Monday, March 12, 2018

1.48 million visits and 4.65 million page views: Thanks for browsing this blog!

I started this blog on October 30, 2005, and my website tracker Statcounter.com reports that, as of 8 PM today, this blog has now been visited more than 1,481,840 times. Another tracker that I used before, Sitemeter.com, reported that the average time per visit was over three minutes. Google Analytics, meanwhile, reports that visitors have come from more than 81 countries and that this blog has reached more than 4,655,430 page views.

For 2016, Statcounter reported a daily average of 916 page views, 510 first-time visits, and 101 return visits. As of today, however, Statcounter reports the following: average daily page views - 442.8; average daily unique visits - 300.6; average daily first time visits - 251.3; and average daily returning visits - 49.4. The drop in the averages from the 2016 stats can be attributed to Google's implementation of its “Fred” algorithm for its search results. If you want to help more people find this blog and its articles when they search Google, please place links to this blog from your websites, blogs, or social media accounts.

Google Analytics and Statcounter work in different ways and thus report different statistics. With regards the average time of 3 minutes per visit, Jakob Nielsen says that 2 minutes is an eternity on the Internet. (Nielsen is the acknowledged guru of writing for the Internet.) Nielsen also says that the number of return visits is a better indicator of website or blog’s effectiveness, rather than the number of first-time (or absolute unique) visits.

The service I provide in this blog and in my Family Matters website is free legal information and Biblical counseling. As I told one person who e-mailed me, what is legal is not always Biblical, and what is Biblical is not always legal. In my website and blogs, however, what is Biblical will always take precedence.

Do not depend on “legal information” found in chat rooms or online forums

Despite this milestone for this blog, three things sadden me:


One, I have stumbled upon chat rooms or online forums for OFWs, single parents, etc. and I am amazed at the tremendous amount of misinformation about legal matters I found in these forums. The problem is that people in these chat rooms, rather than inquiring from lawyers, rely on each other and on people who pretend to know the law. It does not matter whether a person has gone to law school or does good research on legal topics. Answering people’s questions about legal matters is considered as “practice of law” (as the Supreme Court ruled in the case involving the late Sen. Rene Cayetano and former COMELEC chairman Christian Monsod). The practice of law is reserved only for those who have passed the bar exams and are in good standing with the Integrated Bar of the Philippines.

text copied from this blog and then posted in a chat room without attributionSome people in chat rooms and online forums also copy and paste from my blog posts without giving any credit. For example, portions of my post “Can nephews and nieces inherit from their grandparents, unmarried aunts or uncles?” were posted verbatim without any attribution. (Click the image to the left so you can compare my blog post and what was posted in the forum.)

If you do have legal questions, you should inquire from lawyers directly or from government offices. I have listed in a tab below this blogs title graphic the contact information of government offices where you can get free legal assistance. For example, you can ask for free legal help from the Department of Justice Action Center (DOJAC). It acts on complaints, requests for assistance and legal queries of walk-in clients of the DOJ. For legal assistance please visit the Department of Justice Action Center (DOJAC) Main Office, Ground Floor, Multi-Purpose Building, Padre Faura Street, Ermita, Manila; Telephone no: 523-84-81; Email Address: dojac@doj.gov.ph or visit any Regional/Provincial/City Prosecution Offices in your town or city.

You can also try asking for free legal help or information from the following:

  1. Integrated Bar of the Philippines (IBP) chapter offices in your town or city, usually located in the Hall of Justice
  2. OLA (Office of Legal Aid) of the UP College of Law; Room 107, Malcolm Hall, University of the Philippines Diliman, Quezon City, 1101; UP College of Law Trunkline Phone No. (02) 920-5514, Office of Legal Aid - loc. 106; Office Hours: 8:00 am - 12:00 pm; 1:00 pm - 5:00 pm
  3. Legal Aid Bureau of the San Beda College of Law in Mendiola, Manila; tel. no. (02) 489-1670
  4. CJ Roberto Concepcion Legal Aid Clinic of the UST Institute of Civil Law, Espana, Manila; +63(02) 731-4027 or +63(02) 406-1611 (Local 8225)
  5. Sebastinian Office of Legal Aid, San Sebastian College Institute of Law; Trunk Line: (02)734-8931 to 39, Locals: 313 and 173
  6. Commission on Human Rights chapter offices
Two, the most visited page of this blog is that on adultery, concubinage, and psychological violence, with more than 292,000 visits. The other pages with a high number of visits are those dealing with support for an abandoned woman and her children (more than 154,000 visits), annulment or declaration of nullity of marriage, entertainer Amy Perez’s failed petition to have her marriage to Brix Ferraris declared void, and custody battles over children.

Three, there are more people who visit this blog rather than my Salt and Light blog on how to build strong relationships, marriages, and families. Compared to this blog, my SL blog is limping along with only 54,000-plus visitors since December 2005. It seems that there are more people who want to know about how to end their marriage than people concerned about building stronger marriages.

Salt and Light blog title graphicsI remember Valentine’s Day twelve years ago. I received an e-mail from a woman, competent and highly successful in her profession. The problem was, her professional success had led to the breakdown of her marriage because her husband had become totally insecure. The question she desperately asked me was, “Is there hope for my marriage?” I spent the whole afternoon of that Valentine’s Day answering the e-mail, assuring her that yes, there was still hope for her marriage.

My hope is that more people will browse my Salt and Light blog and learn how to reclaim their marriage and rebuild their family. Some of my favorite articles are Lessons in love and life from Miriam Quiambao, Emotional word pictures as a communication tool for increasing intimacy between husbands and wives, and Men are terrible mind readers ...



I also hope that that those of you going through various marital difficulties will try to get hold and watch Kirk Cameron’s movie on relationships; you can watch the YouTube trailer above. (Read more About FIREPROOF; surf to the FIREPROOF blog).

About FIREPROOF, the movie
At work, inside burning buildings, Capt. Caleb Holt lives by the old firefighter’s adage: Never leave your partner behind. At home, in the cooling embers of his marriage, he lives by his own rules. Growing up, Catherine Holt always dreamed of marrying a loving, brave firefighter...just like her daddy. Now, after seven years of marriage, Catherine wonders when she stopped being "good enough" for her husband. Regular arguments over jobs, finances, housework, and outside interests have readied them both to move on to something with more sparks. As the couple prepares to enter divorce proceedings, Caleb's father challenges his son to commit to a 40-day experiment: "The Love Dare." Wondering if it's even worth the effort, Caleb agrees-for his father's sake more than for his marriage. When Caleb discovers the book's daily challenges are tied into his parents' newfound faith, his already limited interest is further dampened. While trying to stay true to his promise, Caleb becomes frustrated time and again. He finally asks his father, "How am I supposed to show love to somebody who constantly rejects me?" When his father explains that this is the love Christ shows to us, Caleb makes a life-changing commitment to love God. And so with God's help he begins to understand what it means to truly love his wife. But is it too late to fireproof his marriage? His job is to rescue others. Now Caleb Holt is ready to face his toughest job ever...rescuing his wife’s heart.

Wednesday, March 30, 2016

Proposed legislation (02): Adverse claims on real property and certain practices of the Register of Deeds and the Land Registration Authority

Index of topics: 1. Background facts; 2. The relevant law on adverse claims - PD 1529 Property Registration Decree; 3. The Supreme Court ruling on adverse claims in Sajonas vs. Court of Appeals; 4. Proposed legislation: Amendments to Section 70 of PD 1529 so as to negate the Sajonas ruling

Background facts:

Elsie and her siblings inherited in 2004 a parcel of land in the province from their parents. Sometime in September 2011, Rose (the person living adjacent to that parcel of land) occupied a certain portion and claimed it as her own. Moreover, Rose filed with the Register of Deeds (RD) an application for annotation of an adverse claim (“application for adverse claim”).

