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[G.R. No. L-4712. July 11, 1952.]

RAMON DIOKNO, Plaintiff-Appellant , v.REHABILITATION FINANCECORPORATION, Defendant-Appellee .

SYLLABUS

1. STATUTORY CONSTRUCTION; "SHALL" MAYBE CONSTRUED AS "MAY."— In its ordinarysignification the word "shall" is imperative ormandatory. However, this signification is not

always followed; it may be construed as "may,"when so required by the context or by the

intention of the statute.

2. ID.; BACKPAY LAW; REPUBLIC ACT NO. 304,SECTION 2 CONSTRUED AS DIRECTORY.—

Section 2 of Republic Act No. 304, in so far asthe discount and acceptance of backpay

certificates are concerned, should beinterpreted to be directory merely, notmandatory, the same to be construed as adirective for the Rehabilitation Finance

Corporation to invest a reasonable portion of itsfunds for the discount of backpay certificates,from time to time in its sound discretion, as

circumstances and its resources may warrant.

3. OBLIGATIONS AND CONTRACTS; ACTIONSFOR SPECIFIC PERFORMANCE DOES NOT LIE IF

OBLIGATION IS NOT CONTRACTUAL.— If anaction is not based on any contractual relation

between plaintiff and defendant, it may not beone for specific performance.

4. PLEADING AND PRACTICE; MANDAMUSDOES NOT LIE TO COMPEL ACCEPTANCE OF

BACKPAY CERTIFICATE IN PAYMENT OFOBLIGATION CONTRACTED AFTER 1948.—

Mandamus does not lie to compel theRehabilitation Finance Corporation to accept

backpay certificates in payment of outstandingloans. Although there is no provision expresslyauthorizing such acceptance, nor is there one

prohibiting it, yet the duty imposed by theBackpay Law upon said Corporation as to theacceptance or discount of backpay certificates isneither clear nor ministerial, but discretionarymerely, and such special civil action does notissue to control the exercise of discretion of a

public officer.

D E C I S I O N

LABRADOR, J. :

Plaintiff is the holder of a backpay certificate ofindebtedness issued by the Treasurer of thePhilippines under the provisions of Republic ActNo. 304 of a face value of P75,857.14 datedAugust 30, 1948. On or about November 10,1950, when this action was brought, he had an

outstanding loan with the Rehabilitation FinanceCorporation, contracted therewith on January27, 1950, in the total sum of P50,000, coveredby a mortgage on his property situated at 44Alhambra, Ermita, Manila, with interest at 4 percent per annum, of which P47,355.28 was stillunpaid. In this action he seeks to compel thedefendant corporation to accept payment of thebalance of his indebtedness with his backpaycertificate. The defendant resists the suit on theground that plaintiff’s demand is not only notauthorized by section 2 of Republic Act No. 304but contrary to the provisions thereof, andfurthermore because plaintiff’s loan wasobtained on January 27, 1950, much after thepassage of Republic Act No. 304, and becausethe law permits only "acceptance or discount ofbackpay certificates," not the repayment ofloans. The court a quo held that section 2 ofRepublic Act No. 304 is permissive merely, andthat even if it were mandatory, plaintiff’s casecan not fall thereunder because he is notacquiring property for a home or constructing aresidential house, but compelling theacceptance of his backpay certificate to pay adebt he contracted after the enactment ofRepublic Act No. 304. It, therefore, dismissedthe complaint with costs.

The appeal involves the interpretation of section2 of Republic Act No. 304, whichprovides: chanrob1es virtual 1aw library

. . . And provided, also, That investment fundsor banks or other financial institutions owned orcontrolled by the Government shall, subject toavailability of loanable funds, and any provisionof their charters, articles of incorporations, by-laws, or rules and regulations to the contrarynotwithstanding, accept or discount at not morethan two per centum per annum for ten yearssuch certificate for the following purposes only:(1) the acquisition of real property for use asthe applicant’s home, or (2) the building orconstruction or reconstruction of the residential

house of the payee of said certificate: . . .It is first contended by the appellant that theabove provision is mandatory, not only becauseit employs the word "shall", which in itsordinary signification is mandatory, notpermissive, but also because the provision isapplicable to institutions of credit under thecontrol of the Government, and becauseotherwise the phrases "subject to availability ofloanable funds" and "any provisions of thischarter, . . . and regulations to the contrarynotwithstanding" would be superfluous.

It is true that in its ordinary signification theword "shall" is imperative.

In common or ordinary parlance, and in its



ordinary signification, the term "shall’ is a wordof command, and one which has always orwhich must be given a compulsory meaning; asdenoting obligation. It has a peremptorymeaning, and it is generally imperative ormandatory. It has the invariable significance ofoperating to impose a duty which may beenforced, particularly if public policy is in favorof this meaning or when addressed to publicofficials, or where a public interest is involved,or where the public or persons have rightswhich ought to be exercised or enforced, unlessa contrary intent appears. People v. O’Rourke,13 P. 2d. 989, 992, 124 Cal. App. 752. (39Words and Phrases, Permanent Ed., p. 90.) .

The presumption is that the word "shall" in astatute is used in an imperative, and not in adirectory, sense. If a different interpretation issought, it must rest upon something in thecharacter of the legislation or in the contextwhich will justify a different meaning. Haythornv. Van Keuren & Son, 74 A. 502, 504, 79 N. J.L. 101; Board of Finance of School City ofAurora v. People’s Nat. Bank of Lawrenceburg,89 N. E. 904, 905, 44 Ind. App. 578. (39 Wordsand Phrases, Permanent Ed., p. 93.)

However, the rule is not absolute; it may beconstrued as "may", when so required by thecontext or by the intention of the statute.

In its ordinary signification, "shall" is

imperative, and not permissive, though it mayhave the latter meaning when required by thecontext. Town of Milton v. Cook, 138 N. E. 589,590, 244 Mass. 93. (39 Words and Phrases,Permanent Ed., p. 89.) .

"Must" or "shall’ in a statute is not alwaysimperative, but may be consistent with anexercise of discretion. In re O’Hara, 82 N. Y. S.293, 296, 40 Misc. 355, citing In re Thurber’sEstate, 162 N. Y. 244, 252, 56 N. E. 638, 639.(Ibid. p. 92.) .

The word "shall" is generally regarded asimperative, but in some contexts it is given apermissive meaning, the intended meaningbeing determined by what is intended by thestatute. National Transit Co. v. Boardman, 197A. 239, 241, 328 Pa. 450.

The word "shall" is to be construed as merelypermissive, where no public benefit or privateright requires it to be given an imperativemeaning. Sheldon v. Sheldon, 134 A. 904, 905,100 N. J. Ex. 24.

Presumption is that word "shall," in ordinance,is mandatory; but, where it is necessary to giveeffect to legislative intent, the word will beconstrued as "may." City of Colorado Springs v.

Street, 254 p. 440, 441, 81 Colo. 181.

The word "shall" does not necessarily indicate amandatory behest. Grimsrud v. Johnson, 202 N.W. 72, 73, 162 Minn. 98.

Words like "may," "must," "shall," etc., areconstantly used in statutes without intendingthat they shall be taken literally, and in theirconstruction the object evidently designed to bereached limits and controls the literal import ofthe terms and phrases employed. Fields v.United States, 27 App. D. C. 433, 440. (39Words and Phrases, Permanent Ed., pp. 89,92).

In this jurisdiction the tendency has been tointerpret the word "shall" as the context or areasonable construction of the statute in whichit is used demands or requires. Thus theprovision of section 11 of Rule 4 of the Rulesrequiring a municipal judge or a justice of thepeace to render judgment at the conclusion ofthe trial has been held to be directory.(Alejandro v. Judge of First Instance 1 40 Off.Gaz., 9th Supp., 261). In like manner section178 of the Election Law, in so far as it requiresthat appeals shall be decided in three months,has been held to be directory for the Court ofAppeals. (Querubin v. The Court of Appeals, 246 Off. Gaz., 155).

In the provision subject of controversy, it is to

be noted that the verb-phrase "shall accept ordiscount" has two modifiers, namely, "subjectto availability of loanable funds" and "at notmore than two per centum per annum for tenyears." As to the second modifier, the interestto be charged, there seems to be no questionthat the verbphrase is mandatory, because notonly does the law use "at not more" but thelegislative purpose and intent, to conserve thevalue of the backpay certificate for the benefitof the holders, for whose benefit the same havebeen issued, can be carried out by fixing a

maximum limit for discounts. But as to whenthe discounting or acceptance shall be made,the context and the sense demand a contraryinterpretation. The phrase "subject" means"being under the contingency of" (Webster’sInt. Dict.) a condition. If the acceptance ordiscount of the certificates is to be "subject" tothe condition of the availability of loanablefunds, it is evident that the Legislature intendedthat the acceptance shall be allowed on thecondition that there are "available loanablefunds." In other words, acceptance or discountis to be permitted only if there are loanablefunds.

Let us now consider the meaning of thecondition imposed for accepting or discountingcertificates, the "availability of loanable funds."



On this issue the appellant contends that themere facts that P50,000 was loaned to him andthat the Rehabilitation Finance Corporation hasbeen granting loans up to the time plaintiffoffered to pay the loan with his certificate — these prove that there are "available loanablefunds." As the court a quo did not pass on suchavailability, he also contends that this is aquestion of fact to be determined by the courts.The defendant denies the existence of"available loanable funds." The gist of plaintiffs’contention is that any and all funds of theRehabilitation Finance Corporation are subjectto the provision for the discount or acceptanceof the certificates; that of defendant-appellee isthat only funds made available for the purposeof discounting backpay certificates may be usedfor such purpose and that at the time the actionwas filed there were no such funds.

The Rehabilitation Finance Corporation wascreated by Republic Act No. 85, which wasapproved on October 29, 1946. The corporationwas created "to provide credit facilities for therehabilitation and development of agriculture,commerce and industry, the reconstruction ofproperty damaged by war, and the broadeningand diversification of the national economy"(section 1), and to achieve the above aims itwas granted the following powers: chanrob1esvirtual 1aw library

SEC. 2. Corporate powers. — The Rehabilitation

Finance Corporation shall havepower: chanrob1es virtual 1aw library

(a) To grant loans for home building and for therehabilitation, establishment or development ofany agricultural, commercial or industrialenterprise, including public utilities;

(b) To grant loans to provincial, city andmunicipal governments for the rehabilitation,construction or reconstruction of publicmarkets, waterworks, toll bridges,

slaughterhouses, and other self- liquidating orincome-producing services;

(c) To grant loans to agencies and corporationsowned or controlled by the Government of theRepublic of the Philippines for the productionand distribution of electrical power, for thepurchase and subdivision of rural and urbanestates, for housing projects, for irrigation andwaterworks systems, and for other essentialindustrial and agricultural enterprises;

(d) To grant loans to cooperative associationsto facilitate production, the marketing of crops,and the acquisition of essential commodities;

(e) To underwrite, purchase, own, sell,mortgage or otherwise dispose of stocks,

bonds, debentures, securities and otherevidences of indebtedness issued for or inconnection with any project or enterprisereferred to in the preceding paragraphs;

(f) To issue bonds, debentures, securities,collaterals, and other obligations with theapproval of the President, but in no case toexceed at any one time an aggregate amountequivalent to one hundred per centum of itssubscribed capital and surplus. . . . .

