january-march 2009 philja newsphilja...

PHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSJanuary-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009

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January to March 2009 Volume XI, Issue No. 41

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SUPREME COURT

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OF THE PHILIP

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BATAS AT BAYAN

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The Philippine Judicial Academy was establishedon March 12, 1996, by virtue of Administrative OrderNo. 35-96 of the Supreme Court, and institutionalizedon February 26, 1998 through Republic Act No. 8557An Act Establishing the Philippine Judicial Academy, Definingits Powers and Functions, Appropriating Funds Therefor, andfor Other Purposes.

This is the PHILJA seal, with symbols that define itsvision and mission, and with purple, the color of law,permeating its background, for judicial educationbrings a clearer understanding and better applicationof the law.

Originally intended to embody PHILJA’s Charter, theBOOK OF KNOWLEDGE has since evolved tosignify knowledge, which is the ultimate goal oflearning and which PHILJA consistently provides.

The SCALE stands for Justice, and is made part of theseal to signify PHILJA’s role in the Philippine JudicialSystem

The TORCH, symbolizing learning, is the light heldhigh by PHILJA that allows all judges and courtpersonnel to benefit from the book of knowledge.

Today, 13 years after its establishment as theeducation arm of the Court, PHILJA has fulfilled itsmission to serve the Judiciary, having made availableto its members the opportunity for the developmentof judicial competence, formation of constructiveattitude and the cultivation of sound values.

We are proud to present to you the highlights ofits progress, through the years.

to work on the challenge to formulate and implementa continuing program of judicial education for justices,judges, court personnel and lawyers. By authority ofthen Chief Justice Andres B. Narvasa, the Chancellorvisited the District Court of Columbia and the FederalJudicial Center in Washington, D.C., from where shegained valuable insights for the grand task ahead. Byyear’s end, in the midst of birth pangs, PHILJA wasable to conduct 11 seminar-workshops andconvention-seminars, in coordination with the U.P.Institute of Judicial Administration, having alreadydesigned instructional modules to achieve theobjectives of the PHILJA Charter. Justices of theSupreme Court and the Court of Appeals were theAcademy’s first lecturers and speakers.

1996The few men and women that composedthe lean PHILJA team immediately went

number swelled to 3,237 justices and judges, and 5,316court personnel in 1997. Among the 42 activitiesconducted for the year, an Appellate Justices’Conference was held for the first time. Visiting USJudge Clifford D. Wallace of the 9th US Circuit Court ofAppeals exchanged views and information with theJustices of the Court of Appeals on the intricacies ofthe appellate justice system. Also a first-time activitywas the conduct of one-day seminars nationwide onthe salient features of the 1997 Rules of Civil Procedurewith the members of the Revision of Rules Committeethemselves, led by Justice Jose Y. Feria, lecturing allover the country. This year also marked the beginningof PHILJA’s international linkages with various judicialeducation organizations. The Chancellor attended theConference of the National Association of State JudicialEducators in Nevada, USA, where she observed thatPHILJA’s judicial education programs comparedfavorably with those abroad. And finally, 12 yearsbefore it was to become a reality, the planning for theconstruction of a new PHILJA training facility wasunderway.

Year 2. From only 579 judges and 168court personnel trained in 1996, the1997

into law Republic Act No. 8557. This LegislativeCharter institutionalized PHILJA as a “training schoolfor justices, judges, court personnel, lawyers andaspirants to judicial posts.” This year also saw PHILJAestablishing consortiums with other institutions, suchas the Ateneo Human Rights Center, for thedevelopment and implementation of its programs.PHILJA took active part in the Chief Justice Andres R.Narvasa Centennial Lecture Series with the Chancellorlecturing on “Legal and Judicial Education Reforms

1998At last, on February 26, 1998, thenPresident Fidel V. Ramos signed

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and the Narvasa Court” where she emphasized thatthe establishment of PHILJA at the instance of thenChief Justice Narvasa was a major instrument forjudicial education reforms. Meanwhile, shortly afterthe approval by the Court en banc of the PHILJATraining Facility plans, Chief Justice Narvasa and theAssociate Justices officiated at the laying of thecornerstone of the proposed building at Tagaytay City.Clearly, on its third year, PHILJA had established itspresence and was right on track.

accorded PHILJA by the World Bank through its reportshowing that PHILJA “achieves internationalstandards in that it supports judicial independencethrough a judicial majority and is representative ofthe various courts it serves.” Also worthy of mentionis the Board of Trustees’ approval of PHILJA’sPhilosophy that the “people are best served when theJudiciary is independent and its members are men andwomen of proven competence, integrity, probity, andindependence.” The Board of Trustees had by nowapproved the curricula for the Academy’s mainprograms. With its expanding activities and increasein personnel, PHILJA designated four core offices inaddition to the Executive Officials and the Corps ofProfessors. These were the Academic Affairs Office,the Research, Publications and Linkages Office, andthe Administrative and Finance Offices. The PilotProject on Mediation and Conciliation in the RTCs andMTCs of Mandaluyong and Valenzuela cities was nowalso implemented. PHILJA has come a long way,indeed.

1999Highlighting this year ’saccomplishments was the recognition

Chief Justice Andres R. Narvasa delivering the firstlecture on “The Chief Justice in Philippine History.”PHILJA successfully launched the first PJP for lawyerswho wanted to pursue a career in the judiciary. Italso expanded its network by collaborating with otheragencies: the RP-UK Child Welfare Initiative, theUNICEF, on seminars for Family Court Judges; theDSWD, with funding assistance from the Office of theUN High Commissioner for Human Rights, and withthe CPC V or Fifth Country Programme for Children.Eighty-eight mediators had now been trained, withThe Asia Foundation assisting the Academy in thebasic programs. Some PHILJA officials and personnelattended seminars abroad, bringing back with theminsights and awareness of the best practices of otherjudicial institutions. The Chancellor attended theWorld Bank Global Conference on “ComprehensiveLegal and Judicial Development: Towards an Agendafor a Just and Equitable Society in the 21st Century” inWashington, D.C.

2000Year 5. PHILJA spearheaded theCentenary Lecture Series with then

seminar titled “Ipagtanggol ang Kalikasan” inpartnership with Tanggol Kalikasan, CIDA, The FordFoundation, USAID, The Asia Foundation and theFoundation for the Philippine Environment. ThreeHundred Fifty-Nine more mediators were accreditedfor Metro Manila, Cebu and Davao. The RPLO tookcharge of the Centenary Lecture Series which includedthe 13th centenary lecture of Justice Ricardo S. Puno,Sr. on “Legacies in Civil Law from Justice Arsenio P.Dizon and His Peers.” The Philippines, representedby PHILJA was selected one of five countries thatparticipated in the World Bank Distance LearningCourse on Judicial Reforms: Performance andAccountability.” At the 9th Conference of Chief Justicesof Asia and the Pacific on October 4-8, 2001 inChristchurch, New Zealand, the delegates “tookspecial notice of the PHILJA and its critical role inelevating the standards of judicial education.” At theinaugural meeting in December of the CommonwealthJudicial Education Institute in Halifax, Canada, PHILJAwas mentioned as having a “most advanced andsophisticated” structure of judicial education. Therecognition was a most welcome Christmas present.

In its sixth year, PHILJA ventured onenvironmental protection through a2001

PHILJA. The first Computer Training and ProficiencySeminar for the CA and Sandiganbayan Justices washeld, and so was the first for Court Librarians.Seminars were held on the Indigenous Peoples’ Rights

2002Many exciting events made thisanother memorable year for

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Act, the Comprehensive Drugs Act of 2002, as well asa symposium on “The Challenge of Terrorism and theDefense of Human Rights.” Through an en bancresolution, the Court granted the Academy omnibusaccreditation of all its programs for purposes ofcompliance with MCLE requirements. TheMemorandum of Understanding between theGovernment of Canada and the Government of theRepublic of the Philippines concerning the JURISProject was signed, a joint 5-year project with theCIDA and the National Judicial Institute of Canada.The Court’s directive for the Ridge Sports andCountry Club Corporation facility in Tagaytay tocease operation as a business concern opened the dooreven wider for the realization of PHILJA’s dreambuilding.

PHILJA introduced Court-Annexed Mediation both inthe trial courts and in the Court of Appeals.Philippine Mediation Center units were set up inMetro Manila, Cebu and Davao. Caseflowmanagement was now being pilot-tested with itselectronic component in the Pasay City trial courts.Another first was the launch of the E-Learning PilotProject. The first APJEF conference was held in Manilathis year, attended by local and foreign delegates from13 countries, members of the InternationalOrganization for Judicial Training (IOJT). The APJEFcharter was signed, and Justice Herrera was electedChair of the Executive Committee. PHILJA also sentthis year a total of 20 delegates to the First and SecondStudy Tours to Canada, as part of the JURIS Project.

2003The climate for judicial education andreforms was even hotter this year.

continued its steady growth in the pursuit of judicialreforms. Prospects looked positive for the proposedPHILJA Development Center project with the JapanInternational Cooperation Agency (JICA). The RJCEPswere carried out in the 13 judicial regions. Multi-disciplinary seminars for Family Courts were heldnationwide. The Academy continues to enjoy strongand productive partnerships with the USAID, TheAsia Foundation, ADB, UNICEF, Embassy of Japan, US-Asia Environmental Partnership Program, UNDP,Asian Institute of Journalism and Communication,Anti-Money Laundering Council, and non-governmental agencies. PHILJA was on a roll.

2004On its ninth year, PHILJA, withinnovativeness and dedication,

G. Davide, Jr. Distinguished Lecture Series describedby then Associate Justice Artemio V. Panganiban asan “intellectual feast.” Noteworthy is theparticipation of 41 members of the Corps of Professorsat the plenary session conducted by PHILJA inpartnership with Canada’s NJI where PHILJA’s hardwork earned the NJI Executive Director’s praise ofPHILJA as one of the world leaders in developingjudicial education. In appreciation of ChancellorHerrera’s leadership, the San Beda Graduate School ofLaw conferred on her the distinction of Doctor of Lawshonoris causa in a special academic convocation. Theconsortium between PHILJA and the San BedaGraduate School of Law admitted 21 applicants tothe Master of Laws program. Topping this year’srewards was the official advice from the Departmentof Finance of the approval of the Non-Project GrantAssistance Countervalue Fund of Japan for theconstruction and equipping of the PDC in Tagaytayand subsequently, the release of Three HundredMillion Pesos for the project. It was icing on the cake.

2005A major highlight of this good year wasthe holding of the Chief Justice Hilario

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of twelve seminars in a month were held, many beingheld simultaneously. Aside from forging relationshipswith other judicial institutions, PHILJA took activepart in international conferences, share experienceand expertise with its Asian and Europeancounterparts. The Chancellor was elected Chairpersonof the Executive Committee of the APJEF and re-electedas Deputy President for Asia and the Pacific of theIOJT of which the Philippines is a founding member.At the Asia Pacific Judicial Reform Forum held inMalaysia, Chancellor Herrera delivered her paper on“Judicial Education and Reforms.” She attended the3rd International Conference on the Training of theJudiciary in Barcelona, Spain, presiding at the specialworkshop on How to Establish a Judicial Training Institute.Again, at the 2007 Pacific Judicial Conference in Guam,the Chancellor attended as Guest Presenter, that laterresulted in requests for assistance from otherinstitutions for the advancement of judicial education.

2007PHILJA happily closed its eleventh yeardespite a crippled RJCEP. An average

that were part of a record 188 seminars conducted,involving 21,756 judicial personnel, including 5,875judges, who consistently gave PHILJA activities highmarks for the seminars’ smooth conduct, excellentlecturers and timely topics. PHILJA held fivedistinguished lectures commencing with thatdelivered by the Chief Justice of Spain, followed bythose of Judge Taihakurei Durie of the High Court ofNew Zealand; Ambassador Lauro Baja, Jr., formerPhilippine Permanent Representative to the UnitedNations; Dr. Jean Marie Henckaerts, Head of theCommittee in International Humanitarian LawProject of the International Committee of the RedCross; and the last by Judge Fausto Pocar, formerPresident of the International Criminal Tribunal forthe former Yugoslavia. On Court-Annexed Mediation,the areas of Lanao del Sur, Lanao del Norte and Rizalgained success rates of 100%, with the remaining 17mediation areas likewise gaining a lot of ground. Ourglobal linkages expanded with the holding of theInternational Conference on the InternationalCriminal Court. A panel of international human rightsexperts led by Judge Roberto Belleli, presently LegalAdviser to the Embassy of Italy in The Hague, theNetherlands, joined our own panel of experts headedby Chief Justice Reynato S. Puno, in high level, timelyand meaningful discourses that were all aimed toaddress global issues concerning human rightsviolations. PHILJA remains grateful for theappreciation and commendation, especially expressedby the foreign visitors, for the successful conduct ofthe conference and our rewarded efforts to gather thebest speakers and discussants.

In the year that just was, PHILJA heldconferences at the international level2008

American Bar Association-Asia’s assessment that wasreported in the Judicial Reform Index for thePhilippines 2006 Analysis. PHILJA continued to focuson its regular programs until it was rocked by thesudden lack of funding for its training programs.Principally sacrificed were the RJCEPs. Nonetheless,119 seminar-workshops were held this year. PHILJAheld the first national conference of mediators whichsaw the oath-taking of 71 Appeals Court mediators.It successfully managed the activities leading to theAcademic, National and Global Forums on thejudicial philosophy Liberty and Prosperity espoused byChief Justice Artemio V. Panganiban. ChancellorHerrera chaired the Program Committee for the GlobalForum which was attended by 300 participants,including Chief Justices from different parts of theworld.

2006The year started well with PHILJA. Itreceived positive ratings in the

(Continued on the NEXT page)

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Finally, the construction of the PHILJATraining Center is in full speed for its2009

completion in December 2009. Presentlyunremarkably located on the quiet hills in Tagaytay,it will soon rise as a landmark for judicial education,not only in the Philippines but in the region, thesymbolic hub of PHILJA’s unrelenting work as theCourt’s education arm.

As PHILJA looks forward to the achievements of the13th year, we are reminded of the 13 rays of the PHILJAseal, representing the 13 judicial regions that PHILJA’s

programs have reached, from LaoagCity in the north of Luzon to farZamboanga in the south. All thesehave been achieved with JusticeAmeurfina A. Melencio Herrera at

the helm of the ship that sails fearlessly on, despite amyriad of difficulties, to reach all in the judicial harbors,in pursuit of judicial excellence.

PHILJA PrayerPHILJA PrayerPHILJA PrayerPHILJA PrayerPHILJA Prayer

by Rev. Fr. Ranhilio C. Aquino, PhD, JurDr

Father of the Eternal Word, the same Yesterday, Today,and Forever,

You call forth from all creation, all that is noblest and most exalted.

In Your people’s thirst for justice, we recognizea yearning for Your Kingdom.

When we, your sons and daughters, render unto each other thatwhich is due and fair,

we serve you and conform ourselves to your Holy Will.

Grant that through us, your servantsat the Philippine Judicial Academy,

the courts of our land may be so permeated by Your Spiritand strive for excellence in the Judiciary,

so that there may be established among us,a reign of justice and of profound respect

for the rights of all.

Make us instruments of justice and equity,by serving with competence and ardor,

so that all may see Your hand at work in our world,and your compassion guiding us through PHILJA’s history.

Philippine Judicial Academy HymnPhilippine Judicial Academy HymnPhilippine Judicial Academy HymnPhilippine Judicial Academy HymnPhilippine Judicial Academy Hymn

Words and Lyrics by Rev. Fr. Ranhilio C. Aquino, PhD, JurDr

They ascend the dais

Our ministers of the law

At the Bench they preside

Our High Priests of Justice

To the plaint of all they must give ear

And to all who before them stand

They must render right and redress the wrong.

RefrainRefrainRefrainRefrainRefrain

To imbue their hearts with a passion for justice

To set their souls ablaze with zeal for the law

To nurture them in the truth

And to steel them in adversity

Thus, we swear to serve at the Philippine Judicial Academy.

Respect for the law

In all they must impress

Confidence in its processes

They must in all inspire

With motives pure and conscience clear

Render justice as the law ordains

At the Supreme Court’s Academy, this is our pledge.

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AAAAA H H H H H omage toomage toomage toomage toomage toM M M M M adame adame adame adame adame CCCCChancellor hancellor hancellor hancellor hancellor A A A A A meurfina meurfina meurfina meurfina meurfina A A A A A guinaldo guinaldo guinaldo guinaldo guinaldo M M M M M elencio elencio elencio elencio elencio HHHHH erreraerreraerreraerreraerrera

In 1996, the Philippine Judicial Academy was established by an administrative order and Justice Ameurfina A.Melecio Herrera was appointed as Chancellor. Four years after her retirement from the Supreme Court, her appointmentwas certainly undisputed as her exceptional public service record adequately proved that Justice Herrera is the right personfor the job. Indeed, the post of PHILJA Chancellor is a noble calling and it was a calling she greatly pursued.

