G.R. No. L-25316 February 28, 1979

KAPISANAN NG MGA MANGGAGAWA SA

MANILA RAILROAD COMPANY CREDIT UNION,

INC., petitioner-appellant,

vs.

MANILA RAILROAD COMPANY, respondent appellee.

In this mandamus petition dismissed by the lower court,

petitioner-appellant would seek a reversal of such decision

relying on what it considered to be a right granted by

Section 62 of the Republic Act No. 2023, more specifically

the first two paragraphs thereof: "...

(1) A member of a cooperative may, notwithstanding the

provisions of existing laws, execute an agreement in favor

of the co-operative authorizing his employer to deduct from

the salary or wages payable to him by the employer such

amount as may be specified in the agreement and to pay the

amount so deducted to the co-operative in satisfaction of any

debt or other demand owing from the member to the co-

operative.

(2) Upon the exemption of such agreement the employer

shall if so required by the co-operative by a request in

writing and so long as such debt or other demand or any part

of it remains unpaid, make the claimant and remit forth with

the amount so deducted to the co-operative." 1

To show that such is futile, the appealed decision, as quoted

in the brief for petitioner-appellant, stated the following:

"Then petitioner contends that under the above provisions of

Rep. Act 2023, the loans granted by credit union to its

members enjoy first priority in the payroll collection from

the respondent's employees' wages and salaries.

As can be clearly seen, there is nothing in the provision of

Rep. Act 2023 hereinabove quoted which provides that

obligation of laborers and employees payable to credit

unions shall enjoy first priority in the deduction from the

employees' wages and salaries.

The only effect of Rep. Act 2023 is to compel the employer to

deduct from the salaries or wages payable to members of

the employees' cooperative credit unions the employees'

debts to the union and to pay the same to the credit union.

In other words, if Rep. Act 2023 had been enacted, the

employer could not be compelled to act as the collecting

agent of the employees' credit union for the employees' debt

to his credit union but to contend that the debt of a member

of the employees cooperative credit union as having first

priority in the matter of deduction, is to write something into

the law which does not appear.

In other words, the mandatory character of Rep. Act 2023 is

only to compel the employer to make the deduction of the

employees' debt from the latter's salary and turn this over to

the employees' credit union but this mandatory character

does not convert the credit union's credit into a first priority

credit.

If the legislative intent in enacting pars. 1 and 2 of Sec. 62

of Rep. Act 2023 were to give first priority in the matter of

payments to the obligations of employees in favor of their

credit unions, then, the law would have so expressly

declared. Thus, the express provisions of the New Civil

Code, Arts. 2241, 2242 and 2244 show the legislative intent

on preference of credits. 2

Such an interpretation, as could be expected, found favor

with the respondent-appellee, which, in its brief, succinctly

pointed out "that there is nothing in said provision from

which it could be implied that it gives top priority to

obligations of the nature of that payable to petitioner, and

that, therefore, respondent company, in issuing the

documents known as Exhibit "3" and Exhibit "P", which

establish the order of priority of payment out of the salaries

of the employees of respondent-appellee, did not violate the

above-quoted Section 62 of Republic Act 2023. In

promulgating Exhibit "3", [and] Exhibit "P" respondent, in

effect, implemented the said provision of law. 3

This petition being one for mandamus and the provision of

law relied upon being clear on its face, it would appear that

no favorable action can be taken on this appeal. We affirm.

1. The applicable provision of Republic Act No. 2023

quoted earlier, speaks for itself. There is no ambiguity. As

thus worded, it was so applied. Petitioner-appellant cannot

therefore raise any valid objection. For the lower court to

view it otherwise would have been to alter the law. That

cannot be done by the judiciary. That is a function that

properly appertains to the legislative branch. As was pointed

out in Gonzaga v. Court of Appeals: 4 "It has been repeated

time and time again that where the statutory norm speaks

unequivocally, there is nothing for the courts to do except to

apply it. The law, leaving no doubt as to the scope of its

operation, must be obeyed. Our decisions have consistently

born to that effect. 5.

G.R. No. 127718 March 2, 2000

NATIONAL FEDERATION OF LABOR, , petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION (5th

Division), PATALON COCONUT ESTATE and/or

CHARLIE REITH as General Manager and SUSIE

GALLE REITH, as owner, respondents.

Before us is a special civil action for certiorari to set aside

and annul two (2) resolutions of the NLRC promulgated on

April 24, 19962 and August 29, 1996

3 denying the award of

separation pay to petitioners.1âwphi1.nêt

Petitioners are bona fide members of the National

Federation of Labor (NFL), a legitimate labor organization

duly registered with the Department of Labor and

Employment. They were employed by private respondents

general manager and owner, of the 354-hectare Patalon

Coconut Estate located at Patalon, Zamboanga City. Patalon

Coconut Estate was engaged in growing agricultural

products and in raising livestock.

In 1988, Congress enacted into law Republic Act (R.A.) No.

6657, otherwise known as the Comprehensive Agrarian

Reform Law (CARL), which mandated the compulsory

acquisition of all covered agricultural lands for distribution

to qualified farmer beneficiaries under the so-called

Comprehensive Agrarian Reform Programme (CARP).

Pursuant to R.A. No. 6657, the Patalon Coconut Estate was

awarded to the Patalon Estate Agrarian Reform Association

(PEARA), a cooperative accredited by the Department of

Agrarian Reform (DAR), of which petitioners are members

and co-owners.

As a result of this acquisition, private respondents shut

down the operation of the Patalon Coconut Estate and the

employment of the petitioners was severed on July 31, 1994.

Petitioners did not receive any separation pay.

On August 1, 1994, the cooperative took over the estate. A

certain Abelardo Sangadan informed respondents of such

takeover via a letter which was received by the respondents

on July 26, 1994. Being beneficiaries of the Patalon Coconut

Estate pursuant to the CARP, the petitioners became part-

owners of the land.4

On April 25, 1995, petitioners filed individual complaints

before the Regional Arbitration Branch (RAB) of the

National Labor Relations Commission (NLRC) in

Zamboanga City, praying for their reinstatement with full

backwages on the ground that they were illegally dismissed.

The petitioners were represented by their labor organization,

the NFL.

On December 12, 1995, the RAB rendered a decision, the

dispositive portion of which provides:

WHEREFORE, in view of the foregoing, judgment

is hereby rendered dismissing complainants' charge

for illegal dismissal for lack of merit, but ordering

respondents thru [sic] its owner-manager or its duly

authorized representative to pay complainants'

separation pay in view of the latter's cessation of

operations or forced sale, and for 13th month

differential pay in the amount, as follows, for:

Appeal was taken by private respondents to public

respondent NLRC.6

On April 24, 1996, the NLRC issued a resolution, the

dispositive portion of which provides:

WHEREFORE, the decision appealed from is

hereby modified in favor of the following findings:

1) Respondents are not guilty of illegally dismissing

complainants. Respondents' cessation of operation was

not due to a unilateral action on their part resulting in the

cutting off of the employment relationship between the

parties. The severance of employer-employee relationship

between the parties came about INVOLUNTARILY, as a

result of an act of the State. Consequently, complainants

are not entitled to any separation pay.

Petitioners filed a motion for reconsideration which was

denied by the NLRC in its resolution8 dated August 29,

1996.

Hence, this petition.

The issue is whether or not an employer that was compelled

to cease its operation because of the compulsory acquisition

by the government of its land for purposes of agrarian

reform, is liable to pay separation pay to its affected

employees.

The petition is bereft of merit.

Petitioners contend that they are entitled to separation pay

citing Article 283 of the Labor Code which reads:

Art. 283. Closure of establishment and reduction of

personnel. — The employer may also terminate the

employment of any employee due to the installation of

labor saving devices, redundancy, retrenchment to prevent

losses or the closing or cessation of operation of the

establishment or undertaking unless the closing is for the

purpose of circumventing the provisions of this Title, by

serving a written notice on the workers and the Ministry

of Labor and Employment at least one (1) month before

the intended date thereof. In case of termination due to the

installation of labor saving devices or redundancy, the

worker affected thereby shall be entitled to a separation

pay equivalent to at least his one (1) month pay or to at

least one (1) month pay for every year of service,

whichever is higher. In case of retrenchment to prevent

losses and in cases of closures or cessation of operations

of establishment or undertaking not due to serious

business losses or financial reverses, the separation pay

shall be equivalent to one (1) month pay or at least one-

half (1/2) month pay for every year of service, whichever

is higher. A fraction of at least six (6) months shall be

considered as one (1) whole year.

It is clear that Article 283 of the Labor Code applies in cases

of closures of establishment and reduction of personnel. The

peculiar circumstances in the case at bar, however, involves

neither the closure of an establishment nor a reduction of

personnel as contemplated under the aforesaid article. When

the Patalon Coconut Estate was closed because a large

portion of the estate was acquired by DAR pursuant to

CARP, the ownership of that large portion of the estate was

precisely transferred to PEARA and ultimately to the

petitioners as members thereof and as agrarian lot

beneficiaries. Hence, Article 283 of the Labor Code is not

applicable to the case at bench.

Even assuming, arguendo, that the situation in this case

were a closure of the business establishment called Patalon

Coconut Estate of private respondents, still the

petitioners/employees are not entitled to separation pay. The

closure contemplated under Article 283 of the Labor Code is

a unilateral and voluntary act on the part of the employer to

close the business establishment as may be gleaned from the

wording of the said legal provision that "The

employer may also terminate the employment of any

employee due to. . .".9 The use of the word "may," in a

statute, denotes that it is directory in nature and generally

permissive only. 10

The "plain meaning rule" or verba

legis in statutory construction is thus applicable in this case.

Where the words of a statute are clear, plain and free from

ambiguity, it must be given its literal meaning and applied

without attempted interpretation. 11

In other words, Article 283 of the Labor Code does not

contemplate a situation where the closure of the business

establishment is forced upon the employer and ultimately

for the benefit of the employees.

WHEREFORE, the petition is DISMISSED.

G.R. No. 84240 March 25, 1992

OLIVIA S. PASCUAL and HERMES S.

PASCUAL, petitioners,

vs.

ESPERANZA C. PASCUAL-BAUTISTA, MANUEL C.

PASCUAL, JOSE C. PASCUAL, SUSANA C.

PASCUAL-BAUTISTA, ERLINDA C. PASCUAL,

WENCESLAO C. PASCUAL, JR., INTESTATE

ESTATE OF ELEUTERIO T. PASCUAL, AVELINO

PASCUAL, ISOCELES PASCUAL, LEIDA PASCUAL-

MARTINES, VIRGINIA PASCUAL-NER, NONA

PASCUAL-FERNANDO, OCTAVIO PASCUAL,

GERANAIA PASCUAL-DUBERT, and THE

HONORABLE PRESIDING JUDGE MANUEL S.

PADOLINA of Br. 162, RTC, Pasig, Metro

Manila, respondents.

This is a petition for review on certiorari which seeks to

reverse and set aside: (a) the decision of the Court of

Appeals 1 dated April 29, 1988 entitled "Olivia S. Pascual

and Hermes S. Pascual v. Esperanza C. Pascual-Bautista,

Manuel C. Pascual, Jose Pascual, Susana C. Pascual-

Bautista, Erlinda C. Pascual, Wenceslao C. Pascual, Jr., et

al." which dismissed the petition and in effect affirmed the

decision of the trial court and (b) the resolution dated July

14, 1988 denying petitioners' motion for reconsideration.

The undisputed facts of the case are as follows:

Petitioners Olivia and Hermes both surnamed Pascual are

the acknowledged natural children of the late Eligio Pascual,

the latter being the full blood brother of the decedent Don

Andres Pascual (Rollo, petition, p. 17).

Don Andres Pascual died intestate on October 12, 1973

without any issue, legitimate, acknowledged natural,

adopted or spurious children.

Adela Soldevilla de Pascual, the surviving spouse of the late

Don Andres Pascual, filed with the (RTC), Branch 162 (CFI

of Rizal, Br. XXIII), a Special Proceeding, for

administration of the intestate estate of her late husband

(Rollo, p. 47).

On December 18, 1973, Adela soldevilla de Pascual filed a

Supplemental Petition to the Petition for letters of

Administration, where she expressly stated that Olivia

Pascual and Hermes Pascual, are among the heirs of Don

Andres Pascual (Rollo, pp. 99-101).

On February 27, 1974, again Adela Soldevilla de Pascual

executed an affidavit, to the effect that of her own

knowledge, Eligio Pascual is the younger full blood brother

of her late husband Don Andres Pascual, to belie the

statement made by the oppositors, that they were are not

among the known heirs of the deceased Don Andres Pascual

(Rollo, p. 102).

On October 16, 1985, all the above-mentioned heirs entered

into a COMPROMISE AGREEMENT, over the vehement

objections of the herein petitioners Olivia S. Pascual and

Hermes S. Pascual, although paragraph V of such

compromise agreement provides, to wit:

This Compromise Agreement shall be without

prejudice to the continuation of the above-entitled

proceedings until the final determination thereof by the

court, or by another compromise agreement, as regards

the claims of Olivia Pascual and Hermes Pascual as

legal heirs of the deceased, Don Andres Pascual.

(Rollo, p. 108)

The said Compromise Agreement had been entered into

despite the Manifestation/Motion of the petitioners Olivia

Pascual and Hermes Pascual, manifesting their hereditary

rights in the intestate estate of Don Andres Pascual, their

uncle (Rollo, pp. 111-112).

On September 30, 1987, petitioners filed their Motion to

Reiterate Hereditary Rights (Rollo, pp. 113-114) and the

Memorandum in Support of Motion to reiterate Hereditary

Rights (Rollo, pp. 116-130).

On December 18, 1987, the Regional Trial Court, presided

over by Judge Manuel S. Padolina issued an order, the

dispositive portion of which reads:

WHEREFORE, premises considered, this Court

resolves as it is hereby resolved to Deny this motion

reiterating the hereditary rights of Olivia and Hermes

Pascual (Rollo, p. 136).

On January 13, 1988, petitioners filed their motion for

reconsideration (Rollo, pp. 515-526). and such motion was

denied.

Petitioner appealed their case to the Court of Appeals

docketed as CA-G.R. No. 14010 (Rollo, p. 15.).

On Aril 29, 1988, the respondent Court of Appeals rendered

its decision the decision the dispositive part of which reads:

WHEREFORE, the petition is

DISMISSED.

Petitioners filed their motion for reconsideration of said

decision and on July 14, 1988, the Court of Appeals issued

its resolution denying the motion for reconsideration (Rollo,

p. 42).

Hence, this petition for review on certiorari.

The main issue to be resolved in the case at bar is whether or

not Article 992 of the Civil Code of the Philippines, can be

interpreted to exclude recognized natural children from the

inheritance of the deceased.

Petitioners contend that they do not fall squarely within the

purview of Article 992 of the Civil Code of the Philippines,

can be interpreted to exclude recognized and of the doctrine

laid down in Diaz v. IAC (150 SCRA 645 [1987]) because

being acknowledged natural children, their illegitimacy is

not due to the subsistence of a prior marriage when such

children were under conception (Rollo, p. 418).

Otherwise stated they say the term "illegitimate" children

as provided in Article 992 must be strictly construed to refer

only to spurious children (Rollo, p. 419).

On the other hand, private respondents maintain that herein

petitioners are within the prohibition of Article 992 of the

Civil Code and the doctrine laid down in Diaz v. IAC is

applicable to them.

The petition is devoid of merit.

Pertinent thereto, Article 992 of the civil Code, provides:

An illegitimate child has no right to inherit ab

intestato from the legitimate children and relatives of his

father or mother; nor shall such children or relatives

inherit in the same manner from the illegitimate child.

The issue in the case at bar, had already been laid to rest

in Diaz v. IAC, supra, where this Court ruled that:

Article 992 of the Civil Code provides a barrier or iron

curtain in that it prohibits absolutely a succession ab

intestato between the illegitimate child and the legitimate

children and relatives of the father or mother of said

legitimate child. They may have a natural tie of blood, but

this is not recognized by law for the purposes of Article

992. Between the legitimate family and illegitimate family

there is presumed to be an intervening antagonism and

incompatibility. The illegitimate child is disgracefully

looked down upon by the legitimate family; the family is

in turn hated by the illegitimate child; the latter considers

the privileged condition of the former, and the resources

of which it is thereby deprived; the former, in turn, sees in

the illegitimate child nothing but the product of sin,

palpable evidence of a blemish broken in life; the law

does no more than recognize this truth, by avoiding

further grounds of resentment.

Eligio Pascual is a legitimate child but petitioners are his

illegitimate children.

Applying the above doctrine to the case at bar, respondent

IAC did not err in holding that petitioners herein cannot

represent their father Eligio Pascual in the succession of the

latter to the intestate estate of the decedent Andres Pascual,

full blood brother of their father.

In their memorandum, petitioners insisted that Article 992 in

the light of Articles 902 and 989 of the Civil Code allows

them (Olivia and Hermes) to represent Eligio Pascual in the

intestate estate of Don Andres Pascual.

On motion for reconsideration of the decision in Diaz v.

IAC, this Court further elucidated the successional rights of

illegitimate children, which squarely answers the questions

raised by the petitioner on this point.

The Court held:

Article 902, 989, and 990 clearly speaks of successional

rights of illegitimate children, which rights are transmitted

to their descendants upon their death. The descendants (of

these illegitimate children) who may inherit by virtue of

the right of representation may be legitimate or

illegitimate. In whatever manner, one should not overlook

the fact that the persons to be represented are

themselves illegitimate. The three named provisions are

very clear on this matter. The right of representation is not

available to illegitimate descendants of legitimate children

in the inheritance of a legitimate grandparent. It may be

argued, as done by petitioners, that the illegitimate

descendant of a legitimate child is entitled to represent by

virtue of the provisions of Article 982, which provides

that "the grandchildren and other descendants shall inherit

by right of representation." Such a conclusion is

erroneous. It would allow intestate succession by an

illegitimate child to the legitimate parent of his father or

mother, a situation which would set at naught the

provisions of Article 992. Article 982 is inapplicable to

the instant case because Article 992 prohibits absolutely a

succession ab intestatobetween the illegitimate child and

the legitimate children and relatives of the father or

mother. It may not be amiss to state Article 982 is the

general rule and Article 992 the exception.

The rules laid down in Article 982 that "grandchildren and

other descendants shall inherit by right of representation"

and in Article 902 that the rights of illegitimate children . .

. are transmitted upon their death to their descendants,

whether legitimate or illegitimate are subject to the

limitation prescribed by Article 992 to the end that an

illegitimate child has no right to inherit ab intestato from

the legitimate children and relatives of his father or

mother. (Amicus Curiae's Opinion by former Justice

Minister Ricardo C. Puno, p. 12). Diaz v. Intermediate

Appellate Court, 182 SCRA 427; pp. 431-432; [1990]).

Verily, the interpretation of the law desired by the petitioner

may be more humane but it is also an elementary rule in

statutory construction that when the words and phrases of

the statute are clear and unequivocal, their meaning must be

determined from the language employed and the statute

must be taken to mean exactly what is says. (Baranda v.

Gustilo, 165 SCRA 758-759 [1988]). The courts may not

speculate as to the probable intent of the legislature apart

from the words (Aparri v. CA, 127 SCRA 233 [1984]).

When the law is clear, it is not susceptible of interpretation.

It must be applied regardless of who may be affected, even

if the law may be harsh or onerous. (Nepomuceno, et al. v.

FC, 110 Phil. 42). And even granting that exceptions may be

conceded, the same as a general rule, should be strictly but

reasonably construed; they extend only so far as their

language fairly warrants, and all doubts should be resolved

in favor of the general provisions rather than the exception.

Thus, where a general rule is established by statute, the

court will not curtail the former nor add to the latter by

implication (Samson v. C.A., 145 SCRA 654 [1986]).

Clearly the term "illegitimate" refers to both natural and

spurious.

Finally under Article 176 of the Family Code, all

illegitimate children are generally placed under one

category, which undoubtedly settles the issue as to whether

or not acknowledged natural children should be treated

differently, in the negative.

It may be said that the law may be harsh but that is the law

(DURA LEX SED LEX).

PREMISES CONSIDERED, the petition is DISMISSED for

lack of merit and the assailed decision of the respondent

Court of Appeals dated April 29, 1988 is AFFIRMED.

G.R. No. 127325 March 19, 1997

MIRIAM DEFENSOR SANTIAGO, ALEXANDER

PADILLA, and MARIA ISABEL ONGPIN, petitioners,

vs.

COMMISSION ON ELECTIONS, JESUS DELFIN,

ALBERTO PEDROSA & CARMEN PEDROSA, in

their capacities as founding members of the People's

Initiative for Reforms, Modernization and Action

(PIRMA), respondents.

The heart of this controversy brought to us by way of a

petition for prohibition under Rule 65 of the Rules of Court

is the right of the people to directly propose amendments to

the Constitution through the system of initiative under

Section 2 of Article XVII of the 1987 Constitution.

Undoubtedly, this demands special attention, as this system

of initiative was unknown to the people of this country,

except perhaps to a few scholars, before the drafting of the

1987 Constitution. The 1986 Constitutional Commission

itself, through the original proponent 1

and the main

sponsor 2 of the proposed Article on Amendments or

Revision of the Constitution, characterized this system as

"innovative". 3 Indeed it is, for both under the 1935 and 1973

Constitutions, only two methods of proposing amendments

to, or revision of, the Constitution were recognized, viz., (1)

by Congress upon a vote of three-fourths of all its members

and (2) by a constitutional convention. 4 For this and the

other reasons hereafter discussed, we resolved to give due

course to this petition.

On 6 December 1996, private respondent Atty. Jesus S.

Delfin filed with public respondent Commission on

Elections (hereafter, COMELEC) a "Petition to Amend the

Constitution, to Lift Term Limits of Elective Officials, by

People's Initiative" (hereafter, Delfin Petition) 5 wherein

Delfin asked the COMELEC for an order

1. Fixing the time and dates for signature gathering

all over the country;

2. Causing the necessary publications of said Order

and the attached "Petition for Initiative on the 1987

Constitution, in newspapers of general and local

circulation;

3. Instructing Municipal Election Registrars in all

Regions of the Philippines, to assist Petitioners and

volunteers, in establishing signing stations at the time

and on the dates designated for the purpose.

Delfin alleged in his petition that he is a founding member

of the Movement for People's Initiative, 6 a group of citizens

desirous to avail of the system intended to institutionalize

people power; that he and the members of the Movement

and other volunteers intend to exercise the power to directly

propose amendments to the Constitution granted under

Section 2, Article XVII of the Constitution; that the exercise

of that power shall be conducted in proceedings under the

control and supervision of the COMELEC; that, as required

in COMELEC Resolution No. 2300, signature stations shall

be established all over the country, with the assistance of

municipal election registrars, who shall verify the signatures

affixed by individual signatories; that before the Movement

and other volunteers can gather signatures, it is necessary

that the time and dates to be designated for the purpose be

first fixed in an order to be issued by the COMELEC; and

that to adequately inform the people of the electoral process

involved, it is likewise necessary that the said order, as well

as the Petition on which the signatures shall be affixed, be

published in newspapers of general and local circulation,

under the control and supervision of the COMELEC.

The Delfin Petition further alleged that the provisions

sought to be amended are Sections 4 and 7 of Article

VI, 7Section 4 of Article VII,

8 and Section 8 of Article

X 9 of the Constitution. Attached to the petition is a copy of

a "Petition for Initiative on the 1987

Constitution" 10

embodying the proposed amendments

which consist in the deletion from the aforecited sections of

the provisions concerning term limits, and with the

following proposition:

DO YOU APPROVE OF LIFTING THE

TERM LIMITS OF ALL ELECTIVE

GOVERNMENT OFFICIALS,

AMENDING FOR THE PURPOSE

SECTIONS 4 AND 7 OF ARTICLE VI,

SECTION 4 OF ARTICLE VII, AND

SECTION 8 OF ARTICLE X OF THE

1987 PHILIPPINE CONSTITUTION?

According to Delfin, the said Petition for Initiative will first

be submitted to the people, and after it is signed by at least

twelve per cent of the total number of registered voters in

the country it will be formally filed with the COMELEC.

Upon the filing of the Delfin Petition, which was forthwith

given the number UND 96-037 (INITIATIVE), the

COMELEC, through its Chairman, issued an Order 11

(a)

directing Delfin "to cause the publication of the petition,

together with the attached Petition for Initiative on the 1987

Constitution (including the proposal, proposed constitutional

amendment, and the signature form), and the notice of

hearing in three (3) daily newspapers of general circulation

at his own expense" not later than 9 December 1996; and (b)

setting the case for hearing on 12 December 1996 at 10:00

a.m.

At the hearing of the Delfin Petition on 12 December 1996,

the following appeared: Delfin and Atty. Pete Q. Quadra;

representatives of the People's Initiative for Reforms,

Modernization and Action (PIRMA); intervenor-oppositor

Senator Raul S. Roco, together with his two other lawyers,

and representatives of, or counsel for, the Integrated Bar of

the Philippines (IBP), Demokrasya-Ipagtanggol ang

Konstitusyon (DIK), Public Interest Law Center, and Laban

ng Demokratikong Pilipino (LABAN). 12

Senator Roco, on

that same day, filed a Motion to Dismiss the Delfin Petition

on the ground that it is not the initiatory petition properly

cognizable by the COMELEC.

After hearing their arguments, the COMELEC directed

Delfin and the oppositors to file their "memoranda and/or

oppositions/memoranda" within five days. 13

On 18 December 1996, the petitioners herein — Senator

Miriam Defensor Santiago, Alexander Padilla, and Maria

Isabel Ongpin — filed this special civil action for

prohibition raising the following arguments:

(1) The constitutional provision on

people's initiative to amend the

Constitution can only be implemented by

law to be passed by Congress. No such

law has been passed; in fact, Senate Bill

No. 1290 entitled An Act Prescribing and

Regulating Constitution Amendments by

People's Initiative, which petitioner

Senator Santiago filed on 24 November

1995, is still pending before the Senate

Committee on Constitutional

Amendments.

(2) It is true that R.A. No. 6735 provides for three

systems of initiative, namely, initiative on the

Constitution, on statutes, and on local legislation.

However, it failed to provide any subtitle on initiative

on the Constitution, unlike in the other modes of

initiative, which are specifically provided for in

Subtitle II and Subtitle III. This deliberate omission

indicates that the matter of people's initiative to amend

the Constitution was left to some future law. Former

Senator Arturo Tolentino stressed this deficiency in

the law in his privilege speech delivered before the

Senate in 1994: "There is not a single word in that law

which can be considered as implementing [the

provision on constitutional initiative]. Such

implementing provisions have been obviously left to a

separate law.

(3) Republic Act No. 6735 provides for the effectivity

of the law after publication in print media. This

indicates that the Act covers only laws and not

constitutional amendments because the latter take

effect only upon ratification and not after publication.

(4) COMELEC Resolution No. 2300, adopted on 16

January 1991 to govern "the conduct of initiative on

the Constitution and initiative and referendum on

national and local laws, is ultra vires insofar

asinitiative on amendments to the Constitution is

concerned, since the COMELEC has no power to

provide rules and regulations for the exercise of the

right of initiative to amend the Constitution. Only

Congress is authorized by the Constitution to pass the

implementing law.

(5) The people's initiative is limited to amendments to

the Constitution, not to revision thereof. Extending or

lifting of term limits constitutes a revision and is,

therefore, outside the power of the people's initiative.

(6) Finally, Congress has not yet appropriated funds

for people's initiative; neither the COMELEC nor any

other government department, agency, or office has

realigned funds for the purpose.

To justify their recourse to us via the special civil action for

prohibition, the petitioners allege that in the event the

COMELEC grants the Delfin Petition, the people's initiative

spearheaded by PIRMA would entail expenses to the

national treasury for general re-registration of voters

amounting to at least P180 million, not to mention the

millions of additional pesos in expenses which would be

incurred in the conduct of the initiative itself. Hence, the

transcendental importance to the public and the nation of the

issues raised demands that this petition for prohibition be

settled promptly and definitely, brushing aside technicalities

of procedure and calling for the admission of a taxpayer's

and legislator's suit. 14

Besides, there is no other plain,

speedy, and adequate remedy in the ordinary course of law.

On 19 December 1996, this Court (a) required the

respondents to comment on the petition within a non-

extendible period of ten days from notice; and (b) issued a

temporary restraining order, effective immediately and

continuing until further orders, enjoining public respondent

COMELEC from proceeding with the Delfin Petition, and

private respondents Alberto and Carmen Pedrosa from

conducting a signature drive for people's initiative to amend

the Constitution.

On 2 January 1997, private respondents, through Atty

Quadra, filed their Comment 15

on the petition. They argue

therein that:

1. IT IS NOT TRUE THAT "IT WOULD

ENTAIL EXPENSES TO THE NATIONAL

TREASURY FOR GENERAL REGISTRATION

OF VOTERS AMOUNTING TO AT LEAST

PESOS: ONE HUNDRED EIGHTY MILLION

(P180,000,000.00)" IF THE "COMELEC

GRANTS THE PETITION FILED BY

RESPONDENT DELFIN BEFORE THE

COMELEC.

2. NOT A SINGLE CENTAVO WOULD BE

SPENT BY THE NATIONAL GOVERNMENT

IF THE COMELEC GRANTS THE PETITION

OF RESPONDENT DELFIN. ALL EXPENSES

IN THE SIGNATURE GATHERING ARE ALL

FOR THE ACCOUNT OF RESPONDENT

DELFIN AND HIS VOLUNTEERS PER THEIR

PROGRAM OF ACTIVITIES AND

EXPENDITURES SUBMITTED TO THE

COMELEC. THE ESTIMATED COST OF THE

DAILY PER DIEM OF THE SUPERVISING

SCHOOL TEACHERS IN THE SIGNATURE

GATHERING TO BE DEPOSITED and TO BE

PAID BY DELFIN AND HIS VOLUNTEERS IS

P2,571,200.00;

3. THE PENDING PETITION BEFORE THE

COMELEC IS ONLY ON THE SIGNATURE

GATHERING WHICH BY LAW COMELEC IS

DUTY BOUND "TO SUPERVISE CLOSELY"

PURSUANT TO ITS "INITIATORY

JURISDICTION" UPHELD BY THE

HONORABLE COURT IN ITS RECENT

SEPTEMBER 26, 1996 DECISION IN THE

CASE OF SUBIC BAY METROPOLITAN

AUTHORITY VS.COMELEC, ET AL. G.R. NO.

125416;

4. REP. ACT NO. 6735 APPROVED ON

AUGUST 4, 1989 IS THE ENABLING LAW

IMPLEMENTING THE POWER OF PEOPLE

INITIATIVE TO PROPOSE AMENDMENTS

TO THE CONSTITUTION. SENATOR

DEFENSOR-SANTIAGO'S SENATE BILL NO.

1290 IS A DUPLICATION OF WHAT ARE

ALREADY PROVIDED FOR IN REP. ACT NO.

6735;

5. COMELEC RESOLUTION NO. 2300

PROMULGATED ON JANUARY 16, 1991

PURSUANT TO REP. ACT 6735 WAS

UPHELD BY THE HONORABLE COURT IN

THE RECENT SEPTEMBER 26, 1996

DECISION IN THE CASE OF SUBIC BAY

METROPOLITAN AUTHORITY VS. COMELEC,

ET AL. G.R. NO. 125416 WHERE THE

HONORABLE COURT SAID: "THE

COMMISSION ON ELECTIONS CAN DO NO

LESS BY SEASONABLY AND JUDICIOUSLY

PROMULGATING GUIDELINES AND RULES

FOR BOTH NATIONAL AND LOCAL USE, IN

IMPLEMENTING OF THESE LAWS."

6. EVEN SENATOR DEFENSOR-

SANTIAGO'S SENATE BILL NO. 1290

CONTAINS A PROVISION DELEGATING TO

THE COMELEC THE POWER TO

"PROMULGATE SUCH RULES AND

REGULATIONS AS MAY BE NECESSARY

TO CARRY OUT THE PURPOSES OF THIS

ACT." (SEC. 12, S.B. NO. 1290, ENCLOSED

AS ANNEX E, PETITION);

7. THE LIFTING OF THE LIMITATION ON

THE TERM OF OFFICE OF ELECTIVE

OFFICIALS PROVIDED UNDER THE 1987

CONSTITUTION IS NOT A "REVISION" OF

THE CONSTITUTION. IT IS ONLY AN

AMENDMENT. "AMENDMENT ENVISAGES

AN ALTERATION OF ONE OR A FEW

SPECIFIC PROVISIONS OF THE

CONSTITUTION. REVISION

CONTEMPLATES A RE-EXAMINATION OF

THE ENTIRE DOCUMENT TO DETERMINE

HOW AND TO WHAT EXTENT IT SHOULD

BE ALTERED." (PP. 412-413, 2ND. ED. 1992,

1097 PHIL. CONSTITUTION, BY JOAQUIN

G. BERNAS, S.J.).

Also on 2 January 1997, private respondent Delfin filed in

his own behalf a Comment 16

which starts off with an

assertion that the instant petition is a "knee-jerk reaction to a

draft 'Petition for Initiative on the 1987 Constitution'. . .

which is not formally filed yet." What he filed on 6

December 1996 was an "Initiatory Pleading" or "Initiatory

Petition," which was legally necessary to start the signature

campaign to amend the Constitution or to put the movement

to gather signatures under COMELEC power and function.

On the substantive allegations of the petitioners, Delfin

maintains as follows:

(1) Contrary to the claim of the petitioners, there is a

law, R.A. No. 6735, which governs the conduct

of initiative to amend the Constitution. The absence

therein of a subtitle for such initiative is not fatal, since

subtitles are not requirements for the validity or

sufficiency of laws.

(2) Section 9(b) of R.A. No. 6735 specifically provides

that the proposition in an initiative to amend the

Constitution approved by the majority of the votes cast

in the plebiscite shall become effective as of the day of

the plebiscite.

(3) The claim that COMELEC Resolution No. 2300

is ultra vires is contradicted by (a) Section 2, Article

IX-C of the Constitution, which grants the COMELEC

the power to enforce and administer all laws and

regulations relative to the conduct of an election,

plebiscite, initiative, referendum, and recall; and (b)

Section 20 of R.A. 6735, which empowers the

COMELEC to promulgate such rules and regulations as

may be necessary to carry out the purposes of the Act.

(4) The proposed initiative does not

involve a revision of, but

mere amendment to, the Constitution

because it seeks to alter only a few

specific provisions of the Constitution, or

more specifically, only those which lay

term limits. It does not seek to reexamine

or overhaul the entire document.

As to the public expenditures for registration of voters,

Delfin considers petitioners' estimate of P180 million as

unreliable, for only the COMELEC can give the exact

figure. Besides, if there will be a plebiscite it will be

simultaneous with the 1997 Barangay Elections. In any

event, fund requirements for initiative will be a priority

government expense because it will be for the exercise of

the sovereign power of the people.

In the Comment 17

for the public respondent COMELEC,

filed also on 2 January 1997, the Office of the Solicitor

General contends that:

(1) R.A. No. 6735 deals with, inter alia,

people's initiative to amend the Constitution. Its

Section 2 on Statement of Policy explicitly affirms,

recognizes, and guarantees that power; and its Section

3, which enumerates the three systems of initiative,

includes initiative on the Constitution and defines the

same as the power to propose amendments to the

Constitution. Likewise, its Section 5 repeatedly

mentions initiative on the Constitution.

(2) A separate subtitle on initiative on the

Constitution is not necessary in R.A. No. 6735

because, being national in scope, that system

of initiative is deemed included in the subtitle on

National Initiative and Referendum; and Senator

Tolentino simply overlooked pertinent provisions of

the law when he claimed that nothing therein was

provided for initiative on the Constitution.

(3) Senate Bill No. 1290 is neither a competent nor a

material proof that R.A. No. 6735 does not deal

with initiative on the Constitution.

(4) Extension of term limits of elected

officials constitutes a mere amendment to

the Constitution, not a revision thereof.

(5) COMELEC Resolution No. 2300 was

validly issued under Section 20 of R.A.

No. 6735 and under the Omnibus Election

Code. The rule-making power of the

COMELEC to implement the provisions

of R.A. No. 6735 was in fact upheld by

this Court in Subic Bay Metropolitan

Authority vs. COMELEC.

On 14 January 1997, this Court (a) confirmed nunc pro

tunc the temporary restraining order; (b) noted the

aforementioned Comments and the Motion to Lift

Temporary Restraining Order filed by private respondents

through Atty. Quadra, as well as the latter's Manifestation

stating that he is the counsel for private respondents Alberto

and Carmen Pedrosa only and the Comment he filed was for

the Pedrosas; and (c) granted the Motion for Intervention

filed on 6 January 1997 by Senator Raul Roco and allowed

him to file his Petition in Intervention not later than 20

January 1997; and (d) set the case for hearing on 23 January

1997 at 9:30 a.m.

On 17 January 1997, the Demokrasya-Ipagtanggol ang

Konstitusyon (DIK) and the Movement of Attorneys for

Brotherhood Integrity and Nationalism, Inc. (MABINI),

filed a Motion for Intervention. Attached to the motion was

their Petition in Intervention, which was later replaced by an

Amended Petition in Intervention wherein they contend that:

(1) The Delfin proposal does not involve a

mere amendment to, but a revision of, the Constitution

because, in the words of Fr. Joaquin Bernas, S.J., 18

it

would involve a change from a political philosophy

that rejects unlimited tenure to one that accepts

unlimited tenure; and although the change might

appear to be an isolated one, it can affect other

provisions, such as, on synchronization of elections

and on the State policy of guaranteeing equal access to

opportunities for public service and prohibiting

political dynasties. 19

A revision cannot be done

by initiative which, by express provision of Section 2

of Article XVII of the Constitution, is limited

to amendments.

(2) The prohibition against reelection of the President

and the limits provided for all other national and local

elective officials are based on the philosophy of

governance, "to open up the political arena to as many

as there are Filipinos qualified to handle the demands

of leadership, to break the concentration of political

and economic powers in the hands of a few, and to

promote effective proper empowerment for

participation in policy and decision-making for the

common good"; hence, to remove the term limits is to

negate and nullify the noble vision of the 1987

Constitution.

(3) The Delfin proposal runs counter to the

purpose of initiative, particularly in a conflict-of-

interest situation. Initiative is intended as a

fallback position that may be availed of by the

people only if they are dissatisfied with the

performance of their elective officials, but not as a

premium for good performance. 20

(4) R.A. No. 6735 is deficient and inadequate in

itself to be called the enabling law that

implements the people's initiative on amendments

to the Constitution. It fails to state (a) the proper

parties who may file the petition, (b) the

appropriate agency before whom the petition is to

be filed, (c) the contents of the petition, (d) the

publication of the same, (e) the ways and means

of gathering the signatures of the voters

nationwide and 3% per legislative district, (f) the

proper parties who may oppose or question the

veracity of the signatures, (g) the role of the

COMELEC in the verification of the signatures

and the sufficiency of the petition, (h) the appeal

from any decision of the COMELEC, (I) the

holding of a plebiscite, and (g) the appropriation

of funds for such people's initiative. Accordingly,

there being no enabling law, the COMELEC has

no jurisdiction to hear Delfin's petition.

(5) The deficiency of R.A. No. 6735 cannot be

rectified or remedied by COMELEC Resolution

No. 2300, since the COMELEC is without

authority to legislate the procedure for a

people's initiativeunder Section 2 of Article XVII

of the Constitution. That function exclusively

pertains to Congress. Section 20 of R.A. No. 6735

does not constitute a legal basis for the

Resolution, as the former does not set a sufficient

standard for a valid delegation of power.

On 20 January 1997, Senator Raul Roco filed his Petition in

Intervention. 21

He avers that R.A. No. 6735 is the enabling

law that implements the people's right to initiate

constitutional amendments. This law is a consolidation of

Senate Bill No. 17 and House Bill No. 21505; he co-

authored the House Bill and even delivered a sponsorship

speech thereon. He likewise submits that the COMELEC

was empowered under Section 20 of that law to promulgate

COMELEC Resolution No. 2300. Nevertheless, he contends

that the respondent Commission is without jurisdiction to

take cognizance of the Delfin Petition and to order its

publication because the said petition is not the initiatory

pleading contemplated under the Constitution, Republic Act

No. 6735, and COMELEC Resolution No. 2300. What vests

jurisdiction upon the COMELEC in an initiative on the

Constitution is the filing of a petition for initiative which

is signedby the required number of registered voters. He

also submits that the proponents of a constitutional

amendment cannot avail of the authority and resources of

the COMELEC to assist them is securing the required

number of signatures, as the COMELEC's role in an

initiative on the Constitution is limited to the determination

of the sufficiency of the initiative petition and the call and

supervision of a plebiscite, if warranted.

On 20 January 1997, LABAN filed a Motion for Leave to

Intervene.