If the Rehabilitation Finance Corporation is tocarry out the aims and purposes for which itwas created, it must evolve a definite plan ofthe industries or activities which it shouldrehabilitate, establish or develop, and apportionits available funds and resources among these,consistent with the policies outlined in itscharter.

As of May 31, 1948, immediately prior to thepassage of the Backpay Law, it had granted thefollowing classes of loans.

Agricultural loans P23,610,350.74

Industrial loans 22,717,565.87

Real Estate loans 34,601,258.29

Loans for purchase, Subdivision and

Resale of Landed Estates 7,271,258.78Loans to Provinces, Cities, and

Municipalities for Self-liquidating

Projects 1,889,763.00

____________

Total Loans P90,090,077.68

(Exhibit 2).As of February 2, 1951, the corporation hadaccepted in payment of loans granted beforeJune 18, 1948, the total amount ofP8,225,299.96, as required by section 2 of theBackpay Law. (See Exhibit 11, p. 4.)

The third anniversary report of theRehabilitation Finance Corporation datedJanuary 2, 1950 (Exhibit 1), shows that thefunds originally available to the corporationcame from the following sources: chanrob1esvirtual 1aw library

Funds made available: chanrob1es virtual 1awlibrary



Initial cash capital P50,000,000.00

Cash transferred from Financial

Rehabilitation funds 2,423,079.74

Cash received from Surplus Property

Commission 26,350,000.00

Cash received from Phil. Shipping Adm.3,700,000.00

Cash payment of capital 82,473,079.74

Proceeds of bond issues 58,909,148.18

Advances from the Central Bank 10,000,000.00

There was also collectible from loans the totalamount of P28,659,442.12, so that the totalcash available to the corporation from January2, 1947, to November 30, 1949, wasP180,041,670.04. But the total amount of loansalready approved as of the last date wasP203,667,403.78 and the total of approvedloans pending release was P25,342,020.78, andthe only cash balance available in November,1949, to meet these approved loans wasP1,716,286.71.

It may readily be seen from the above data thatwere we to follow appellants’ theory and

contention that the law is mandatory, the loanhe had applied for, as well as that of any holderof a backpay certificate, would have to be paidout of this available cash, pursuant to thealleged mandate of section 2 of the BackpayLaw. The compulsory acceptance and discountof certificates will bring about, as a direct andnecessary consequence, the suspension of all, ifnot of most, of the activities of theRehabilitation Finance Corporation; and noagricultural or industrial loans, or loans tofinancial institutions and local governments for

their markets, waterworks, etc., would begranted, until all the backpay certificates(amounting to some hundred millions of pesos)shall have been accepted or discounted. And asthe defendant-appellant forcefully argues, evenfunds obtained by the Rehabilitation FinanceCorporation by the issue of bonds, at rates ofinterest of more than 2 per cent, the rate fixedfor the discount of backpay certificates, willhave to be loaned to holders of backpaycertificates at a loss, to the prejudice of thecorporation. There would be loans for holders ofbackpay certificates, but none for rehabilitationor reconstruction, or development of industries,or of the national economy; there would befunds for employees’ loans, but none for thoseengaged in agriculture and industry, none forthe improvements of public services, etc, as all

Rehabilitation Finance Corporation funds will benecessary to meet the demands of holders ofbackpay certificates. And if it be rememberedthat the provision is intended for all financialinstitutions controlled by the Government, theconsequences would be felt by all industriesand activities, and the whole scheme of nationalfinancial organization and developmentdisrupted. It seems evident that the legislaturenever could have intended such absurdconsequences, even with all the sympathy thatit is showing for holders of backpaycertificates.

But while we agree with the appellee that itcould not have been the intention of Congressto disrupt the whole scheme of rehabilitation,reconstruction, and development envisioned inthe Rehabilitation Act, by its passage of section2 of the Backpay Law, neither are we preparedto follow appellee’s insinuation that the sectionis impracticable or impossible of execution bythe Rehabilitation Finance Corporation in thesituation in which its funds and resources wereat the time of the trial. In our opinion, what theLegislature intended by the provision in disputeis that the Rehabilitation Finance Corporation,through its Board of Directors, should from timeto time set aside some reasonable amount forthe discount of backpay certificates, when thiscan be done without unduly taxing itsresources, or unduly prejudicing the plan ofrehabilitation and development that it has

mapped out, or that which the correspondingauthority has laid down as a policy. Thislegislative intention can be inferred from thefact that Congress itself expressly ordered thatall financial institutions accept or discountbackpay certificates in payment of those loans,evidently laying down an example to befollowed by financial institutions under itscontrol. The loans granted under section 2 ofthe law by the Rehabilitation FinanceCorporation amounted to P8,225,299.96. It isnot shown or even pretended that the payment

of this considerable amount has impaired ordisrupted the activities of the RehabilitationFinance Corporation. It is not claimed, either,that at the time of the filing of appellant’saction the Rehabilitation Finance Corporationwas in no position to set aside a modest sum,in a manner similar to the creation of a sinkingfund, for the discount of backpay certificates tohelp the Government comply with its financialcommitments. We are convinced that theRehabilitation Finance Corporation may, withoutimpairment of its activities, set aside from timeto time, say, half a million pesos or aconsiderable part thereof, for the payment ofbackpay certificates. But these circumstancesnotwithstanding, we are of the opinion that thelaw in question (section 2 of the Backpay Law),in so far as the discount and acceptance of



backpay certificates are concerned, should beinterpreted to be directory merely, notmandatory, as claimed by plaintiff-appellant,the same to be construed as a directive for theRehabilitation Finance Corporation to invest areasonable portion of its funds for the discountof backpay certificates, from time to time and inits sound discretion, as circumstances and itsresources may warrant.

Having come to the conclusion that section 2 ofthe Backpay Law is directory merely, we nowaddress ourselves to the propriety of the action,which the plaintiff and appellant labels asspecific performance. As the action is not basedon any contractual relation between the plaintiffand appellant and the defendant and appellee,it may be one for specific performance; it is ineffect predicated on a supposed legal dutyimposed by law and is properly designated as aspecial civil action of mandamus, because theappellant seeks to compel the appellee toaccept his backpay certificate in payment of hisoutstanding obligation. We are not impressedby the defense, technical in a sense, that theRehabilitation Finance Corporation is notexpressly authorized to accept certificates inpayment of outstanding loans. There is noprovision expressly authorizing this procedureor system; but neither is there one prohibitingit. The legislature had once ordered it; theRehabilitation Finance Corporation has onceauthorized it. We believe the legislature could

not have intended to discriminate against thosewho have already built their houses, who havecontracted obligations in so doing. We prefer topredicate our ruling that this special action doesnot lie on the ground that the duty imposed bythe Backpay Law upon the appellee as to theacceptance or discount of backpay certificates isneither clear nor ministerial, but discretionarymerely and that mandamus does not issue tocontrol the exercise of discretion of a publicofficer. (Viuda e Hijos de Crispulo Zamora v.Wright and Segado, 53 Phil., 613, 621, Blanco

v. Board of Medical Examiners, 46 Phil., 190,192, citing Lamb v. Phipps, 22 Phil., 456;Gonzales v. Board of Pharmacy, 20 Phil., 367,etc.) It is, however, argued on behalf of theappellant that inasmuch as the Board ofDirectors of the Rehabilitation FinanceCorporation has seen fit to approve a resolutionaccepting backpay certificates amounting toP151,000 (Exhibit H), law and equity demandthat the same privilege should be accorded him.The trial court held that the above resolutionwas illegal and that its unauthorized enactment(which he called a "wrong") does not justify itsrepetition for the benefit or appellant. As wehave indicated above, we believe that itsapproval (not any supposed discrimination onbehalf of some special holders) can be defendedunder the law, but that the passage of a similar

resolution can not be enjoined by an action ofmandamus.

We must admit, however, that appellant’s caseis not entirely without any merit or justification;similar situations have already been favorablyacted upon by the Congress, when it orderedthat certificates be accepted in payment ofoutstanding obligations, and by theRehabilitation Finance Corporation in its above-mentioned resolution. But we feel we arepowerless to enforce his claim, as theacceptance and discount of backpay certificateshas been placed within the sound discretion ofthe Rehabilitation Finance Corporation, andsubject to the availability of loanable funds, andsaid discretion may not be reviewed orcontrolled by us. It is clear that this remedymust be available in other quarters, not in thecourts of justice.

For all the foregoing considerations, we areconstrained to dismiss the appeal, with costsagainst the Appellant .

[G.R. NO. 168617 : February 19, 2007]

BERNADETTE L.ADASA, Petitioner , v. CECILLE S.ABALOS, Respondent .

D E C I S I O N

CHICO-NAZARIO, J. :

This Petition for Review under Rule 45 of theRules of Court, filed by petitioner Bernadette L.Adasa, seeks to nullify and set aside the 21 July2004 Decision1 and 10 June 2005 Resolution 2 ofthe Court of Appeals in CA-G.R. SP No. 76396which nullified the Resolutions of theDepartment of Justice (DOJ). The Resolutions ofthe DOJ reversed and set aside the Resolutionof the Office of the City Prosecutor of IliganCity, which found on reinvestigation probablecause against petitioner, and directed the Officeof the City Prosecutor of Iligan City to withdrawthe information for Estafa against petitioner.

The instant case emanated from the twocomplaints-affidavits filed by respondent CecilleS. Abalos on 18 January 2001 before the Officeof the City Prosecutor of Iligan City, againstpetitioner for Estafa.

Respondent alleged in the complaints-affidavitsthat petitioner, through deceit, received andencashed two checks issued in the name ofrespondent without respondent's knowledgeand consent and that despite repeated

http://www.chanrobles.com/cralaw/2007februarydecisions.php?id=208#fnt1








demands by the latter, petitioner failed andrefused to pay the proceeds of the checks.

On 23 March 2001, petitioner filed a counter-affidavit admitting that she received andencashed the two checks issued in favor ofrespondent.