The PHILJA was mandated to be the country’s judicial training school. However, beyond this lofty vision of thisinstitution, the difficulty of setting it up loomed as a huge challenge. Without a precedent in the Philippine jurisdiction anda manual of how to properly set it up, Justice Herrera boldly took on the reins, and pursued the establishment of theAcademy with persistent exertion and endless wisdom. She took the necessary steps with passion, astuteness, andcourage, and exhibited a readiness to meet the perplexities of the position she held.

After 13 productive years, the PHILJA is now at the core of continuing judicial education, and viewed as a primaryinstitution that can effectively facilitate change in the Judiciary. The Academy is presently a prestigious school with coreeducation programs that were carefully devised to give our judges and personnel the best possible judicial education. ThePHILA has also utilized the latest technologies, such as the Internet and videoconferencing, to be cost-effective means ofproviding judicial education, and introduced mediation as an alternative dispute resolution mechanism. Moreover, theAcademy has ventured internationally and is often seen at the helm of globalizing judicial education. Truly, these highpoints have Justice Herrera’s trademark of excellence and ingenuity as well as reflect her personal dream for PHILJA tobecome Asia Pacific’s regional leader in judicial education. Fortified by her innate meticulousness, forward-thinkingperspective, and penchant for innovation, all these projects have made PHILJA the distinguished and widely-trustedinstitution that it is today.

Throughout her stint as Chancellor, Justice Herrera was never satisfied with mediocrity and maintained a very highstandard of excellence for the endeavors of the PHILJA. She has exhibited an outstanding work ethic and a remarkabledevotion to the endeavors of the Academy and for all these, we highly commend and honor her. As her admirable legacybecomes the true foundation of the PHILJA, may her breakthroughs live on and enthuse the Academy to excel even more.

-- Reynato S. PunoChief Justice

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Tunay ngang masasabi na ina ng Philippine Judicial Academy si Justice Ameurfina A. Melencio Herrera. Pinuno siya ng komitena bumuo ng Administrative Order na tumupad sa pangarap na dalubhasaan ng paghuhukom. At ng iluwal na ang Akademya, siyaang nag-aruga, nagpalusog, nagpalakas at nagpalaki nito hanggang sa ang PHILJA ay kilalanin bilang natatanging tagahubogng kaalaman at kabutihan ng mga hukom. Ang paggalang at pagkilala sa PHILJA, dito sa Pilipinas at maging sa buong mundo, aypumapantay na sa dangal ng pangalang Ameurfina A. Melencio Herrera. Natupad na ang pangarap, malaki na, sa anumangkahulugan, ang Akademya. Salamat sa kanyang ina.

-- Jose P. PerezCourt Administrator

AAAAA H H H H H omage to omage to omage to omage to omage to M M M M M adame adame adame adame adame CCCCChancellor hancellor hancellor hancellor hancellor A A A A A meurfina meurfina meurfina meurfina meurfina A A A A A guinaldo guinaldo guinaldo guinaldo guinaldo M M M M M elencio elencio elencio elencio elencio H H H H H erreraerreraerreraerreraerrera (continued)

Justice Ameurfina A. Melencio Herrera, Founding Chancellor of the Philippine Judicial Academy, is a human rights advocatewithout even realizing it. Her work in this field is the story I wish to record on this page for it must be told.

In 1999 upon returning from my service in the United Nations, Justice Herrera kindly invited me to join the small core staff ofPHILJA. I humbly accepted upon condition that I would work on the legal subject I thought I could claim any expertise in—humanrights and international humanitarian law. Justice Herrera agreed and assigned me to head the Research and Publications Office andChair of the Department of Human Rights and International Humanitarian Law. That was the beginning of what is now a fullblown curricular offering on various aspects of human rights law at PHILJA and the entire judiciary.

Justice Herrera took a big leap forward when she accepted the notion that human rights is at the heart of justice. Child right wasand still is a strong advocacy thrust. Using the International Convention on the Rights of the Child (CRC) as the centerpiece, acontinuing training program in Family Courts Courts—for judges, prosecutors, social workers, police and non-governmentalorganizations working among others—is now a PHILJA staple. This has been acknowledged as unique among ASEAN countriesand PHILJA experts have shared their experience in various international fora. Primarily as a result of PHILJA’s training and researchprogram on child rights, the Supreme Court promulgated revised rules to harmonize the Rules of Court with the CRC’s fundamentalprinciple—the best interests of the child must be paramount in all proceedings affecting the child.

Strength and dignity are her clothing,Strength and dignity are her clothing,Strength and dignity are her clothing,Strength and dignity are her clothing,Strength and dignity are her clothing,

And she smiles at the future.And she smiles at the future.And she smiles at the future.And she smiles at the future.And she smiles at the future.

She opens her mouth in wisdom,She opens her mouth in wisdom,She opens her mouth in wisdom,She opens her mouth in wisdom,She opens her mouth in wisdom,

And the teaching of kindness is on her tongueAnd the teaching of kindness is on her tongueAnd the teaching of kindness is on her tongueAnd the teaching of kindness is on her tongueAnd the teaching of kindness is on her tongue.(Vide Proverbs 31:25-26)

Madame Justice Ameurfina Aguinaldo Melencio-Herrera is the classic embodiment of judicial leadership. In variouscapacities, she has influenced the development of law in ways that go beyond decisional output. Her invaluable service to theJudiciary even beyond retirement is admirable and beyond compare. Her commitment to gender development issues is nonpareil, giventhe partnership forged between the Philippine Judicial Academy (PHILJA) and the Court’s Committee on Gender Responsiveness inthe Judiciary in collaborative programs and endeavors. Her pioneering efforts at the PHILJA have made the most impact in judicialdevelopment, leaving a legacy of judicial competence to future dispensers of justice and thus imparting a lasting contribution to thefuture of the judicial system.

Madame Justice Herrera is the idyllic portrait of a genteel woman. Having had the privilege of working with her under theCourt’s Knowledge-Sharing Committee, I find her life to be a testament that “charm is deceitful and beauty is vain.”(Vide Proverbs 31:30)

Springing from within her is an insatiable passion for work that could engulf an entire hall. Yet, at the end of the day’s toil, she stillexudes an easy grace that outshines the most polished, and a gratifying ease that reflects a job well done.

Learned in the legalities…, refined in the regalities…., and rooted in the realities… of life, Madame Justice Herrera deserves aplace in the Hall of Fame of the brightest among legal luminaries and the most brilliant among legal gems.

-- Conchita Carpio MoralesAssociate Justice, Supreme Court

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The greatest measure of our lives is not public recognition but the legacy we leave behind, the people we have touched, and theway we did it.

The birth of any institution necessarily has its growing pains. With the establishment of PHILJA as a training arm of thejudiciary, the UP- IJA served as an administrative and technical “wet nurse” with Justice Amor as the loving mother.

In recent years, PHILJA has become a self-sufficient institution. For this, we owe our most sincere gratitude to its guiding light.Justice Amor, you have touched us and we will always remember you.

-- Myrna S. Feliciano and StaffUP Institute of Judicial Administration

In May, at her own request, Justice Ameurfina Melencio Herrera will turn over stewardship of the Philippine Judicial Academyto Justice Adolf Azcuna. In ceremonies marking the Judicial Academy’s anniversary a week ago, the professors of the Academy, pastand present, and the staff paid her the tribute she so justly deserves.

I joined the Academy in 1999. By then it was three years old but very evidently still in its infancy. My father, Justice HilarionAquino, who joined PHILJA ahead, told me that when he was appointed a judge, he was expected to learn the ropes by himself, seekingthe advice when needed of one colleague or the other, devising managerial strategies of his own and making do with ad hoc solutionsas challenges presented themselves. The Supreme Court first organized the Academy by an administrative order, and Congresssubsequently passed Republic Act No. 8557 that granted it its legislative charter as a distinct but integral office of the Supreme Courtof the Philippines. The whole concept behind PHILJA was to have a school for judges, justices and aspirants to judicial positions sothat not only would judges be properly oriented in the ways and demands of the Bench when appointed, but also so that there wouldbe a pool of qualified candidates for the Bench.

Ameurfina Herrera was never a professor, but her appointment as founding Chancellor could not have been wiser and moreauspicious. Despite her venerable age she was always excited over new ideas, particularly in the field of professional education. Shewas attentive to all who had fresh ideas to offer and she was one who had very little patience for “arguments from inertia”… so it hasbeen so shall it be! Sometimes it vexed me that she consulted endlessly, but it was a sign of profound humility on her part to listen withreal attention to the opinions of others before making a judgment call. Other jurisdictions recognized her competence as well and shewas elected Deputy President of the International Organization of Judicial Trainers. She founded too the Asia Pacific JudicialEducator’s Forum.

In the nascent PHILJA, we were only a handful, and back in 1999 to 2001 or thereabouts, “handful” referred to Justice Herrera,Justice Nathaniel Grospe, the Vice Chancellor, Dr. Purificacion Quisumbing who had just returned from her New York stint with theUN Human Rights Commission and was conscripted to take charge of Research, Publications and Linkages, Professor EdwinSandoval, who was Deputy Executive Secretary and I, heading the Academic Affairs Office. But turf was really no problem for anyof us, and we all helped each other. Many of the academic programs were crafted by Dr. Quisumbing and I helped too in publicationand research. We constituted the “administration” of the Academy. We met very often, and we spent long hours in what used to be

Another PHILJA human rights program of significant import is the multi-sectoral training on how to improve judicial responseto the serious problem of extrajudicial (extra-legal) killings currently challenging the Philippines. In partnership with representativesof all the pillars of criminal justice, PHILJA and the Commission of Human Rights of the Philippines (initiated while I was Chairpersonof the CHRP) are addressing a domestic and international grave concern that a culture of impunity is threatening to undermine thejustice system. The Supreme Court has responded significantly to this human rights issue by promulgating the Rule on the Writ ofAmparo and the Rule on Habeas Data.

Women’s rights in a gender-responsive judiciary. This is another curricular hallmark of PHILJA. Working with women’s rightsadvocates, Justice Herrera paved the way to active participation in framing legislation and court rules.

Many pioneering human rights activities were undertaken during the Chancellor’s leadership; conferences, justiciability ofeconomic, social, cultural rights; high level lecture and international dialogues on new developments in International Law such asCommand Responsibility and domestic application of International Humanitarian Law.

For all these, and more, Chancellor Herrera has earned her rightful title – JUSTICE AMEURFINA A. MELENCIO HERRERA:HUMAN RIGHTS ADVOCATE.

-- Purificacion Valera QuisumbingPhilippine Judicial Academy

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the conference room of the first division of the Court in the Old Supreme Court Building at Taft Avenue. In fact the Chancellor calledfor meetings so often that Justice Antonio Martinez, who succeeded Justice Grospe, and I once quipped that at our deaths, on ourepitaphs “DOM” – Died of Meetings – would be inscribed. But these meetings that we so dreaded then have borne fruit in theprograms of the Academy now. One thing is for certain: the meetings were never pointless. Justice Herrera was never one to rushthings through when she thought more study was needed, and she was not one to settle for mediocre work. She demanded the best ofall and PhilJA did enjoy enormous prestige and public trust. It still does today.

The staff we had then was lean, but truly mean in the productive sense. There was no clock-watching at PHILJA. Five o’clockwas not necessarily dismissal time because it all depended on whether everything was set for the activities of the next day. In fact,PHILJA personnel, to whom I also pay tribute, knew that they could be summoned from a weekend respite to get things in readinessfor a seminar or an academic program. Everyone knew that when you brought something to the Chancellor for her review, it better begood – properly formatted even. She was never harsh, but she was never one to compromise with the quality of work too. Programswere fastidiously checked and double-checked, and the names of speakers, moderators, and reactors had to be complete, with middleinitials and proper titles. This was the education we all got under the tutelage of Justice Herrera.

But she loved fun too, she gamely took part in afternoon ball-games at Tagaytay during judges’ seminars and even in “de-freezing” activities that included dancing and sashaying. I organized regional judicial career enhancement seminars, the conceptbeing to take the academy to the judicial regions rather than flying in judges from far south as Tawi-Tawi and as far north as Bascoto Tagaytay. That meant out-of-town trips, and Justice Amor gamely trudged along. But that also put the entire staff – including thelecturers – on their toes. Everything had to be right if Justice Herrera, whom we all called “Mama H,” was around! In fact, the firstregional seminar was at Tuguegarao City for all Region 2 judges, and she made the land trip with the rest of the Academy’s crew.When I met her at the city’s entrance and told her that somewhere in the hills surrounding Tuguegarao, her grandfather, GeneralEmilio Aguinaldo, the first President of the Republic, had made camp to elude arrest by the Americans, she wanted to be taken to thehills. I succeeded in dissuading her. In many ways her sheltered childhood and her careful upbringing made some of her waysinteresting – and memorable. On a trip to Bohol, after a successful seminar (almost all of PHILJA’s programs are), she treated us allto a dampa that had a reputation for unrivalled sea-food delights. After a hearty meal she promptly asked for the bill and handed hercredit card to her secretary. She was flabbergasted to be told that the cajera would not even know what to do with the credit card. Sheoffered a check, and argued that from the Negotiable Instruments Law that it was in fact a substitute for money – to no avail! Herbeautiful house at Tagaytay, with its scenic vista of the crater-lake, is elegant but unpretentious. She played host to us on differentoccasions and we always enjoyed the classy ambiance, the luxuriant garden and the unparalleled panorama below!

She was, however, updated in many ways. She pushed for e-delivery of judicial course, she has nagged the ManagementInformation Systems Office of the Supreme Court to keep up to date its e-library, she has supported the elimination of too much paperat PHILJA and joined in the advocacy for e-conferences, and her computer skills are definitely more than rudimentary. There is so muchthat should be credited to her. Mediation was her pet project and court-annexed mediation has now been institutionalized. The Ruleon the Examination of the Child Witness started as a PHILJA proposal as did so many other special rules. Even of the doctrine laiddown in People v. Mateo through the pen of Justice Jose Vitug traces its roots to a proposal by the research group of the Academy.Reforms in the Bar Examination came as a result of an investigating Panel she chaired as Chancellor. I was privileged to be aConsultant of that body, upon her request.

I personally owe her a lot. She invited me to join PHILJA and she trusted me, as she has trusted all who have proved themselvesworthy of her trust. I have no doubt that Justice Adolf will make a good Chancellor, but when the Supreme Court, on motion ofPHILJA’s Academic Council, conferred on Justice Amor the title “Founding Chancellor Emeritus,” I do not think that a mere honorificwas meant. I know, as do my colleagues on the Academic Council know, that we will continue to rely on her wisdom, her vision and

her consecration to the cause of judicial education.Pensees, Manila Standard Today (Monday, March 23, 2009) pp. A4-A5

-- Fr. Ranhilio Callangan AquinoPhilippine Judicial Academy

Working with Justice Herrera has been a unique opportunity. She is a source of inspiration and confidence. PHILJA achieved alevel of excellence in judicial education during her watch. The editorial staff of PHILJA Bulletin has been deeply honored with hercommitment and discipline.

