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Michael Sinclair has a broadly based experience in all areas of corporate and commercial law.
Recently, the former Grand Chief of the Assembly of First Nations, Phil Fontaine, was appointed a Special Advisor to the Royal Bank of Canada. One of Mr. Fontaine’s roles with RBC will be to increase economic opportunities for First Nations people. The fact that a major Canadian bank has emphasized First Nation (1) economic opportunities is not surprising. Increasingly, First Nations are seeking a greater share of the benefits and opportunities that come with participating in the larger Canadian economy. At the same time, resource developers and other businesses and industries are seeking commercial arrangements, including partnerships and joint ventures, with First Nations to facilitate access to natural resources, to expand their labour pools in remote areas, to promote the provision of goods and services by local businesses and to increase their customer base.
This trend is likely to accelerate. Canada has a huge storehouse of untapped natural resources mostly in Northern and remote areas where the First Nations populations are large and where traditional and constitutionally recognized pursuits, such as hunting, trapping, fishing and gathering are still a significant way of life. First Nations people are demographically one of, if not the fastest, growing segments of Canadian society and, comparatively, they are young and underemployed. First Nations want economic opportunities for the benefit of their youth and for the future of their communities and will support, partner in and lead development provided it is sustainable, environmentally sensitive and respectful of their culture, language and traditions.
In addition, in recent years the federal and provincial governments have prioritized the need to redress past grievances and reconcile the rights and aspirations of Canada’s Aboriginal people, including First Nations people, with those of the larger Canadian society. These initiatives of government are due in part to court decisions requiring governments to uphold the honour of the Crown and to respect and accommodate the rights of Aboriginal people in Crown actions and decision making. However, it is not just court decisions that are driving this governmental agenda, but the recognition that Canada’s reputation, its strength as a nation and its long-term economic well-being will be adversely affected if these fundamental inequities are not addressed.
In this social and political context, forward thinking companies wanting to do business or access resources in traditional territories of First Nations are trying to find ways to work with those First Nations. They are consulting with First Nation governments, taking steps to minimize impacts arising from development and finding ways to benefit local First Nations and their members. In most instances the benefits arise from business and employment opportunities and often involve detailed commercial and contractual arrangements. Entering into such arrangements with First Nations raises some unique legal issues. The purpose of this article is to identify and discuss some of those issues.
(1). First Nation is another name for bands or tribes and First Nation members are Indians who belong to a First Nation. This paper is restricted in scope to a consideration of issues related to First Nations and does not address the other Aboriginal people of Canada, namely the Métis and the Inuit.
One of the first issues that lawyers consider in crafting legal agreements is the capacity and legal status of the entities involved. Over hundreds of years the common law and statutes have brought a significant level of certainty to these questions in the normal business setting. The legal capacity of individuals, corporations, partnerships, joint ventures and governments are well established, as are the processes required to ensure that the commitments they make are legally binding and enforceable.
The law in relation to the legal status and powers of First Nations is not as well established. The Indian Act does not provide that a band is a legal entity, or that it has the powers of a natural person, or that it may be bound by the signatures of its proper officers. The absence of these provisions likely stems, in part, from the Royal Proclamation of 1763 in which the Crown, primarily to protect Britain’s interests in unsettled territories, prohibited anyone from purchasing lands from the “Nations or Tribes” except through the Crown. A justification for the Proclamation was that Indian nations could not make informed decisions in their own best interests, that they lacked legal capacity and required Crown protection. That paternalistic approach, which is the cause of much resentment, is reflected throughout the Indian Act and is one of the factors fuelling the drive to self-government.
Regardless of the cause, in the absence of such statutory provisions, the courts have been reluctant to pronounce that bands are “legal persons”. They have struggled with the authority of Bands to sue and be sued in their own names. They have varied in their view about how bands exercise their authorities and when and how a Chief and Council can bind the band.
In the context of court proceedings, there is a wealth of case law holding that bands are analogous to, or a unique type of, unincorporated associations. This case law emerged after the requirement in the Indian Act that anyone soliciting funds for Indian legal claims first obtain a licence from the superintendent general was repealed in 1951, and bands began filing law suits in their own names. Court rules allow unincorporated associations to sue and be sued; and by recognizing that bands could be treated as unincorporated associations the courts were able to hear and decide these claims.
The courts have also held that bands can be beneficiaries of a trust. In Keewatin Tribal Council v. Thompson (City), a corporation was created to hold title to buildings as a trustee under a trust indenture in which a number of bands were designated as beneficiaries. The corporation claimed that it was exempt from municipal taxation because the buildings were held in trust for the bands. In response, the taxing authorities alleged, amongst other things, that the bands were only unincorporated associations, not legal entities, and could not qualify as beneficiaries.
The court found that “Indian bands are unincorporated associations, but, with rather special features. They are not like an ordinary club or association, existing by consent of its members, but are creatures of statute, namely the Indian Act” and have standing to sue, in their own names, as an unincorporated association. The fact that the band could sue was crucial. The validity of the trust depended on there being a beneficiary with legal standing to enforce the trust should it be required. Since bands could sue, they could be beneficiaries.
The ability of a band to hold shares in a corporation has also been questioned and may depend on the specific corporations legislation. Under the British Columbia Business Corporations Act only “persons” are allowed to hold shares and the term “person” under the BC Interpretation Act does not include an unincorporated association. The term “person” under the Ontario Business Corporations Act, includes “unincorporated associations” and under the federal Canada Business Corporations Act, includes “associations”. Since bands or First Nations have been considered as unincorporated associations for purposes of litigation, it is reasonable that they can hold shares in a corporation in any jurisdictions where such associations can hold shares. However, that view is not universally accepted and despite the complexity, it is fairly common practice for shares to be placed in the names of band councillors, or other legal entities, to hold in trust for the band. In some instances this is the result of tax planning, but the lack of certainty about capacity is also a factor.
Similarly, in relation to partnerships, the relevant partnership act must be reviewed to determine who has the legal status to be a partner. Under The Partnership Act in Manitoba, the term “person” expressly includes unincorporated associations, and therefore reasonably would permit bands to form legal partnerships, but that is not the case under the Alberta Partnership Act and Interpretation Act.
There is no definitive answer to this issue of legal status and capacity, but the law, both common and statute, seems to be evolving in a way that would facilitate First Nations participating more fully, and with less impediments, in the mainstream economy. However, until there is certainty about the legal status of bands, the issue will need to be carefully considered in any commercial contracts.
This is also a very sensitive issue with many First Nations. They may accept that under the Indian Act, reserve land is held by the Federal Crown for their use and benefit, but they resist the notion that they do not have full legal capacity. Regardless of the Indian Act, First Nations point out that prior to European contact they existed as autonomous self-governing Nations, that they had capacity as governments to hold land and to sign treaties disposing of their interests in their land and that they have never relinquished those powers.
However, with bands there is no indoor management rule and the power of chief and council to enter into contracts on behalf of the band is subject to compliance with section 2(3) of the Indian Act, which provides that, “unless the context otherwise requires or this Act otherwise provides … a power conferred on the council of a band shall be deemed not to be exercised unless it is exercised pursuant to the consent of a majority of the councillors of the band present at a meeting of the council duly convened”. The consent of chief and council is often evidenced by a “Band Council Resolution” (BCR), but such a document is not conclusive evidence of compliance.
Strict compliance with this provision has generally been held as an essential prerequisite to the creation of a contract. As such, where there was no consent given by the councillors at a duly called meeting, there was no contract. The law in some more recent cases may be moving to a more flexible position where the courts could recognize and enforce equitable rights when the legal requirement has not been met. For example in Maloney v. Eskasoni Indian Band, the court did not require formal council approval of an employment contract where the Chief was authorized by the council to negotiate and conclude a contract on behalf of the Band and further found that bands could be bound by the actions of the Chief acting with ostensible authority. In reaching its decision the court, relying on the McDiarmid Lumber case, at paragraph 259, stated “it is not for the courts to expand on provisions in the Indian Act that make First Nations people, or their governments, exceptional figures in the marketplace”. However, this case does represent a major shift and is only a trial court decision.
From a commercial perspective, where certainty is important, obtaining a BCR evidencing consent to a contract is recommended. That BCR should recite that the decision it purports to document was in fact made by the majority of the council at a duly convened meeting and should be signed by the majority of the councillors. Even with this level of documentation, the validity of the decision can be put in question because there are no specific requirements in the Act relating to the calling of a meeting. As a consequence, BCRs and decisions have been questioned on the basis that the meeting was not duly called, or that one or more of the councillors was improperly excluded, or that there was no meeting and the BCR was simply circulated for signing.
This can also be a very sensitive issue with First Nations. Most accept the requirements of the Indian Act in relation to how they must consent, but some First Nations refuse to provide a BCR since that is not required under the Act. In some cases First Nations demand that their traditional decision making processes or their powers of self-determination be accepted. In some situations these concerns can be addressed through formal signing ceremonies where the members of Chief and Council attend the ceremony and sign the document as it is being signed by the other parties.