In her Supplemental Affidavit filed on 29 March2001, petitioner, however, recanted and allegedinstead that it was a certain Bebie Correa whoreceived the two checks which are the subjectmatter of the complaints and encashed thesame; and that said Bebie Correa left thecountry after misappropriating the proceeds ofthe checks.

On 25 April 2001, a resolution was issued bythe Office of the City Prosecutor of Iligan Cityfinding probable cause against petitioner andordering the filing of two separate Informationsfor Estafa Thru Falsification of CommercialDocument by a Private Individual, under Article315 in relation to Articles 171 and 172 of theRevised Penal Code, as amended.

Consequently, two separate criminal cases werefiled against petitioner docketed as CriminalCases No. 8781 and No. 8782, raffled toBranches 4 and 5, Regional Trial Court of IliganCity, respectively.

This instant petition pertains only to CriminalCase No. 8782.

On 8 June 2001, upon motion of the petitioner,the trial court in Criminal Case No. 8782 issuedan order directing the Office of the CityProsecutor of Iligan City to conduct areinvestigation.

After conducting the reinvestigation, the Officeof the City Prosecutor of Iligan City issued aresolution dated 30 August 2001, affirming the

finding of probable cause against petitioner.Meanwhile, during her arraignment on 1October 2001 in Criminal Case No. 8782,petitioner entered an unconditional plea of notguilty.3

Dissatisfied with the finding of the Office of theCity Prosecutor of Iligan City, petitioner filed aPetition for Review before the DOJ on 15October 2001.

In a Resolution dated 11 July 2002, the DOJreversed and set aside the 30 August 2001resolution of the Office of the City Prosecutor ofIligan City and directed the said office to

withdraw the Information for Estafa againstpetitioner.

The said DOJ resolution prompted the Office ofthe City Prosecutor of Iligan City to file a"Motion to Withdraw Information" on 25 July2002.

On 26 July 2002, respondent filed a motion forreconsideration of said resolution of the DOJarguing that the DOJ should have dismissedoutright the Petition for Review since Section 7of DOJ Circular No. 70 mandates that when anaccused has already been arraigned and theaggrieved party files a Petition for Reviewbefore the DOJ, the Secretary of Justice cannot,and should not take cognizance of the petition,or even give due course thereto, but insteaddeny it outright. Respondent claimed Section 12thereof mentions arraignment as one of thegrounds for the dismissal of the Petition forReview before the DOJ.

In a resolution dated 30 January 2003, the DOJdenied the Motion for Reconsideration opiningthat under Section 12, in relation to Section 7,of DOJ Circular No. 70, the Secretary of Justiceis not precluded from entertaining any appealtaken to him even where the accused hasalready been arraigned in court. This is due tothe permissive language "may" utilized inSection 12 whereby the Secretary has thediscretion to entertain an appealed resolutionnotwithstanding the fact that the accused hasbeen arraigned.

Meanwhile, on 27 February 2003, the trial courtissued an order granting petitioner's "Motion toWithdraw Information" and dismissing CriminalCase No. 8782. No action was taken byrespondent or any party of the case from thesaid order of dismissal.

Aggrieved by the resolution of the DOJ,respondent filed a Petition for Certiorari beforethe Court of Appeals. Respondent raised thefollowing issues before the appellate court:

1. Whether or not the Department of Justicegravely abused its discretion in giving duecourse to petitioner's Petition for Reviewdespite its having been filed after the latter hadalready been arraigned;

2. Whether or not there is probable cause thatthe crime of estafa has been committed andthat petitioner is probably guilty thereof;

3. Whether or not the petition before the Courtof Appeals has been rendered moot andacademic by the order of the Regional TrialCourt dismissing Criminal Case No. 8782.







The Court of Appeals in a Decision dated 21July 2004 granted respondent's petition andreversed the Resolutions of the DOJ dated 11July 2002 and 30 January 2003.

In resolving the first issue, the Court ofAppeals, relying heavily on Section 7 of DOJCircular No. 70 which states "[i]f an informationhas been filed in court pursuant to the appealedresolution, the petition shall not be given duecourse if the accused had already beenarraigned," ruled that since petitioner wasarraigned before she filed the Petition forReview with the DOJ, it was imperative for theDOJ to dismiss such petition. It added thatwhen petitioner pleaded to the charge, she wasdeemed to have waived her right toreinvestigation and right to question anyirregularity that surrounds it.

Anent the second issue, the Court of Appealsdeclared that the existence of probable cause orthe lack of it, cannot be dealt with by it sincefactual issues are not proper subjects of aPetition for Certiorari.

In disposing of the last issue, the Court ofAppeals held that the order of the trial courtdismissing the subject criminal case pursuant tothe assailed resolutions of the DOJ did notrender the petition moot and academic. It saidthat since the trial court's order relied solely onthe resolutions of the DOJ, said order is void asit violated the rule which enjoins the trial courtto assess the evidence presented before it in amotion to dismiss and not to rely solely on theprosecutor's averment that the Secretary ofJustice had recommended the dismissal of thecase.

Dissatisfied by the Court of Appeals' ruling,petitioner filed a Motion for Reconsiderationsetting forth the following grounds:

1. that the over-all language of Sections 7 and12 of Department Circular No. 70 is permissiveand directory such that the Secretary of Justicemay entertain an appeal despite the fact thatthe accused had been arraigned;

2. that the contemporaneous construction bythe Secretary of Justice should be given greatweight and respect;

3. that Section 7 of the Circular applies only toresolutions rendered pursuant to a preliminaryinvestigation, not on a reinvestigation;

4. that the trial court's order of dismissal of thecriminal case has rendered the instant petitionmoot and academic;

5. that her arraignment was null and void itbeing conducted despite her protestations;andcralawlibrary

6. that despite her being arraigned, thesupposed waiver of her right to preliminaryinvestigation has been nullified or recalled byvirtue of the trial court's order ofreinvestigation .4

The Court of Appeals stood firm by its decision.This time, however, it tried to construe Section7 side by side with Section 12 of DOJ CircularNo. 70 and attempted to reconcile these twoprovisions. According to the appellate court, thephrase "shall not" in paragraph two, firstsentence of Section 7 of subject circular, to wit:

If an information has been filed in courtpursuant to the appealed resolution, thepetition shall not be given due course if theaccused had already been arraigned. x x x.(Emphasis supplied .)

employed in the circular denotes a positiveprohibition. Applying the principle in statutoryconstruction - that when a statute or provisioncontains words of positive prohibition, such as"shall not," "cannot," or "ought not" or which iscouched in negative terms importing that theact shall not be done otherwise thandesignated, that statute or provision ismandatory, thus rendering the provisionmandatory - it opined that the subject provisionsimply means that the Secretary of Justice hasno other course of action but to deny or dismissa petition before him when arraignment of anaccused had already taken place prior to thefiling of the Petition for Review .

On the other hand, reading Section 12 of thesame circular which reads:

The Secretary may reverse, affirm or modifythe appealed resolution. He may, motu proprioor upon motion, dismiss the Petition for Reviewon any of the following grounds:

x x x

(e) That the accused had already beenarraigned when the appeal was taken; x x x.

the Court of Appeals opined that the permissiveword "may" in Section 12 would seem to implythat the Secretary of Justice has discretion to

entertain an appeal notwithstanding the factthat the accused has been arraigned. Thisprovision should not be treated separately, butshould be read in relation to Section 7. The twoprovisions, taken together, simply meant that







when an accused was already arraigned whenthe aggrieved party files a Petition for Review,the Secretary of Justice cannot, and should nottake cognizance of the petition, or even givedue course thereto, but instead dismiss or denyit outright. The appellate court added that theword "may" in Section 12 should be read as"shall" or "must" since such construction isabsolutely necessary to give effect to theapparent intention of the rule as gathered fromthe context.

As to the contemporaneous construction of theSecretary of Justice, the Court of Appealsstated that the same should not be givenweight since it was erroneous.

Anent petitioner's argument that Section 7 ofthe questioned circular applies only to originalresolutions that brought about the filing of thecorresponding informations in court, but not toresolutions rendered pursuant to a motion forreinvestigation, the appellate court simplybrushed aside such contention as having nobasis in the circular questioned.

It also rejected petitioner's protestation thather arraignment was forced upon her since shefailed to present any evidence to substantiatethe same.

It is petitioner's contention that despite herbeing arraigned, the supposed waiver of herright to preliminary investigation has beennullified by virtue of the trial court's order orreinvestigation. On this score, the Court ofAppeals rebuffed such argument stating thatthere was no "supposed waiver of preliminaryinvestigation" to speak of for the reason thatpetitioner had actually undergone preliminaryinvestigation.

Petitioner remained unconvinced with theexplanations of the Court of Appeals.

Hence, the instant petition.

Again, petitioner contends that the DOJ cangive due course to an appeal or Petition forReview despite its having been filed after theaccused had already been arraigned. It assertsthat the fact of arraignment of an accusedbefore the filing of an appeal or Petition forReview before the DOJ "is not at all relevant" asthe DOJ can still take cognizance of the appealor Petition for Review before it. In support ofthis contention, petitioner set her sights on theruling of this Court in Crespo v. Mogul ,5 to wit:

The rule therefore in this jurisdiction is thatonce a complaint or information is filed in Courtany disposition of the case as to its dismissal or

the conviction or acquittal of the accused restsin the sound discretion of the Court. Althoughthe fiscal retains the direction and control of theprosecution of criminal cases even while thecase is already in Court he cannot impose hisopinion on the trial court. The Court is the bestand sole judge on what to do with the casebefore it. The determination of the case iswithin its exclusive jurisdiction andcompetence. A motion to dismiss the case filedby the fiscal should be addressed to the Courtwho has the option to grant or deny thesame. It does not matter if this is done beforeor after the arraignment of the accused or thatthe motion was filed after a reinvestigation orupon instructions of the Secretary of Justicewho reviewed the records of the investigation.(Emphasis supplied .)

To bolster her position, petitioner cites Robertsv. Court of Appeals ,6 which stated:

There is nothing in Crespo v. Mogul which barsthe DOJ from taking cognizance of an appeal,by way of a Petition for Review, by an accusedin a criminal case from an unfavorable ruling ofthe investigating prosecutor. It merely advisedthe DOJ to, "as far as practicable, refrain fromentertaining a Petition for Review or appealfrom the action of the fiscal, when thecomplaint or information has already been filedin Court. x x x. ( Emphasis supplied .)

