Bicol University

COLLEGE OF LAW
Legazpi City

STATUTORY CONSTRUCTION

ASSIGNMENT NO. 1

Case Digests

Cecilleville Realty & Service Corp. v. CA

G.R. No. 120363, Sept. 5, 1997

FACTS: Petitioner Cecilleville Realty and Service Corporation is the owner of a

parcel of land, which private respondent Herminigildo Pascual occupies. Respondent
refused to vacate despite repeated demands and insisted that he is entitled to
occupy the land since he is helping his mother, Ana Pascual, petitioner’s tenant, to
cultivate the land in question.

Petitioner instituted an ejectment suit which was granted by the MTC. Upon petition
to the RTC, it set aside the decision of the lower court and remanded the case to
the DARAB for further adjudication. Petitioner subsequently appealed to the Court
of Appeals which dismissed the same. It ruled that the defendant Pascual, although
not the tenant himself, is afforded protection provided by law as his mother is
already old and inform and is allowed to avail of the labor of her immediate
household. Furthermore, his having a house of his own on the property is merely
incidental to the tenancy. Hence, this instant petition.

ISSUE: Whether or not Section 22(3) of RA 1199, as amended by RA 2263 grants

an immediate farm household the right to construct or maintain a house within the
land of the landowner?
RULING: No. The law is unambiguous and clear. It must be applied according to
its plain and obvious meaning according to its express items. Verba legis non est
recedendum, or from the words of a statute there should be no departure.

Sec. 22(3). The tenant shall have the right to demand for a home lot suitable for
dwelling with an area of not more than 3 per cent of the area of his landholding
provided that it does not exceed one thousand square meters and that it shall be
located at a convenient and suitable place within the land of the landholder to be
designated by the latter where the tenant shall construct his dwelling and may raise
vegetables, poultry, pigs, and other animals and engage in minor industries, the
products of which shall accrue to the tenant exclusively. The tenant’s dwelling shall not
be removed from the lot already assigned to him by the landholder, except as provided
in section twenty-six unless there is a severance of the tenancy relationship between
them as provided under section nine, or unless the tenant is ejected for a cause, and
only after the expiration of forty-five days following such severance of relationship or
dismissal for cause.

As clearly provided in Section 22(3), only a tenant is granted the right to have a
home lot and the right to construct or maintain a house thereon. Respondent
Herminigildo Pascual admits that he is a mere member of Ana Pascual’s immediate
farm household. Therefore, we find private respondent not entitled to a home lot.
To rule otherwise is to make a mockery of the purpose of the tenancy relations
between a bona-fide tenant and the landholder.

The petition is GRANTED. The decision of the MTC directing private respondent
Herminigildo Pascual to vacate the portion of the landholding he occupies and to
pay the petitioner’s attorney’s fees in the amount of P10,000.00 and another sum
of P500.00 from the filing of the complaint is hereby REINSTATED.
 Galvez and Guy v. CA
G.R. No. 187919, April 25, 2012

FACTS: In 1999, Radio Marine Network (Smartnet) Inc. (RMSI), claiming to do

business under the name Smartnet Philippines and/or Smartnet Philippines, Inc. (SPI),
applied for an Omnibus Credit Line with Asia United Bank (AUB). It presented its
Articles of Incorporation with its capitalization of P400M and its congressional telecom
franchise to extend the Omnibus Credit.

AUB granted it a P250M Omnibus Credit line under Smartnet Philippines, RMSI’s
division. The credit line was subsequently increased to P452M after a third-party real
estate mortgage by Goodland Company, Inc. in favor of Smartnet Philippines was
offered to the bank. RMSI then submitted proof of authority to open the Omnibus
Credit Line and peso and dollar accounts in the name of Smartnet Philippines, Inc.
Prior to this major transaction, however, and unknown to AUB, while RMSI was doing
business under Smartnet Philippines, and that there was a division under the same
name, petitioners formed a subsidiary corporation, the SPI with a capital of
P62,500.00.