Where the business opportunity being pursued requires occupying or building upon reserve land, it is important to be aware that the Indian Act provides that, except where a permit has been issued by the Minister, an agreement of any kind, which purports to permit a person, other than a member of that band, to occupy or use a reserve, is void. There are other provisions which allow reserve land to be surrendered to the Crown and then disposed of by the Crown to non-Indians, but except under ministerial permits, there is no way under the Indian Act for a non-Indian to acquire an interest in reserve lands.
There are some First Nations that are proceeding to self-government status under negotiated agreements with the Federal Crown and their reserves may fall under the provisions of the First Nations Land Management Act, but this legislation, which expressly gives the First Nations more control over its lands, currently applies only to a small group of bands.
In addition, it is important to be aware that Indian reserve lands generally fall under the jurisdiction of the federal government and only provincial laws of general application that are not inconsistent with the Indian Act and other applicable federal legislation, including regulations or by-laws in force under such federal legislation, are applicable on reserve. Considerable care must be taken when doing business on reserves that you are applying or conforming to the applicable legal requirements.
Doing business on reserve can have some positive tax benefits, because under section 87 of the Indian Act property of an Indian or a band on reserve, which includes income earned on a reserve by an Indian or a band, is not taxable. Although this exemption is not available to non-Indians, it is a factor that should be carefully considered when structuring agreements.
Finally, under section 81 of the Indian Act businesses on reserves may be subject to by-laws and regulations of the Band Councils and under section 83 subject to Band Council licensing and taxation powers. These powers of the Band Councils under the Indian Act are subject to ministerial or governmental approvals.
When drafting a business contract, the prudent lawyer invariably asks what happens if one side or the other fails to meet its obligations. If the remedy for non-performance is monetary compensation and a party to the contract is an Indian or a Band, then consideration must be given to enforcement and collection. Under section 89 of the Indian Act, a creditor, other than an Indian or band, cannot charge, attach, seize or otherwise execute against the assets of an Indian or band that are “situated on a reserve”.
The “paramount location” test, commonly used in determining situs of property for the purposes of tax exemption, also applies to section 89 per Mitchell v. Peguis Indian Band. Determining the situs of an asset involves an examination of the pattern of use and the safekeeping of the property, meaning that it is possible for property to be situated on reserve within the meaning of section 89 even if not physically located on the reserve. The Supreme Court also identified, in Williams v. Canada, the importance of identifying and weighing the “connecting factors” between property and a reserve for the purposes of determining the situs of the property.
The practical reality is such that generally, property located on-reserve is exempt from seizure and property located off reserve can be seized or attached.
In addition to section 89 protections based on situs of property, there is also a deeming provision at section 90 of the Indian Act which protects personal property purchased by Her Majesty with Indian money or money appropriated by Parliament for the use and benefit of Indians or bands, as well as personal property given to Indians or to a band under a treaty or agreement between a band and Her Majesty. Such property is always deemed to be situated on reserve.
Where funds in a bank account are concerned, a survey of the existing case law suggests the location of the bank branch where the account is located is determinative. In Joyes v. Louis Bull Tribe #439, a Band held accounts with Peace Hills Trust in Hobbema (on-reserve) and Edmonton (off reserve). The Band argued that their intention was that all banking occurs at the Hobbema branch and the account at Edmonton was opened for the purpose of clearing “high volume cheque transactions”. The court found the intentions of the Band Council were not relevant; what was relevant was whether the account was in fact located on reserve. As a result, the Edmonton account was not exempted from garnishment proceedings.
In Borden & Elliot v. Temagami First Nation, funds were received and held by a general partner and subsequently distributed to the Band, among other limited partners. The creditor argued the funds were not the property of the Band until distribution and that, as the general partner is not an Indian or a Band, any monies held by it are not exempt from garnishment. The creditor also argued that the revenue generated from a commercial activity (casino), was not the kind of revenue that ought to be protected by the Indian Act. The court held “there is no criterion concerning the source or nature of the funds to be exempted from seizure like, for example, funds generated in the commercial mainstream” and further held the Band’s share in the funds represented an intangible asset considered to be property under section 89. In the result, the funds were exempt from garnishment under section 89 because the funds were located on reserve and held for the benefit of the First Nation.
While the protections of section 89 are broad, there are certain exemptions from protection which can assist in obtaining security for a creditor. First, if the creditor is an Indian or band, the protections of section 89 do not apply and the real or personal property of an Indian or band is subject to charge, attachment or seizure. This does not mean that a claim on the debt could be assigned to a status Indian or band in order to bypass section 89 and seize property. Secondly, under section 89(1.1), a leasehold interest in “designated lands” under the Indian Act is not protected from seizure, execution or enforcement under section 89. Similarly, under section 89(2), personal property sold under a conditional sales agreement is not protected by section 89.
It is also possible for the protection from seizure to be waived. In Tribal Wi-Chi-Way-Win Capital Corp. v. Stevenson, Stevenson signed an authorization and consent waiving his section 89 rights. The court held that an Indian can effectively waive the protection of section 89 with respect to commercial transactions on reserve. In doing so, the court relied on McDiarmid Lumber Ltd. v. God’s Lake First Nation, and the finding that provincial credit regimes are designed to apply universally and, unless expressly excluded by the Indian Act, apply to Indian property.
The rationale in the McDiarmid Lumber case reflects the apparent direction of the courts and the law in Canada.
Additional legal challenges will arise when doing business with First Nations; however, these challenges are by no means insurmountable in developing positive economic relationships between industry and First Nations. In fact, such challenges create opportunity – recognizing the partnerships which existed in the creation of a Canadian economy and re-connecting in a manner which brings those historic partnerships full circle to a point of positive impact, benefits and interaction between First Nations and Canadian society as a whole.
This article appeared on Page 83 of The 2010 Lexpert/American Lawyer Guide to the Leading 500 Lawyers in Canada and is reproduced with permission.

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WINSTON-SALEM/FORSYTH COUNTY BOARD OF EDUCATION, JULIA EDMONDS, individually and in her official capacity, KAYE HUNTER, individually and in Her official capacity, BRAD ROYAL, individually and in his official capacity, ELLEN WESTON, individually and in her official capacity, KARA RICHARDSON, individually and in her official capacity, MARY TODD ALLEN, individually and in her official capacity, TINA RAMSEY, individually and in her official capacity, SAM DEMPSEY, individually and in his official capacity, GRETCHEN TROUTMAN, individually and in her official capacity, JONATHAN L. GARWOOD, individually and in his official capacity, MORGAN C. THETEROW, individually and in her official capacity, MARTHA C. TEDROW, individually and in her official capacity, and DR. KENNETH SIMINGTON, individually and in his official capacity, Defendants.
Presently before this court is a Motion for Summary Judgment filed by Defendants Julia Edmonds, Kaye Hunter, Ellen Weston, Kara Richardson, Tina Ramsey, Gretchen Troutman, Jonathan L. Garwood, and Martha C. Tedrow (collectively the “School Defendants”), (Doc. 71), to which Plaintiffs have responded, (Doc. 78), and the School Defendants have replied, (Doc. 81). Further, the School Defendants have filed a related Motion to Strike, (Doc. 79), to which Plaintiffs have responded, (Doc. 85), and School Defendants have replied, (Doc. 86). These motions are ripe for adjudication and for the reasons stated herein, this court will grant the School Defendants' Motion for Summary Judgment as well as their Motion to Strike in part.
At the motion to dismiss stage, this court dismissed all claims pending against the School Defendants with the exception of Plaintiff Laurence Charles Sauers, III (“Trey”)'s negligent infliction of emotional distress (“NIED”) claim,  which was dismissed on public officer immunity grounds against School Defendants Mary Todd Allen, Sam Dempsey, Brad Royal, and Dr. Kenneth Simington, but remains pending as to School Defendants Julia Edmonds, Kaye Hunter, Ellen Weston, Kara Richardson, Tina Ramsey, Gretchen Troutman, Jonathan Garwood, and Martha Tedrow. Sauers v. Winston-Salem/Forsyth Cty. Bd. of Educ., 179 F.Supp.3d 544, 559 (M.D. N.C. 2016).
Summary judgment is appropriate where an examination of the pleadings, affidavits, and other proper discovery materials before the court demonstrates that no genuine issue of material facts exists, thus entitling the moving party to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The moving party bears the burden of initially demonstrating the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323.
If the moving party has met that burden, then the nonmoving party must persuade the court that a genuine issue remains for trial. However, this requires “more than simply show[ing] that there is some metaphysical doubt as to the material facts”; the “nonmoving party must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citations and footnote omitted) (quoting Fed.R.Civ.P. 56). “‘A party asserting that a fact . . . is genuinely disputed must support the assertion by citing to particular parts of materials in the record . . . .' ‘Conclusory or speculative allegations do not suffice' to oppose a properly supported motion for summary judgment, ‘nor does a mere scintilla of evidence.'” Matherly v. Andrews, 859 F.3d 264, 280 (4th Cir.) (citations omitted), cert. denied, ___ U.S. ___, 138 S.Ct. 399 (2017).
In considering a motion for summary judgment, the court is not to weigh the evidence, but rather must determine whether there is a genuine dispute as to a material issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Further, the court must ensure that the facts it considers can be “presented in a form that would be admissible in evidence” and that any affidavits or evidence used to support or oppose a motion are “made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” See Fed.R.Civ.P. 56(c)(2), (4).