Petitioner likewise invokes Marcelo v. Court ofAppeals7 where this Court declared:

Nothing in the said ruling forecloses the poweror authority of the Secretary of Justice toreview resolutions of his subordinates incriminal cases. The Secretary of Justice is onlyenjoined to refrain as far as practicable fromentertaining a Petition for Review or appealfrom the action of the prosecutor once acomplaint or information is filed in court. In anycase, the grant of a motion to dismiss, whichthe prosecution may file after the Secretary ofJustice reverses an appealed resolution, issubject to the discretion of the court.

The Court is unconvinced.

A cursory reading of Crespo v. Mogul revealsthat the ruling therein does not concern theissue of an appeal or Petition for Review beforethe DOJ after arraignment. Verily, thepronouncement therein has to do with the filingof a motion to dismiss and the court's discretionto deny or grant the same. As correctly pointedout by respondent, the emphasized portion inthe Crespo ruling is a parcel of the entireparagraph which relates to the duty and

jurisdiction of the trial court to determine for















itself whether or not to dismiss a case before it,and which states that such duty comes into playregardless of whether such motion is filedbefore or after arraignment and upon whoseinstructions. The allusion to the Secretary ofJustice as reviewing the records of investigationand giving instructions for the filing of a motionto dismiss in the cited ruling does not take intoconsideration of whether the appeal or petitionbefore the Secretary of Justice was filed afterarraignment. Significantly, in the Crespo case,the accused had not yet been arraigned whenthe appeal or Petition for Review was filedbefore the DOJ. Undoubtedly, petitioner'sreliance on the said case is misplaced.

Also unavailing is petitioner's invocation of thecases of Roberts v. Court of Appeals andMarcelo v. Court of Appeals. As in Crespo v.Mogul, neither Roberts v. Court of Appeals norMarcelo v. Court of Appeals took into account ofwhether the appeal or petition before theSecretary of Justice was filed after arraignment.Just like in the Crespo case, the accused in bothRoberts v. Court of Appeals and Marcelo v.Court of Appeals had not yet been arraignedwhen the appeal or Petition for Review was filedbefore the DOJ.

Moreover, petitioner asserts that the Court ofAppeals' interpretation of the provisions of DOJCircular No. 70 violated three basic rules instatutory construction. First, the rule that theprovision that appears last in the order ofposition in the rule or regulation must prevail.Second, the rule that the contemporaneousconstruction of a statute or regulation by theofficers who enforce it should be given weight.Third, petitioner lifted a portion from Agpalo'sStatutory Constructio n8 where the word "shall"had been construed as a permissive, and not amandatory language.

The all too-familiar rule in statutoryconstruction, in this case, an administrativerule9 of procedure, is that when a statute orrule is clear and unambiguous, interpretationneed not be resorted to .10 Since Section 7 ofthe subject circular clearly and categoricallydirects the DOJ to dismiss outright an appeal ora Petition for Review filed after arraignment, noresort to interpretation is necessary.

Petitioner's reliance to the statutory principlethat "the last in order of position in the rule orregulation must prevail" is not applicable. Inaddition to the fact that Section 7 of DOJCircular No. 70 needs no construction, the citedprinciple cannot apply because, as correctlyobserved by the Court of Appeals, there is noirreconcilable conflict between Section 7 and

Section 12 of DOJ Circular No. 70. Section 7 ofthe circular provides:

SECTION 7. Action on the petition. - TheSecretary of Justice may dismiss the petitionoutright if he finds the same to be patentlywithout merit or manifestly intended for delay,or when the issues raised therein are toounsubstantial to require consideration. If aninformation has been filed in court pursuant tothe appealed resolution, the petition shall notbe given due course if the accused had alreadybeen arraigned. Any arraignment made afterthe filing of the petition shall not bar theSecretary of Justice from exercising his powerof review. (Italics supplied.)

On the other hand, Section 12 of the samecircular states:

SECTION 12. Disposition of the Appeal. - TheSecretary may reverse, affirm or modify theappealed resolution. He may, motu proprio orupon motion, dismiss the Petition for Review onany of the following grounds:

(a) That the petition was filed beyond theperiod prescribed in Section 3 hereof;

(b) That the procedure or any of therequirements herein provided has not beencomplied with;

(c) That there is no showing of any reversibleerror;

(d) That the appealed resolution is interlocutoryin nature, except when it suspends theproceedings based on the alleged existence of aprejudicial question;

(e) That the accused had already beenarraigned when the appeal was taken;

(f) That the offense has already prescribed; and(g) That other legal or factual grounds exist towarrant a dismissal. ( Emphases supplied .)

It is noteworthy that the principle cited bypetitioner reveals that, to find application, thesame presupposes that "one part of the statutecannot be reconciled or harmonized withanother part without nullifying one in favor ofthe other." In the instant case, however,Section 7 is neither contradictory norirreconcilable with Section 12. As can be seenabove, Section 7 pertains to the action on thepetition that the DOJ must take, while Section12 enumerates the options the DOJ has with














regard to the disposition of a Petition forReview or of an appeal.

As aptly observed by respondent, Section 7specifically applies to a situation on what theDOJ must do when confronted with an appeal ora Petition for Review that is either clearlywithout merit, manifestly intended to delay, orfiled after an accused has already beenarraigned, i.e., he may dismiss it outright if it ispatently without merit or manifestly intended todelay, or, if it was filed after the acccused hasalready been arraigned, the Secretary shall notgive it due course.

Section 12 applies generally to the dispositionof an appeal. Under said section, the DOJ maytake any of four actions when disposing anappeal, namely:

1. reverse the appealed resolution;

2. modify the appealed resolution;

3. affirm the appealed resolution;

4. dismiss the appeal altogether, depending onthe circumstances and incidents attendantthereto.

As to the dismissal of a Petition for Review oran appeal, the grounds are provided for in

Section 12 and, consequently, the DOJ mustevaluate the pertinent circumstances and thefacts of the case in order to determine whichground or grounds shall apply.

Thus, when an accused has already beenarraigned, the DOJ must not give the appeal orPetition for Review due course and mustdismiss the same. This is bolstered by the factthat arraignment of the accused prior to thefiling of the appeal or Petition for Review is setforth as one of the grounds for its dismissal.

Therefore, in such instance, the DOJ, notingthat the arraignment of an accused prior to thefiling of an appeal or Petition for Review is aground for dismissal under Section 12, must goback to Section 7 and act upon as mandatedtherein. In other words, the DOJ must not givedue course to, and must necessarily dismiss,the appeal.

Likewise, petitioner's reliance on the principle ofcontemporary construction, i.e., the DOJ is notprecluded from entertaining appeals where the

accused had already been arraigned, because itexercises discretionary power, and because itpromulgated itself the circular in question, isunpersuasive. As aptly ratiocinated by the Courtof Appeals:

True indeed is the principle that acontemporaneous interpretation or constructionby the officers charged with the enforcement ofthe rules and regulations it promulgated isentitled to great weight by the court in thelatter's construction of such rules andregulations. That does not, however, make sucha construction necessarily controlling orbinding. For equally settled is the rule thatcourts may disregard contemporaneousconstruction in instances where the law or ruleconstrued possesses no ambiguity, where theconstruction is clearly erroneous, where strongreason to the contrary exists, and where thecourt has previously given the statute adifferent interpretation.

If through misapprehension of law or a rule anexecutive or administrative officer called uponto implement it has erroneously applied orexecuted it, the error may be corrected whenthe true construction is ascertained. If acontemporaneous construction is found to beerroneous, the same must be declared null andvoid. Such principle should be as it is applied inthe case at bar .11

Petitioner's posture on a supposed exception tothe mandatory import of the word "shall" ismisplaced. It is petitioner's view that thelanguage of Section 12 is permissive andtherefore the mandate in Section 7 has beentransformed into a matter within the discretionof the DOJ. To support this stance, petitionercites a portion of Agpalo's StatutoryConstruction which reads:

For instance, the word "shall" in Section 2 ofRepublic Act 304 which states that "banks orother financial institutions owned or controlledby the Government shall, subject to availabilityof funds xxx, accept at a discount at not morethan two per centum for ten years such(backpay) certificate" implies not a mandatory,but a discretionary, meaning because of thephrase "subject to availability of funds."Similarly, the word "shall" in the provision tothe effect that a corporation violating thecorporation law "shall, upon such violationbeing proved, be dissolved by quo warrantoproceedings" has been construed as "may. "12

After a judicious scrutiny of the cited passage,it becomes apparent that the same is notapplicable to the provision in question. In thecited passage, the word "shall" departed fromits mandatory import connotation because itwas connected to certain provisos/conditions:"subject to the availability of funds" and "uponsuch violation being proved." No suchproviso/condition, however, can be found in











Section 7 of the subject circular. Hence, theword "shall" retains its mandatory import.

At this juncture, the Court of Appeals'disquisition in this matter is enlightening:

Indeed, if the intent of Department Circular No.70 were to give the Secretary of Justice a

discretionary power to dismiss or to entertain aPetition for Review despite its being outrightlydismissible, such as when the accused hasalready been arraigned, or where the crime theaccused is being charged with has alreadyprescribed, or there is no reversible error thathas been committed, or that there are legal orfactual grounds warranting dismissal, the resultwould not only be incongruous but alsoirrational and even unjust. For then, the actionof the Secretary of Justice of giving due courseto the petition would serve no purpose andwould only allow a great waste of time.Moreover, to give the second sentence ofSection 12 in relation to its paragraph (e) adirectory application would not only subvert theavowed objectives of the Circular, that is, forthe expeditious and efficient administration of

justice, but would also render its othermandatory provisions - Sections 3, 5, 6 and 7,nugatory .13

In her steadfast effort to champion her case,petitioner contends that the issue as to whetherthe DOJ rightfully entertained the instant case,despite the arraignment of the accused prior toits filing, has been rendered moot and academicwith the order of dismissal by the trial courtdated 27 February 2003. Such contentiondeserves scant consideration.

It must be stressed that the trial courtdismissed the case precisely because of theResolutions of the DOJ after it had, in graveabuse of its discretion, took cognizance of thePetition for Review filed by petitioner. Havingbeen rendered in grave abuse of its discretion,the Resolutions of the DOJ are void. As theorder of dismissal of the trial court was madepursuant to the void Resolutions of the DOJ,said order was likewise void. The rule in this

jurisdiction is that a void judgment is acomplete nullity and without legal effect, andthat all proceedings or actions founded thereonare themselves regarded as invalid andineffective for any purpose .14 That respondentdid not file a motion for reconsideration orappeal from the dismissal order of the trialcourt is of no moment. Since the dismissal wasvoid, there was nothing for respondent tooppose.