The following day, the IBP filed a Motion for Intervention

to which it attached a Petition in Intervention raising the

following arguments:

(1) Congress has failed to enact an enabling law

mandated under Section 2, Article XVII of the 1987

Constitution.

(2) COMELEC Resolution No. 2300 cannot substitute

for the required implementing law on the initiative to

amend the Constitution.

(3) The Petition for Initiative suffers from a fatal

defect in that it does not have the required number of

signatures.

(4) The petition seeks, in effect a revision of the

Constitution, which can be proposed only by Congress

or a constitutional convention. 22

On 21 January 1997, we promulgated a Resolution (a)

granting the Motions for Intervention filed by the DIK and

MABINI and by the IBP, as well as the Motion for Leave to

Intervene filed by LABAN; (b) admitting the Amended

Petition in Intervention of DIK and MABINI, and the

Petitions in Intervention of Senator Roco and of the IBP; (c)

requiring the respondents to file within a nonextendible

period of five days their Consolidated Comments on the

aforesaid Petitions in Intervention; and (d) requiring

LABAN to file its Petition in Intervention within a

nonextendible period of three days from notice, and the

respondents to comment thereon within a nonextendible

period of five days from receipt of the said Petition in

Intervention.

At the hearing of the case on 23 January 1997, the parties

argued on the following pivotal issues, which the Court

formulated in light of the allegations and arguments raised

in the pleadings so far filed:

1. Whether R.A. No. 6735, entitled An

Act Providing for a System of Initiative

and Referendum and Appropriating Funds

Therefor, was intended to include or

cover initiative on amendments to the

Constitution; and if so, whether the Act, as

worded, adequately covers such initiative.

2. Whether that portion of COMELEC Resolution No.

2300 (In re: Rules and Regulations Governing the

Conduct of Initiative on the Constitution, and Initiative

and Referendum on National and Local Laws)

regarding the conduct of initiative on amendments to

the Constitution is valid, considering the absence in the

law of specific provisions on the conduct of such

initiative.

3. Whether the lifting of term limits of elective national

and local officials, as proposed in the draft "Petition for

Initiative on the 1987 Constitution," would constitute a

revision of, or an amendment to, the Constitution.

4. Whether the COMELEC can take cognizance of, or

has jurisdiction over, a petition solely intended to obtain

an order (a) fixing the time and dates for signature

gathering; (b) instructing municipal election officers to

assist Delfin's movement and volunteers in establishing

signature stations; and (c) directing or causing the

publication of, inter alia, the unsigned proposed

Petition for Initiative on the 1987 Constitution.

5. Whether it is proper for the Supreme Court to take

cognizance of the petition when there is a pending case

before the COMELEC.

After hearing them on the issues, we required the parties to

submit simultaneously their respective memoranda within

twenty days and requested intervenor Senator Roco to

submit copies of the deliberations on House Bill No. 21505.

On 27 January 1997, LABAN filed its Petition in

Intervention wherein it adopts the allegations and arguments

in the main Petition. It further submits that the COMELEC

should have dismissed the Delfin Petition for failure to state

a sufficient cause of action and that the Commission's

failure or refusal to do so constituted grave abuse of

discretion amounting to lack of jurisdiction.

On 28 January 1997, Senator Roco submitted copies of

portions of both the Journal and the Record of the House of

Representatives relating to the deliberations of House Bill

No. 21505, as well as the transcripts of stenographic notes

on the proceedings of the Bicameral Conference Committee,

Committee on Suffrage and Electoral Reforms, of 6 June

1989 on House Bill No. 21505 and Senate Bill No. 17.

Private respondents Alberto and Carmen Pedrosa filed their

Consolidated Comments on the Petitions in Intervention of

Senator Roco, DIK and MABINI, and IBP. 23

The parties

thereafter filed, in due time, their separate memoranda. 24

As we stated in the beginning, we resolved to give due

course to this special civil action.

For a more logical discussion of the formulated issues, we

shall first take up the fifth issue which appears to pose a

prejudicial procedural question.

I

THE INSTANT PETITION IS VIABLE DESPITE

THE PENDENCY IN THE COMELEC OF THE

DELFIN PETITION.

Except for the petitioners and intervenor Roco, the parties

paid no serious attention to the fifth issue, i.e., whether it is

proper for this Court to take cognizance of this special civil

action when there is a pending case before the COMELEC.

The petitioners provide an affirmative answer. Thus:

28. The Comelec has no jurisdiction to take cognizance of

the petition filed by private respondent Delfin. This being

so, it becomes imperative to stop the Comelec from

proceeding any further, and under the Rules of Court,

Rule 65, Section 2, a petition for prohibition is the proper

remedy.

29. The writ of prohibition is an extraordinary judicial

writ issuing out of a court of superior jurisdiction and

directed to an inferior court, for the purpose of preventing

the inferior tribunal from usurping a jurisdiction with

which it is not legally vested. (People v. Vera, supra., p.

84). In this case the writ is an urgent necessity, in view of

the highly divisive and adverse environmental

consequences on the body politic of the questioned

Comelec order. The consequent climate of legal confusion

and political instability begs for judicial statesmanship.

30. In the final analysis, when the system of constitutional

law is threatened by the political ambitions of man, only

the Supreme Court

can save a nation in peril and uphold the paramount

majesty of the Constitution. 25

It must be recalled that intervenor Roco filed with the

COMELEC a motion to dismiss the Delfin Petition on the

ground that the COMELEC has no jurisdiction or authority

to entertain the petition. 26

The COMELEC made no ruling

thereon evidently because after having heard the arguments

of Delfin and the oppositors at the hearing on 12 December

1996, it required them to submit within five days their

memoranda or oppositions/memoranda. 27

Earlier, or

specifically on 6 December 1996, it practically gave due

course to the Delfin Petition by ordering Delfin to cause the

publication of the petition, together with the attached

Petition for Initiative, the signature form, and the notice of

hearing; and by setting the case for hearing. The

COMELEC's failure to act on Roco's motion to dismiss and

its insistence to hold on to the petition rendered ripe and

viable the instant petition under Section 2 of Rule 65 of the

Rules of Court, which provides:

Sec. 2. Petition for prohibition. — Where

the proceedings of any tribunal,

corporation, board, or person, whether

exercising functions judicial or

ministerial, are without or in excess of its

or his jurisdiction, or with grave abuse of

discretion, and there is no appeal or any

other plain, speedy and adequate remedy

in the ordinary course of law, a person

aggrieved thereby may file a verified

petition in the proper court alleging the

facts with certainty and praying that

judgment be rendered commanding the

defendant to desist from further

proceedings in the action or matter

specified therein.

It must also be noted that intervenor Roco claims that the

COMELEC has no jurisdiction over the Delfin Petition

because the said petition is not supported by the required

minimum number of signatures of registered voters.

LABAN also asserts that the COMELEC gravely abused its

discretion in refusing to dismiss the Delfin Petition, which

does not contain the required number of signatures. In light

of these claims, the instant case may likewise be treated as a

special civil action for certiorari under Section I of Rule 65

of the Rules of Court.

In any event, as correctly pointed out by intervenor Roco in

his Memorandum, this Court may brush aside technicalities

of procedure in

cases of transcendental importance. As we stated

in Kilosbayan, Inc. v. Guingona, Jr. 28

A party's standing before this Court is a

procedural technicality which it may, in

the exercise of its discretion, set aside in

view of the importance of issues raised. In

the landmark Emergency Powers Cases,

this Court brushed aside this technicality

because the transcendental importance to

the public of these cases demands that

they be settled promptly and definitely,

brushing aside, if we must, technicalities

of procedure.

II

R.A. NO. 6735 INTENDED TO INCLUDE THE

SYSTEM OF INITIATIVE ON AMENDMENTS

TO THE CONSTITUTION, BUT IS,

UNFORTUNATELY, INADEQUATE TO

COVER THAT SYSTEM.

Section 2 of Article XVII of the Constitution provides:

Sec. 2. Amendments to this Constitution

may likewise be directly proposed by the

people through initiative upon a petition of

at least twelve per centum of the total

number of registered voters, of which

every legislative district must be

represented by at least three per centum of

the registered voters therein. No

amendment under this section shall be

authorized within five years following the

ratification of this Constitution nor oftener

than once every five years thereafter.

The Congress shall provide for the implementation of the

exercise of this right.

This provision is not self-executory. In his book, 29

Joaquin

Bernas, a member of the 1986 Constitutional Commission,

stated:

Without implementing legislation Section

2 cannot operate. Thus, although this

mode of amending the Constitution is a

mode of amendment which bypasses

congressional action, in the last analysis it

still is dependent on congressional action.

Bluntly stated, the right of the people to directly

propose amendments to the Constitution through

the system of initiative would remain entombed in

the cold niche of the Constitution until Congress

provides for its implementation. Stated otherwise,

while the Constitution has recognized or granted

that right, the people cannot exercise it if Congress,

for whatever reason, does not provide for its

implementation.

This system of initiative was originally included in Section 1

of the draft Article on Amendment or Revision proposed by

the Committee on Amendments and Transitory Provisions

of the 1986 Constitutional Commission in its Committee

Report No. 7 (Proposed Resolution No. 332). 30

That section

reads as follows:

Sec. 1. Any amendment to, or revision of, this Constitution

may be proposed:

(a) by the National Assembly upon a vote

of three-fourths of all its members; or

(b) by a constitutional convention; or

(c) directly by the people themselves thru

initiative as provided for in Article___

Section ___of the Constitution. 31

After several interpellations, but before the period

of amendments, the Committee submitted a new

formulation of the concept of initiative which it

denominated as Section 2;

The people may, after five years from the

date of the last plebiscite held, directly

propose amendments to this Constitution

thru initiative upon petition of at least ten

percent of the registered voters.

This completes the blanks appearing in the

original Committee Report No. 7. 32

The interpellations on Section 2 showed that the details for

carrying out Section 2 are left to the legislature.

It was made clear during the interpellations that the

aforementioned Section 2 is limited to proposals to AMEND

— not to REVISE — the Constitution;

Amendments to the proposed Section 2 were thereafter

introduced by then Commissioner Hilario G. Davide, Jr.,

which the Committee accepted.

The interpellations which ensued on the proposed modified

amendment to Section 2 clearly showed that it was a

legislative act which must implement the exercise of the

right.

Commissioner Davide also reaffirmed that his modified

amendment strictly confines initiative to AMENDMENTS

to — NOT REVISION of — the Constitution.

Commissioner Davide further emphasized that the process

of proposing amendments through initiative must be more

rigorous and difficult than the initiative on legislation.

The Davide modified amendments to Section 2 were

subjected to amendments, and the final version, which the

Commission approved by a vote of 31 in favor and 3

against, reads as follows:

MR. DAVIDE. Thank you Madam President.

Section 2, as amended, reads as follows:

"AMENDMENT TO THIS CONSTITUTION

MAY LIKEWISE BE DIRECTLY PROPOSED

BY THE PEOPLE THROUGH INITIATIVE

UPON A PETITION OF AT LEAST TWELVE

PERCENT OF THE TOTAL NUMBER OF

REGISTERED VOTERS, OF WHICH EVERY

LEGISLATIVE DISTRICT MUST BE

REPRESENTED BY AT LEAST THREE

PERCENT OF THE REGISTERED VOTERS

THEREOF. NO AMENDMENT UNDER THIS

SECTION SHALL BE AUTHORIZED WITHIN

FIVE YEARS FOLLOWING THE

RATIFICATION OF THIS CONSTITUTION

NOR OFTENER THAN ONCE EVERY FIVE

YEARS THEREAFTER.

THE NATIONAL ASSEMBLY SHALL BY

LAW PROVIDE

FOR THE IMPLEMENTATION OF THE

EXERCISE OF THIS RIGHT. 40

The entire proposed Article on Amendments or

Revisions was approved on second reading on 9

July 1986.41

Thereafter, upon his motion for

reconsideration, Commissioner Gascon was

allowed to introduce an amendment to Section 2

which, nevertheless, was withdrawn. In view

thereof, the Article was again approved on Second

and Third Readings on 1 August 1986. 42

However, the Committee on Style recommended that the

approved Section 2 be amended by changing "percent"

to "per centum" and "thereof" to "therein" and deleting the

phrase "by law" in the second paragraph so that said

paragraph reads: The Congress 43

shall provide for the

implementation of the exercise of this right. 44

This

amendment was approved and is the text of the present

second paragraph of Section 2.

The conclusion then is inevitable that, indeed, the system of

initiative on the Constitution under Section 2 of Article

XVII of the Constitution is not self-executory.

Has Congress "provided" for the implementation of the

exercise of this right? Those who answer the question in the

affirmative, like the private respondents and intervenor

Senator Roco, point to us R.A. No. 6735.

There is, of course, no other better way for Congress to

implement the exercise of the right than through the passage

of a statute or legislative act. This is the essence or rationale

of the last minute amendment by the Constitutional

Commission to substitute the last paragraph of Section 2 of

Article XVII then reading:

The Congress 45

shall by law provide for the

implementation of the exercise of this right. with

The Congress shall provide for the implementation of

the exercise of this right.

This substitute amendment was an investiture on

Congress of a power to provide for the rules

implementing the exercise of the right. The "rules"

means "the details on how [the right] is to be carried

out." 46

We agree that R.A. No. 6735 was, as its history reveals,

intended to cover initiative to propose amendments to the

Constitution. The Act is a consolidation of House Bill No.

21505 and Senate Bill No. 17. The former was prepared by

the Committee on Suffrage and Electoral Reforms of the

House of Representatives on the basis of two House Bills

referred to it, viz., (a) House Bill No. 497, 47

which dealt

with the initiative and referendum mentioned

in Sections 1 and 32 of Article VI of the Constitution; and

(b) House Bill No. 988, 48

which dealt with the subject

matter of House Bill No. 497, as well as with initiative and

referendum under Section 3 of Article X (Local

Government) and initiative provided for in Section 2 of

Article XVII of the Constitution. Senate Bill No. 17 49

solely

dealt with initiative and referendum concerning ordinances

or resolutions of local government units. The Bicameral

Conference Committee consolidated Senate Bill No. 17 and

House Bill No. 21505 into a draft bill, which was

subsequently approved on 8 June 1989 by the Senate 50

and

by the House of Representatives. 51

This approved bill is

now R.A. No. 6735.

But is R.A. No. 6735 a full compliance with the power and

duty of Congress to "provide for the implementation of the

exercise of the right?"

A careful scrutiny of the Act yields a negative answer.

First. Contrary to the assertion of public respondent

COMELEC, Section 2 of the Act does not suggest an

initiative on amendments to the Constitution. The said

section reads:

Sec. 2. Statement and Policy. — The

power of the people under a system of

initiative and referendum to directly

propose, enact, approve or reject, in whole

or in part, the Constitution, laws,

ordinances, or resolutions passed by any

legislative body upon compliance with the

requirements of this Act is hereby

affirmed, recognized and guaranteed.

(Emphasis supplied).

The inclusion of the word "Constitution" therein

was a delayed afterthought. That word is neither

germane nor relevant to said section, which

exclusively relates to initiative and referendum on

national laws and local laws, ordinances, and

resolutions. That section is silent as

to amendments on the Constitution. As pointed out

earlier, initiative on the Constitution is confined

only to proposals to AMEND. The people are not

accorded the power to "directly propose, enact,

approve, or reject, in whole or in part, the

Constitution" through the system of initiative. They

can only do so with respect to "laws, ordinances, or

resolutions."

The foregoing conclusion is further buttressed by the fact

that this section was lifted from Section 1 of Senate Bill No.

17, which solely referred to a statement of policy on local

initiative and referendum and appropriately used the phrases

"propose and enact," "approve or reject" and "in whole or in

part." 52

Second. It is true that Section 3 (Definition of Terms) of the

Act defines initiative on amendments to the Constitution and

mentions it as one of the three systems of initiative, and that

Section 5 (Requirements) restates the constitutional

requirements as to the percentage of the registered voters

who must submit the proposal. But unlike in the case of the

other systems of initiative, the Act does not provide for the

contents of a petition forinitiative on the Constitution.

Section 5, paragraph (c) requires, among other things,

statement of the proposed law sought to be enacted,

approved or rejected, amended or repealed, as the case may

be. It does not include, as among the contents of the petition,

the provisions of the Constitution sought to be amended, in

the case of initiative on the Constitution. Said paragraph (c)

reads in full as follows:

(c) The petition shall state the following:

c.1 contents or text of the proposed

law sought to be enacted, approved or

rejected, amended or repealed, as the case

may be;

c.2 the proposition;

c.3 the reason or reasons therefor;

c.4 that it is not one of the exceptions

provided therein;

c.5 signatures of the petitioners or

registered voters; and

c.6 an abstract or summary proposition is

not more than one hundred (100) words

which shall be legibly written or printed at

the top of every page of the petition.

(Emphasis supplied).

The use of the clause "proposed laws sought to be

enacted, approved or rejected, amended or

repealed" only strengthens the conclusion that

Section 2, quoted earlier, excludes initiative on

amendments to the Constitution.

Third. While the Act provides subtitles for National

Initiative and Referendum (Subtitle II) and for Local

Initiative and Referendum (Subtitle III), no subtitle is

provided for initiative on the Constitution. This conspicuous

silence as to the latter simply means that the main thrust of

the Act is initiative and referendum on national and local

laws. If Congress intended R.A. No. 6735 to fully provide

for the implementation of the initiative on amendments to

the Constitution, it could have provided for a subtitle

therefor, considering that in the order of things, the primacy

of interest, or hierarchy of values, the right of the people to

directly propose amendments to the Constitution is far more

important than the initiative on national and local laws.

We cannot accept the argument that the initiative on

amendments to the Constitution is subsumed under the

subtitle on National Initiative and Referendum because it is

national in scope. Our reading of Subtitle II (National

Initiative and Referendum) and Subtitle III (Local Initiative

and Referendum) leaves no room for doubt that the

classification is not based on the scope of the initiative

involved, but on its nature and character. It is "national

initiative," if what is proposed to be adopted or enacted is

a national law, or a law which only Congress can pass. It is

"local initiative" if what is proposed to be adopted or

enacted is a law, ordinance, or resolution which only the

legislative bodies of the governments of the autonomous

regions, provinces, cities, municipalities, and barangays can

pass. This classification of initiative

into national and local is actually based on Section 3 of the

Act, which we quote for emphasis and clearer

understanding:

Sec. 3. Definition of terms —

xxx xxx xxx

There are three (3) systems of initiative, namely:

a.1 Initiative on the Constitution which

refers to a petition proposing amendments

to the Constitution;

a.2 Initiative on Statutes which refers to a

petition proposing to enact a national

legislation; and

a.3 Initiative on local legislation which

refers to a petition proposing to enact a

regional, provincial, city, municipal, or

barangay law, resolution or ordinance.

(Emphasis supplied).

Hence, to complete the classification under subtitles there

should have been a subtitle on initiative on amendments to

the Constitution. 53

A further examination of the Act even reveals that the

subtitling is not accurate. Provisions not germane to the

subtitle on National Initiative and Referendum are placed

therein, like (1) paragraphs (b) and (c) of Section 9, which

reads:

(b) The proposition in an initiative on the Constitution

approved by the majority of the votes cast in the

plebiscite shall become effective as to the day of the

plebiscite.

(c) A national or local initiative proposition approved

by majority of the votes cast in an election called for

the purpose shall become effective fifteen (15) days

after certification and proclamation of the

Commission. (Emphasis supplied).

(2) that portion of Section 11 (Indirect Initiative) referring to

indirect initiative with the legislative bodies of local

governments; thus:

Sec. 11. Indirect Initiative. — Any duly accredited

people's organization, as defined by law, may file a

petition for indirect initiative with the House of

Representatives, and other legislative bodies. . . .

and (3) Section 12 on Appeal, since it applies to

decisions of the COMELEC on the findings of

sufficiency or insufficiency of the petition for

initiative or referendum, which could be petitions

for both national and localinitiative and

referendum.

Upon the other hand, Section 18 on "Authority of Courts"

under subtitle III on Local Initiative and Referendum is

misplaced, 54

since the provision therein applies to both

national and local initiative and referendum. It reads:

Sec. 18. Authority of Courts. — Nothing

in this Act shall prevent or preclude the

proper courts from declaring null and void

any proposition approved pursuant to this

Act for violation of the Constitution or

want of capacity of the local legislative

body to enact the said measure.

Curiously, too, while R.A. No. 6735 exerted utmost

diligence and care in providing for the details in the

implementation of initiative and referendum on national and

local legislation thereby giving them special attention, it

failed, rather intentionally, to do so on the system of

initiative on amendments to the Constitution. Anent the

initiative on national legislation, the Act provides for the

following:

(a) The required percentage of registered voters to sign the

petition and the contents of the petition;

(b) The conduct and date of the initiative;

(c) The submission to the electorate of the proposition and

the required number of votes for its approval;

(d) The certification by the COMELEC of the approval of

the proposition;

(e) The publication of the approved proposition in the

Official Gazette or in a newspaper of general circulation in

the Philippines; and

(f) The effects of the approval or rejection of the

proposition. 55

As regards local initiative, the Act provides for the

following:

(a) The preliminary requirement as to the number of

signatures of registered voters for the petition;

(b) The submission of the petition to the local legislative

body concerned;

(c) The effect of the legislative body's failure to favorably

act thereon, and the invocation of the power of initiative as a

consequence thereof;

(d) The formulation of the proposition;

(e) The period within which to gather the signatures;

(f) The persons before whom the petition shall be signed;

(g) The issuance of a certification by the COMELEC

through its official in the local government unit concerned

as to whether the required number of signatures have been

obtained;

(h) The setting of a date by the COMELEC for the

submission of the proposition to the registered voters for

their approval, which must be within the period specified

therein;

(i) The issuance of a certification of the result;

(j) The date of effectivity of the approved proposition;

(k) The limitations on local initiative; and

(l) The limitations upon local legislative bodies. 56

Upon the other hand, as to initiative on amendments to the

Constitution, R.A. No. 6735, in all of its twenty-three

sections, merely (a) mentions, the word "Constitution" in

Section 2; (b) defines "initiative on the Constitution" and

includes it in the enumeration of the three systems of

initiative in Section 3; (c) speaks of "plebiscite" as the

process by which the proposition in an initiative on the

Constitution may be approved or rejected by the people; (d)

reiterates the constitutional requirements as to the number of

voters who should sign the petition; and (e) provides for the

date of effectivity of the approved proposition.

There was, therefore, an obvious downgrading of the more

important or the paramount system of initiative. RA. No.

6735 thus delivered a humiliating blow to the system of

initiative on amendments to the Constitution by merely

paying it a reluctant lip service. 57

The foregoing brings us to the conclusion that R.A. No.

6735 is incomplete, inadequate, or wanting in essential

terms and conditions insofar as initiative on amendments to

the Constitution is concerned. Its lacunae on this substantive

matter are fatal and cannot be cured by "empowering" the

COMELEC "to promulgate such rules and regulations as

may be necessary to carry out the purposes of [the] Act. 58

The rule is that what has been delegated, cannot be

delegated or as expressed in a Latin maxim: potestas

delegata non delegari potest. 59

The recognized exceptions

to the rule are as follows:

(1) Delegation of tariff powers to the President under

Section 28(2) of Article VI of the Constitution;

(2) Delegation of emergency powers to the President under

Section 23(2) of Article VI of the Constitution;

(3) Delegation to the people at large;

(4) Delegation to local governments; and

(5) Delegation to administrative bodies. 60

Empowering the COMELEC, an administrative body

exercising quasi-judicial functions, to promulgate rules and

regulations is a form of delegation of legislative authority

under no. 5 above. However, in every case of permissible

delegation, there must be a showing that the delegation itself

is valid. It is valid only if the law (a) is complete in itself,

setting forth therein the policy to be executed, carried out, or

implemented by the delegate; and (b) fixes a standard — the

limits of which are sufficiently determinate and

determinable — to which the delegate must conform in the

performance of his functions. 61

A sufficient standard is one

which defines legislative policy, marks its limits, maps out

its boundaries and specifies the public agency to apply it. It

indicates the circumstances under which the legislative

command is to be effected. 62

Insofar as initiative to propose amendments to the

Constitution is concerned, R.A. No. 6735 miserably failed to

satisfy both requirements in subordinate legislation. The

delegation of the power to the COMELEC is then invalid.

III

COMELEC RESOLUTION NO. 2300, INSOFAR

AS IT PRESCRIBES RULES AND

REGULATIONS ON THE CONDUCT OF

INITIATIVE ON AMENDMENTS TO THE

CONSTITUTION, IS VOID.

It logically follows that the COMELEC cannot validly

promulgate rules and regulations to implement the exercise

of the right of the people to directly propose amendments to

the Constitution through the system of initiative. It does not

have that power under R.A. No. 6735. Reliance on the

COMELEC's power under Section 2(1) of Article IX-C of

the Constitution is misplaced, for the laws and regulations

referred to therein are those promulgated by the COMELEC

under (a) Section 3 of Article IX-C of the Constitution, or

(b) a law where subordinate legislation is authorized and

which satisfies the "completeness" and the "sufficient

standard" tests.

IV

COMELEC ACTED WITHOUT JURISDICTION

OR WITH GRAVE ABUSE OF DISCRETION IN

ENTERTAINING THE DELFIN PETITION.

Even if it be conceded ex gratia that R.A. No. 6735 is a full

compliance with the power of Congress to implement the

right to initiate constitutional amendments, or that it has

validly vested upon the COMELEC the power of

subordinate legislation and that COMELEC Resolution No.

2300 is valid, the COMELEC acted without jurisdiction or

with grave abuse of discretion in entertaining the Delfin

Petition.

Under Section 2 of Article XVII of the Constitution and

Section 5(b) of R.A. No. 6735, a petition for initiative on the

Constitution must be signed by at least 12% of the total

number of registered voters of which every legislative

district is represented by at least 3% of the registered voters

therein. The Delfin Petition does not contain signatures of

the required number of voters. Delfin himself admits that he

has not yet gathered signatures and that the purpose of his

petition is primarily to obtain assistance in his drive to

gather signatures. Without the required signatures, the

petition cannot be deemed validly initiated.

The COMELEC acquires jurisdiction over a petition for

initiative only after its filing. The petition then is

theinitiatory pleading. Nothing before its filing is

cognizable by the COMELEC, sitting en banc. The only

participation of the COMELEC or its personnel before the

filing of such petition are (1) to prescribe the form of the

petition; 63

(2) to issue through its Election Records and

Statistics Office a certificate on the total number of

registered voters in each legislative district; 64

(3) to assist,

through its election registrars, in the establishment of

signature stations; 65

and (4) to verify, through its election

registrars, the signatures on the basis of the registry list of

voters, voters' affidavits, and voters' identification cards

used in the immediately preceding election. 66

Since the Delfin Petition is not the initiatory petition under

R.A. No. 6735 and COMELEC Resolution No. 2300, it

cannot be entertained or given cognizance of by the

COMELEC. The respondent Commission must have known

that the petition does not fall under any of the actions or

proceedings under the COMELEC Rules of Procedure or

under Resolution No. 2300, for which reason it did not

assign to the petition a docket number. Hence, the said

petition was merely entered as UND, meaning, undocketed.

That petition was nothing more than a mere scrap of paper,

which should not have been dignified by the Order of 6

December 1996, the hearing on 12 December 1996, and the

order directing Delfin and the oppositors to file their

memoranda or oppositions. In so dignifying it, the

COMELEC acted without jurisdiction or with grave abuse

of discretion and merely wasted its time, energy, and

resources.

The foregoing considered, further discussion on the issue of

whether the proposal to lift the term limits of elective

national and local officials is an amendment to, and not

a revision of, the Constitution is rendered unnecessary, if not

academic.

CONCLUSION

This petition must then be granted, and the COMELEC

should be permanently enjoined from entertaining or taking

cognizance of any petition for initiative on amendments to

the Constitution until a sufficient law shall have been validly

enacted to provide for the implementation of the system.

We feel, however, that the system of initiative to propose

amendments to the Constitution should no longer be kept in

the cold; it should be given flesh and blood, energy and

strength. Congress should not tarry any longer in complying

with the constitutional mandate to provide for the

implementation of the right of the people under that system.

WHEREFORE, judgment is hereby rendered

a) GRANTING the instant petition;

b) DECLARING R.A. No. 6735 inadequate to cover the

system of initiative on amendments to the Constitution, and

to have failed to provide sufficient standard for subordinate

legislation;

c) DECLARING void those parts of Resolution No. 2300 of

the Commission on Elections prescribing rules and

regulations on the conduct of initiative or amendments to the

Constitution; and

d) ORDERING the Commission on Elections to forthwith

DISMISS the DELFIN petition (UND-96-037).

The Temporary Restraining Order issued on 18 December

1996 is made permanent as against the Commission on

Elections, but is LIFTED as against private respondents.

Resolution on the matter of contempt is hereby reserved.

SO ORDERED.

G.R. Nos. 145156-57. July 29, 2005

SOLID HOMES, INC., Petitioners,

vs.

SPOUSES ANCHETA K. TAN and CORAZON DE

JESUS TAN, Respondents.

In this appeal by way of a petition for review

on certiorari under Rule 45 of the Rules of Court, petitioner

Solid Homes, Inc. urges us to nullify and set aside the

following issuances of the Court of Appeals in CA-G.R. SP

No. 53443 and 55324, to wit:

1. Decision dated May 23, 2000,1 setting aside an earlier

decision of the Office of the President in a complaint for

breach of obligation filed by the herein respondents against

the petitioner in connection with the sale of a subdivision

lot; and

2. Resolution dated September 12, 2000,2 denying

petitioner’s motion for reconsideration.

The material facts, undisputed by the parties, may be briefly

stated, as follows:

On April 7, 1980, petitioner Solid Homes, Inc., sold to the

spouses Joe Uy and Myrna Uy a subdivision lot with an area

of 1,069 square meters, more particularly identified as Lot

18, Block 2, located at petitioner’s Loyola Grand Villas

Subdivision, Quezon City. Thereafter, the lot was registered

in the name of the Uys under Transfer Certificate of Title

(TCT) No. 280963/T-1409 of the Register of Deeds of

Quezon City.

Sometime in February, 1985, the spouses Uy sold the same

lot to herein respondents, the spouses Ancheta K. Tan and

Corazon de Jesus-Tan, by reason of which the former title

covering the lot was cancelled and replaced by TCT No.

RT-14465 (327754) in respondents’ name.

From then on, respondents visited their property a number

of times, only to find out the sad state of development

thereat. There was no infrastructure and utility systems for

water, sewerage, electricity and telephone, as announced in

the approved plans and advertisements of the subdivision.

Worse, squatters occupy their lot and its surrounding areas.

In short, there has been no development at all.

Accordingly, in a letter dated December 18, 1995,

respondents demanded on petitioner to provide the needed

utility systems and clear the area of squatters and other

obstructions by the end of January, 1996 to enable them to

start the construction of their house thereon and to allow

other lot owners in the area a full access to and peaceful

possession of their respective lots, conformably with P.D.

No. 957 which requires an owner or developer of a

subdivision project to develop the same within one year

from the issuance of its license.

Having received no reply from petitioner, respondents filed

with the Field Office of the Housing and Land Use

Regulatory Board (HLURB), NCR a complaint for specific

performance and damages therein praying, inter alia, that

petitioner be ordered to provide the needed facilities in the

premises and rid the same of squatters; or, in the alternative,

for petitioner to replace respondents’ property with another

lot in the same subdivision where there are facilities

and sans squatters.

After due proceedings, the Housing and Land Use Arbiter,

in a decision dated September 17, 1996,3 rendered judgment

for the respondents by directing petitioner:

a. to perform its obligation to provide subdivision facilities

in the subject premises and to rid the premises of squatters.

In the alternative, at the option of complainants xxx to

replace subject lot with a lot of similar size and with

available facilities, located in the subject subdivision.

b. to pay complainants P20,000.00 as and by way of

attorney’s fees.

In the same decision, the Arbiter dismissed the complaint

against petitioner’s co-defendant, Purita Soliven.

Dissatisfied, petitioner went on appeal to the HLURB Board

of Commissioners, which, in a decision dated April 16,

1997,4 affirmed that of the Arbiter.

From there, petitioner elevated the case to the Office of the

President (O.P.).

In a decision5 dated June 3, 1999, the O.P., thru then

Executive Secretary Ronaldo B. Zamora, affirmed with

modification the appealed decision of the HLURB Board of

Commissioners, thus:

WHEREFORE, premises considered, the first paragraph of

the decision appealed from is hereby AFFIRMED with the

modification that in case Solid Homes, Inc. fails to replace

subject lot with a lot of similar size and with available

facilities located in the subdivision, because it had already

sold or transferred all of its properties in the subdivision, it

shall pay spouses Ancheta Tan and Corazon Tan the total

amount received from them as purchase price, with legal

rate of interest from February 1985, until fully paid. Save

for this modification, the decision appealed from is

hereby AFFIRMED.

SO ORDERED (Italics, ours).

On June 25, 1999, respondents filed a motion for partial

reconsideration of the aforementioned decision, praying for

the deletion of that portion thereof giving petitioner the

option of merely paying them the purchase price with

interest in the event petitioner "fails to replace subject lot

with a lot of similar size and with available facilities located

in the subdivision, because it had already sold or

transferred all of its properties in the

subdivision."Respondents argued that it would be more in

accord with equity and fair play if they will be paid the fair

market value of the lot in question and not merely its

purchase price, should there be no available lot with

facilities in the area.

However, in a resolution dated September 22, 1999,6 O.P.

denied respondents’ motion.

Both parties then went to the Court of Appeals via their

respective petitions for review, thereat separately docketed

as CA- G.R. SP No. 53443 (for petitioners) and CA-G.R.

SP No. 55324 (for respondent). Pursuant to Section 1, Rule

31 of the Rules of the Court, the appellate court ordered the

consolidation of the two (2) petitions.

As stated at the threshold hereof, the Court of Appeals, in its

consolidated decision dated May 23, 2000,7 set aside that

of the O.P. and affirmed the earlier decision dated April 16,

1997 of the HLURB Board of Commissioners, but subject to

the modification that petitioner shall pay respondents

the current market value of the lot, not merely its purchase

price, should there be no more available lots with facilities

in petitioner’s Loyola Grand Villas Subdivision. We quote

the decretal portion of the appellate court’s decision:

WHEREFORE, Premises Considered, the assailed Decision

dated 03 June 1999 is hereby SET ASIDE and the Decision

of the HLURB dated 16 April 1997 is

hereby AFFIRMED subject to the modification that if there

is no more available lot in Loyola Grand Villas to replace

subject lot, Solid Homes, Inc. should pay the spouses Tan

the current market value of their lot.

SO ORDERED.

This time, petitioner moved for reconsideration but its

motion was denied by the same court in its resolution of

September 12, 2000.8

Hence, petitioner’s present recourse, contending that the

Court of Appeals erred –

1. XXX IN RULING THAT PRESCRIPTION HAS NOT

SET-IN;

2. XXX IN APPLYING THE PRINCIPLE ON EQUITY AS

AGAINST POSITIVE LAW TO THE PREJUDICE OF

HEREIN PETITIONER; AND

3. XXX IN RULING THAT PETITIONER SHOULD PAY

RESPONDENTS THE CURRENT MARKET VALUE OF

THE LOT IN QUESTION.

We DENY.

The errors assigned actually simmered down to only two (2)

issues, namely: (1) whether or not respondents’ right to

bring the instant case against petitioner has already

prescribed; and (2) in the event respondents opt to rescind

the contract, should petitioner pay them merely the price

they paid for the lot plus interest or the current market value

thereof.

In the matter of prescription, it is petitioner’s posture that

respondents’ right to bring the action against it has already

prescribed, arguing that the 10-year prescriptive period

therefor should be reckoned from April 7, 1980 when

petitioner originally sold the lot in question to the spouses

Joe Uy and Myrna Uy, or, at the latest from February, 1985,

when respondents acquired the same lot from the Uy

spouses. Hence, and as respondents’ action was filed with

the HLURB Field Office only on April 1, 1996 or after more

than ten (10) years, it follows that the same was filed out of

time and, therefore, ought to have been dismissed.

We disagree.

There can be no debate at all on the legal postulate that the

prescriptive period for bringing action for specific

performance, as here, prescribes in ten (10) years. This is so

provided in Article 1144 of the Civil Code. What we cannot

agree on with the petitioner, and about which petitioner is in

serious error, is its submission that the 10-year prescriptive

period should commence either on April 7, 1980, when

petitioner originally sold the lot to spouses Uy; or in

February, 1985, when the respondents thereafter bought the

same lot from the Uy couple. Obviously, petitioner misread

Article 1144 which specifically provides that the 10-year

period therein referred to commences to run only from the

time the right of action accrues. We quote in full the codal

provision relied upon by petitioner:

Article 1144. The following actions must be brought

within ten years from the time the right of action

accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment (Emphasis supplied).

If not on a written contract, petitioner’s obligation to

introduce improvements on the area in question arises from

law, more specifically P.D. 957, as amended by P.D. 1216,

Section 31 of which pertinently reads:

SECTION 31. Roads, Alleys, Sidewalks and Open Spaces. –

The owner as developer of a subdivision shall provide

adequate roads, alleys and sidewalks. For subdivision

projects one (1) hectare or more, the owner or developer

shall reserve thirty percent (30%) of the gross area for open

space.

The next inquiry, then, is when the respondents’ cause of

action accrued. Our earlier ruling in Banco Filipino Savings

and Mortgage Bank vs. CA9 provides the answer:

Thus, the period of prescription of any action is reckoned

only from the date the cause of action accrued. And a cause

of action arises when that which should have been done

is not done, or that which should not have been done is

done. The period should not be made to retroact to the date

of execution of the contract on January 15, 1975 as claimed

by the petitioner for at that time, there would be no way for

the respondents to know of the violation of their rights. The

Court of Appeals therefore correctly found that respondents’

cause of action accrued on October 30, 1978, the date they

received the statement of account showing the increased rate

of interest, for it was only from that moment that they

discovered the petitioner’s unilateral increase thereof. We

quote with approval the pertinent portions of the Court of

Appeals decision as follows:

It is the legal possibility of bringing the action that

determines the starting point for the computation of the

period of prescription.10

In fine, the ten-year prescriptive

period is to be reckoned from the accrual of the Appellee’s

right of action, not necessarily on the very date of the

execution of the contracts subject of the action11

(Emphasis

supplied)

In law, a cause of action exists when the following requisites

concur, to wit: (1) a right in favor of the plaintiff by

whatever means and under whatever law it arises or is

created; (2) an obligation on the part on the defendant to

respect such right; and (3) an act or omission on the part of

such defendant violative of the right of the plaintiff.12

Time and again, we have emphasized that it is only upon the

happening of the last element when it can be said that a

cause of action has arisen. In short, it is from the time an act

is performed or an omission incurred which is violative of

the plaintiff’s right, that signals the accrual of a cause of

action. And it is from that time that the 10-year prescriptive

period commences to run.

Here, it was only on December 18, 1995 when respondents

made a written demand upon petitioner to construct

subdivision roads, put up utility facilities and rid the

premises of squatters, obligations which are unquestionably

in the nature of an obligation to do. And under Article

116913

of the Code, a party who is under obligation to do

something incurs delay only from the time that the obligee

demands, either judicially or extrajudicially, for the

fulfillment of the obligation.

Parenthetically, and as we have said in Social Security

System vs. Moonwalk Development and Housing

Corporation, et al.,14

an obligor violates his obligation to the

obligee from the time the latter made a demand for

performance, which demand also marks the point of time

when the former incurs mora or delay:

The debtor, therefore, violates the obligation in point of time

if there is mora or delay. Now, there is no mora or delay

unless there is a demand. It is noteworthy that in the present

case during all the period when the principal obligation was

still subsisting, although there were late amortizations there

was no demand made by the creditor, plaintiff-appellant for

the payment of the penalty. Therefore up to the time of the

letter of plaintiff-appellant there was no demand for the

payment of the penalty, hence the debtor was not in mora in

the payment of the penalty.

Hence, absent any demand from the obligee, the obligor

does not incur delay. And so long as the obligor does not

incur in delay, he cannot be said to be guilty of some

omission violative of the obligee’s rights. Consequently, as

long as the obligor is not guilty of some omission violative

of the obligee’s rights, the latter has no cause of action

against the former. As a result, the prescriptive period within

which the obligee may bring an action against the obligor

does not commence to run until a demand is made.

With the reality that in this case, respondents made their

written demand upon petitioner to perform what is

incumbent upon it only on December 18, 1995, it was only

from that date when the 10-year prescriptive period under

Article 1144 commenced to run. And since respondents’

complaint for specific performance was filed with the Field

Office of the HLURB only on April 1, 1996, or less than

four (4) months after the date of their demand, petitioner’s

reliance on prescription of action is simply without any leg

to stand on.