The court must view the facts in the light most favorable to the nonmoving party, drawing inferences favorable to that party if such inferences are reasonable. Anderson, 477 U.S. at 255. However, there must be more than a factual dispute; the fact in question must be material, and the dispute must be genuine. Fed.R.Civ.P. 56(c); Anderson, 477 U.S. at 248. A dispute is only “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248.
As this court noted at the motion to dismiss stage: “[I]n order to state a claim for negligent infliction of emotional distress, a plaintiff ‘must allege that (1) the defendant negligently engaged in conduct, (2) it was reasonably foreseeable that such conduct would cause the plaintiff severe emotional distress . . ., and (3) the conduct did in fact cause the plaintiff severe emotional distress.'” Sauers, 179 F.Supp.3d at 554 (quoting Ennett v. Cumberland Cty. Bd. of Educ., 698 F.Supp.2d 557, 560 (E.D. N.C. 2010)). This court will grant the School Defendants' Motion for Summary Judgment as Plaintiff has failed to present facts to support a finding that the conduct of the School Defendants did in fact cause Plaintiff severe emotional distress. See Wells v. Liddy, 186 F.3d 505, 520 (4th Cir. 1999) (“Summary judgment is appropriate when a party, who would bear the burden on the issue at trial, does not forecast evidence sufficient to establish an essential element of the case . . . .”); Glenn v. Johnson, ___ N.C.App. ___, ___, 787 S.E.2d 65, 70 (2016) (“[S]ummary judgment in favor of defendants on the NIED claim is proper where the evidence does not establish negligence by defendants or establishes that the alleged negligent conduct was not the foreseeable and proximate cause of plaintiff's severe emotional distress.”).
The third element of the NIED claim for which Plaintiff must forecast evidence is that “the conduct did in fact cause the plaintiff severe emotional distress.” See Sauers, 179 F.Supp.3d at 554 (quoting Ennett v. Cumberland Cty. Bd. of Educ., 698 F.Supp.2d 557, 560 (E.D. N.C. 2010)). Plaintiff contends that there is a “genuine issue of material fact as to whether the Individual Defendants' conduct in fact did cause Plaintiff Trey extreme emotional distress.” (Pls.' Resp. in Opp'n to Def. Winston-Salem Forsyth Cty. Board of Educ.'s Resp. to Pls.' Mot. for Summ. J. (“Pls.' Resp.”) (Doc. 78) at 13.) In support of this position, Plaintiff cites to three pieces of evidence: (1) his expert disclosures; (2) an expert report of Dr. Andrew P. Smiler; and (3) an expert report of Dr. Doreen L. Hughes. (Id., Ex. 7, Pl.'s Expert Disclosures (Doc. 78-8); Ex. 9, Letter from Dr. Smiler (Doc. 78-10); Ex. 8, Consultation Report (Doc. 78-9).) Defendants have moved to strike all three of these documents. (Mem. in Supp. of Individual Sch. Defs.' Mot. to Strike (“Defs.' Mot. to Strike Mem.”) (Doc. 80) at 8-9.) Because a determination of whether Plaintiff has presented facts that may be considered in determining this motion, see Fed.R.Civ.P. 56(c)(1), the court accordingly considers the pertinent motion to strike as an initial matter. For purposes of this summary judgment motion, the relevant motion to strike relates to Dr. Hughes, Dr. Smiler, and Plaintiff's Expert Disclosures, as Plaintiff alleges these facts as establishing the third element.

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PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. RAUL GERONA Y GOC-ONG, GREGORIO DIANO, JR. Y ARCAYAN, and CONCORDIO BIHAG, ALIAS "CORDIO" (AT-LARGE), Accused-Appellants.
Felipe S. Velasquez for Gregorio Diano, Jr.
1.	REMEDIAL LAW; EVIDENCE; CREDIBILITY; FINDINGS OF FACTS OF THE TRIAL COURT, GENERALLY UPHELD ON APPEAL; CASE AT BAR, NOT AN EXCEPTION. — Findings of the trial court on the issue of credibility of the witnesses’ testimonies are accorded great weight and respect on appeal because the trial judge has first hand opportunity to examine and observe the conduct and demeanor of the witnesses, while testifying in court (People v. Marcos, 185 SCRA 154 ). Unless it be clearly shown that the trial court had overlooked or disregarded arbitrarily the facts and circumstances of significance in the case (People v. Simbulan, 214 SCRA 537 ), appellate courts are wary of disturbing the credence, or lack of it, accorded by the trial court to the testimony of witnesses. In the present case, there is nothing on record to warrant deviation from the general rule.
2.	CRIMINAL LAW; CONSPIRACY; PRESENCE DURING NEGOTIATION AND ACTUAL DELIVERY OF PROHIBITED DRUGS, INDICATIVE THEREOF. — Appellant’s presence during the negotiation and actual delivery, indicates a conspiracy or common purpose with the other accused to sell marijuana (People v. Natipravat, 145 SCRA 483 ), his protestations to the contrary notwithstanding.
3.	REMEDIAL LAW; EVIDENCE; CREDIBILITY; POSITIVE IDENTIFICATION AND DECLARATIONS, GIVEN WEIGHT THAN MERE DENIALS. — As between a mere denial of the accused-appellant and the positive identification and detailed declarations of the prosecution witnesses, the trial court committed no error in according greater weight to the latter (People v. Marcos, 185 SCRA 154  citing People v. Melgar, 157 SCRA 718 , People v. Marilao, 177 SCRA 271 ).
4.	ID.; ID.; ID.; BOLSTERED BY ABSENCE OF ULTERIOR MOTIVE OF POLICE OFFICERS TO FALSELY CHARGE ACCUSED. — There is nothing in the record to suggest that the police officers were compelled by any ulterior motive or ill-will in arresting or testifying against the accused other than to accomplish their mission (People v. Como, 202 SCRA 200 ). Courts generally give full faith and credit to police officers for they are presumed to have performed their duties in a regular manner in the absence of proof to the contrary (Rule 131, Section 5 (m), Rules of Court; People v. Marcos, supra).
5.	ID.; CRIMINAL PROCEDURE; APPEAL; WITHDRAWAL THEREOF INDICATIVE OF VERACITY OF OFFENSE CHARGED. — Appellant’s co-accused, Raul Gerona withdrew his appeal opting to avail of parole which is indicative of the veracity of the offense charged (See People v. Flores, 23 SCRA 309 ).
6.	CRIMINAL LAW; PENALTIES; LIFE IMPRISONMENT AND RECLUSION PERPETUA, TWO DISTINCT PENALTIES. — Life imprisonment and reclusion perpetua are two distinct penalties and are not interchangeable for the latter carries with it the accessory penalties enumerated in Article 41 of the Revised Penal Code (People v. Blas, 209 SCRA 339 ; People v. Marcos, 212 SCRA 748 ). Furthermore, reclusion perpetua entails imprisonment for at least thirty (30) years after which the convict becomes eligible for pardon; whereas life imprisonment does not appear to have any definite extent or duration (People v. Baguio, 196 SCRA 459 ).
"That on or about the 28th day of April, 1990, at about 11:00 A.M., more or less, in the City of Cebu, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conniving and confederating together and mutually helping with one another, with deliberate intent, did then and there deliver, sell and give away one bundle of marijuana dried leaves more or less 50 grams wrapped in a newspaper, a prohibited drug, to a person who posted himself as buyer without authority of law.
"WHEREFORE, judgment is hereby rendered finding the two accused Raul Gerona y Goc-ong and Gregorio Diano, Jr. y Arcayan, guilty beyond reasonable doubt of having violated Section 4, Article II in relation to Section 21, Article IV of Republic Act No 6425 as amended, and they are hereby sentenced to reclusion perpetua or life imprisonment (sic), and a fine of P20,000.00, without subsidiary imprisonment in case of insolvency, and to pay the costs.
"Considering, however, that both are still comparatively young — Raul Gerona is only 24 years old while Gregorio Diano, Jr. is only 21 — and considering moreover that the present indictment is their first offense, the Court feels that they should be given a second chance at life. The Court accordingly recommends that executive clemency be extended to them after they shall have served at least ten years of their sentences in prison.
Both accused Gerona and Diano initially appealed the judgment of conviction but later on, Accused Gerona filed a motion to withdraw appeal which was granted by this Court in a Resolution dated May 26, 1993 (Rollo, pp. 87-88).
"On his second surveillance on April 26, 1990 Inding did not find Tiwa, Alo and Boy at the store. So he looked for these three at the basketball court at Pit-os, supposing he would find them there. He did not find them at the basketball court, either. Instead, he found in the basketball court the two accused Raul Gerona and Gregorio Diano, Jr. playing basketball with other teenagers. He joined their game and befriended Raul Gerona and Gregorio Diano, Jr. or ‘Greg.’ He asked these two where Alo, Tiwa and Boy were, telling these two that he had a transaction with Alo, Tiwa and Boy. But Gerona and Diano asked him what his transaction to the three was.’So I informed them that I want to get some marijuana dried leaves.’ And they said ‘Kami na lang bay kay mao ra man gihapon kanang ilang kuhaon nga marijuana parehas ra man ang among presyo.’ Translation: ‘Just buy from us, friend, because the marijuana they will get from Bihag we can also sell to you at the same price.’ Inding saw Bihag in a waiting shed in Pit-os some 100 meters from the basketball court. On that date, he bought P100.00 worth of marijuana from Gerona, who get it from Bihag.