Petitioner further asserts that Section 7 of DOJCircular No. 70 applies only to appeals from

original resolution of the City Prosecutor anddoes not apply in the instant case where anappeal is interposed by petitioner from theResolution of the City Prosecutor denying hermotion for reinvestigation. This claim isbaseless. Ï‚Î·Î±Ã±rÎ¿blÎµÅ¡ Î½Î¹râ€ Ï…Î±l lÎ±Ï‰ lÎ¹brÎ±rÃ¿

A reading of Section 7 discloses that there is noqualification given by the same provision tolimit its application to appeals from originalresolutions and not to resolutions onreinvestigation. Hence, the rule stating that"when the law does not distinguish, we mustnot distinguish "15 finds application in thisregard.

Petitioner asserts that her arraignment was nulland void as the same was improvidentlyconducted. Again, this contention is withoutmerit. Records reveal that petitioner'sarraignment was without any restriction,condition or reservation .16 In fact she wasassisted by her counsels Atty. Arthur Abudienteand Atty. Maglinao when she pleaded to thecharge .17

Moreover, the settled rule is that when anaccused pleads to the charge, he is deemed tohave waived the right to preliminaryinvestigation and the right to question anyirregularity that surrounds it .18 This precept isalso applicable in cases of reinvestigation aswell as in cases of review of suchreinvestigation. In this case, when petitionerunconditionally pleaded to the charge, sheeffectively waived the reinvestigation of thecase by the prosecutor as well as the right toappeal the result thereof to the DOJ Secretary.Thus, with the arraignment of the petitioner,the DOJ Secretary can no longer entertain theappeal or Petition for Review because petitionerhad already waived or abandoned the same.

Lastly, while there is authority 19 permitting theCourt to make its own determination ofprobable cause, such, however, cannot bemade applicable in the instant case. As earlierstated, the arraignment of petitioner constitutesa waiver of her right to preliminaryinvestigation or reinvestigation. Such waiver istantamount to a finding of probable cause. Forthis reason, there is no need for the Court todetermine the existence or non-existence ofprobable cause.

Besides, under Rule 45 of the Rules of Court,only questions of law may be raised in, and besubject of, a Petition for Reviewon Certiorari since this Court is not a trier offacts. This being the case, this Court cannotreview the evidence adduced by the parties






























before the prosecutor on the issue of theabsence or presence of probable cause .20

WHEREFORE, the petition is DENIED. TheDecision of the Court of Appeals dated 21 July2004 and its Resolution dated 10 June 2005 inCA-G.R. SP No. 76396 are AFFIRMED. Costsagainst petitioner.

SO ORDERED.

G.R. No. L-33487 May 31, 1971

THE PEOPLE OF THE PHILIPPINES,Plaintiff-Appellant, v. MAXIMO MARTIN,CANDIDO MARTIN and RODOLPOHIGASHI, defendants-appellees.

CASTRO, J.:

This appeal by the People of the Philippinesfrom the order dated August 2, 1968 of theCourt of First Instance of La Union dismissingcriminal case A-392 on the ground of lack of

jurisdiction, was certified by the Court ofAppeals to this Court, the issues raised beingpurely of law.

The central issue is the proper interpretation ofthe provisions Section 46 of Commonwealth Act613, as amended by Rep. Act 144 and Rep. Act327, otherwise known as the PhilippineImmigration Act.The defendants Maximo Martin, Candido Martinand Rodolfo Higashi were charged in criminalcase A-392 of the CFI of La Union with aviolation of section 46 of Com. Act 613, asamended. The information dated January 12,1968 recites as follows:

The undersigned Acting State Prosecutor, andAsst. Provincial Fiscal accuse MAXIMO MARTIN,CANDIDO MARTIN and RODOLFO HIGASHI ofSec. 46 of Commonwealth Act NO. 613otherwise known as Philippine Immigration Actof 1940, as amended by Republic Act No. 827,committed as follows:

That on or about the 22nd day of September,1966, in the Municipality of Sto. Tomas,Province of La Union, Philippines, and within the

jurisdiction of this Honorable court, the above-named accused, conspiring and confederatingtogether and mutually helping one another andin active aid with Filipino nationals who arepresently charged before the Court of FirstInstance of Bulacan in Crim. Case No. 6252-M,

did then and there wilfully, unlawfully andfeloniously bring in and carry into thePhilippines thirty nine (39) Chinese aliens whotraveled by the Chinese vessel "Chungking"from the port of Hongkong and who are not

duly admitted by any immigration officer or notlawfully entitled to enter the Philippines, andfrom the Chinese vessel "Chungking," accusedtook delivery, loaded, and ferried the Chinesealiens in the vessel "MARU XI" owned,operated, under the charge and piloted by allthe herein accused from outside into thePhilippines, sureptitiously landing the saidaliens at Barrio Damortis, Sto. Tomas, LaUnion, Philippines which place of landing is nota duly authorized port of entry in thePhilippines.

After the thirty-nine (39) illegal entrants werelanded in barrio Damortis, as charged in theindictment, they were loaded in a car and two

jeepneys for transport to Manila. They did nothowever reach their destination because theywere intercepted by Philippine Constabularyagents in Malolos, Bulacan.

For concealing and harboring these thirty-ninealiens, Jose Pascual, Filipinas Domingo, JoseRegino, Alberto Bunyi, Emerdoro Santiago andIbarra Domingo were charged before the Courtof First Instance of Bulacan in criminal case6258-M. The amended information in the saidcriminal case reads as follows:

The undersigned Provincial Fiscal accuses JosePascual, Filipinas Domingo, Jose Regino, AlbertoBunyi, Emerdoro Santiago and Ibarra Domingoof the violation of Section 46 of Commonwealth

Act No. 613, otherwise known as the PhilippineImmigration Act of 1940, as amended byRepublic Act No. 827, committed as follows:

That on or about the 22nd day of September,1966, in the municipality of Malolos, Province ofBulacan, Philippines, and within the jurisdictionof this Honorable Court, the above namedaccused and several others whose identities arestill unknown, conspiring and confederating andaiding one another, did then and there wilfully,unlawfully and, feloniously, bring conceal and

harbor 39 Chinese aliens not duly admitted byany immigration officer or not lawfully entitledto enter or reside within the Philippines underthe terms of the Immigration Laws, whosenames are as follows: Hung Chang Cheong,Hung Ling Choo, Sze Lin Chuk, Chian Giok Eng,Mung Bun Bung, Lee Chin Kuo, Gan KeeChiong, See Sei Hong Chun, Go Kian Sim, KhoMing Jiat, See Lee Giok, Uy Chin Chu, Go SuKim, Go Chu, Chiang Tian, Chua Tuy Tee, SyJee Chi, Sy Sick Bian, Sy Kang Liu, Ang ChiHun, Kho Chu, Chua Hong, Lim Chin Chin, AngLu Him, William Ang, Sy Siu Cho, Ang Puy Hua,Sy Chi Tek, Lao Sing Tee, Cua Tiong Bio, KhoLee Fun, Kho Lee Fong, Ang Giok, Sy Si Him,Sy Lin Su, Lee Hun, Sy SiongGo and Sy ChoLung, who previously earlier on the same day,thru the aid, help and manipulation of the







abovenamed accused, were loaded and ferriedto the shore from the Chinese vessel "CHIUNGHING" in a fishing vessel known as the "MARUXl" and landed at barrio Damortis, Sto. Tomas,La Union, and immediately upon landing wereloaded in 3 vehicles an automobile bearingplate No. H-3812-Manila driven and operatedby Emerdoro Santiago and 2 jeepneys withplates Nos. S-27151- Philippines, 1966 and S-26327-Philippines, 1966 driven and operated byJose Regino and Alberto Bunyi, respectively,and brought southwards along the MacArthurhighway and upon reaching Malolos, Bulacan,were apprehended by the agents of thePhilippine Constabulary, the latter confiscatingand impounding the vehicles used in carryingand transporting the aid aliens and includingthe sum of P15,750.00 found in the possessionof the accused Jose Pascual which was usedand/or to be used in connection with thecommission of the crime charged.

On July 1, 1968 the three accused in criminalcase A-392 filed a "motion to dismiss" [quash]on the ground that the CFI of La Union has no

jurisdiction over the offense charged in the saidindictment as the court had been pre-emptedfrom taking cognizance of the case by thedependency in the CFI of Bulacan of criminalcase 6258-M. This motion was opposed by theprosecution.

On August 2, 1968 the Court of First Instance

of La Union dismissed the case, with costs deoficio. The Government's motion forreconsideration was denied; hence the presentrecourse.

In this appeal the Government contends thatthe lower court erred (1) "in declaring that theinformation in the instant case [A-392] allegesconspiracy between the accused herein and thepersons accused in criminal case 6258-M of theCourt of First Instance of Bulacan;" (2) "inholding that by reason of said allegation of

conspiracy in the information in this case [A-3921], the act of one of the accused in bothcriminal cases is deemed the act of all theaccused and that as a consequence all thoseaccused in the two cases are liable andpunishable for one offense or violation ofsection 46 of Commonwealth Act 613, asamended, although committed by and throughthe different means specified in said section;"(3) "in holding that the violation of section 46of Commonwealth Act 613, as amended,committed by the accused in both criminalcases partakes of the nature of a transitory orcontinuing offense;" and (4) "in declaring that itlacks jurisdiction and is now excluded fromtaking cognizance of this case [A-392] and indismissing it."

Section 46 of Commonwealth Act 613, asamended, reads as follows:

Any individual who shall bring into or land inthe Philippines or conceal or harbor any aliennot duly admitted by any immigration officer ornot lawfully entitled to enter or reside withinthe Philippines under the terms of theimmigration laws, or attempts, conspires with,or aids another to commit any such act, andany alien who enters the Philippines withoutinspection of admission by the immigrationofficials, or obtains entry into the Philippines bywilful, false, or misleading representation orwilful concealment of a material fact, shall beguilty of an offense and upon convictionthereof, shall be fined not more than tenthousand pesos, imprisoned for not more thanten years, and deported if he is an alien.

If the individual who brings into or lands in thePhilippines or conceals or harbors any alien notduly admitted by any immigration officer or notlawfully entitled to enter or reside herein, orwho attempts, conspires with or aids another tocommit any such act, is the pilot, master,agent, owner, consignee, or any person incharge of the vessel or aircraft which broughtthe alien into the Philippines from any placeoutside thereof, the fine imposed under the firstparagraph hereof shall constitute a lien againstthe vessel or aircraft and may be enforced inthe same manner as fines are collected and

enforced against vessels under the customslaws: Provided, however, That if the court shallin its discretion consider forfeiture to be

justified by the circumstances of the case, itshall order, in lieu of the fine imposed, theforfeiture of the vessel or aircraft in favor of theGovernment, without prejudice to theimposition to the penalty of imprisonmentprovided in the preceding paragraph.