This brings us to the second question.

Petitioner submits as erroneous the appellate court’s ruling

that "[e]quity and justice dictate that the injured party

should be paid the market value of the lot, otherwise,

respondents Solid Homes, Inc. & Purita Soliven would

enrich themselves at the expense of herein lot owners when

they sell the same lot at the present market value".To

petitioner, equity may be availed of only in the absence of

and never against statutory law or judicial rules of

procedure. It then invokes Article 1385 of the New Civil

Code, which provides:

Article 1385. Rescission creates the obligation to return the

things which were the object of the contract, together with

their fruits, and the price with its interests; consequently, it

can be carried out only when he who demands rescission

can return whatever he may be obliged to restore.

On surface, petitioner’s argument appears infallible.

However, a closer look at our laws and the reason and spirit

behind their enactment, as well as established jurisprudence,

negates petitioner’s thesis.

It is true that this Court have, in the past, applied the

provision of Article 1385 to cases of rescission due to

breach of obligation under Article 1191.15

But this

notwithstanding, the Court finds no reason to alter the ruling

of the Court of Appeals.

In many instances, this Court has refused to apply the literal

import of a particular provision of law when to do so would

lead to unjust, unfair and absurd results. After all, it is the

function of courts to see to it that justice is dispensed,

fairness is observed and absurdity prevented. So it is that

in Commissioner of Internal Revenue vs. Solidbank

Corporation,16

we made the following pronouncement:

A literal application of any part of a statute is to be

rejected if it will operate unjustly, lead to absurd results,

or contradict the evident meaning of the statute taken as

a whole. Unlike the CA, we find that the literal application

of the aforesaid sections of the Tax Code and its

implementing regulations does not operate unjustly or

contradict the evident meaning of the statute taken as a

whole. Neither does it lead to absurd results. Indeed, our

courts are not to give words meanings that would lead to

absurd or unreasonable consequences. We have repeatedly

held thus:

xxx [Statutes should receive a sensible construction, such

as will give effect to the legislative intention and so as to

avoid an unjust or an absurd conclusion. (Emphasis

supplied.)

Were we to follow the letter of Article 1385, we will in

effect be paving the way to an absurd situation whereby

subdivision developers who have reneged on their

contractual and legal obligation to provide utility systems

and facilities for the use of subdivision lot owners may

themselves profit from their very own wrongs and

shortcomings. In the curt language of the Court of Appeals,

to which we are in full accord:

Indeed, there would be unjust enrichment if

respondents Solid Homes, Inc. & Purita Soliven are made to

pay only the purchase price plus interest. It is definite that

the value of the subject property already escalated after

almost two decades from the time the petitioner paid for it.

Equity and justice dictate that the injured party should be

paid the market value of the lot, otherwise, respondents

Solid Homes, Inc. & Purita Soliven would enrich

themselves at the expense of herein lot owners when they

sell the same lot at the present market value. Surely, such a

situation should not be countenanced for to do so would be

contrary to reason and therefore, unconscionable. Over time,

courts have recognized with almost pedantic adherence that

what is inconvenient or contrary to reason is not allowed in

law.

The foregoing scenario becomes even more intolerable

when it is considered that P.D. 959 was issued precisely as a

measure against subdivision owners, developers, operators

and/or sellers who reneged on their obligation to provide the

needed utility systems and facilities in their subdivisions. As

expressed in one of the decree’s whereas clauses:

WHEREAS, numerous reports reveal that many real estate

subdivision owners, developers, operators and/or sellers

have reneged on their representations and obligations to

provide and maintain properly subdivision roads, drainage,

sewerage, water systems, lighting systems, and other similar

basic requirements, thus endangering the health and safety

of home and lot buyers.

WHEREFORE, the instant petition is DENIED and the

assailed decision and resolution of the Court of Appeals

AFFIRMED.

G.R. No. L-30458 August 31, 1976

FRANCISCO Q. BOCOBO, petitioner,

vs.

VICENTE M. ESTANISLAO, Municipal Judge of

Balanga, Bataan; and JESUS MATIC respondents.

It is the assumption of jurisdiction over a criminal case for

libel by respondent Municipal Judge Vicente Estanislao1 of

Balanga, Bataan, that is assailed in this certiorari and

prohibition proceeding. The merit of the petition is apparent

if there be deference, as should be the case, to the ruling

in Jalandoni v. Endaya. 2 There was, according to the

petition, a criminal complaint for libel filed by private

respondent with the Municipal Court of Balanga, Bataan,

against petitioner, docketed as Criminal Case No.

1575. 3 Pursuant to such criminal complaint, respondent

Judge conducted a preliminary investigation. 4 Then came

the challenged order to the effect that the offense charged is

one that falls within the concurrent jurisdiction of the

municipal court of Balanga, Bataan, with the records of the

case being referred to the Provincial Fiscal of Bataan for the

filing of the corresponding information. 5 Subsequently, the

Provincial Fiscal of Bataan pursuant to such order of

respondent Judge, filed an information for libel against

petitioner in the Municipal Court of Balance Bataan. 6 A

plea of not guilty was entered by him upon

arraignment. 7 On the same day, in a motion to quash, he

raise the question of jurisdiction, his allegation being that it

is a court of first instance and not a municipal court that

could try the offense. 8Respondent Judge denied such

motion to quash. 9 The motion for reconsideration having

been filed and thereafter denied,10

this present petition was

filed. As noted at the outset, the Jalandoni doctrine is

decisive. Petitioner is entitled to the writs prayed for.

The initial impression yielded, even upon the most cursory

reading of the petition, was that it embodied a correct

appreciation of the applicable law, Article 360 of the

Revised Penal Code. 11

Accordingly, respondents were not

only inquired to answer, but a restraining order was issued.

There was nothing they could say in their subsequent

pleadings that militated against the assertion of petitioner as

to a court of first instance having exclusive jurisdiction.

Accordingly, as noted, we find for him.

1. The of the recent Jalandoni decision makes clear why this

petition should prosper. Thus: Mere is no need to make

mention again that it is a court of first instance that is

specifically designated to try a libel case Article 360 of the

Revised Penal Code so provides. Its language is categorical;

its meaning is free from doubt. This is one of those statutory

Provisions that leaves no room for interpretation. All that is

required is application. What the law ordains must then be

followed. It is as simple as that. It did not appear to be so to

respondent Judge. He would go ahead. He therefore did

invite a suit of this character bent as he was on treading

grounds where his presence was, to put it at its mildest,

unwelcome. He must be rescued. 12

It was likewise noted in

the Jalandoni decision that there has been as yet no previous

case where a municipal court "has been sustained in its

determination to go ahead and try on the merits a

prosecution for libel ..." 13

2. It is the contention of respondents that the alleged libel,

having arisen from a radio broadcast, is triable by a

municipal court, for in a later portion of Article 360 the

phrase 'by similar mean is not repeated thus leading them to

conclude that it is Only where there is "defamation in

writing' that there is conferment of exclusive jurisdiction in

a court of first instance. Such an argument does not carry

weight. It loses sight of the basic Purpose of the act, namely,

to prevent inconvenience or even harassment to those

unfortunate enough to be accused of libel, if any municipal

court where there was publication could be chosen by the

complainant as the venue. Since a radio broadcast may be

spread far and wide, much more so than in cases of

newspaper publications, it is not difficult to imagine how

deplorable the effect would be for one indicted for such an

offense even if he could rely on a sound and valid offense.

This is contrary to the legal tradition of the Philippines

dating back to the landmark case ofUnited States v.

Bustos, 14

where Justice Malcolm emphasized that to prevent

dilution of the constitutional right to free speech and free

press, every libel prosecution should be tested on the

rigorous and exacting standard of whether or not it could be

violative of such fundamental guarantee. It is a commitment,

to such a final postulate that is the basis of Article 360 as

amended. Its purpose is therefore crystal-clear. As noted

in Sarcos v. Castillo 15

It is fundamental that once the policy

or purpose of the law has been ascertained, effect should be

given to it by the judiciary. From Ty Sue v. Hord decided in

1909, it has been our constant holding that the choice

between conflicting theories falls on that which best accords

with the letter of the law and with its purpose. The next

year, in an equally leading decision, United States v.

Toribio, there was a caveat against a construction that would

tend 'to defeat the purpose and object of the legislator.' Then

came the admonition in Rivera v. Palmaroli against an

application so narrow 'as to defeat the manifest purpose of

the legislator.' This was repeated in the latest

case, Commissioner of Customs v. Caltex, in against

identical language. 16

Such an excerpt was quoted with

approval in Automotive Parts and Equipment Company v.

Lingad. 17

It is of the essence of judicial duty then to

construe statutes to reflect fidelity to such a concept. In the

apt language of Frankfurter: "A decent respect for the policy

of Congress must save us from imputing to it a self-

defeating, if not disingenuous purpose. 18

Certainly, we must

reject a construction that at best amounts to a manifestation

of verbal ingenuity but is certainly at war with the policy

enshrined in the law.

3. The further point was raised by respondents that under

Republic Act No. 3828, concurrent jurisdiction was

conferred on municipal judges in the capitals of provinces

with a court of first instance, in which the penalty provided

for by law does not exceed prision correccional or

imprisonment for not more than six years or a fine of

P6,000.00 or both, such fine or imprisonment being the

penalty for libel by means of radio broadcast as provided

under Article 355 of the Revised Penal Code. For then that

would mean that there was an implied repeal of the earlier

amendatory act, Republic Act No. 1289 vesting exclusive

jurisdiction on courts of first instance. Such a point was

raised and rejected in the Jalandoni opinion in these words:

"It suffices by way of refutation to call attention to the

doctrine on repeals by implication as set forth in the latest

case of Villegas v. Subido. Thus: 'It has been the constant

holding of this court that repeals by implication are not

favored and will not be so declared unless it be manifest that

the legislature so intended. Such a doctrine goes as far back

as United States v. Reyes, a 1908 decision. It is necessary

then before such a repeal is deemed to exist that it be shown

that the statutes or statutory provisions deal with the same

subject matter and that the latter be inconsistent with the

former. There must be a showing of repugnancy clear and

convincing in character. The language used in the latter

statute must be such as to render it irreconcilable with what

had been formerly enacted. An inconsistency that falls short

of that standard does not suffice. What is needed is a

manifest indication of the legislative purpose to repeal An

even more relevant excerpt from Villegas also follows:

'More specifically, a subsequent statute, general in character

as to its terms and application, is not to be construed as

repealing a special or specific enactment, unless the

legislative purpose to do so is manifest. This is so even if the

provisions of the latter are sufficiently comprehensive to

include what was set forth in the special act. This principle

has likewise been consistently applied in decisions of this

Court from Manila Railroad Co. v. Rafferty, decided as far

back as 1919." 19

That would seem to take care in a neat and

conclusive manner, of this last but futile effort to uphold

what was done by respondent Judge.

WHEREFORE, the writ of certiorari is granted and the

challenged orders of January 15, 1968 as well as of January

27, 1969 are nullified and set aside on the ground that the

exclusive jurisdiction of libel cases belongs to a court of

first instance. The writ of prohibition prayed for is likewise

granted and the restraining order issued by this Court is

made permanent, except for the purpose of dismissing the

case for lack of

G.R. No. 111651 November 28, 1996

OSMALIK S. BUSTAMANTE, PAULINO A.

BANTAYAN, FERNANDO L. BUSTAMANTE, MARIO

D. SUMONOD, and SABU J. LAMARAN, petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION,

FIFTH DIVISION, and EVERGREEN FARMS,

INC.respondents.

R E S O L U T I O N

PADILLA, J.:

On 15 March 1996, the Court (First Division) promulgated a

decision in this case, the dispositive part of which states:

WHEREFORE, the Resolution of the National Labor

Relations Commission dated 3 May 1993 is modified in

that its deletion of the award for backwages in favor of

petitioners, is SET ASIDE. The decision of the Labor

Arbiter dated 26 April 1991 is AFFIRMED with the

modification that backwages shall be paid to petitioners

from the time of their illegal dismissal on 25 June 1990

up to the date of their reinstatement. If reinstatement is

no longer feasible, a one-month salary shall be paid the

petitioners as ordered in the labor arbiter's decision, in

addition to the adjudged backwages.

Private respondent now moves to reconsider the decision on

grounds that (a) petitioners are not entitled to recover

backwages because they not actually dismissed but their

probationary employment was not converted to permanent

employment; and (b) assuming that petitioners are entitled

to backwages, computation thereof should not start from

cessation of work up to actual reinstatement, and that salary

earned elsewhere (during the period of illegal dismissal)

should be deducted from the award such backwages.

There is no compelling reason to reconsider the decision of

the Court (First Division) dated 15 March 1996. However,

we here clarify the computation of backwages due an

employee on account of his illegal dismissal from

employment.

This Court has, over the years, applied different methods in

the computation of backwages. The first labor relations law

governing the award of backwages was Republic Act No.

875, the Industrial Peace Act, approved on 17 June 1953.

Sections 5 and 15 thereof provided thus:

Sec. 5. Unfair Labor Practice Cases. —

(c) . . . If, after investigation, the Court shall be of the

opinion that any person named in the complaint has

engaged in or is engaging in any unfair labor practice,

then the Court shall state its findings of fact and shall

issue and cause to be served on such person an order

requiring such person to cease and desist from such

unfair labor practice and take such affirmative action

as will effectuate the policies of this Act, including

(but not limited to) reinstatement of employees with

or without back-pay and including rights of the

employees prior to dismissal including seniority.

. . . (emphasis supplied)

Sec. 15. Violation of Duty to Bargain Collectively.

— . . . Any employee whose work has stopped as a

consequence of such lockout shall be entitled to

back-pay. (emphasis supplied)

In accordance with these provisions, backpay (the same as

backwages) could be awarded where, in the opinion of the

Court of Industrial Relations (CIR), such was necessary to

effectuate the policies of the Industrial Peace

Act. 1 Only in one case was backpay a matter of right, that

was, when an employer had declared a lockout without

having first bargained collectively with his employees in

accordance with the provisions of the Act.

As the CIR was given wide discretion to grant or disallow

payment of backpay (backwages) to an employee, it also

had the implied power of mitigating (reducing) the backpay

where backpay was allowed. 2 Thus, in the exercise of its

jurisdiction, the CIR increased or diminished the award of

backpay, depending on several circumstances, among them,

the good faith of the employer, 3 the employee's

employment in other establishments during, the period of

illegal dismissal, or the probability that the employee could

have realized net earnings from outside employment if he

had exercised due diligence to search for outside

employment. 4 In labor cases decided during the effectivity

of R.A. No. 875, this Court acknowledged and upheld the

CIR's authority to deduct any amount from the employee's

backwages, 5 including the discretion to reduce such award

of backwages whatever earnings were obtained by the

employee elsewhere during the period of his illegal

dismissal. 6 In the case of Itogon-Suyoc Mines,

Inc. v. Sañgilo-Itogon Workers' Union, 7 this Court restated

the guidelines for determination of total backwages, thus:

First. To be deducted from the backwages accruing to

each of the laborers to be reinstated is the total amount

of earnings obtained by him from other employment(s)

from the date of dismissal to the date of reinstatement.

Should the laborer decide that it is preferable not to

return to work, the deduction should be made up to the

time judgment becomes final. And these, for the

reason that employees should not be permitted to

enrich themselves at the expense of their employer.

Besides, there is the "law's abhorrence for double

compensation".

Second. Likewise, in mitigation of the damages that

the dismissed respondents are entitled to, account

should be taken of whether in the exercise of due

diligence respondents might have obtained income

from suitable remunerative employment. We are

prompted to give out this last reminder because it is

really unjust that a discharged employee should, with

folded arms, remain inactive in the expectation that a

windfall would come to him. A contrary view would

breed idleness; it is conducive to lack of initiative on

the part of a laborer. Both bear the stamp of

undesirability.

From this ruling came the burden of disposing of an illegal

dismissal case on its merits and of determining whether or

not the computation of the award of backwages is correct. In

order not to unduly delay the disposition of illegal dismissal

cases, this Court found occasion in the case of Mercury

Drug Co., Inc., et al. v. CIR, et al. 8 to rule that a fixed

amount of backwages without further qualifications should

be awarded to an illegally dismissed employee (hereinafter

the Mercury Drug rule). This ruling was grounded upon

considerations of expediency in the execution of the

decision. Former Justice Claudio Teehankee approved of

this formula expressing that such method of computation is

a "realistic, reasonable and mutually beneficial solution" and

"thus obviates the twin evils of idleness on the part of the

employees and attrition and undue delay in satisfying the

award on the part of the employer" 9 However, Justice

Teehankee dissented from the majority view that the

employee in said case should be awarded backwages only

for a period of 1 year, 11 months and 15 day which

represented the remainder of the prescriptive period after

deducting the period corresponding to the delay incurred by

the employee in filing the complaint for unfair labor practice

and reinstatement. Justice Teehankee opined that:

. . . an award of back wages equivalent to three years

(where the case is not terminated sooner) should serve

as the base figure for such awards without deduction,

subject to deduction where there are mitigating

circumstances in favor of the employer but subject to

increase by way of exemplary damages where there

are aggravating circumstances (e.g. oppression or

dilatory appeals) on the employer's part. 10

The proposal on the three-year backwages was subsequently

adopted in later cases, among them, Feati University

Faculty Club (PAFLU) v. Feati University (No. L-31503, 15

August 1974, 58 SCRA 395), Luzon Stevedoring

Corporation v. CIR (No. L-34300, 22 November 1974, 61

SCRA 154), Danao Development Corporation

v. NLRC (Nos. L-40706 and L-40707, 16 February 1978, 81

SCRA 487), Associated Anglo-American Tobacco

Corporation v. Lazaro (No. 63779, 27 October 1983, 125

SCRA 463), Philippine National Oil Company -Energy

Development Corporation v. Leogardo (G.R. No. 58494, 5

July 1989, 175 SCRA 26).

Then came Presidential Decree No. 442 (the Labor Code of

Philippines) which was signed into law on 1 May 1974 and

which took effect on 1 November 1974. Its posture on the

award of backwages, as amended, was expressed as follows.

Art. 279. Security of tenure. — In cases of

regular employment, the employer shall

not terminate the services of an employee

except for a just cause or when authorized

by this Title. An employee who is unjustly

dismissed from work shall be entitled to

reinstatement without loss of seniority

rights and to his back wages computed

from the time his compensation was

withheld from him up to the time of his

reinstatement. (emphasis supplied).

Under the abovequoted provision, it became mandatory to

award backwages to illegally dismissed regular employees.

The law specifically declared that the award of backwages

was to be computed from the time compensation was

withheld from the employee up to the time of his

instatement. This notwithstanding, the rule generally applied

by the Court under the promulgation of the Mercury

Drug case, 11

and during the effectivity of P.D. No. 442 was

still the Mercury Drug rule. A survey of causes from 1974

until 1989, when the amendatory law to P.D. No. 442,

namely, R.A. No. 6715 took effect, supports this conclusion.

In the case of New Manila Candy Workers

Union (Naconwa-Paflu) v. CIR (1978), 12

or after the Labor

Code (P.D. No. 442) had taken effect, the court still

followed the Mercury Drug rule to avoid the necessity of a

hearing on earnings obtained elsewhere by the employee

during the period of illegal dismissal. In an even later case

(1987) 13

the Court declared that the general principle is that

an employee is entitled to receive as backwages the amounts

he may have received from the date of his dismissal up to

the time of his reinstatement. However, in compliance with

the jurisprudential policy of fixing the amount of backwages

to a just and reasonable level, the award of backwages

equivalent to three (3) years, without qualification or

deduction, was nonetheless followed in said case.

In a more direct approach to the rule on the award of

backwages, this Court declared in the 1990 case of Medado

v. Court of Appeals 14

that "any decision or order granting

backwages in excess of three (3) years is null nad void as to

the excess."

In sum, during the effectivity of P.D. 442, the Court

enforced the Mercury Drug rule and, in effect, qualified the

provision under P.D. No. 442 by limiting the award of

backwages to three (3) years.

On March 1989, Republic Act No. 6715 took effect,

amending the Labor Code. Article 279 thereof states in part :

Art. 279 Security of Tenure. — . . . An employee who is

unjustly dismissed from work shall be entitled to

reinstatement without loss of seniority rights and other

privileges and to his full backwages, inclusive of

allowances, and to his other benefits or their monetary

equivalent computed from the time his compensation is

witheld from him up to the time of his actual

reinstatement. (emphasis supplied)

In accordance with the above provision, an illegally

dismissed employee is entitled to his full backwages from

the time his compensation was witheld from him (which, as

a rule, is from the time of his illegal dismissal) up to the

time of his actual reinstatement. It is true that this Court had

ruled in the case of Pines City Educational Center vs. NLRC

(G.R. No. 96779, 10 November 1993, 227 SCRA 655) that

"in ascertaining the total amount of backwages payable to

them (employees), we go back to the rule prior to the

Mercury Drug rule that the total amount derived from

employment elsewhere by the employee from the date of

dismissal up to the date of reinstatement, if any, should be

deducted therefrom." 15

The rationale for such ruling was

that, the earnings derived elsewhere by the dismissed

employee while litigating the legality of his dismissal,

should be deducted from the full amount of backwages

which the law grants him upon reinstatement, so as not to

unduly or unjustly enrich the employee at the sense of the

employer.

The Court deems it appropriate, however, to reconsider such

earlier on the computation of backwages as enunciated in

said Pines City Educational Center case, by now holding

that comformably with the evident legislative intent as

expressed in Rep. Act No. 6715, above-quoted, backwages

to be awarded to an illegally dismissed employee, should

not, as general rule, be diminished or reduced by the

earnings derived by him elsewhere during the period of his

illegal dismissal. The underlying reason of this ruling is that

the employee, while litigating the legality (illegality) of his

dismissal, must still earn a living to support himself and

family, while his backwages have to be paid by the

employer as part of the price or penalty he has to pay for

illegally dismissing his employee. The clear legislative

intent of the amendment in Rep. Act No. 6715 is to give

more benefits to workers than was previously given them

under the Mercury Drug rule or the "deduction of earnings

elsewhere" rule. Thus, a closer adherence to the legislative

policy behind Rep. Act No. 6715 points to "full backwages"

as meaning exactly that, i.e., without deducting from

backwages the earnings derived elsewhere by the concerned

employee during the period of his illegal dismissal. 16

In

other words, the provision handling for "full backwages" to

illegally dismissed employees is clear, plain and free from

ambiguity and, therefore, must be applied without attempted

or strained interpretation. Index animi sermo est. 17

Therefore, in accordance with R.A. No. 6715, petitioners are

entitled on their full backwages, inclusive of allowances and

other benefits or their monetary equivalent, from the time

their actual compensation was withheld on them up to the

time of their actual reinstatement.

As to reinstatement of petitioners, this Court has already

ruled that reinstatement is no longer feasible, because the

company would be adjustly prejudiced by the continued

employment of petitioners who at present are overage, a

separation pay equal to one-month salary granted to them in

the Labor Arbiter's decision was in order and, therefore,

affirmed on the Court's decision of 15 March 1996.

Furthermore, since reinstatement on this case is no longer

feasible, the amount of backwages shall be computed from

the time of their illegal termination on 25 June 1990 up to

the time of finality of this decision. 18

ACCORDINGLY, private respondent's Motion for

Reconsideration, dated 10 April 1996, is DENIED.

SO ORDERED.

[G.R. No. L-28771. March 31, 1971.]

CORNELIA MATABUENA, Plaintiff-Appellant, v.

PETRONILA CERVANTES, Defendant-Appellee.

A question of first impression is before this Court in this

litigation. We are called upon to decide whether the ban on a

donation between the spouses during a marriage applies to a

common-law relationship. 1 The plaintiff, now appellant

Cornelia Matabuena, a sister to the deceased Felix

Matabuena, maintains that a donation made while he was

living maritally without benefit of marriage to defendant,

now appellee Petronila Cervantes, was void. Defendant

would uphold its validity. The lower court, after noting that

it was made at a time before defendant was married to the

donor, sustained the latter’s stand. Hence this appeal. The

question, as noted, is novel in character, this Court not

having had as yet the opportunity of ruling on it. A 1954

decision of the Court of Appeals, Buenaventura v. Bautista,

2 by the then Justice J. B. L. Reyes, who was appointed to

this Court later that year, is indicative of the appropriate

response that should be given. The conclusion reached

therein is that a donation between common-law spouses falls

within the prohibition and is "null and void as contrary to

public policy." 3 Such a view merits fully the acceptance of

this Court. The decision must be reversed.

In the decision of November 23, 1965, the lower court, after

stating that in plaintiff’s complaint alleging absolute

ownership of the parcel of land in question, she specifically

raised the question that the donation made by Felix

Matabuena to defendant Petronila Cervantes was null and

void under the aforesaid article of the Civil Code and that

defendant on the other hand did assert ownership precisely

because such a donation was made in 1956 and her marriage

to the deceased did not take place until 1962, noted that

when the case was called for trial on November 19, 1965,

there was stipulation of facts which it quoted. 4 Thus: "The

plaintiff and the defendant assisted by their respective

counsels, jointly agree and stipulate: (1) That the deceased

Felix Matabuena owned the property in question; (2) That

said Felix Matabuena executed a Deed of Donation inter

vivos in favor of Defendant, Petronila Cervantes over the

parcel of land in question on February 20, 1956, which same

donation was accepted by defendant; (3) That the donation

of the land to the defendant which took effect immediately

was made during the common law relationship as husband

and wife between the defendant-done and the now deceased

donor and later said donor and done were married on March

28, 1962; (4) That the deceased Felix Matabuena died

intestate on September 13, 1962; (5) That the plaintiff

claims the property by reason of being the only sister and

nearest collateral relative of the deceased by virtue of an

affidavit of self-adjudication executed by her in 1962 and

had the land declared in her name and paid the estate and

inheritance taxes thereon’" 5

The judgment of the lower court on the above facts was

adverse to plaintiff. It reasoned out thus: "A donation under

the terms of Article 133 of the Civil Code is void if made

between the spouses during the marriage. When the

donation was made by Felix Matabuena in favor of the

defendant on February 20, 1956, Petronila Cervantes and

Felix Matabuena were not yet married. At that time they

were not spouses. They became spouses only when they

married on March 28, 1962, six years after the deed of

donation had been executed." 6

We reach a different conclusion. While Art. 133 of the Civil

Code considers as void a "donation between the spouses

during the marriage," policy considerations of the most

exigent character as well as the dictates of morality require

that the same prohibition should apply to a common-law

relationship. We reverse.

1. As announced at the outset of this opinion, a 1954 Court

of Appeals decision, Buenaventura v. Bautista, 7

interpreting a similar provision of the old Civil Code 8

speaks unequivocally. If the policy of the law is, in the

language of the opinion of the then Justice J.B.L. Reyes of

that Court, "to prohibit donations in favor of the other

consort and his descendants because of fear of undue and

improper pressure and influence upon the donor, a prejudice

deeply rooted in our ancient law; ‘porque no se engañen

despojandose el uno al otro por amor que han de consuno

[according to] the Partidas (Part IV, Tit. XI, LAW IV),

reiterating the rationale ‘Ne mutuato amore invicem

spoliarentur’ of the Pandects (Bk. 24, Tit. 1, De donat, inter

virum et uxorem); then there is every reason to apply the

same prohibitive policy to persons living together as

husband and wife without the benefit of nuptials. For it is

not to be doubted that assent to such irregular connection for

thirty years bespeaks greater influence of one party over the

other, so that the danger that the law seeks to avoid is

correspondingly increased. Moreover, as already pointed out

by Ulpian (in his lib. 32 ad Sabinum, fr. 1), ‘it would not be

just that such donations should subsist, lest the condition of

those who incurred guilt should turn out to be better.’ So

long as marriage remains the cornerstone of our family law,

reason and morality alike demand that the disabilities

attached to marriage should likewise attach to concubinage."

9

2. It is hardly necessary to add that even in the absence of

the above pronouncement, any other conclusion cannot

stand the test of scrutiny. It would be to indict the framers of

the Civil Code for a failure to apply a laudable rule to a

situation which in its essentials cannot be distinguished.

Moreover, if it is at all to be differentiated, the policy of the

law which embodies a deeply-rooted notion of what is just

and what is right would be nullified if such irregular

relationship instead of being visited with disabilities would

be attended with benefits. Certainly a legal norm should not

be susceptible to such a reproach. If there is ever any

occasion where the principle of statutory construction that

what is within the spirit of the law is as much a part of it as

what is written, this is it. Otherwise the basic purpose

discernible in such codal provision would not be attained.

Whatever omission may be apparent in an interpretation

purely literal of the language used must be remedied by an

adherence to its avowed objective. In the language of Justice

Pablo: "El espiritu que informa la ley debe ser la luz que ha

de guiar a los tribunales en la aplicación de sus

disposiciones.’’ 10

3. The lack of validity of the donation made by the deceased

to defendant Petronila Cervantes does not necessarily result

in plaintiff having exclusive right to the disputed property.

Prior to the death of Felix Matabuena, the relationship

between him and the defendant was legitimated by their

marriage on March 28, 1962. She is therefore his widow. As

provided for in the Civil Code, she is entitled to one-half of

the inheritance and the plaintiff, as the surviving sister, to

the other half. 11

WHEREFORE, the lower court decision of November 23,

1965 dismissing the complaint with costs is reversed. The

questioned donation is declared void, with the rights of

plaintiff and defendant as pro indiviso heirs to the property

in question recognized. The case is remanded to the lower

court for its appropriate disposition in accordance with the

above opinion. Without pronouncement as to costs.

G.R. No. 93177 August 2, 1991

B/GEN. JOSE COMENDADOR, B/GEN, MARIELO

BLANDO, CAPT. DANILO PIZARRO, CAPT.

MANUEL ISON, COL. LUISITO SANCHEZ, LTC.

ROMELINO GOJO, LTC. ARSENIO TECSON, LTC.

RAFAEL GALVEZ, LTC. TIBURCIO FUSILLERO,

LTC. ERICSON AURELIO, LTC. JACINTO LIGOT

LTC. FRANKLIN BRAWNER, MAJ. ALFREDO

OLIVEROS, MAJ. CESAR DE LA PERA, MAJ.

LEUVINO VALENCIA, CAPT. FLORENCIO

FLORES, CAPT. JAIME JUNIO, CAPT. DANILO

LIM, CAPT. ELMER AMON, CAPT. VERGEL

NACINO, and LT. JOEY SARROZA, petitioners,

vs.

GEN. RENATO S. DE VILLA, CHIEF OF STAFF,

AFP, THE PTI INVESTIGATING PANEL

COMPOSED OF: COL. MANUEL S. MENDIOLA,

COL. VIRTUD NORBERTO L. DAGZA MAJ. FELIX

V. BALDONADO and MAJ. ESTELITO L. PORNEA

and GENERAL COURT-MARTIAL NO. 14

COMPOSED OF: B/GEN. DEMETRIO CAMUA COL.

HERMINIO A. MENDOZA, COL. ERNESTO B. YU,

COL. ROMEO ODI, COL. WILLY FLORENDO, COL.

DIONY A. VENTURA and CAPT. FRANCISCO T.

MALLILLIN, respondents.

These four cases have been consolidated because they

involve practically the same parties and related issues

arising from the same incident.

The petitioners in G.R. Nos. 93177 and 96948 and the

private respondents in G.R. Nos. 95020 and 97454 are

officers of the Armed Forces of the Philippines facing

prosecution for their alleged participation in the failed coup

d' etat that took place on December 1 to 9, 1989.

The charges against them are violation of Articles of War

(AW) 67 (Mutiny), AW 96 (Conduct Unbecoming an

Officer and a Gentleman) and AW 94 (Various Crimes) in

relation to Article 248 of the Revised Penal Code (Murder).

In G.R. No. 93177, which is a petition for certiorari,

prohibition and mandamus, they are questioning the conduct

of the Pre-Trial Investigation PTI Panel constituted to

investigate the charges against them and the creation of the

General Court Martial GCM convened to try them.

In G.R. No. 96948, the petitioners, besides challenging the

legality of GCM No. 14, seek certiorari against its ruling

denying them the right to peremptory challenge as granted

by Article 18 of Com. Act No. 408.

In G.R. No. 95020, the orders of the respondent judge of the

Regional Trial Court of Quezon City are assailed

oncertiorari on the ground that he has no jurisdiction over

GCM No. 14 and no authority either to set aside its ruling

denying bail to the private respondents.

In G.R. No. 97454, certiorari is also sought against the

decision of the Regional Trial Court of Quezon City in a

petition for habeas corpus directing the release of the

private respondents. Jurisdictional objections are likewise

raised as in G.R. No. 95020.

I

Before the charges were referred to GCM No. 14, a Pre-

Trial Investigation PTI Panel had been constituted pursuant

to Office Order No. 16 dated January 14, 1990, to

investigate the petitioners in G.R. Nos. 93177 and 96948.

The PTI Panel issued a uniform subpoena dated January 30,

1990, individually addressed to the petitioners, to wit:

You are hereby directed to appear in person before the

undersigned Pre-Trial Investigating Officers on 12 Feb

90 9:00 a.m. at Kiangan Hall, Camp Crame Quezon

City, then and there to submit your counter-affidavit

and the affidavits of your witnesses, if any, in the pre-

trial investigation of the charge/charges against you for

violence of AWs _______________. DO NOT

SUBMIT A MOTION TO DISMISS.

Failure to submit the aforementioned

counter-affidavits on the date above

specified shall be deemed a waiver of your

right to submit controverting evidence.

On the same date, the petitioners acknowledged receipt of a

copy of the charge sheet, sworn statements of witnesses, and

death and medical certificates of victims of the rebellion.

At the first scheduled hearing, the petitioners challenged the

proceedings on various grounds, prompting the PTI Panel to

grant them 10 days within which to file their objections in

writing This was done through a Motion for Summary

Dismissal dated February 21, 1990.

In a resolution dated February 27,1990, the PTI Panel

denied the motion and gave the petitioners 5 days from

notice to submit their respective counter-affidavits and the

affidavits of their witnesses.

On March 7, 1990, the petitioners verbally moved for

reconsideration of the foregoing denial and the PTI Panel

gave them 7 days within which to reduce their motion to

writing. This was done on March 14,1990.

The petitioners now claim that there was no pre-trial

investigation of the charges as mandated by Article of War

71, which provides:

Art. 71. Charges Action upon. — Charges and

specifications must be signed by a person subject to

military law, and under the oath either that he has

personal knowledge of, or has investigated, the matters

set forth therein and that the same are true in fact, to

the best of his knowledge and belief.

No charge will be referred to a general court-martial

for trial until after a thorough and impartial

investigation thereof shall have been made. This

investigation will include inquiries as to the truth of

the matter set forth in said charges, form of charges,

and what disposition of the case should be made in the

interest of justice and discipline. At such investigation

full opportunity shall be given to the accused to cross-

examine witnesses against him if they are available

and to present anything he may desire in his own

behalf, either in defense or mitigation, and the

investigating officer shall examine available witnesses

requested by the accused. If the charges are forwarded

after such investigation, they shall be accompanied by

a statement of the substance of the testimony taken on

both sides. (Emphasis supplied.)

They also allege that the initial hearing of the charges

consisted merely of a roll call and that no prosecution

witnesses were presented to reaffirm their affidavits. while

the motion for summary dismissal was denied, the motion

for reconsideration remains unresolved to date and they

have not been able to submit their counter-affidavits.

At the hearing of May 15, 1990, the petitioners in G.R. No.

96948 manifested that they were exercising their right to

raise peremptory challenges against the president and

members of GCM No.14. They invoked Article 18 of Com.

Act No. 408 for this purpose. GCM No. 14 ruled, however,

that peremptory challenges had been discontinued under

P.D. No. 39.

In G.R. No. 95020, Ltc Jacinto Ligot applied for bail on

June 5, 1990, but the application was denied by GCM

No.14. He thereupon filed with the Regional Trial Court of

Quezon City a petition for certiorari and mandamus with

prayer for provisional liberty and a writ of preliminary

injunction. After considering the petition and the answer

thereto filed by the president and members of GCM No.14,

Judge Maximiano C. Asuncion issued an order granting

provisional liberty to Ligot.

On July 28, 1990, Ligot filed an urgent omnibus motion to

enforce the order for his release and to declare in contempt

the commanding officer of the PC/INP Jail for disobey 'ng

the said order. He later also complained that Generals De

Villa and Aguirre had refused to release him "pending final

resolution of the appeal to be taken" to this Court.

After hearing, the trial court reiterated its order for the

provisional liberty of Ligot, as well as of intervenors Ltc

Franklin Brawner, Lt/Col. Arsenio Tecson and Maj. Alfredo

Oliveros, and later of additional intervenors Ltc Romelino

Gojo and Capt. Manuel Ison.

On August 22, 1990, the trial court rendered judgment inter

alia:

(a) Declaring, that Section 13, Article III of the

Constitution granting the right to bail to all persons with

the defined exception is applicable and covers all

military men facing court-martial proceedings.

Accordingly, the assailed orders of General Court-

Martial No. 14 denying bail to petitioner and

intervenors on the mistaken assumption that bail does

not apply to military men facing court-martial

proceedings on the ground that there is no precedent,

are hereby set aside and declared null and void.

Respondent General Court-Martial No. 14 is hereby

directed to conduct proceedings on the applications of

bail of the petitioner, intervenors and which may as well

include other persons facing charges before General

Court-Martial No. 14.

Pending the proceedings on the applications for bail

before General Court-Martial No. 14, this Court

reiterates its orders of release on the provisional liberty

of petitioner Jacinto Ligot as well as intervenors

Franklin Brawner and Arsenio Tecson.

On February 18, 1991, the private respondents in G.R. No.

97454 filed with this Court a petition for habeas corpus on

the ground that they were being detained in Camp Crame

without charges. The petition was referred to the Regional

Trial Court of Quezon City, where it was raffled to

respondent Judge Antonio P. Solano. Finding after hearing

that no formal charges had been filed against the petitioners

after more than a year after their arrest, the trial court

ordered their release.

II

The Court has examined the records of this case and rules as

follows.

It appears that the petitioners in G.R. Nos. 93177 and 96948

were given several opportunities to present their side at the

pre-trial investigation, first at the scheduled hearing of

February 12, 1990, and then again after the denial of their

motion of February 21, 1990, when they were given until

March 7, 1990, to submit their counter-affidavits. On that

date, they filed instead a verbal motion for reconsideration

which they were again asked to submit in writing. This they

did on March 13, 1990. The motion was in effect denied

when the PTI Panel resolved to recommend that the charges

be referred to the General Court Martial for trial.

The said petitioners cannot now claim they have been

denied due process because the investigation was resolved

against them owing to their own failure to submit their

counter-affidavits. They had been expressly warned In the

subpoena sent them that "failure to submit the

aforementioned counter-affidavits on the date above

specified shall be deemed a waiver of (their) right to submit

controverting evidence." They chose not to heed the

warning. As their motions appeared to be dilatory, the PTI

Panel was justified in referring the charges to GCM No. 14

without waiting for the petitioners to submit their defense.

Due process is satisfied as long as the party is accorded an

opportunity to be heard. If it is not availed of, it is deemed

waived or forfeited without violation of the Bill of Rights.

There was in our view substantial compliance with Article

of War 71 by the PTI Panel. Moreover, it is now settled that

"even a failure to conduct a pre-trial investigation does not

deprive a general court- martial of jurisdiction." We so held

in Arula v. Espino, 1 thus:

xxx xxx xxx

But even a failure to conduct a pre-trial investigation

does not deprive a general court-martial of jurisdiction.

The better accepted concept of pre-trial investigation is

that it is directory, not mandatory, and in no way affects

the jurisdiction of a court-martial. In Humphrey v.

Smith, 336 U.S. 695, 93 L ed 986 (1949), the Court

said:

We do not think that the pre-trial investigation procedure

by Article 70 (The Philippine counter-part is article of war

71, Commonwealth Act 408) can properly be construed as

an indispensable pre-requisite to the exercise of the Army

General court martial jurisdiction.. The Article does serve

important functions in the administration of court-martial

procedures and does provide safeguards to an accused. Its

language is clearly such that a defendant could object to

trial in the absence of the required investigation. In that

event the court-martial could itself postpone trial pending

the investigation. And the military reviewing authorities

could consider the same contention, reversing a court-

martial conviction where failure to comply with Article 70

has substantially injured an accused. But we are not

persuaded that Congress intended to make otherwise valid

court-martial judgments wholly void because pre-trial

investigations fall short of the standards prescribed by

Article 70. That Congress has not required analogous pre-

trial procedure for Navy court-martial is an indication that

the investigatory plan was not intended to be exalted to the

jurisdictional level.

xxx xxx xxx

Shortly after enactment of Article 70 in 1920 the Judge

Advocate General of the Army did hold that where there

had been no pre-trial investigation, court-martial

proceedings were void ab initio. But this holding has been

expressly repudiated in later holdings of the Judge

Advocate General. This later interpretation has been that

the pre-trial requirements of Article 70 are directory, not

mandatory, and in no way effect the jurisdiction of a court-

martial. The War Department's interpretation was pointedly

called to the attention of Congress in 1947 after which

Congress amended Article 70 but left unchanged the

language here under consideration. compensable pre-

requisite to the exercise of Army general court-martial

jurisdiction

A trial before a general court-martial convened without

any pretrial investigation under article of war 71 would of

course be altogether irregular but the court-martial might

nevertheless have jurisdiction. Significantly, this rule is

similar to the one obtaining in criminal procedure in the

civil courts to the effect that absence of preliminary

investigation does not go into the jurisdiction of the court

but merely to the regularity of the proceedings.