In the belief that SPI is the same as Smartnet Philippines, AUB granted SPI among
others, Irrevocable Letter of Credit No. 990361 in the total sum of $29,300.00.
petitioners executed Promissory Note No. 010445 in behalf of SPI in favor of AUB.
This was renewed twice, first under SPI, and last in the name of Smartnet Philippines,
bolstering AUB’s belief that RMSI’s directors and officers consistently treated this letter
of credit as obligations of RMSI.

AUB sent letters demanding payments when RMSI’s obligations remained unpaid, to
which the latter denied liability contending the transaction was incurred solely by SPI,
a corporation which has a separate and distinct personality from RMSI. Aggrieved,
AUB filed a case of syndicated estafa against petitioners.

The prosecutor found probable cause to indict petitioners for estafa, but dismissed the
charge of syndicated estafa under PD No. 1689. The DOJ subsequently reversed the
prosecutor’s resolution and ordered the dismissal of the estafa charges. Appealing to
the Court of Appeals, the same partially granted AUB’s petition and reinstated the
resolution of the prosecutor.

Aggrieved, petitioners filed the present petitions assailing the CA’s decision which
reinstated the resolution of the prosecutor. The AUB also filed its own petition which is
now consolidated with the former, assailing the CA’s decision for dismissing the charge
of syndicated estafa.

ISSUE: Whether or not there is probable cause to indict petitioners for syndicated
estafa in violation of PD No. 1689?

RULING: Yes. Anent the issue as to whether or not Gilbert Guy, et al. should be
charged for syndicated estafa in relation to Section 1 of PD No. 1689, which states
that:

SEC 1. Any person or persons who shall commit estafa or other forms of swindling as
defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished
by life imprisonment to death if the swindling (estafa) is committed by a syndicate
consisting of five or more persons formed with the intention of carrying out the unlawful or
illegal act, transaction, enterprise or scheme, and the defraudation results in the
misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperatives, “samahang nayon(s)”, or farmers associations, or of funds solicited by
corporations/associations from the general public.

The Court holds that the afore-quoted law applies to the case at bar. Under Section 1
of PD No. 1689, the elements of syndicated estafa are:

a. Estafa or other forms of swindling as defined in Article 315 and 316 of the
Revised Penal Code is committed
b. The estafa or swindling is committed by a syndicate of five or more persons
c. Defraudation results in the misappropriation of moneys contributed by
stockholders, or members of rural banks, cooperatives, “samahang nayon(s),” or
 farmers associations or of funds solicited by corporations/associations from the
general public.

Five accused, namely Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L.
Guy, and Eugenio H. Galvez, Jr. were all involved in the formation of the entities used
to defraud AUB. They used these corporations to carry out the illegal and unlawful ct
of misrepresenting SPI as a mere division of RMSI and, despite knowing SPI’s
separate juridical personality, applied for a letter of credit secured by SPI’s promissory
note, knowing fully that SPI has no credit line with AUB. The circumstances of the
creation of these entities and their dealings with the bank reveal this criminal intent to
defraud and to deceive AUB. The fact that the defraudation of AUB resulted to
misappropriation of the money which it solicited from the general public in the form of
deposts was substantially established.

Gilbert Guy et al. want this Court to believe that AUB, being a commercial bank, is
beyond the coverage of PD No. 1689. We hold, however, that a bank is a corporation
whose funds come from the general public. PD No. 1689 does not distinguish the
nature of the corporation. It requires, rather, that the funds of such corporation should
come from the general public. This is bolstered by the third “whereas clause” of the
quotes law which states that the same also applies to other “corporations/associations
operating on funds solicited from the general public.” This is precisely the very same
scheme that PD No. 1689 contemplates that this species of estaba “be checked or at
least be minimized by imposing capital punishment involving funds solicited by
corporations/associations from the general public” because “this erodes the confidence
of the public in banking and cooperative system, contravenes public interest and
constitutes economic sabotage that threatenes the stability of the nation.”
 General Milling Corp. v. Torres
G.R. No. 93666, April 12, 1991

FACTS: An alien employment permit was issued in favor of petitioner Earl Timothy
Cone as sports consultant and assistant coach for petitioner General Milling
Corporation (GMC). The following year, petitioner Cone’s application for a change of
admission status from temporary visitor to pre-arranged employee was approved.
Petitioner GMC requested renewal of petitioner Cone’s alien permit and that GMC be
allowed to employ Cone as full-fledged coach which were both granted.