"Having indeed ascertained or confirmed that Concordio Bihag was the source of marijuana dried leaves in Pit-os, and that Bihag was assisted in this nefarious business by his ‘boys’ or ‘runners,’ on the late morning of April 28, 1990 S/Sgt. Ibrahim Mohammadshaid, Sgt. Ricardo Inding, and CIC Teodosio Rosaroso and four civilian agents, soon after their constitution into a ‘buy-bust’ team, went to Pit-os on board a mini-cruiser to catch or entrap Concordio Bihag and his ‘boys’ or ‘runners’ who could be caught in the act of selling marijuana. The members of the team got off some 200 meters away from the waiting shed where in previous surveillances Inding had observed Bihag to have been transacting business through his ‘boys’ or ‘runners.’ Inding then proceeded to the waiting shed while S/Sgt. Mohammadshaid and CIC Rosaroso positioned themselves some 20 meters away. (CIC Rosaroso knew Bihag, and Bihag knew Rosaroso, some years before).
"Not long after he had reached the waiting shed where Bihag was sitting on a bench, Inding gave the pre-arranged signal-(he got a handkerchief from his pocket and waved it) — that he had consummated the sale or delivery of marijuana leaves. Mohammadshaid and Rosaroso rushed forward. Upon seeing the approaching lawmen, especially Rosaroso whom he (Bihag) had previously known, Bihag scampered away, with Rosaroso in pursuit. Inding then grabbed Gerona while Mohammadshaid grabbed Diano.
"According to Inding, just before Mohammadshaid and Rosaroso rushed forward in response to his pre-arranged signal, he was approached by the accused Raul Gerona and Gregorio Diano, Jr., to whom he expressed his desire to buy dried marijuana leaves worth P100.00. Gerona asked for the money (i.e. marked money) and, on receiving it, gave it to his (Gerona’s) co-accused Diano, who thereupon approached the third accused in this case, Concordio Bihag, who was then seated in a bench in the waiting shed, and handed Bihag the money. Bihag then got a bundle of marijuana leaves wrapped in a newspaper placed near him and gave it to Diano. Upon receiving the bundle Diano delivered it to Gerona who in turn handed it to Inding.
"Inding categorically declared that he received from Gerona and Diano the bundle of dried marijuana leaves weighing 50 grams (Exhibit ‘C’). The raiding team also recovered 200 grams of dried marijuana leaves wrapped in a paper (Exhibit ‘D’) on the bench occupied by Bihag.
"Lt. Myrna P. Areola, PC-Criminal Laboratory forensic chemist testified that the substance found in Exhibit ‘C’ and ‘D’ were positive for marijuana.
"In exculpation, the accused Raul Gerona and Gregorio Diano testified that on the morning of April 28, 1990 they were playing basketball in the basketball court at Pit-os when overcame by thirst, they went to the store of Ruben Miñoza, Jr. to buy soft drinks. When they reached the store they found Concordio Bihag there. They bought some soft drinks and while taking the soft drinks, Sgt. Inding arrived and asked for Bihag. They pointed to Bihag inside. Inding then called for Bihag and the latter came out with two packs of dried marijuana leaves which he handed to Inding. After taking delivery of the two packs, Inding gave P100.00 to Bihag.
"Inding opened the pack and smelled its contents. Gerona and Diano were also asked to smell the pack, and they did. Their companions in the store likewise smelled the contents of the packs.
"Inding thereafter put back the contents into the pack, got a handkerchief from his pocket, and wiped his face with it. Moments later, Inding’s fellow police officers rushed into the store. Inding took hold of Bihag, but as Bihag was bigger than Inding, Bihag succeeded in shaking himself free from Inding’s hold, and in scampering away. Gerona and Diano were then rounded up by the lawmen, along with Bihag’s other ‘boys’ or ‘runners,’ Eper, Boy, Alo and Tiwa.
"Since they failed to get their principal quarry the members of the raiding team then made Gerona and Diano board their service vehicle, took off towards Bacayan, Talamban, and asked Gerona and Diano to point to the house of Bihag there.
"The members of the team however did not find Bihag in his house. So they brought Gerona and Diano, and Bihag’s other ‘boys’ or ‘runners’ to the NARCOM headquarters. These other ‘boys’ or ‘runners’ were nonetheless released on the same day, April 28, 1990.
"Gerona and Diano alleged that they protested their arrest by the members of the raiding team, but Sgt. Inding told them that they would be simply utilized as witnesses. Both insisted that they did not commit the crime imputed to them.
"Agustin Padayao, who claimed to be an uncle by affinity of the third accused, Concordio Bihag, sought to corroborate Gerona and Diano’s testimonies" (Rollo, pp. 19-22).
"I.	THE COURT-A-QUO ERRED IN NOT GIVING CREDENCE TO THE TESTIMONIES OF ACCUSED GREGORIO DIANO, JR., RAUL GERONA AND WITNESS AGUSTIN PADAYAO.
From the foregoing, it is at once apparent that the only issue involved herein is the credibility of witnesses.
Once again, the present appeal affords Us the occasion to reiterate the well-entrenched rule that findings of the trial court on the issue of credibility of the witnesses’ testimonies are accorded great weight and respect on appeal because the trial judge has first hand opportunity to examine and observe the conduct and demeanor of the witnesses, while testifying in court (People v. Marcos, 185 SCRA 154 , citing People v. Rodriguez, 172 SCRA 742 , People v. Tejada, 170 SCRA 497 , People v. Abonada, 169 SCRA 530 , People v. Turla, 167 SCRA 278 , People v. Aboga, 147 SCRA 404 ). Unless it be clearly shown that the trial court had overlooked or disregarded arbitrarily the facts and circumstances of significance in the case (People v. Simbulan, 214 SCRA 537 ), appellate courts are wary of disturbing the credence, or lack of it, accorded by the trial court to the testimony of witnesses. In the present case, there is nothing on record to warrant deviation from the general rule. The instant appeal must therefore fail.
"Sec. 4.	Sale, Administration, Delivery, Distribution and Transportation of Prohibited Drugs. — The penalty of life imprisonment to death and a fine ranging from twenty thousand to thirty thousand pesos shall be imposed upon any person who, unless authorized by law, shall sell, administer, deliver, give away to another, distribute, dispatch in transit or transport any prohibited drug, or shall act as a broker in any of such transactions. If the victim of the offense is a minor, or should a prohibited drug involved in any offense under this Section be the proximate cause of the death of a victim thereof, the maximum penalty herein provided shall be imposed (Italics supplied).
The wordings of the law clearly negate the theory of improbability espoused by accused-appellant Diano. The facts as recited in Sgt. Inding’s testimony is consistent with the charge leveled against the two accused as brokers or commission agents in the sale of marijuana by confederating and mutually helping each other in the sale and delivery of one bundle of dried marijuana leaves. Moreover, the version of the prosecution fits the modus operandi of the third accused Bihag. Accused Bihag is known to conduct his business of selling marijuana through the use of his "boys" or "runners." These "boys" or "runners" act as the middlemen between Bihag and the buyer, such that they deal directly with the latter and get their commission from the proceeds of the sale. Accused Gerona and Diano were just two of Bihag’s runners. There is therefore nothing surprising in Sgt. Inding’s declaration that the marked money and the marijuana passed from one hand to another (from Inding to Gerona to Diano to Bihag, and vice versa) in the course of the transaction.
In the light of what the prosecution established about Bihag’s operation, it is far more difficult to lend credence to the proposition of the defense that the participation of the two accused to the buy-bust operation was limited to pointing out where Bihag was to Sgt. Inding, and after the consummation of the sale between Sgt. Inding and Bihag, to smelling the contents of the pack containing the dried marijuana leaves. It is inconsistent with ordinary human experience for a buyer of prohibited drugs to explicitly request everyone present at the store to smell the merchandise right after the consummation of what supposedly was a discreet and illicit transaction.
Furthermore, appellant’s presence during the negotiation and actual delivery, indicates a conspiracy or common purpose with the other accused to sell marijuana (People v. Natipravat, 145 SCRA 483 ), his protestations to the contrary notwithstanding.
Thus, as between a mere denial of the accused-appellant and the positive identification and detailed declarations of the prosecution witnesses, the trial court committed no error in according greater weight to the latter (People v. Marcos, 185 SCRA 154  citing People v. Melgar, 157 SCRA 718 , People v. Marilao, 177 SCRA 271 ).