As to what law should govern the conduct of the preliminary

investigation, that issue was resolved more than two years

ago in Kapunan v. De Villa, 2 where we declared:

The Court finds that, contrary to the contention of

petitioners, there was substantial compliance with the

requirements of law as provided in the Articles of War

and P.D. No. 77, as amended by P.D. No. 911. The

amended charge sheets, charging petitioners and their

co-respondents with mutiny and conduct unbecoming

an officer, were signed by Maj. Antonio Ruiz, a person

subject to military law, after he had investigated the

matter through an evaluation of the pertinent records,

including the reports of respondent AFP Board of

Officers, and was convinced of the truth of the

testimonies on record. The charge sheets were sworn to

by Maj. Ruiz, the "accuser," in accordance with and in

the manner provided under Art. 71 of the Articles of

War. Considering that P.D. No. 77, as amended by P.D.

No. 911, is only of suppletory application, the fact that

the charge sheets were not certified in the manner

provided under said decrees, i.e., that the officer

administering the oath has personally examined the

affiant and that he is satisfied that they voluntarily

executed and understood its affidavit, does not

invalidate said charge sheets. Thereafter, a "pretrial

investigation" was conducted by respondent Maj.

Baldonado, wherein, pursuant to P.D. No. 77, as

amended by P.D. No. 911, petitioners were subpoenaed

and required to file their counter-affidavit. However,

instead of doing so, they filed an untitled pleading

seeking the dismissal of the charges against them. That

petitioners were not able to confront the witnesses

against them was their own doing, for they never even

asked Maj. Baldonado to subpoena said witnesses so

that they may be made to answer clarificatory questions

in accordance with P. D, No. 77, as amended by P.D.

No. 911.

The petitioners also allege that GCM No. 14 has not been

constitute in accordance with Article 8 of the Articles of

War because General Order No. M-6, which supposedly

convened the body, was not signed by Gen. Renato de Villa

as Chief of Staff.

Article of War No. 8 reads:

Art. 8. General Courts-Martial. — The President of the

Philippines, the Chief of Staff of the Armed Forces of

the Philippines, the Chief of Constabulary and, when

empowered by the President, the commanding officer of

a major command or task force, the commanding

officer of a division, the commanding officer of a

military area, the superintendent of the Military

Academy, the commanding officer of a separate brigade

or body of troops may appoint general courts-martial;

but when any such commander is the accuser or the

prosecutor of the person or persons to be tried, the court

shall be appointed by superior competent authority. ...

While it is true that General Order No. M-6 was not signed

by Gen. De Villa, there is no doubt that he authorized it

because the order itself said it was issued "By Command of

General De Villa" and it has not been shown to be spurious.

As observed by the Solicitor General, the Summary

Disposition Form showed that Gen. De Villa, as Chief of

Staff, AFP, actually constituted GCM No. 14 and appointed

its president and members. It is significant that General De

Villa has not disauthorized or revoked or in any way

disowned the said order, as he would certainly have done if

his authority had been improperly invoked. On the contrary,

as the principal respondent in G.R. No. 93177, he sustained

General Order No. M 6 in the Comment filed for him and

the other respondents by the Solicitor General.

Coming now to the right to peremptory challenge, we note

that this was originally provided for under Article 18 of

Com. Act No. 408 (Articles of War), as amended by Rep.

Act No. 242, on June 12, 1948, to wit:

Art. 18. Challenges. — Members of general or special

courts-martial may be challenged by the accused or the

trial judge advocate for cause stated to the court. The

court shall determine the relevancy and validity thereof,

and shall not receive a challenge to more than one

member at a time. Challenges by the trial judge

advocate shall ordinarily be presented and decided

before those by the accused are offered. Each side shall

be entitled to the peremptory challenge, but the law

member of the court shall not be challenged except for

cause.

The history of peremptory challenge was traced

in Martelino v. Alejandro, 3 thus:

In the early formative years of the infant Philippine

Army, after the passage in 1935 of Commonwealth

Act No. 1 (otherwise known as the National Defense

Act), except for a handful of Philippine Scout officers

and graduates of the United States military and naval

academies who were on duty with the Philippine

Army, there was a complete dearth of officers learned

in military law, its aside from the fact that the officer

corps of the developing army was numerically made

equate for the demands of the strictly military aspects

of the national defense program. Because of these

considerations it was then felt that peremptory

challenges should not in the meanwhile be permitted

and that only challenges for cause, in any number,

would be allowed. Thus Article 18 of the Articles of

War (Commonwealth Act No. 408), as worded on

September 14, 1938, the date of the approval of the

Act, made no mention or reference to any peremptory

challenge by either the trial judge advocate of a court-

martial or by the accused. After December 17,1958,

when the Manual for Courts-Martial of the Philippine

Army became effective, the Judge Advocate

General's Service of the Philippine Army conducted a

continuing and intensive program of training and

education in military law, encompassing the length

and breadth of the Philippines. This program was

pursued until the outbreak of World War 11 in the

Pacific on December 7, 1941. After the formal

surrender of Japan to the allies in 1945, the officer

corps of the Armed Forces of the Philippines had

expanded to a very large number, and a great many of

the officers had been indoctrinated in military law. It

was in these environmental circumstances that Article

of War 18 was amended on June 12,1948 to entitle

"each side" to one peremptory challenge, with the

sole proviso that "the law member of court shall not

be challenged except for cause.

On September 27,1972, President Marcos issued General

Order No. 8, empowering the Chief of Staff of the Armed

Forces to create military tribunals "to try and decide cases of

military personnel and such other cases as may be referred

to them.

On November 7,1972, he promulgated P.D. No. 39

(Governing the Creation, Composition, Jurisdiction,

Procedure, and other matters relevant to military Tribunals).

This decree disallowed the peremptory challenge, thus:

No peremptory challenge shall be allowed.

Challenges for cause may be entertained to insure

impartiality and good faith. Challenges shall

immediately be heard and determined by a majority

of the members excluding the challenged member. A

tie vote does not disqualify the challenged member. A

successfully challenged member shall be immediately

replaced.

On June 11, 1978, President Marcos promulgated P.D. No.

1498, or the National Security Code, which was a

compilation and codification of decrees, general orders, LOI

and policies intended "to meet the continuing threats to the

existence, security and stability of the State." The modified

rule on challenges under P.D. No. 39 was embodied in this

decree.

On January 17,1981, President Marcos issued Proc. No.

2045 proclaiming the termination of the state of martial law

throughout the Philippines. The proclamation revoked

General Order No. 8 and declared the dissolution of the

military tribunals created pursuant thereto upon final

determination of the cases pending therein.

P.D. No. 39 was issued to implement General Order No. 8

and the other general orders mentioned therein. With the

termination of martial law and the dissolution of the military

tribunals created thereunder, the reason for the existence of

P.D. No. 39 ceased automatically.

It is a basic canon of statutory construction that when the

reason of the law ceases, the law itself ceases.Cessante

ratione legis, cessat ipsa lex. This principle is also expressed

in the maxim ratio legis est anima: the reason of law is its

soul.

Applying these rules, we hold that the withdrawal of the

right to peremptory challenge in L P.D. No. 39 became

ineffective when the apparatus of martial law was

dismantled with the issuance of Proclamation No. 2045, As

a result, the old rule embodied in Article 18 of Com. Act

No. 408 was automatically revived and now again allows

the right to peremptory challenge.

We do not agree with the respondents in G.R. No. 96948

that the right to peremptory challenge remains withdrawn

under P.D. No. 39. To repeat for emphasis, this decree was

itself withdrawn when martial law was lifted on January 17,

1981. Indeed, even if not so withdrawn, it could still be

considered no longer operative, having been cast out under

the new dispensation as, in the words of the Freedom

Constitution, one of the "iniquitous vestiges of the previous

regime.

The military tribunal was one of the most oppressive

instruments of martial law. It is curious that the present

government should invoke the rules of that discredited body

to justify its action against the accused officers.

The Court realizes that the recognition of the right to

peremptory challenge may be exploited by a respondent in a

court-martial trial to delay the proceedings and defer his

deserved Punishment. It is hoped that the accused officers in

the cases at bar will not be so motivated. At any rate, the

wisdom of Com. Act No. 408, in the light of present

circumstances, is a matter addressed to the law-makers and

not to this Court. The judiciary can only interpret and apply

the laws without regard to its own misgivings on their

adverse effects. This is a problem only the political

departments can resolve.

The petitioners in G.R. Nos. 95020 and 97454 question the

propriety of the petition for certiorari and mandamus and the

petition for habeas corpus filed by the private respondents

with the Regional Trial Courts of Quezon City. It is argued

that since the private respondents are officers of the Armed

Forces accused of violations of the Articles of War, the

respondent courts have no authority to order their release

and otherwise interfere with the court-martial proceedings.

The petitioners further contend that under Sec. 9(3) of BP 1

29, the Court of Appeals is vested with "exclusive appellate

jurisdiction over all final judgments, decisions, resolutions,

orders, or awards of Regional Trial Courts and quasi-judicial

agencies, instrumentalities, boards or commissions." Rather

irrelevantly, the petitioners also cite the case of Yang v.

Court of Appeals 4 where this Court held that "appeals from

the Professional Regulation Commission are now

exclusively cognizable by the Court of Appeals.

It should be noted that the aforecited provision and the case

cited refer to ordinary appeals and not to the remedies

employed by the accused officers before the respondent

courts.

In Martelino, we observed as follows:

It is true that civil courts as a rule exercise no

supervision or correcting power over the proceedings

of courts-martial, and that mere errors in their

proceedings are not open to consideration. The single

inquiry, the test, is jurisdiction. But it is equally true

that in the exercise of their undoubted discretion,

courts-martial may commit such an abuse of discretion

— what in the language of Rule 65 is referred to as

"grave abuse of discretion" — as to give rise to a

defect in their jurisdiction. This is precisely the point

at issue in this action suggested by its nature as one for

certiorari and prohibition ... .

The Regional Trial Court has concurrent jurisdiction with

the Court of Appeals and the Supreme Court over petitions

for certiorari, prohibition or mandamus against inferior

courts and other bodies and on petitions forhabeas

corpus and quo warranto. 5 In the absence of a law

providing that the decisions, orders and ruling of a court-

martial or the Office of the Chief of Staff can be questioned

only before the Court of Appeals and the Supreme Court, we

hold that the Regional Trial Court can exercise similar

jurisdiction.

We find that the right to bail invoked by the private

respondents in G.R. Nos. 95020 has traditionally not been

recognized and is not available in the military, as an

exception to the general rule embodied in the Bill of Rights.

This much was suggested in Arula, where we observed that

"the right to a speedy trial is given more emphasis in the

military where the right to bail does not exist.

The justification for this exception was well explained by

the Solicitor General as follows:

The unique structure of the military should

be enough reason to exempt military men

from the constitutional coverage on the

right to bail.

Aside from structural peculiarity, it is vital

to note that mutinous soldiers operate

within the framework of democratic

system, are allowed the fiduciary use of

firearms by the government for the

discharge of their duties and

responsibilities and are paid out of

revenues collected from the people. All

other insurgent elements carry out their

activities outside of and against the

existing political system.

xxx xxx xxx

National security considerations should

also impress upon this Honorable Court

that release on bail of respondents

constitutes a damaging precedent. Imagine

a scenario of say 1,000 putschists roaming

the streets of the Metropolis on bail, or if

the assailed July 25,1990 Order were

sustained, on "provisional" bail. The sheer

number alone is already discomforting.

But, the truly disquieting thought is that

they could freely resume their heinous

activity which could very well result in the

overthrow of duly constituted authorities,

including this Honorable Court, and

replace the same with a system consonant

with their own concept of government and

justice.

The argument that denial from the military of the right to

bail would violate the equal protection clause is not

acceptable. This guaranty requires equal treatment only of

persons or things similarly situated and does not apply

where the subject of the treatment is substantially different

from others. The accused officers can complain if they are

denied bail and other members of the military are not. But

they cannot say they have been discriminated against

because they are not allowed the same right that is extended

to civilians.

On the contention of the private respondents in G.R. No.

97454 that they had not been charged after more than one

year from their arrest, our finding is that there was

substantial compliance with the requirements of due process

and the right to a speedy trial.

The petition for habeas corpus was directly filed with this

Court on February 18, 1991, and was referred to the

Regional Trial Court of Quezon City for raffle, hearing and

decision. It was heard on February 26, 1991, by the

respondent court, where the petitioners submitted the charge

memorandum and specifications against the private

respondents dated January 30, 1991. On February 12, 1991,

pursuant to Office Order No. 31-91, the PTI panel was

created and initial investigation was scheduled on March 12,

1991 at 2:00 p.m. On March 20, 1991, the private

respondents received the copies of the charges, charge

sheets and specifications and were required to submit their

counter-affidavits on or before April 11, 1991. There was

indeed a delay of more than one year in the investigation

and preparation of the charges against the private

respondents. However, this was explained by the Solicitor

General thus:

... The AFP Special Investigating Committee was

able to complete it pre-charge investigation only

after one (1) year because hundreds of officers and

thousands of enlisted men were involved in the

failed coup. All of them, as well as other witnesses,

had to be interviewed or investigated, and these

inevitably took months to finish. The pre-charge

investigation was rendered doubly difficult by the

fact that those involved were dispersed and scattered

throughout the Philippines. In some cases, command

units, such as the Scout Rangers, have already been

disbanded. After the charges were completed, the

same still had to pass review and approval by the

AFP Chief of Staff.

While accepting this explanation, the Court nevertheless

must reiterate the following admonition:

This Court as protector of the rights of the people,

must stress the point that if the participation of

petitioner in several coup attempts for which he is

confined on orders of Adjutant General Jorge

Agcaoili cannot be established and no charges can be

filed against him or the existence of a prima

facie case warranting trial before a military

commission is wanting, it behooves respondent then

Major General Rodolfo Biazon (now General) to

release petitioner. Respondents must also be

reminded that even if a military officer is arrested

pursuant to Article 70 of then Articles of War,

indefinite confinement is not sanctioned, as Article 71

thereof mandates that immediate steps must be taken

to try the person accused or to dissmiss the charge

and release him. Any officer who is responsible for

unnecessary delay in investigating or carrying the

case to a final conclusion may even be punished as a

court martial may direct. 6

It should be noted, finally, that after the decision was

rendered by Judge Solano on February 26, 1991, the

government filed a notice of appeal ad cautelam and a

motion for reconsideration, the latter was ultimately denied,

after hearing, on March 4, 1991. The 48- hour period for

appeal under Rule 41, Section 18, of the Rules of Court did

not run until after notice of such denial was received by the

petitioners on March 12, 1991. Contrary to the private

respondents' contention, therefore, the decision had not yet

become final and executory when the special civil action in

G.R. No. 97454 was filed with this Court on March 12,

1991.

III

Regarding the propriety of the petitions at bar, it is well to

reiterate the following observations of the Court in Arula:

The referral of charges to a court-martial

involves the exercise of judgment and

discretion (AW 71). A petition

for certiorari, in order to prosper, must be

based on jurisdictional grounds because,

as long as the respondent acted with

jurisdiction, any error committed by him

or it in the exercise thereof will amount to

nothing more than an error of judgment

which may be reviewed or corrected only

by appeal. Even an abuse of discretion is

not sufficient by itself to justify the

issuance of a writ ofcertiorari.

As in that case, we find that the respondents in G.R. No.

93177 have not acted with grave abuse of discretion or

without or in excess of jurisdiction to justify the intervention

of the Court and the reversal of the acts complained of by

the petitioners. Such action is indicated, however, in G.R.

No. 96948, where we find that the right to peremptory

challenge should not have been denied, and in G.R. Nos.

95020 and 97454, where the private respondents should not

have been ordered released.

ACCORDINGLY, in G.R. No. 93177, the petition is

DISMISSED for lack of merit. In G.R. No. 96948, the

petition is GRANTED, and the respondents are DIRECTED

to allow the petitioners to exercise the right of peremptory

challenge under Article 18 of the Articles of War. In G.R.

Nos. 95020 and 97454, the petitions are also GRANTED,

and the orders of the respondent courts for the release of the

private respondents are hereby REVERSED and SET

ASIDE. No costs.

SO ORDERED.

G.R. No. L-9274 February 1, 1957

RUFINO LOPEZ & SONS, INC., petitioner,

vs.

THE COURT OF TAX APPEALS, respondent.

Isidro A. Vera and Eulalio F. Legaspi for petitioner.

Office of the Solicitor General Ambrosio Padila, Assistant

Solicitor General Ramon L. Avanceña and Solicitor

Felicisimo R. Rosete for respondent.

MONTEMAYOR, J.:

Petitioner appellant Rufino Lopez & Sons, Inc. is appealing

from a resolution of the Court of Tax Appeals dismissing its

appeal from a decision of the Collector of Customs for the

Port of Manila, assessing additional fees on petitioner for a

certain importation of wire netting. The facts are simple and

undisputed. Lopez & Sons imported hexagonal wire netting

from Hamburg, Germany. The Manila Collector of Customs

assessed the corresponding customs duties on the

importation on the basis of consular and supplies invoices.

Said customs duties were paid and the shipments were

released. Subsequently, however, and freight of said wire

netting and as a result of the reassessment, additional

customs duties in the amount of P1,966.59 were levied and

imposed upon petitioner. Failing to secure a reconsideration

of the reassessment and levy of additional customs duties,

Lopez & Sons appealed to the Court of Tax Appeals. Acting

upon a motion to dismiss the appeal, filed by the Solicitor

General on the ground of lack of jurisdiction, the Tax Court,

by its resolution of May 23, 1955, dismissed the appeal on

the ground that it had no jurisdiction to review decisions of

the Collector of Customs of Manila, citing section 7 of

Republic Act No. 1125, creating said tax court. From said

resolution of dismissal, Lopez & Sons appealed to us,

seeking a reversal of said resolution of dismissal.

For purposes of reference, we are reproducing section 7 of

Republic Act No. 1125 relied upon by the Tax Court and the

Solicitor General, as well as Section 11 of the same Act

invoked by the petitioner:

Sec. 7. Jurisdiction. — The Court of Tax Appeals

shall exercise exclusive appellate jurisdiction to

review by appeal, as herein provided —

(1) Decisions of the Collector of Internal Revenue

in cases involving disputed assessments, refunds of

internal revenue taxes, fees or other charges,

penalties imposed in relation thereto, or other

matters arising under the National Internal Revenue

Code or other law or part of law administered by

the Bureau of Internal Revenue;

(2) Decisions of the Commissioner of Customs in

cases involving liability for customs duties, fees or

other money charges, seizure, detention or release

of property affected; fines, forfeitures or other

penalties imposed in relation thereto, or other

matters arising under the Customs Law or other

law or part of law administered by the Bureau of

Customs; and

(3) Decisions of provincial or city Board of

Assessment Appeals in case involving the

assessment and taxation of real property or other

matters arising under the assessment Law,

including rules and regulations relative thereto.

x x x x x x x x x

SEC. 11. Who may appeal; effect of appeal. —

Any person, association or corporation adversely

by a decision or ruling of the Collector of Internal

Revenue, the Collector of Customs or any

provincial or city Board of Assessment Appeals

may file an appeal in the Court of Tax Appeals

within thirty days after the receipt of such decision

or ruling.

No appeal taken to the Court of Tax Appeals from

the decision of the Collector of Internal Revenue or

the Collector of the Customs shall suspend the

payment, levy, distraint, and/or sale of any property

of the taxpayer for the satisfaction of his tax

liability as provided by existing law: Provided,

however, that when in the opinion of the Court the

collection by the Bureau of Internal Revenue or the

Commissioner of Customs may jeopardize the

interests of the Government and/or the taxpayer the

Court at any stage of the proceeding may suspend

the said collection and require the taxpayer either

to deposit the amount claimed or to file a surety

bond for not more than double the amount with the

Court. (Emphasis supplied.)

There is really a discrepancy between Sections 7 and 11

above reproduced. Section 7 provides that the Court of Tax

Appeals has exclusive appellate jurisdiction to review by

appeal decisions of the Collector of Internal Revenue,

decisions of the Commissioner of Customs and decisions of

provincial or city Board of Assessment Appeals on cases

mentioned in said section. On the other hand, section 11 of

the same Republic Act in listing and enumerating the

persons and entities who may appeal as well as the effect of

said appeal, mentions those affected by a decision or ruling

of the Collector of Internal Revenue, the Collector of

Customs or any provincial or City Board of Assessment

Appeals, and fails to mention the Commissioner of

Customs. Taken literally, a person affected by a decision of

the Collector of Customs may appeal to the Court of Tax

Appeals; and since no mention is made about decisions of

the Commissioner of Customs, a person affected by said

decision may not appeal to the Court of Tax Appeals.

However, section 7 of the Act above reproduced specially

provides that the Court of Tax Appeals has appellate

jurisdiction to review decisions of the Commissioner of

Customs. That legal provision conferring appellate

jurisdiction on the Court of Tax Appeals to review decisions

of the Commissioner of Customs would be empty,

meaningless, and unenforceable because under Section 11,

no person affected by the decision of the Commissioner of

customs may appeal to the Tax Court. These two

meaningless, and unenforceable because under Section 11,

should be harmonized and reconciled if possible, in order to

give effect to the whole Act.

We are in entire accord with the Tax Court and the Solicitor

General that a clerical error was committed in section 11,

mentioning therein the Collector of Customs. It should be,

as it was meant to be, the Commissioner of Customs. There

are several reasons in support of this view. Under the

Customs Law, found in sections 1137 to 1419 of the

Revised Administrative Code, the Commissioner of

Customs (Insular Collector of Customs) is the Chief of the

Bureau of Customs and has jurisdiction over the whole

country as regards the enforcement of the Customs Law,

whereas, there are about sixteen Collectors of Customs for

the sixteen collection districts and principal parts of entry

into which the Philippines has been divided. These

Collectors of Customs are subordinates of the Commissioner

of Customs over whom he has supervision and control

(section 1152, Revised Administrative Code). Pursuant to

said supervision and control, under section 1405 of the

Revised Administrative Code, when any new or unsettled

question shall be determined by the Collector of Customs,

he shall, if matter is not otherwise carried upon for review in

ordinary course, notify the Commissioner of his decision,

submitting an adequate statement of acts involved. What is

more important is the provision of section 1380, which

reproduce below:

SEC. 1380. Review by Commissioner. — The

person aggrieved by the decision of the Collector

of Customs in any matter presented upon protest or

by his action in any case of seizure may, within

fifteen days after notification in writing by the

collector of his action or decision, give written

notice to the collector signifying his desore to have

the matter reviewed by the Commissioner.

Thereupon, the Collector of Customs shall

forthwith transmit all the papers in the cause to the

Commissioner, who shall approve, modify, or

reverse the action of his subordinate and shall take

such steps and make such order or orders as may be

necessary to give effect to his decision.

Under this section, any person affected or aggrieved by the

decision of the Collector of Customs may appeal the

decision to the Commissioner of Customs. From all this, it is

clear if we followed the literal meaning and wording of

section 11 of Republic Act No. 1125, in the sense that

persons affected by a decision of the Collector of Customs

may appeal directly tot he Court of Tax Appeals, then the

supervision and control of the Commissioner of Customs

over his Collector of Customs, and his right to review their

decisions upon appeal to him by the persons affected by said

decision would, not only be gravely affected, but even

destroyed. We cannot believe that was the intention of the

Legislature in passing Republic Act No. 1125. It is more

reasonable and logical to hold that in Section 11 of the Act,

the Legislature meant and intended to say, the

Commissioner of Customs, instead of Collector of Customs

in the first paragraph and the first part of the second

paragraph of said section. In thus holding, the Court are not

exactly indulging in judicial legislation. They are merely

endeavoring to rectify and correct a clearly clerical error in

the wording of a statute, in order to give due course and

carry out the evident intention of the Legislature. This the

Courts should and can validly do. Under the rules of

statutory construction, it is not the letter but rather the spirit

of the law and intention of the Legislature that is important

and which matters. When the interpretation of a statute

according to the exact and literal import of its words would

lead to absurd or mischievous results, or would contravene

the clear purposes of the Legislature, it should be construed

according to its spirit and reason, disregarding as far as

necessary, the latter of the law. Statutes may be extended to

cover cases not within the literal meaning of the terms, for

that which is clearly within the intention of the Legislature

in enacting the law is as much within the statute as if it were

within the latter. Here the error (clerical and misprint) is

plain and obvious. It is within the province of the courts to

correct said error. This is not to correct the act of the

Legislature, but rather to carry out and give due course to

the true intention of said Legislature. (Black on

Interpretation of Laws, 2nd edition, pp. 66-67; 157-158.).

Furthermore, section 11 of Republic Act 1125 may well be

regarded as a mere complement or implementation of

section 7. Since section 7 provides that the Tax Court has

jurisdiction to review by appeal, decisions of the Collector

of Internal Revenue. decisions of the Commissioner of

Customs, and decisions of provincial or city Boards of

Assessment Appeals, so section 11 naturally provides that

persons adversely affected by said decisions may appeal to

the Tax Court. However, in enumerating the governmental

bodies or agencies rendering said decisions that may be

appealed, it erroneously listed the Collector instead of the

Commissioner, of Customs. The error is plain.

As a matter of fact, the Court of Tax Appeals in its

resolution of dismissal of May 23, 1955 cites in support

thereof a resolution promulgated by it on January 22, 1955

in C.T.A. Case No. 17, entitled "Acting Collector of

Customsvs. Acting Commissioner of Customs", wherein it

said:

The phrase "Collector of Customs" appearing in the

above-mentioned provision (section 11) of

Republic Act No. 1125 is clearly an oversight on

the part of Congress. It should read "Commissioner

of Customs" to make the provision conform with

section 7 of the said Republic Act section 1380 of

the Revised Administrative Code.

Petitioner contends that the literal meaning of Section 11 of

Republic Act No. 1125 should be adopted in the sense that

the Court of Tax Appeals has concurrent jurisdiction with

the Commissioner of Customs over Appeals from decisions

of Collectors of Customs, so that a person adversely affected

by a decision of a Collector of Customs is given the choice

of appealing the said decision either to the Commissioner of

Customs or to the Courts of Tax Appeals. We find

contention unteable. In the first place, the two remedies

suggested are entirely different, one from the other; an

appeal to the Commissioner of Customs is purely

administrative, whereas, appeal to the Court of Tax Appeal

is manifestly judicial. And it is a sound rule that before one

resorts to the Courts, the administrative remedy provided by

law should first be exhausted. In the second place, the two

remedies suggested by the petitioner would result in

confusion because a person adversely affected by a decision

of a Collector of Customs could not be sure where to seek

the remedy, whether with the Commissioner of Customs or

with the Court of Tax Appeals, and it might even be difficult

for him to decide because, if he took the appeal directly to

the Tax Court, that would ordinarily cut off his remedy

before the Commissioner of Customs for the reason that,

should the Court of Tax Appeals decide against him, he may

not appeal said decision to the Commissioner of Customs

because the Commissioner as an administrative officer may

not review the decision of the Court. On the other hand, if

the person affected by a decision of a Collector of Customs

took his appeal to the Commissioner of Customs, and there

receives an adverse decision, he may yet appeal therefrom to

the Court of Tax Appeals. In the third place, even if the

person affected by an adverse ruling of the Collector of

Customs took his appeal to the Court of Tax Appeals, as

advocated by counsel for the petitioner, under the literal

meaning of section 11, the Tax Court may refuse to entertain

said appeal, as was done in the present case, on the ground

that under section 7 of Republic Act No. 1125, it had no

jurisdiction to review a decision of the Collector of

Customs, section 7 clearly limiting its appellate jurisdiction

to review decisions of the Commissioner of Customs.

In view of the foregoing, we hold that under the law,

particularly, the Customs Law and Republic Act No. 1125,

the Court of Tax Appeals has no jurisdiction to review by

appeal, decisions of the Collector of Customs. The appealed

order of dismissal is hereby affirmed, with costs.

G.R. No. 123169 November 4, 1996

DANILO E. PARAS, petitioner,

vs.

COMMISSION ON ELECTIONS, respondent.

R E S O L U T I O N

FRANCISCO, J.:

Petitioner Danilo E. Paras is the incumbent Punong

Barangay of Pula, Cabanatuan City who won during the last

regular barangay election in 1994. A petition for his recall as

Punong Barangay was filed by the registered voters of the

barangay. Acting on the petition for recall, public

respondent Commission on Elections (COMELEC) resolved

to approve the petition, scheduled the petition signing on

October 14, 1995, and set the recall election on November

13,

1995. 1 At least 29.30% of the registered voters signed the

petition, well above the 25% requirement provided by law.

The COMELEC, however, deferred the recall election in

view of petitioner's opposition. On December 6, 1995, the

COMELEC set anew the recall election, this time on

December 16, 1995. To prevent the holding of the recall

election, petitioner filed before the Regional Trial Court of

Cabanatuan City a petition for injunction, docketed as SP

Civil Action No. 2254-AF, with the trial court issuing a

temporary restraining order. After conducting a summary

hearing, the trial court lifted the restraining order, dismissed

the petition and required petitioner and his counsel to

explain why they should not be cited for contempt for

misrepresenting that the barangay recall election was

without COMELEC approval. 2

In a resolution dated January 5, 1996, the COMELEC, for

the third time, re-scheduled the recall election an January

13, 1996; hence, the instant petition for certiorari with

urgent prayer for injunction. On January 12, 1996, the Court

issued a temporary restraining order and required the Office

of the Solicitor General, in behalf of public respondent, to

comment on the petition. In view of the Office of the

Solicitor General's manifestation maintaining an opinion

adverse to that of the COMELEC, the latter through its law

department filed the required comment. Petitioner thereafter

filed a reply. 3

Petitioner's argument is simple and to the point. Citing

Section 74 (b) of Republic Act No. 7160, otherwise known

as the Local Government Code, which states that "no recall

shall take place within one (1) year from the date of the

official's assumption to office or one (1) year immediately

preceding a regular local election", petitioner insists that

the scheduled January 13, 1996 recall election is now barred

as the Sangguniang Kabataan (SK) election was set by

Republic Act No. 7808 on the first Monday of May 1996,

and every three years thereafter. In support thereof,

petitioner cites Associated Labor Union v. Letrondo-

Montejo, 237 SCRA 621, where the Court considered the

SK election as a regular local election. Petitioner maintains

that as the SK election is a regular local election, hence no

recall election can be had for barely four months separate

the SK election from the recall election. We do not agree.

The subject provision of the Local Government Code

provides:

Sec. 74. Limitations on Recall. — (a) Any

elective local official may be the subject

of a recall election only once during his

term of office for loss of confidence.

(b) No recall shall take place within one

(1) year from the date of the official's

assumption to office or one (1) year

immediately preceding a regular local

election.

[Emphasis added]

It is a rule in statutory construction that every part of the

statute must be interpreted with reference to the context,i.e.,

that every part of the statute must be considered together

with the other parts, and kept subservient to the general

intent of the whole enactment. 4 The evident intent of

Section 74 is to subject an elective local official to recall

election once during his term of office. Paragraph (b)

construed together with paragraph (a) merely designates the

period when such elective local official may be subject of a

recall election, that is, during the second year of his term of

office. Thus, subscribing to petitioner's interpretation of the

phrase regular local election to include the SK election will

unduly circumscribe the novel provision of the Local

Government Code on recall, a mode of removal of public

officers by initiation of the people before the end of his

term. And if the SK election which is set by R.A No. 7808

to be held every three years from May 1996 were to be

deemed within the purview of the phrase "regular local

election", as erroneously insisted by petitioner, then no

recall election can be conducted rendering inutile the recall

provision of the Local Government Code.

In the interpretation of a statute, the Court should start with

the assumption that the legislature intended to enact an

effective law, and the legislature is not presumed to have

done a vain thing in the enactment of a statute. 5 An

interpretation should, if possible, be avoided under which a

statute or provision being construed is defeated, or as

otherwise expressed, nullified, destroyed, emasculated,

repealed, explained away, or rendered insignificant,

meaningless, inoperative or nugatory. 6

It is likewise a basic precept in statutory construction that a

statute should be interpreted in harmony with the

Constitution. 7 Thus, the interpretation of Section 74 of the

Local Government Code, specifically paragraph (b) thereof,

should not be in conflict with the Constitutional mandate of

Section 3 of Article X of the Constitution to "enact a local

government code which shall provide for a more responsive

and accountable local government structure instituted

through a system of decentralization with effective

mechanism of recall, initiative, and referendum . . . ."

Moreover, petitioner's too literal interpretation of the law

leads to absurdity which we cannot countenance. Thus, in a

case, the Court made the following admonition:

We admonish against a too-literal reading

of the law as this is apt to constrict rather

than fulfill its purpose and defeat the

intention of its authors. That intention is

usually found not in "the letter that killeth

but in the spirit that vivifieth". . . 8

The spirit, rather than the letter of a law determines

its construction; hence, a statute, as in this case,

must be read according to its spirit and intent.

Finally, recall election is potentially disruptive of the normal

working of the local government unit necessitating

additional expenses, hence the prohibition against the

conduct of recall election one year immediately preceding

the regular local election. The proscription is due to the

proximity of the next regular election for the office of the

local elective official concerned. The electorate could

choose the official's replacement in the said election who

certainly has a longer tenure in office than a successor

elected through a recall election. It would, therefore, be

more in keeping with the intent of the recall provision of the

Code to construe regular local election as one referring to

an election where the office held by the local elective

official sought to be recalled will be contested and be filled

by the electorate.

Nevertheless, recall at this time is no longer possible

because of the limitation stated under Section 74 (b) of the

Code considering that the next regular election involving the

barangay office concerned is barely seven (7) months away,

the same having been scheduled on May 1997. 9

ACCORDINGLY, the petition is hereby dismissed for

having become moot and academic. The temporary

restraining order issued by the Court on January 12, 1996,

enjoining the recall election should be as it is hereby made

permanent.

SO ORDERED.

G.R. No. L-42050-66 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.

HONORABLE JUDGE AMANTE P. PURISIMA,

COURT OF FIRST INSTANCE OF MANILA,

BRANCH VII, and PORFIRIO CANDELOSAS,

NESTOR BAES, ELIAS L. GARCIA, SIMEON

BUNDALIAN, JR., JOSEPH C. MAISO, EDUARDO A.

LIBORDO, ROMEO L. SUGAY, FEDERICO T.

DIZON, GEORGE M. ALBINO, MARIANO COTIA,

JR., ARMANDO L. DIZON, ROGELIO B. PARENO,

RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE

A. BACARRA, REYNALDO BOGTONG, and

EDGARDO M. MENDOZA, respondents.

These twenty-six (26) Petitions for Review filed by the

People of the Philippines represented, respectively, by the

Office of the City Fiscal of Manila, the Office of the

Provincial Fiscal of Samar, and joined by the Solicitor

General, are consolidated in this one Decision as they

involve one basic question of law.

These Petitions or appeals involve three Courts of First

Instance, namely: the Court of First Instance of Manila,

Branch VII, presided by Hon. Amante P. Purisima (17

Petitions), the Court of First Instance of Manila, Branch

XVIII, presided by Hon. Maximo A. Maceren (8 Petitions)

and, the Court of First Instance of Samar, with Hon.

Wenceslao M. Polo, presiding, (1 Petition).

Before those courts, Informations were filed charging the

respective accused with "illegal possession of deadly

weapon" in violation of Presidential Decree No. 9. On a

motion to quash filed by the accused, the three Judges

mentioned above issued in the respective cases filed before

them — the details of which will be recounted below — an

Order quashing or dismissing the Informations, on

a common ground, viz, that the Information did not allege

facts which constitute the offense penalized by Presidential

Decree No. 9 because it failed to state one essential element

of the crime.

Thus, are the Informations filed by the People sufficient in

form and substance to constitute the offense of "illegal

possession of deadly weapon" penalized under Presidential

Decree (PD for short) No. 9? This is the central issue which

we shall resolve and dispose of, all other corollary matters

not being indispensable for the moment.

A — The Information filed by the People —

1. In L-42050-66, one typical Information filed with the

Court presided by Judge Purisima follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus

PORFIRIO CANDELOSAS Y DURAN, accused.

Crim. Case No. 19639

VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF

PROCLAMATION 1081

INFORMATION

The undersigned accuses PORFIRIO CANDELOSAS

Y DURAN of a violation of paragraph 3, Presidential

Decree No. 9 of Proclamation 1081, committed as

follows:

That on or about the 14 th day of December, 1974, in

the City of Manila, Philippines, the said accused did

then and there wilfully, unlawfully, feloniously and

knowingly have in his possession and under his custody

and control one (1) carving knife with a blade of 6-½

inches and a wooden handle of 5-1/4 inches, or an

overall length of 11-¾ inches, which the said accused

carried outside of his residence, the said weapon not

being used as a tool or implement necessary to earn his

livelihood nor being used in connection therewith.

Contrary to law. (p. 32, rollo of L-42050-66)

The other Informations are similarly worded except for the

name of the accused, the date and place of the commission

of the crime, and the kind of weapon involved.

2. In L-46229-32 and L-46313-16, the Information filed

with the Court presided by Judge Maceren follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus

REYNALDO LAQUI Y AQUINO, accused. CRIM.

CASE NO. 29677VIOL. OF PAR. 3,PD 9 IN REL. TO

LOINo. 266 of the ChiefExecutive dated April 1, 1975

INFORMATION

The undersigned accuses REYNALDO LAQUI Y

AQUINO of a VIOLATION OF PARAGRAPH 3,

PRESIDENTIAL DECREE NO. 9 in relation to Letter

of Instruction No. 266 of the Chief Executive dated

April 1, 1975, committed as follows:

That on or about the 28 th day of January, 1977, in the

City of Manila, Philippines, the said accused did then

and there wilfully, unlawfully and knowingly carry

outside of his residence a bladed and pointed weapon,

to wit: an ice pick with an overall length of about 8½

inches, the same not being used as a necessary tool or

implement to earn his livelihood nor being used in

connection therewith.

Contrary to law. (p. 14, rollo of L-46229-32)

The other Informations are likewise similarly worded except

for the name of the accused, the date and place of the

commission of the crime, and the kind of weapon involved.

3. In L-46997, the Information before the Court of First

Instance of Samar is quoted hereunder:

PEOPLE OF THE PHILIPPINES, complainant, versus

PANCHITO REFUNCION, accused.CRIM. CASE NO.

933For:ILLEGAL POSSESSION OFDEADLY

WEAPON(VIOLATION OF PD NO. 9)

INFORMATION

The undersigned First Assistant Provincial Fiscal of

Samar, accuses PANCHITO REFUNCION of the crime

of ILLEGAL POSSESSION OF DEADLY WEAPON or

VIOLATION OF PD NO. 9 issued by the President of

the Philippines on Oct. 2, 1972, pursuant to

Proclamation No. 1081 dated Sept. 21 and 23, 1972,

committed as follows:

That on or about the 6th day of October, 1976, in the

evening at Barangay Barruz, Municipality of

Matuginao, Province of Samar Philippines, and within

the jurisdiction of this Honorabe Court, the

abovenamed accused, knowingly, wilfully, unlawfully

and feloniously carried with him outside of his

residence a deadly weapon called socyatan, an

instrument which from its very nature is no such as

could be used as a necessary tool or instrument to

earn a livelihood, which act committed by the accused

is a Violation of Presidential Decree No. 9.

CONTRARY TO LAW. (p. 8, rollo of L-

46997)

B. — The Orders of dismissal —

In dismissing or quashing the Informations the trial courts

concurred with the submittal of the defense that one

essential element of the offense charged is missing from the

Information, viz: that the carrying outside of the accused's

residence of a bladed, pointed or blunt weapon is in

furtherance or on the occasion of, connected with or related

to subversion, insurrection, or rebellion, organized

lawlessness or public disorder.