-- Sedfrey M. CandelariaEditor-in-Chief

AAAAA H H H H H omage to omage to omage to omage to omage to M M M M M adame adame adame adame adame CCCCChancellor hancellor hancellor hancellor hancellor A A A A A meurfina meurfina meurfina meurfina meurfina A A A A A guinaldo guinaldo guinaldo guinaldo guinaldo M M M M M elencio elencio elencio elencio elencio H H H H H erreraerreraerreraerreraerrera (continued)

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REGION IIIAtty. Jo Anne N. Dela Cruz-MalatonRTC, Br. 39, San Jose City, Nueva EcijaMs. Rachelle DG. ErnieRTC, Br. 23, Cabanatuan City, Nueva EcijaAtty. Joyce B. GaballoRTC, Br. 45, Masbate CityAtty. John Albert T. ReyesRTC, Br. 87. Gapan, Nueva Ecija

REGION IVAtty. Marivic M. AlayonRTC, OCC, San Jose City, Nueva EcijaAtty. Ulysses G. BamboRTC, Br. 33, Siniloan, LagunaAtty. Marivic A. BungayRTC, Br. 52, Puerto Prinsesa City, PalawanMarites D. DadullaRTC, Br. 77, San Mateo, RizalAtty. Menandro T. Lim, Jr.RTC, Br. 48, Pto. Princesa City, PalawanAtty. Jose Michael D. MasangkayRTC, Br. 05, Lemery, BatangasAtty. Nancy A. Maxino-GalvezRTC, Br. 62, Gumaca, QuezonAtty. Brian DS. NoveroRTC, Br. 16, Cavite CityAtty. Amiel Raymond O. PargasRTC, Br. 08, Batangas City, BatangasAtty. Amie T. RegalaRTC, Br. 26, Sta. Cruz, LagunaAtty. Jose Jonnel U. SevillaRTC, Br. 12, Lipa City, Batangas

REGION VAtty. Jezebel L. AlmodalRTC, Br. 44, Masbate, MasbateAtty. Joseph Domingo M. AngustiaRTC, Br. 46, Masbate City, MasbateAtty. Charo Z. CadagRTC, Br. 52, Sorsogon City, SorsogonAtty. Charmine E. Pontanal-ParesRTC, Br. 35, Iriga City, Camarines Sur

MUNICIPAL CIRCUIT TRIAL COURTS

REGION IMs. Estella E. Imperial6th MCTC, Santiago-San Esteban, Ilocos Sur

REGION IIMr. Julieto R. Octaviano12th MCTC, Mallig-Quezon, Isabela

REGION IVMs. Leah M. Ambojia2nd MCTC, Silang, Cavite

RJCEP (Level 5)

Date conducted: January 21 to 23, 2009Venue: Trader’s Hotel, Pasay CityParticipants: 126 Regional Trial Court and First LevelTrial Court Judges of the NCJR (Batch 1)

Multi-Sectoral and Skills-Building Seminar

Workshop on Human Rights Issues: Extralegal Killingsand Enforced DisappearancesDate conducted: January 29 to 30, 2009Venue: Marco Polo Davao Hotel, Davao CityParticipants: judges, prosecutors, PAO lawyers, andrepresentatives from CHR, IBP, PBP, AFP and the CivilSociety of the 11th and 12th Judicial Region (Batch 1)

The 13th Orientation Seminar-Workshop for Newly

Appointed Clerks of CourtDate conducted: February 3 to 6, 2009Venue: Bayview Park Hotel, ManilaParticipants: 58 newly appointed clerks of court

REGIONAL TRIAL COURTS

REGION IAtty. Rouella Melinda P. AtmosferaRTC, Br. 1, Bangued, AbraAtty, Jesse P. CabrillosRTC, Br. 32, Agoo, La UnionAtty. Jeanylene T. Isip-FukaiRTC, Br. 7, Baguio City, BenguetAtty. Elizabeth S. JanapinRTC, Br. 12, Laoag City, Ilocos NorteAtty. Vincent E. LamugRTC, OCC, Dagupan City, PangasinanAtty. Jihan Q. PalconRTC, Br. 58, Bucay, AbraAtty. Alejandra P. PaningbatanRTC, OCC, San Carlos City, PangasinanAtty. Marian Estrella C. ServitoRTC, Br. 49, Urdaneta, Pangasinan

REGION IIAtty. Amy I. Alafag-VerzolaRTC, Br. 26, Luna, ApayaoAtty. Milagros F. CacachoRTC, Br. 27, Bayombong, Nueva VizcayaAtty. Roberto Ricardo O. KanapiRTC, Br. 2, Tuguegarao City, CagayanAtty. Raden Y. LlanaRTC, Br. 24, Echague, IsabelaAtty. Alfred Roderick T. ManzanoRTC, Br. 28, Bayombong, Nueva VizcayaAtty. Ryan F. MenesesRTC, Br. 38, Maddela, QuirinoAtty. Donnaliza A. NicolasRTC, Br. 12, Sanchez Mira, Cagayan


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A. NEW APPOINTMENTS


REGION VIIIHon. Bienvenido M. MontallaRTC, Br. 16, Naval, Biliran

REGION XIHon. Virginia D. Tehano-AngRTC, Br. 1, Tagum City, Davao del Norte

MUNICIPAL CIRCUIT TRIAL COURTS

REGION IIHon. Rodrigo F. Pascua, Jr.14th MCTC, Ramon-San Isidro, IsabelaHon. Precious Lovely Olivia O. Sales-Jao12th MCTC, Mallig-Quezon, Isabela

REGION IIIHon. Stela Marie Q. Gandia-Asuncion1st MCTC, Sta. Ignacia-Mayantoc-San Clemente-San Jose, TarlacHon. Marivic C. Vitor4th MCTC, Moncada-San Manuel-Anao, Tarlac

REGION IVHon. Evelyn C. CañeteMCTC Brooke’s Point-Española, Palawan

REGION VHon. Renante N. Bacolod2nd MCTC, Mandaun-Balud, MasbateHon. Dioscoro V. Conag4th MCTC, Placer-Cawayan-Esperanza, MasbateHon. Tito D. Diaz2nd MCTC, Bulusan-Barcelona, SorsogonHon. Jean A. Noble1st MCTC, Capalonga-Sta. Elena, Camarines Norte

REGION VIIIHon. Emerenciana O. Manook5th MCTC, Mondragon-San Roque, Northern Samar

REGION XIHon. Remedio Alejandro L. Enriquez2nd MCTC, Monkayo-Montevista, Compostela Valley

MUNICIPAL TRIAL COURTS

REGION IIHon. Nicanor S. Pascual, Jr.MTC, Baggao, Cagayan

REGION IVHon. Fernando R. FernandezMTC, Calauag, Quezon

REGION VHon. Emerson G. CarpioMTC, Bulan, Sorsogon

REGION VMs. Maria Concesa R. Sario6th MCTC, Polangui-Libon, Albay

MUNICIPAL TRIAL COURTS

REGION IMr. Arthur B. De JesusMTC, Langangilang, Abra

REGION IIMs. Imelda G. BautistaMTC, Bayombong, Nueva VizcayaMr. Peter C. CuaresmaMTC, Solano, Nueva Vizcaya

REGION IVAtty. Roderick C. EndozoMTC, Mataas-na Kahoy, Batangas

REGION VMs. Emerose F. DensoMTC, Bulan, Sorsogon

MUNICIPAL TRIAL COURTS IN CITIES

REGION IIIZoraida A. BuenaventuraMTCC, Br. 1, Malolos CityJerome C. DomingoMTCC, Br. 2, Cabanatuan CityMary Angelie M. KayananMTCC, Br. 1, Tarlac City, Tarlac

REGION IVCelia Gertrudez H. MagpantayMTCC, Br. 1, San Pablo City, Laguna

REGION VJanice B. CoderisMTCC, OCC, Ligao CityGracia C. SuelilaMTCC, Br. 1, Iriga City, Camarines Sur

54th Orientation Seminar-Workshop for Newly

Appointed JudgesDate conducted: February 10 to 19, 2009Venue: Bayview Park Hotel, ManilaParticipants: 24 judges.

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Launching of Justice on Wheels, Mobile Court-

Annexed Mediation, and Information DisseminationThrough A Dialogue Among Barangay Officials of PasigDate conducted: February 14, 2009Venue: Pasig City Sports Center, Pasig CityParticipants: 654 Barangay Officials of Pasig City

Launching of Justice on Wheels, Mobile Court-

Annexed Mediation, and Information DisseminationThrough a Dialogue Among Barangay Officials ofParañaque with the Chief Justice and Other Court OfficialsDate conducted: February 21, 2009Venue: Don Galo Gym, Parañaque CityParticipants: 200 Barangay Officials of Parañaque

Multi-Sectoral and Skills-Building Seminar

Workshop on Human Rights Issues: Extralegal Killingsand Enforced DisappearancesDate conducted: February 19 to 20, 2009Venue: Marco Polo Davao Hotel, Davao CityParticipants: judges, prosecutors, PAO lawyers, andrepresentatives from CHR, IBP, PBP, AFP and the CivilSociety of the 11th and 12th Judicial Region ( Batch 2)

RJCEP (Level 5)

Date conducted: February 25 to 27, 2009Venue: Trader’s Hotel, Pasay CityParticipants: 128 Regional Trial Court and First LevelTrial Court Judges of the NCJR (Batch 2)

International Association of Women Judges (IAWJ)

ASIA-Pacific Regional Conference Symposium and 14th

National-Convention-Seminar and General Meeting ofthe Philippine Women Judges (PWJA).Date conducted: March 4 to 6, 2009Venue: Manila Hotel, Intramuros, ManilaParticipants: 334 judges nationwideTheme: “Women Judges Upholding Human and FamilyRights”

Seminar-Workshop on CEDAW and Gender

SensitivityDate conducted: March 10 to 11, 2009Venue: Court of Appeals Auditorium, ManilaParticipants: 33 Supreme Court lawyers

REGION VIIIHon. Reynaldo M. EspinarMTC, Laoang, Northern Samar

MUNICIPAL TRIAL COURTS IN CITIES

REGION IIHon. Racquel C. Reyes-AglauaMTCC, Br. 1, Tuguegarao City

REGION XHon. Vincent Filomeno B. RosalesMTCC, Br. 4, Cagayan de Oro City

2. PROMOTIONS


NCJRHon. Jose L. Bautista, Jr.RTC, Br. 107, Quezon CityHon. Divina Gracia L. PeliñoRTC, Br. 231, Pasay CityHon. Roslyn M. Rabara-TriaRTC, Br. 94, Quezon City

REGION VIIIHon. Ma. Daisy P. GonzalezRTC, Br. 25, Maasin, Leyte

REGION XHon. Benjamin P. EstradaRTC, Br. 9, Malaybalay, Bukidnon

2nd Regional Multi-Sectoral Stakeholders Seminar-

Workshop in Improving Access to Justice in Family CourtsDate conducted: February 5, 2009Venue: College of St. Benilde Hotel, Manila

Participants: NCJR Family Courts

Competency Enhancement Training for Family Court

Judges and Personnel in Handling Child Abuse CasesDate conducted: February 10 to 12, 2009Venue: Hotel Elizabeth, Baguio CityParticipants: selected Family Court judges, courtpersonnel, prosecutors, PAO lawyers

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Multi-Sectoral Seminar-Workshop on Agrarian

JusticeDate conducted: March 17 to 19, 2009Venue: Queen Margarette Hotel, Lucena CityParticipants: judges, prosecutors, PAO lawyers,representatives from DAR, PNP, CHR, NGOs, POs andthe church of the Province of Quezon

Competency Enhancement Training for Family Court

Judges and Personnel in Handling Trafficking and ChildAbuse CasesDate conducted: March 23 to 25, 2009Venue: Leyte Park Hotel, Tacloban CityParticipants: selected Family Court judges, courtpersonnel, prosecutors, PAO lawyers

MEDIATION

Orientation Conference with Stakeholders on

Court-Annexed Mediation

Tarlac and Nueva Ecija Mediation ProgramDate conducted: January 23, 2009Venue: La Parilla Hotel, Cabanatuan City

Cavite and Laguna Mediation ProgramDate conducted: February 6, 2009Venue: Technopart Hotel, Greenfield,Sta. Rosa, Laguna

The underlying objectives or reliefs sought inboth the quieting-of-title and the annulment-of-title cases are essentially the same –adjudication of the ownership of the disputedlot and nullification of one of the two certificatesof title. Thus, it becomes readily apparent thatthe same evidence of facts as those consideredin the quieting-of-title case would also be used

in this petition.

The subject cases are so intimately related toeach other that the judgment that may be renderedin one, regardless of which party would besuccessful, would amount to res judicata in the other.

From the foregoing, it is clear that there is litispendentia, and that the RTC committed grave abuseof discretion in refusing to grant respondents’motion to dismiss.

(Villarica Pawnshop, Inc., represented by Atty.Henry R. Villarica, Maria Consolacion Valmadrid,and Rafael Valmadrid Tan, petitioners, v. SpousesRoger G. Gernale, Far East Bank and Trust Co., (nowBank of the Philippine Islands) and the Register ofDeeds of Meycauayan, Bulacan, respondents., G.R.No. 163344, March 20, 2009.)

REMEDIAL LAW(continued from page 16)

Basic Mediation Course

Panay Mediation ProgramDate conducted: February 21, 2009Venue: Sarabia Manor Hotel, Iloilo City

Bataan-Zambales Mediation ProgramDate conducted: February 24 to 27, 2009Venue: Seorabeol, Grand Leisure Hotel, Zambales

Tarlac Mediation ProgramDate conducted: March 24 to 27, 2009Venue: Tarlac

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ADMINISTRATIVE LAWReorganization; test of good faith

A reorganization “involves the reduction ofpersonnel, consolidation of offices, or abolitionthereof by reason of economy or redundancy offunctions.” It alters the existing structure ofgovernment offices or units therein, including the linesof control, authority and responsibility between themto make the bureaucracy more responsive to the needsof the public clientele as authorized by law. It couldresult in the loss of one’s position through removal orabolition of an office. For a reorganization for thepurpose of economy or to make the bureaucracy moreefficient to be valid, however, it must pass the test ofgood faith, otherwise it is void ab initio.

x x x As a general rule, a reorganization is carriedout in “good faith” if it is for the purpose ofeconomy or to make bureaucracy more efficient.In that event, no dismissal (in case of a dismissal)or separation actually occurs because the positionitself ceases to exist. And in that case, security oftenure would not be a Chinese wall. Be that as itmay, if the “abolition,” which is nothing else but aseparation or removal, is done for political reasonsor purposely to defeat security of tenure, orotherwise not in good faith, no valid “abolition”takes place and whatever “abolition” is done, is voidab initio. There is an invalid “abolition” as wherethere is merely a change of nomenclature ofpositions, or where claims of economy are beliedby the existence of ample funds. (emphasis

supplied) Korteä

Section 2 of R.A. No. 6656 cites certaincircumstances showing bad faith in the removal ofemployees as a result of any reorganization, thus:

SEC. 2. No officer or employee in the career serviceshall be removed except for a valid cause andafter due notice and hearing. A valid cause forremoval exist when, pursuant to a bona fidereorganization, a position has been abolished orrendered redundant or there is a need to merge,divide, or consolidate positions in order to meetthe exigencies of the service, or other lawfulcauses allowed by the Civil Service Law. Theexistence of any or some of the followingcircumstances may be considered as evidence ofbad faith in the removals made as a result of thereorganization, giving rise to a claim forreinstatement or reappointment by an aggrievedparty:

a) Where there is a significant increase in thenumber of positions in the new staffing patternof the department or agency concerned;

b) Where an office is abolished and anotherperforming substantially the same functions iscreated;

c) Where incumbents are replaced by those lessqualified in terms of status of appointment,performance and merit;

d) Where there is a reclassification of offices in thedepartment or agency concerned and thereclassified offices perform substantially thesame functions as the original offices;

e) Where the removal violates the order ofseparation provided in Section 3 hereof.

(emphasis and italics supplied)

And Section 3 of the same law provides for the orderof removal of employees as follows:

SEC. 3. In the separation of personnel pursuant toreorganization, the following order of removal shallbe followed:

(a) Casual employees with less than five years ofgovernment service;

(b) Casual employees with five years or more ofgovernment service;

(c) Employees holding temporary appointments;and

(d) Employees holding permanent appointments:Provided, That those in the same category asenumerated above, who are least qualified interms of performance and merit shall be laid

first, length of service notwithstanding.

In the case at bar, petitioner claims that there hasbeen a drastic reduction of plantilla positions in thenew staffing pattern in order to address the LGU’sgaping budgetary deficit. Thus, he states that in themunicipal treasurer ’s office and waterworksoperations unit where respondents were previouslyassigned, only 11 new positions were created out ofthe previous 35 which had been abolished; and thatthe new staffing pattern had 98 positions only, ascompared with the old which had 129.

The CSC, however, highlighted the recreation ofsix casual positions for clerk II and utility worker I,which positions were previously held by respondentsMarivic, Cantor, Asor and Enciso. Petitionerinexplicably never disputed this finding nor proferredany proof that the new positions do not perform thesame or substantially the same functions as those ofthe abolished. And nowhere in the records does itappear that these recreated positions were first offeredto respondents.

The appointment of casuals to these recreatedpositions violates R.A. No. 6656, as Section 4 thereofinstructs that:


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CIVIL LAWOption Contract needs to be supported by a separateconsideration

In Bible Baptist Church v. Court of Appeals, theSupreme Court stressed that an option contract needsto be supported by a separate consideration. Theconsideration need not be monetary but could consistof other things or undertakings. However, if theconsideration is not monetary, these must be thingsor undertakings of value, in view of the onerous natureof the option contract. Furthermore, when aconsideration for an option contract is not monetary,said consideration must be clearly specified as suchin the option contract or clause.