Additionally, there is nothing in the record to suggest that the police officers were compelled by any ulterior motive or ill-will in arresting or testifying against the accused other than to accomplish their mission (People v. Como, 202 SCRA 200 ). Courts generally give full faith and credit to police officers for they are presumed to have performed their duties in a regular manner in the absence of proof to the contrary (Rule 131, Section 5 (m), Rules of Court; People v. Marcos, supra, citing People v. Lamog Et. Al., 172 SCRA 342 , People v. Gamayon, 121 SCRA 642 , People v. Policarpio, 158 SCRA 85 , People v. Natipravat, supra; People v. De Jesus, 145 SCRA 52 ; People v. Khan, 161 SCRA 406 ). Finally appellant’s co-accused, Raul Gerona withdrew his appeal opting to avail of parole which is indicative of the veracity of the offense charged (See People v. Flores, 23 SCRA 309 ).
All told, we find no reversible error in the judgment of conviction.
Regarding the imposition of the appropriate penalty, however, the Court would like to remind the trial courts to be more careful in imposing the proper penalty in accordance with the strict letter of the law. The penalty prescribed by Section 4, Article II of Republic Act No. 6425 for the commission of the described offense is life imprisonment to death and a fine ranging from twenty to thirty thousand pesos, and not reclusion perpetua. Life imprisonment and reclusion perpetua are two distinct penalties and are not interchangeable for the latter carries with it the accessory penalties enumerated in Article 41 of the Revised Penal Code (People v. Blas, 209 SCRA 339 ; People v. Marcos, 212 SCRA 748 ). Furthermore, reclusion perpetua entails imprisonment for at least thirty (30) years after which the convict becomes eligible for pardon; whereas life imprisonment does not appear to have any definite extent or duration (People v. Baguio, 196 SCRA 459 ).
WHEREFORE, the judgment appealed is hereby AFFIRMED with the MODIFICATION of the imposable penalty which is life imprisonment and a fine of TWENTY THOUSAND PESOS (P20,000.00) instead of reclusion perpetua.

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RAYMUNDO ODANI SECOSA, EL BUENASENSO SY AND DASSAD WAREHOUSING AND PORT SERVICES, INCORPORATED, PETITIONERS, VS. HEIRS OF ERWIN SUAREZ FRANCISCO, RESPONDENTS.
This is a petition for review under Rule 45 of the Rules of Court seeking the reversal of the decision of the Court of Appeals dated February 27, 2003 in CA-G.R. CV No. 61868, which affirmed in toto the June 19, 1998 decision of Branch 20 of the Regional Trial Court of Manila in Civil Case No. 96-79554.
On June 27, 1996, at around 4:00 p.m., Erwin Suarez Francisco, an eighteen year old third year physical therapy student of the Manila Central University, was riding a motorcycle along Radial 10 Avenue, near the Veteran Shipyard Gate in the City of Manila. At the same time, petitioner, Raymundo Odani Secosa, was driving an Isuzu cargo truck with plate number PCU-253 on the same road. The truck was owned by petitioner, Dassad Warehousing and Port Services, Inc.
Traveling behind the motorcycle driven by Francisco was a sand and gravel truck, which in turn was being tailed by the Isuzu truck driven by Secosa. The three vehicles were traversing the southbound lane at a fairly high speed. When Secosa overtook the sand and gravel truck, he bumped the motorcycle causing Francisco to fall. The rear wheels of the Isuzu truck then ran over Francisco, which resulted in his instantaneous death. Fearing for his life, petitioner Secosa left his truck and fled the scene of the collision.
Respondents, the parents of Erwin Francisco, thus filed an action for damages against Raymond Odani Secosa, Dassad Warehousing and Port Services, Inc. and Dassad’s president, El Buenasucenso Sy. The complaint was docketed as Civil Case No. 96-79554 of the RTC of Manila, Branch 20.
The sum of P50,000.00 as attorney’s fees plus cost of suit.
Petitioners appealed the decision to the Court of Appeals, which affirmed the appealed decision in toto.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT THAT PETITIONER DASSAD DID NOT EXERCISE THE DILIGENCE OF A GOOD FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES WHICH IS NOT IN ACCORDANCE WITH ARTICLE 2180 OF THE NEW CIVIL CODE AND RELATED JURISPRUDENCE ON THE MATTER.
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT IN HOLDING PETITIONER EL BUENASENSO SY SOLIDARILY LIABLE WITH PETITIONERS DASSAD AND SECOSA IN VIOLATION OF THE CORPORATION LAW AND RELATED JURISPRUDENCE ON THE MATTER.
THE JUDGMENT OF THE TRIAL COURT AS AFFIRMED BY THE COURT OF APPEALS AWARDING P500,000.00 AS MORAL DAMAGES IS MANIFESTLY ABSURD, MISTAKEN AND UNJUST.
On the issue of whether petitioner Dassad Warehousing and Port Services, Inc. exercised the diligence of a good father of a family in the selection and supervision of its employees, we find the assailed decision to be in full accord with pertinent provisions of law and established jurisprudence.
The obligation imposed by article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible x x x.
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry x x x.
Based on the foregoing provisions, when an injury is caused by the negligence of an employee, there instantly arises a presumption that there was negligence on the part of the employer either in the selection of his employee or in the supervision over him after such selection. The presumption, however, may be rebutted by a clear showing on the part of the employer that it exercised the care and diligence of a good father of a family in the selection and supervision of his employee. Hence, to evade solidary liability for quasi-delict committed by an employee, the employer must adduce sufficient proof that it exercised such degree of care.
In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of presenting at the trial such amount of evidence required by law to obtain a favorable judgment . . . In making proof in its or his case, it is paramount that the best and most complete evidence is formally entered.
Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must be corroborated by documentary evidence, inasmuch as the witnesses’ testimonies dwelt on mere generalities, we cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the selection and supervision of employees. Petitioner’s attempt to prove its “deligentissimi patris familias” in the selection and supervision of employees through oral evidence must fail as it was unable to buttress the same with any other evidence, object or documentary, which might obviate the apparent biased nature of the testimony.
“The failure of the defendant company to produce in court any ‘record’ or other documentary proof tending to establish that it had exercised all the diligence of a good father of a family in the selection and supervision of its drivers and buses, notwithstanding the calls therefor by both the trial court and the opposing counsel, argues strongly against its pretensions.
We are fully aware that there is no hard-and-fast rule on the quantum of evidence needed to prove due observance of all the diligence of a good father of a family as would constitute a valid defense to the legal presumption of negligence on the part of an employer or master whose employee has by his negligence, caused damage to another. x x x (R)educing the testimony of Albert to its proper proportion, we do not have enough trustworthy evidence left to go by. We are of the considered opinion, therefore, that the believable evidence on the degree of care and diligence that has been exercised in the selection and supervision of Roberto Leon y Salazar, is not legally sufficient to overcome the presumption of negligence against the defendant company.
In the selection of prospective employees, employers are required to examine them as to their qualifications, experience, and service records. On the other hand, with respect to the supervision of employees, employers should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for breaches thereof. To establish these factors in a trial involving the issue of vicarious liability, employers must submit concrete proof, including documentary evidence.
In this case, MMTC sought to prove that it exercised the diligence of a good father of a family with respect to the selection of employees by presenting mainly testimonial evidence on its hiring procedure. According to MMTC, applicants are required to submit professional driving licenses, certifications of work experience, and clearances from the National Bureau of Investigation; to undergo tests of their driving skills, concentration, reflexes, and vision; and, to complete training programs on traffic rules, vehicle maintenance, and standard operating procedures during emergency cases.
Although testimonies were offered that in the case of Pedro Musa all these precautions were followed, the records of his interview, of the results of his examinations, and of his service were not presented. . . [T]here is no record that Musa attended such training programs and passed the said examinations before he was employed. No proof was presented that Musa did not have any record of traffic violations. Nor were records of daily inspections, allegedly conducted by supervisors, ever presented. . . The failure of MMTC to present such documentary proof puts in doubt the credibility of its witnesses.
Jurisprudentially, therefore, the employer must not merely present testimonial evidence to prove that he observed the diligence of a good father of a family in the selection and supervision of his employee, but he must also support such testimonial evidence with concrete or documentary evidence. The reason for this is to obviate the biased nature of the employer’s testimony or that of his witnesses.
Applying the foregoing doctrines to the present case, we hold that petitioner Dassad Warehousing and Port Services, Inc. failed to conclusively prove that it had exercised the requisite diligence of a good father of a family in the selection and supervision of its employees.
Edilberto Duerme, the lone witness presented by Dassad Warehousing and Port Services, Inc. to support its position that it had exercised the diligence of a good father of a family in the selection and supervision of its employees, testified that he was the one who recommended petitioner Raymundo Secosa as a driver to Dassad Warehousing and Port Services, Inc.; that it was his duty to scrutinize the capabilities of drivers; and that he believed petitioner to be physically and mentally fit for he had undergone rigid training and attended the PPA safety seminar.
Petitioner Dassad Warehousing and Port Services, Inc. failed to support the testimony of its lone witness with documentary evidence which would have strengthened its claim of due diligence in the selection and supervision of its employees. Such an omission is fatal to its position, on account of which, Dassad can be rightfully held solidarily liable with its co-petitioner Raymundo Secosa for the damages suffered by the heirs of Erwin Francisco.
However, we find that petitioner El Buenasenso Sy cannot be held solidarily liable with his co-petitioners. While it may be true that Sy is the president of petitioner Dassad Warehousing and Port Services, Inc., such fact is not by itself sufficient to hold him solidarily liable for the liabilities adjudged against his co-petitioners.