1. Judge Purisima reasoned out, inter alia, in this manner:

... the Court is of the opinion that in order that possession

of bladed weapon or the like outside residence may be

prosecuted and tried under P.D. No. 9, the information

must specifically allege that the possession of bladed

weapon charged was for the purpose of abetting, or in

furtherance of the conditions of rampant criminality,

organized lawlessness, public disorder, etc. as are

contemplated and recited in Proclamation No. 1081, as

justification therefor. Devoid of this specific allegation, not

necessarily in the same words, the information is not

complete, as it does not allege sufficient facts to constitute

the offense contemplated in P.D. No. 9. The information in

these cases under consideration suffer from this defect.

xxx xxx xxx

And while there is no proof of it before the Court, it is

not difficult to believe the murmurings of detained

persons brought to Court upon a charge of

possession of bladed weapons under P.D. No. 9, that

more than ever before, policemen - of course not all

can be so heartless — now have in their hands P.D.

No. 9 as a most convenient tool for extortion, what

with the terrifying risk of being sentenced to

imprisonment of five to ten years for a rusted kitchen

knife or a pair of scissors, which only God knows

where it came from. Whereas before martial law an

extortion-minded peace officer had to have a stock of

the cheapest paltik, and even that could only convey

the coercive message of one year in jail, now

anything that has the semblance of a sharp edge or

pointed object, available even in trash cans, may

already serve the same purpose, and yet five to ten

times more incriminating than the infamous paltik.

For sure, P.D. No. 9 was conceived with the best of

intentions and wisely applied, its necessity can never

be assailed. But it seems it is back-firing, because it is

too hot in the hands of policemen who are inclined to

backsliding.

The checkvalves against abuse of P.D. No. 9 are to be

found in the heart of the Fiscal and the conscience of

the Court, and hence this resolution, let alone

technical legal basis, is prompted by the desire of this

Court to apply said checkvalves. (pp. 55-57, rollo of

L-42050-66)

2. Judge Maceren in turn gave his grounds for dismissing

the charges as follows:

xxx xxx xxx

As earlier noted the "desired result" sought to be

attained by Proclamation No. 1081 is the

maintenance of law and order throughout the

Philippines and the prevention and suppression of

all forms of lawless violence as well as any act of

insurrection or rebellion. It is therefore reasonable

to conclude from the foregoing premises that the

carrying of bladed, pointed or blunt weapons

outside of one's residence which is made unlawful

and punishable by said par. 3 of P.D. No. 9 is one

thatabets subversion, insurrection or rebellion,

lawless violence, criminality, chaos and public

disorder or is intended to bring about these

conditions. This conclusion is further strengthened

by the fact that all previously existing laws that also

made the carrying of similar weapons punishable

have not been repealed, whether expressly or

impliedly. It is noteworthy that Presidential Decree

No. 9 does not contain any repealing clause or

provisions.

xxx xxx xxx

The mere carrying outside of one's residence of

these deadly weapons if not concealed in one's

person and if not carried in any of the aforesaid

specified places, would appear to be not unlawful

and punishable by law.

With the promulgation of Presidential Decree No. 9,

however, the prosecution, through Assistant Fiscal

Hilario H. Laqui, contends in his opposition to the

motion to quash, that this act is now made unlawful

and punishable, particularly by paragraph 3

thereof, regardless of the intention of the person

carrying such weapon because the law makes it

"mala prohibita". If the contention of the

prosecution is correct, then if a person happens to

be caught while on his way home by law

enforcement officers carrying a kitchen knife that

said person had just bought from a store in order

that the same may be used by one's cook for

preparing the meals in one's home, such person will

be liable for punishment with such a severe penalty

as imprisonment from five to ten years under the

decree. Such person cannot claim that said knife is

going to be used by him to earn a livelihood because

he intended it merely for use by his cook in

preparing his meals.

This possibility cannot be discounted if

Presidential Decree No. 9 were to be

interpreted and applied in the manner that

that the prosecution wants it to be done.

The good intentions of the President in

promulgating this decree may thus be

perverted by some unscrupulous law

enforcement officers. It may be used as a

tool of oppression and tyranny or of

extortion.

xxx xxx xxx

It is therefore the considered and humble

view of this Court that the act which the

President intended to make unlawful and

punishable by Presidential Decree No. 9,

particularly by paragraph 3 thereof, is

one that abets or is intended to abet

subversion, rebellion, insurrection,

lawless violence, criminality, chaos and

public disorder. (pp. 28-30, rollo of L-

46229-32)

3. Judge Polo of the Court of First Instance of Samar

expounded his order dismissing the Information filed before

him, thus:

... We believe that to constitute an offense

under the aforcited Presidential decree,

the same should be or there should be an

allegation that a felony was committed in

connection or in furtherance of

subversion, rebellion, insurrection,

lawless violence and public disorder.

Precisely Proclamation No. 1081

declaring a state of martial law

throughout the country was issued

because of wanton destruction to lives and

properties widespread lawlessness and

anarchy. And in order to restore the

tranquility and stability of the country and

to secure the people from violence anti

loss of lives in the quickest possible

manner and time, carrying firearms,

explosives and deadly weapons without a

permit unless the same would fall under

the exception is prohibited. This

conclusion becomes more compelling

when we consider the penalty imposable,

which is from five years to ten years. A

strict enforcement of the provision of the

said law would mean the imposition of the

Draconian penalty upon the accused.

xxx xxx xxx

It is public knowledge that in rural areas,

even before and during martial law, as a

matter of status symbol, carrying deadly

weapons is very common, not necessarily

for committing a crime nor as their farm

implement but for self-preservation or

self-defense if necessity would arise

specially in going to and from their farm.

(pp. 18-19, rollo of L-46997)

In most if not all of the cases, the orders of dismissal were

given before arraignment of the accused. In the criminal

case before the Court of (First Instance of Samar the

accused was arraigned but at the same time moved to quash

the Information. In all the cases where the accused were

under arrest, the three Judges ordered their immediate

release unless held on other charges.

C. — The law under which the Informations in question

were filed by the People.

As seen from the Informations quoted above, the accused

are charged with illegal possession of deadly weapon in

violation of Presidential Decree No. 9, Paragraph 3.

We quote in full Presidential Decree No. 9, to wit:

PRESIDENTIAL DECREE NO. 9

DECLARING VIOLATIONS OF GENERAL ORDERS

NO. 6 and NO. 7 DATED SEPTEMBER 22, 1972,

AND SEPTEMBER 23, 1972, RESPECTIVELY, TO

BE UNLAWFUL AND PROVIDING PENALTIES

THEREFORE.

WHEREAS, pursuant to Proclamation No. 1081

dated September 21, 1972, the Philippines has been

placed under a state of martial law;

WHEREAS, by virtue of said Proclamation No.

1081, General Order No. 6 dated September 22,

1972 and General Order No. 7 dated September 23,

1972, have been promulgated by me;

WHEREAS, subversion, rebellion,

insurrection, lawless violence, criminality,

chaos and public disorder mentioned in

the aforesaid Proclamation No. 1081 are

committed and abetted by the use of

firearms, explosives and other deadly

weapons;

NOW, THEREFORE, I, FERDINAND E.

MARCOS, Commander-in-Chief of all the

Armed Forces of the Philippines, in older

to attain the desired result of the aforesaid

Proclamation No. 1081 and General

Orders Nos. 6 and 7, do hereby order and

decree that:

1. Any violation of the aforesaid General

Orders Nos. 6 and 7 is unlawful and the

violator shall, upon conviction suffer:

(a) The mandatory penalty of death by a

firing squad or electrocution as a

Military, Court/Tribunal/Commission may

direct, it the firearm involved in the

violation is unlicensed and is attended by

assault upon, or resistance to persons in

authority or their agents in the

performance of their official functions

resulting in death to said persons in

authority or their agent; or if such

unlicensed firearm is used in the

commission of crimes against persons,

property or chastity causing the death of

the victim used in violation of any other

General Orders and/or Letters of

Instructions promulgated under said

Proclamation No. 1081:

(b) The penalty of imprisonment ranging

from twenty years to life imprisonment as

a Military Court/Tribunal/commission

may direct, when the violation is not

attended by any of the circumstances

enumerated under the preceding

paragraph;

(c) The penalty provided for in the

preceding paragraphs shall be imposed

upon the owner, president, manager,

members of the board of directors or other

responsible officers of any public or

private firms, companies, corporations or

entities who shall willfully or knowingly

allow any of the firearms owned by such

firm, company, corporation or entity

concerned to be used in violation of said

General Orders Nos. 6 and 7.

2. It is unlawful to posses deadly weapons, including

hand grenades, rifle grenades and other explosives,

including, but not limited to, "pill box bombs," "molotov

cocktail bombs," "fire bombs," or other incendiary

device consisting of any chemical, chemical compound,

or detonating agents containing combustible units or

other ingredients in such proportion, quantity, packing,

or bottling that ignites by fire, by friction, by

concussion, by percussion, or by detonation of all or

part of the compound or mixture which may cause such

a sudden generation of highly heated gases that the

resultant gaseous pressures are capable of producing

destructive effects on continguous objects or of causing

injury or death of a person; and any person convicted

thereof shall be punished by imprisonment ranging

from ten to fifteen years as a Military

Court/Tribunal/Commission may direct.

3. It is unlawful to carry outside of residence any

bladed, pointed or blunt weapon such as "fan knife,"

"spear," "dagger," "bolo," "balisong," "barong," "kris,"

or club, except where such articles are being used as

necessary tools or implements to earn a livelihood and

while being used in connection therewith; and any

person found guilty thereof shall suffer the penalty of

imprisonment ranging from five to ten years as a

Military Court/Tribunal/Commission may direct.

4. When the violation penalized in the preceding

paragraphs 2 and 3 is committed during the

commission of or for the purpose of committing, any

other crime, the penalty shall be imposed upon the

offender in its maximum extent, in addition to the

penalty provided for the particular offenses committed

or intended to be committed.

Done in the City of Manila, this 2nd day of October in

the year of Our Lord, nineteen hundred and seventy-

two.(SGD) FERDINAND E. MARCOS

PresidentRepublic of the Philippines

D. — The arguments of the People —

In the Comment filed in these cases by the Solicitor General

who as stated earlier joins the City Fiscal of Manila and the

Provincial Fiscal of Samar in seeking the setting aside of

the questioned orders of dismissal, the main argument

advanced on the issue now under consideration is that a

perusal of paragraph 3 of P.D. 9 'shows that the prohibited

acts need not be related to subversive activities; that the act

proscribed is essentially a malum prohibitum penalized for

reasons of public policy. 1

The City Fiscal of Manila in his brief adds further that in

statutory offenses the intention of the accused who commits

the act is immaterial; that it is enough if the prohibited act

is voluntarily perpetuated; that P.D. 9 provides and

condemns not only the carrying of said weapon in

connection with the commission of the crime of subversion

or the like, but also that of criminality in general, that is, to

eradicate lawless violence which characterized pre-martial

law days. It is also argued that the real nature of the

criminal charge is determined not from the caption or

preamble of the information nor from the specification of the

provision of law alleged to have been violated but by the

actual recital of facts in the complaint or information. 2

E. — Our Ruling on the matter —

1. It is a constitutional right of any person who stands

charged in a criminal prosecution to be informed of the

nature and cause of the accusation against him. 3

Pursuant to the above, Section 5, Rule 110 of the Rules of

Court, expressly requires that for a complaint or

information to be sufficient it must, inter alia state the

designation of the offense by the statute, and the acts or

omissions complained of as constituting the offense. This is

essential to avoid surprise on the accused and to afford him

the opportunity to prepare his defense accordingly. 4

To comply with these fundamental requirements of the

Constitution and the Rules on Criminal Procedure, it is

imperative for the specific statute violated to be designated

or mentioned 4 in the charge. In fact, another compelling

reason exists why a specification of the statute violated is

essential in these cases. As stated in the order of respondent

Judge Maceren the carrying of so-called "deadly weapons"

is the subject of another penal statute and a Manila city

ordinance. Thus, Section 26 of Act No. 1780 provides:

Section 26. It should be unlawful for any person to

carry concealed about his person any bowie knife, dirk

dagger, kris, or other deadly weapon: ... Any person

violating the provisions of this section shall, upon

conviction in a court of competent jurisdiction, be

punished by a fine not exceeding five hundred pesos, or

by imprisonment for a period not exceeding six months,

or both such fine and imprisonment, in the discretion of

the court.

Ordinance No. 3820 of the City of Manila as amended by

Ordinance No. 3928 which took effect on December 4, 1957,

in turn penalizes with a fine of not more than P200.00 or

imprisonment for not more than one months, or both, at the

discretion of the court, anyone who shall carry concealed in

his person in any manner that would disguise its deadly

character any kind of firearm, bowie knife, or other deadly

weapon ... in any public place.Consequently, it is necessary

that the particular law violated be specified as there exists a

substantial difference between the statute and city ordinance

on the one hand and P.D. 9 (3) on the other regarding the

circumstances of the commission of the crime and the

penalty imposed for the offense.

We do not agree with petitioner that the above-mentioned

statute and the city ordinance are deemed repealed by P.D.

9 (3). 5 P. D. 9(3) does not contain any repealing clause or

provision, and repeal by implication is not favored. 6 This

principle holds true with greater force with regards to penal

statutes which as a rule are to be construed strictly against

the state and liberally in favor of the accused. 7 In fact,

Article 7 of the New Civil Code provides that laws are

repealed only by subsequent ones and their violation or non-

observance shall not be excused by disuse, or custom or

practice to the contrary.

Thus we are faced with the situation where a particular act

may be made to fall, at the discretion of a police officer or a

prosecuting fiscal, under the statute, or the city ordinance,

or the presidential decree. That being the case, the right

becomes more compelling for an accused to be confronted

with the facts constituting the essential elements of the

offense charged against him, if he is not to become an easy

pawn of oppression and harassment, or of negligent or

misguided official action — a fear understandably shared by

respondent Judges who by the nature of their judicial

functions are daily exposed to such dangers.

2. In all the Informations filed by petitioner the accused are

charged in the caption as well as in the body of the

Information with a violation of paragraph 3, P.D. 9. What

then are the elements of the offense treated in the

presidential decree in question?

We hold that the offense carries two elements: first, the

carrying outside one's residence of any bladed, blunt, or

pointed weapon, etc. not used as a necessary tool or

implement for a livelihood; and second, that the act of

carrying the weapon was either in furtherance of, or to abet,

or in connection with subversion, rebellion, insurrection,

lawless violence, criminality, chaos, or public disorder.

It is the second element which removes the act of carrying a

deadly weapon, if concealed, outside of the scope of the

statute or the city ordinance mentioned above. In other

words, a simple act of carrying any of the weapons

described in the presidential decree is not a criminal offense

in itself. What makes the act criminal or punishable under

the decree is the motivation behind it. Without that

motivation, the act falls within the purview of the city

ordinance or some statute when the circumstances so

warrant.

Respondent Judges correctly ruled that this can be the only

reasonably, logical, and valid construction given to P.D.

9(3).

3. The position taken by petitioner that P.D. 9(3) covers one

and all situations where a person carries outside his

residence any of the weapons mentioned or described in the

decree irrespective of motivation, intent, or purpose,

converts these cases into one of "statutory construction."

That there is ambiguity in the presidential decree is manifest

from the conflicting views which arise from its

implementation. When ambiguity exists, it becomes a

judicial task to construe and interpret the true meaning and

scope of the measure, guided by the basic principle that

penal statutes are to be construed and applied liberally in

favor of the accused and strictly against the state.

4. In the construction or interpretation of a legislative

measure — a presidential decree in these cases — the

primary rule is to search for and determine the intent and

spirit of the law. Legislative intent is the controlling factor,

for in the words of this Court in Hidalgo v. Hidalgo, per Mr.

Justice Claudio Teehankee, whatever is within the spirit of a

statute is within the statute, and this has to be so if strict

adherence to the letter would result in absurdity, injustice

and contradictions. 8

There are certain aids available to Us to ascertain the intent

or reason for P.D. 9(3).

First, the presence of events which led to or precipitated the

enactment of P.D. 9. These events are clearly spelled out in

the "Whereas" clauses of the presidential decree, thus: (1)

the state of martial law in the country pursuant to

Proclamation 1081 dated September 21, 1972; (2) the

desired result of Proclamation 1081 as well as General

Orders Nos. 6 and 7 which are particularly mentioned in

P.D. 9; and (3) the alleged fact that subversion, rebellion,

insurrection, lawless violence, criminality, chaos, aid public

disorder mentioned in Proclamation 1081 are committed

and abetted by the use of firearms and explosives and other

deadly weapons.

The Solicitor General however contends that a preamble of

a statute usually introduced by the word "whereas", is not

an essential part of an act and cannot enlarge or confer

powers, or cure inherent defects in the statute (p. 120, rollo

of L-42050-66); that the explanatory note or enacting clause

of the decree, if it indeed limits the violation of the

decree, cannot prevail over the text itself inasmuch as such

explanatory note merely states or explains the reason which

prompted the issuance of the decree. (pp. 114-115, rollo of

46997)

We disagree with these contentions. Because of the problem

of determining what acts fall within the purview of P.D. 9, it

becomes necessary to inquire into the intent and spirit of the

decree and this can be found among others in the preamble

or, whereas" clauses which enumerate the facts or events

which justify the promulgation of the decree and the stiff

sanctions stated therein.

A "preamble" is the key of the statute, to

open the minds of the makers as to

the mischiefs which are to be remedied,

and objects which are to be accomplished,

by the provisions of the statute." (West

Norman Timber v. State, 224 P. 2d 635,

639, cited in Words and Phrases,

"Preamble"; emphasis supplied)

While the preamble of a statute is not

strictly a part thereof, it may, when the

statute is in itself ambiguous and difficult

of interpretation, be resorted to, but not to

create a doubt or uncertainty which

otherwise does not exist." (James v. Du

Bois, 16 N.J.L. (1 Har.) 285, 294, cited in

Words and Phrases, "Preamble")

In Aboitiz Shipping Corporation, et al. v. The City of Cebu,

et al. this Court had occasion to state that '(L)egislative

intent must be ascertained from a consideration of the

statute as a whole, and not of an isolated part or a

particular provision alone. This is a cardinal rule of

statutory construction. For taken in the abstract, a word or

phrase might easily convey a meaning quite different from

the one actually intended and evident when the word or

phrase is considered with those with which it is associated.

Thus, an apparently general provision may have a limited

application if read together with other provisions. 9

Second, the result or effects of the presidential decree must

be within its reason or intent.

In the paragraph immediately following the last "Whereas"

clause, the presidential decree states:

NOW, THEREFORE, I , FERDINAND E.

MARCOS, Commander-in-Chief of an the

Armed Forces of the Philippines, in order

to attain the desired result of the aforesaid

Proclamation No. 1081 and General

Orders Nos. 6 and 7, do hereby order and

decree that:

xxx xxx xxx

From the above it is clear that the acts

penalized in P.D. 9 are those related to

the desired result of Proclamation

1081 and General Orders Nos. 6 and 7.

General Orders Nos. 6 and 7 refer to

firearms and therefore have no relevance

to P.D. 9(3) which refers to blunt or

bladed weapons. With respect to

Proclamation 1081 some of the underlying

reasons for its issuance are quoted

hereunder:

WHEREAS, these lawless elements having

taken up arms against our duly constituted

government and against our people, and

having committed and are still committing

acts of armed insurrection and rebellion

consisting of armed raids, forays, sorties,

ambushes, wanton acts of murders,

spoilage, plunder, looting, arsons,

destruction of public and private

buildings, and attacks against innocent

and defenseless civilian lives and

property, all of which activities have

seriously endangered and continue to

endanger public order and safety and the

security of the nation, ...

xxx xxx xxx

WHEREAS, it is evident that there is

throughout the land a state of anarchy and

lawlessness, chaos and disorder, turmoil

and destruction of a magnitude equivalent

to an actual war between the forces of our

duly constituted government and the New

People's Army and their satellite

organizations because of the unmitigated

forays, raids, ambuscades, assaults,

violence, murders, assassinations, acts of

terror, deceits, coercions, threats,

intimidations, treachery, machinations,

arsons, plunders and depredations

committed and being committed by the

aforesaid lawless elements who have

pledged to the whole nation that they will

not stop their dastardly effort and scheme

until and unless they have fully attained

their primary and ultimate purpose of

forcibly seizing political and state power

in this country by overthrowing our

present duly constituted government, ...

(See Book I, Vital Documents on the

Declaration of Martial Law in the

Philippines by the Supreme Court of the

Philippines, pp. 13-39)

It follows that it is only that act of carrying a blunt or

bladed weapon with a motivation connected with or related

to the afore-quoted desired result of Proclamation 1081 that

is within the intent of P.D. 9(3), and nothing else.

Statutes are to be construed in the light of purposes to

be achieved and the evils sought to be remedied. (U.S.

v. American Tracking Association, 310 U.S. 534, cited

in LVN Pictures v. Philippine Musicians Guild, 110

Phil. 725, 731; emphasis supplied)

When construing a statute, the reason for its enactment

should be kept in mind, and the statute should be

construed with reference to its intended scope and

purpose. (Statutory Construction by E.T. Crawford, pp.

604-605, cited in Commissioner of Internal Revenue v.

Filipinas Compania de Seguros, 107 Phil. 1055, 1060;

emphasis supplied)

5. In the construction of P.D. 9(3) it becomes relevant to

inquire into the consequences of the measure if a strict

adherence to the letter of the paragraph is followed.

It is a salutary principle in statutory construction that there

exists a valid presumption that undesirable consequences

were never intended by a legislative measure, and that a

construction of which the statute is fairly susceptible is

favored, which will avoid all objectionable, mischievous,

indefensible, wrongful, evil, and injurious consequences. 9-a

It is to be presumed that when P.D. 9 was promulgated by

the President of the Republic there was no intent to work a

hardship or an oppressive result, a possible abuse of

authority or act of oppression, arming one person with a

weapon to impose hardship on another, and so on. 10

At this instance We quote from the order of Judge Purisima

the following:

And while there is no proof of it before the

Court, it is not difficult to believe the

murmurings of detained persons brought

to Court upon a charge of possession of

bladed weapons under P.D. No. 9, that

more than ever before, policemen - of

course not all can be so heartless — now

have in their hands P.D. No. 9 as a most

convenient tool for extortion, what with

the terrifying risk of being sentenced to

imprisonment of five to ten years for a

rusted kitchen knife or a pair of scissors,

which only God knows where it came

from. Whereas before martial law an

extortion-minded peace officer had to

have a stock of the cheapest paltik, and

even that could only convey the coercive

message of one year in jail, now anything

that has the semblance of a sharp edge or

pointed object, available even in trash

cans, may already serve the same purpose,

and yet five to ten times more

incriminating than the infamous paltik.

(pp. 72-73, rollo L-42050-66)

And as respondent Judge Maceren points out, the people's

interpretation of P.D. 9(3) results in absurdity at times. To

his example We may add a situation where a law-abiding

citizen, a lawyer by profession, after gardening in his house

remembers to return the bolo used by him to his neighbor

who lives about 30 meters or so away and while crossing the

street meets a policeman. The latter upon seeing the bolo

being carried by that citizen places him under arrest and

books him for a violation of P.D. 9(3). Could the

presidential decree have been conceived to produce such

absurd, unreasonable, and insensible results?

6. Penal statutes are to be construed strictly against the

state and liberally in favor of an accused.

American jurisprudence sets down the reason for this rule to

be "the tenderness of the law of the rights of individuals; the

object is to establish a certain rule by conformity to which

mankind would be safe, and the discretion of the court

limited." 11

The purpose is not to enable a guilty person to

escape punishment through a technicality but to provide a

precise definition of forbidden acts. 12

Our own decisions have set down the same guidelines in this

manner, viz:

Criminal statutes are to be construed strictly. No

person should be brought within their terms who is not

clearly within them, nor should any act be pronounced

criminal which is not made clearly so by the statute.

(U.S. v. Abad Santos, 36 Phil. 243, 246)

The rule that penal statutes are given a strict

construction is not the only factor controlling the

interpretation of such laws, instead, the rule merely

serves as an additional, single factor to be considered

as an aid in determining the meaning of penal laws.

(People v. Manantan, 5 SCRA 684, 692)

F. The Informations filed by petitioner are fatally defective.

The two elements of the offense covered by P.D. 9(3) must

be alleged in the Information in order that the latter may

constitute a sufficiently valid charged. The sufficiency of an

Information is determined solely by the facts alleged

therein. 13

Where the facts are incomplete and do not convey

the elements of the crime, the quashing of the accusation is

in order.

Section 2(a), Rule 117 of the Rules of Court provides that

the defendant may move to quash the complaint or

information when the facts charged do not constitute an

offense.

In U.S.U. Gacutan, 1914, it was held that where an accused

is charged with knowingly rendering an unjust judgment

under Article 204 of the Revised Penal Code, failure to

allege in the Information that the judgment was rendered

knowing it to be unjust, is fatal. 14

In People v. Yadao, 1954, this Court through then Justice

Cesar Bengzon who later became Chief Justice of the Court

affirmed an order of the trial court which quashed an

Information wherein the facts recited did not constitute a

public offense as defined in Section 1, Republic Act 145. 15

G. The filing of these Petitions was unnecessary because the

People could have availed itself of other available remedies

below.

Pertinent provisions of the Rules of Court follow:

Rule 117, Section 7. Effect of sustaining the motion to

quash. — If the motion to quash is sustained the court

may order that another information be filed. If such

order is made the defendant, if in custody, shall remain

so unless he shall be admitted to bail. If such order is

not made or if having been made another information is

not filed withuntime to be specified in the order, or

within such further time as the court may allow for

good cause shown, the defendant, if in custody, shall be

discharged therefrom, unless he is in custody on some

other charge.

Rule 110, Section 13. Amendment. — The information

or complaint may be amended, in substance or form,

without leave of court, at any time before the defendant

pleads; and thereafter and during the trial as to all

matters of form, by leave and at the discretion of the

court, when the same can be done without prejudice to

the rights of the defendant.

xxx xxx xxx

Two courses of action were open to Petitioner upon the

quashing of the Informations in these cases, viz:

First, if the evidence on hand so warranted, the People

could have filed an amended Information to include the

second element of the offense as defined in the disputed

orders of respondent Judges. We have ruled that if the facts

alleged in the Information do not constitute a punishable

offense, the case should not be dismissed but the prosecution

should be given an opportunity to amend the Information. 16

Second, if the facts so justified, the People could have filed a

complaint either under Section 26 of Act No. 1780, quoted

earlier, or Manila City Ordinance No. 3820, as amended by

Ordinance No. 3928, especially since in most if not all of the

cases, the dismissal was made prior to arraignment of the

accused and on a motion to quash.

Section 8. Rule 117 states that:

An order sustaining the motion to quash is

not a bar to another prosecution for the

same offense unless the motion was based

on the grounds specified in section 2,

subsections (f) and (h) of this rule.

Under the foregoing, the filing of another complaint or

Information is barred only when the criminal action or

liability had been extinguished (Section 2[f]) or when the

motion to quash was granted for reasons of double

jeopardy. (ibid., [h])

As to whether or not a plea of double jeopardy may be

successfully invoked by the accused in all these cases should

new complaints be filed against them, is a matter We need

not resolve for the present.

H. — We conclude with high expectations that police

authorities and the prosecuting arm of the government true

to the oath of office they have taken will exercise utmost

circumspection and good faith in evaluating the particular

circumstances of a case so as to reach a fair and just

conclusion if a situation falls within the purview of P.D. 9(3)

and the prosecution under said decree is warranted and

justified. This obligation becomes a sacred duty in the face

of the severe penalty imposed for the offense.

On this point, We commend the Chief State Prosecutor

Rodolfo A. Nocon on his letter to the City Fiscal of Manila

on October 15, 1975, written for the Secretary, now

Minister of Justice, where he stated the following:

In any case, please study well each and every case of

this nature so that persons accused of carrying bladed

weapons, specially those whose purpose is not to

subvert the duly constituted authorities, may not be

unduly indicted for the serious offenses falling under

P.D. No. 9. 17

Yes, while it is not within the power of courts of justice to

inquire into the wisdom of a law, it is however a judicial

task and prerogative to determine if official action is within

the spirit and letter of the law and if basic fundamental

rights of an individual guaranteed by the Constitution are

not violated in the process of its implementation. We have to

face the fact that it is an unwise and unjust application of a

law, necessary and justified under prevailing circumstances,

which renders the measure an instrument of oppression and

evil and leads the citizenry to lose their faith in their

government.

WHEREFORE, We DENY these 26 Petitions for Review and

We AFFIRM the Orders of respondent Judges dismissing or

quashing the Information concerned, subject however to

Our observations made in the preceding pages 23 to 25 of

this Decision regarding the right of the State or Petitioner

herein to file either an amended Information under

Presidential Decree No. 9, paragraph 3, or a new one under

other existing statute or city ordinance as the facts may

warrant.

Without costs.

SO ORDERED.

[G.R. No. L-6379. September 29, 1954.]

In the matter of the petition of WILFRED UYTENGSU

to be admitted a citizen of the Philippine. WILFRED

UYTENGSU, Petitioner-Appellee, v. REPUBLIC OF

THE PHILIPPINES,Oppositor-Appellant.

This is an appeal taken by the Solicitor General from a

decision of the Court of First Instance of Cebu, granting the

application of Wilfred Uytengsu, for naturalization as

citizen of the Philippines.

The main facts are not disputed. Petitioner-appellee was

born, of Chinese parents, in Dumaguete, Negros Oriental on

October 6, 1927. He began his primary education at the

Saint Theresa’s College in said municipality. Subsequently,

he attended the Little Flower of Jesus Academy, then the

San Carlos College and, still later the Siliman University —

all in the same locality — where he completed the

secondary course. Early in 1946, he studied, for one

semester, in the Mapua Institute of Technology, in Manila.

Soon after, he went to the United States, where, from 1947

to 1950, he was enrolled in the Leland Stanford Junior

University, in California, and was graduated, in 1950, with

the degree of Bachelor of Science. In April of the same year

he returned to the Philippines for four (4) months vacation.

Then, to be exact, on July 15, 1950, his present application

for naturalization was filed. Forthwith, he returned to the

United States and took a postgraduate course, in chemical

engineering, in another educational institution, in Fort

Wayne, Indiana. He finished this course in July 1951; but

did not return to the Philippines until October 13, 1951.

Hence, the hearing of the case, originally scheduled to take

place on July 12, 1951, had to be postponed on motion of

counsel for the petitioner.

The only question for the determination in this appeal is

whether or not the application for naturalization may be

granted, notwithstanding the fact that petitioner left the

Philippines immediately after the filing of his petition and

did not return until several months after the first date set for

the hearing thereof. The Court of First Instance of Cebu

decided this question in the affirmative and accordingly

rendered judgment for the petitioner. The Solicitor General,

who maintains the negative, has appealed from said

judgment.

Section 7 of Commonwealth Act No. 473 reads as

follows:jgc:chanrobles.com.ph

"Any person desiring to acquire Philippine citizenship shall

file with the competent court, a petition in triplicate,

accompanied by two photographs of the petitioner, setting

forth his name and surname, his present and former place of

residence; his occupation; the place and date of his birth;

whether single or married and if the father of children, the

name, age, birthplace and residence of the wife and of each

of the children; the approximate date of his arrival in the

Philippines, the name of the port of debarkation, and if he

remembers it, the name of the ship on which he came; a

declaration that he has the qualifications required by this

Act, specifying the same, and that he is not disqualified for

naturalization under the provisions of this Act; that he has

complied with the requirements of section five of this Act,

and that he will reside continuously in the Philippines from

the date of the filing of the petition up to the time of his

admission to Philippine citizenship . . ." (Emphasis

supplied.)

In conformity with this provision, petitioner stated in

paragraph 13 of his application:jgc:chanrobles.com.ph

". . . I will reside continuously in the Philippines from the

date of the filing of my petition up to the time of my

admission to Philippine citizenship." (Record on Appeal,

page 3.)

Petitioner contends, and the lower court held, that the word

"residence", as used in the aforesaid provision of the

Naturalization Law, is synonymous with domicile, which,

once acquired, is not lost by physical absence, until another

domicile is obtained, and that, from 1946 to 1951, he

continued to be domiciled in, and hence a resident of the

Philippines, his purpose in staying in the United States, at

that time, being, merely to study therein.

It should be noted that to become a citizen of the Philippines

by naturalization, one must reside therein for not less than

10 years, except in some special cases, in which 5 years of

residence is sufficient (sections 2 and 3, Commonwealth Act

No. 473). Pursuant to the provision above quoted, he must,

also, file an application stating therein, among other things,

that he "has the qualifications required" by law. Inasmuch as

these qualifications include the residence requirement

already referred to, it follows that the applicant must prove

that he is a resident of the Philippines at the time, not only

of the filing of the application, but, also, of its hearing. If the

residence thus required is the actual or constructive

permanent home, otherwise known as legal residence or

domicile, then the applicant must be domiciled in the

Philippines on both dates. Consequently, when section 7 of

Commonwealth Act No. 473 imposes upon the applicant the

duty to state in his sworn application "that he will reside

continuously in the Philippines" in the intervening period, it

can not refer merely to the need of an uninterrupted

domicile or legal residence, irrespective of actual residence,

for said legal residence or domicile is obligatory under the

law, even in the absence of the requirement contained in

said clause, and, it is well settled that, whenever possible, a

legal provision must not be so construed as to be a useless

surplusage, and, accordingly, meaningless, in the sense of

adding nothing to the law or having no effect whatsoever

thereon. This consequences may be avoided only by

construing the clause in question as demanding actual

residence in the Philippines from the filing of the petition

for naturalization to its determination by the court.

Indeed, although the words "residence" and "domicile" are

often used interchangeably, each has, in strict legal parlance,

a meaning distinct and different from that of the other.

x x x

". . . There is a decided preponderance of authority to the

effect that residence and domicile are not synonymous in

connection with citizenship, jurisdiction, limitations, school

privileges, probate and succession.

". . . the greater or less degree of permanency contemplated

or intended furnishes a clue to the sometimes shadowy

distinction between residence and domicile. To be a resident

one must be physically present in that place of a longer or

shorter period of time.’The essential distinction between

residence and domicile is this: the first involves the intent to

leave when the purpose for which he has taken up his abode

ceases; the other has no such intent, the abiding is animo

manendi. One may seek a place for purposes of pleasure, of

business, or of health. If his intent be to remain it becomes

his domicile; if his intent is to leave as soon as his purpose is

accomplished, it is his residence. Perhaps the most

satisfactory definition is that one is a resident of a place

from which his departure is indefinite as to time, definite as

to purpose; and for this purpose he has made the place his

temporary home.

"For many legal purposes there is a clear distinction

between ’residence’ and ’domicile.’ A person may hold an

office or may have business or employment or other affair

which requires him to reside at a particular place. His

intention is to remain there while the office or business or

employment or other concern continues; but he has no

purpose to remain beyond the time the interest exists which

determines his place of abode. Domicile is characterized by

the animus manendi. . . .

"Residence and domicile are not to be held synonymous.

Residence is an act. Domicile is an act coupled with an

intent. A man may have a residence in one state or country

and his domicile in another, and he may be a nonresident of

the state of his domicile in the sense that his place of actual

residence is not there. Hence the great weight of authorities.

— rightly so, as we think — that a debtor, although his legal

domicile is in the state, may reside or remain out of it for so

long a time and under such circumstances as to acquire so to

speak, an actual nonresidence within the meaning of the

attachment statute."cralaw virtua1aw library

"Domicile is a much broader term than residence. A man

may have his domicile in one state and actually reside in

another, or in a foreign country. If he has once had a

residence in a particular place and removed to another, but

with the intention of returning after a certain time, however

long that may be, his domicile is at the former residence and

his residence at the place of his temporary habitation.

Residence and habitation are generally regarded as

synonymous. A resident and an inhabitant mean the same

thing. A person resident is defined to be one ’dwelling and

having his abode in any place,’ ’an inhabitant,’ ’one that

resides in a place.’

The question of domicile is not involved in determining

whether a person is a resident of a state or country. The

compatibility of domicile in one state with actual residence

in another has been asserted and acted upon in the law of

attachment by the Courts of New York, New Jersey,

Maryland, North Carolina, Mississippi and Wisconsin.

"Residence indicates permanency of occupation, distinct

from lodging or boarding, or temporary occupation. It does

not include as much as domicile, which requires intention

combined with residence.’ . . .’one may seek a place for

purposes of pleasure, of business, or of health. If his intent

be to remain, it becomes his domicile; if his intent be to

leave as soon as his purpose is accomplished, it is his

residence.’

"The derivation of the two words ’residence’ and ’domicile’

fairly illustrates the distinction in their meaning. A home

(domus) is something more than a temporary place of

remaining (residendi) however long such stay may

continue.

‘While, generally speaking, domicile and residence mean

one and the same thing, residence combined with intention

to remain, constitutes domicile while an established abode,

fixed permanently for a time [!] for business or other

purposes, constitutes a residence, though there may be an

intent, existing all the while, to return to the true domicile.’

"There is a difference between domicile and

residence.’Residence’ is used to indicate the place of abode,

whether permanent or temporary’ ’domicile’ denotes a fixed

permanent residence to which, when absent, one has the

intention of returning. A man may have a residence in one

place and a domicile in another.’ ’Residence is not domicile,

but domicile is residence coupled with intention to remain

for an unlimited time. A man can have but one domicile for

one and the same purpose at any time, but he may have

numerous places of residence. His place of residence

generally is his place of domicile, but is not by any means

necessarily so, since no length of residence without intention

of remaining will constitute domicile." (Kennan on

Residence and Domicile, pp. 26, 31-35)

Such distinction was, in effect, applied by this Court in the

case of Domingo Dy, alias William Dy Chinco v. Republic

of the Philippines (92 Phil., 278). The applicant in that case

was born in Naga, Camarines Sur, on May 19, 1915. "At the

age of seven or eight, or in the year 1923, he went to China,

with his mother to study, and while he used to go back and

forth from China to the Philippines during school vacations,

he did not come back to live permanently here until the year

1937." He applied for naturalization in 1949. The question

arose whether, having been domiciled in the Philippines for

over 30 years, he could be naturalized as a citizen of the

Philippines, without a previous declaration of intention, in

view of section 6 of Commonwealth Act No. 473 (as

amended by Commonwealth Act No. 535), exempting from

such requirement "those who have resided in the Philippines

continuously for a period of thirty years or more, before

filing their application." This Court decided the question in

the negative, upon the ground that "actual and substantial

residence within the Philippines, not legal residence", or

"domicile," along, is essential to the enjoyment of the

benefits of said exemption.

If said actual and substantial residence — not merely legal

residence — is necessary to dispense with the filing of a

declaration of intention, it is even more necessary during the

period intervening from the filing of the petition for

naturalization to the date of the hearing thereof. In this

connection, it should be remembered that, upon the filing of

said petition, the clerk of court is ordained by law to publish

it with a notice of the date of the hearing, which, pursuant to

section 7 of Act No. 2927, shall not be less than 60 days

from the date of the last publication. This period was

extended to two (2) months, by section 7 of Commonwealth

Act No. 473, and then to six (6) months, by Republic Act

No. 530. The purpose of said period, particularly the

extensions thereof — like the requirement of making a

declaration of intention at least one (1) year prior to the

filing of the application — is not difficult to determine. It is

nothing but to give the government sufficient time to check

the truth of the statements made in said declaration of

intention, if any, and in the application for naturalization,

especially the allegations therein relative to the possession

of the qualifications and none of the disqualifications

provided by law. Although data pertinent to said

qualifications and disqualifications could generally to be

obtained from persons familiar with the applicant, it is be

expected that the information thus secured would consist,

mainly, of conclusions and opinions of said individuals.

Indeed, what else can they be expected to say on whether

the applicant has a good moral character; or whether he

believes in the principles underlying our Constitution; or

whether his conduct has been proper and irreproachable; or

whether he is suffering from mental alienation or incurable

contagious diseases, or has not mingled socially with the

Filipinos? Obviously, the Government would be in a better

position to draw its own conclusions on these matters if its

officers could personally observe the behaviour of the

applicant and confer with him if necessary.

In the case at bar, the Government has not had any chance

whatsoever to thus keep a watchful eye on petitioner herein.

Immediately after the filing of his application — and —

notwithstanding the explicit promise therein made him,

under oath, to the effect that he would reside continuously in

the Philippines "from the date of the filing of his petition up

to the time of his admission to Philippine citizenship" — he

returned to the United States, where he stayed, continuously,

until October 13, 1951. For this first time, on July 12, 1951,

his counsel had to move for opportunity needed by the

Government to observe petitioner herein was enhanced by

the fact that, having been born in the Philippines, where he

finished his primary and secondary education, petitioner his

not have to file, and did not file, a declaration of intention

prior to the filing of his petition for naturalization. Thus, the

Government had no previous notice of his intention to apply

for naturalization until the filing of his petition and could

not make the requisite investigation prior thereto.