The Register of Deeds did not inform Elsie and her siblings of the pending application for adverse claim.

Sometime in early 2012, when a buyer expressed interest in the land, Elsie and her siblings tried to get a certified copy of their Transfer Certificate of Title (TCT). The RD refused to issue the certified copy saying that there was a pending application for adverse claim. (Elsie and her siblings also found out later on that several persons interested in the land were told by the RD staff that there was a pending application for adverse claim.)

Sometime in April 2013 (two years after the application was filed), the RD approved and annotated the adverse claim on the TCT of the land inherited by Elsie and her siblings.

Again, the RD did not inform Elsie and her siblings that the adverse claim was approved and annotated on the TCT.

The RD also dated the annotation as of September 2011 (the date of the filing of the application), not as of April 2013 (date when the application was approved and actually annotated).

Elsie and her siblings filed a “consulta” with the Land Registration Authority (LRA) with the following questions:

1. Why didn’t the RD notify them that an application for annotation of adverse claim was filed against their land?

2. Why did it take the RD two years to decide whether to deny or grant the application for annotation of the adverse claim?

3. Why did the RD date the annotation as of September 2011 (the date of the filing of the application) and not as of April 2013 (date when the application was approved and actually annotated)?

The relevant law on adverse claims: PD 1529 Property Registration Decree


Section 70 of PD 1529 states:

Adverse claim. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be canceled upon filing of a verified petition therefor by the party in interest: Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant.

Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered canceled. If, in any case, the court, after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect.

Lawyers who graduated from law school or were admitted into the bar before 1996 understood this section to mean:

1. The adverse claim is effective only for 30 days from the date of annotation.

2. Within 30 days after the adverse claim is annotated, the claimant must file with the Regional Trial Court (RTC) the proper petition to enforce the claim. (The reason for filing the adverse claim with the RD is to prevent the landowner from disposing of the property while the lawyer is preparing the petition with the RTC.)

3. Although the adverse claim automatically loses its effectivity after the 30-day period, the affected landowner needs to file a petition with the RTC to have the annotation cancelled. (The landowner can include in the petition a claim for damages against the party who filed the adverse claim.)

The Supreme Court ruling on adverse claims in Sajonas vs. Court of Appeals


The Supreme Court in Sajonas vs. CA (G. R. No. 102377, July 5, 1996) ruled that the adverse claim is effective even beyond the 30-day period, for as long as there’s no decision from the RTC declaring that the adverse claim has been cancelled. The Supreme Court said: “The cancellation of the adverse claim is still necessary to render it ineffective, otherwise, the inscription will remain annotated and shall continue as a lien upon the property.” It also clarified the reason for the required court hearing:

[t]he annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property Registration Decree), and serves as a warning to third parties dealing with said property that someone is claiming an interest or the same or a better right than the registered owner thereof.

The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising from such adverse claim.

The Supreme Court upheld its Sajonas ruling in these subsequent cases: Diaz-Duarte vs. Ong and CA, G.R. No. 130352 November 3, 1998; Equatorial Realty Development vs. Frogozo and CA, G.R. No. 128563, March 25, 2004.

Proposed legislation: Amendments to Section 70 of PD 1529 so as to negate the Sajonas ruling


According to the LRA staff whom I have talked to, numerous landowners have complained to them of the negative effects of the Sajonas ruling, specifically about frivolous claims that are meant to harass landowners. One staff member told me that the LRA has approached some members of Congress asking them to amend the law on adverse claims.

1. Proposed legislation: Increase the penalty imposed on frivolous adverse claims from “not less than one thousand pesos nor more than five thousand pesos” to, for example, from fifty thousand pesos to one hundred thousand pesos.

Section 70, PD 1529 states:

If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered canceled. If, in any case, the court, after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos nor more than five thousand pesos, in its discretion.

Landowners whose property have been subjected to adverse claims are reluctant to go to court to have the annotation cancelled because of the high costs of litigation. The penalty of “not less than one thousand pesos nor more than five thousand pesos” does not even cover the cost of a lawyer’s single appearance fee. The increase in the penalty can (a) discourage the frivolous filing of adverse claims and (b) answer for the landowner’s legal expenses.

2. With the Sajonas ruling that an adverse claim is valid beyond the 30-day period, the claimant doesn’t have to do anything else once the adverse claim has been annotated. The landowner is now forced to incur legal expenses by retaining the services of a lawyer to have the annotation canceled.

Moreover, Section 70, PD 1529 seemingly violates the doctrine that a Torrens title cannot be subjected to a collateral attack. For example: The landowner files a petition to have the annotation of adverse claim cancelled. What if the adverse claimant, in the Answer, raises grounds that question the authenticity of the title? Normally, such an Answer is not allowed because it’s a collateral attack, but Section 70, PD 1529 (as clarified in the Sajonas ruling) states:

The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising from such adverse claim.

Proposed legislation: Amend Section 70, PD 1529 so that the adverse claimant must proactively pursue the claim in court. (“He who alleges must prove.”) The claimant must file, within 30 days from the annotation, the proper petition in court to prove the adverse claim. If the claimant fails to do so, then the adverse claim should no longer be effective.

This proposed amendment will prevent the filing of frivolous adverse claims.

3. Proposed legislation: To prevent the filing of frivolous adverse claims, an adverse claim must be effective only for 30 days and will be automatically canceled by the mere lapse of the period, without the need for a court order or an annotation by the RD.

In the alternative, the RD can annotate the cancellation upon the application by the landowner. To prevent the RD from sitting on the application for cancellation, the action on the application must be made within the 5-day period for simple transactions provided by RA 9485 Anti-Red Tape Act of 2007.

Another alternative: The effectivity of an adverse claim can be increased from 30 days to 45 days, so as to give the adverse claimant enough time to enforce the claim in the Regional Trial Court.

Benefits of this proposed legislation:

(a) Frivolous adverse claims will be minimized.

(b) Landowners will not incur legal expenses in going to court to have the adverse claim canceled.

4. As stated in the “Background facts” above, the RD did not inform Elsie and her siblings of the pending application for adverse claim.

The third paragraph of Section 70 of PD 1529 provides that the landowner (who is a “party in interest”) has the remedy of going to court for the cancellation of the adverse claim within 30 days from the registration of the claim. This section thus implies that the RD must immediately notify the landowner so that the legal remedy can be availed of.

Proposed legislation:

(a) Make explicit the duty of the RD to immediately notify the landowner of the registration of the adverse claim, and

(b) Provide penalties if the RD fails to notify the landowner.

The legislation could require the RD to notify the landowner twice: first notice that an application for adverse claim has been filed, and second notice that the application has either been denied or approved.

5. As stated in the “Background facts” above, it took the RD two years to act on the application for adverse claim.

Proposed legislation:

(a) Set a time limit of 30 days from the time the application for an adverse claim was filed within which the RD must either deny or approve the application, with the corresponding penalty if the RD fails to comply with this period;

(b) Provide that if the RD denies the application for adverse claim, the denial cannot be subject of a motion for reconsideration or an appeal to the Land Registration Authority. The remedy of the applicant should be to file a court action to pursue the claim.

As stated in the “Background facts,” the RD refused to issue a certified copy of the TCT to Elsie and her siblings while the application for adverse claim was pending. Under the LRA guidelines, if the RD denies the application for adverse claim, the claimant can file a “consulta” with the LRA questioning the denial. This guideline should be repealed because it means that, while the “consulta” is pending, the RD can continue to refuse issuing a certified copy of the affected TCT (or continue to tell interested buyers of the pending appeal), to the detriment of the landowner who may wish to sell the property.

(The LRA usually takes years to resolve a “consulta” because it goes through numerous stages or departments — investigation by an RD designated as the hearing officer or by the Investigation and Inspection Division; preliminary review of the hearing officer’s draft resolution by the LRA Administrator; consulta conference; drafting and signing of the final resolution by the LRA Deputy Administrator; final review by the LRA Administrator; and promulgation by the Clerks of Court Division.)