To be stressed at the outset is the significantrepetition, in the second paragraph above-

quoted, of basic words and concepts set forth inthe first paragraph. Thus, the first paragraphbegins with: "Any individual who shall bring intoor land in the Philippines or conceal or harborany alien ...;" the second paragraph starts with"If the individual who brings into or lands in thePhilippines or conceals or harbors any alien ..."(emphasis supplied) Scanning section 46 in itsentire context, it is at once apparent, therebeing no indication to the contrary, that the actof bringing into, the act of landing, the act ofconcealing, the act of harboring, are fourseparate acts, each act possessing its owndistinctive, different and disparate meaning."Bring into" has reference to the act of placingan alien within the territorial waters of thePhilippines. "Land" refers to the act of puttingashore an alien. "Conceal" refers to the act of



hiding an alien. "Harbor" refers to the act ofgiving shelter and aid to an alien. It is of courseunderstood that the alien brought into orlanded in the Philippines, or concealed orharbored, is an "alien not duly admitted by anyimmigration officer or not lawfully entitled toenter or reside within the Philippines under theterms of the immigration laws." 1chanroblesvirtual law library

The rule is too well-settled to require anycitation of authorities that the word "or" is adisjunctive term signifying dissociation andindependence of one thing from each of theother things enumerated unless the contextrequires a different interpretation. While in theinterpretation of statutes, 'or' may read 'and'and vice versa, it is so only when the context sorequires.

A reading of section 46 above-quoted does not justify giving the word "or" a non-disjunctivemeaning.

Bringing into and landing in the Philippines ofthe 39 aliens were completed when they wereplaced ashore in the barrio of Damortis onSeptember 22, 1966. The act of the six accusedin criminal case 6258-M before the CFI ofBulacan of transporting the aliens constitutesthe offenses of "concealing" and "harboring," asthe terms are used in section 46 of ourImmigration Laws. The court a quo in point of

fact accepted this interpretation when itobserved that "it could happen that differentindividuals, acting separately from, andindependently of each other could violate andbe criminally liable for violation of theimmigration Act, if each individualindependently commits any of the meansspecified under said section 46 ofCommonwealth Act 613, as amended byRepublic Act 827. For example, an individual actindependently, with the use of a motor boat,brings into the country and lands several

Chinese aliens and after doing so he goes away.There is no question that said individualviolated said section 46 of the Immigration Act,for bringing into and landing in the Philippinessome alien. Now, after the said landing of thesaid aliens another individual also actingindependently, without connection whatsoeverwith the one who brought and landed the saidaliens, and knowing that the Chinese alienshave no right to enter the country or unlawfullyconceals or harbors the said aliens. There is nodoubt that this is also liable and punishable foranother separate violation of said section 46 ofCommonwealth Act 613."chanrobles virtual lawlibrary

This notwithstanding, the court dismissed thiscase on the ground that there is an express

allegation in the information of connivancebetween the three defendant-appellees hereinand the six accused in criminal case 6258-M ofthe CFI of Bulacan. In our view the court a quoincurred in error in reading this conclusion. Thiserror, which is one of misinterpretation of thephraseology of the information, was induced bya reading of the first of the said informationwhich states as follows:

That on or about the 22nd day of September,1966, in the Municipality of Sto. Tomas,Province of La Union, Philippines, and within the

jurisdiction of this Honorable Court, theabovenamed accused, conspiring andconfederating together and mutually helpingone another and in active aid with Filipinonationals who are presently charged before theCFI of Bulacan in Crim. Case No. 6258-M, didthen and there wilfully, unlawfully andfeloniously bring in and ferry into thePhilippines thirty-nine (39) Chinese aliens whotraveled by the Chinese vessel 'Chungking' fromthe port of Hongkong ... (Emphasis ours)

It is crystal-clear that the words, "the above-named accused, conspiring and confederatingtogether and mutually helping one another,"can refer only and exclusively to the threepersons accused in this case, namely MaximoMartin, Candido Martin and Rodolfo Higashi.While the unfortunate insertion in theinformation of the clause reading, "and in active

aid with Filipino nationals who are presentlycharged before the CFI of Bulacan in CriminalCase No. 6258-M," may yield the implicationthat the three defendants-appellees and the sixaccused in criminal case 6258-M before the CFIof Bulacan may have agreed on the sequence ofthe precise steps to be taken in the smugglingof the Chinese aliens and on the identities ofthe persons charged with consummating eachstep, still there seems to be no question thatthe three defendants-appellees are chargedonly with bringing in and landing on Philippine

soil the thirty-nine aliens, whereas the sixaccused in criminal case 6258-M are chargedonly with concealing and harboring the saidaliens. It is technically absurd to draw aconclusion of conspiracy among the threedefendants-appellees and the six accused in thecriminal case 6258-M before the CFI of Bulacanwho are not named defendants in this case.

At all events, the words, "and in active aid withFilipino nationals who are presently chargedbefore the CFI of Bulacan in Crim. Case No.6258-M," can and should be considered as asurplusage, and may be omitted from theinformation without doing violence to ordetracting from the intendment of the saidindictment. These words should therefore bedisregarded



Finally, the court a quo erred in maintaining theview that the acts of bringing into and landingaliens in the Philippines illegally and the acts ofconcealing and harboring them constitute one"transitory and continuing violation". We hererepeat and emphasize that the acts of bringinginto and landing an alien in the Philippines arecompleted once the alien is brought ashore onPhilippine territory, and are separate anddistinct from the acts of concealing andharboring such alien. If the aliens in this casewere apprehended immediately after landing,there would be no occasion for concealing andharboring them. Upon the other hand, one setof persons may actually accomplish the act ofbringing in and/or landing aliens in thePhilippines, and another completely differentset of persons may conceal and/or harborthem. The general concept of a continuingoffense is that the essential ingredients of thecrime are committed in different provinces. Anexample is the complex offense of kidnappingwith murder if the victim is transported throughdifferent provinces before he is actually killed.In such case the CFI of any province in whichany one of the essential elements of saidcomplex offense has been committed, has

jurisdiction to take cognizance of the offense.3chanrobles virtual law library

The conclusion thus become ineluctable that thecourt a quo erred in refusing to take cognizance

of the case at bar.ACCORDINGLY, the order of the Court of FirstInstance of La Union of August 2, 1968,dismissing this case and cancelling the bailbond posted by the three defendants-appellees,is set aside, and this case is remanded forfurther proceedings in accordance with law.

G.R. No. 167022 August 31, 2007

LICOMCEN INCORPORATED, Petitioner,

vs.

FOUNDATION SPECIALISTS, INC., Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 169678

FOUNDATION SPECIALISTS, INC., Petitioner,

vs.

LICOMCEN INCORPORATED and COURT OFAPPEALS, Respondents.

D E C I S I ON

NACHURA, J.:

For review in these consolidated petitions is theNovember 23, 2004 Decision1 of the Court ofAppeals (CA) in CA-G.R. SP. No. 78218, as wellas the Resolutions dated February 4, 20052 andSeptember 13, 2005,3 denying the motions forits reconsideration.

Liberty Commercial Center, Inc. (LICOMCEN) isa corporation engaged in the business ofoperating shopping malls. In March 1997, theCity Government of Legaspi leased its lot in theCentral District of Legaspi to LICOMCEN. TheLease Contract was based on the Build-Operate-Transfer Scheme under whichLICOMCEN will finance, develop and constructthe LCC City Mall (CITIMALL). LICOMCENengaged E.S. De Castro and Associates (ESCA)as its engineering consultant for the project.

On September 1, 1997, LICOMCEN andFoundation Specialist, Inc. (FSI) signed aConstruction Agreement for the bored pilefoundation of CITIMALL.4 Forming part of theagreement were the Bid Documents and theGeneral Conditions of Contract (GCC)5prepared by ESCA. A salient provision of theGCC is the authority granted the engineeringconsultant to suspend the work, wholly orpartly. LICOMCEN was also given the right tosuspend the work or terminate the contract.Among other caveats, GC-05 provided thatquestions arising out or in connection with thecontract or its breach should be litigated in thecourts of Legaspi, except where otherwisestated, or when such question is submitted forsettlement through arbitration. GC-61 alsoprovided that disputes arising out of theexecution of the work should first be submitted

to LICOMCEN for resolution, whose decisionshall be final and binding, if not contestedwithin thirty (30) days from receipt. Otherwise,the dispute shall be submitted to theConstruction Industry Arbitration Commission(CIAC) for arbitration.

Upon receipt of the notice to proceed, FSIcommenced work and undertook to complete itwithin ninety (90) days, all in accordance withthe approved drawing, plans, and

specifications.In the course of the construction, LICOMCENrevised the design for the CITIMALL involvingchanges in the bored piles and substantial



reduction in number and length of the piles.ESCA, thus, informed FSI of the major revisionon December 16, 19976 and ordered the non-delivery of the steel bars, pending approval ofthe new design. FSI, however, responded thatthe steel bars had already been loaded andshipped out of Manila. ESCA then suggested thedelivery of 50% of the steel bars to the jobsiteand the return of the other 50% to Manila,where storage and security were better.7

On January 15, 1998, LICOMCEN sent anotherletter to FSI ordering all the constructionactivities suspended, because Albay AccreditedConstructions Association (AACA) had contestedthe award of the Contract of Lease toLICOMCEN and filed criminal complaints withthe Office of the Ombudsman for violation ofthe Anti-Graft and Corrupt Practices Act againstLICOMCEN and the City Government of Legaspi.Thus, pending a clear resolution of the case,LICOMCEN decided to suspend all constructionactivities. It also requested FSI not to unloadthe steel bars.8

On January 17, 1998, the steel bars for theCITIMALL arrived at the Legaspi port, anddespite LICOMCEN’s previous request, thesewere unloaded and delivered to the jobsite andsome to Tuanzon compound,9 FSI’s batchingsite. Then, on January 19, 1998, LICOMCENreiterated its decision to suspend construction,and ordered demobilization of the materials andequipment for the project.10 Finally, onFebruary 17, 1998, LICOMCEN indefinitelysuspended the project, due to the pendingcases in the Ombudsman.11

FSI demanded payment for its workaccomplishments, material costs, and standby

off equipment, as well as other expensesamounting to P22,667,026.97,12 butLICOMCEN took no heed.

On October 12, 1998, the Ombudsmandismissed the cases filed against the CityGovernment and LICOMCEN. The dismissal wasaffirmed by this Court13 and attained finality onSeptember 20, 2000.14 This notwithstanding,LICOMCEN did not lift the suspension of theconstruction that it previously ordered. It then

hired Designtech Consultants and ManagementSystem (Designtech) as its new projectconsultant, which, in turn, invited contractors,including FSI, to bid for the bored piling worksfor CITIMALL.15

FSI reiterated its demand for payment fromLICOMCEN, but the latter failed and refused topay, prompting FSI to file a petition forarbitration with the CIAC, docketed as CIACCase No. 37-2002.