Moreover, considering that petitioner had stayed in the

United States, practically without interruption, from early

1947 to late in 1951, or for almost five (5) years, over three

years and a half of which preceded the filing of the

application, it may be said that he resided — as

distinguished from domiciled — in the United States at that

time and for over a year subsequently thereto. In fact, under

our laws, residence for six (6) months suffices to entitle a

person to exercise the right to suffrage in a given

municipality (section 98, Republic Act No. 180); residence

for sentatives (sec. 7, Art. VI, of the Constitution); and

residence for two (2) years, to run for the Senate (sec. 4, Art.

VI, of the Constitution). In some states of the United States,

a residence of several weeks or months is enough to

establish a domicile for purpose of divorce. Although in

these cases the word "residence" has been construed,

generally, to mean "domicile" — that is to say, actual

residence, coupled with the intention to stay permanently, at

least at the time of the acquisition of said domicile - it would

seem apparent from the foregoing that the length justifies

the conclusion that he was residing abroad when his

application for naturalization was filed and for fifteen (15)

months thereafter, and that this is precisely the situation

sought to be forestalled by the law in enjoining the applicant

to "reside continuously in the Philippines from the date of

the filing of the petition up to the time of his admission to

Philippine citizenship," unless this legal mandate — which

did not exist under Act No. 2927, and was advisely inserted,

therefore, by section 7 of Commonwealth Act No. 473 —

were to be regarded as pure verbiage, devoid, not only, of

any force or effect, but, also, of any intent or purpose, as it

would, to our mind, turn out to be, were we to adopt

petitioner’s pretense.

In short, we are of the opinion that petitioner herein has not

complied with the requirements of section 7 of

Commonwealth Act No. 473, and with the aforementioned

promise made by him in his application, and, accordingly, is

not entitled, in the present proceedings, to a judgment in his

favor. Wherefore, the decision appealed from is hereby

reversed, and the case dismissed, with costs against the

petitioner, but without prejudice to the filing of another

application, if he so desires, in conformity with law. It is so

ordered.

G.R. No. 155076 February 27, 2006

LUIS MARCOS P. LAUREL, Petitioner,

vs.

HON. ZEUS C. ABROGAR, Presiding Judge of the

Regional Trial Court, Makati City, Branch 150,

PEOPLE OF THE PHILIPPINES& PHILIPPINE

LONG DISTANCE TELEPHONE

COMPANY, Respondents.

D E C I S I O N

CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari of the

Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.

68841 affirming the Order issued by Judge Zeus C. Abrogar,

Regional Trial Court (RTC), Makati City, Branch 150,

which denied the "Motion to Quash (With Motion to Defer

Arraignment)" in Criminal Case No. 99-2425 for theft.

Philippine Long Distance Telephone Company (PLDT) is

the holder of a legislative franchise to render local and

international telecommunication services under Republic

Act No. 7082.2 Under said law, PLDT is authorized to

establish, operate, manage, lease, maintain and purchase

telecommunication systems, including transmitting,

receiving and switching stations, for both domestic and

international calls. For this purpose, it has installed an

estimated 1.7 million telephone lines nationwide. PLDT also

offers other services as authorized by Certificates of Public

Convenience and Necessity (CPCN) duly issued by the

National Telecommunications Commission (NTC), and

operates and maintains an International Gateway Facility

(IGF). The PLDT network is thus principally composed of

the Public Switch Telephone Network (PSTN), telephone

handsets and/or telecommunications equipment used by its

subscribers, the wires and cables linking said telephone

handsets and/or telecommunications equipment, antenna, the

IGF, and other telecommunications equipment which

provide interconnections.3 1avvphil.net

PLDT alleges that one of the alternative calling patterns that

constitute network fraud and violate its network integrity is

that which is known as International Simple Resale (ISR).

ISR is a method of routing and completing international

long distance calls using International Private Leased Lines

(IPL), cables, antenna or air wave or frequency, which

connect directly to the local or domestic exchange facilities

of the terminating country (the country where the call is

destined). The IPL is linked to switching equipment which

is connected to a PLDT telephone line/number. In the

process, the calls bypass the IGF found at the terminating

country, or in some instances, even those from the

originating country.4

One such alternative calling service is that offered by

Baynet Co., Ltd. (Baynet) which sells "Bay Super Orient

Card" phone cards to people who call their friends and

relatives in the Philippines. With said card, one is entitled to

a 27-minute call to the Philippines for about ¥37.03 per

minute. After dialing the ISR access number indicated in the

phone card, the ISR operator requests the subscriber to give

the PIN number also indicated in the phone card. Once the

caller’s identity (as purchaser of the phone card) is

confirmed, the ISR operator will then provide a Philippine

local line to the requesting caller via the IPL. According to

PLDT, calls made through the IPL never pass the toll center

of IGF operators in the Philippines. Using the local line, the

Baynet card user is able to place a call to any point in the

Philippines, provided the local line is National Direct Dial

(NDD) capable.5

PLDT asserts that Baynet conducts its ISR activities by

utilizing an IPL to course its incoming international long

distance calls from Japan. The IPL is linked to switching

equipment, which is then connected to PLDT telephone

lines/numbers and equipment, with Baynet as subscriber.

Through the use of the telephone lines and other auxiliary

equipment, Baynet is able to connect an international long

distance call from Japan to any part of the Philippines, and

make it appear as a call originating from Metro Manila.

Consequently, the operator of an ISR is able to evade

payment of access, termination or bypass charges and

accounting rates, as well as compliance with the regulatory

requirements of the NTC. Thus, the ISR operator offers

international telecommunication services at a lower rate, to

the damage and prejudice of legitimate operators like

PLDT.6

PLDT pointed out that Baynet utilized the following

equipment for its ISR activities: lines, cables, and antennas

or equipment or device capable of transmitting air waves or

frequency, such as an IPL and telephone lines and

equipment; computers or any equipment or device capable

of accepting information applying the prescribed process of

the information and supplying the result of this process;

modems or any equipment or device that enables a data

terminal equipment such as computers to communicate with

other data terminal equipment via a telephone line;

multiplexers or any equipment or device that enables two or

more signals from different sources to pass through a

common cable or transmission line; switching equipment, or

equipment or device capable of connecting telephone lines;

and software, diskettes, tapes or equipment or device used

for recording and storing information.7

PLDT also discovered that Baynet subscribed to a total of

123 PLDT telephone lines/numbers.8 Based on the Traffic

Study conducted on the volume of calls passing through

Baynet’s ISR network which bypass the IGF toll center,

PLDT incurred an estimated monthly loss of

P10,185,325.96.9 Records at the Securities and Exchange

Commission (SEC) also revealed that Baynet was not

authorized to provide international or domestic long distance

telephone service in the country. The following are its

officers: Yuji Hijioka, a Japanese national (chairman of the

board of directors); Gina C. Mukaida, a Filipina (board

member and president); Luis Marcos P. Laurel, a Filipino

(board member and corporate secretary); Ricky Chan Pe, a

Filipino (board member and treasurer); and Yasushi

Ueshima, also a Japanese national (board member).

Upon complaint of PLDT against Baynet for network fraud,

and on the strength of two search warrants10

issued by the

RTC of Makati, Branch 147, National Bureau of

Investigation (NBI) agents searched its office at the 7th

Floor, SJG Building, Kalayaan Avenue, Makati City on

November 8, 1999. Atsushi Matsuura, Nobuyoshi Miyake,

Edourd D. Lacson and Rolando J. Villegas were arrested by

NBI agents while in the act of manning the operations of

Baynet. Seized in the premises during the search were

numerous equipment and devices used in its ISR activities,

such as multiplexers, modems, computer monitors, CPUs,

antenna, assorted computer peripheral cords and

microprocessors, cables/wires, assorted PLDT statement of

accounts, parabolic antennae and voltage regulators.

State Prosecutor Ofelia L. Calo conducted an inquest

investigation and issued a Resolution11

on January 28, 2000,

finding probable cause for theft under Article 308 of the

Revised Penal Code and Presidential Decree No.

40112

against the respondents therein, including Laurel.

On February 8, 2000, State Prosecutor Calo filed an

Information with the RTC of Makati City charging

Matsuura, Miyake, Lacson and Villegas with theft under

Article 308 of the Revised Penal Code. After conducting the

requisite preliminary investigation, the State Prosecutor filed

an Amended Information impleading Laurel (a partner in the

law firm of Ingles, Laurel, Salinas, and, until November 19,

1999, a member of the board of directors and corporate

secretary of Baynet), and the other members of the board of

directors of said corporation, namely, Yuji Hijioka, Yasushi

Ueshima, Mukaida, Lacson and Villegas, as accused for

theft under Article 308 of the Revised Penal Code. The

inculpatory portion of the Amended Information reads:

On or about September 10-19, 1999, or prior thereto, in

Makati City, and within the jurisdiction of this Honorable

Court, the accused, conspiring and confederating together

and all of them mutually helping and aiding one another,

with intent to gain and without the knowledge and consent

of the Philippine Long Distance Telephone (PLDT), did

then and there willfully, unlawfully and feloniously take,

steal and use the international long distance calls belonging

to PLDT by conducting International Simple Resale (ISR),

which is a method of routing and completing international

long distance calls using lines, cables, antennae, and/or air

wave frequency which connect directly to the local or

domestic exchange facilities of the country where the call is

destined, effectively stealing this business from PLDT while

using its facilities in the estimated amount of

P20,370,651.92 to the damage and prejudice of PLDT, in

the said amount.

CONTRARY TO LAW.13

Accused Laurel filed a "Motion to Quash (with Motion to

Defer Arraignment)" on the ground that the factual

allegations in the Amended Information do not constitute

the felony of theft under Article 308 of the Revised Penal

Code. He averred that the Revised Penal Code, or any other

special penal law for that matter, does not prohibit ISR

operations. He claimed that telephone calls with the use of

PLDT telephone lines, whether domestic or international,

belong to the persons making the call, not to PLDT. He

argued that the caller merely uses the facilities of PLDT, and

what the latter owns are the telecommunication

infrastructures or facilities through which the call is made.

He also asserted that PLDT is compensated for the caller’s

use of its facilities by way of rental; for an outgoing

overseas call, PLDT charges the caller per minute, based on

the duration of the call. Thus, no personal property was

stolen from PLDT. According to Laurel, the P20,370,651.92

stated in the Information, if anything, represents the rental

for the use of PLDT facilities, and not the value of anything

owned by it. Finally, he averred that the allegations in the

Amended Information are already subsumed under the

Information for violation of Presidential Decree (P.D.) No.

401 filed and pending in the Metropolitan Trial Court of

Makati City, docketed as Criminal Case No. 276766.

The prosecution, through private complainant PLDT,

opposed the motion,14

contending that the movant

unlawfully took personal property belonging to it, as

follows: 1) intangible telephone services that are being

offered by PLDT and other telecommunication companies,

i.e., the connection and interconnection to their telephone

lines/facilities; 2) the use of those facilities over a period of

time; and 3) the revenues derived in connection with the

rendition of such services and the use of such facilities.15

The prosecution asserted that the use of PLDT’s intangible

telephone services/facilities allows electronic voice signals

to pass through the same, and ultimately to the called party’s

number. It averred that such service/facility is akin to

electricity which, although an intangible property, may,

nevertheless, be appropriated and be the subject of theft.

Such service over a period of time for a consideration is the

business that PLDT provides to its customers, which enables

the latter to send various messages to installed recipients.

The service rendered by PLDT is akin to merchandise which

has specific value, and therefore, capable of appropriation

by another, as in this case, through the ISR operations

conducted by the movant and his co-accused.

The prosecution further alleged that "international business

calls and revenues constitute personal property envisaged in

Article 308 of the Revised Penal Code." Moreover, the

intangible telephone services/facilities belong to PLDT and

not to the movant and the other accused, because they have

no telephone services and facilities of their own duly

authorized by the NTC; thus, the taking by the movant and

his co-accused of PLDT services was with intent to gain and

without the latter’s consent.

The prosecution pointed out that the accused, as well as the

movant, were paid in exchange for their illegal appropriation

and use of PLDT’s telephone services and facilities; on the

other hand, the accused did not pay a single centavo for their

illegal ISR operations. Thus, the acts of the accused were

akin to the use of a "jumper" by a consumer to deflect the

current from the house electric meter, thereby enabling one

to steal electricity. The prosecution emphasized that its

position is fortified by the Resolutions of the Department of

Justice in PLDT v. Tiongson, et al. (I.S. No. 97-0925) and in

PAOCTF-PLDT v. Elton John Tuason, et al. (I.S. No. 2000-

370) which were issued on August 14, 2000 finding

probable cause for theft against the respondents therein.

On September 14, 2001, the RTC issued an Order16

denying

the Motion to Quash the Amended Information. The court

declared that, although there is no law that expressly

prohibits the use of ISR, the facts alleged in the Amended

Information "will show how the alleged crime was

committed by conducting ISR," to the damage and prejudice

of PLDT.

Laurel filed a Motion for Reconsideration17

of the Order,

alleging that international long distance calls are not

personal property, and are not capable of appropriation. He

maintained that business or revenue is not considered

personal property, and that the prosecution failed to adduce

proof of its existence and the subsequent loss of personal

property belonging to another. Citing the ruling of the Court

in United States v. De Guzman,18

Laurel averred that the

case is not one with telephone calls which originate with a

particular caller and terminates with the called party. He

insisted that telephone calls are considered privileged

communications under the Constitution and cannot be

considered as "the property of PLDT." He further argued

that there is no kinship between telephone calls and

electricity or gas, as the latter are forms of energy which are

generated and consumable, and may be considered as

personal property because of such characteristic. On the

other hand, the movant argued, the telephone business is not

a form of energy but is an activity.

In its Order19

dated December 11, 2001, the RTC denied the

movant’s Motion for Reconsideration. This time, it ruled

that what was stolen from PLDT was its "business" because,

as alleged in the Amended Information, the international

long distance calls made through the facilities of PLDT

formed part of its business. The RTC noted that the movant

was charged with stealing the business of PLDT. To support

its ruling, it cited Strochecker v. Ramirez,20

where the Court

ruled that interest in business is personal property capable of

appropriation. It further declared that, through their ISR

operations, the movant and his co-accused deprived PLDT

of fees for international long distance calls, and that the ISR

used by the movant and his co-accused was no different

from the "jumper" used for stealing electricity.

Laurel then filed a Petition for Certiorari with the CA,

assailing the Order of the RTC. He alleged that the

respondent judge gravely abused his discretion in denying

his Motion to Quash the Amended Information.21

As

gleaned from the material averments of the amended

information, he was charged with stealing the international

long distance calls belonging to PLDT, not its business.

Moreover, the RTC failed to distinguish between the

business of PLDT (providing services for international long

distance calls) and the revenues derived therefrom. He

opined that a "business" or its revenues cannot be

considered as personal property under Article 308 of the

Revised Penal Code, since a "business" is "(1) a commercial

or mercantile activity customarily engaged in as a means of

livelihood and typically involving some independence of

judgment and power of decision; (2) a commercial or

industrial enterprise; and (3) refers to transactions, dealings

or intercourse of any nature." On the other hand, the term

"revenue" is defined as "the income that comes back from

an investment (as in real or personal property); the annual or

periodical rents, profits, interests, or issues of any species of

real or personal property."22

Laurel further posited that an electric company’s business is

the production and distribution of electricity; a gas

company’s business is the production and/or distribution of

gas (as fuel); while a water company’s business is the

production and distribution of potable water. He argued that

the "business" in all these cases is the commercial activity,

while the goods and merchandise are the products of such

activity. Thus, in prosecutions for theft of certain forms of

energy, it is the electricity or gas which is alleged to be

stolen and not the "business" of providing electricity or gas.

However, since a telephone company does not produce any

energy, goods or merchandise and merely renders a service

or, in the words of PLDT, "the connection and

interconnection to their telephone lines/facilities," such

service cannot be the subject of theft as defined in Article

308 of the Revised Penal Code.23

He further declared that to categorize "business" as personal

property under Article 308 of the Revised Penal Code would

lead to absurd consequences; in prosecutions for theft of

gas, electricity or water, it would then be permissible to

allege in the Information that it is the gas business, the

electric business or the water business which has been

stolen, and no longer the merchandise produced by such

enterprise.24

Laurel further cited the Resolution of the Secretary of

Justice in Piltel v. Mendoza,25

where it was ruled that the

Revised Penal Code, legislated as it was before present

technological advances were even conceived, is not

adequate to address the novel means of "stealing" airwaves

or airtime. In said resolution, it was noted that the

inadequacy prompted the filing of Senate Bill 2379 (sic)

entitled "The Anti-Telecommunications Fraud of 1997" to

deter cloning of cellular phones and other forms of

communications fraud. The said bill "aims to protect in

number (ESN) (sic) or Capcode, mobile identification

number (MIN), electronic-international mobile equipment

identity (EMEI/IMEI), or subscriber identity module" and

"any attempt to duplicate the data on another cellular phone

without the consent of a public telecommunications entity

would be punishable by law."26

Thus, Laurel concluded,

"there is no crime if there is no law punishing the crime."

On August 30, 2002, the CA rendered judgment dismissing

the petition.27

The appellate court ruled that a petition for

certiorari under Rule 65 of the Rules of Court was not the

proper remedy of the petitioner. On the merits of the

petition, it held that while business is generally an activity

which is abstract and intangible in form, it is nevertheless

considered "property" under Article 308 of the Revised

Penal Code. The CA opined that PLDT’s business of

providing international calls is personal property which may

be the object of theft, and cited United States v. Carlos28

to

support such conclusion. The tribunal also cited Strochecker

v. Ramirez,29

where this Court ruled that one-half interest in

a day’s business is personal property under Section 2 of Act

No. 3952, otherwise known as the Bulk Sales Law. The

appellate court held that the operations of the ISR are not

subsumed in the charge for violation of P.D. No. 401.

Laurel, now the petitioner, assails the decision of the CA,

contending that -

THE COURT OF APPEALS ERRED IN RULING

THAT THE PERSONAL PROPERTY

ALLEGEDLY STOLEN PER THE

INFORMATION IS NOT THE

"INTERNATIONAL LONG DISTANCE CALLS"

BUT THE "BUSINESS OF PLDT."

THE COURT OF APPEALS ERRED IN RULING

THAT THE TERM "BUSINESS" IS PERSONAL

PROPERTY WITHIN THE MEANING OF ART.

308 OF THE REVISED PENAL CODE.30

Petitioner avers that the petition for a writ of certiorari may

be filed to nullify an interlocutory order of the trial court

which was issued with grave abuse of discretion amounting

to excess or lack of jurisdiction. In support of his petition

before the Court, he reiterates the arguments in his pleadings

filed before the CA. He further claims that while the right to

carry on a business or an interest or participation in business

is considered property under the New Civil Code, the term

"business," however, is not. He asserts that the Philippine

Legislature, which approved the Revised Penal Code way

back in January 1, 1932, could not have contemplated to

include international long distance calls and "business" as

personal property under Article 308 thereof.

In its comment on the petition, the Office of the Solicitor

General (OSG) maintains that the amended information

clearly states all the essential elements of the crime of theft.

Petitioner’s interpretation as to whether an "international

long distance call" is personal property under the law is

inconsequential, as a reading of the amended information

readily reveals that specific acts and circumstances were

alleged charging Baynet, through its officers, including

petitioner, of feloniously taking, stealing and illegally using

international long distance calls belonging to respondent

PLDT by conducting ISR operations, thus, "routing and

completing international long distance calls using lines,

cables, antenna and/or airwave frequency which connect

directly to the local or domestic exchange facilities of the

country where the call is destined." The OSG maintains that

the international long distance calls alleged in the amended

information should be construed to mean "business" of

PLDT, which, while abstract and intangible in form, is

personal property susceptible of appropriation.31

The OSG

avers that what was stolen by petitioner and his co-accused

is the business of PLDT providing international long

distance calls which, though intangible, is personal property

of the PLDT.32

For its part, respondent PLDT asserts that personal property

under Article 308 of the Revised Penal Code comprehends

intangible property such as electricity and gas which are

valuable articles for merchandise, brought and sold like

other personal property, and are capable of appropriation. It

insists that the business of international calls and revenues

constitute personal property because the same are valuable

articles of merchandise. The respondent reiterates that

international calls involve (a) the intangible telephone

services that are being offered by it, that is, the connection

and interconnection to the telephone network, lines or

facilities; (b) the use of its telephone network, lines or

facilities over a period of time; and (c) the income derived in

connection therewith.33

PLDT further posits that business revenues or the income

derived in connection with the rendition of such services and

the use of its telephone network, lines or facilities are

personal properties under Article 308 of the Revised Penal

Code; so is the use of said telephone services/telephone

network, lines or facilities which allow electronic voice

signals to pass through the same and ultimately to the called

party’s number. It is akin to electricity which, though

intangible property, may nevertheless be appropriated and

can be the object of theft. The use of respondent PLDT’s

telephone network, lines, or facilities over a period of time

for consideration is the business that it provides to its

customers, which enables the latter to send various messages

to intended recipients. Such use over a period of time is akin

to merchandise which has value and, therefore, can be

appropriated by another. According to respondent PLDT,

this is what actually happened when petitioner Laurel and

the other accused below conducted illegal ISR operations.34

The petition is meritorious.

The issues for resolution are as follows: (a) whether or not

the petition for certiorari is the proper remedy of the

petitioner in the Court of Appeals; (b) whether or not

international telephone calls using Bay Super Orient Cards

through the telecommunication services provided by PLDT

for such calls, or, in short, PLDT’s business of providing

said telecommunication services, are proper subjects of theft

under Article 308 of the Revised Penal Code; and (c)

whether or not the trial court committed grave abuse of

discretion amounting to excess or lack of jurisdiction in

denying the motion of the petitioner to quash the amended

information.

On the issue of whether or not the petition for certiorari

instituted by the petitioner in the CA is proper, the general

rule is that a petition for certiorari under Rule 65 of the

Rules of Court, as amended, to nullify an order denying a

motion to quash the Information is inappropriate because the

aggrieved party has a remedy of appeal in the ordinary

course of law. Appeal and certiorari are mutually exclusive

of each other. The remedy of the aggrieved party is to

continue with the case in due course and, when an

unfavorable judgment is rendered, assail the order and the

decision on appeal. However, if the trial court issues the

order denying the motion to quash the Amended

Information with grave abuse of discretion amounting to

excess or lack of jurisdiction, or if such order is patently

erroneous, or null and void for being contrary to the

Constitution, and the remedy of appeal would not afford

adequate and expeditious relief, the accused may resort to

the extraordinary remedy of certiorari.35

A special civil

action for certiorari is also available where there are special

circumstances clearly demonstrating the inadequacy of an

appeal. As this Court held in Bristol Myers Squibb (Phils.),

Inc. v. Viloria:36

Nonetheless, the settled rule is that a writ of certiorari may

be granted in cases where, despite availability of appeal

after trial, there is at least a prima facie showing on the face

of the petition and its annexes that: (a) the trial court issued

the order with grave abuse of discretion amounting to lack

of or in excess of jurisdiction; (b) appeal would not prove to

be a speedy and adequate remedy; (c) where the order is a

patent nullity; (d) the decision in the present case will arrest

future litigations; and (e) for certain considerations such as

public welfare and public policy.37

In his petition for certiorari in the CA, petitioner averred that

the trial court committed grave abuse of its discretion

amounting to excess or lack of jurisdiction when it denied

his motion to quash the Amended Information despite his

claim that the material allegations in the Amended

Information do not charge theft under Article 308 of the

Revised Penal Code, or any offense for that matter. By so

doing, the trial court deprived him of his constitutional right

to be informed of the nature of the charge against him. He

further averred that the order of the trial court is contrary to

the constitution and is, thus, null and void. He insists that he

should not be compelled to undergo the rigors and

tribulations of a protracted trial and incur expenses to defend

himself against a non-existent charge.

Petitioner is correct.

An information or complaint must state explicitly and

directly every act or omission constituting an offense38

and

must allege facts establishing conduct that a penal statute

makes criminal;39

and describes the property which is the

subject of theft to advise the accused with reasonable

certainty of the accusation he is called upon to meet at the

trial and to enable him to rely on the judgment thereunder of

a subsequent prosecution for the same offense.40

It must

show, on its face, that if the alleged facts are true, an offense

has been committed. The rule is rooted on the constitutional

right of the accused to be informed of the nature of the

crime or cause of the accusation against him. He cannot be

convicted of an offense even if proven unless it is alleged or

necessarily included in the Information filed against him.

As a general prerequisite, a motion to quash on the ground

that the Information does not constitute the offense charged,

or any offense for that matter, should be resolved on the

basis of said allegations whose truth and veracity are

hypothetically committed;41

and on additional facts admitted

or not denied by the prosecution.42

If the facts alleged in the

Information do not constitute an offense, the complaint or

information should be quashed by the court.43

We have reviewed the Amended Information and find that,

as mentioned by the petitioner, it does not contain material

allegations charging the petitioner of theft of personal

property under Article 308 of the Revised Penal Code. It,

thus, behooved the trial court to quash the Amended

Information. The Order of the trial court denying the motion

of the petitioner to quash the Amended Information is a

patent nullity.

On the second issue, we find and so hold that the

international telephone calls placed by Bay Super Orient

Card holders, the telecommunication services provided by

PLDT and its business of providing said services are not

personal properties under Article 308 of the Revised Penal

Code. The construction by the respondents of Article 308 of

the said Code to include, within its coverage, the aforesaid

international telephone calls, telecommunication services

and business is contrary to the letter and intent of the law.

The rule is that, penal laws are to be construed strictly. Such

rule is founded on the tenderness of the law for the rights of

individuals and on the plain principle that the power of

punishment is vested in Congress, not in the judicial

department. It is Congress, not the Court, which is to define

a crime, and ordain its punishment.44

Due respect for the

prerogative of Congress in defining crimes/felonies

constrains the Court to refrain from a broad interpretation of

penal laws where a "narrow interpretation" is appropriate.

The Court must take heed to language, legislative history

and purpose, in order to strictly determine the wrath and

breath of the conduct the law forbids.45

However, when the

congressional purpose is unclear, the court must apply the

rule of lenity, that is, ambiguity concerning the ambit of

criminal statutes should be resolved in favor of lenity.46

Penal statutes may not be enlarged by implication or intent

beyond the fair meaning of the language used; and may not

be held to include offenses other than those which are

clearly described, notwithstanding that the Court may think

that Congress should have made them more

comprehensive.47

Words and phrases in a statute are to be

construed according to their common meaning and accepted

usage.

As Chief Justice John Marshall declared, "it would be

dangerous, indeed, to carry the principle that a case which is

within the reason or

mischief of a statute is within its provision, so far as to

punish a crime not enumerated in the statute because it is of

equal atrocity, or of kindred character with those which are

enumerated.48

When interpreting a criminal statute that does

not explicitly reach the conduct in question, the Court

should not base an expansive reading on inferences from

subjective and variable understanding.49

Article 308 of the Revised Penal Code defines theft as

follows:

Art. 308. Who are liable for theft.– Theft is committed by

any person who, with intent to gain but without violence,

against or intimidation of persons nor force upon things,

shall take personal property of another without the latter’s

consent.

The provision was taken from Article 530 of the Spanish

Penal Code which reads:

1. Los que con ánimo de lucrarse, y sin violencia o

intimidación en las personas ni fuerza en las cosas, toman

las cosas muebles ajenas sin la voluntad de su dueño.50

For one to be guilty of theft, the accused must have an intent

to steal (animus furandi) personal property, meaning the

intent to deprive another of his ownership/lawful possession

of personal property which intent is apart from and

concurrently with the general criminal intent which is an

essential element of a felony of dolo (dolus malus).

An information or complaint for simple theft must allege the

following elements: (a) the taking of personal property; (b)

the said property belongs to another; (c) the taking be done

with intent to gain; and (d) the taking be accomplished

without the use of violence or intimidation of person/s or

force upon things.51

One is apt to conclude that "personal property" standing

alone, covers both tangible and intangible properties and are

subject of theft under the Revised Penal Code. But the

words "Personal property" under the Revised Penal Code

must be considered in tandem with the word "take" in the

law. The statutory definition of "taking" and movable

property indicates that, clearly, not all personal properties

may be the proper subjects of theft. The general rule is that,

only movable properties which have physical or material

existence and susceptible of occupation by another are

proper objects of theft.52

As explained by Cuelo Callon:

"Cosa juridicamente es toda sustancia corporal, material,

susceptible de ser aprehendida que tenga un valor

cualquiera."53

According to Cuello Callon, in the context of the Penal

Code, only those movable properties which can be taken and

carried from the place they are found are proper subjects of

theft. Intangible properties such as rights and ideas are not

subject of theft because the same cannot be "taken" from the

place it is found and is occupied or appropriated.

Solamente las cosas muebles y corporales pueden ser objeto

de hurto. La sustracción de cosas inmuebles y la cosas

incorporales (v. gr., los derechos, las ideas) no puede

integrar este delito, pues no es posible asirlas, tomarlas, para

conseguir su apropiación. El Codigo emplea la expresión

"cosas mueble" en el sentido de cosa que es susceptible de

ser llevada del lugar donde se encuentra, como dinero,

joyas, ropas, etcétera, asi que su concepto no coincide por

completo con el formulado por el Codigo civil (arts. 335 y

336).54

Thus, movable properties under Article 308 of the Revised

Penal Code should be distinguished from the rights or

interests to which they relate. A naked right existing merely

in contemplation of law, although it may be very valuable to

the person who is entitled to exercise it, is not the subject of

theft or larceny.55

Such rights or interests are intangible and

cannot be "taken" by another. Thus, right to produce oil,

good will or an interest in business, or the right to engage in

business, credit or franchise are properties. So is the credit

line represented by a credit card. However, they are not

proper subjects of theft or larceny because they are without

form or substance, the mere "breath" of the Congress. On

the other hand, goods, wares and merchandise of

businessmen and credit cards issued to them are movable

properties with physical and material existence and may be

taken by another; hence, proper subjects of theft.

There is "taking" of personal property, and theft is

consummated when the offender unlawfully acquires

possession of personal property even if for a short time; or if

such property is under the dominion and control of the thief.

The taker, at some particular amount, must have obtained

complete and absolute possession and control of the

property adverse to the rights of the owner or the lawful

possessor thereof.56

It is not necessary that the property be

actually carried away out of the physical possession of the

lawful possessor or that he should have made his escape

with it.57

Neither asportation nor actual manual possession

of property is required. Constructive possession of the thief

of the property is enough.58

The essence of the element is the taking of a thing out of the

possession of the owner without his privity and consent and

without animus revertendi.59

Taking may be by the offender’s own hands, by his use of

innocent persons without any felonious intent, as well as any

mechanical device, such as an access device or card, or any

agency, animate or inanimate, with intent to gain. Intent to

gain includes the unlawful taking of personal property for

the purpose of deriving utility, satisfaction, enjoyment and

pleasure.60

We agree with the contention of the respondents that

intangible properties such as electrical energy and gas are

proper subjects of theft. The reason for this is that, as

explained by this Court in United States v. Carlos61

and

United States v. Tambunting,62

based on decisions of the

Supreme Court of Spain and of the courts in England and

the United States of America, gas or electricity are capable

of appropriation by another other than the owner. Gas and

electrical energy may be taken, carried away and

appropriated. In People v. Menagas,63

the Illinois State

Supreme Court declared that electricity, like gas, may be

seen and felt. Electricity, the same as gas, is a valuable

article of merchandise, bought and sold like other personal

property and is capable of appropriation by another. It is a

valuable article of merchandise, bought and sold like other

personal property, susceptible of being severed from a mass

or larger quantity and of being transported from place to

place. Electrical energy may, likewise, be taken and carried

away. It is a valuable commodity, bought and sold like other

personal property. It may be transported from place to place.

There is nothing in the nature of gas used for illuminating

purposes which renders it incapable of being feloniously

taken and carried away.

In People ex rel Brush Electric Illuminating Co. v.

Wemple,64

the Court of Appeals of New York held that

electric energy is manufactured and sold in determinate

quantities at a fixed price, precisely as are coal, kerosene oil,

and gas. It may be conveyed to the premises of the

consumer, stored in cells of different capacity known as an

accumulator; or it may be sent through a wire, just as gas or

oil may be transported either in a close tank or forced

through a pipe. Having reached the premises of the

consumer, it may be used in any way he may desire, being,

like illuminating gas, capable of being transformed either

into heat, light, or power, at the option of the purchaser. In

Woods v. People,65

the Supreme Court of Illinois declared

that there is nothing in the nature of gas used for

illuminating purposes which renders it incapable of being

feloniously taken and carried away. It is a valuable article of

merchandise, bought and sold like other personal property,

susceptible of being severed from a mass or larger quantity

and of being transported from place to place.

Gas and electrical energy should not be equated with

business or services provided by business entrepreneurs to

the public. Business does not have an exact definition.

Business is referred as that which occupies the time,

attention and labor of men for the purpose of livelihood or

profit. It embraces everything that which a person can be

employed.66

Business may also mean employment,

occupation or profession. Business is also defined as a

commercial activity for gain benefit or

advantage.67

Business, like services in business, although

are properties, are not proper subjects of theft under the

Revised Penal Code because the same cannot be "taken" or

"occupied." If it were otherwise, as claimed by the

respondents, there would be no juridical difference between

the taking of the business of a person or the services

provided by him for gain, vis-à-vis, the taking of goods,

wares or merchandise, or equipment comprising his

business.68

If it was its intention to include "business" as

personal property under Article 308 of the Revised Penal

Code, the Philippine Legislature should have spoken in

language that is clear and definite: that business is personal

property under Article 308 of the Revised Penal Code.69

We agree with the contention of the petitioner that, as

gleaned from the material averments of the Amended

Information, he is charged of "stealing the international long

distance calls belonging to PLDT" and the use thereof,

through the ISR. Contrary to the claims of the OSG and

respondent PLDT, the petitioner is not charged of stealing

P20,370,651.95 from said respondent. Said amount of

P20,370,651.95 alleged in the Amended Information is the

aggregate amount of access, transmission or termination

charges which the PLDT expected from the international

long distance calls of the callers with the use of Baynet

Super Orient Cards sold by Baynet Co. Ltd.

In defining theft, under Article 308 of the Revised Penal

Code, as the taking of personal property without the consent

of the owner thereof, the Philippine legislature could not

have contemplated the human voice which is converted into

electronic impulses or electrical current which are

transmitted to the party called through the PSTN of

respondent PLDT and the ISR of Baynet Card Ltd. within its

coverage. When the Revised Penal Code was approved, on

December 8, 1930, international telephone calls and the

transmission and routing of electronic voice signals or

impulses emanating from said calls, through the PSTN, IPL

and ISR, were still non-existent. Case law is that, where a

legislative history fails to evidence congressional awareness

of the scope of the statute claimed by the respondents, a

narrow interpretation of the law is more consistent with the

usual approach to the construction of the statute. Penal

responsibility cannot be extended beyond the fair scope of

the statutory mandate.70

Respondent PLDT does not acquire possession, much less,

ownership of the voices of the telephone callers or of the

electronic voice signals or current emanating from said calls.

The human voice and the electronic voice signals or current

caused thereby are intangible and not susceptible of

possession, occupation or appropriation by the respondent

PLDT or even the petitioner, for that matter. PLDT merely

transmits the electronic voice signals through its facilities

and equipment. Baynet Card Ltd., through its operator,

merely intercepts, reroutes the calls and passes them to its

toll center. Indeed, the parties called receive the telephone

calls from Japan.

In this modern age of technology, telecommunications

systems have become so tightly merged with computer

systems that it is difficult to know where one starts and the

other finishes. The telephone set is highly computerized and

allows computers to communicate across long

distances.71

The instrumentality at issue in this case is not

merely a telephone but a telephone inexplicably linked to a

computerized communications system with the use of

Baynet Cards sold by the Baynet Card Ltd. The corporation

uses computers, modems and software, among others, for its

ISR.72

The conduct complained of by respondent PLDT is

reminiscent of "phreaking" (a slang term for the action of

making a telephone system to do something that it normally

should not allow by "making the phone company bend over

and grab its ankles"). A "phreaker" is one who engages in

the act of manipulating phones and illegally markets

telephone services.73

Unless the phone company replaces all

its hardware, phreaking would be impossible to stop. The

phone companies in North America were impelled to

replace all their hardware and adopted full digital switching

system known as the Common Channel Inter Office

Signaling. Phreaking occurred only during the 1960’s and

1970’s, decades after the Revised Penal Code took effect.

The petitioner is not charged, under the Amended

Information, for theft of telecommunication or telephone

services offered by PLDT. Even if he is, the term "personal

property" under Article 308 of the Revised Penal Code

cannot be interpreted beyond its seams so as to include

"telecommunication or telephone services" or computer

services for that matter. The word "service" has a variety of

meanings dependent upon the context, or the sense in which

it is used; and, in some instances, it may include a sale. For

instance, the sale of food by restaurants is usually referred to

as "service," although an actual sale is involved.74

It may

also mean the duty or labor to be rendered by one person to

another; performance of labor for the benefit of another.75

In

the case of PLDT, it is to render local and international

telecommunications services and such other services as

authorized by the CPCA issued by the NTC. Even at

common law, neither time nor services may be taken and

occupied or appropriated.76

A service is generally not

considered property and a theft of service would not,

therefore, constitute theft since there can be no caption or

asportation.77

Neither is the unauthorized use of the

equipment and facilities of PLDT by the petitioner theft

under the aforequoted provision of the Revised Penal

Code.78

If it was the intent of the Philippine Legislature, in 1930, to

include services to be the subject of theft, it should have

incorporated the same in Article 308 of the Revised Penal

Code. The Legislature did not. In fact, the Revised Penal

Code does not even contain a definition of services.

If taking of telecommunication services or the business of a

person, is to be proscribed, it must be by special statute79

or

an amendment of the Revised Penal Code. Several states in

the United States, such as New York, New Jersey,

California and Virginia, realized that their criminal statutes

did not contain any provisions penalizing the theft of

services and passed laws defining and penalizing theft of

telephone and computer services. The Pennsylvania

Criminal Statute now penalizes theft of services, thus:

(a) Acquisition of services. --

(1) A person is guilty of theft if he intentionally obtains

services for himself or for another which he knows are

available only for compensation, by deception or threat, by

altering or tampering with the public utility meter or

measuring device by which such services are delivered or by

causing or permitting such altering or tampering, by making

or maintaining any unauthorized connection, whether

physically, electrically or inductively, to a distribution or

transmission line, by attaching or maintaining the

attachment of any unauthorized device to any cable, wire or

other component of an electric, telephone or cable television

system or to a television receiving set connected to a cable

television system, by making or maintaining any

unauthorized modification or alteration to any device

installed by a cable television system, or by false token or

other trick or artifice to avoid payment for the service.

In the State of Illinois in the United States of America, theft

of labor or services or use of property is penalized:

(a) A person commits theft when he obtains the temporary

use of property, labor or services of another which are

available only for hire, by means of threat or deception or

knowing that such use is without the consent of the person

providing the property, labor or services.

In 1980, the drafters of the Model Penal Code in the United

States of America arrived at the conclusion that labor and

services, including professional services, have not been

included within the traditional scope of the term "property"

in ordinary theft statutes. Hence, they decided to incorporate

in the Code Section 223.7, which defines and penalizes theft

of services, thus:

(1) A person is guilty of theft if he purposely obtains

services which he knows are available only for

compensation, by deception or threat, or by false token or

other means to avoid payment for the service. "Services"

include labor, professional service, transportation, telephone

or other public service, accommodation in hotels, restaurants

or elsewhere, admission to exhibitions, use of vehicles or

other movable property. Where compensation for service is

ordinarily paid immediately upon the rendering of such

service, as in the case of hotels and restaurants, refusal to

pay or absconding without payment or offer to pay gives

rise to a presumption that the service was obtained by

deception as to intention to pay; (2) A person commits theft

if, having control over the disposition of services of others,

to which he is not entitled, he knowingly diverts such

services to his own benefit or to the benefit of another not

entitled thereto.

Interestingly, after the State Supreme Court of Virginia

promulgated its decision in Lund v.

Commonwealth,80

declaring that neither time nor services

may be taken and carried away and are not proper subjects

of larceny, the General Assembly of Virginia enacted Code

No. 18-2-98 which reads:

Computer time or services or data processing services or

information or data stored in connection therewith is hereby

defined to be property which may be the subject of larceny

under § § 18.2-95 or 18.2-96, or embezzlement under §

18.2-111, or false pretenses under § 18.2-178.

In the State of Alabama, Section 13A-8-10(a)(1) of the

Penal Code of Alabama of 1975 penalizes theft of services:

"A person commits the crime of theft of services if: (a) He

intentionally obtains services known by him to be available

only for compensation by deception, threat, false token or

other means to avoid payment for the services …"

In the Philippines, Congress has not amended the Revised

Penal Code to include theft of services or theft of business

as felonies. Instead, it approved a law, Republic Act No.