6. As stated in the “Background facts” above, Elsie and her siblings questioned why the RD dated the annotation as of September 2011 (the date of the filing of the application) and not as of April 2013 (date when the application was approved and actually annotated)?

In reply to this question, the RD invoked the Implementing Guidelines of the Philippine Land Registration and Information System (PHILARIS), specifically Section 5, sub-paragraph k), which states:

k) Electronic Primary Entry Book for Registered Land (EPEB-RL) – refers to the electronic book wherein registered lands,including all transactions and/or instruments registered related thereto, are recorded and assigned sequential entry numbers in the order of presentation indicating therein the date, hour, and minute when the same was received.

But Section 5, sub-paragraph k) of the PHILARIS guidelines is contrary to the provisions of the third paragraph of Section 70 of PD 1529. As stated above,  this section of PD 1529 provides that the landowner (“party in interest”) has the remedy of going to court for the cancellation of the adverse claim within 30 days from the registration of the claim. But how can Elsie and her siblings have availed of this remedy when the approval of the application for adverse claim made in 2013 was retroactively dated to 2011?

In effect, this provision of the PHILARIS guidelines on retroactive dating negates the legal remedy provided by PD 1529.

Proposed legislation: Require the RD to annotate any adverse claim using the date of actual registration rather than the date of the filing of the claim. (The implementing guidelines of PHILARIS must therefore also be amended by the LRA.)

Friday, May 16, 2014

Escalation of interest rates in loan contracts void without written notice to and written consent of the borrower

Plain Language summary:

Case title:Spouses Ignacio F. Juico and Alice P. Juico, Petitioners, -versus- China Banking Corporation, Respondent,” G.R. No. 187678, April 10, 2013

Ruling: The escalation clause is void because it granted China Banking the power to impose an increased rate of interest without a written notice to the Juico couple and their written consent.  

Definition: “Escalation clauses refer to stipulations allowing an increase in the interest rate agreed upon by the contracting parties.  

Doctrine: “There is nothing inherently wrong with escalation clauses which are valid stipulations in commercial contracts to maintain fiscal stability and to retain the value of money in long term contracts.”

“But an escalation clause is void where the creditor unilaterally determines and imposes an increase in the stipulated rate of interest without the express conformity of the debtor.”

New Sampaguita Builders Construction, Inc. v. Philippine National Bank (July 30, 2004)

Note: The Supreme Court rulings on escalation clauses also apply to credit card agreements. Polotan, Sr. v. CA (Eleventh Div.), 357 Phil. 250 (1998)

Background facts


Spouses Ignacio and Alice Juico got a loan from China Banking Corporation as evidenced by 2 promissory notes. The loan was secured by a Real Estate Mortgage over the Juico couple’s property located at White Plains, Quezon City. The notes contained the following escalation clause stating that the interest rate would change every month based on the prevailing market rate:
“I/We hereby authorize the CHINA BANKING CORPORATION to increase or decrease as the case may be, the interest rate/service charge presently stipulated in this note without any advance notice to me/us in the event a law or Central Bank regulation is passed or promulgated by the Central Bank of the Philippines or appropriate government entities, increasing or decreasing such interest rate or service charge.”
The Juicos failed to pay the monthly amortizations due. As of February 23, 2001, the amount due on the two promissory notes totaled P19,201,776.63 representing the principal, interests, penalties and attorney’s fees. The mortgaged property was sold at public auction, with China Bank as the highest bidder for the amount of Php 10,300,000.

After the auction, China Bank filed a collection case with the Regional Trial Court (RTC) of Makati City for Php 8,901,776.63, the amount of deficiency after applying the proceeds of the foreclosure sale to the mortgage debt.

In their Answer, the Juicos admitted their debt but claimed that the principal of the loan was already paid when the mortgaged property was extrajudicially foreclosed and sold for Php 10,300,000. They contended that should they be held liable for any deficiency, it should be only for Php 55,000 representing the difference between the total outstanding obligation of Php 10,355,000 and the bid price of Php 10,300,000.

At the trial, China Bank presented Ms. Annabelle Cokai Yu, its Senior Loans Assistant, as witness. She testified that she handled the account of the Juicos and assisted them in processing their loan application. She called them monthly to inform them of the prevailing rates to be used in computing interest due on their loan.

On cross-examination, Ms. Yu reiterated that the interest rate changes every month based on the prevailing market rate and she notified the Juicos of the prevailing rate by calling them monthly before their account becomes past due. When asked if there was any written authority from the Juicos to increase the interest rate unilaterally, Ms. Yu answered that they signed a promissory note indicating that they agreed to pay interest at the prevailing rate.

In defense, Ignacio Juico testified that before the loan’s release, he was required to sign a blank promissory note and was informed that the interest rate on the loan will be based on prevailing market rates. On cross-examination, Ignacio testified that he is a Doctor of Medicine and also engaged in the business of distributing medical supplies. Ignacio admitted having read the promissory notes and that he is aware of his obligation under them before he signed them.

The RTC rules against the Juicos 


The trial court held that:

(1) Ignacio’s claim that he signed the promissory notes in blank cannot negate or mitigate his liability since he admitted reading the Promissory Notes before signing them.

(2) Considering the substantial amount involved, it is unbelievable that the Juicos threw all caution to the wind and simply signed the documents without reading and understanding the contents.

The Court of Appeals affirms RTC ruling 


The CA recognized China Bank’s right to claim the deficiency because the proceeds of the foreclosure sale were insufficient to cover the amount of the debt.

Also, the CA found as valid the stipulation in the promissory notes that interest will be based on the prevailing rate. It noted that the parties agreed on the interest rate which was not unilaterally imposed by the bank but was the rate offered daily by all commercial banks as approved by the Monetary Board. Having signed the promissory notes, the Juicos are bound by the stipulations.

Supreme Court rules partly for the Juicos and partly for China Bank 


The Juico couple appealed to the Supreme Court. According to the Juicos, the issues are:

(1) The interest rates imposed by China Bank are not valid as they were not by virtue of any law or Bangko Sentral ng Pilipinas regulation or any regulation that was passed by an appropriate government entity. They insist that the interest rates were unilaterally imposed by the bank and thus violate the principle of mutuality of contracts.

(2) The escalation clause in the promissory notes does not give China Bank the unbridled authority to increase the interest rate unilaterally. Any change must be mutually agreed upon.

The Court’s ruling in favor of the Juicos: 

(1) Escalation clauses are not necessarily void. These clauses are valid stipulations in commercial contracts to maintain fiscal stability and to retain the value of money in long term contracts.

(2) The Juicos were not coerced into signing the promissory notes and they did not protest the new rates imposed on their loan. Nevertheless, an escalation clause “granting the creditor an unbridled right to adjust the interest independently and upwardly, completely depriving the debtor of the right to assent to an important modification in the agreement” is void. A stipulation of this nature violates the principle of mutuality of contracts under Article 1308 of the New Civil Code.

(3) An escalation clause is void where the creditor unilaterally determines and imposes an increase in the stipulated rate of interest without the express conformity of the debtor.

(4) Changes in the rate of interest for loans under an escalation clause must be the result of an agreement between the parties.

(5) China Bank should have given a detailed billing statement based on the new imposed interest with corresponding computation of the total debt. The statement would have enabled the Juicos to make an informed decision. China Bank should also have provided an appropriate form to be signed by the Juicos to indicate their conformity to the new rates.

The Court’s ruling in favor of China Bank: 

The Court ordered the Juicos to pay China Bank Php 4,761 ,865. 79 (instead of Php 8,901,776.63, the amount originally claimed) representing the amount of deficiency inclusive of interest, penalty charge and attorney’s fees.