LICOMCEN denied the claim of FSI, arguing thatit lacks factual and legal basis. It also assailedthe jurisdiction of the CIAC to take cognizanceof the suit, claiming that jurisdiction over thecontroversy was vested in the regular courts,and that arbitration under the GC-61 of theGCC may only be resorted to if the disputeconcerns the execution of works, not if itconcerns breach of contract.

During the preliminary conference, the partiesagreed to submit the controversy to the ArbitralTribunal and signed the Terms of Reference(TOR).16 But on February 4, 2003, LICOMCEN,through a collaborating counsel, filed an ExAbundati Ad Cautela Omnibus Motion.17 Itreiterated the claim that the arbitration clausein the contract does not cover claims forpayment of unrealized profits and damages,and FSI did not comply with the conditionprecedent for the filing of the suit, thus, theCIAC cannot take cognizance of the suit.LICOMCEN further averred that FSI has nocause of action against it because the claim formaterial costs has no factual basis and becausethe contract is clear that FSI cannot claimdamages beyond the actual workaccomplishments, but only reasonable expensesfor the suspension or termination of thecontract. LICOMCEN also alleged that theexpenses incurred by FSI, if there be any,cannot be considered reasonable, because therewas no showing that the materials wereordered and actually delivered to the job site.

Finally, it prayed for the suspension of theproceedings, pending the resolution of itsomnibus motion.

On February 20, 2003, the CIAC issued anOrder18 denying LICOMCEN’s omnibus motionon the ground that it runs counter to thestipulations in the TOR. Trial, thereafter,ensued. FSI and LICOMCEN presentedwitnesses in support of their respective claims.

After due proceedings, the CIAC rendered aDecision19 in favor of FSI, the dispositiveportion of which reads:



WHEREFORE, premises considered, judgment ishereby rendered in favor of ClaimantFOUNDATION SPECIALIST, INC. and againstRespondent LICOMCEN, INCORPORATED,ordering the latter to pay to the former thefollowing amounts:

1. P14,643,638. 51 representing material costsat site;

2. P2,957,989.94 representing payment forequipment and labor standby costs;

3. P5,120,000.00 representing unrealizedprofit; and

4. P1,264,404.12 representing the unpaidbalance of FSI's billing.

FURTHER, the said Respondent is ordered tosolely and exclusively bear the entire cost ofarbitration proceedings in the total amount ofP474,407.95 as indicated in the TOR, and toreimburse the herein Claimant of any amountthereof which it had advanced and paidpursuant to TOR.

All the above-awarded amounts shall bearinterest of 6% per annum from the date of theformal demand on February 3, 1998 (Par. 10,Admitted Facts, TOR) until the date thisDecision/Award becomes final and executoryand 12% per annum from the date thisDecision/Award becomes final and executoryuntil fully paid.

SO ORDERED.20

LICOMCEN elevated the CIAC Decision to theCA. It faulted the CIAC for taking cognizance of

the case, arguing that it has no jurisdiction overthe suit. It also assailed the award and theruling that the contract had been terminated,allegedly for lack of factual and legal basis.

On November 23, 2004, the CA rendered theassailed Decision, modifying the CIAC Decision,viz.:

WHEREFORE, the foregoing considered, theassailed Decision is hereby MODIFIED to the

extent that paragraph 1 of the dispositiveportion is amended and accordingly, petitioneris ordered to pay only the amount ofP5,694,939.865 representing the material costsat site; and paragraphs 2 and 3 on equipment

and labor standby costs and unrealized profit ofthe same dispositive portion are deleted. Therest is AFFIRMED in all respects. No costs.

SO ORDERED.21

Both LICOMCEN and FSI filed motions forpartial reconsideration, but these were denied

by the CA in its Resolutions dated February 4,200522 and September 13, 2005.23

LICOMCEN and FSI reacted with the instantpetitions. Considering that the cases involve thesame parties, issues and assailed decision, thisCourt ordered the consolidation of G.R. No.167022 and G.R. No. 169678 in its Resolutiondated November 20, 2006.

LICOMCEN raised the following issues:

1.

WHETHER OR NOT THE PROJECT WAS MERELYSUSPENDED AND NOT TERMINATED.

2.

WHETHER OR NOT THE TRIBUNAL HADJURISDICTION OVER THE DISPUTE.

3.

WHETHER OR NOT FSI IS ENTITLED TO CLAIMANY AMOUNT OF DAMAGES.

4.

WHETHER OR NOT LICOMCEN IS THE PARTY ATFAULT.24

FSI, on the other hand, interposes thefollowing:

1. THE COURT OF APPEALS ERRED IN NOTAWARDING TO PETITIONER THE FULL AMOUNTOF MATERIAL COSTS AT THE SITE.

2. THE COURT OF APPEALS ERRED IN DENYINGPETITIONER'S CLAIM FOR EQUIPMENT ANDLABOR STANDBY COSTS.

3. THE COURT OF APPEALS ERRED IN DENYINGPETITIONER'S CLAIM FOR UNREALIZEDPROFIT.

4. THE COURT OF APPEALS ERRED INRENDERING A MERE MINUTE RESOLUTION INRESOLVING PETITIONER'S MOTION FORPARTIAL RECONSIDERATION.25



First, we resolve the is sue of the CIAC’s jurisdiction.

LICOMCEN insists that the CIAC had no jurisdiction over the suit. Citing GC-05 and GC-61 of the GCC, it posits that jurisdiction overthe dispute rests with the regular courts ofLegaspi City.

The argument is misplaced.

The power and authority of a court to hear, try,and decide a case is defined as jurisdiction.Elementary is the distinction between

jurisdiction over the subject matter and jurisdiction over the person. The former isconferred by the Constitution or by law, whilethe latter is acquired by virtue of the party'svoluntary submission to the authority of the

court through the exercise of its coerciveprocess.26

Section 4 of Executive Order (E.O.) No. 1008,or the Construction Industry Arbitration Law,provides:

SECTION 4. Jurisdiction.— The CIAC shall haveoriginal and exclusive jurisdiction over disputesarising from, or connected with, contractsentered into by parties involved in construction

in the Philippines, whether the dispute arisesbefore or after the completion of the contract,or after the abandonment or breach thereof.These disputes may involve government orprivate contracts. For the Board to acquire

jurisdiction, the parties to a dispute must agreeto submit the same to voluntary arbitration.

The jurisdiction of the CIAC may include but isnot limited to violation of specifications formaterials and workmanship; violation of the

terms of agreement; interpretation and/orapplication of contractual provisions; amount ofdamages and penalties; commencement timeand delays; maintenance and defects; paymentdefault of employer or contractor and changesin contract cost.

Excluded from the coverage of this law aredisputes arising from employer-employeerelationships which shall continue to be coveredby the Labor Code of the Philippines. (Emphasis

supplied)Corollarily, Section 1, Article III of the Rules ofProcedure Governing Construction Arbitrationprovides that recourse to the CIAC may be

availed of whenever a contract contains aclause for the submission of a futurecontroversy to arbitration, thus:

SECTION 1. Submission to CIAC Jurisdiction.— An arbitration clause in a construction contractor a submission to arbitration of a constructiondispute shall be deemed an agreement tosubmit an existing or future controversy toCIAC jurisdiction, notwithstanding the referenceto a different arbitration institution or arbitralbody in such contract or submission. When acontract contains a clause for the submission ofa future controversy to arbitration, it is notnecessary for the parties to enter into asubmission agreement before the claimant mayinvoke the jurisdiction of CIAC.

Clearly then, the CIAC has original andexclusive jurisdiction over disputes arising fromor connected with construction contractsentered into by parties that have agreed tosubmit their dispute to voluntary arbitration.27

The GCC signed by LICOMCEN and FSI had thefollowing arbitral clause:

GC-61 DISPUTES AND ARBITRATION

Should any dispute of any kind arise between

the LICOMCEN, INCORPORATED and theContractor or the Engineer and the Contractorin connection with, or arising out of theexecution of the Works, such dispute shall firstbe referred to and settled by the LICOMCEN,INCORPORATED who shall within a period ofthirty (30) days after being formally requestedby either party to resolve the dispute, issue awritten decision to the Engineer and Contractor.

Such decision shall be final and binding upon

the parties and the Contractor shall proceedwith the execution of the Works with duediligence notwithstanding any Contract or’sobjection to the decision of the Engineer. Ifwithin a period of thirty (30) days from receiptof the LICOMCEN, INCORPORATED’s decision onthe dispute, either party does not officially givenotice to contest such decision througharbitration, the said decision shall remain finaland binding. However, should any party withinthirty (30) days from receipt of the LICOMCEN,INCORPORATED’s decision contest saiddecision, the dispute shall be submitted forarbitration under the Construction IndustryArbitration Law, Executive Order 1008. The



arbitrators appointed under said rules andregulations shall have full power to open up,revise and review any decision, opinion,direction, certificate or valuation of theLICOMCEN, INCORPORATED. Neither party shallbe limited to the evidence or arguments putbefore the LICOMCEN, INCORPORATED for thepurpose of obtaining his said decision. Nodecision given by the LICOMCEN,INCORPORATED shall disqualify him from beingcalled as a witness and giving evidence in thearbitration. It is understood that the obligationsof the LICOMCEN, INCORPORATED, theEngineer and the Contractor shall not be alteredby reason of the arbitration being conductedduring the progress of the Works.28

LICOMCEN theorizes that this arbitration clausecannot vest jurisdiction in the CIAC, because itcovers only disputes arising out of or inconnection with the execution of works,whether permanent or temporary. It arguesthat since the claim of FSI was not connected toor did not arise out of the execution of theworks as contemplated in GC-61, but is based

on alleged breach of contract, under GC-0529of the GCC, the dispute can only be takencognizance of by the regular courts.Furthermore, FSI failed to comply with thecondition precedent for arbitration. Thus,according to LICOMCEN, the CIAC erred inassuming jurisdiction over the case.

Contrary to what LICOMCEN wants to portray,the CIAC validly acquired jurisdiction over thedispute. Firstly, LICOMCEN submitted itself tothe jurisdiction of the CIAC when its presidentAntonio S. Tan signed the TOR30 during thepreliminary conference. The TOR states:

V. MODE OF ARBITRATION

The parties agree that their differences besettled by an Arbitral Tribunal who wereappointed in accordance with the provision ofArticle V, Section 2 of the CIAC Rules ofProcedure Governing Construction Arbitration,as follows:

SALVADOR C. CEGUERA

ChairmanFELISBERTO G.L. REYES

Member

SALVADOR P. CASTRO, JR.