(Chico-Nazario, J., Enrico S. Eulogio v. SpousesClemente Apeles and Luz Apeles, G.R. No. 167884,January 20, 2009.)

Interest; kinds of interest; condition required for thepayment of interest

Interest is a compensation fixed by the parties forthe use or forbearance of money. This is referred to asmonetary interest. Interest may also be imposed bylaw or by courts as penalty or indemnity for damages.This is called compensatory interest. The right tointerest arises only by virtue of a contract or by virtue

SEC. 4. Officers and employees holding permanentappointments shall be given preference forappointment to the new positions in the approvedstaffing pattern comparable to their formerpositions or in case there are not enough comparablepositions, to positions next lower in rank.

No new employees shall be taken until all permanentofficers and employees have been appointed,including temporary and casual employees whopossess the necessary qualification requirement,among which is the appropriate civil serviceeligibility, for permanent appointment to positionsin the approved staffing pattern, in case thereare still positions to be filled, unless such positionsare policy-determining, primarily confidential orhighly technical in nature. (emphasis and italics

supplied)

In the case of respondent Peña, petitioner claimsthat the position of waterworks supervisor had beenabolished during the reorganization. Yet, petitionerappointed an officer-in-charge in 1999 for itswaterworks operations even after a supposed newstaffing pattern had been effected in 1998. Notably,this position of waterworks supervisor does notappear in the new staffing pattern of the LGU. Apparently, the Municipality of Goa never intendedto do away with such position wholly andpermanently as it appointed another person to act asofficer-in-charge vested with similar functions.

While the CSC never found the new appointees tobe unqualified, and never disapproved nor recalledtheir appointments as they presumably met all theminimum requirements therefor, there is nothingcontradictory in the CSC’s course of action as it islimited only to the non-discretionary authority ofdetermining whether the personnel appointed meetall the required conditions laid down by law.

Congruently, the CSC can very well orderpetitioner to reinstate respondents to their formerpositions (as these were never actually abolished) orto appoint them to comparable positions in the newstaffing pattern.

In fine, the reorganization of the government ofthe Municipality of Goa was not entirely undertakenin the interest of efficiency and austerity but appearsto have been marred by other considerations in orderto circumvent the constitutional security of tenure ofcivil service employees like respondents.

(Carpio Morales, J., Mayor Marcel S. Pan, representingthe Municipality of Goa, Camarines Sur as Mayor v.Yolanda O. Peña, Marivic P. Enciso, Melinda S. Cantor,Romeo Asor and Edgar A. Enciso, G.R. No. 174244,February 13, 2009.)

AGRARIAN LAWTenancy relationships; elements of

A tenancy relationship arises between alandholder and a tenant once they agree, expressly orimpliedly, to undertake jointly the cultivation of a landbelonging to the landholder, as a result of whichrelationship the tenant acquires the right to continueworking on and cultivating the land.

The existence of a tenancy relationship cannot bepresumed and claims that one is a tenant do notautomatically give rise to security of tenure. For atenancy relationship to exist, all of the followingessential requisites must be present: (1) the partiesare the landowner and the tenant; (2) the subjectmatter is agricultural land; (3) there is consentbetween the parties; (4) the purpose is agriculturalproduction; (5) there is personal cultivation by thetenant; and, (6) there is sharing of the harvestsbetween the parties.

(Puno, C.J., Francisco Landicho, Federico Landicho andBuenaventura Landicho v. Felix Sia, G.R. No. 169472,January 20, 2009.)

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REMEDIAL LAWLitis Pendentia; its requisites

Litis pendentia as a ground for the dismissal of a civilaction refers to that situation wherein another actionis pending between the same parties for the same causeof action, such that the second action becomesunnecessary and vexatious.

The underlying principle of litis pendentia is thetheory that a party is not allowed to vex another morethan once regarding the same subject matter and forthe same cause of action.

This theory is founded on the public policy thatthe same subject matter should not be the subject ofcontroversy in courts more than once, in order thatpossible conflicting judgments may be avoided for thesake of the stability of the rights and status of persons.

The requisites of litis pendentia are: (a) the identityof parties, or at least such as representing the sameinterests in both actions; (b) the identity of rightsasserted and relief prayed for, the relief being foundedon the same facts; and (c) the identity of the two casessuch that judgment in one, regardless of which partyis successful, would amount to res judicata in the other.

With respect to the first requisite, the Court findsno error in the ruling of the CA that there is identity ofparties in Civil Case Nos. 438-M-2002 and 502-M-2002. It is true that in Civil Case No. 502-M-2002, Valmadridand Tan were added as plaintiffs, while BPI and theRegister of Deeds of Meycauayan, Bulacan were addedas defendants. However, identity of parties does notmean total identity of parties in both cases. It is enough

of damages for delay or failure to pay the principalloan on which interest is demanded.

Article 1956 of the Civil Code, which refers tomonetary interest, specifically mandates that nointerest shall be due unless it has been expresslystipulated in writing. As can be gleaned from theforegoing provision, payment of monetary interest isallowed only if: (1) there was an express stipulationfor the payment of interest; and (2) the agreement forthe payment of interest was reduced in writing. Theconcurrence of the two conditions is required for thepayment of monetary interest. Thus, we have heldthat collection of interest without any stipulationtherefor in writing is prohibited by law.

(Chico-Nazario, J., Sebastian Siga-an v. AliciaVillanueva, G.R. No. 173227, January 20, 2009.)

that there is substantial identity of parties. Theinclusion of new parties in the second action does notremove the case from the operation of the rule of litispendentia. What is primordial is that the primarylitigants in the first case are also parties to the secondaction. A different rule would render illusory theprinciple of litis pendentia. The facility of itscircumvention is not difficult to imagine given theresourcefulness of lawyers. The fact that new partieswere included in Civil Case No. 502-M-2002 does notdetract from the fact that the principal litigants,Villarica and the Gernale spouses, are the same in bothcases. Besides, it is clear that Valmadrid and Tan,being the previous owners from whom Villaricabought the subject properties, represent the sameinterests as the latter. On the other hand, the Registerof Deeds of Meycauayan, Bulacan was impleadedmerely as a nominal party.

With respect to the second and third requisites,hornbook is the rule that identity of causes of actiondoes not mean absolute identity; otherwise, a partycould easily escape the operation of res judicata bychanging the form of the action or the relief sought. The test to determine whether the causes of actionare identical is to ascertain whether the same evidencewill sustain both actions, or whether there is anidentity in the facts essential to the maintenance ofthe two actions. If the same facts or evidence wouldsustain both, the two actions are considered the same,and a judgment in the first case is a bar to thesubsequent action. Hence, a party cannot, by varyingthe form of action or adopting a different method ofpresenting his case, escape the operation of theprinciple that one and the same cause of action shallnot be twice litigated between the same parties ortheir privies.

Civil Case No. 438-M-2002 is for quieting of titleand damages, while Civil Case No. 502-M-2002 is forannulment and cancellation of titles and damages. The two cases are different only in the form of action,but an examination of the allegations in both cases reveals that the main issue raised, which is ownershipof the land, and the principal relief sought, which iscancellation of the opposing parties’ transfercertificates of title, are substantially the same. Theevidence required to substantiate the parties’ claimsis likewise the same. The proceedings in Civil CaseNo. 502-M-2002 would entail the presentation ofessentially the same evidence, which should beadduced in Civil Case No. 438-M-2002. As cited bythe CA, this Court held in Stilianopulos v. City of Legaspithat:

(Continued on page 13)

CIVIL LAW (continued)

PHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinPHILJA BulletinRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARS18

RESOLUTION of the COURT En Banc datedDecember 2, 2008 on A.M. No. 00-8-10-SC

RE: RULES OF PROCEDURE ON CORPORATEREHABILITATION

Acting on the recommendation of TheSubcommittee on Special Rules for Special CommercialCourts, submitting for the consideration and approvalof the Court the proposed “Rules of Procedure onCorporate Rehabilitation (2008),” the Court Resolvedto APPROVE the same.

The Rule shall take effect on January 16, 2009following its publication in two newspapers of generalcirculation.

December 2, 2008.

PUNO, CJ, QUISUMBING, YNARES-SANTIAGO,CARPIO, AUSTRIA-MARTINEZ, CORONA (on officialleave), CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, VELASCO, JR., NACHURA, REYES,LEONARDO-DE CASTRO, BRION, JJ. concur.

RULES OF PROCEDURE ON CORPORATEREHABILITATION (2008)

RULE 1COVERAGE

SECTION 1. Scope. – These Rules shall apply to petitionsfor rehabilitation of corporations, partnerships andassociations pursuant to Presidential Decree No. 902-A, as amended.

SEC. 2. Applicability to Rehabilitation Cases Transferredfrom the Securities and Exchange Commission. – Casesfor rehabilitation transferred from the Securities andExchange Commission to the Regional Trial Courtspursuant to Republic Act No. 8799, otherwise knownas The Securities Regulation Code, shall likewise begoverned by these Rules.

RULE 2DEFINITION OF TERMS AND CONSTRUCTION

SECTION 1. Definition of Terms. – For purposes of theseRules:

“Administrative Expenses” shall refer to (a) reasonableand necessary expenses that are incurred inconnection with the filing of the petition; (b) expensesincurred in the ordinary course of business after theissuance of the stay order, excluding interest payableto the creditors for loans and credit accommodationsexisting at the time of the issuance of the stay order;and (c) other expenses that are authorized under theseRules.

“Affidavit of General Financial Condition” shall referto a verified statement on the general financialcondition of the debtor required in Section 2, Rule 4 ofthese Rules.

“Affiliate” is a corporation that directly orindirectly, through one or more intermediaries, iscontrolled by, or is under the common control ofanother corporation, which thereby becomes itsparent corporation.

“Asset” is anything of value that can be in the formof money, such as cash at the bank or amounts owed;fixed assets such as property or equipment; orintangibles including intellectual property, the bookvalue of which is shown in the last three auditedfinancial statements immediately preceding the filingof the petition. In case the debtor is less than threeyears in operation, it is sufficient that the book valueis based on the audited financial statement/s for thetwo years or year immediately preceding the filing ofthe petition, as the case may be.

“Board of Directors” shall include the executivecommittee or the management of a partnership orassociation.

“Claim” shall include all claims or demands ofwhatever nature or character against a debtor or itsproperty, whether for money or otherwise.

“Control” is the power of a parent corporation todirect or govern the financial and operating policies ofan enterprise so as to obtain benefits from its activities.Control is presumed to exist when the parent owns,directly or indirectly through subsidiaries, more thanone-half (½) of the voting power of an enterprise unless,in exceptional circumstances, it can clearly bedemonstrated that such ownership does not constitutecontrol. Control also exists even when the parent ownsone-half (½) or less of the voting power of an enterprisewhen there is power:

(a) Over more than one-half (½) of the votingrights by virtue of an agreement withinvestors;

(b) To direct or govern the financial and operatingpolicies of the enterprise under a statute or anagreement;

(c) To appoint or remove the majority of themembers of the board of directors orequivalent governing body; or

(d) To cast the majority votes at meetings of theboard of directors or equivalent governingbody.

SUPREME COURT


PHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSPHILJA NEWSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSRESOLUTIONS, ORDERS AND CIRCULARSJanuary-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009January-March 2009 19

“Secured claim” shall refer to any claim whosepayment or fulfillment is secured by contract or bylaw, including any claim or credit enumerated underArticles 2241 and 2242 of the Civil Code and Article110, as amended, of the Labor Code of the Philippines.

“Subsidiary” means a corporation more than 50percent of the voting stock of which is owned orcontrolled directly or indirectly through one or moreintermediaries by another corporation, which therebybecomes its parent corporation.

“Unsecured claim” shall mean any claim other thana secured claim.

SEC. 2. Construction. – These Rules shall be liberallyconstrued to carry out the objectives of Sections 5(d),6(c) and 6(d) of Presidential Decree No. 902-A, asamended, and to assist the parties in obtaining a just,expeditious and inexpensive determination of cases.Where applicable, the Rules of Court shall applysuppletorily to proceedings under these Rules.

RULE 3GENERAL PROVISIONS

SECTION 1. Nature of Proceedings. – Any proceedinginitiated under these Rules shall be considered in rem.Jurisdiction over all persons affected by theproceedings shall be considered as acquired uponpublication of the notice of the commencement of theproceedings in any newspaper of general circulationin the Philippines in the manner prescribed by theseRules.

The proceedings shall also be summary and non-adversarial in nature. The following pleadings areprohibited:

(a) Motion to dismiss;(b) Motion for a bill of particulars;(c) Petition for relief;(d) Motion for extension;(e) Motion for postponement;(f) Third-party complaint;(g) Intervention;(h) Motion to hear affirmative defenses; and(i) Any pleading or motion which is similar to or

of like effect as any of the foregoing.

Any pleading, motion, opposition, defense or claimfiled by any interested party shall be supported byverified statements that the affiant has read the sameand that the factual allegations therein are true andcorrect of his personal knowledge or based onauthentic records, and shall contain as annexes such

“Creditor” shall mean any holder of a Claim.

“Court” shall refer to the proper Regional TrialCourt designated to hear and decide the casescontemplated under these Rules.

“Days” shall refer to calendar days unlessotherwise provided in these Rules.

“Debtor” shall mean any corporation, partnershipor association or a group of companies, whethersupervised or regulated by the Securities and ExchangeCommission or other government agencies, on whosebehalf a petition for rehabilitation has been filed underthese Rules.

“Foreign court” means a judicial or other authoritycompetent to control or supervise a foreignproceeding.

“Foreign proceeding” means a collective judicial oradministrative proceeding in a foreign State, includingan interim proceeding, pursuant to a law relating toinsolvency in which proceeding the assets and affairsof the debtor are subject to control or supervision bya foreign court, for the purpose of rehabilitation or re-organization.

“Foreign representative” means a person or entity,including one appointed on an interim basis,authorized in a foreign proceeding to administer thereorganization or rehabilitation of the debtor or toact as a representative of the foreign proceeding.

“Group of companies” refers to, and can cover only,corporations that are financially related to one anotheras parent corporations, subsidiaries and affiliates.

When the petition covers a group of companies,all reference under these Rules to “debtor” shallinclude and apply to the group of companies.

Liabilities” shall refer to monetary claims againstthe debtor, including stockholder’s advances that havebeen recorded in the debtor ’s audited financialstatements as advances for future subscriptions.

“Parent” is a corporation which has control overanother corporation directly or indirectly through oneor more intermediaries.

“Rehabilitation” shall mean the restoration of thedebtor to a position of successful operation andsolvency, if it is shown that its continuance ofoperation is economically feasible and its creditors canrecover by way of the present value of paymentsprojected in the plan, more if the corporation continuesas a going concern than if it is immediately liquidated.



documents as may be deemed by the party submittingthe same as supportive of the allegations in theaffidavits. The court may decide matters on the basisof affidavits and other documentary evidence. Wherenecessary, the court shall conduct clarificatoryhearings before resolving any matter submitted to itfor resolution.

SEC. 2. Venue. – Petitions for rehabilitation pursuantto these Rules shall be filed in the regional trial courtwhich has jurisdiction over the principal office of thedebtor as specified in its articles of incorporation orpartnership. Where the principal office of thecorporation, partnership or association is registeredin the Securities and Exchange Commission as MetroManila, the action must be filed in the regional trialcourt of the city or municipality where the head officeis located.

A joint petition by a group of companies shall befiled in the Regional Trial Court which has jurisdictionover the principal office of the parent company, asspecified in its Articles of Incorporation.

SEC. 3. Service of Pleadings and Documents. – When soauthorized by the court, any pleading and/or documentrequired by these Rules may be filed with the courtand/or served upon the other parties by facsimiletransmission (fax) or electronic mail (e-mail). In suchcases, the date of transmission shall be deemed to bethe date of service. Where the pleading or document isvoluminous, the court may, upon motion, waive therequirement of service; provided that a copy thereoftogether with all its attachments is duly filed withthe court and is made available for examination andreproduction by any party, and provided, further, thata notice of such filing and availability is duly servedon the parties.

SEC. 4. Trade Secrets and Other Confidential Information.– Upon motion, the court may issue an order to protecttrade secrets or other confidential research,development or commercial information belonging tothe debtor.

SEC. 5. Executory Nature of Orders. – Any order issuedby the court under these Rules is immediatelyexecutory. A petition to review the order shall not staythe execution of the order unless restrained or enjoinedby the appellate court. Unless otherwise provided inthese Rules, the review of any order or decision of thecourt or an appeal therefrom shall be in accordancewith the Rules of Court; provided, however, that thereliefs ordered by the trial or appellate courts shalltake into account the need for resolution of proceedingsin a just, equitable and speedy manner.