Overview of Supreme Court rulings on escalation cases 


The controlling case and ruling on escalation clauses is New Sampaguita Builders Construction, Inc. v. Philippine National Bank. The Court ruled that “an escalation clause is void where the creditor unilaterally determines and imposes an increase in the stipulated rate of interest without the express conformity of the debtor.” The Court explained:
Courts have the authority to strike down or to modify provisions in promissory notes that grant the lenders unrestrained power to increase interest rates, penalties and other charges at the latter’s sole discretion and without giving prior notice to and securing the consent of the borrowers. This unilateral authority is anathema to the mutuality of contracts and enable lenders to take undue advantage of borrowers. Although the Usury Law has been effectively repealed, courts may still reduce iniquitous or unconscionable rates charged for the use of money. Furthermore, excessive interests, penalties and other charges not revealed in disclosure statements issued by banks, even if stipulated in the promissory notes, cannot be given effect under the Truth in Lending Act.
Posted below are some other cases on escalation clauses.

Banco Filipino Savings & Mortgage Bank v. Navarro, No. L-46591, July 28, 1987, 152 SCRA 346, 353

“I/We hereby authorize Banco Filipino to correspondingly increase the interest rate stipulated in this contract without advance notice to me/us in the event a law should be enacted increasing the lawful rates of interest that may be charged on this particular kind of loan.”
Ruling:

Escalation clause void because: Circular No. 494 issued by the Monetary Board on January 2,1976, because said circular is not a law although it has the force and effect of law Escalation clause has no provision for reducing the stipulated interest “in the event that the applicable maximum rate of interest is reduced by law or by the Monetary Board” (de-escalation clause).
Philippine National Bank v. Court of Appeals, G.R. No. 107569, November 8, 1994, 238 SCRA 20

The promissory notes authorized PNB to increase the stipulated interest per annum “within the limits allowed by law at any time depending on whatever policy [PNB] may adopt in the future; Provided, that, the interest rate on this note shall be correspondingly decreased in the event that the applicable maximum interest rate is reduced by law or by the Monetary Board.” Philippine National Bank v. Court of Appeals, 273 Phil. 789 (1991)
Ruling:

Although the contract included a de-escalation clause, increases unilaterally imposed by PNB violated the principle of mutuality essential in contracts.
Philippine National Bank v. Court of Appeals, 328 Phil. 54, 61-62 (1996)

Escalation clause authorized PNB to raise the stipulated interest rate at any time without notice, within the limits allowed by law.
Ruling:

PNB did not secure the conformity of the borrower to the successive increases in the interest rate. The borrower’s assent to the increases cannot be implied from lack of response to the letters sent by PNB, informing them of the increases.
Philippine Savings Bank v. Castillo, G.R. No. 193178, May 30, 2011, 649 SCRA 527

“The rate of interest and/or bank charges herein stipulated, during the terms of this promissory note, its extensions, renewals or other modifications, may be increased, decreased or otherwise changed from time to time within the rate of interest and charges allowed under present or future law(s) and/or government regulation(s) as the [PSBank] may prescribe for its debtors.”
Ruling:

Escalation clause void despite provision for de-escalation.

“The increase or decrease of interest rates under such clause hinges solely on the discretion of petitioner as it does not require the conformity of the maker before a new interest rate could be enforced. We also said that respondents’ assent to the modifications in the interest rates cannot be implied from their lack of response to the memos sent by petitioner, informing them of the amendments, nor from the letters requesting for reduction of the rates.”

Some observations:

[1] The Juicos should have asked for the reduction of the attorney’s fees demanded by China Bank amounting to 10% or about Php 1.36 million. In New Sampaguita Builders Construction, Inc. v. Philippine National Bank, the Supreme Court equitably reduced the attorney’s fees to just 1%.

[2] The Supreme Court rulings on escalation clauses also apply to credit card agreements. See Polotan, Sr. v. CA (Eleventh Div.), 357 Phil. 250 (1998).

Friday, May 09, 2014

Rights of employees and obligations of employers in business closure, asset sale, or stock sale

(Note: For counseling on labor problems, please contact the Public Assistance and Complaints Unit (PACU) of the Department of Labor and Employment, Muralla St. cor. Gen. Luna St., Intramuros, 1002 Manila, between Pamantasan ng Lungsod ng Maynila and the Bulletin. You may call DOLE Hotline: 1349 from your fixed-line phones. You can also inquire through an online form.)

Business closure The law permits an employer to dismiss its employees if the business is being closed down. Obligations of employer:

(1) serve written notices on the employees and the Department of Labor at least one month before the intended date of closure;

(2) pay the dismissed employees separation pay, except if the closure is due to serious business losses or financial reverses.

Exemption from giving separation pay: .

a. the closure was due to serious business losses or financial reverses; .

b. the employer must show convincing evidence that it actually suffered serious financial reverses.
Asset sale The business owner sells all or substantially all of the assets to another party. The business owner who sells in good faith is authorized to dismiss the affected employees. But the owner must give separation pay to the employees.

The buyer in good faith, on the other hand, is:

(1) not obliged to absorb the employees affected by the sale.

(2) not liable for paying their claims.
Stock sale

The individual or corporate shareholders sell a controlling block of stock to new or existing shareholders. The employees cannot be dismissed simply because new majority stockholders and new management have taken over the business.

Sari-sari Group of Companies, Inc. v. Piglas Kamao, G.R. No. 164624, 11 August 2008, 561 SCRA 569


Facts: The employees agreed with the corporation’s act of considering them as terminated. They accepted their separation pay.

Ruling: Despite having accepted the separation pay, the employees can contest the legality of their dismissal.

SME Bank vs. De Guzman, G.R. No. 184517, October 8, 2013


Background facts:


The original principal shareholders and corporate directors of Small and Medium Enterprise Bank, Incorporated (SME Bank) were Eduardo M. Agustin, Jr. (Agustin) and Peregrin de Guzman, Jr. (De Guzman). Some of SME Bank’s employees were Elicerio Gaspar (Elicerio), Ricardo Gaspar, Jr.(Ricardo), Eufemia Rosete (Eufemia), Fidel Espiritu (Fidel), Simeon Espiritu, Jr. (Simeon, Jr.), and Liberato Mangoba (Liberato).

SME Bank experienced financial difficulties in June 2001. To remedy the situation, Agustin and De Guzman sold 86.365% of the shares of stock of SME Bank to spouses Abelardo and Olga Samson. The Samson couple then became the principal shareholders of SME Bank, while Aurelio Villaflor, Jr. was appointed bank president.

Before the sale, Simeon Espiritu (Espiritu), then the general manager of SME Bank, met with all the employees of the head office and of the Talavera and Muñoz branches of SME Bank. He persuaded them to tender their resignations, with the promise that they would be rehired when they reapplied.

Relying on this representation, Elicerio, Ricardo, Fidel, Simeon, Jr., and Liberato tendered their resignations dated August 27, 2001. As for Eufemia, she first tendered a resignation letter and then a retirement letter dated September 2001. But as it turned out, the employees, except for Simeon, Jr., were not rehired.

The employees demanded the payment of their respective separation pays but their requests were denied. They then filed a Complaint with the National Labor Relations Commission (NLRC) – Regional Arbitration Branch No. III against SME Bank, the Samson couple, and Villaflor for unfair labor practice; illegal dismissal; illegal deductions; underpayment; and nonpayment of allowances, separation pay and 13th month pay. The employees later on amended their Complaint to include Agustin and De Guzman as respondents.

In defense, the Samson Group (the Samson couple, and Villaflor) contended that Elicerio, Ricardo, Fidel, and Liberato voluntarily resigned from their posts while Eufemia retired from her position. As their resignations and retirements were voluntary, they were not dismissed from their employment. In support of this argument, the Samson Group presented copies of their resignation and retirement letters, which were couched in terms of gratitude.

Labor Arbiter dismisses case against the Samson Group but rules against Agustin and De Guzman


(1) The buyer of an enterprise is not bound to absorb its employees, unless there is an express stipulation to the contrary.