It is a settled precept in this jurisdiction that a corporation is invested by law with a personality separate from that of its stockholders or members. It has a personality separate and distinct from those of the persons composing it as well as from that of any other entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not in itself sufficient ground for disregarding the separate corporate personality. A corporation’s authority to act and its liability for its actions are separate and apart from the individuals who own it.
The so-called veil of corporation fiction treats as separate and distinct the affairs of a corporation and its officers and stockholders. As a general rule, a corporation will be looked upon as a legal entity, unless and until sufficient reason to the contrary appears. When the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons. Also, the corporate entity may be disregarded in the interest of justice in such cases as fraud that may work inequities among members of the corporation internally, involving no rights of the public or third persons. In both instances, there must have been fraud and proof of it. For the separate juridical personality of a corporation to be disregarded, the wrongdoing must be clearly and convincingly established. It cannot be presumed.
The records of this case are bereft of any evidence tending to show the presence of any grounds enumerated above that will justify the piercing of the veil of corporate fiction such as to hold the president of Dassad Warehousing and Port Services, Inc. solidarily liable with it.
The Isuzu cargo truck which ran over Erwin Francisco was registered in the name of Dassad Warehousing and Port Services, Inc., and not in the name of El Buenasenso Sy. Raymundo Secosa is an employee of Dassad Warehousing and Port Services, Inc. and not of El Buenasenso Sy. All these things, when taken collectively, point toward El Buenasenso Sy’s exclusion from liability for damages arising from the death of Erwin Francisco.
Having both found Raymundo Secosa and Dassad Warehousing and Port Services, Inc. liable for negligence for the death of Erwin Francisco on June 27, 1996, we now consider the question of moral damages which his parents, herein respondents, are entitled to recover. Petitioners assail the award of moral damages of P500,000.00 for being manifestly absurd, mistaken and unjust. We are not persuaded.
(Atty. Balanag): What did you do when you learned that your son was killed on June 27, 1996?
(ANTONIO FRANCISCO): I boxed the door and pushed the image of St. Niño telling why this happened to us.
Mr. Witness, how did you feel when you learned of the untimely death of your son, Erwin Suares (sic)?
Masakit po ang mawalan ng anak. It’s really hard for me, the thought that my son is dead.
How did your family react to the death of Erwin Suarez Francisco?
All of my family and relatives were felt (sic) sorrow because they knew that my son is (sic) good.
Even if they pay me millions, they cannot remove the anguish of my son (sic).
Moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant. They are awarded to allow the former to obtain means, diversion or amusements that will serve to alleviate the moral suffering he has undergone due to the defendant’s culpable action and must, perforce, be proportional to the suffering inflicted. We have previously held as proper an award of P500,000.00 as moral damages to the heirs of a deceased family member who died in a vehicular accident. In our 2002 decision in Metro Manila Transit Corporation v. Court of Appeals, et al., we affirmed the award of moral damages of P500,000.00 to the heirs of the victim, a mother, who died from injuries she sustained when a bus driven by an employee of the petitioner hit her. In the case at bar, we likewise affirm the portion of the assailed decision awarding the moral damages.
Since the petitioners did not question the other damages adjudged against them by the court a quo, we affirm the award of these damages to the respondents.
WHEREFORE, the petition is DENIED. The assailed decision is AFFIRMED with the MODIFICATION that petitioner El Buenasenso Sy is ABSOLVED from any liability adjudged against his co-petitioners in this case.
 Penned by Justice Danilo B. Pine and concurred in by Justices Eugenio S. Labitoria and Renato C. Dacudao. Rollo, pp. 25-31.
 Penned by Judge Virgilio D. Quijano, Presiding Judge.
 Baliwag Transit, Inc. v. Court of Appeals, et al., G.R. No. 116624, 20 September 1996, 262 SCRA 230. See also, Philippine Air Lines v. Court of Appeals, G.R. No. L-46036, 18 May 1990, 185 SCRA 449.
 G.R. No. 104408, 21 June 1993, 223 SCRA 521.
 Citing Republic v. Court of Appeals, G.R. No. 84966, 21 November 1991, 204 SCRA 160.
 U.S. v. Tria, 17 Phil. 303 (1910).
 Garcia v. Gonzales, G.R. No. 48184, 12 March 1990, 183 SCRA 72.
 54 O.G., No. 31, 7415 (1958).
 Metro Manila Transit Corporation v. Court of Appeals, et al., G.R. No. 116617, 16 November 1998, 298 SCRA 495.
 Campo v. Camarote, 100 Phil. 459, 463 (1956).
 Ernesto Syki v. Salvador Begasa, G.R. No. 149149, 23 October 2003.
 Villanueva, Philippine Commercial Law Review, 1998 edition, p. 345.
 Sunio v. NLRC, G.R. No. L-57767, 31 January 1984, 127 SCRA 390.
 Jentz, Miller, Cross and Clarkson, West’s Business Law, 4th edition, p. 614.
 Volume 1, Fletcher Cyclopedia Corporations, Chapter 2, Section 41.7.
 Matuguina Integrated Wood Products, Inc. v. Court of Appeals, G.R. No. 98310, 24 October 1996, 263 SCRA 490, 509.
 Avelina G. Ramoso, et al. v. Court of Appeals, et al., G.R. No. 117416, 8 December 2000, 347 SCRA 463.
 Sangco, Torts and Damages, 986 [1994 ed.].
 TSN, March 20, 1997, pp. 4-6.
 Philtranco Service Enterprises v. Court of Appeals, et al., G.R. No. 120553, 17 June 1997, 273 SCRA 562.
 G.R. No. 141089, 1 August 2002.

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§ 65-1 Short title; purpose.
§ 65-2 Approval of plans required.
§ 65-3 Definitions and word usage.
§ 65-4 General procedures and requirements.
§ 65-5 Site plan review.
§ 65-6 Violations, penalties and remedies.
§ 65-7 Site Plan Checklist.
To provide rules, regulations and standards to guide the development of lands in this Borough in a manner which will promote the public health, safety, morals and general welfare.
To ensure the orderly development, conservation, protection and proper use of land and adequate provision for circulation, utilities and services.
To ensure the coordination of development within the Borough with the development and general welfare of neighboring municipalities, the county and the State of New Jersey as a whole.
To promote a desirable visual environment through creative development techniques and good civic design and arrangement.
To encourage development which incorporates the best features of design and to relate the type, design and layout of residential, commercial, industrial and recreational development to the particular site.
To encourage coordination of the various public and private procedures and activities shaping land development with a view to lessening the cost of such development, to ensuring the most efficient use of land and to protecting the Borough from undue obligations from land development.
To promote the conservation of energy through the use of planning practices designed to reduce energy consumption and to provide for maximum utilization of renewable energy sources.
To promote the maximum practical recovery and recycling of recyclable materials from municipal solid waste through the use of planning practices designed to incorporate the goals of the municipality's recycling program.
Any owner of land within or partly within the Borough of Paulsboro shall, prior to development of any land as designated in § 65-5A of this chapter, submit site plans of the proposed development for review and approval by resolution of the Planning Board, as hereafter provided in this chapter, before any construction permits may be issued for the development.
Approval of final plans by the Planning Board shall constitute an approval of proposed dedications of land for streets, parks and other public uses or purposes. However, such approval shall not constitute an acceptance of physical improvements on such dedicated land and shall not impose upon the Borough any obligation of maintenance of or jurisdiction over such improvements. Such obligations shall be undertaken only after the Borough Council shall have accepted the improvements by official act according to law.
Whenever a term is not defined in this chapter, it is intended to have the meaning set forth in P.L. 1979, c. 216 (N.J.S.A. 40:55D et seq.), if defined by that statute. In the event of a conflict between a definition in this chapter and that contained in the statute, the definition in said statute shall apply under and in accordance with the usual rules of statutory construction.
An application form completed as specified by this chapter and the rules and regulations of the Planning Board and all accompanying documents required by ordinance for approval of the application for development, including but not limited to a site plan containing all information required in the Site Plan Checklist specified in § 65-7 of this chapter.
The construction, conversion, structural alteration, relocation or enlargement of any building or other structure or any mining, excavation or landfill, and any use or change in the use of any building or other structure or land or extension of use of land, for which authorization may be required pursuant to this chapter.
A zoning ordinance, subdivision ordinance, site plan ordinance, official map ordinance or other regulation of the use and development of land, or amendment thereto, adopted and filed pursuant to N.J.S.A. 40:55D-1 et seq.
The lands required for the installation of stormwater sewers or drainage ditches or lands required along a natural stream or watercourse for preserving the channel and providing for the flow of water therein to safeguard the public against flood damage in accordance with Chapter 1 of Title 58 of the Revised Statutes.
A right granted for the use of private land for certain public or quasi-public purposes; also the land to which such a right pertains.
The official action of the Planning Board taken on a site plan after all conditions, engineering plans and other requirements have been completed or fulfilled and the required improvements have been installed or guarantees properly posted for their completion or approval conditioned upon the posting of such guaranties.