Private respondent Basketball Coaches Association of the Philippines (BCAP) appealed

issuance of the said alien employment permit to respondent Secretary of Labor, who
issued a decision ordering cancellation of petitioner Cone’s employment permit on the
ground that there was no showing that there is no person in the Philippines who is
competent, able, and willing to perform the services required nor that the hiring of
petitioner Cone would redound to the national interest. Petitioner GMC

ISSUE: Whether or not the Secretary of Labor gravely abused his discretion when he
revoked petitioner Cone’s alien employment permit?

RULING: No. The Court considers that petitioners have failed to show any grave
abuse of discretion or any act without or in excess of jurisdiction on the part of
respondent Secretary of Labor. Under Article 40 of the Labor Code, an employer
seeking employment of an alien must first obtain an employment permit from the
Department of Labor.

Art. 40. Employment per unit of non-resident aliens. – Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an employment permit from
the Department of Labor.

The employment permit may be issued to a non-resident alient or to the applicant employer
after a determination of the non-availability of a person in the Philippines who is competent,
 able, and willing at the time of application to perform the services for which the alien is
desired.”

The permissive language employed in the Labor Code indicates that the authority
granted involves the exercise of discretion on the part of the issuing authority.

The Court resolved to DISMISS the Petition for certiorari for lack of merit.
 Paras v. COMELEC
G.R. No. 123169, Nov. 4, 1996

FACTS: Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula,

Cabanatuan City who won during the last regular barangay election in 1994. A
petition for recall as Punong Barangay was filed against him. to prevent the holding
of the recall election, petitioner filed a petition for injunction before the RTC of
Cabantuan City. After conducting a summary hearing, the RTC lifted the restraining
order and dismissed the petition. For the third time, COMELEC re-scheduled the
recall, hence, the instant petition for certiorary with urgent prayer for injunction.

Petitioner argues, citing Section 74(b) of RA 7160, or the Local Government Code,
insisting that the scheduled recall on January 13, 1996 is barred as the
Sangguniang Kabataan (SK) election was set on the first Monday of May, 1996
and every three years thereafter.

ISSUE: Whether or not the phrase “regular local election” refers to the SK
elections?

RULING: No. The subject provision of the Local Government Code provides:

Sec. 74. Limitations on Recall. – (a) Any elective official may be the subject of a recall
election only once during his term of office for loss of confidence.

(b) No recall shall take place within one (1) year from the date of the official’s
assumption to office or one (1) year immediately preceding a regular local election.

It is a rule in statutory construction that every part of the statute must be interpreted
with reference to the context. The evident intent of Section 74 is to subject an elective
local official to recall election once during his term of office. Paragraph (b) construed
together with paragraph (a) merely designates the period when such elective local
official may be subject of a recall election, that is, during the second year of his term
of office. And
Thus, subscribing to petitioner’s interpretation of the phrase regular local election to
include the SK election will unduly circumscribe the novel provision of the Local
Government Code on recall. And if the SK election were to be deemed as
abovementioned, then no recall election can be conducted rendering inutile the recall
provision.

In the interpretation of a statute, the Court should start with the assumption that the
legislature intended to enact an effective law, and the legislature is not presumed to
have done a vain thing in the enactment of a statute.

We admonish against a too-literal reading of the law as this is apt to constrict rather
than fulfill its purpose and defeat the intention of its authors. That intention is usually
found not in “the letter that killet but in the spirit that vivifieth.”

The petition is hereby DISMISSED for having become moot and academic.