SEC. 6. Nullification of Illegal Transfers and Preferences.– Upon motion the court may nullify any transfer ofproperty or any other conveyance, sale, payment oragreement made in violation of its stay order or inviolation of these Rules.

SEC. 7. Stay Order. – If the court finds the petition to besufficient in form and substance, it shall, not later thanfive working days from the filing of the petition, issuean order: (a) appointing a rehabilitation receiver andfixing his bond; (b) staying enforcement of all claims,whether for money or otherwise and whether suchenforcement is by court action or otherwise, againstthe debtor, its guarantors and persons not solidarilyliable with the debtor; provided, that the stay order shallnot cover claims against letters, of credit and similarsecurity arrangements issued by a third party tosecure the payment of the debtor’s obligations; provided,further, that the stay order shall not cover foreclosureby a creditor of property not belonging to a debtorunder corporate rehabilitation; provided, however, thatwhere the owner of such property sought to beforeclosed is also a guarantor or one who is notsolidarily liable, said owner shall be entitled to thebenefit of excussion as such guarantor; (c) prohibitingthe debtor from selling, encumbering, transferring, ordisposing in any manner any of its properties exceptin the ordinary course of business; (d) prohibiting thedebtor from making any payment of its liabilitiesexcept as provided in items (e), (f) and (g) of this Sectionor when ordered by the court pursuant to Section 10of Rule 3; (e) prohibiting the debtor’s suppliers of goodsor services from withholding supply of goods andservices in the ordinary course of business for as longas the debtor makes payments for the services andgoods supplied after the issuance of the stay order; (f)directing the payment in full of all administrativeexpenses incurred after the issuance of the stay order;(g) directing the payment of new loans or other formsof credit accommodations obtained for therehabilitation of the debtor with prior court approval;(h) fixing the dates of the initial hearing on the petitionnot earlier than 45 days but not later than 60 daysfrom the filing thereof; (i) directing the petitioner topublish the Order in a newspaper of generalcirculation in the Philippines once a week for twoconsecutive weeks; (j) directing the petitioner tofurnish a copy of the petition and its annexes, as wellas the stay order, to the creditors named in the petitionand the appropriate regulatory agencies such as, butnot limited to, the Securities and ExchangeCommission, the Bangko Sentral ng Pilipinas, theInsurance Commission, the NationalTelecommunications Commission, the Housing andLand Use Regulatory Board and the Energy Regulatory

RESOLUTION on A.M. No. 00-8-10-SC (Continued)


Commission; (k) directing the petitioner that foreigncreditors with no known addresses in the Philippinesbe individually given a copy of the stay order at theirforeign addresses; (1) directing all creditors and allinterested parties (including the regulatory agenciesconcerned) to file and serve on the debtor a verifiedcomment on or opposition to the petition, withsupporting affidavits and documents, not later than15 days before the date of the first initial hearing andputting them on notice that their failure to do so willbar them from participating in the proceedings; and(m) directing the creditors and interested parties tosecure from the court copies of the petition and itsannexes within such time as to enable themselves tofile their comment on or opposition to the petition andto prepare for the initial hearing of the petition.

The issuance of a stay order does not affect theright to commence actions or proceedings insofar as itis necessary to preserve a claim against the debtor.

SEC. 8. Service of Stay Order on Rehabilitation Receiver.– The petitioner shall immediately serve a copy of thestay order on the rehabilitation receiver appointedby the court, who shall manifest his acceptance or non-acceptance of his appointment not later than 10 daysfrom receipt of the order.

SEC. 9. Period of Stay Order. – The stay order shall beeffective from the date of its issuance until theapproval of the rehabilitation plan or the dismissal ofthe petition.

SEC. 10. Relief from, Modification, or Termination of StayOrder. –

(a) The court may, upon motion, terminate,modify, or set conditions for the continuanceof the stay order, or relieve a claim from thecoverage thereof upon showing that (1) any ofthe allegations in the petition, or any of thecontents of any attachment, or the verificationthereof has ceased to be true; (2) a creditor doesnot have adequate protection over propertysecuring its claim; (3) the debtor’s securedobligation is more than the fair market valueof the property subject of the stay and suchproperty is not necessary for therehabilitation of the debtor; or (4) the propertycovered by the stay order is not essential ornecessary to the rehabilitation and thecreditor’s failure to enforce its claim will causemore damage to the creditor than to the debtor.

(b) For purposes of this Section, the creditor lacksadequate protection if it can be shown that:

(1) The debtor fails or refuses to honor a pre-existing agreement with the creditor tokeep the property insured;

(2) The debtor fails or refuses to takecommercially reasonable steps tomaintain the property; or

(3) The property has depreciated to an extentthat the creditor is undersecured.

(c) Upon showing of the creditor’s lack of adequateprotection, the court shall order therehabilitation receiver to (1) makearrangements to provide for the insurance ormaintenance of the property, or (2) to makepayments or otherwise provide additional orreplacement security such that the obligationis fully secured. If such arrangements are notfeasible, the court shall modify the stay orderto allow the secured creditor lacking adequateprotection to enforce its claim against thedebtor; provided, however, that the court maydeny the creditor the remedies in thisparagraph if such remedies would prevent thecontinuation of the debtor as a going concernor otherwise prevent the approval andimplementation of a rehabilitation plan.

SEC. 11. Qualifications of Rehabilitation Receiver. –

(a) In the appointment of the rehabilitationreceiver, the following qualifications shall betaken into consideration by the court:

(1) Expertise and acumen to manage andoperate a business similar in size andcomplexity to that of the debtor;

(2) Knowledge in management, finance andrehabilitation of distressed companies;

(3) General familiarity with the rights ofcreditors in suspension of payments orrehabilitation, and general understandingof the duties and obligations of arehabilitation receiver;

(4) Good moral character, independence andintegrity;

(5) Lack of conflict of interest as defined inthis Section; and

(6) Willingness and ability to file a bond insuch amount as may be determined by thecourt.



(b) Without limiting the generality of thefollowing, a rehabilitation receiver may bedeemed to have a conflict of interest if:

(1) He is a creditor or stockholder of thedebtor;

(2) He is engaged in a line of business whichcompetes with the debtor;

(3) He is, or was within two years from thefiling of the petition, a director, officer,or employee of the debtor or any of itspresent creditors, or the auditor oraccountant of the debtor;

(4) He is or was within two years from thefiling of the petition, an underwriter ofthe outstanding securities of the debtor;

(5) He is related by consanguinity or affinitywithin the fourth civil degree to anycreditor, stockholder, director, officer,employee, or underwriter of the debtor;or

(6) He has any other direct or indirectmaterial interest in the debtor or anycreditor.

SEC. 12. Powers and Functions of RehabilitationReceiver. – The rehabilitation receiver shall not takeover the management and control of the debtor butshall closely oversee and monitor the operations ofthe debtor during the pendency of the proceedings.For this purpose, the rehabilitation receiver shallhave the powers, duties and functions of a receiverunder Presidential Decree No. 902-A, as amended,and the Rules of Court.

The rehabilitation receiver shall be consideredas an officer of the court. He shall be primarily taskedto study the best way to rehabilitate the debtor andto ensure that the value of the debtor’s property isreasonably maintained pending the determinationof whether or not the debtor should be rehabilitated,as well as implement the rehabilitation plan after itsapproval. Accordingly, he shall have the followingpowers and functions:

(a) To verify the accuracy of the petition,including its annexes such as the Schedule ofDebts and Liabilities and the Inventory of Assetssubmitted in support of the petition;

(b) To accept and incorporate, when justified,amendments to the Schedule of Debts andLiabilities;

(c) To recommend to the court the disallowance ofclaims and rejection of amendments to theSchedule of Debts and Liabilities that lack sufficientproof and justification;

(d) To submit to the court and make available forreview by the creditors, a revised Schedule ofDebts and Liabilities;

(e) To investigate the acts, conduct, properties,liabilities and financial condition of the debtor,the operation of its business and the desirabilityof the continuance thereof; and, any othermatter relevant to the proceeding or to theformulation of a rehabilitation plan;

(f) To examine under oath the directors and officersof the debtor and any other witnesses that hemay deem appropriate;

(g) To make available to the creditors documentsand notices necessary for them to follow andparticipate in the proceedings.

(h) To report to the court any fact ascertained byhim pertaining to the causes of the debtor’sproblems, fraud, preferences, dispositions,encumbrances, misconduct, mismanagementand irregularities committed by thestockholders, directors, management, or anyother person against the debtor;

(i) To employ such person or persons such aslawyers, accountants, appraisers and staff asare necessary in performing his functions andduties as rehabilitation receiver;

(j) To monitor the operations of the debtor and toimmediately report to the court any materialadverse change in the debtor’s business;

(k) To evaluate the existing assets and liabilities,earnings and operations of the debtor;

(l) To determine and recommend to the court thebest way to salvage and protect the interests ofthe creditors, stockholders and the generalpublic;

(m) To study the rehabilitation plan proposed bythe debtor or any rehabilitation plan submittedduring the proceedings, together with anycomments made thereon;

(n) To prohibit and report to the court anyencumbrance, transfer or disposition of thedebtor’s property outside of the ordinary courseof business or what is allowed by the court;




(o) To prohibit and report to the court anypayments outside of the ordinary course ofbusiness;

(p) To have unlimited access to the debtor ’semployees, premises, books, records andfinancial documents during business hours;

(q) To inspect, copy, photocopy or photograph anydocument, paper, book, account or letter,whether in the possession of the debtor orother persons;

(r) To gain entry into any property for thepurpose of inspecting, measuring, surveyingor photographing it or any designatedrelevant object or operation thereon;

(s) To take possession, control and custody of thedebtor’s assets;

(t) To notify counterparties and the court as tocontracts that the debtor has decided tocontinue to perform or breach;

(u) To be notified of and to attend all meetings ofthe board of directors and stockholders of thedebtor;

(v) To recommend any modification of anapproved rehabilitation plan as he may deemappropriate;

(w) To bring to the attention of the court anymaterial change affecting the debtor’s abilityto meet the obligations under therehabilitation plan;

(x) To recommend the appointment of amanagement committee in the cases providedfor under Presidential Decree No. 902-A, asamended;

(y) To recommend the termination of theproceedings and the dissolution of the debtorif he determines that the continuance inbusiness of such entity is no longer feasible orprofitable or no longer works to the bestinterest of the stockholders, parties-litigants,creditors or the general public;

(z) To apply to the court for any order or directivethat he may deem necessary or desirable toaid him in the exercise of his powers andperformance of his duties and functions; and

(aa) To exercise such other powers as may fromtime to time be conferred upon him by thecourt.

SEC. 13. Oath and Bond. – Before entering upon hispowers, duties and functions, the rehabilitationreceiver must be sworn in to perform them faithfully,and must post a bond executed in favor of the debtorin such sum as the court may direct, to guarantee thathe will faithfully discharge his duties and obey theorders of the court. If necessary, he shall also declareunder oath that he will perform the duties of a trusteeof the assets of the debtor, will act honestly and ingood faith, and deal with the assets of the debtor in acommercially reasonable manner.

SEC. 14. Fees and Expenses. – The rehabilitation receiverand the persons hired by him shall be entitled toreasonable professional fees and reimbursement ofexpenses which shall be considered as administrativeexpenses.

SEC. 15. Immunity from Suit. – The rehabilitation receivershall not be subject to any action, claim or demand inconnection with any act done or omitted by him ingood faith in the exercise of his functions and powersherein conferred.

SEC. 16. Reports. – The rehabilitation receiver shall filea written report every three months to the court or asoften as the court may require on the general conditionof the debtor. The report shall include, at the minimum,interim financial statements of the debtor.

SEC. 17. Dismissal of Rehabilitation Receiver. – Arehabilitation receiver may, upon motion, be dismissedby the court on the following grounds: (a) if he fails,without just cause, to perform any of his powers andfunctions under these Rules; or (b) on any of thegrounds for removing a trustee under the generalprinciples of trusts.

SEC. 18. Rehabilitation Plan. – The rehabilitation planshall include ( a) the desired business targets or goalsand the duration and coverage of the rehabilitation;(b) the terms and conditions of such rehabilitationwhich shall include the manner of its implementation,giving due regard to the interests of secured creditorssuch as, but not limited, to the non-impairment of theirsecurity liens or interests; (c) the material financialcommitments to support the rehabilitation plan; (d)the means for the execution of the rehabilitation plan,which may include debt to equity conversion,restructuring of the debts, dacion en pago or sale orexchange or any disposition of assets or of the interestof shareholders, partners or members; (e) a liquidationanalysis setting out for each creditor that the presentvalue of payments it would receive under the plan ismore than that which it would receive if the assets of



the debtor were sold by a liquidator within a six-month period from the estimated date of filing of thepetition; and (f) such other relevant information toenable a reasonable investor to make an informeddecision on the feasibility of the rehabilitation plan.

SEC. 19. Repayment Period. – If the rehabilitation planextends the period for the debtor to pay its contractualobligations, the new period should not extend beyond15 years from the expiration of the stipulated termexisting at the time of filing of the petition.

SEC. 20. Effects of Rehabilitation Plan. – The approvalof the rehabilitation plan by the court shall result inthe following:

(a) The plan and its provisions shall be bindingupon the debtor and all persons who may beaffected thereby, including the creditors,whether or not such persons haveparticipated in the proceedings or opposedthe plan or whether or not their claims havebeen scheduled;

(b) The debtor shall comply with the provisionsof the plan and shall take all actions necessaryto carry out the plan;

(c) Payments shall be made to the creditors inaccordance with the provisions of the plan;

(d) Contracts and other arrangements betweenthe debtor and its creditors shall beinterpreted as continuing to apply to theextent that they do not conflict with theprovisions of the plan; and

(e) Any compromises on amounts orrescheduling of timing of payments by thedebtor shall be binding on creditorsregardless of whether or not the plan issuccessfully implemented.

SEC. 21. Revocation of Rehabilitation Plan on Groundsof Fraud. – Upon motion, within 90 days from theapproval of the rehabilitation plan, and after noticeand hearing, the court may revoke the approvalthereof on the ground that the same was securedthrough fraud.

SEC. 22. Alteration or Modification of RehabilitationPlan. – An approved rehabilitation plan may, uponmotion, be altered or modified if, in the judgment ofthe court, such alteration or modification is necessaryto achieve the desired targets or goals set forth therein.

SEC. 23. Termination of Proceedings. – The court shall,upon motion or upon recommendation of the

rehabilitation receiver, terminate the proceeding in anyof the following cases:

(a) Dismissal of the petition;

(b) Failure of the debtor to submit the rehabilitationplan;

(c) Disapproval of the rehabilitation plan by thecourt;

(d) Failure to achieve the desired targets or goalsas set forth in the rehabilitation plan;

(e) Failure of the debtor to perform its obligationsunder the plan;

(f) Determination that the rehabilitation plan mayno longer be implemented in accordance withits terms, conditions, restrictions orassumptions; or

(g) Successful implementation of the rehabilitationplan.

SEC. 24. Discharge of Rehabilitation Receiver. – Upontermination of the rehabilitation proceedings, therehabilitation receiver shall submit his final report andaccounting within such period of time as the court willallow him. Upon approval of his report and accounting,the court shall order his discharge.

RULE 4DEBTOR-INITIATED REHABILITATION

SECTION. 1. Who May Petition. – Any debtor who foreseesthe impossibility of meeting its debts when theyrespectively fall due, may petition the proper regionaltrial court for rehabilitation.

A group of companies may jointly file a petition forrehabilitation under these Rules when one or more ofits constituent corporations foresee the impossibilityof meeting debts when they respectively fall due, andthe financial distress would likely adversely affect thefinancial condition and/or operations of the othermember companies of the group and/or theparticipation of the other member companies of thegroup is essential under the terms and conditions ofthe proposed rehabilitation plan.

SEC. 2. Contents of Petition. –

(a) The petition filed by the debtor must be verifiedand must set forth with sufficient particularityall the following material facts: (1) the nameand business of the debtor; (2) the nature of thebusiness of the debtor; (3) the history of thedebtor; (4) the cause of its inability to pay itsdebts; (5) all the pending actions or proceedings



known to the debtor and the courts ortribunals where they are pending; (6) threatsor demands to enforce claims or liens againstthe debtor; and (7) the manner by which thedebtor may be rehabilitated and how suchrehabilitation may benefit the general body ofcreditors, employees and stockholders.