Security, in the form of either a surety bond, letter of credit under the circumstances specified pursuant to N.J.S.A. 40:55D-53.5, or cash, acceptable to the Borough to assure the maintenance of any improvements installed by the developer after the final acceptance of the improvement and required by this chapter.
Contains the information reasonably required in order to make an informed determination as to whether the requirements established by ordinance for approval of a minor site plan have been met.
Any security which may be accepted by the Borough, including cash, provided that not more than 10% of the total performance guaranty may be required in cash.
The conferral of certain rights pursuant to N.J.S.A. 40:55D-46 and 40:55D-49 prior to final approval after specific elements of a development plan have been agreed upon by the Planning Board and the applicant.
Land set aside for use as a street, alley, crosswalk or common means of communication, travel, utility or drainage.
Any other information that may be reasonably required in order to make an informed determination pursuant to the provisions of this chapter relating to review and approval of site plans by the Planning Board.
Any street, avenue, boulevard, road, parkway, viaduct, drive or other way which is an existing state, county or Borough roadway, which is shown upon a plat heretofore approved pursuant to law, which is approved by official action as provided by statute or which is shown on a plat duly filed and recorded in the office of the county recording officer prior to the appointment of a Planning Board and the grant to such a Board of the power to review plats; and includes the land between the street lines, whether improved or unimproved, and may comprise pavement, shoulders, gutters, curbs, sidewalks, parking areas and other areas within the street lines.
Jurisdiction. The Planning Board shall have approval authority of site plans and shall have full discretion to determine which site plans shall come within its jurisdiction. Applications for development may be processed without full notice and hearing if the Planning Board or Site Plan Review Committee finds that the application conforms to the definition of "minor site plan."
General instructions to the Planning Board. The Planning Board shall make its decisions on site plans according to the purposes stated in the Municipal Land Use Law, amendments thereto and this chapter, and according to the standards of design set forth in this chapter. The Board shall approve final plans only on the determination that such plans are in conformity with previously approved preliminary plans.
The purposes stated in the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq.
The requirements of this chapter, including standards of design established herein.
The requirements of the National Flood Insurance Act of 1968, as amended, to ensure that all site plan proposals are consistent with the need to minimize flood damage; that all public utilities and facilities, such as sewer, gas, electrical and water systems, are located, elevated and constructed to minimize or eliminate flood damage; and that adequate drainage is provided so as to reduce exposure to flood hazards.
Whether the plans have been referred to appropriate agencies for review, if so required, by the Coastal Wetlands Act (N.J.S.A. 13:9A-1 et seq.), the New Jersey County and Regional Planning Enabling Act (N.J.S.A. 40:27-6.3), the Realty Improvement Sewerage and Facilities Act 1954 (N.J.S.A. 58:11-25.1), the Flood Hazard Area Control Act 1972 (N.J.S.A. 58:16A-50 et seq.) or other applicable environmental laws, rules or regulations. In the event that the application requires approval by a governmental agency other than the Planning Board, the Planning Board shall, in appropriate instances, condition its approval upon the subsequent approval of such governmental agency.
The requirements of the New Jersey Statewide Source Separation and Recycling Act (P.L. 1987, c. 102), as it may be amended or superseded.
If an application for development is found to be incomplete, the developer shall be notified in writing of the deficiencies therein by the Board or the Board's designee within 45 days of the submission of such application, or it shall be deemed to be properly submitted.
An application shall be certified as complete immediately upon the meeting of all requirements specified in this chapter and in the rules and regulations of the Planning Board and shall be deemed complete as of the day it is so certified by the Planning Board for purposes of the commencement of the time period for action by the Planning Board.
Time requirements for action. Upon the submission of a complete application for a minor site plan which involves 10 acres of land or less, the Planning Board shall grant or deny preliminary approval within 45 days of the date of such submission or within such further time as may be consented to by the applicant. Upon the submission of a complete application for a site plan which involves more than 10 acres or more than 10 dwelling units, the Planning Board shall grant or deny preliminary approval within 95 days of the date of such submission or within such further time as may be consented to by the developer. If the Planning Board fails to act within the above time limits, the Board shall be deemed to have granted preliminary approval to the site plan.
Revision of preliminary plans. If the Planning Board requires any substantial amendment in the layout of improvements proposed by the applicant that have been the subject of hearing or if the applicant, on his own initiative, makes substantial changes after the hearing, an amended application shall be submitted and proceeded upon as in the case of the original application for preliminary approval.
The regulations, requirements and standards contained in this chapter constitute the minimum requirements for the protection of the public health, safety, convenience and welfare, as affected by the development of lands, of the inhabitants of the Borough, and the Planning Board shall give primary consideration to such fact in deciding upon all actions taken by it under this chapter; provided, however, that if the applicant can demonstrate that, because of peculiar conditions pertaining to the land proposed to be developed, the literal enforcement of one or more of said regulations, requirements and standards is impractical or will result in undue hardship, the Planning Board may waive or modify such provisions as will be reasonable and within the general purpose and intent of said regulations, requirements and standards established by this chapter.
In any case of peculiar conditions pertaining to the land proposed to be developed, if the minimum standards herein provided are determined by the Planning Board to be inadequate for the protection of the public health, safety, convenience and welfare, then the Planning Board may require compliance with such additional standards as it deems reasonable and within the general purpose and intent of this chapter.
The Planning Board shall grant final approval of site plans if the detailed drawings, specifications, guarantees and other requirements for final approval conform to the standards established by this chapter and the conditions of preliminary approval.
Upon the submission of a complete application for final site plan approval, the Planning Board shall grant or deny final approval within 45 days after submission or within such further time as may be consented to by the applicant or within 95 days where a site plan of more than 10 acres is submitted.
Whenever review or approval of the final site plan application by the County Planning Board is required pursuant to N.J.S.A. 40:27-6.6 (Site Plan), the Planning Board shall condition any approval that it grants upon timely receipt of a favorable report on the application by the County Planning Board or approval by the County Planning Board by its failure to report thereon within the required time.
Resolutions of actions required. Each decision of the Planning Board on any application for development shall be reduced in writing and shall include findings of facts and conclusions based thereon and conditions, if any. Failure of a motion to approve an application for development to receive the number of votes required for approval shall be deemed an action denying the application. Such actions shall be memorialized by written resolution, as required by N.J.S.A. 40:55D-10g. Where the application for site plan approval is subject to review and/or approval of other governmental agencies such as the Gloucester County Planning Board and those agencies listed in § 65-4C(1)(d) hereof, preliminary approval shall be subject to the condition that such reviews and/or approvals be obtained from such agencies.
Developer rights upon plan approval. Rights of applicant with respect to developments after preliminary plan approval and upon approval of site plans shall be as specified in N.J.S.A. 40:55D-49 and 52.
Fees for application, review of plans and inspection of improvements.
The application fee for minor and major site plans is $125.
Fee for review of plans (preliminary or final).
The fee for review of preliminary or final plans for any use which by ordinance requires site plan review shall be $15 per 1,000 square feet of ground floor area, but not less than $500 for a minor site plan application and not less than $1,000 for a major site plan application. Such fees shall be paid to the Borough Clerk when plans are submitted and are nonrefundable whether or not the application is approved.
Such fees shall be used to pay the costs of professional personnel retained by the Borough to process, review and make recommendations on the land planning, legal and engineering aspects of applications and plans. Should such costs exceed the amount of fees paid on any project, the applicant shall be so advised by the Borough Clerk and rendered a written itemization of such costs. Such excess costs shall be paid by the applicant prior to final approval of plans.
Fees for construction review and inspection.
After approval of a plan but prior to construction, the applicant shall deposit with the Borough a sum of money which the Borough Treasurer shall deposit in an escrow account to cover the costs of engineering and other technical review of the installation of required improvements which affect the public interest. The Treasurer shall use the funds so deposited to pay the fees and costs of any advertising and any professional personnel employed, including the Borough Engineer, to process, review and make recommendations on and inspections of the construction of required improvements. The Treasurer shall make disbursements from the escrow account in accordance with the usual voucher system employed by the Borough. The applicant shall, upon request, be given an accounting of the funds so disbursed. Said escrow account shall be separate from and in addition to the plan review fees set forth above. The amount of money required to be deposited by the applicant shall be 5% of the estimated cost of the required improvements as determined by the Borough Engineer.
If at any time during the review and inspection of the construction of the said improvements it becomes evident that the escrow account is or will be insufficient to cover the costs thereof, the applicant shall make such additional deposits in amounts to be determined by Borough Council on recommendation by the Borough Engineer, based upon the estimated remaining costs required to properly review and inspect the improvements. The applicant shall be given a written itemization of costs chargeable to the escrow account whenever funds in the account are insufficient to cover costs and upon final acceptance of improvements. Any excess funds held in the escrow account at the time of final acceptance of the improvements shall be promptly returned to the applicant, without interest, after payment of all outstanding fees for engineering and other technical review and inspection. For the purpose of this section, the term "required improvements" shall mean all street improvements, both internal and external, including grading and paving, parking areas, sidewalks, curbs, gutters, streetlighting, shade trees, water mains, culverts, storm sewers, sanitary sewers, pumping stations, drainage structures, recreational facilities and such other improvements as may be found to be necessary in the public interest in accordance with Borough regulations.