(2) The employees were illegally dismissed, because they had involuntarily executed their resignation letters after relying on representations that they would be given their separation benefits and rehired by the new management. The arbiter ordered Agustin and De Guzman to pay the complainants’ separation pay.

NLRC ruling: mere change in management not a valid ground to terminate the employees


Dissatisfied with the judgment, Elicerio and the other employees appealed to the NLRC. Agustin and De Guzman also appealed. The employees questioned the labor arbiter’s failure to award backwages. Agustin and De Guzman, on the other hand, contended that they should not be held liable for the payment of the employees’ claims.

The NLRC found that there was only a mere transfer of shares – and therefore, a mere change of management – from Agustin and De Guzman to the Samson Group. As the change of management was not a valid ground to terminate respondent bank employees,

(1) Elicerio and the other employees were illegally dismissed;

(2) Agustin, De Guzman, and the Samson Group should be held jointly and severally liable for the employees’ separation pay and backwages.

Supreme Court ruling: corporate officers who act in bad faith or with malice liable for illegal dismissal


(1) Elicerio and the other employees are entitled to separation pay, full backwages, moral damages, exemplary damages and attorney’s fees. They tendered resignation letters only because they were led to believe that, upon reapplication, they would be reemployed by the new management. They had no real intention of leaving their posts.

While resignation letters containing words of gratitude may indicate that the employees were not coerced into resignation, this fact alone is not conclusive proof that they intelligently, freely and voluntarily resigned. To rule that resignation letters couched in terms of gratitude are, by themselves, conclusive proof that the employees intended to relinquish their posts would open the floodgates to possible abuse.

In order to withstand the test of validity, resignations must be made voluntarily and with the intention of relinquishing the office, coupled with an act of relinquishment. Therefore, in order to determine whether the employees truly intended to resign from their respective posts, the Court cannot merely rely on the tenor of the resignation letters, but must consider the totality of circumstances.

(2) Contrary to SME Bank’s argument, there was no transfer of the business establishment but merely a change in the new majority shareholders and new management of the corporation. This change is not a just or authorized cause for termination of employment under the Labor Code.

SME Bank continued to be the employer of respondent employees notwithstanding the equity change in the corporation. A corporation has a personality separate and distinct from that of its individual shareholders or members. Thus, a change in the composition of its shareholders or members would not affect its corporate liabilities.

As the employer of the illegally dismissed employees before and after the equity transfer, SME Bank is liable for the satisfaction of their claims.

(3) Liability of corporate directors and officers in illegal dismissal cases

Rule

Corporate officers are not personally liable for their official acts. A corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members.
Exception

Corporate directors and officers are solidarily liable with the corporation if they acted with malice or in bad faith in terminating the employees.

Agustin and De Guzman are corporate directors who acted in bad faith. They may be held solidarily liable with SME Bank for the satisfaction of the employees’ lawful claims.

The dismissal of Elicerio and the other employees was done in bad faith. Motivated by their desire to sell their shares of stock to the Samson couple, Agustin and De Guzman agreed to and later implemented the precondition in the Letter Agreements as to the termination or retirement of SME Bank’s employees. But instead of going through the proper procedure, the bank manager induced the employees to resign or retire from their respective employments, while promising that they would be rehired by the new management. Fully relying on that promise, they tendered courtesy resignations or retirements and eventually found themselves jobless. Clearly, this sequence of events constituted a gross circumvention of labor laws and a violation of the employees’ constitutionally guaranteed right to security of tenure.

Tuesday, May 06, 2014

Differences between regular employees and project employees, between project employment and fixed term employment

Plain Language summary:

Case title: GMA Network, Inc., Petitioner, vs.Carlos P. Pabriga, Geoffrey F. Arias, Kirby N. Campo, Arnold L. Lagahit, And Armando A. Catubig, Respondents” G.R. No. 176419, November 27, 2013

Ruling: Pabriga and his co-workers were GMA7’s regular employees, not project employees, and they were illegally dismissed.

Definitions:

Regular employees perform activities that are usually necessary or desirable in the employer’s usual business or trade.”

Project employees perform activities that may be usually necessary or desirable in the usual business or trade of the employer.” (For example, a construction company engages in various projects like a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are properly treated as “project employees,” and their services may be lawfully terminated at completion of the project.)

“Project employees perform activities that may not be usually necessary or desirable in the usual business or trade of the employer.” (For example, a steel company engages in  fish production or cultivation of vegetables.)

A project employee or a member of a work pool may acquire the status of a regular employee.

Related case:Universal Robina Sugar Milling Corporation, et. al., vs. Acibo, et. al” G.R. No. 186439, 15 January 2014 (differences between regular, project/seasonal, and casual employees)
(Note: For counseling on labor problems, please contact the Public Assistance and Complaints Unit (PACU) of the Department of Labor and Employment, Muralla St. cor. Gen. Luna St., Intramuros, 1002 Manila, between Pamantasan ng Lungsod ng Maynila and the Manila Bulletin office. You may call DOLE Hotline: 1349 from your fixed-line phones. You can also inquire through an online form.)

Background facts


Carlos Pabriga, Geoffrey Arias, Kirby Campo, Arnold Lagahit, and Armando Catubig worked as television technicians for GMA7 in the late 1990s. Their work included manning of technical operations center and acting as transmitter/VTR men, maintenance staff, and cameramen. They were repeatedly rehired in several fixed term contracts from 1996 to 1999.

Pabriga and his co-workers originally filed in July 1999 a complaint for non-payment of benefits with the National Labor Relations Commission (NLRC). Later on, they amended their complaint by raising the issues of unfair labor practice, illegal dismissal, damages, and attorney’s fees.

Pabriga and his co-workers claimed that they were GMA7's regular employees. On the other hand, GMA7 claimed that they were merely hired as “pinch-hitters” on fixed term contracts.

Labor Arbiter rules against Pabriga and his co-workers


The Labor Arbiter dismissed the complaint for illegal dismissal and unfair labor practice, but held GMA 7 liable for 13th month pay.


NLRC reverses Labor Arbiter’s decision; Court of Appeals affirms NLRC ruling



The NLRC ruled that Pabriga and his co-workers were regular employees with respect to the particular activity to which they were assigned, until it ceased to exist. As such, they were entitled to payment of separation pay computed at one month salary for every year of service.

The NLRC also ruled that Pabriga and his co-workers were entitled to 13th month pay, night shift differential, and service incentive leave pay.

GMA7 elevated the case to the Court of Appeals through a petition for certiorari. On September 8, 2006, the CA denied the petition for lack of merit.


Supreme Court ruling: Pabriga and his co-workers were regular employees, not project employees, and they were illegally dismissed


The Supreme Court affirmed the findings of the NLRC and the CA that Pabriga and his co-workers were GMA7’s regular employees and that they were illegally dismissed.The Court ruled:

(1) Pabriga and his co-workers were not project employees because the manning of the operations center to air commercials, acting as transmitter/VTR men, maintaining the equipment, and acting as cameramen were not undertakings separate or distinct from the business of a broadcasting company.

(2) Even if Pabriga and his co-workers are to be considered as project employees, they attained regular employment status because GMA7 continuously rehired them.

(3) GMA7 did not report the completion of its projects and the dismissal of Pabriga and his co-workers in its finished projects to the nearest Public Employment Office as required by Policy Instruction No. 20 of the Department of Labor and Employment. Based on jurisprudence, the failure of an employer to report to the nearest Public Employment Office the termination of its workers’ services every time a project or a phase is completed indicates that the workers are not project employees.

(4) GMA7’s practice of hiring and rehiring of workers on fixed terms, without end, is unjustifiable.

Difference between regular employee and project employee


A regular employee performs activities that are usually necessary or desirable in the employer’s usual business or trade. A project employee performs activities that may or may not be usually necessary or desirable in the usual business or trade of the employer.