(b) The petition shall be accompanied by thefollowing documents:

(1) An audited financial statement of thedebtor at the end of its last fiscal year;

(2) Interim financial statements as of the endof the month prior to the filing of thepetition;

(3) A Schedule of Debts and Liabilities whichlists all the creditors of the debtor,indicating the name and last address ofrecord of each creditor; the amount of eachclaim as to principal, interest, or penaltiesdue as of the date of filing; the nature of theclaim; and any pledge, lien, mortgagejudgment or other security given for thepayment thereof;

(4) An Inventory of Assets which must listwith reasonable specificity all the assetsof the debtor, stating the nature of eachasset, the location and condition thereof,the book value or market value of the asset,and attaching the correspondingcertificate of title therefor in case of realproperty, or the evidence of title orownership in case of movable property,the encumbrances, liens or claims thereon,if any, and the identities and addresses ofthe lienholders and claimants. TheInventory shall include a Schedule ofAccounts Receivable which must indicate theamount of each, the persons from whomdue, the date of maturity and the degree ofcollectibility categorizing them as highlycollectible to remotely collectible;

(5) A rehabilitation plan which conformswith the minimal requirements set out inSection 18 of Rule 3;

(6) A Schedule of Payments and Dispositionof Assets which the debtor may haveeffected within three months immediatelypreceding the filing of the petition;

(7) A Schedule of Cash Flow of the debtor forthree months immediately preceding the

filing of the petition, and a detailedschedule of the projected cash flow for thesucceeding three months;

(8) A Statement of Possible Claims by or againstthe debtor which must contain a briefstatement of the facts which might giverise to the claim and an estimate of theprobable amount thereof;

(9) An Affidavit of General Financial Conditionwhich shall contain answers to thequestions or matters prescribed in Annex“A” hereof;

(10) At least three nominees for the position ofrehabilitation receiver as well as theirqualifications and addresses, includingbut not limited to their telephonenumbers, fax numbers and e-mail address;and

(11) A certificate attesting under oath that (i)the filing of the petition has been dulyauthorized; and (ii) the directors andstockholders of the debtor haveirrevocably approved and/or consentedto, in accordance with existing laws, allactions or matters necessary and desirableto rehabilitate the debtor including, butnot limited to, amendments to the articlesof incorporation and by-laws or articlesof partnership; increase or decrease in theauthorized capital stock; issuance ofbonded indebtedness; alienation, transfer,or encumbrance of assets of the debtor; andmodification of shareholders’ rights.

(c) Five copies of the petition shall be filed withthe court.

SEC. 3. Verification by Debtor. – The petition filed by thedebtor must be verified by an affidavit of a responsibleofficer of the debtor and shall be in a form substantiallyas follows:

I, __________________ , (position) of (name ofpetitioner), do solemnly swear that the petitionerhas been duly authorized to file the petition andthat the stockholders and board of directors (orgoverning body) have approved and/or consentedto, in accordance with law, all actions or mattersnecessary or desirable to rehabilitate the debtor.The petition is being filed to protect the interests ofthe debtor, the stockholders, the investors and thecreditors of the debtor, which warrant theappointment of a rehabilitation receiver. There isno petition for insolvency filed with any other body,



court or tribunal affecting the petitioner. TheInventory of Assets and the Schedule of Debts andLiabilities contains a full, correct and true descriptionof all debts and liabilities and of all goods, effects,estate and property of whatever kind or classbelonging to petitioner. The Inventory also containsa full, correct and true statement of all debts owingor due to petitioner, or to any person or persons intrust for petitioner and of all securities and contractswhereby any money may hereafter become due orpayable to petitioner or by or through which anybenefit or advantage may accrue to petitioner. Thepetition contains a concise statement of the factsgiving rise, or which might give rise, to any cause ofaction in favor of petitioner. Petitioner has no land,money, stock, expectancy, or property of any kind,except those set forth in the Inventory of Assets.Petitioner has, in no instance, created oracknowledged a debt for a greater sum than thetrue and correct amount. Petitioner, its officers,directors and stockholders have not, directly orindirectly, concealed, fraudulently sold or otherwisefraudulently disposed of, any part of petitioner’s realor personal property, estate, effects or rights ofaction, and petitioner, its officers, directors andstockholders have not in any way compounded withany of its creditors in order to give preference tosuch creditors, or to receive or to accept any profitor advantage therefrom, or to defraud or deceive inany manner any creditor to whom petitioner isindebted. Petitioner, its officers, directors, andstockholders have been acting in good faith and withdue diligence.

SEC. 4. Opposition to or Comment on Petition. – Everycreditor of the debtor or any interested party shall filehis verified opposition to or comment on the petitionnot later than 15 days before the date of the initialhearing fixed in the stay order. After such time, nocreditor or interested party shall be allowed to file anycomment thereon or opposition thereto without leaveof court.

If the Schedule of Debts and Liabilities omits a claim orliability, the creditor concerned shall attach to itscomment or opposition a verified statement of theobligations allegedly due it.

SEC. 5. Initial Hearing. –

(a) On or before the initial hearing set in the ordermentioned in Section 7 of Rule 3, the petitionershall file a publisher’s affidavit showing thatthe publication requirements and a petitioner’saffidavit showing that the notificationrequirement for foreign creditors had beencomplied with, as required in the stay order.

(b) Before proceeding with the initial hearing, thecourt shall determine whether the

jurisdictional requirements set forth abovehad been complied with. After finding thatsuch requirements are met, the court shallensure that the parties consider in detail all ofthe following:

(1) To the rehabilitation plan proposed by thedebtor;

(2) Simplification of the issues;

(3) The possibility of obtaining stipulationsand admission of facts and documents,including resort to request for admissionunder Rule 26 of the Rules of Court;

(4) The possibility of amicably agreeing onany issue brought up in the comments on,or opposition to, the petition;

(5) Referral of any accounting, financial andother technical issues to an expert;

(6) The possibility of submitting the petitionfor decision on the basis of the comments,opposition, affidavits and otherdocuments on record;

(7) The possibility of a new rehabilitationplan voluntarily agreed upon by thedebtor and its creditors; and

(8) Such other matters as may aid in thespeedy an summary disposition of thecase.

SEC. 6. Additional Hearings. – The court may holdadditional hearings as part of the initial hearingcontemplated in these Rules but the initial hearingmust be concluded not later than 90 days from theinitial date of the initial hearing fixed in the stay order.

SEC. 7. Order After Initial Hearing. –

(a) Within 20 days after the last hearing, the courtshall issue an order which shall:

(l) Give due course to the petition andimmediately refer the petition and itsannexes to the rehabilitation receiver whoshall evaluate the rehabilitation plan andsubmit his recommendations to the courtnot later than 90 days from the date of thelast initial hearing, if the court is satisfiedthat there is merit to the petition,otherwise the court shall immediatelydismiss the petition; and

(2) Recite in detail the matters taken up inthe initial hearing and the actions taken


thereon, including a substituterehabilitation plan contemplated inSections 5 (b )(7) and (8) of this Rule;

(b) If the debtor and creditors agree on a newrehabilitation plan pursuant to Section 5 (b)(7) of this Rule, the order shall so state the factand require the rehabilitation receiver tosupply the details of the plan and submit itfor the approval of the court not later than 60days from the date of the last initial hearing.The court shall approve the newrehabilitation plan not later than 90 days fromthe date of the last initial hearing uponconcurrence of the following:

(1) Approval or endorsement of creditorsholding at least two-thirds (2/3) of thetotal liabilities of the debtor includingsecured creditors holding more than 50percent of the total secured claims of thedebtor and unsecured creditors holdingmore than 50 percent of the totalunsecured claims of the debtor;

(2) The rehabilitation plan complies with therequirements specified in Section 18 ofRule 3;

(3) The rehabilitation plan would providethe objecting class of creditors withpayments whose present value projectedin the plan would be greater than thatwhich they would have received if theassets of the debtor were sold by aliquidator within a six month period fromthe date of filing of the petition; and

(4) The rehabilitation receiver hasrecommended, approval of the plan.

The approval by the court of the newrehabilitation plan shall have the same effect asapproval of a rehabilitation plan under Section 20 ofRule 3.

SEC. 8. Creditors’ Meetings. – If no new rehabilitationplan is agreed upon by the debtor and the creditors,the rehabilitation receiver, at any time before hesubmits his evaluation on the debtor-proposedrehabilitation plan to the court as prescribed in Section7 (a)(l) of this Rule, shall, either alone or with thedebtor, meet with the creditors or any interested partyto discuss the plan with a view to clarifying orresolving any matter connected therewith.

SEC. 9. Comments on or Opposition to RehabilitationPlan. – Any creditor or interested party of record may

file comments on or opposition to the proposedrehabilitation plan, with a copy given to therehabilitation receiver, not later than 60 days fromthe date of the last initial hearing. The court shallconduct summary and non-adversarial proceedingsto receive evidence, if necessary, in hearing thecomments on and opposition to the plan.

SEC. 10. Modification of Proposed Rehabilitation Plan. –The debtor may modify its rehabilitation plan in thelight of the comments of the rehabilitation receiverand creditors or any interested party and submit arevised or substitute rehabilitation plan for the finalapproval of the court. Such rehabilitation plan mustbe submitted to the court not later than 10 monthsfrom the date of the date of filing of the petition.

SEC. 11. Approval of Rehabilitation Plan. – The courtmay approve a rehabilitation plan even over theopposition of creditors of the debtor if, in its judgment,the rehabilitation of the debtor is feasible and theopposition of the creditors is manifestly unreasonable.The opposition of the creditors is manifestlyunreasonable if the following are present:

(a) The rehabilitation plan complies with therequirements specified in Section 18 of Rule 3;

(b) The rehabilitation plan would provide theobjecting class of creditors with paymentswhose present value projected in the planwould be greater than that which received ifthe assets of the debtor were sold by aliquidator within a six-month period from thedate of filing of the petition; and

(c) The rehabilitation receiver has recommendedapproval of the plan.

In approving the rehabilitation plan, the courtshall ensure that the rights of the secured creditorsare not impaired. The court shall also issue thenecessary orders or processes for its immediate andsuccessful implementation. It may impose such terms,conditions, or restrictions as the effectiveimplementation and monitoring thereof mayreasonably require, or for the protection andpreservation of the interests of the creditors shouldthe plan fail.

SEC. 12. Period to Decide Petition. – The court shalldecide the petition within one year from the date offiling of the petition, unless the court, for good causeshown, is able to secure an extension of the period fromthe Supreme Court.



RULE 5CREDITOR-INITIATED REHABILITATION

SECTION 1. Who May Petition. – Any creditor or creditorsholding at least 20 percent of the debtor’s total liabilitiesmay file a petition with the proper regional trial courtfor rehabilitation of a debtor that cannot meet its debtsas they respectively fall due.

SEC. 2. Requirements for Creditor-Initiated Petitions. –Where the petition is filed by a creditor or creditorsunder this Rule, it is sufficient that the petition isaccompanied by a rehabilitation plan and a list of atleast three nominees to the position of rehabilitationreceiver and verified by a sworn statement that theaffiant has read the petition and that its contents aretrue and correct of his personal knowledge or based onauthentic records and that the petition is being filed toprotect the interests of the debtor, the stockholders, theinvestors and the creditors of the debtor.

SEC. 3. Applicability of Provisions Relating to Debtor-Initiate, Rehabilitation. – The provisions of Sections 5to 12 of Rule 4 shall apply to rehabilitation under thisRule.

RULE 6PRE- NEGOTIATED REHABILITATION

SECTION 1. Pre-negotiated Rehabilitation Plan. – A debtorthat foresees the impossibility of meeting its debts asthey fall due may, by itself or jointly with any of itscreditors, file a verified petition for the approval of apre-negotiated rehabilitation plan. The petition shallcomply with Section 2 of Rule 4 and be supported byan affidavit showing the written approval orendorsement of creditors holding at least two-thirds(2/3) of the total liabilities of the debtor, includingsecured creditors holding more than 50 percent of thetotal secured claims of the debtor and unsecuredcreditors holding more than 50 percent of the totalunsecured claims of the debtor.

SEC. 2. Issuance of Order. – If the court finds the petitionsufficient in form and substance, it shall, not later thanfive working days from the filing of the petition, issuean order which shall:

(a) Identify the debtor, its principal business oractivity/ies and its principal place of business;

(b) Direct the publication of the order in anewspaper of general circulation once a weekfor at least two consecutive weeks, with thefirst publication to be made within seven daysfrom the time of its issuance;

(c) Direct the service by personal delivery of a copy

of the petition on each creditor who is not apetitioner holding at least 5 percent of the totalliabilities of the debtor, as determined in theschedule attached to the petition, within threedays;

(d) Direct the petitioner to furnish a copy of thepetition and its annexes, as well as the stayorder, to the relevant regulatory agency;

(e) State that copies of the petition and therehabilitation plan are available forexamination and copying by any interestedparty;

(f) Direct creditors and other parties interested(including the Securities and ExchangeCommission and the relevant regulatoryagencies such as, but not limited to, the BangkoSentral ng Pilipinas, the InsuranceCommission, the National Telecommuni-cations Commission, the Housing and LandUse Regulatory Board and the EnergyRegulatory Commission) in opposing thepetition or rehabilitation plan to file theirverified objections thereto or commentsthereon within a period of not later than 20days from the second publication of the order,with a warning that failure to do so will barthem from participating in the proceedings;

(g) Appoint the rehabilitation receiver named inthe plan, unless the court finds that he is notqualified under these Rules in which case itmay appoint a qualified rehabilitationreceiver of its choice;

(h) Stay enforcement of all claims, whether formoney or otherwise and whether suchenforcement is by court action or otherwise,against the debtor, its guarantors and personsnot solidarily liable with the debtor; provided,that the stay order shall not cover claimsagainst letters of credit and similar securityarrangements issued by a third party tosecure the payment of the debtor’s obligations;provided further, that the stay order shall notcover foreclosure by a creditor of propertynot belonging to a debtor under corporaterehabilitation; provided, however, that wherethe owner of such property sought to beforeclosed is also a guarantor or one who isnot solidarily liable, said owner shall beentitled to the benefit of excussion as suchguarantor;

(i) Prohibit the debtor from selling, encumbering,




transferring, or disposing in any manner anyof its properties except in the ordinary courseof business;

(j) Prohibit the debtor from making any paymentof its liabilities outstanding as of the date offiling of the petition;

(k) Prohibit the debtor’s suppliers of goods orservices from withholding supply of goods andservices in the ordinary course of business foras long as the debtor makes payments for theservices and goods supplied after the issuanceof the stay order;

(1) Direct the payment in full of all administrativeexpenses incurred after the issuance of the stayorder; and

(m) Direct the payment of new loans or other formsof credit accommodations obtained for therehabilitation of the debtor with prior courtapproval.

SEC. 3. Approval of Plan. – Within 10 days from thedate of the second publication of the order referred toin Section 2 of this Rule, the court shall approve therehabilitation plan unless a creditor or other interestedparty submits a verified objection to it in accordancewith the next succeeding section.

SEC. 4. Objection to Petition or Rehabilitation Plan. –Any creditor or other interested party may submit tothe court a verified objection to the petition or therehabilitation plan. The objections shall be limited tothe following:

(a) The petition or the rehabilitation plan or theirattachments contain material omissions or arematerially false or misleading;

(b) The terms of rehabilitation are unattainable;or

(c) The approval or endorsement of creditorsrequired under Section 1 of this Rule has notbeen obtained

Copies of any objection to the petition or therehabilitation plan shall be served on the petitioningdebtor and/or creditors.

SEC. 5. Hearing on Objections. – The court shall set thecase for hearing not earlier than 10 days and no laterthan 20 days from the date of the second publication ofthe order mentioned in Section 2 of this Rule on theobjections to the petition or rehabilitation plan. If thecourt finds that the objection is in accordance with theimmediately preceding section, it shall direct the

petitioner to cure the defect within a period 15 daysfrom receipt of the order.

SEC. 6. Period for Approval of Rehabilitation Plan. –The court shall decide the petition not later than 120days from the date of the filing of the petition. If thecourt fails to do so within said period, therehabilitation plan shall be deemed approved

SEC. 7. Effects of Approval of Rehabilitation Plan. –Approval of the rehabilitation plan under this Ruleshall have the same legal effect as approval of arehabilitation plan under Section 20 of Rule 3.

SEC. 8. Revocation of Approved Rehabilitation Plan. –Not later than 30 days from the approval of arehabilitation plan under this Rule, the plan may,upon motion and after notice and hearing, be revokedon the ground that the approval was secured by fraudor that the petitioner has failed to cure the defectordered by the court pursuant to Section 5 of this Rule.

SEC. 9. Effect of Rule on Pending Petitions. – Anypending petition for rehabilitation that has notundergone the initial hearing prescribed under theInterim Rules of Procedure for CorporateRehabilitation at the time of the effectivity of theseRules may be converted into a rehabilitationproceeding under this Rule.