8484, otherwise known as the Access Devices Regulation

Act of 1998, on February 11, 1998. Under the law, an access

device means any card, plate, code, account number,

electronic serial number, personal identification number and

other telecommunication services, equipment or

instrumentalities-identifier or other means of account access

that can be used to obtain money, goods, services or any

other thing of value or to initiate a transfer of funds other

than a transfer originated solely by paper instrument.

Among the prohibited acts enumerated in Section 9 of the

law are the acts of obtaining money or anything of value

through the use of an access device, with intent to defraud or

intent to gain and fleeing thereafter; and of effecting

transactions with one or more access devices issued to

another person or persons to receive payment or any other

thing of value. Under Section 11 of the law, conspiracy to

commit access devices fraud is a crime. However, the

petitioner is not charged of violation of R.A. 8484.

Significantly, a prosecution under the law shall be without

prejudice to any liability for violation of any provisions of

the Revised Penal Code inclusive of theft under Rule 308 of

the Revised Penal Code and estafa under Article 315 of the

Revised Penal Code. Thus, if an individual steals a credit

card and uses the same to obtain services, he is liable of the

following: theft of the credit card under Article 308 of the

Revised Penal Code; violation of Republic Act No. 8484;

and estafa under Article 315(2)(a) of the Revised Penal

Code with the service provider as the private complainant.

The petitioner is not charged of estafa before the RTC in the

Amended Information.

Section 33 of Republic Act No. 8792, Electronic Commerce

Act of 2000 provides:

Sec. 33. Penalties.— The following Acts shall be penalized

by fine and/or imprisonment, as follows:

a) Hacking or cracking which refers to unauthorized access

into or interference in a computer system/server or

information and communication system; or any access in

order to corrupt, alter, steal, or destroy using a computer or

other similar information and communication devices,

without the knowledge and consent of the owner of the

computer or information and communications system,

including the introduction of computer viruses and the like,

resulting on the corruption, destruction, alteration, theft or

loss of electronic data messages or electronic documents

shall be punished by a minimum fine of One hundred

thousand pesos (P100,000.00) and a maximum

commensurate to the damage incurred and a mandatory

imprisonment of six (6) months to three (3) years.

IN LIGHT OF ALL THE FOREGOING, the petition is

GRANTED. The assailed Orders of the Regional Trial Court

and the Decision of the Court of Appeals are REVERSED

and SET ASIDE. The Regional Trial Court is directed to

issue an order granting the motion of the petitioner to quash

the Amended Information.

SO ORDERED.

G.R. No. 113092 September 1, 1994

MARTIN CENTENO, petitioner,

vs.

HON. VICTORIA VILLALON-PORNILLOS, Presiding

Judge of the Regional Trial Court of Malolos, Bulacan,

Branch 10, and THE PEOPLE OF THE

PHILIPPINES, respondents.

Santiago V. Marcos, Jr. for petitioner.

REGALADO, J.:

It is indeed unfortunate that a group of elderly men, who

were moved by their desire to devote their remaining years

to the service of their Creator by forming their own civic

organization for that purpose, should find themselves

enmeshed in a criminal case for making a solicitation from a

community member allegedly without the required permit

from the Department of Social Welfare and Development.

The records of this case reveal that sometime in the last

quarter of 1985, the officers of a civic organization known

as the Samahang Katandaan ng Nayon ng Tikay launched a

fund drive for the purpose of renovating the chapel of Barrio

Tikay, Malolos, Bulacan. Petitioner Martin Centeno, the

chairman of the group, together with Vicente Yco,

approached Judge Adoracion G. Angeles, a resident of

Tikay, and solicited from her a contribution of P1,500.00. It

is admitted that the solicitation was made without a permit

from the Department of Social Welfare and Development.

As a consequence, based on the complaint of Judge Angeles,

an information 1 was filed against petitioner Martin Centeno,

together with Religio Evaristo and Vicente Yco, for

violation of Presidential Decree No. 1564, or the Solicitation

Permit Law, before the Municipal Trial Court of Malolos,

Bulacan, Branch 2, and docketed as Criminal Case No.

2602. Petitioner filed a motion to quash the information 2 on

the ground that the facts alleged therein do not constitute an

offense, claiming that Presidential Decree No. 1564 only

covers solicitations made for charitable or public welfare

purposes, but not those made for a religious purpose such as

the construction of a chapel. This was denied 3 by the trial

court, and petitioner's motion for reconsideration having met

the same fate, trial on the merits ensued.

On December 29, 1992, the said trial court rendered

judgment 4 finding accused Vicente Yco and petitioner

Centeno guilty beyond reasonable doubt and sentencing

them to each pay a fine of P200.00. Nevertheless, the trial

court recommended that the accused be pardoned on the

basis of its finding that they acted in good faith, plus the fact

that it believed that the latter should not have been

criminally liable were it not for the existence of Presidential

Decree

No. 1564 which the court opined it had the duty to apply in

the instant case.

Both accused Centeno and Yco appealed to the Regional

Trial Court of Malolos, Bulacan, Branch 10. However,

accused Yco subsequently withdrew his appeal, hence the

case proceeded only with respect to petitioner Centeno. On

May 21, 1993, respondent Judge Villalon-Pornillos affirmed

the decision of the lower court but modified the penalty,

allegedly because of the perversity of the act committed

which caused damage and prejudice to the complainant, by

sentencing petitioner Centeno to suffer an increased penalty

of imprisonment of 6 months and a fine of P1,000.00,

without subsidiary imprisonment in case of

insolvency. 5 The motion for reconsideration of the decision

was denied by the court. 6

Thus it is that a fine of P200.00 imposed as a penalty by the

lowest court in the judicial hierarchy eventually reached this

highest tribunal, challenged on the sole issue of whether

solicitations for religious purposes are within the ambit of

Presidential Decree No. 1564. Quantitatively, the financial

sanction is a nominal imposition but, on a question of

principle, it is not a trifling matter. This Court is gratified

that it can now grant this case the benefit of a final

adjudication.

Petitioner questions the applicability of Presidential Decree

No. 1564 to solicitations for contributions intended for

religious purposes with the submissions that (1) the term

"religious purpose" is not expressly included in the

provisions of the statute, hence what the law does not

include, it excludes;

(2) penal laws are to be construed strictly against the State

and liberally in favor of the accused; and (3) to subject to

State regulation solicitations made for a religious purpose

would constitute an abridgment of the right to freedom of

religion guaranteed under the Constitution.

Presidential Decree No. 1564 (which amended Act No.

4075, otherwise known as the Solicitation Permit Law),

provides as follows:

Sec. 2. Any person, corporation, organization, or

association desiring to solicit or receive contributions for

charitable or public welfare purposes shall first secure a

permit from the Regional Offices of the Department of

Social Services and Development as provided in the

Integrated Reorganization Plan. Upon the filing of a

written application for a permit in the form prescribed by

the Regional Offices of the Department of Social

Services and Development, the Regional Director or his

duly authorized representative may, in his discretion,

issue a permanent or temporary permit or disapprove the

application. In the interest of the public, he may in his

discretion renew or revoke any permit issued under Act

4075.

The main issue to be resolved here is whether the phrase

"charitable purposes" should be construed in its broadest

sense so as to include a religious purpose. We hold in the

negative.

I. Indeed, it is an elementary rule of statutory construction

that the express mention of one person, thing, act, or

consequence excludes all others. This rule is expressed in

the familiar maxim "expressio unius est exclusio alterius."

Where a statute, by its terms, is expressly limited to certain

matters, it may not, by interpretation or construction, be

extended to others. The rule proceeds from the premise that

the legislature would not have made specified enumerations

in a statute had the intention been not to restrict its meaning

and to confine its terms to those expressly mentioned. 7

It will be observed that the 1987 Constitution, as well as

several other statutes, treat the words "charitable" and

"religious" separately and independently of each other.

Thus, the word "charitable" is only one of three descriptive

words used in Section 28 (3), Article VI of the Constitution

which provides that "charitable institutions, churches and

personages . . ., and all lands, buildings, and improvements,

actually, directly, and exclusively used for religious,

charitable, or educational purposes shall be exempt from

taxation." There are certain provisions in statutes wherein

these two terms are likewise dissociated and individually

mentioned, as for instance, Sections 26 (e) (corporations

exempt from income tax) and 28 (8) (E) (exclusions from

gross income) of the National Internal Revenue Code;

Section 88 (purposes for the organization of non-stock

corporations) of the Corporation Code; and

Section 234 (b) (exemptions from real property tax) of the

Local Government Code.

That these legislative enactments specifically spelled out

"charitable" and "religious" in an enumeration, whereas

Presidential Decree No. 1564 merely stated "charitable or

public welfare purposes," only goes to show that the framers

of the law in question never intended to include solicitations

for religious purposes within its coverage. Otherwise, there

is no reason why it would not have so stated expressly.

All contributions designed to promote the work of the

church are "charitable" in nature, since religious activities

depend for their support on voluntary

contributions. 8 However, "religious purpose" is not

interchangeable with the expression "charitable purpose."

While it is true that there is no religious purpose which is

not also a charitable purpose, yet the converse is not equally

true, for there may be a "charitable" purpose which is not

"religious" in the legal sense of the term. 9 Although the

term "charitable" may include matters which are "religious,"

it is a broader term and includes matters which are not

"religious," and, accordingly, there is a distinction between

"charitable purpose" and "religious purpose," except where

the two terms are obviously used synonymously, or where

the distinction has been done away with by statute.10

The

word "charitable," therefore, like most other words, is

capable of different significations. For example, in the law,

exempting charitable uses from taxation, it has a very wide

meaning, but under Presidential Decree No. 1564 which is a

penal law, it cannot be given such a broad application since

it would be prejudicial to petitioners.

To illustrate, the rule is that tax exemptions are generally

construed strictly against the taxpayer. However, there are

cases wherein claims for exemption from tax for "religious

purposes" have been liberally construed as covered in the

law granting tax exemptions for "charitable purposes." Thus,

the term "charitable purposes," within the meaning of a

statute providing that the succession of any property passing

to or for the use of any institution for purposes only of

public charity shall not be subject to succession tax, is

deemed to include religious purposes.11

A gift for "religious

purposes" was considered as a bequest for "charitable use"

as regards exemption from inheritance tax. 12

On the other hand, to subsume the "religious" purpose of the

solicitation within the concept of "charitable" purpose which

under Presidential Decree

No. 1564 requires a prior permit from the Department of

Social Services and Development, under paid of penal

liability in the absence thereof, would be prejudicial to

petitioner. Accordingly, the term "charitable" should be

strictly construed so as to exclude solicitations for

"religious" purposes. Thereby, we adhere to the fundamental

doctrine underlying virtually all penal legislations that such

interpretation should be adopted as would favor the accused.

For, it is a well-entrenched rule that penal laws are to be

construed strictly against the State and liberally in favor of

the accused. They are not to be extended or enlarged by

implications, intendments, analogies or equitable

considerations. They are not to be strained by construction

to spell out a new offense, enlarge the field of crime or

multiply felonies. Hence, in the interpretation of a penal

statute, the tendency is to subject it to careful scrutiny and to

construe it with such strictness as to safeguard the rights of

the accused. If the statute is ambiguous and admits of two

reasonable but contradictory constructions, that which

operates in favor of a party accused under its provisions is to

be preferred. The principle is that acts in and of themselves

innocent and lawful cannot be held to be criminal unless

there is a clear and unequivocal expression of the legislative

intent to make them such. Whatever is not plainly within the

provisions of a penal statute should be regarded as without

its intendment. 13

The purpose of strict construction is not to enable a guilty

person to escape punishment through a technicality but to

provide a precise definition of forbidden acts. 14

The word

"charitable" is a matter of description rather than of precise

definition, and each case involving a determination of that

which is charitable must be decided on its own particular

facts and circumstances. 15

The law does not operate in

vacuo nor should its applicability be determined by

circumstances in the abstract.

Furthermore, in the provisions of the Constitution and the

statutes mentioned above, the enumerations therein given

which include the words "charitable" and "religious" make

use of the disjunctive "or." In its elementary sense, "or" as

used in a statute is a disjunctive article indicating an

alternative. It often connects a series of words or

propositions indicating a choice of either. When "or" is

used, the various members of the enumeration are to be

taken separately. 16

Accordingly, "charitable" and

"religious," which are integral parts of an enumeration using

the disjunctive "or" should be given different, distinct, and

disparate meanings. There is no compelling consideration

why the same treatment or usage of these words cannot be

made applicable to the questioned provisions of Presidential

Decree No. 1564.

II. Petitioner next avers that solicitations for religious

purposes cannot be penalized under the law for, otherwise, it

will constitute an abridgment or restriction on the free

exercise clause guaranteed under the Constitution.

It may be conceded that the construction of a church is a

social concern of the people and, consequently, solicitations

appurtenant thereto would necessarily involve public

welfare. Prefatorily, it is not implausible that the regulatory

powers of the State may, to a certain degree, extend to

solicitations of this nature. Considering, however, that such

an activity is within the cloak of the free exercise clause

under the right to freedom of religion guaranteed by the

Constitution, it becomes imperative to delve into the

efficaciousness of a statutory grant of the power to regulate

the exercise of this constitutional right and the allowable

restrictions which may possibly be imposed thereon.

The constitutional inhibition of legislation on the subject of

religion has a double aspect. On the one hand, it forestalls

compulsion by law of the acceptance of any creed or the

practice of any form of worship. Freedom of conscience and

freedom to adhere to such religious organization or form of

worship as the individual may choose cannot be restricted

by law. On the other hand, it safeguards the free exercise of

the chosen form of religion. Thus, the constitution embraces

two concepts, that is, freedom to believe and freedom to act.

The first is absolute but, in the nature of things, the second

cannot be. Conduct remains subject to regulation for the

protection of society. The freedom to act must have

appropriate definitions to preserve the enforcement of that

protection. In every case, the power to regulate must be so

exercised, in attaining a permissible end, as not to unduly

infringe on the protected

freedom. 17

Whence, even the exercise of religion may be regulated, at

some slight inconvenience, in order that the State may

protect its citizens from injury. Without doubt, a State may

protect its citizens from fraudulent solicitation by requiring

a stranger in the community, before permitting him publicly

to solicit funds for any purpose, to establish his identity and

his authority to act for the cause which he purports to

represent. The State is likewise free to regulate the time and

manner of solicitation generally, in the interest of public

safety, peace, comfort, or convenience. 18

It does not follow, therefore, from the constitutional

guaranties of the free exercise of religion that everything

which may be so called can be tolerated. 19

It has been said

that a law advancing a legitimate governmental interest is

not necessarily invalid as one interfering with the "free

exercise" of religion merely because it also incidentally has

a detrimental effect on the adherents of one or more

religion. 20

Thus, the general regulation, in the public

interest, of solicitation, which does not involve any religious

test and does not unreasonably obstruct or delay the

collection of funds, is not open to any constitutional

objection, even though the collection be for a religious

purpose. Such regulation would not constitute a prohibited

previous restraint on the free exercise of religion or

interpose an inadmissible obstacle to its exercise.21

Even with numerous regulative laws in existence, it is

surprising how many operations are carried on by persons

and associations who, secreting their activities under the

guise of benevolent purposes, succeed in cheating and

defrauding a generous public. It is in fact amazing how

profitable the fraudulent schemes and practices are to people

who manipulate them. The State has authority under the

exercise of its police power to determine whether or not

there shall be restrictions on soliciting by unscrupulous

persons or for unworthy causes or for fraudulent purposes.

That solicitation of contributions under the guise of

charitable and benevolent purposes is grossly abused is a

matter of common knowledge. Certainly the solicitation of

contributions in good faith for worthy purposes should not

be denied, but somewhere should be lodged the power to

determine within reasonable limits the worthy from the

unworthy. 22

The objectionable practices of unscrupulous

persons are prejudicial to worthy and proper charities which

naturally suffer when the confidence of the public in

campaigns for the raising of money for charity is lessened or

destroyed. 23

Some regulation of public solicitation is,

therefore, in the public interest. 24

To conclude, solicitation for religious purposes may be

subject to proper regulation by the State in the exercise of

police power. However, in the case at bar, considering that

solicitations intended for a religious purpose are not within

the coverage of Presidential Decree No. 1564, as earlier

demonstrated, petitioner cannot be held criminally liable

therefor.

As a final note, we reject the reason advanced by respondent

judge for increasing the penalty imposed by the trial court,

premised on the supposed perversity of petitioner's act

which thereby caused damage to the complainant. It must be

here emphasized that the trial court, in the dispositive

portion of its decision, even recommended executive

clemency in favor of petitioner and the other accused after

finding that the latter acted in good faith in making the

solicitation from the complainant, an observation with

which we fully agree. After all, mistake upon a doubtful and

difficult question of law can be the basis of good faith,

especially for a layman.

There is likewise nothing in the findings of respondent judge

which would indicate, impliedly or otherwise, that petitioner

and his co-accused acted abusively or malevolently. This

could be reflective upon her objectivity, considering that the

complainant in this case is herself a judge of the Regional

Trial Court at Kalookan City. It bears stressing at this point

that a judge is required to so behave at all times as to

promote public confidence in the integrity and impartiality

of the judiciary, 25

should be vigilant against any attempt to

subvert its independence, and must resist any pressure from

whatever source. 26

WHEREFORE, the decision appealed from is hereby

REVERSED and SET ASIDE, and petitioner Martin

Centeno is ACQUITTED of the offense charged, with

costs de oficio.

SO ORDERED.

G.R. No. L-18924 June 30, 1964

MARINDUQUE IRON MINES AGENTS,

INC., petitioner-appellee,

vs.

THE MUNICIPAL COUNCIL OF THE

MUNICIPALITY OF HINABANGAN, PROVINCE OF

SAMAR, ET AL.,respondents-appellants.

Santiago de los Reyes and Francisco C. Catral for

petitioner-appellee.

Eliseo de Veyra and Juan Figueroa for defendants-

appellants.

REYES, J.B.L., J.:

Appeal from a declaratory decision of the Court of First

Instance of Manila declaring Municipal Ordinance No. 7,

Series of 1960, of the Municipality of Hinabangan, Samar,

null and void.

On June 27, 1960, the Municipality of Hinabangan, through

its duly constituted Municipality Council, enacted

Ordinance No. 7, Series of 1960, which in full reads as

follows:

An Ordinance Imposing a Municipal License Tax

On the Gross Outputs of the Mines and Other

Business; Its Imposition and Penalties Thereof

Within the Jurisdiction of this Municipality.

Be it ordained by the Municipal Council of

Hinabangan. Samar, THAT:

Section 1. — For the purpose of this Ordinance, the

following terms are defined:

"CORPORATION" refers to any person or persons,

firm or association engaged in the business for

which this Ordinance is enacted.

"GROSS OUTPUTS" shall be interpreted as the

total actual market value of minerals or mineral

products from each mine or mineral land operated

as separate entity without any deduction on

expenses incurred in the operation of the business.

"MUNICIPAL TREASURER" herein referred to,

is the duly appointed Municipal Treasurer

including his authorized representatives and/or

deputies in his office.

Section 2. — Republic Act 2264 empowers the

Municipal Council of Hinabangan, Samar, to

impose a graduated Municipal License Fees on any

occupation or business in the municipality to any

Corporation, based on the gross outputs or in

accordance with following schedule:

MINES AND OTHER BUSINESS

Section 3. — Any corporation subject to payment

of the Municipal License herein imposed shall

immediately at the end of each calendar year, but in

no case shall it exceed beyond the first FIFTEEN

(15) DAYS of the succeeding year, submit to

Municipal Treasurer certified true copies of

receipts and/or invoices as the case may be on the

total output per shipment of the mining produce,

for the year or the total yearly sales which will

serve as the basis for the collection of the

Municipal License Tax PROVIDED that upon

subsequent verification by the Municipal Treasurer

no erroneous or fraudulent entries are made. On the

contrary when upon proper investigation and

examination of the Books and/or Records of the

Corporation, there shall be found discrepancies in

the declarations of the total output per shipment or

sales, such discrepancy shall be revised within

TEN (10) DAYS from the date of verification

within which to settle the taxes due without

penalties as provided for by law.

Section 4. — To enforce this Ordinance, the

Municipal Treasurer shall have authority to

examine the Books and Records of the Corporation

subject to the payment of tax herein levied,

PROVIDED that such examination of Records or

Books as the case may be, be made during Office

hours, unless a written consent from the President,

or Manager as the case may be of the Corporation

is secured.

Section 5. — Any violation of a provision of this

Ordinance is punishable by a fine of not less than

ONE HUNDRED (P100.00) PESOS nor more than

TWO HUNDRED (P200.00) PESOS or by an

imprisonment of not less than ONE (1) MONTH

nor more than SIX (6) MONTHS or both fine and

imprisonment in the discretion of the Court. Any

violation of Section 2 of this Ordinance shall

subject the Corporation to pay the tax imposed plus

penalties and the subsequent fine and imprisonment

promulgated by the Court. Criminal responsibility

rests on the President, Manager or any person

charged with the management of the Corporation.

Section 6. — All Ordinances or parts thereof in

conflict with the Present Ordinance are hereby

repealed.

Section 7. — This Ordinance shall take effect

FIFTEEN (15) DAYS from its approval.

On December 14, 1960, the petitioner, a corporation duly

organized and existing under the laws of the Philippines and

operating the only mine within the jurisdiction of the

municipality of Hinabangan, filed this case of declaratory

relief in the Court of First Instance of Manila questioning

the validity of the ordinance as enacted without authority

and in violation of law. Respondents answered averring the

ordinance's validity with a counterclaim for damages and

petitioner having filed an amended petition and answer to

the counterclaim, which amended petition was accordingly

answered by respondents, the case was tried by the Court a

quo on March 15, 1961; the parties filed respective

memoranda, and on April 4, 1961 the Court a quo rendered

its decision declaring the ordinance in question illegal, from

which judgment respondents in due time perfected their

appeal to this Court.

Neither petitioner-appellee nor respondents-appellants

adduced any evidence before the Court a quo, the facts

heretofore stated having been based on the allegations of the

amended petition and the admissions thereof in the

appellants' amended answer thereto and the case was

submitted for decision on the pleadings.

Respondents-appellants maintain in this appeal that the

Court a quo erred in finding that Ordinance No. 7 does

impose a tax; that Ordinance No. 7 was intended to impose a

tax on sales; that Ordinance No. 7 is illegal because it is an

imposition of a double taxation, and that Ordinance No. 7 is

null and void.

On the petitioner-appellee's side, they maintain that Section

2 of Municipal Ordinance No. 7 does not impose a tax or

levy, and there is no clear and express imposition of a

charge in the other provisions of the ordinance; that the

declaration of authority to impose a tax is false and

erroneous because no such power is conferred in Section 2

of Republic Act No. 2264 upon which such authority is

based; that, moreover, there is no finding by the Court a

quo that a tax was imposed, much less, that the same is

based on the gross outputs or sales, because the Courta

quo merely assumed that the tax is imposed and declared it

illegal as not within the Municipal Council's authority to

impose because it falls within the exceptions to the tax-in-

powers of municipal governments, as prescribed in Section

2, last paragraph, of the Local Autonomy Act (R.A. No.

2264).

We find no error in the decision appealed from in so far as it

holds that the ordinance in question fails to levy any tax.

Appellants admit in their brief that the main section (section

2) of the ordinance "seems merely declaratory of authority,"

albeit they aver that a reading of it as a whole leads to the

conclusion that a tax was intended. It is, however, a well

established rule that —

A statute will not be construed as imposing a tax

unless does so clearly, expressly and it

unambiguously. (82 C.J.S., 956) (Emphasis

supplied)

and that —

It is an ancient principle that a tax can not be

imposed without clear and express words for that

purpose. Accordingly, the general rule of

requiring adherence to the letter in construing

statutes applies with peculiar strictness to tax

laws and the provisions of a taxing act are not to be

extended by implication. (30 Am. Jur. 153; also

McQuillin on Municipal Corp., Vol. 16, p. 267;

emphasis ours)

A mere reading of the ordinance discloses that not only are

there no words therein imposing a tax but that the peruser is

left in doubt as to whether the intention is to levy a tax for

revenue or charge a fee for permitting the business to be

carried on; for section 2 declares that the law "empowers the

Municipal Council of Hinabangan, Samar to impose

graduated Municipal License Fecs." Since the validity of

taxes and license fees are governed by different principles,

the taxpayer is left in doubt as to the true nature of the

charge and whether he must bear it or not. The rule is that

taxes may not be imposed by implication,1 and "a tax statute

is to be construed strictly andagainst the subjection to a tax

liability where the question is whether a matter, property or

person is subject to the tax" (82 C.J.S., p. 957). Considering

the avoidability of taxes by the citizen, it seems that the least

he is entitled to is to be expressly required to pay a tax,

which the words of the questioned ordinance do not state.

This is particularly true where the ordinance, as in this case,

carries penal provisions.

We further agree with the judgment appealed from that

Ordinance No. 7, Ser. 1960, of Hinabangan, Samar, is

invalid because the same infringes upon the express

restrictions placed by the legislature upon the taxing power

delegated to city and municipal councils. Section 2,

paragraph 1, of Republic Act No. 2264, after conferring

power to cities, municipalities, and municipal districts to

impose license taxes and service fees or charges on business

and occupations, expressly limited said powers by the

following proviso:

Provided that municipalities and municipal districts

shall, in no case, impose any percentage tax on

sales or other taxes in any form based thereon; ... .

Even granting that it does impose a tax, the ordinance in

question, while not providing for a percentage tax, but a

graduated tax (the progressive tax therein imposed not being

calculated on a percentage of the sales made by the

taxpayer), nevertheless, it prescribes a tax based on sales,

contrary to the statute (R.A. 2264). It is true that the

ordinance purports to base the tax on either "gross output or

sales but the only standard provided for measuring the gross

output is its peso value, as determined from "true copies of

receipts and/or invoices (which are precisely the evidence of

sales) that the taxpayer is required to submit to the

municipal treasurer (section 3), without deduction being

provided for freight insurance, or incidental costs. Directly

or indirectly, the amount of payable tax under this ordinance

is determined by the gross sales of the taxpayer, and violates

the explicit prohibition that the municipality must not levy,

or impose, "taxes in any form based on sales."

The plea that the members of the Municipal Council "are not

attorneys and of low scholastic ability" afford no excuse for

not observing well-established legal principles. The tax

imposing authority is held to know and understand that the

levying of taxes is a subject of grave responsibility, and of

serious consequences to the taxpayer. Taxation is not merely

a matter of wishing before an unused well, or of stroking

some wornout lamp.1äwphï1.ñët

IN VIEW OF THE FOREGOING, the judgment appealed

from is affirmed, with costs against appellants.

G.R. No. L-12436 May 31, 1961

LA CARLOTA SUGAR CENTRAL and ELIZALDE &

CO., INC., petitioners-appellants,

vs.

PEDRO JIMENEZ, AUDITOR GENERAL OF THE

PHILIPPINES, respondent-appellee.

Pacifico de Ocampo for petitioners-appellants.

Office of the Solicitor General for respondent-appellee.

DIZON, J.:

Sometime in September, 1955 La Carlota Sugar Central — a

domestic corporation hereinafter referred to as the Central,

managed, controlled and operated by Elizalde & Co., Inc.,

referred to hereinafter as Elizalde, imported 500 short tons

of ammonium sulphate and 350 short tons of ammonium

phosphate. The corresponding letter of credit in the sum of

$60,930.00, U.S. currency, was opened through the

Hongkong & Shanghai Banking Corporation in the name of

the Central and in favor of the Overseas Central Enterprises,

Inc., 141 Battery St., San Francisco 11, California, U.S.A.

The invoices, bill of lading, and all other papers incident to

said importation were also in the name of the Central.

When the fertilizers arrived in the Philippines, the Central

Bank imposed on, and demanded with the provisions of

Republic Act No. 601, as amended, and the Central paid in

that connection the total sum of P20,872.09 (Annexes B and

C attached to the Petition for Review).

On November 18, 1955 the Central filed, through the

Hongkong & Shanghai Banking Corporation, a petition for

the refund of the P20,872.09 paid as above stated, claiming

that it had imported the fertilizers mentioned heretofore

upon request and for the exclusive use of five haciendas

known as "Esperanza", "Nahalin", "Valencia" — owned by

Elizalde — "Consuelo" and "Maayon", these last two

managed by the same company, and therefore the

importation was exempt from the 17% exchange tax in

accordance with Sec. 2, Rep. Act 601, as amended by Act

1375. The Auditor of the Central Bank, however, denied the

petition on July 2, 1956. The Central requested the Auditor

to reconsider his ruling, but after a reexamination of all

pertinent papers the reconsideration was denied. The Central

then appealed to the Auditor General of the Philippines, who

on January 18, 1957, affirmed the ruling of the Auditor of

the Central Bank upon the ground that "the importation of

the fertilizers here in question does not fall within the scope

of the exempting provisions of Section 2 of Republic Act

No. 601, as amended by Republic Act No. 1357.

Accordingly, the decision of the Auditor, Central Bank of

the Philippines, denying the aforementioned request for

refund of 17% exchange tax, is hereby affirmed." In view of

this result, the Central and Elizalde filed the present petition

for review.

The only question to be resolved is whether upon the

undisputed facts of the case the importation of the fertilizers

mentioned heretofore is covered by the exemption provided

by Sections 1 and 2 of Republic Act No. 601, as amended

by Republic Acts Nos. 1175, 1197 and 1375, which read as

follows:

SECTION 1. Except as herein otherwise provided,

there shall be assessed, collected and paid a special

excise tax of seventeen per centum on the value in

Philippine peso of foreign exchange sold by the

Central Bank of the Philippines, or any of its agents

until June thirtieth, nineteen hundred and fifty-six.

SEC. 2. The tax provided for in section one of this

Act shall not be collected on foreign exchange used

for the payment of the cost, transportation and/or

other charges of canned milk, canned beef, cattle,

canned fish, cocoa beans, malt, stabilizer and

flavors, vitamin concentrate; supplies and

equipment purchased directly by the Government

or any of its instrumentalities for its own exclusive

use; machinery, equipment, accessories, and spare

parts, for the use of industries, miners, mining

enterprises, planters and farmers; and fertilizers

when imported by planters or farmers directly or

through their cooperatives; . . . .

The law is, therefore, clear that imported fertilizers are

exempt from the payment of the 17% tax only if the same

were imported by planters or farmers directly or through

their cooperatives. In the present case, as appellants admit

that the Central "is not the planter ultimately benefited by

the fertilizers, much less a cooperative within the purview of

Rep. Act No. 601, as amended", the only possible

conclusion is that the imported fertilizers in question are not

entitled to the exemption provided by law.

It is, however, argued that the Central imported the

fertilizers for the exclusive purpose of accommodating the

haciendas mentioned heretofore, who were to use the

fertilizers; that the Central acted merely as an agent of the

aforesaid haciendas; that considering the relationship and

corporate tie-up between the Central, on the one hand, and

Elizalde, on the other, the act of the Central in importing the

fertilizers should be considered as an act of Elizalde and,

therefore, the act of the haciendas themselves, three of

which were owned and two managed by Elizalde. We find

these contentions to be without merit.

As already stated, the exemption covers exclusively

fertilizers imported by planters or farmers directly or

through their cooperatives. The word "directly" has been

interpreted to mean "without anything intervening" (Words

and Phrases, Vol. 12A, p. 140 — citing Gulf Atlantic

Warehouse, etc. vs. Bennet, 51 So 2nd 544, 546, 36 Ala.

App. 33); "proximately or without intervening agency or

person" (Idem, p. 142 — citing Employers' Casualty Co. v.

Underwood, 286 P. 7, 10; 142 Okl. 208). Consequently, an

importation of fertilizers made by a farmer or planter

through an agent, other than his cooperative, is not

imported directly as required by the exemption. This

conclusion acquires added force upon consideration of the

fact that the legal provision in question has already

established an exception from the meaning or scope of the

term "directly" by providing coverage for fertilizers

imported by planters or farmers through their cooperatives.

The latter, therefore, is the only agent of planters or farmers

recognized by the exception, and we can not recognize any

other.

On the other hand, that the agent acted simply to

accommodate the planter or farmer and without any idea of

making any profit from the transaction would seem to be

immaterial considering the language employed in the statute

under consideration.

In connection with what has been stated heretofore, we have

to bear in mind likewise that when the issue is whether or

not the exemption from a tax imposed by law is applicable,

the rule is that the exempting provision is to be construed

liberally in favor of the taxing authority and strictly against

exemption from tax liability, the result being that statutory

provisions for the refund of taxes are strictly construed in

favor of the State and against the taxpayer (82 C.J.S. pp.

957-958; Helvering vs. Northwest Steel Rolling Mills, 311

US 46 85 L. ed. 29 S. Ct., 51 Am. Jur. p. 526). Indeed, were

we to adopt appellants' construction of the law by exempting

from the 17% tax all fertilizers imported by planters or

farmers through any agent other than their cooperatives, we

would be rendering useless the only exception expressly

established in the case of fertilizers imported by planters or

farmers through their cooperatives.

IN VIEW OF THE FOREGOING, the ruling appealed from

is hereby affirmed, with costs.

G.R. No. 120082 September 11, 1996

MACTAN CEBU INTERNATIONAL AIRPORT

AUTHORITY, petitioner,

vs.

HON. FERDINAND J. MARCOS, in his capacity as the

Presiding Judge of the Regional Trial Court, Branch 20,

Cebu City, THE CITY OF CEBU, represented by its

Mayor HON. TOMAS R. OSMEÑA, and EUSTAQUIO

B. CESA, respondents.

DAVIDE, JR., J.:

For review under Rule 45 of the Rules of Court on

a pure question of law are the decision of 22 March

1995 1 of the Regional Trial Court (RTC) of Cebu

City, Branch 20, dismissing the petition for

declaratory relief in Civil Case No. CEB-16900

entitled "Mactan Cebu International Airport

Authority vs. City of Cebu", and its order of 4,

May 1995 2 denying the motion to reconsider the

decision.

We resolved to give due course to this petition for

its raises issues dwelling on the scope of the taxing

power of local government-owned and controlled

corporations.

The uncontradicted factual antecedents are

summarized in the instant petition as follows:

Petitioner Mactan Cebu International

Airport Authority (MCIAA) was created

by virtue of Republic Act No. 6958,

mandated to "principally undertake the

economical, efficient and effective

control, management and supervision of

the Mactan International Airport in the

Province of Cebu and the Lahug Airport

in Cebu City, . . . and such other Airports

as may be established in the Province of

Cebu . . . (Sec. 3, RA 6958). It is also

mandated to:

a) encourage, promote and develop

international and domestic air traffic

in the Central Visayas and Mindanao

regions as a means of making the

regions centers of international trade

and tourism, and accelerating the

development of the means of

transportation and communication in

the country; and

b) upgrade the services and facilities

of the airports and to formulate

internationally acceptable standards

of airport accommodation and

service.

Since the time of its creation, petitioner

MCIAA enjoyed the privilege of

exemption from payment of realty taxes in

accordance with Section 14 of its Charter.

Sec. 14. Tax Exemptions. — The

authority shall be exempt from realty

taxes imposed by the National

Government or any of its political

subdivisions, agencies and

instrumentalities . . .

On October 11, 1994, however, Mr.

Eustaquio B. Cesa, Officer-in-Charge,

Office of the Treasurer of the City of

Cebu, demanded payment for realty taxes

on several parcels of land belonging to the

petitioner (Lot Nos. 913-G, 743, 88 SWO,

948-A, 989-A, 474, 109(931), I-M, 918,

919, 913-F, 941, 942, 947, 77 Psd., 746

and 991-A), located at Barrio Apas and

Barrio Kasambagan, Lahug, Cebu City, in

the total amount of P2,229,078.79.

Petitioner objected to such demand for

payment as baseless and unjustified,

claiming in its favor the aforecited Section

14 of RA 6958 which exempt it from

payment of realty taxes. It was also

asserted that it is an instrumentality of the

government performing governmental

functions, citing section 133 of the Local

Government Code of 1991 which puts

limitations on the taxing powers of local

government units:

Sec. 133. Common Limitations on the Taxing

Powers of Local Government Units. — Unless

otherwise provided herein, the exercise of the

taxing powers of provinces, cities,

municipalities, and barangay shall not extend to

the levy of the following:

a) . . .

xxx xxx xxx

o) Taxes, fees or charges of any kind on the

National Government, its agencies and

instrumentalities, and local government units.

(Emphasis supplied)

Respondent City refused to cancel and set

aside petitioner's realty tax account,

insisting that the MCIAA is a government-

controlled corporation whose tax

exemption privilege has been withdrawn

by virtue of Sections 193 and 234 of the

Local Governmental Code that took effect

on January 1, 1992:

Sec. 193. Withdrawal of Tax Exemption

Privilege. — Unless otherwise provided in

this Code, tax exemptions or incentives

granted to, or presently enjoyed by all

persons whether natural or

juridical,including government-owned or

controlled corporations, except local

water districts, cooperatives duly

registered under RA No. 6938, non-stock,

and non-profit hospitals and educational

institutions,are hereby withdrawn upon

the effectivity of this Code. (Emphasis

supplied)

xxx xxx xxx

Sec. 234. Exemptions from Real Property

taxes. — . . .

(a) . . .

xxx xxx xxx

(c) . . .

Except as provided

herein, any exemption

from payment of real

property tax previously

granted to, or presently

enjoyed by all persons,

whether natural or

juridical, including

government-owned or

controlled corporations

are hereby withdrawn

upon the effectivity of

this Code.

As the City of Cebu was about to issue a

warrant of levy against the properties of

petitioner, the latter was compelled to pay

its tax account "under protest" and

thereafter filed a Petition for Declaratory

Relief with the Regional Trial Court of

Cebu, Branch 20, on December 29, 1994.

MCIAA basically contended that the

taxing powers of local government units

do not extend to the levy of taxes or fees

of any kind on an instrumentality of the

national government. Petitioner insisted

that while it is indeed a government-

owned corporation, it nonetheless stands

on the same footing as an agency or

instrumentality of the national

government. Petitioner insisted that while

it is indeed a government-owned

corporation, it nonetheless stands on the

same footing as an agency or

instrumentality of the national government

by the very nature of its powers and

functions.

Respondent City, however, asserted that

MACIAA is not an instrumentality of the

government but merely a government-

owned corporation performing proprietary

functions As such, all exemptions

previously granted to it were deemed

withdrawn by operation of law, as

provided under Sections 193 and 234 of

the Local Government Code when it took

effect on January 1, 1992. 3

The petition for declaratory relief was docketed as

Civil Case No. CEB-16900.

In its decision of 22 March 1995, 4 the trial court

dismissed the petition in light of its findings, to wit:

A close reading of the New Local

Government Code of 1991 or RA 7160

provides the express cancellation and

withdrawal of exemption of taxes by

government owned and controlled

corporation per Sections after the

effectivity of said Code on January 1,

1992, to wit: [proceeds to quote Sections

193 and 234]

Petitioners claimed that its real properties

assessed by respondent City Government

of Cebu are exempted from paying realty

taxes in view of the exemption granted

under RA 6958 to pay the same (citing

Section 14 of RA 6958).

However, RA 7160 expressly provides

that "All general and special laws, acts,

city charters, decress [sic], executive

orders, proclamations and administrative

regulations, or part or parts thereof which

are inconsistent with any of the provisions

of this Code are hereby repealed or

modified accordingly." ([f], Section 534,

RA 7160).

With that repealing clause in RA 7160, it

is safe to infer and state that the tax

exemption provided for in RA 6958

creating petitioner had been expressly

repealed by the provisions of the New

Local Government Code of 1991.

So that petitioner in this case has to pay

the assessed realty tax of its properties

effective after January 1, 1992 until the

present.

This Court's ruling finds expression to

give impetus and meaning to the overall

objectives of the New Local Government

Code of 1991, RA 7160. "It is hereby

declared the policy of the State that the

territorial and political subdivisions of the

State shall enjoy genuine and meaningful

local autonomy to enable them to attain

their fullest development as self-reliant

communities and make them more

effective partners in the attainment of

national goals. Towards this end, the State

shall provide for a more responsive and

accountable local government structure

instituted through a system of

decentralization whereby local

government units shall be given more

powers, authority, responsibilities, and

resources. The process of decentralization

shall proceed from the national

government to the local government units.

. . . 5

Its motion for reconsideration having been denied

by the trial court in its 4 May 1995 order, the

petitioner filed the instant petition based on the

following assignment of errors:

I RESPONDENT JUDGE ERRED IN

FAILING TO RULE THAT THE

PETITIONER IS VESTED WITH

GOVERNMENT POWERS AND

FUNCTIONS WHICH PLACE IT IN THE

SAME CATEGORY AS AN

INSTRUMENTALITY OR AGENCY OF

THE GOVERNMENT.