The services of the project employees are legally and automatically terminated when the project ends or is completed.

The principal test for determining whether employees are “project employees” is two-fold:

(1) Is the employee assigned to carry out a specific project or undertaking?

(2) Is the completion or termination of the project specified or determined at the time the employee was engaged for that project?

Definition of “project”



The term “project” must be properly defined in order to safeguard the rights of workers against the arbitrary use of the word “project” by employers to prevent them from attaining the status of regular employees.

(1) The “project” would ordinarily have some relationship to the usual business of the employer.

For example, a construction company ordinarily carries out two or more [distinct] identifiable construction projects: a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects (the scope and duration of which has been determined and made known to the employees at the time of employment), are properly treated as “project employees,” and their services may be lawfully terminated at completion of the project.

(2) Exceptionally, the “project” job or undertaking is not within the regular business of the employer. The job or undertaking is identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times. For example, a steel-making company, for one reason or another, undertakes the breeding and production of fish or the cultivation of vegetables.

Examples of regular employee and a project employee


Philippine Long Distance Telephone Company v. Ylagan, 537 Phil. 840 (2006)

Although essentially a telephone company, PLDT maintains its own accounting department to which Ylagan was assigned. PLDT was not able to prove that accounting duties were distinct, separate and identifiable from its usual undertakings.

Ylagan is therefore a regular employee, not a project employee.


San Miguel Corporation v. National Labor Relations Commission, 357 Phil. 954 (1998)

The private respondent was hired to repair furnaces, which are needed by San Miguel Corporation to manufacture glass, an integral component of its packaging and manufacturing business.

San Miguel Corporation is not engaged in the business of repairing furnaces. Although the activity was necessary to enable it to continue manufacturing glass, the necessity for the repairs arose only when a furnace reached the end of its life or operating cycle.

Private respondent is therefore a project employee.





























A project employee or a member of a work pool may acquire the status of a regular employee when the following concur:

(1) The project employee is continuously rehired even after a project has ended; and

(2) The alleged project employee performs tasks are vital, necessary, and indispensable to the usual business or trade of the employer.

Difference between project employment and fixed period/fixed term employment


GMA7 interchangeably characterized Pabriga and his co-workers’s service as project employment and fixed term employment. But these types of employment are not the same.

Project employment

The employee’s services are coterminous with the project.
The employment may, in fact, last for more than a year, depending on the needs or circumstances of the project.
Fixed period/fixed term employment

Duration of employment is agreed upon by the parties.


The decisive determinant in fixed-term employment is not the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the employment relationship to commence and terminate.

The use of fixed-term employment is subject to abuse by employers who want to deprive workers of their security of tenure. In this situation, the fixed term or period should be struck down as contrary to public policy or morals.

Indications or criteria under which “term employment” does not circumvent the law on security of tenure:

(1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or

(2) The employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

To prove the fixed term contracts, GMA7 presented cash disbursement vouchers signed by Pabriga and his co-workers, stating that they were merely hired as “pinch-hitters.” The Court observed that Pabriga and his co-workers were in no position to refuse to sign these vouchers, as refusal would entail not getting paid for their services. Plainly, Pabriga and his co-workers as “pinch-hitters” cannot be considered to be on equal footing as GMA7 in the negotiation of their employment contract.

Thursday, October 10, 2013

Clear, concise, and effective English for law students, bar examinees, and legal writers in organizations, private companies, and government offices (23): Typography and visual design for pleadings, motions, court and other legal documents

Jump to: Efficient Use of Paper Rule A.M. No. 11-9-4-SC; Save forests, use Plain English; Proposed Rules on E-Filing A. M. 10-3-7-SC; Typography in briefs and other papers, from US 7th Circuit Court of Appeals; US SEC design guidelines; How to create a PDF
[1] “Typography for Lawyers, Essential Tools for Polished and Persuasive Documents” by Matthew Butterick (California-based lawyer; graduated magna cum laude from Harvard University in visual and environmental studies; designed fonts for Apple and Microsoft; awarded the Legal Writing Institute’s 2012 Golden Pen Award)
Good typography is part of good lawyering.

Good typography reinforces the goals of the text.

Any lawyer can master the essentials of good typography.

Typography in legal documents should be held to the same standards as any professionally published material.

Some of Butterick’s recommendations for typography in legal documents:
  • Point size should be 10-12 points in printed documents, 15-25 pixels on the web.
  • Never use Times New Roman and Arial.
  • Line spacing should be 120-145% of the point size. In word processors, use the “Exact” line-spacing option to achieve this. The default single-line option is too tight; the 1½-line option is too loose.
  • The average line length should be 45-90 characters (including spaces).
Butterick’s view on point size for pleadings, motions, and court documents:
While courts often require text to be set at 12 point—and sometimes larger—it’s not the most comfortable size for reading. If you compare a court filing with the average book, newspaper, or magazine, you’ll notice that the text in the filing is larger.

When you’re not bound by court rules, don’t treat 12 point as the minimum. Try sizes down to 10 point, including intermediate sizes like 10.5 and 11.5 point—half-point differences are meaningful at these sizes.
Be a better legal writer
or editor through StyleWriter 4
: this software checks 10,000 words in 12 seconds for hundreds of style and English usage issues like wordy and complex sentences, passive voice, nominalization, jargon, clichés, readability, spelling, etc.

StyleWriter 4 graphs your style and sentence variety, and identifies your writing habits to give an instant view of your writing. You can learn to adjust your writing style to suit your audience and task. You can learn, for example, the writing style of Newsweek, Time, The Economist, and Scientific American.

StyleWriter 4 is widely used in the US federal government (for example, the Environmental Protection Agency). It can be used by educators, students, and professionals in various fields - business, law, social or physical science, medicine, nursing, engineering, public relations, human resources, journalism, accounting, etc. Download your free 14-day trial copy now.
[2] “Best Dressed Briefs - Why Appearance Matters by Susan Hanley Duncan, University of Louisville Louis D. Brandeis School of Law
US Supreme Court’s clerk accepts only documents using fonts in the Century family and refuses to accept filings of any brief printed in Times New Roman.
[3] “Pay Attention to the Aesthetics of Your Pages by Bryan A. Garner (Michigan Bar Journal, March 2010)
Yet the legal profession is still largely unaware of how important page layout can be. On the whole, we're still stuck in the ugly typewriting mode: we still tend to rely on all-caps text and underlining as means of emphasis. Professional typographers I've spoken with are bewildered by our naiveté about the importance of not just what words appear on the page, but how they appear.
[4] “Requirements and Suggestions for Typography in Briefs and Other Papers” from US 7th Circuit Court of Appeals
Use typefaces that were designed for books. Both the Supreme Court and the Solicitor General use Century.
Any face with the word “book” in its name is likely to be good for legal work. Baskerville, Bembo, Caslon, Deepdene, Galliard, Jenson, Minion, Palatino, Pontifex, Stone Serif, Trump Medieval, and Utopia are among other faces designed for use in books and thus suitable for brief-length presentations.
Use italics, not underlining, for case names and emphasis.
Use real typographic quotes (“and”) and real apostrophes (’), not foot and inch marks. Reserve straight ticks for feet, inches, and minutes of arc.
Put only one space after punctuation. The typewriter convention of two spaces is for monospaced type only.
Do not justify your text unless you hyphenate it too. Indent the first line of each paragraph 1/4 inch or less. Big indents disrupt the flow of text.
Cut down on long footnotes and long block quotes.
Avoid bold type. It is hard to read and almost never necessary. Use italics instead.
Avoid setting text in all caps.
Another way to improve the attractiveness and readability of your brief or motion is to emulate high-quality legal typography. The opinions of the Supreme Court, and the briefs of the Solicitor General, are excellent models of type usage.
[5] US Securities and Exchange Commission “Plain English Handbook” design guidelines
A plain English document reflects thoughtful design choices. The right design choices make a document easier to read and its information easier to understand. The wrong design choices can make even a well-written document fail to communicate.
Typography (do not use all caps; use serif typefaces; mixing two serif or two sans serif typefaces can look like a mistake; do not use more than two typefaces in any document, not including the bold or italic versions of a typeface.)
Layout (flush left, ragged right; short line length; short paragraphs; vertical lists; white space)
Before and After example from SEC handbook (click the graphic to see the enlarged view)