RULE 7RECOGNITION OF FOREIGN PROCEEDINGS

SECTION 1. Scope of Application. – This Rule applieswhere (a) assistance is sought in a Philippine courtby a foreign court or a foreign representative inconnection with a foreign proceeding; (b) assistanceis sought in a foreign State in connection with adomestic proceeding governed by these Rules; or (c) aforeign proceeding and a domestic proceeding areconcurrently taking place.

The sole fact that a petition is filed pursuant tothis Rule does not subject the foreign representativeor the foreign assets and affairs of the debtor to thejurisdiction of the local courts for any purpose otherthan the petition.

SEC. 2. Non-Recognition of Foreign Proceeding. –Nothing in this Rule prevents the court from refusingto take an action governed by this Rule if (a) the actionwould be manifestly contrary to the public policy ofthe Philippines; and (b) if the court finds that thecountry of which the petitioner is a national does notgrant recognition to a Philippine rehabilitationproceeding in a manner substantially in accordancewith this Rule.

(Continued on NEXT page)


Sec. 3. Petition for Recognition of Foreign Proceeding. –A foreign representative may apply with the RegionalTrial Court where the debtor resides for recognitionof the foreign proceeding in which the foreignrepresentative has been appointed.

A petition for recognition shall be accompaniedby:

(a) A certified copy of the decision commencingthe foreign proceeding and appointing theforeign representative; or

(b) A certificate from the foreign court affirmingthe existence of the foreign proceeding and ofthe appointment of the foreign representative;or

(c) In the absence of evidence referred to insubparagraphs (a) and (b), any other evidenceacceptable to the court of the existence of theforeign proceeding and of the appointment ofthe foreign representative.

SEC. 4. Recognition of Foreign Proceeding. – A foreignproceeding shall be recognized if:

(a) The proceeding is a foreign proceeding asdefined herein;

(b) The person or body applying for recognitionis a foreign representative as defined herein;and

(c) The petition meets the requirements of Section3 of this Rule;

SEC. 5. Period to Recognize Foreign Proceeding. – Apetition for recognition of a foreign proceeding shallbe decided within 30 days from the filing thereof.

SEC. 6. Notification to Court. – From the time of filingthe petition for recognition of the foreign proceeding,the foreign representative shall inform the courtpromptly of:

(a) Any substantial change in the status of theforeign proceeding or the status of the foreignrepresentative’s appointment; and

(b) Any other foreign proceeding regarding thesame debtor that becomes known to the foreignrepresentative.

SEC. 7. Provisional Relief that May be Granted uponApplication for Recognition of Foreign Proceeding. –From the time of filing a petition for recognition untilthe same is decided upon, the court may, upon motionof the foreign representative where relief is urgentlyneeded to protect the assets of the debtor or the

interests of the creditors, grant relief of a provisionalnature, including:

(a) Staying execution against the debtor’s assets;

(b) Entrusting the administration or realizationof all or part of the debtor’s assets located inthe Philippines to the foreign representativeor another person designated by the court inorder to protect and preserve the value ofassets that, by their nature or because of othercircumstances, are perishable, susceptible todevaluation or otherwise in jeopardy;

(c) Any relief mentioned in Sections 9(a)(1), (2) and(7) of this Rule.

SEC. 8. Effects of Recognition of Foreign Proceeding. –Upon recognition of a foreign proceeding:

(a) Commencement or continuation of individualactions or individual proceedings concerningthe debtor ’s assets, rights, obligations orliabilities is stayed; provided, that such stay doesnot affect the right to commence individualactions or proceedings to the extent necessaryto preserve a claim against the debtor.

(b) Execution against the debtor’s assets is stayed;and

(c) The right to transfer, encumber or otherwisedispose of any assets of the debtor issuspended.

SEC. 9. Relief That May be Granted After Recognition ofForeign Proceeding. –

(a) Upon recognition of a foreign proceeding,where necessary to protect the assets of thedebtor or the interests of the creditors, thecourt may, upon motion of the foreignrepresentative, grant any appropriate reliefincluding:

(1) Staying the commencement orcontinuation of individual actions orindividual proceedings concerning thedebtor ’s assets, rights, obligations orliabilities to the extent they have not beenstayed under Section 8(a) of this Rule;

(2) Staying execution against the debtor’sassets to the extent it has not been stayedunder Section 8(b) of this Rule;

(3) Suspending the right to transfer,encumber or otherwise dispose of anyassets of the debtor to the extent this right



has not been suspended under Section 8(c) of this Rule;

(4) Providing for the examination ofwitnesses, the taking of evidence or thedelivery of information concerning thedebtor’s assets, affairs, rights, obligationsor liabilities;

(5) Entrusting the administration orrealization of all or part of the debtor’sassets located in the Philippines to theforeign representative or another persondesignated by the court;

(6) Extending the relief granted under Section7 of this Rule;

(7) Granting any additional relief that maybe available to the rehabilitation receiverunder these laws.

(b) Upon recognition of a foreign proceeding, thecourt may, at the request of the foreignrepresentative, entrust the distribution of allor part of the debtor’s assets located in thePhilippines to the foreign representative oranother person designated by the court;provided that the court is satisfied that theinterests of local creditors are adequatelyprotected.

SEC. 10. Protection of Creditors and Other InterestedPersons. –

(a) In granting or denying relief under this Ruleor in modifying or terminating the relief underparagraph (c) of this Section, the court mustbe satisfied that the interests of the creditorsand other interested persons, including thedebtor, are adequately protected.

(b) The court may subject the relief granted underSection 7 or Section 9 of this Rule to conditionsit considers appropriate.

(c) The court may, upon motion of the foreignrepresentative or a person affected by the reliefgranted under Section 7 or Section 9 of thisRule, or on its own motion, modify orterminate such relief

SEC. 11. Actions to Avoid Acts Detrimental to Creditors.– Upon recognition of a foreign proceeding, the foreignrepresentative acquires the standing to initiate actionsto avoid or otherwise render ineffective actsdetrimental to creditors that are available under theseRules.

SEC. 12. Intervention by Foreign Representative inPhilippine Proceedings. – Upon recognition of a foreignproceeding, the foreign representative may intervenein any action or proceeding in the Philippines in whichthe debtor is a party.

SEC. 13. Cooperation and Direct Communication withForeign Courts and Foreign Representatives. – In matterscovered by this Rule, the court shall cooperate to themaximum extent possible with foreign courts orforeign representatives.

The court is entitled to communicate directly with,or request information or assistance directly from,foreign courts or foreign representatives.

SEC. 14. Forms of Cooperation. – Cooperation may beimplemented by any appropriate means, including butnot limited to the following:

(a) Appointment of a person or body to act at thediscretion of the court;

(b) Communication of information by any meansconsidered appropriate by the court;

(c) Coordination of the administration andsupervision of the debtor’s assets and affairs;

(d) Approval or implementation by courts ofagreements concerning the coordination ofproceedings;

(e) Coordination of concurrent proceedingsregarding the same debtor;

(t) Suspension of proceedings against the debtor;

(g) Limiting the relief to assets that should beadministered in a foreign proceeding pendingin a jurisdiction other than the place wherethe debtor has its principal place of business(foreign non-main proceeding) or informationrequired in that proceeding; and

(h) Implementation of rehabilitation or re-organization plan for the debtor.

Nothing in this Rule limits the power of the courtto provide additional assistance to the foreignrepresentative under other applicable laws.

SEC. 15. Commencement of Local Proceeding afterRecognition of Foreign Proceeding. – After therecognition of a foreign proceeding, a local proceedingunder these Rules may be commenced only if the debtoris doing business in the Philippines, the effects of theproceedings shall be restricted to the assets of thedebtor located in the country and, to the extent



necessary to implement cooperation and coordinationunder Sections 13 and 14 of this Rule, to the other assetsof the debtor that, under local laws, must beadministered in that proceeding.

SEC. 16. Local and Foreign Proceedings. – Where a foreignproceeding and a local proceeding are taking placeconcurrently regarding the same debtor, the courtshall seek cooperation and coordination under Sections13 and 14 of this Rule. Any relief granted to the foreignproceeding must be made consistent with the reliefgranted in the local proceeding.

RULE 8PROCEDURAL REMEDIES

SECTION 1. Motion for Reconsideration. – A party mayfile a motion for reconsideration of any order issuedby the court prior to the approval of the rehabilitationplan. No relief can be extended to the party aggrievedby the court’s order on the motion through a specialcivil action for certiorari under Rule 65 of the Rules ofCourt. Such order can only be elevated to the Court ofAppeals as an assigned error in the petition for reviewof the decision or order approving or disapprovingthe rehabilitation plan.

An order issued after the approval of therehabilitation plan can be reviewed only through aspecial civil action for certiorari under Rule 65 of theRules of Court.

SEC. 2. Review of Decision or Order on RehabilitationPlan. – An order approving or disapproving arehabilitation plan can only be reviewed through apetition for review to the Court of Appeals under Rule43 of the Rules of Court within 15 days from notice ofthe decision or order.

RULE 9FINAL PROVISIONS

SECTION 1. Severability. – If any provision or section ofthese Rules is held invalid, the other provisions orsections shall not be effected thereby.

SEC. 2. Transitory Provision. – Unless the court ordersotherwise to prevent manifest injustice, any pendingfor rehabilitation that has not undergone the initialhearing prescribed under the Interim Rules ofProcedure for Corporate Rehabilitation at the time ofthe effectivity of these Rules shall be governed by theseRules.

SEC. 3. Effectivity. – These Rules shall take effect on 16January 2009 following its publication in twonewspapers of general circulation in the Philippines .

ANNEX “A”

AFFIDAVIT OF GENERAL FINANCIAL CONDITION

(1) Are you an officer of the debtor referred to in theseproceedings?

(2) What is your full name and what position do you hold in thedebtor?

(3) What is the full name of the debtor and what is the address ofits head office?

(4) When was it formed or incorporated?(5) When did the debtor commence business?(6) What is the nature of its business? What is the market share

of the debtor in the industry in which it is engaged?(7) Who are the parties, members, or stockholders? How many

employees?(8) What is the capital of the debtor?(9) What is the capital contribution and what is the amount of the

capital, paid and unpaid, of each of the partners orshareholders?

(10) Do any of these people hold the shares in trust for others?(11) Who are the directors and officers of the debtors?(12) Has the debtor any subsidiary corporation? If so, give

particulars?(13) Has the debtor properly maintained its books and are they

updated?(14) Were the books audited annually?(15) If so, what is the name of the auditor and when was the last

audited statement drawn up?(16) Have all proper returns been made to the various government

agencies requiring same?(17) When did the debtor first become aware of its problems?(18) Has the debtor within the twelve months preceding the filing

of the petition:(a) made any payments, returned any goods or delivered

any property to any of its creditors, except in the normalcourse of business?

(b) executed any mortgage, pledge, or security over any ofits properties in favor of any creditor?

(c) transferred or disposed of any of its properties in paymentof any debt?

(d) sold, disposed of, or removed any of its property exceptin the ordinary course of business?

(e) sold any merchandise at less than fair market value orpurchased merchandise or services at more than fairmarket value?

(f) made or been a party to any settlement of property infavor of any person?

If, so, give particulars.(19) Has the debtor recorded all sales or dispositions of assets?(20) What were the sales for the last three years and what

percentage of the sales represented the profit or mark-up?(21) What were the profits or losses for the debtor for the last

three years?(22) What are the causes of the problems of the debtor? Please

provide particulars?(23) When did you first notice these problems and what actions

did the debtor take to rectify them?(24) How much do you estimate is needed to rehabilitate the debtor?(25) Has any person expressed interest in investing new money

into the debtor?(26) Are there any pending and threatened legal actions against

the debtor? If so, please provide pm1iculars.(27) Has the debtor discussed any restructuring or repayment plan

with any of the creditors? Please provide status and details.(28) Has any creditor expressed interest in restructuring the debts

of the debtor? If so, please give particulars.(29) Have employees’ wages and salaries been kept current? If

not, how much are in arrears and what time period do thearrears represent?

(30) Have obligation to the government and its agencies been keptcurrent? If not, how much are in arrears and what time perioddo the arrears represent?


Department of Labor and EmploymentRegional Offices, Department of AgrarianReform Adjudication Board and NationalCommission for Indigenous Peoples. The term“practicing lawyers” shall exclude:

(i) Government employees and incumbentelective officials not allowed by law topractice;

(ii) Lawyers who by law are not allowed toappear in court;

(iii) Supervising lawyers of students enrolledin law student practice in duly accreditedlegal clinics of law schools and lawyers ofnon-governmental organizations (NGOs)and peoples’ organizations (Pos) like theFree Legal Assistance Group who by thenature of their work already render freelegal aid to indigent and pauper litigantsand

(iv) Lawyers not covered undersubparagraphs (i) to (iii) including thosewho are employed in the private sectorbut do not appear for and in behalf ofparties in courts of law and quasi-judicialagencies.

(b) Indigent and pauper litigants are those definedunder Rule 141, Section 19 of the Rules of Courtand Algura v. The Local Government Unit of theCity of Naga (G.R. No. 150135, 30 October 2006,506 SCRA 81);

(c) Legal aid cases are those actions, disputes, andcontroversies that are criminal, civil andadministrative in nature in whatever stagewherein indigent and pauper litigants needlegal representation;

(d) Free legal aid services refer to appearance in courtor quasi-judicial body for and in behalf of anindigent or pauper litigant and thepreparation of pleadings or motions. It shallalso cover assistance by a practicing lawyerto indigent or poor litigants in court-annexedmediation and in other modes of alternativedispute resolution (ADR). Services renderedwhen a practicing lawyer is appointed counselde oficio shall also be considered as free legalaid services and credited as compliance underthis Rule;

(e) Integrated Bar of the Philippines (IBP) is the officialnational organization of lawyers in thecountry;

RESOLUTION of the COURT En Banc dated

February 10, 2008 on Bar Matter No. 2012

PROPOSED RULE ON MANDATORY LEGAL AIDSERVICE FOR PRACTICING LAWYERS

Acting on the Memorandum dated January 27,2009 of Justice Renato C. Corona re: Comment of theIntegrated Bar of the Philippines on our SuggestedRevisions to the Proposed Rule of Mandatory LegalAid Service for Practicing Lawyers, the Court Resolvedto APPROVE the same.

This Resolution shall take effect on July 1, 2009following publication of the said Rule and itsimplementing regulations in at least two newspapersof general circulation.

February 10, 2009.

PUNO, CJ, QUISUMBING, YNARES-SANTIAGO,CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIOMORALES, AZCUNA, TINGA, CHICO-NAZARIO,VELASCO, JR., NACHURA, LEONARDO-DE CASTRO,BRION, PERALTA, JJ. concur.

RULE ON MANDATORY LEGAL AID SERVICE

SECTION 1. Title. – This Rule shall be known as “TheRule on Mandatory Legal Aid Service.”

SEC. 2. Purpose. – This Rule seeks to enhance the dutyof lawyers to society as agents of social change and tothe courts as officers thereof by helping improve accessto justice by the less privileged members of societyand expedite the resolution of cases involving them.Mandatory free legal service by members of the barand their active support thereof will aid the efficientand effective administration of justice especially incases involving indigent and pauper litigants.

SEC. 3. Scope. – This Rule shall govern the mandatoryrequirement for practicing lawyers to render free legalaid services in all cases (whether, civil, criminal oradministrative) involving indigent and pauperlitigants where the assistance of a lawyer is needed. Itshall also govern the duty of other members of thelegal profession to support the legal aid program ofthe Integrated Bar of the Philippines.

SEC. 4. Definition of Terms. – For purpose of this Rule:

(a) Practicing lawyers are members of the PhilippineBar who appear for and in behalf of parties incourts of law and quasi-judicial agencies,including but not limited to the NationalLabor Relations Commission, NationalConciliation and Mediation Board,

SUPREME COURT



and obtain a certificate from the Clerk of Courtattesting to the number of hours spentrendering free legal aid services in a case. Thecertificate shall contain the followinginformation:

(i) The case or cases where the legal aidservice was rendered, the party or partiesin the said case(s) for whom the servicewas rendered, the docket number of thesaid case(s) and the date(s) the service wasrendered.

(ii) The number of hours actually spentattending a hearing or conducting trial ona particular case in the court or quasi-judicial body.

(iii) The number of hours actually spentattending mediation, conciliation or anyother mode of ADR on a particular case.

(iv) A motion (except a motion for extensionof time to file a pleading or forpostponement of hearing or conference) orpleading filed on a particular case shallbe considered as one hour of Service

The Clerk of Court shall issue thecertificate in triplicate, one copy to beretained by the practicing lawyer, onecopy to be retained by the Clerk of Courtand one copy to be attached to thelawyer’s compliance report.