General. In furtherance of the purposes specified in the New Jersey Municipal Land Use Law, N.J.S.A. 40:55D-2, a site plan approval must be obtained prior to the excavation, grading or clearing of land, or construction, or issuance of any permit by the Construction Official or Zoning Officer for any land development involving commercial uses, or any industrial or manufacturing use, the construction of a railroad siding or extension thereof, or any community residence for the developmentally disabled or community shelter for victims of domestic violence which houses more than six such persons, excluding resident staff, and all applications for such building or zoning permits shall be referred to the Planning Board for review and action in accordance with the procedures and standards prescribed herein and in Chapter 40A, Land Use Procedures, and Chapter 80, Zoning, of the Paulsboro Borough Code. For purposes of administering site plan review provisions, in addition to new structures or uses, "land development" shall be interpreted to include any addition to, or change in the use of, an existing building or land; any change in number, location, design or layout or parking facilities where the Zoning Ordinance requires six or more resulting parking spaces; and any change in the location of an access to or exit from a parking lot or a loading/unloading area to a public street.
Editor's Note: This ordinance also provided an effective date retroactive to January 1, 2006.
The location, boundaries, dimensions and ownership of the land to be included; the names of the owners of adjoining properties, and the zoning district in which located.
The location, use, dimensions and arrangements of existing and proposed buildings and structures, signs, streets, sidewalks, railroads, railroad sidings, or extensions thereof, and open spaces, including the height of all buildings; the location and capacity of all areas to be used for off-street parking, parking lot layout, loading and unloading; the location and dimensions for all entrances, exits, traffic flow patterns, and other provisions for accommodating traffic; and the location of all areas devoted to planting, landscaping or similar purposes. The plan shall also indicate the location and use of buildings on adjoining lots, with dimensions from the applicant's property line.
Provisions made for pedestrian circulation.
The total gross floor area of all buildings, including basement.
The physical features of the tract, including existing topography and proposed grading contours.
The provisions made for all utilities, refuse disposal, stormwater drainage, exterior lighting and the location of exterior air-conditioning equipment. All such improvements shall comply with the standards established in Subsection D hereof, with the Borough Flood Damage Prevention Ordinance, the State Soil Erosion and Sediment Control Act and with such other applicable environmental standards as may be promulgated, by federal, state and county agencies.
Editor's Note: See Ch. 35A, Flood Damage Prevention.
A description, rendering, sketch, picture or plans of proposed buildings or structures, including signs.
Information sufficient to demonstrate that satisfactory arrangements will be made to accommodate probable increases in traffic and to facilitate traffic movement on all streets in the vicinity of the proposed use.
A plan or description of buffer or screening devices and areas to be installed, and provisions to be made for the maintenance thereof.
Provisions for the recycling of recyclable material in developments of 25 or more multifamily dwelling units or 1,000 square feet of commercial or industrial land pursuant to Chapter 38, Garbage and Rubbish, of the Code of the Borough of Paulsboro.
For conditional uses (including applications for conversions into multiple-family use) where interior changes or alterations are to be made which will require review and approval by the Planning Board, floor plans shall be submitted identifying such changes or alterations, including location of walls, partitions, doors, exits and common areas.
Sufficient data in all instances to enable the Planning Board to judge the effectiveness of the design and character of the proposed development; to consider properly the relationship of the proposed development or use to surrounding areas, anticipated traffic, public health, safety and general welfare and the like; and to determine that the proposed plan and use comply with the requirements of the district and all other pertinent requirements of the Borough.
The Planning Board may waive or modify any of the above requirements as may be reasonable and consistent with their general purposes and intent if the Board determines that certain requirements are not necessary to ensure that the plan conforms to the standards of sound planning and will have no deleterious effect on neighboring properties from the standpoint of ensuring adequate protection in terms of health, welfare, amenities and safety. The Planning Board is also authorized to waive public notice and hearing requirements for minor site plans as provided by law.
A performance bond with a surety company authorized to do business in the state, or other guarantee acceptable to the Borough for the satisfactory construction and installation of all required public improvements and for the restoration of all existing streets affected by the proposed construction, in accordance with requirements of the law. The amount of the bond or guaranty shall be determined by the Borough Engineer's estimate of the cost of such construction and installation.
A maintenance bond with a surety company authorized to do business in the state or other guarantee acceptable to the Borough for the maintenance of all required on-tract and public improvements for a period of two years after the date of construction and installation of those improvements. The amount of the bond or other guarantee shall be 15% of the Borough Engineer's estimate of the cost of the original construction.
The existing natural resources on the site and the landscape shall be preserved in the natural state insofar as possible and tree and soil removal kept to a minimum. Grade changes shall be made in keeping with the general appearance of neighboring developed areas. New landscaping and grass and ground cover areas shall be developed as screening and environmental protection of the site.
Proposed structures shall be related harmoniously to the terrain and to existing buildings and structures in the vicinity that have a visual relationship to the proposed development. Provisions shall be made for screening of all parking, service and loading areas, playgrounds (where required), equipment and storage areas from adjacent properties.
Adequate provision shall be made for vehicular and pedestrian circulation, including walkways, interior drives and parking; special attention shall be given to location and number of access points to the public streets, separation of pedestrian and vehicular traffic and arrangements of parking areas that are safe and convenient and do not detract from design of proposed structures and the neighboring properties.
Lighting shall be directed away from adjoining premises and public rights-of-way. The size, location, design, color, texture, lighting and materials of all signs shall not detract from the design of the proposed buildings and structures and the surrounding properties or create confusion with other signs or for drivers of vehicles.
Provision shall be made for the cleanliness and maintenance of common areas and for parking and landscaped areas.
Recycling. Consideration shall be given to the provisions for implementing recycling.
Any person, firm or corporation violating any of the provisions of this chapter shall be subject to a fine not exceeding $1,000 or imprisonment in the county jail for a term not exceeding 90 days, or both. Each and every violation of this chapter and each day that a violation of this chapter continues shall be deemed to be a separate and distinct violation thereof.
In case any building or structure is erected, constructed, altered, repaired, converted or maintained or any building, structure or land is used in violation of this chapter or of any other ordinance or other regulation made under authority conferred hereby, the proper local authorities of the Borough or an interested party, in addition to other remedies, may institute any appropriate action or proceedings or prevent such unlawful erection, construction, reconstruction, alteration, repair, conversion, maintenance or use to restrain, correct or abate such violation, to prevent the occupancy of said building, structure or land and to prevent any illegal action, conduct, business or use in or about such premises.
The following checklist of site plan submission requirements is hereby adopted pursuant to N.J.S.A. 40:55D-10.3. An application may be deemed incomplete until such time as all checklist requirements are submitted unless waived by the Planning Board.
Borough application fully completed and signed.
Review fee (at least $500 for minor site plan and at least $1,000 for major site plan).
Corporate/partnership disclosure (if applicable; see attachment to application form).
Name and title of applicant, owner and person preparing map.
Place for signature of Chairman and Secretary of Planning Board.
Place for signature of Township Engineer.
Tax map lot and block number.
Date, scale and North sign.
Key map of the site with reference to surrounding areas and existing street locations.
Zone district in which property in question falls, zone district of adjoining properties and all property within a two-hundred-foot radius of the property in question.
Names of owners of all contiguous land and adjacent property.
Dimensions of lot, setbacks, front yard, side yards and rear yards; size, kind and location of fences.
Location dimensions and details of all signs and exterior lighting, including type of standards, location, radius of light and intensity in footcandles.
The outside dimensions of existing and/or proposed principal building(s) and all accessory structures.
Storm drainage plan showing location of inlets, pipes, swales, berms and other storm drainage facilities, including roof leaders. Indicate existing and proposed runoff calculations.
Rights-of-way, easements and all lands to be dedicated to the municipality or reserved for specific uses.
The entire property in question, even though only a portion of said property is involved in the site plan; provided, however, where it is physically impossible to show the entire property on the required sheet, a separate map at an appropriate scale may be submitted.
Significant existing physical features, including streams, watercourses, rock outcrops, swampy soil, etc.
Bearings and distances of property lines.
Plans of off-street parking area layout and off-street loading facilities showing location and dimensions of individual parking spaces, loading areas, aisles, traffic patterns and driveways for ingress and egress.
All driveways and streets within 200 feet of site.
All existing and proposed curbs and sidewalks. All existing and proposed utility lines within and adjacent to the subject property.
Typical floor plans and elevations.
Existing and proposed sanitary sewerage disposal system. Show percolation test holes and result and soil log data.
Method of solid waste disposal and storage.
Existing and proposed spot elevations based upon the United States Coastal Geodetic datum at all building corners, all floor levels, center lines of abutting roads, top and bottom curbs, property corners, gutters and other pertinent locations.
Existing and proposed contours of site at two-foot intervals for areas less than five-percent grade and five-foot intervals above five-percent grade.
Location of all existing trees or tree masses, indicating general sizes and species of trees.
Landscaping and buffering plan showing what will remain and what will be planted, indicating names of plants and trees and dimensions, approximate time of planting and method of planting (base rooted, ball and burlap).