[6] “Document Design: Pretty in Print- Part I” by Judge Gerald Lebovits (faculty member of Columbia University - Law School, Fordham University School of Law, and New York University School of Law)
Document design, or typography, refers to the visual component of a word: typeface, type size, white space, margins, alignment, horizontal and vertical spacing, headings, footnotes, endnotes, superscript, straight and curly quotes, boldface, italics, and underlining.
Without effective, legible typography, the reader won't appreciate a document's content. When you have a choice, make the document accessible, comprehensible, persuasive, and professional.
[7] “Painting with Print: Incorporating Concepts of Typographic and Layout Design into the Text of Legal Writing Documents” by Ruth Anne Robbins, Associate Professor of Law, Rutgers School of Law, Camden.
Persuasion includes looking good on paper — literally. Persuasion is the backbone of a lawyer’s job. Attorneys who are able to appeal to their audience will establish a measure of credibility, ethos, that will enhance the overall effectiveness of the argument. Lawyers are taught to use every part of a document as an opportunity to persuade. Textual design of the document should be approached with the same attitude, i.e., how can it help the lawyer persuade an audience?
Prof. Robbins on point size and court rules:
There is no definitive scientific answer, however, to whether court rules should require 12-point or 14-point font, given a page that is 8.5 inches by 11 inches. The studies unfortunately did not test the relative legibility of font sizes using lines of text closer to what normally appears on the standard paper size used for most legal documents. There is some discussion that larger font sizes such as 14-point Roman cause longer fixation pauses, which in turn slows reading. Dr. Tinker took care to caution that there was no easy way to draw a final conclusion as to optimal type size because other factors contribute to the equation, such as line length and line spacing. Nevertheless, experts in the field recommend reserving 14-point and larger sizes for headings as opposed to blocks of text. (page 122)
On line length:
The optimal line length depends on the size of the type. Unfortunately, the standard 6.5 inches of 12-point type in common use, that is, one-inch margins on the left and right sides of an 8.5-inch-wide page, decreases legibility by more than 3%. Based on those studies, more modern publications claim that the ideal line length for 12-point type should range from 2.75 to 4 inches. Modern examples of text using narrow columns for printing include newspapers and online legal research documents from Lexis/Nexis or Westlaw. (pages 122-123)
Prof. Robbins includes in her study the typographic requirements of various US courts.
“Efficient Use of Paper Rule” A.M. No. 11-9-4-SC

The Supreme Court’s “Efficient Use of Paper Rule” became effective as of January 1, 2013. Covered by the Rule are pleadings, motions, and similar papers; all decisions, resolutions, and orders issued by courts and by quasi-judicial bodies under the administrative supervision of the Supreme Court; reports submitted to the courts, and transcripts of stenographic notes. (Please read also A.M. No. 10-3-7-SC Proposed Rules on E-Filing.)

The Rule requires all pleadings and court documents to be written in:
  • single space with a one-and- a-half space between paragraphs,
  • using an easily readable font style of the party's choice,
  • of 14-size font, and
  • on a 13-inch by 8.5-inch white bond paper.
The Rule also requires a left hand margin of 1.5 inches from the edge; an upper margin of 1.2 inches from the edge; a right hand margin of 1.0 inch from the edge; and a lower margin of 1.0 inch from the edge.

The Supreme Court justifies the Rule by the following reasons:

(1) To produce 500 reams of paper, twenty trees are cut and 100,000 liters of water are used, water that is no longer reusable because it is laden with chemicals and is just released to the environment to poison our rivers and seas;

2) The judicial system needs to cut the use of excessive quantities of costly paper, save our forests, avoid landslides, and mitigate the worsening effects of climate change that the world is experiencing;

(3) The judiciary can play a big part in saving our trees, conserving precious water, and helping mother earth.

Save forests, use Plain English

“In 1992, the Sierra Club estimated that the average California lawyer used a ton of paper each year, a hefty pile indeed in a state that had about 137,000 lawyers. The environmental group urged the state’s Judicial Council to enact a rule requiring use of recycled paper in documents filed in the courts, a move that the group estimated would save more than 6,000 trees annually.

“Two days later, a Los Angeles Times reader penned a letter-to-the-editor with a one-sentence solution of his own. ‘If the Sierra Club would like to save whole forests rather than just a few thousand trees,’ he wrote, ‘I suggest that they encourage lawyers to use plain English.’”

“The letter writer was David Mellinkoff, professor emeritus at the UCLA School of Law and the acknowledged dean of the legal profession’s Plain English movement.”

Source: “Legal Writing: Sense and Nonsense” by Douglas E. Abrams, Associate Professor, University of Missouri School of Law


Proposed Rules on E-Filing A.M. No. 10-3-7-SC: Guidelines on Submission and Processing of Soft Copies of Supreme Court-Bound Papers Pursuant to the Efficient Use of Paper Rule

(1) Soft copies of all Supreme Court-bound papers and their annexes must be submitted simultaneously with the hard copy if by compact disc (CD) or within twenty-four (24) hours from the filing of the hard copy if by e-mail. It must be understood, however, that the paper shall be deemed to have been filed on the date and time of filing of the hard copy and not the soft copy.

(2) The soft copies must be in PDF and individually saved, as well as individually attached to the e-mail, if applicable. The file name of the soft copy must be the same as the document title. Examples: Petition for Review should have a file name "Petition for Review.pdf" Annex A should have a file name "Annex A. pdf"

(3) Soft copies submitted by e-mail must be addressed to the appropriate docketing office:

Case Type Docketing Office E-mail Address (please verify)


Judicial cases Judicial Records Office (JRO) efilejro@sc.judiciary.gov.ph
Administrative
complaints
against personnel of the SC and its decentralized units (e.g., OCA, PHILJA, JBC,
MCLEO)
Office of Administrative Services, SC (OAS-SC) efile_oas_sc@sc.judiciary.gov.ph
Administrative complaints and
matters involving the Court of
Appeals, Sandiganbayan,
Court of Tax Appeals and lower courts, its justices, judges and personnel

Documentation Division, Legal Office, OCA efile_oca@sc.judiciary.gov.ph
Administrative
matters
involving the SC
and its
decentralized
units
Office of the Clerk of Court En Banc efile_occeb@sc.judiciary.gov.ph
Complaints against lawyers
and other bar matters
Office of the Bar Confidant (OBC) efile_bar@sc.jucliciary.gov.ph

(4) The above docketing offices have the primary responsibility of ensuring that all Supreme Court-bound papers have the corresponding soft copies. They shall also be responsible for the safekeeping and archiving of the CDs.

(5) The e-mail shall use the following format:



(6)) A CD or an e-mail shall contain only electronic documents pertaining to one case. In the same manner, all soft copies of Supreme Court-bound papers and their annexes pertaining to the same case shall be saved in one CD or attached to one e-mail. In case the total file size of the electronic documents exceeds the maximum size of the CD or the maximum size allowed for uploading by the e-mail service being used by the filer, the electronic documents may be saved in different CDs or e-mailed in batches, but must be clearly marked and/or follow the format prescribed above.

(7) The filer shall also attach to the CD or the e-mail a verified declaration that the pleading and annexes submitted electronically are complete and true copies of the printed document and annexes filed with the Supreme Court. The declaration shall use the following format:



The declaration attached to the CD must be original, while the declaration attached to the e-mail must be in PDF.