(c) Said compliance report shall be submitted tothe Legal Aid Chairperson of the IBP Chapterwithin the court’s jurisdiction. The Legal AidChairperson shall then be tasked withimmediately verifying the contents of thecertificate with the issuing Clerk of Court bycomparing the copy of the certificate attachedto the compliance report with the copyretained by the Clerk of Court.

(d) The IBP Chapter shall, after verification, issuea compliance certificate to the concernedlawyer. The IBP Chapter shall also submit thecompliance reports to the IBP’s NCLA forrecording and documentation. Thesubmission shall be made within 45 days afterthe mandatory submission of compliancereports by the practicing lawyers.

(e) Practicing lawyers shall indicate in allpleadings filed before the courts or quasi-judicial bodies the number and date of issue

(f) National Committee on Legal Aide (NCLA) is thecommittee of the IBP which is specificallytasked with handling legal aid cases;

(g) Committee on Bar Discipline (CBD) is thecommittee of the IBP which is specificallytasked with disciplining members of the Bar;

(h) IBP Chapters are those chapters of the IntegratedBar of the Philippines located in the differentgeographical areas of the country as definedin Rule 139-A and

(i) Clerk of Court is the Clerk of Court of the courtwhere the practicing lawyer rendered freelegal aid services. In the case of quasi-judicialbodies, it refers to an officer holding anequivalent or similar position.

The term shall also include an officerholding a similar position in agenciesexercising quasi-judicial functions, or aresponsible officer of an accredited PO orNGO, or an accredited mediator whoconducted the court-annexed mediationproceeding.

SEC. 5. Requirements. –

(a) Every practicing lawyer is required to rendera minimum of 60 hours of free legal aidservices to indigent litigants in a year. Said60 hours shall be spread within a period of 12months, with a minimum of five hours of freelegal aid services each month. However,where it is necessary for the practicing lawyerto render legal aid service for more than fivehours in one month, the excess hours may becredited to the said lawyer for the succeedingperiods.

For this purpose, a practicing lawyer shallcoordinate with the Clerk of Court for caseswhere he may render free legal aid service.He may also coordinate with the IBP LegalAid Chairperson of the IBP Chapter to inquireabout cases where he may render free legalaid service. In this connection, the IBP LegalAid Chairperson of the IBP Chapter shallregularly and actively coordinate with theClerk of Court.

The practicing lawyer shall reportcompliance with the requirement within 10days of the last month of each quarter of theyear.

(b) A practicing lawyer shall be required to secure


RESOLUTION on Bar Matter No. 2012 (Continued)

for the proper handling and accounting oflegal aid cases which practicing lawyers canrepresent.

(b) The NCLA shall monitor the activities of theChapter of the Legal Aid Office with respectto the coordination with Clerks of Court onlegal aid cases and the collation of certificatessubmitted by practicing lawyers.

(c) The NCLA shall act as the national repositoryof records in compliance with this Rule.

(d) The NCLA shall prepare the following forms:certificate to be issued by the Clerk of Courtand forms mentioned in Section 5(e) and (g).

(e) The NCLA shall hold in trust, manage andutilize the contributions and penalties thatwill be paid by lawyers pursuant to this Ruleto effectively carry out the provisions of thisRule. For this purpose, it shall annuallysubmit an accounting to the IBP Board ofGovernors. The accounting shall be includedby the IBP in its report to the Supreme Courtin connection with its request for the releaseof the subsidy for its legal aid program.

SEC. 7. Penalties. –

(a) At the end of every calendar year, anypracticing lawyer who fails to meet theminimum prescribed 60 hours of legal aidservice each year shall be required by the IBP,through the NCLA, to explain why he wasunable to render the minimum prescribednumber of hours. If no explanation has beengiven or if the NCLA finds the explanationunsatisfactory, the NCLA shall make a reportand recommendation to the IBP Board ofGovernors that the erring lawyer be declareda member of the IBP who is not in goodstanding. Upon approval of the NCLA’srecommendation, the IBP Board of Governorsshall declare the erring lawyer as a membernot in good standing. Notice thereof shall befurnished the erring lawyer and the IBPChapter which submitted the lawyer ’scompliance report or the IBP Chapter wherethe lawyer is registered, in case he did notsubmit a compliance report. The notice to thelawyer shall include a directive to pay FourThousand Pesos (P4,000.00) penalty whichshall accrue to the special fund for the legalaid program of the IBP.

of their certificate of compliance for theimmediately preceding compliance period.Failure to disclose the required informationwould cause the dismissal of the case and theexpunction of the pleadings from the records.

(f) Before the end of a particular year, lawyerscovered by the category under Section 4(a)(ii),shall fill up a form prepared by the NCLAwhich states that, during that year, they areemployed with the government or incumbentelective officials not allowed by law to practiceor lawyers who by law are not allowed toappear in court. The form shall be sworn toand submitted to the IBP Chapter or IBPNational Office together with the payment ofan annual contribution of Two ThousandPesos (P2,000.00). Said contribution shallaccrue to a special fund of the IBP for thesupport of its legal aid program.

(g) Before the end of a particular year, lawyerscovered by the category under Section 4(a)(iii)shall secure a certification from the director ofthe legal clinic or of the concerned NGO or POto the effect that, during that year, they haveserved as supervising lawyers in a legal clinicor actively participated in the NGOs or POsfree legal aid activities. The certification shallbe submitted to the IBP Chapter or IBPNational Office.

(h) Before the end of a particular year, lawyerscovered by the category under Section 4(a)(iv)shall fill up a form prepared by the NCLAwhich states that, during that year, they areneither practicing lawyers nor covered bySection 4(a)(i) to Section 4(a)(iii). The form shallbe sworn to and submitted to the IBP Chapteror IBP National Office together with thepayment of an annual contribution of FourThousand Pesos (P4,000.00) by way of supportfor the efforts of practicing lawyers whorender mandatory free legal aid services. Saidcontribution shall accrue to a special fund ofthe IBP for the support of its legal aid program.

(i) Failure to pay the annual contribution shallsubject the lawyer to a penalty of TwoThousand Pesos (P2,000.00) for that yearwhich amount shall also accrue to the specialfund for the legal aid program of the IBP.

SEC. 6. NCLA. –

(a) The NCLA shall coordinate with the variouslegal aid committees of the IBP local chapters (Continued on NEXT page)


MCLE Committee under Section 2(g), Rule 2 of the Ruleson MCLE.

A lawyer who renders mandatory legal aid serviceof the required number of hours in a year for at leasttwo consecutive years within the three year-periodcovered by a compliance period under the Rules onMCLE shall be credited the following: one credit unitsfor legal ethics, one credit units for trial and pretrialskills, one credit units for alternative disputeresolution, two credit units for legal writing and oraladvocacy, two credit units for substantive andprocedural laws and jurisprudence and three creditunits for such subjects as may be prescribed by theMCLE Committee under Section 2(g), Rule 2 of the Ruleson MCLE.

SEC. 9. Implementing Rules. – The IBP, through theNCLA, is hereby given authority to recommendimplementing regulations in determining who are“practicing lawyers,” what constitute “legal aid cases”and what administrative procedures and financialsafeguards which may be necessary and proper in theimplementation of this rule may be prescribed. It shallcoordinate with the various legal chapters in thecrafting of the proposed implementing regulations and,upon approval by the IBP Board of Governors, the saidimplementing regulations shall be transmitted to theSupreme Court for final approval.

SEC. 10. Effectivity. – This Rule and its implementingrules shall take effect on July 1, 2009 after they havebeen published in two newspapers of generalcirculation.

ADMINISTRATIVE CIRCULAR NO. 08-2009

TO: ALL JUDGES AND COURT PERSONNEL

SUBJECT: GUIDELINES IN CASE OF PROLONGEDABSENCES, TARDINESS and UNDERTIME, FILINGOF APPLICATIONS FOR LEAVE AND AVAILMENTOF THE REHABILITATION PRIVILEGE

To achieve uniformity in the filing of applicationsfor leave and for the proper monitoring of theattendance of officials and employees in the lowercourts, the following guidelines shall be observed:

I. PROLONGED ABSENCES

1. Sections 51, 52, 53 and 54 Rule XVI of theOmnibus Rules Implementing Book V ofE.O. 292 and Other Pertinent Civil ServiceLaws relative to the submission ofapplications for leave provide as follows:

(b) The “not in good standing” declaration shallbe effective for a period of three months fromthe receipt of the erring lawyer of the noticefrom the IBP Board of Governors. During thesaid period, the lawyer cannot appear in courtor any quasi-judicial body as counsel.Provided, however, that the “not in goodstanding” status shall subsist even after thelapse of the three-month period until andunless the penalty shall have been paid.

(c) Any lawyer who fails to comply with hisduties under this Rule for at least threeconsecutive years shall be the subject ofdisciplinary proceedings to be instituted motuproprio by the CBD. The said proceedings shallafford the erring lawyer due process inaccordance with the rules of the CBD and Rule139-B of the Rules of Court. If foundadministratively liable, the penalty ofsuspension in the practice of law for one yearshall be imposed upon him.

(d) Any lawyer who falsifies a certificate or anyform required to be submitted under this Ruleor any contents thereof shall beadministratively charged with falsificationand dishonesty and shall be subject todisciplinary action by the CBD. This iswithout prejudice to the filing of criminalcharges against the lawyer.

(e) The falsification of a certificate or any contentsthereof by any Clerk of Court or by anyChairperson of the Legal Aid Committee ofthe IBP local chapter where the case is pendingor by the Director of a legal clinic orresponsible officer of an NGO or PO shall be aground for an administrative case against thesaid Clerk of Court or Chairperson. This iswithout prejudice to the filing of the criminaland administrative charges against themalfeasor.

SEC. 8. Credit for Mandatory Continuing Legal Education.– A lawyer who renders mandatory legal aid servicefor the required number of hours in a year for the threeyear-period covered by a compliance period under theRules on MCLE shall be credited the following: twocredit units for legal ethics, two credit units for trialand pretrial skills, two credit units for alternativedispute resolution, four credit units for legal writingand oral advocacy, four credit units for substantiveand procedural laws and jurisprudence and six creditunits for such subjects as may be prescribed by the


employees who have incurred less than30 unauthorized absences, except whenthe absences were on account of sicknessand appropriate notice had been given bythe employee concerned as provided inparagraph 3 hereof. The order shall beserved at their last known address onrecord.

6. If, despite the Return-to-Work Order, theconcerned employee still fails to reportfor work within the period stated in theOrder, the same shall be a valid groundto drop him/her from the rolls. ThePresiding Judge/Executive Judge is herebydirected to immediately report the matterto the Employees Leave Division, OAS,OCA.

7. Inasmuch as court employees who areabsent without approved leave are notentitled to receive their salariescorresponding to the period of theirunauthorized leave of absence, the Clerkof Court is hereby directed toimmediately return the correspondingchecks of the concerned employees to theFinancial Management Office, OCA.

II. TARDINESS AND UNDERTIME

Court personnel are also directed toobserve Memorandum Circular No. 34, s.1998 issued by the Civil Service Commissionon August 11, 1998, amending Section 8, RuleXVII of the Omnibus Rules ImplementingBook V of E.O. No. 292 (Administrative Codeof 1987), which provides as follows:

SEC. 8. Officers and employees who haveincurred tardiness and undertime,regardless of the number of minutes per day,10 times a month for at least two consecutivemonths during the year or for at least twomonths in a semester shall be subject todisciplinary action.” (emphasis ours)

III. DAILY TIME RECORDS/BUNDY CARDS

Daily Time Records/Bundy Cardssubmitted to the Employees Leave Division,OAS, OCA should be signed by the ExecutiveJudge (for those in the Office of the Clerk ofCourt) or the Presiding Judge (for those incourt branches) or the Clerk of Court, asdelegated by the Presiding Judge/ExecutiveJudge in writing.

IV. APPLICATION FOR LEAVE

Applications for leave of absence of allnature shall be filed using the prescribed form(Annex 1) which shall be acted upon by theauthorized officials in the Supreme Court thruthe Office of the Court Administrator. Theapplication for leave of absence of the PresidingJudge should bear the recommendation forapproval or disapproval of the Executive Judgeand the application for leave of absence of thecourt personnel should bear therecommendation for approval or disapprovalof the Executive Judge (for those in the Office ofthe Clerk of Court) or the Presiding Judge (forthose in court branches) or the Clerk of Court,as delegated by the Executive Judge/PresidingJudge in writing.

Applications for vacation leave shall beacted upon by the Supreme Court thru theOffice of the Court Administrator taking intoconsideration the recommendation of theExecutive Judge/Presiding Judge or the Clerkof Court.

On the other hand, applications for sickleave which are recommended for approval bythe Executive Judge/Presiding Judge or theClerk of Court and accompanied by a medicalcertificate (in excess of five successive days)shall be approved by the Supreme Court thruthe Office of the Court Administrator. For thosewhich are recommended for disapproval bythe Executive Judge/Presiding Judge or theClerk of Court for sick leave, regardless of thenumber of days applied for, shall beaccompanied by a medical certificate. Themedical certificate shall be evaluated by theSupreme Court Medical Services for validity.To be rendered valid, the following informationshall be indicated clearly:

(a) Name and license number of theattending/issuing physician;

(b) Clinic hours, address, and contactnumber of the private clinic and/orhospital where physician practices;

(c) Diagnosis of clinical impression

In lieu of a medical certificate, a certificateof confinement issued/signed by the recordsofficer of the hospital clinic shall be honored asproof of illness. The certificate of confinementshall bear the seal of the hospital.


A.C. No. 08-2009 (Continued)

On a case to case basis, any of the followingdocuments may be required by the SupremeCourt Medical Services in the process ofevaluation, namely:

(a) Clinical abstract signed by theattending physician;

(b) Medical prescription(s) with the nameof the patient and date of consultation;

(c) Results of laboratory tests;

(d) Records of operation/anesthesia (in

surgical cases)

Lack of a valid medical certificate and/orfailure to comply with the above requirementswithin 30 days from receipt of notice shall be aground for disapproval of the sick leaveapplication.

V. REHABILITATION PRIVILEGE

Pursuant to Joint Circular No. 01, s. 2006of the Civil Service Commission and theDepartment of Budget and Management,judges and court personnel may avail of aRehabilitation Privilege subject to thefollowing guidelines and procedure:

x x x

3.0 Guidelines

3.1. Officials and employees may beentitled to the Rehabilitation Privilegefor a maximum period of six monthsfor wounds and/or injuries sustainedwhile in the performance of officialduties. The duration, frequency andterms of availing of the privilege maybe for less than six months, or maybe on a half-time basis or anintermittent schedule as determinedby medical authorities provided thatthe cumulative total period of availingof the privilege will not exceed sixmonths.

Illness or sickness resulting from oraggravated by working conditions ofthe environment cannot be a basis foravailing of the Rehabilitation Privilegeeven if the same may becompensable under the law andregulations of the EmployeesCompensation Commission (ECC).

3.2. For availing oneself of theRehabilitation Privilege, performanceof duties means situations wherein

the official or employee was alreadyat work. The same privilege may beextended to officials and employeesin situations where the official oremployee meets an accident whileengaged in activities inherent to theperformance of his/her duties,including being on official businessoutside of his/her work situation,Official Travel, authorized Overtime,Detail Order, and Special AssignmentOrders.

Injuries from accidents that occurredwhile the official or employee wasgoing to work and going home fromwork are not considered sustainedwhile in the performance of officialduties.

3.3. Absence from work during the periodof Rehabilitation Privilege shall not bededucted from the accumulated sickor vacation leave credits of the officialor employee.

However, official and employees onRehabilitation Privilege do not earnand accumulate vacation leave andsick leave credits.

3.4. Officials and employees availing ofthe Rehabilitation Privilege shallreceive their salaries and regularbenefits such as Personnel EconomicRelief Allowance (PERA), AdditionalCompensation (AdCom), year-endbonus, and cash gift mandated by law.

They are not entitled, however, tobenefits and privileges that areenjoyed based on the actualperformance of the duties of positionsentitled to these benefits such asRepresentation and TransportationAllowances.

3.5. Claimants of Rehabilitation Privilegebenefits are entitled toreimbursement by their agency forfirst-aid expenses, preferably ingovernment facilities.Reimbursement is subject to theavailability of funds and shall notexceed P5,000.00 unless expendituresbeyond said amount are necessaryas certified by medical authoritiesand approved by the head of agency.

For this purpose, first aid refers to thebasic medical treatment immediatelygiven to a person hurt in an accident.


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