demonstrate the necessity. 6ettled is the rule that the non-impairment clause of the 9onstitution must yield to the loftier purposes targeted by theEovernment. The right granted by this provision must submit to the demands andnecessities of the 6tateNs poer of regulation. 6uch authority to regulate businessesetends to the banking industry hich, as this 9ourt has time and again emphasiJed, isundeniably imbued ith public interest.

/aving ruled that the assailed 6ection 43 of 1.A. 7o. 83% is constitutional, e *nd noreversible error committed by the 9A in holding that petitioner can no longer eercise theright of redemption over its foreclosed properties after the certi*cate of sale in favor of respondent had been registered.

survival kit sec 10

Documents