How to create a PDF; use a scanner to turn your paper documents to PDF

The Proposed Rules on (paperless) E-Filing require lawyers to submit their pleadings to the Supreme Court in PDF format. PDF stands for “Portable Document Format.” Adobe Acrobat is the standard for creating PDFs (where you can sign your documents online) but it is expensive.

A cheaper alternative is to use a scanner to turn your paper document to PDF. Late-model printers from HP, Brother, Epson, etc. have scanners bundled with them. (If you only have a generic scanner, you can download free software.) Here are the steps:

[1] After preparing your documents in your word processor (MS Word, Libre Office, etc.), print them out. Sign the documents and have them notarized.

[2] Scan your documents page by page; if you have voluminous documents, scanning them will be a tedious process.

You can monitor on your computer screen the scanning progress. Be careful with choosing the scanning type. If you choose a very high resolution, your PDF file will be extremely large. (If you are using Yahoo Mail, it has a limit of 25 megabytes for attachments.)

Save your documents as PDF to an appropriate folder.

[3] Burn your PDFs into a CD. Or attach them to your email.

Resources: 

How do I scan to PDF? (University of Cambridge, Faculty of Law)

Scanning Directly to a PDF File – Epson

How to Scan a Document to PDF | eHow

Advanced Scan to PDF Free - CNET Download.com

Tuesday, October 08, 2013

Illegal drugs: if chain of custody is broken, accused must be acquitted

Plain Language summary:

Case title:People of the Philippines vs. Nicolas Gutierrez” G.R. No. 179213, September 3, 2009

Ruling: The prosecution failed to prove under the “chain of custody” rule that the shabu allegedly seized from the accused by the police officers was the same shabu presented in court. The accused must therefore be acquitted.

Definitions:

(1) “Corpus delicti”: substance of the crime that proves a crime has actually been committed. In cases involving illegal drugs, the illegal drug itself is the corpus delicti. Its existence is vital for the court to find the accused beyond reasonable doubt.

(2) “Chain of custody” rule: there must be testimony about every link in the chain, from the moment the object seized was picked up to the time it is offered in evidence.

Every person who touched the object must describe
  • how and from whom it was received, where it was, and what happened to it while in the witness's possession,

  • the condition in which it was received, and

  • the condition in which it was delivered to the next link in the chain.
References, links, relevant laws:

Mallillin v. People” G.R. No. 172953, April 30, 2008 (Supreme Court requirements in proving chain of custody)

Section 1 (b) of the Dangerous Drugs Board Regulation No. 1, Series of 2002 which implements R.A. No. 9165 (definition of "chain of custody")
Background facts:

[1] A police team arrested Nicolas Gutierrez during a buy-bust operation on June 16, 2003 in Pasig City. The team allegedly seized from Gutierrez five centigrams of methylamphetamine hydrochloride (“shabu”) and drug paraphernalia.

Gutierrez was charged under R.A. 9165 with illegal sale of shabu and illegal possession of paraphernalia.

[2] Gutierrez pleaded “not guilty” during his arraignment. He claimed that he was merely having dinner with his family when four unidentified armed men barged into his house and arrested him.

[3] During the pre-trial, Gutierrez’s lawyer stipulated that:
a. the specimen (alleged shabu) exists,
b. the arresting officers requested for its examination,
c. a forensic chemist examined the specimen, and
d. it tested positive for methyl amphetamine hydrochloride.

[4] During the hearing, the fiscal presented some of the police officers who arrested Gutierrez. The officers identified the buy-bust money paid to Gutierrez and the shabu bought from him. PO1 Espares testified on the marking and eventual turnover of the seized sachet of alleged shabu to the investigator.

[5] The Pasig City Regional Trial Court found Gutierrez guilty of the illegal sale of shabu. But the RTC acquitted him of the charge of illegal possession of paraphernalia.

Gutierrez questioned the RTC’s ruling before the Court of Appeals. The CA affirmed the RTC’s decision. Gutierrez then brought his case up to the Supreme Court.

Issue:

The prosecution failed to show what happened to the shabu from the time the arresting officers gave it to the investigator up to its turnover for laboratory examination. The case records also do not show what happened to the shabu between its turnover by the chemist to the investigator and its presentation in court. Since the prosecution failed to prove that the shabu allegedly seized from Gutierrez was the same shabu presented in court, should Gutierrez be acquitted?

Supreme Court ruling:

Gutierrez should be acquitted because the prosecution failed to show an unbroken chain of custody of the alleged shabu.

Under Section 5, Article II of R.A. No. 9165, the elements necessary in a prosecution for the illegal sale of shabu are:
  • the identity of the buyer and the seller;
  • the object and the consideration; and
  • the delivery of the thing sold and the payment for it.
The prosecution must prove that the sale of shabu took place. The corpus delicti— the body or substance of the crime which establishes the fact that acrime has actually been committed—must also be presented in court. In cases involving narcotics, the illegal drug itself constitutes the corpus delicti of the offense. The existence of the illegal drug is vital for the court to find the accused guilty beyond reasonable doubt. The “chain of custody” rule ensures that unnecessary doubts on the identity of the evidence are removed.

In “Malillin v. People,” the Supreme Court explained how it expects the chain of custody or “movement” of the seized evidence to be maintained. There must be testimony about every link in the chain, from the moment the object seized was picked up to the time it is offered in evidence. Every person who touched the object must describe
  • how and from whom it was received, where it was, and what happened to it
    while in the witness’s possession,
  • the condition in which it was received, and
  • the condition in which it was delivered to the next link in the chain.
These witnesses must describe the precautions taken to ensure that there had been
1. no change in the condition of the object and
2. no opportunity for someone not in the chain to possess the object.
PO1 Espares, one of the arresting officers, testified on the marking and eventual turnover of the allegedly seized sachet of shabu to the investigator. But no explanation was given on its custody in the interim – from the time it was turned over to the investigator to its turnover for laboratory examination. The case records also do not show what happened to the allegedly seized shabu between the turnover by the chemist to the investigator and its presentation in court.

Highlights of the Supreme Court’s decision / clarifications:

[1] The Supreme Court also ruled that Gutierrez should be acquitted because the arresting officers failed to comply with the rule on the custody and disposition of confiscated drugs (Section 21, Paragraph 1 of Article II of R.A. No. 9165). The officers did not physically inventory and take pictures of the shabu allegedly confiscated from Gutierrez. The officers also did not explain why they did not follow the rule.

[2] “Because of the built-in danger of abuse that a buy-bust operation carries, it is governed by specific procedures on the seizure and custody of drugs.”

“By the very nature of anti-narcotics operations, the need for entrapment procedures, the use of shady characters as informants, the ease with which sticks of marijuana or grams of heroin can be planted in the pockets or hands of unsuspecting provincial hicks, and the secrecy that inevitably shrouds all drug deals, the possibility of abuse is great.”

“Courts must be extra vigilant in trying drug cases lest an innocent person is made to suffer the unusually severe penalties for drug offenses.”

[3] What about the stipulations made by Gutierrez’s lawyer during the pre-trial?

These stipulations have no bearing on the question of chain of custody. The Court said:
These stipulations, which merely affirm the existence of the specimen, and the request for laboratory examination and the results thereof, were entered into during pre-trial only in order to dispense with the testimony of the forensic chemist and abbreviate the proceedings. That such is the intention of the parties is clear from the additional stipulations that the forensic chemist had no personal knowledge as to the source of the alleged specimen; and that the defense was reserving its right to object to the pieces of evidence marked by the prosecution. Clearly, the stipulations do not cover the manner the specimen was handled before it came to the possession of the forensic chemist and after it left her possession.

To interpret the stipulations as an admission that appellant was the source of the specimen would be to bind him to an unceremonious withdrawal of his plea of not guilty – a reading not supported by the records which creates a dangerous precedent.