II RESPONDENT JUDGE ERRED IN

RULING THAT PETITIONER IS LIABLE

TO PAY REAL PROPERTY TAXES TO

THE CITY OF CEBU.

Anent the first assigned error, the petitioner asserts

that although it is a government-owned or

controlled corporation it is mandated to perform

functions in the same category as an

instrumentality of Government. An instrumentality

of Government is one created to perform

governmental functions primarily to promote

certain aspects of the economic life of the

people. 6 Considering its task "not merely to

efficiently operate and manage the Mactan-Cebu

International Airport, but more importantly, to

carry out the Government policies of promoting

and developing the Central Visayas and Mindanao

regions as centers of international trade and

tourism, and accelerating the development of the

means of transportation and communication in the

country," 7

and that it is an attached agency of the

Department of Transportation and Communication

(DOTC), 8 the petitioner "may stand in [sic] the

same footing as an agency or instrumentality of the

national government." Hence, its tax exemption

privilege under Section 14 of its Charter "cannot be

considered withdrawn with the passage of the

Local Government Code of 1991 (hereinafter LGC)

because Section 133 thereof specifically states that

the taxing powers of local government units shall

not extend to the levy of taxes of fees or charges of

any kind on the national government its agencies

and instrumentalities."

As to the second assigned error, the petitioner

contends that being an instrumentality of the

National Government, respondent City of Cebu has

no power nor authority to impose realty taxes upon

it in accordance with the aforesaid Section 133 of

the LGC, as explained in Basco vs. Philippine

Amusement and Gaming Corporation; 9

Local governments have no power to tax

instrumentalities of the National

Government. PAGCOR is a government

owned or controlled corporation with an

original character, PD 1869. All its shares

of stock are owned by the National

Government. . . .

PAGCOR has a dual role, to operate and

regulate gambling casinos. The latter joke

is governmental, which places it in the

category of an agency or instrumentality

of the Government. Being an

instrumentality of the Government,

PAGCOR should be and actually is

exempt from local taxes. Otherwise, its

operation might be burdened, impeded or

subjected to control by a mere Local

government.

The states have no power by taxation or

otherwise, to retard, impede, burden or in

any manner control the operation of

constitutional laws enacted by Congress to

carry into execution the powers vested in

the federal government. (McCulloch v.

Maryland, 4 Wheat 316, 4 L Ed. 579).

This doctrine emanates from the

"supremacy" of the National Government

over local government.

Justice Holmes, speaking for the Supreme

Court, make references to the entire

absence of power on the part of the States

to touch, in that way (taxation) at least, the

instrumentalities of the United States

(Johnson v. Maryland, 254 US 51) and it

can be agreed that no state or political

subdivision can regulate a federal

instrumentality in such a way as to prevent

it from consummating its federal

responsibilities, or even to seriously

burden it in the accomplishment of them.

(Antieau Modern Constitutional Law, Vol.

2, p. 140)

Otherwise mere creature of the State can

defeat National policies thru extermination

of what local authorities may perceive to

be undesirable activities or enterprise

using the power to tax as "a toll for

regulation" (U.S. v. Sanchez, 340 US

42). The power to tax which was called by

Justice Marshall as the "power to destroy"

(McCulloch v. Maryland, supra) cannot

be allowed to defeat an instrumentality or

creation of the very entity which has the

inherent power to wield it. (Emphasis

supplied)

It then concludes that the respondent Judge "cannot

therefore correctly say that the questioned

provisions of the Code do not contain any

distinction between a governmental function as

against one performing merely proprietary ones

such that the exemption privilege withdrawn under

the said Code would apply to allgovernment

corporations." For it is clear from Section 133, in

relation to Section 234, of the LGC that the

legislature meant to exclude instrumentalities of the

national government from the taxing power of the

local government units.

In its comment respondent City of Cebu alleges

that as local a government unit and a political

subdivision, it has the power to impose, levy,

assess, and collect taxes within its jurisdiction.

Such power is guaranteed by the Constitution 10

and

enhanced further by the LGC. While it may be true

that under its Charter the petitioner was exempt

from the payment of realty taxes, 11

this exemption

was withdrawn by Section 234 of the LGC. In

response to the petitioner's claim that such

exemption was not repealed because being an

instrumentality of the National Government,

Section 133 of the LGC prohibits local government

units from imposing taxes, fees, or charges of any

kind on it, respondent City of Cebu points out that

the petitioner is likewise a government-owned

corporation, and Section 234 thereof does not

distinguish between government-owned

corporation, and Section 234 thereof does not

distinguish between government-owned

corporation, and Section 234 thereof does not

distinguish between government-owned or

controlled corporations performing governmental

and purely proprietary functions. Respondent city

of Cebu urges this the Manila International Airport

Authority is a governmental-owned

corporation, 12

and to reject the application of

Basco because it was "promulgated . . . before the

enactment and the singing into law of R.A. No.

7160," and was not, therefore, decided "in the light

of the spirit and intention of the framers of the said

law.

As a general rule, the power to tax is an incident of

sovereignty and is unlimited in its range,

acknowledging in its very nature no limits, so that

security against its abuse is to be found only in the

responsibility of the legislature which imposes the

tax on the constituency who are to pay it.

Nevertheless, effective limitations thereon may be

imposed by the people through their

Constitutions. 13

Our Constitution, for instance,

provides that the rule of taxation shall be uniform

and equitable and Congress shall evolve a

progressive system of taxation.14

So potent indeed

is the power that it was once opined that "the power

to tax involves the power to destroy." 15

Verily,

taxation is a destructive power which interferes

with the personal and property for the support of

the government. Accordingly, tax statutes must be

construed strictly against the government and

liberally in favor of the taxpayer. 16

But since taxes

are what we pay for civilized society, 17

or are the

lifeblood of the nation, the law frowns against

exemptions from taxation and statutes granting tax

exemptions are thus construed strictissimi

juris against the taxpayers and liberally in favor of

the taxing authority. 18

A claim of exemption from

tax payment must be clearly shown and based on

language in the law too plain to be

mistaken. 19

Elsewise stated, taxation is the rule,

exemption therefrom is the exception. 20

However,

if the grantee of the exemption is a political

subdivision or instrumentality, the rigid rule of

construction does not apply because the practical

effect of the exemption is merely to reduce the

amount of money that has to be handled by the

government in the course of its operations. 21

The power to tax is primarily vested in the

Congress; however, in our jurisdiction, it may be

exercised by local legislative bodies, no longer

merely by virtue of a valid delegation as before, but

pursuant to direct authority conferred by Section 5,

Article X of the Constitution. 22

Under the latter,

the exercise of the power may be subject to such

guidelines and limitations as the Congress may

provide which, however, must be consistent with

the basic policy of local autonomy.

There can be no question that under Section 14 of

R.A. No. 6958 the petitioner is exempt from the

payment of realty taxes imposed by the National

Government or any of its political subdivisions,

agencies, and instrumentalities. Nevertheless, since

taxation is the rule and exemption therefrom the

exception, the exemption may thus be withdrawn at

the pleasure of the taxing authority. The only

exception to this rule is where the exemption was

granted to private parties based on material

consideration of a mutual nature, which then

becomes contractual and is thus covered by the

non-impairment clause of the Constitution. 23

The LGC, enacted pursuant to Section 3, Article X

of the constitution provides for the exercise by

local government units of their power to tax, the

scope thereof or its limitations, and the exemption

from taxation.

Section 133 of the LGC prescribes the common

limitations on the taxing powers of local

government units as follows:

Sec. 133. Common Limitations on the

Taxing Power of Local Government Units.

— Unless otherwise provided herein, the

exercise of the taxing powers of

provinces, cities, municipalities, and

barangays shall not extend to the levy of

the following:

(a) Income tax, except when levied on banks

and other financial institutions;

(b) Documentary stamp tax;

(c) Taxes on estates, "inheritance, gifts,

legacies and other acquisitions mortis causa,

except as otherwise provided herein

(d) Customs duties, registration fees of vessels

and wharfage on wharves, tonnage dues, and

all other kinds of customs fees charges and

dues except wharfage on wharves constructed

and maintained by the local government unit

concerned:

(e) Taxes, fees and charges and other

imposition upon goods carried into or out of,

or passing through, the territorial jurisdictions

of local government units in the guise or

charges for wharfages, tolls for bridges or

otherwise, or other taxes, fees or charges in

any form whatsoever upon such goods or

merchandise;

(f) Taxes fees or charges on agricultural and

aquatic products when sold by marginal

farmers or fishermen;

(g) Taxes on business enterprise certified to

be the Board of Investment as pioneer or non-

pioneer for a period of six (6) and four (4)

years, respectively from the date of

registration;

(h) Excise taxes on articles enumerated under

the National Internal Revenue Code, as

amended, and taxes, fees or charges on

petroleum products;

(i) Percentage or value added tax (VAT) on

sales, barters or exchanges or similar

transactions on goods or services except as

otherwise provided herein;

(j) Taxes on the gross receipts of

transportation contractor and person

engage in the transportation of passengers

of freight by hire and common carriers by

air, land, or water, except as provided in

this code;

(k) Taxes on premiums paid by ways

reinsurance or retrocession;

(l) Taxes, fees, or charges for the

registration of motor vehicles and for the

issuance of all kinds of licenses or permits

for the driving of thereof, except,

tricycles;

(m) Taxes, fees, or other charges on

Philippine product actually exported,

except as otherwise provided herein;

(n) Taxes, fees, or charges, on

Countryside and Barangay Business

Enterprise and Cooperatives duly

registered under R.A. No. 6810 and

Republic Act Numbered Sixty nine

hundred thirty-eight (R.A. No. 6938)

otherwise known as the "Cooperative

Code of the Philippines; and

(o) TAXES, FEES, OR CHARGES OF

ANY KIND ON THE NATIONAL

GOVERNMENT, ITS AGENCIES AND

INSTRUMENTALITIES, AND LOCAL

GOVERNMENT UNITS. (emphasis

supplied)

Needless to say the last item (item o) is pertinent in

this case. The "taxes, fees or charges" referred to

are "of any kind", hence they include all of these,

unless otherwise provided by the LGC. The term

"taxes" is well understood so as to need no further

elaboration, especially in the light of the above

enumeration. The term "fees" means charges fixed

by law or Ordinance for the regulation or

inspection of business activity, 24

while "charges"

are pecuniary liabilities such as rents or fees

against person or property. 25

Among the "taxes" enumerated in the LGC is real

property tax, which is governed by Section 232. It

reads as follows:

Sec. 232. Power to Levy Real Property

Tax. — A province or city or a

municipality within the Metropolitan

Manila Area may levy on an annual ad

valorem tax on real property such as land,

building, machinery and other

improvements not hereafter specifically

exempted.

Section 234 of LGC provides for the exemptions

from payment of real property taxes and withdraws

previous exemptions therefrom granted to natural

and juridical persons, including government owned

and controlled corporations, except as provided

therein. It provides:

Sec. 234. Exemptions from Real Property

Tax. — The following are exempted from

payment of the real property tax:

(a) Real property owned by the Republic of the

Philippines or any of its political subdivisions

except when the beneficial use thereof had been

granted, for reconsideration or otherwise, to a

taxable person;

(b) Charitable institutions, churches, parsonages

or convents appurtenants thereto, mosques

nonprofits or religious cemeteries and all lands,

building and improvements actually, directly,

and exclusively used for religious charitable or

educational purposes;

(c) All machineries and equipment that are

actually, directly and exclusively used by local

water districts and government-owned or

controlled corporations engaged in the supply

and distribution of water and/or generation and

transmission of electric power;

(d) All real property owned by duly registered

cooperatives as provided for under R.A. No.

6938; and;

(e) Machinery and equipment used for pollution

control and environmental protection.

Except as provided herein, any exemptions from

payment of real property tax previously granted

to or presently enjoyed by, all persons whether

natural or juridical, including all government

owned or controlled corporations are hereby

withdrawn upon the effectivity of his Code.

These exemptions are based on the ownership,

character, and use of the property. Thus;

(a) Ownership Exemptions. Exemptions from

real property taxes on the basis of ownership are

real properties owned by: (i) the Republic, (ii) a

province, (iii) a city, (iv) a municipality, (v) a

barangay, and (vi) registered cooperatives.

(b) Character Exemptions. Exempted from real

property taxes on the basis of their character are:

(i) charitable institutions, (ii) houses and temples

of prayer like churches, parsonages or convents

appurtenant thereto, mosques, and (iii) non profit

or religious cemeteries.

(c) Usage exemptions. Exempted from real

property taxes on the basis of the actual, direct

and exclusive use to which they are devoted are:

(i) all lands buildings and improvements which

are actually, directed and exclusively used for

religious, charitable or educational purpose; (ii)

all machineries and equipment actually, directly

and exclusively used or by local water districts or

by government-owned or controlled corporations

engaged in the supply and distribution of water

and/or generation and transmission of electric

power; and (iii) all machinery and equipment

used for pollution control and environmental

protection.

To help provide a healthy environment in the

midst of the modernization of the country, all

machinery and equipment for pollution control

and environmental protection may not be taxed

by local governments.

2. Other Exemptions Withdrawn. All other

exemptions previously granted to natural or

juridical persons including government-owned or

controlled corporations are withdrawn upon the

effectivity of the Code. 26

Section 193 of the LGC is the general provision on

withdrawal of tax exemption privileges. It

provides:

Sec. 193. Withdrawal of Tax Exemption

Privileges. — Unless otherwise provided

in this code, tax exemptions or incentives

granted to or presently enjoyed by all

persons, whether natural or juridical,

including government-owned, or

controlled corporations, except local water

districts, cooperatives duly registered

under R.A. 6938, non stock and non profit

hospitals and educational constitutions,

are hereby withdrawn upon the effectivity

of this Code.

On the other hand, the LGC authorizes local

government units to grant tax exemption privileges.

Thus, Section 192 thereof provides:

Sec. 192. Authority to Grant Tax

Exemption Privileges. — Local

government units may, through ordinances

duly approved, grant tax exemptions,

incentives or reliefs under such terms and

conditions as they may deem necessary.

The foregoing sections of the LGC speaks of: (a)

the limitations on the taxing powers of local

government units and the exceptions to such

limitations; and (b) the rule on tax exemptions and

the exceptions thereto. The use of exceptions of

provisos in these section, as shown by the

following clauses:

(1) "unless otherwise provided herein" in the

opening paragraph of Section 133;

(2) "Unless otherwise provided in this Code"

in section 193;

(3) "not hereafter specifically exempted" in

Section 232; and

(4) "Except as provided herein" in the last

paragraph of Section 234

initially hampers a ready understanding of the

sections. Note, too, that the aforementioned clause

in section 133 seems to be inaccurately worded.

Instead of the clause "unless otherwise provided

herein," with the "herein" to mean, of course, the

section, it should have used the clause "unless

otherwise provided in this Code." The former

results in absurdity since the section itself

enumerates what are beyond the taxing powers of

local government units and, where exceptions were

intended, the exceptions were explicitly indicated

in the text. For instance, in item (a) which excepts

the income taxes "when livied on banks and other

financial institutions", item (d) which excepts

"wharfage on wharves constructed and maintained

by the local government until concerned"; and item

(1) which excepts taxes, fees, and charges for the

registration and issuance of license or permits for

the driving of "tricycles". It may also be observed

that within the body itself of the section, there are

exceptions which can be found only in other parts

of the LGC, but the section interchangeably uses

therein the clause "except as otherwise provided

herein" as in items (c) and (i), or the clause "except

as otherwise provided herein" as in items (c) and

(i), or the clause "excepts as provided in this Code"

in item (j). These clauses would be obviously

unnecessary or mere surplus-ages if the opening

clause of the section were" "Unless otherwise

provided in this Code" instead of "Unless otherwise

provided herein". In any event, even if the latter is

used, since under Section 232 local government

units have the power to levy real property tax,

except those exempted therefrom under Section

234, then Section 232 must be deemed to qualify

Section 133.

Thus, reading together Section 133, 232 and 234 of

the LGC, we conclude that as a general rule, as laid

down in Section 133 the taxing powers of local

government units cannot extend to the levy of inter

alia, "taxes, fees, and charges of any kind of the

National Government, its agencies and

instrumentalties, and local government units";

however, pursuant to Section 232, provinces, cities,

municipalities in the Metropolitan Manila Area

may impose the real property tax except on, inter

alia, "real property owned by the Republic of the

Philippines or any of its political subdivisions

except when the beneficial used thereof has been

granted, for consideration or otherwise, to a taxable

person", as provided in item (a) of the first

paragraph of Section 234.

As to tax exemptions or incentives granted to or

presently enjoyed by natural or juridical persons,

including government-owned and controlled

corporations, Section 193 of the LGC prescribes

the general rule, viz., they are withdrawn upon the

effectivity of the LGC, except upon the effectivity

of the LGC, except those granted to local water

districts, cooperatives duly registered under R.A.

No. 6938, non stock and non-profit hospitals and

educational institutions, and unless otherwise

provided in the LGC. The latter proviso could refer

to Section 234, which enumerates the properties

exempt from real property tax. But the last

paragraph of Section 234 further qualifies the

retention of the exemption in so far as the real

property taxes are concerned by limiting the

retention only to those enumerated there-in; all

others not included in the enumeration lost the

privilege upon the effectivity of the LGC.

Moreover, even as the real property is owned by

the Republic of the Philippines, or any of its

political subdivisions covered by item (a) of the

first paragraph of Section 234, the exemption is

withdrawn if the beneficial use of such property

has been granted to taxable person for

consideration or otherwise.

Since the last paragraph of Section 234

unequivocally withdrew, upon the effectivity of the

LGC, exemptions from real property taxes granted

to natural or juridical persons, including

government-owned or controlled corporations,

except as provided in the said section, and the

petitioner is, undoubtedly, a government-owned

corporation, it necessarily follows that its

exemption from such tax granted it in Section 14 of

its charter, R.A. No. 6958, has been withdrawn.

Any claim to the contrary can only be justified if

the petitioner can seek refuge under any of the

exceptions provided in Section 234, but not under

Section 133, as it now asserts, since, as shown

above, the said section is qualified by Section 232

and 234.

In short, the petitioner can no longer invoke the

general rule in Section 133 that the taxing powers

of the local government units cannot extend to the

levy of:

(o) taxes, fees, or charges of any kind on the

National Government, its agencies, or

instrumentalities, and local government units.

I must show that the parcels of land in question,

which are real property, are any one of those

enumerated in Section 234, either by virtue of

ownership, character, or use of the property. Most

likely, it could only be the first, but not under any

explicit provision of the said section, for one exists.

In light of the petitioner's theory that it is an

"instrumentality of the Government", it could only

be within be first item of the first paragraph of the

section by expanding the scope of the terms

Republic of the Philippines" to embrace . . . . .

. "instrumentalities" and "agencies" or expediency

we quote:

(a) real property owned by the Republic of the

Philippines, or any of the Philippines, or any of

its political subdivisions except when the

beneficial use thereof has been granted, for

consideration or otherwise, to a taxable person.

This view does not persuade us. In the first place,

the petitioner's claim that it is an instrumentality of

the Government is based on Section 133(o), which

expressly mentions the word "instrumentalities";

and in the second place it fails to consider the fact

that the legislature used the phrase "National

Government, its agencies and instrumentalities" "in

Section 133(o),but only the phrase "Republic of the

Philippines or any of its political subdivision "in

Section 234(a).

The terms "Republic of the Philippines" and

"National Government" are not interchangeable.

The former is boarder and synonymous with

"Government of the Republic of the Philippines"

which the Administrative Code of the 1987 defines

as the "corporate governmental entity though which

the functions of the government are exercised

through at the Philippines, including, saves as the

contrary appears from the context, the various arms

through which political authority is made effective

in the Philippines, whether pertaining to the

autonomous reason, the provincial, city, municipal

or barangay subdivision or other forms of local

government." 27

These autonomous regions,

provincial, city, municipal or barangay

subdivisions" are the political subdivision. 28

On the other hand, "National Government" refers

"to the entire machinery of the central government,

as distinguished from the different forms of local

Governments." 29

The National Government then is

composed of the three great departments the

executive, the legislative and the judicial. 30

An "agency" of the Government refers to "any of

the various units of the Government, including a

department, bureau, office instrumentality, or

government-owned or controlled corporation, or a

local government or a distinct unit therein;" 31

while

an "instrumentality" refers to "any agency of the

National Government, not integrated within the

department framework, vested with special

functions or jurisdiction by law, endowed with

some if not all corporate powers, administering

special funds, and enjoying operational autonomy;

usually through a charter. This term includes

regulatory agencies, chartered institutions and

government-owned and controlled corporations". 32

If Section 234(a) intended to extend the exception

therein to the withdrawal of the exemption from

payment of real property taxes under the last

sentence of the said section to the agencies and

instrumentalities of the National Government

mentioned in Section 133(o), then it should have

restated the wording of the latter. Yet, it did not

Moreover, that Congress did not wish to expand the

scope of the exemption in Section 234(a) to include

real property owned by other instrumentalities or

agencies of the government including government-

owned and controlled corporations is further borne

out by the fact that the source of this exemption is

Section 40(a) of P.D. No. 646, otherwise known as

the Real Property Tax Code, which reads:

Sec 40. Exemption from Real Property

Tax. — The exemption shall be as

follows:

(a) Real property owned by the Republic of the

Philippines or any of its political subdivisions

and any government-owned or controlled

corporations so exempt by is charter: Provided,

however, that this exemption shall not apply to

real property of the above mentioned entities the

beneficial use of which has been granted, for

consideration or otherwise, to a taxable person.

Note that as a reproduced in Section 234(a), the

phrase "and any government-owned or controlled

corporation so exempt by its charter" was excluded.

The justification for this restricted exemption in

Section 234(a) seems obvious: to limit further tax

exemption privileges, specially in light of the

general provision on withdrawal of exemption from

payment of real property taxes in the last paragraph

of property taxes in the last paragraph of Section

234. These policy considerations are consistent

with the State policy to ensure autonomy to local

governments 33

and the objective of the LGC that

they enjoy genuine and meaningful local autonomy

to enable them to attain their fullest development as

self-reliant communities and make them effective

partners in the attainment of national goals. 34

The

power to tax is the most effective instrument to

raise needed revenues to finance and support

myriad activities of local government units for the

delivery of basic services essential to the promotion

of the general welfare and the enhancement of

peace, progress, and prosperity of the people. It

may also be relevant to recall that the original

reasons for the withdrawal of tax exemption

privileges granted to government-owned and

controlled corporations and all other units of

government were that such privilege resulted in

serious tax base erosion and distortions in the tax

treatment of similarly situated enterprises, and

there was a need for this entities to share in the

requirements of the development, fiscal or

otherwise, by paying the taxes and other charges

due from them. 35

The crucial issues then to be addressed are: (a)

whether the parcels of land in question belong to

the Republic of the Philippines whose beneficial

use has been granted to the petitioner, and (b)

whether the petitioner is a "taxable person".

Section 15 of the petitioner's Charter provides:

Sec. 15. Transfer of Existing Facilities

and Intangible Assets. — All existing

public airport facilities, runways, lands,

buildings and other properties, movable or

immovable, belonging to or presently

administered by the airports, and all

assets, powers, rights, interests and

privileges relating on airport works, or air

operations, including all equipment which

are necessary for the operations of air

navigation, acrodrome control towers,

crash, fire, and rescue facilities are hereby

transferred to the Authority: Provided

however, that the operations control of all

equipment necessary for the operation of

radio aids to air navigation, airways

communication, the approach control

office, and the area control center shall be

retained by the Air Transportation Office.

No equipment, however, shall be removed

by the Air Transportation Office from

Mactan without the concurrence of the

authority. The authority may assist in the

maintenance of the Air Transportation

Office equipment.

The "airports" referred to are the "Lahug Air Port"

in Cebu City and the "Mactan International AirPort

in the Province of Cebu", 36

which belonged to the

Republic of the Philippines, then under the Air

Transportation Office (ATO). 37

It may be reasonable to assume that the term

"lands" refer to "lands" in Cebu City then

administered by the Lahug Air Port and includes

the parcels of land the respondent City of Cebu

seeks to levy on for real property taxes. This

section involves a "transfer" of the "lands" among

other things, to the petitioner and not just the

transfer of the beneficial use thereof, with the

ownership being retained by the Republic of the

Philippines.

This "transfer" is actually an absolute conveyance

of the ownership thereof because the petitioner's

authorized capital stock consists of, inter alia "the

value of such real estate owned and/or administered

by the airports." 38

Hence, the petitioner is now the

owner of the land in question and the exception in

Section 234(c) of the LGC is inapplicable.

Moreover, the petitioner cannot claim that it was

never a "taxable person" under its Charter. It

was only exempted from the payment of real

property taxes. The grant of the privilege only in

respect of this tax is conclusive proof of the

legislative intent to make it a taxable person subject

to all taxes, except real property tax.

Finally, even if the petitioner was originally not a

taxable person for purposes of real property tax, in

light of the forgoing disquisitions, it had already

become even if it be conceded to be an "agency" or

"instrumentality" of the Government, a taxable

person for such purpose in view of the withdrawal

in the last paragraph of Section 234 of exemptions

from the payment of real property taxes, which, as

earlier adverted to, applies to the petitioner.

Accordingly, the position taken by the petitioner is

untenable. Reliance on Basco vs. Philippine

Amusement and Gaming Corporation 39

is

unavailing since it was decided before the

effectivity of the LGC. Besides, nothing can

prevent Congress from decreeing that even

instrumentalities or agencies of the government

performing governmental functions may be subject

to tax. Where it is done precisely to fulfill a

constitutional mandate and national policy, no one

can doubt its wisdom.

WHEREFORE, the instant petition is DENIED.

The challenged decision and order of the Regional

Trial Court of Cebu, Branch 20, in Civil Case No.

CEB-16900 are AFFIRMED.

No pronouncement as to costs.

G.R. No. L-40858 September 15, 1987

SPOUSES FEDERICO SERFINO and LORNA

BACHAR, petitioners,

vs.

THE COURT OF APPEALS and LOPEZ SUGAR

CENTRAL MILL CO., INC., respondents.

No. L-40751 September 15, 1987

PHILIPPINE NATIONAL BANK, petitioner,

vs.

THE HONORABLE COURT OF APPEALS, LOPEZ

SUGAR CENTRAL MILL COMPANY, INC.,

SPOUSES FEDERICO SERFINO and LORNA

BACHAR, respondents.

PARAS, J.:

Before Us are two (2) Petitions for certiorari to review the

decision 1 of the Court of Appeals als in CA-G.R. No.

37748-R, consolidated for Our disposition since they arose

from the same factual background.

The records of the case show that on August 25, 1937, a

parcel of land consisting of 21.1676 hectares situated in the

Municipality of Sagay, Province of Negros Occidental, was

patented in the name of Pacifico Casamayor, under

Homestead Patent No. 44139. Upon registration of said

patent in the office of the Register of Deeds of Negros

Occidental, OCT No. 1839 was issued by said office in the

name of Pacifico Casamayor. On December 14, 1945, the

latter sold said land in favor of Nemesia D. Baltazar.

Apparently, OCT No. 1839 was lost during the war and

upon petition of Nemesia Baltazar, the Court of First

Instance of Negros Occidental ordered 2 the reconstitution

thereof. Pursuant thereto, OCT No. 14-R (1839) was issued

on January 18, 1946 in the name of Pacifico Casamayor. On

that same day, TCT No. 57-N was issued in the name of

Nemesia Baltazar but after the cancellation of OCT No. 14-

R (1839).

On August 25, 1951, Nemesia Baltazar, sold said property

to Lopez Sugar Central Mill Co., Inc. (Lopez Sugar Central,

for brevity). The latter, however did not present the

documents for registration until December 17, 1964 to the

Office of the Registry of Deeds. Said office refused

registration upon its discovery that the same property was

covered by another certificate of title, TCT No. 38985, in

the name of Federico Serfino.

An inquiry into this discrepancy reveals that the Provincial

Treasurer of Negros Occidental on October 30, 1956 had

conducted a public auction sale of this property for tax

delinquency for the period starting the year 1950. Notice of

this public auction sale was sent to Pacifico Casamayor but

none to Nemesia Baltazar and Lopez Sugar Million There

being no public bidders on the scheduled date of sale, the

Provincial Treasurer of Negros Occidental issued a

Certification of Sale of Delinquent Real Property over the

disputed land to the Province of Negros Occidental. On May

14, 1964, upon payment of the amount of P1,838.49 by

Federico Serfino, a Certificate of Repurchase of Real

Property was issued and executed by the Provincial

Treasurer in favor of Federico Serfino, for and in behalf of

Pacifico Casamayor.

On May 28, 1964, Serfino filed a petition with the Court of

First Instance of Negros Occidental for the Reconstitution of

OCT No. 1839 in the name of Pacifico Casamayor, upon the

allegation that said title was lost. After due publication and

hearing, said OCT was ordered reconstituted and thus OCT

No. RP-1304 (1839) was issued by the Registry of Deeds in

the name of Casamayor.

On October 30, 1964, Serfino petitioned the court for

confirmation of his title to the land as purchaser in the

auction sale. On October 31, 1964, court granted the petition

and on November 2, 1964, OCT No. RP-1304 (1839) was

cancelled and TCT No. 38985 was issued in the name of

Federico Serfino, married to Lorna Bachar.

On November 19, 1964, the spouses Serfinos mortgaged the

land to the Philippine National Bank (PNB) to secure a loan

in the amount of P5,000.00. Said mortgage in favor of PNB

was inscribed in TCT No. 38985. Hence, this was the

situation of the land when the Office of the Register of

Deeds refused registration of the property in question

requested by the Lopez Sugar Central.

The lower court in its Order, dated January 16, 1965 in the

Petition of the Office of the Register of Deeds seeking the

cancellation of either TCT No. 57-N (in the name of

Nemesia Baltazar) or TCT No. 38985 (in the name of Lopez

Sugar Central), ordered Lopez Sugar Central and spouses

Serfino to take the necessary steps towards the clearing of

their respective titles before a court of general jurisdiction.

Pursuant thereto, Lopez Sugar Central, on May 5, 1965,

instituted an action for 1) annulment of OCT No. RP-1304

(1839), of TCT No. 38985 and of the mortgage executed by

the Serfinos in favor of PNB, 2) for the registration of the

Deed of Sale, 3) for the issuance of a TCT in its name and 4)

for recovery of possession of the disputed land from the

Serfinos.

On February 4, 1966, the lower court rendered its

decision, 3 the dispositive portion reading as follows:

WHEREFORE, and considering the conclusions and

opinion set forth above, judgment is hereby rendered as

follows:

1. The Register of Deeds of Negros Occidental is

hereby ordered to cancel Transfer Certificate of Title

No. 38985;

2. The same Register of Deeds is ordered to register the

deed of sale executed by Nemesia D. Baltazar on

August 25, 1951, and after cancelling Transfer

Certificate of Title No. 57-N and other titles issued

prior thereto, to issue a new transfer certificate of title

in the name of Lopez Sugar Central Mill Co., Inc., upon

previous payments of the legal fees;

3. The Lopez Sugar Central Mill Co., Inc., shall pay the

Philippine National Bank, Bacolod Branch, the sum of

P5,261.11 secured by a real estate mortgaged registered

and annotated on Transfer Certificate of Title 38985

which shall be carried over in the new transfer

certificate of title to be issued to the Lopez Sugar

Central Mill Co., Inc. with the right of recourse to the

Assurance Fund; and

4. The defendant, Federico Serfino, is hereby ordered to

vacate the land in question and to deliver the possession

thereof to the plaintiff;

5. The plaintiff is exempt from reimbursing the

defendant, Federico Serfino, for the sum of P602.94

which the latter paid for the repurchase of the land in

question for the reason that the former is already

burdened with the payment of the mortgage

indebtedness with the Philippine National Bank in the

amount of P5,261.11; and

6. The Court makes no award for damages and costs.

SO ORDERED. (Rollo L-40751, pp. 117 & 118, Joint

Record on Appeal, Annex "D", p. 50)

Both parties appealed from this decision of the trial court.

Ruling on the assignment of errors, the appellate court

affirmed the judgment of the trial court with modification in

its decision, the pertinent portion reading as follows:

Plaintiff contends that the mortgage executed by the

Serfinos in favor of PNB is null and void, because the

property conveyed in mortgage did not belong to them.

The contention is meritorious. That the mortgagor

should be the absolute owner of the property mortgaged

is an essential requisite for the validity of a contract of

mortgage (Art. 2085, Civil Code); and a mortgage

constituted by one not the owner of the property

mortgaged is null and void, the registration of the

mortgage notwithstanding (Parqui vs. PNB, 96 Phil.

157). Thus, the mortgage lien of PNB in the contract

executed in its favor by the Serfinos did not attach to

the property in question.

The argument advanced by appellee PNB that it is a

mortgagee in good faith deserves scant consideration.

Note that when the mortgage was constituted, the

disputed land was covered by a valid and existing title,

TCT No. 57-N, in the name of Nemesis D. Baltazar.

Indeed, the whole world, including appellee PNB, is

charged with notice thereof. Consequently, that portion

of the trial court's decision declaring plaintiff liable to

the PNB for payment of the sum of P5,261.11 should

beset aside.

As to the plaintiff's claim for damages against the

Serfinos, We find the same devoid of merit. Whatever

injury plaintiff may have suffered was occasioned by

the faulty and defective indexing and filing system in

the office of the Register of Deeds of Negros

Occidental, and not by any intentional Act on the part

of the Serfino Spouses. Anyway, the evidence fails to

show that they deliberately intended to cause damage to

plaintiff.

However, equity dictates that plaintiff should reimburse

the Serfino spouses of the sum of P1,839.49,

representing the unpaid taxes and penalties paid by the

latter when they repurchased the property from the

province of Negros Occidental.

WHEREFORE, with the modifications above indicated,

the judgment appealed from is hereby affirmed. No

costs.

SO ORDERED. (Decision, Annex "A", pp. 40-42,

Rollo-L40751)

From the aforesaid ruling, the spouses Serfino and the

Philippine National Bank appealed to Us by way of

certiorari. Petitioners, spouses Serfinos 4 assign the

following errors:

I. The Purchase by plaintiff-appellant corporation

(Lopez Sugar Central) of the lot in question was null

and void from the beginning.

II. Petitioners are proper parties to challenge the

legality of the sale of the land in question to private

respondent.

III. Notice to Nemesia Baltazar of the Tax Sale of the

land in question was not essential to the validity of the

sale.

IV. The legality of the auction sale of the property in

question was not in issue before the court a quo.

Petitioner Philippine National Bank 5 submits the following.

ASSIGNMENT OF ERRORS

I. The Court of Appeals erred in holding that the

auction sale of the disputed property was null and

void.

II. The Court of Appeals erred in not holding that

petitioner is a mortgagee in good faith.

Petitioners spouses Serfinos maintain that sale of a land

covered by homestead to be valid must have the following

requisites: 1) consent of the grantee 2) approval of the

Secretary of Agriculture and Natural Resources 3) sale is

solely for educational, religious, or charitable purposes or

for a right of way (Sec. 121, CA No. 141 ).

Petitioner spouses Serfinos in support of their first

assignment of error cited Sec. 121, CA No. 141 reading as

follows:

SEC. 121. Except with the consent of the grantee and

the approval of the Secretary of Agriculture and

Commerce, and solely for commercial, industrial,

educational, religious or charitable purposes or for a

right of way, no corporation, association, or

partnership may acquire or have any right, title,

interest, or property right whatsoever to any land

granted under the free patent, homestead or individual

sale provisions of this Act or to any permanent

improvement on such land.

They argue that since private respondent is a corporation, it

is barred from owning land granted under the free patent if

the aforementioned requisites are not present. Such Pacifico

Casamayor who obtained a Homestead Patent and later an

original certificate of title in his name. Later it was this

original grantee who sold the land in question to Nemesia

Baltazar on December 14, 1945 or more than eight (8) years

after he obtained his homestead patent on August 25, 1937.

On these facts, We now apply Sec. 118 of Commonwealth

Act No. 141 which prohibits the alienation of homestead

lots to private individual within five (5) years from the date

of the issuance of the patent and not Sec. 121 which governs

sale to corporation. Since the grant was more than five (5)

years before, the transfer to Nemesia Baltazar was valid and

legal. Nemesia Baltazar who became the titled or registered

owner as evidenced by TCT No. 57-N, could exercise acts

of ownership over the land such as disposing of it to private

respondent by a deed of sale.

The assailed decision of the appellate court declares that the

prescribed procedure in auction sales of property for tax

delinquency being in derogation of property rights should be

followed punctiliously. Strict adherence to the statutes

governing tax sales is imperative not only for the protection

of the tax payers, but also to allay any possible suspicion of

collusion between the buyer and the public officials called

upon to enforce such laws. Notice of sale to the delinquent

land owners and to the public in general is an essential and

indispensable requirement of law, the non-fulfillment of

which initiates the sale.

We give our stamp of approval on the aforementioned ruling

of the respondent court. In the case at bar, there is no

evidence that Nemesia Baltazar, who had obtained a transfer

certificate of title in her name on January 18, 1946, was

notified of the auction sale which was scheduled on October

30, 1956. Neither was she furnished as the owner of the

delinquent real property with the certificate of sale as

prescribed by Sec. 37 of Commonwealth Act No. 470.

These infirmities are fatal. Worth mentioning also is the fact

that Lopez Sugar Central was not entirely negligent in its

payment of land taxes. The record shows that taxes were

paid for the years 1950 to 1953 and a receipt therefor was

obtained in its name. The sale therefore by the Province of

Negros Occidental of the land in dispute to the spouses

Serfinos was void since the Province of Negros Occidental

was not the real owner of the property thus sold. In turn, the

spouses Serfinos title which has been derived from that of

the Province of Negros Occidental is likewise void. A

purchaser of real estate at the tax sale obtains only such title

as that held by the taxpayer, the principle of caveat

emptor applies. Where land is sold for delinquency taxes

under the provisions of the Provincial Assessment Law,

rights of registered but undeclared owners of the land are

not affected by the proceedings and the sale conveys only

such interest as the person who has declared the property for

taxation has therein.

We now come to the arguments of petitioner Philippine

National Bank. The appellate court in modifying the trial

court's decision nullified the mortgage in favor of Philippine

National Bank and exempted Lopez Sugar Central from the

payment to PNB of the amount of the mortgage loan.

Petitioner Philippine National Bank now questions this

maintaining that it is a mortgagee in good faith and as such

is entitled to the protection of the law.

We find merit in petitioner's contention. The findings of fact

by the trial court which were undisputed by the contending

parties show that after TCT No. 38985 had been issued in

the name of Federico Serfino, he declared the property in his

name for the year 1965 under T.D. No. 9382, continuously

paid the taxes and introduced improvements thereon in the

nature of feeder roads and sugar cane plants. It was under

these circumstances that PNB extended a loan to Serfino,

secured by the land in question on the strength of TCT No.

38985 in the name of the Serfinos and after a spot

investigation by one of the bank inspectors who made a

report of his investigation. After the execution of a real

estate mortgage in favor of the Philippine National Bank

duly annotated on the title of the Serfinos TCT No. 38985,

the bank actually loaned Serfino the amount of P5,000.00

which amounted to P5,261.11 as of August 17, 1965.

Petitioner Philippine National Bank relied on TCT No.

38985, the genuineness of which is not in issue as it was

really issued by the Register of Deeds of Negros Occidental.

Philippine National Bank had every right to rely on TCT

No. 38985 as it was a sufficient evidence of ownership of

the mortgagor. The Philippine National Bank at that time

had no way of knowing of the existence of another genuine

title covering the same land in question.

The fact that the public auction sale of the disputed property

was not valid (for lack of notice of the auction sale to the

actual owner) can not in any way be attributed to the

mortgagee's (PNB's) fault. The fact remains that in spite of

the lack of notice to the actual registered owner at that time

(who was Nemesia Baltazar) the Register of Deeds issued a

TCT in the name of Federico Serfino married to Lorna

Bachar which title was relied upon by petitioner Philippine

National Bank. The Register of Deeds disowned liability

and negligence or connivance claiming that existence of

TCT No. 57-N in the name of Nemesia Baltazar was not

found in the records of the Register of Deeds for the reason

that it did not exist in the index card as the land was not

designated by cadastral lot number. Thus the discrepancy

was due to the faulty system of indexing the parcels of land.

Be it noted that the inability of the Register of Deeds to

notify the actual owner or Lopez Sugar Central of the

scheduled public auction sale was partly due to the failure of

Lopez Sugar Central to declare the land in its name for a

number of years and to pay the complete taxes thereon.

Petitioner Philippine National Bank is therefore entitled to

the payment of the mortgage loan as ruled by the trial court

and exempted from the payment of costs.

WHEREFORE, premises considered, with the slight

modification that the PNB mortgage credit must be paid by

Lopez Sugar Central, the assailed decision is hereby

AFFIRMED.

SO ORDERED.