Member

The case shall be decided in accordance withthe Contract of the parties and the ConstructionIndustry Arbitration Law (Executive Order No.1008) and on the basis of evidence submitted,

applicable laws, and industry practices whereapplicable under the law.31

Secondly, we agree with the CA that the suitarose from the execution of works defined inthe contract. As it aptly ratiocinated:

[T]he dispute between [FSI] and [LICOMCEN]arose out of or in connection with the executionof works. [LICOMCEN] has gone quite far ininterpreting "disputes arising out of or in

connection with the execution of work" asseparate and distinct from "disputes arising outof or in connection with the contract" citing thevarious provisions of the ConstructionAgreement and Bid Documents to precludeCIAC from taking cognizance of the case. To themind of this Court, such differentiation isimmaterial. Article 1374 of the Civil Code on theinterpretation of contracts ordains that "thevarious stipulations of a contract shall beinterpreted together, attributing to the doubtful

ones that sense which may result from all ofthem taken jointly." Essentially, while we agreethat [FSI’s] money claims against [LICOMCEN]arose out of or in connection with the contract,the same necessarily arose from the work itaccomplished or sought to accomplish pursuantthereto. Thus, said monetary claims can becategorized as a dispute arising out of or inconnection with the execution of work.32

Thirdly, FSI complied with the conditionprecedent provided in GC-61. Record showsthat FSI referred the claim to ESCA on February3, 1998, and then to LICOMCEN on March 3,1998,33 but it was disallowed on March 24,1998.34 Then, on April 15, 1998, FSI rejectedthe evaluation of the billings made by ESCA andLICOMCEN and further informed the latter of itsintention to turn over the project.35 FSIexerted efforts to have the claim settledamicably, but no settlement was arrived at.Hence, on March 14, 2001, FSI through counselmade a final demand to pay.36 LICOMCEN,however, adamantly refused to pay, prompting



FSI to file suit with the CIAC. Clearly, FSIsubstantially complied with the conditionprecedent laid down in GC-61. Finally, thearbitral clause in the agreement, consideringthat the requisites for its application arepresent, is a commitment by the parties tosubmit to arbitration the disputes coveredtherein. Because that clause is binding, theyare expected to abide by it in good faith.37

Just as meaningful, the issue of jurisdiction wasrendered moot by LICOMCEN's activeparticipation in the proceedings before theCIAC. It is true that LICOMCEN initially assailedthe jurisdiction of the CIAC. But when the CIACasserted its jurisdiction in its February 20, 2003Order,38 LICOMCEN did not seek relief from theCIAC ruling. Instead, LICOMCEN took part inthe discussion on the merits of the case, evengoing to the extent of seeking affirmative relief.The active involvement of a party in theproceedings is tantamount to an invocation of,or at least an acquiescence to, the court's

jurisdiction. Such participation indicates awillingness to abide by the resolution of thecase, and will bar said party from later onimpugning the court or body's jurisdiction.39The Court will not countenance the effort of anyparty to subvert or defeat the objective of

voluntary arbitration for its own privatemotives.40 After submitting itself to arbitrationproceedings and actively participating therein,LICOMCEN is estopped from assailing the

jurisdiction of the CIAC, merely because thelatter rendered an adverse decision.

Having resolved the issue of jurisdiction, weproceed to the merits of the case.

LICOMCEN faults the CIAC and the CA for ruling

that the contract had been terminated, insistingthat it was merely indefinitely suspended. Tobolster its position, LICOMCEN cited GC-41 ofthe GCC which reads:

GC-41 LICOMCEN, INCORPORATED’S RIGHT TOSUSPEND WORK OR TERMINATE THECONTRACT

x x x x

2. For Convenience of LICOMCEN,INCORPORATED

If any time before completion of work under theContract it shall be found by the LICOMCEN,INCORPORATED that reasons beyond thecontrol of the parties render it impossible oragainst the interest of LICOMCEN,INCORPORATED to complete the work, theLICOMCEN, INCORPORATED at any time, bywritten notice to the Contractor, maydiscontinue the work and terminate theContract in whole or in part. Upon issuance ofsuch notice of termination, the Contractor shalldiscontinue the work in such manner, sequenceand at such time as the LICOMCEN,INCORPORATED/Engineer may direct,continuing and doing after said notice only suchwork and only until such time or times as theLICOMCEN, INCORPORATED/Engineer maydirect. x x x41 (Emphasis supplied)

Unfortunately for LICOMCEN, this provisiondoes not support but enervates its theory ofindefinite suspension. The cited provision maybe invoked only in cases of termination ofcontract, as clearly inferred from the phrase"discontinue the work and terminate thecontract." And in statutory construction impliesconjunction, joinder or union.42 Thus, byinvoking GC-41, LICOMCEN, in effect, admittedthat the contract had already been terminated.

The termination of the contract was madeobvious and unmistakable when LICOMCEN’snew project consultant rebidded the contractfor the bored piling works for the CITIMALL.43The claim that the rebidding was conducted forpurposes of getting cost estimates for apossible new design44 taxes our credulity. Itimpresses us as nothing more than a lameattempt of LICOMCEN to avoid liability underthe contract. As the CIAC had taken pains to

demonstrate:Suspension of work is ordinarily understood tomean a temporary work stoppage or acessation of work for the time being. It may beassumed that, at least initially, LCC had a validreason to suspend the Works on December 16,1997 pursuant to GC-38 above-quoted. Theevidence show, however, that it has notordered a resumption of work up to the presentdespite the lapse of more than four years, and

despite the dismissal of the case filed with theOffice of the Ombudsman which it gave asreason for the suspension in the first place. Assuch, LCC’s suspension of the Works hadalready lost its essential characteristic of being



merely temporary or only for the time being. Tostill consider it a "suspension" at this point is todo violence to reason and logic.

Perhaps because of this LCC came up with theassertion that what we have is an "indefinitesuspension." There is no such term in theConstruction Agreement or the ContractDocuments. In fact, it is unknown in theconstruction industry. Construction work mayeither be suspended or terminated, but neverindefinitely suspended. Since it is notsanctioned by practice and not mentioned inthe herein Construction Agreement and theContract Documents, "indefinite suspension" isirregular and invalid. Due to the apparentincongruity of an "indefinite suspension," LCCchanged the term to "continued suspension" inits Memorandum. Unfortunately for it, thefactual situation remains unchanged. The Worksstay suspended for an indefinite period oftime.45

Accordingly, the CA did not err in affirming theCIAC ruling that the contract had already beenterminated.

Neither can LICOMCEN find refuge in the

principle of laches to steer clear of liability. It isnot just the lapse of time or delay thatconstitutes laches. The essence of laches is thefailure or neglect, for an unreasonable andunexplained length of time, to do that which,through due diligence, could or should havebeen done earlier, thus giving rise to apresumption that the party entitled to assert ithad either abandoned or declined to assert it.46

Indeed, FSI filed its petition for arbitration onlyon October 8, 2002, or after the lapse of morethan four years since the project was"indefinitely suspended." But we agree with theCIAC and the CA that such delay can hardly beconsidered unreasonable to give rise to theconclusion that FSI already abandoned itsclaim. On the contrary, the delay was due tothe fact that FSI exerted efforts to have theclaim settled extra-judicially which LICOMCENrebuffed. Beside s, except for LICOMCEN’sallegation that the filing of the suit is alreadybarred by laches, no proof was offered to showthat the filing of the suit was iniquitous orunfair to LICOMCEN. We reiterate that, unless

reasons of inequitable proportions are adduced,a delay within the prescriptive period issanctioned by law and is not to be considereddelay that would bar relief.47 In the instantcase, FSI filed its claim well within the ten-yearprescriptive period provided for in Article 1144of the Civil Code.48 Therefore, laches cannot beinvoked to bar FSI from instituting this suit.

The doctrine of laches is based upon grounds ofpublic policy which require, for the peace ofsociety, discouraging stale claims. It isprincipally a question of the inequity orunfairness of permitting a right or claim to beenforced or asserted. There is no absolute ruleas to what constitutes laches; each case is tobe determined according to its particularcircumstances. The question of laches isaddressed to the sound discretion of the court,and since it is an equitable doctrine, itsapplication is controlled by equitableconsiderations. It cannot be worked to defeat

justice or to perpetrate fraud and injustice. 49

We now come to the monetary awards grantedto FSI. LICOMCEN avers that the award lackedfactual and legal basis. FSI, on the other hand,posits otherwise, and cries foul on themodification made by the CA. It asserts that theCA erred in disregarding the pieces of evidencethat it submitted in support of the claim despitethe lack of objection and opposition fromLICOMCEN. It insists entitlement to the fullamount of material costs at site, for equipmentand labor standard costs, as well as unrealizedprofits.

In this connection, we must emphasize thedistinction between admissibility of evidenceand its probative value. Just because a piece of

evidence is not objected to does not ipso factomean that it conclusively proves the fact indispute. The admissibility of evidence shouldnot be confused with its probative value.Admissibility refers to the question of whethercertain pieces of evidence are to be consideredat all, while probative value refers to thequestion of whether the admitted evidenceproves an issue. Thus, a particular item ofevidence may be admissible, but its evidentiaryweight depends on judicial evaluation within the

guidelines provided by the rules of evidence.50We have carefully gone over the records andare satisfied that the findings of the CA are wellsupported by evidence. As mentioned above,



the contract between LICOMCEN and FSI hadalready been terminated and, in such case, theGCC expressly provides that:

GC-42 PAYMENT FOR TERMINATED CONTRACT

If the Contract is terminated as aforesaid, theContractor will be paid for all items of workexecuted, and satisfactorily completed andaccepted by the LICOMCEN, INCORPORATED upto the date of termination, at the rates andprices provided for in the contract and inaddition:

1. The cost of partially accomplished items ofadditional or extra work agreed upon by theLICOMCEN, INCORPORATED and theContractor.

2. The cost of materials or goods reasonablyordered for the Permanent or Temporary Workswhich have been delivered to the Contractorbut not yet used and which delivery has beencertified by the Engineer.

3. The reasonable cost of demobilization

For any payment due the Contractor under theabove conditions, the LICOMCEN,INCORPORATED, however, shall deduct anyoutstanding balance due from the Contractorfor advances in respect to mobilization andmaterials, and any other sum the LICOMCEN,INCORPORATED is entitled to be credited.51

We agree with the Court of Appeals that theliability of LICOMCEN for the cost of materialson site is only P5,694,939.85. The said awardrepresents the materials reasonably ordered forthe project and which were delivered to the jobsite. FSI cannot demand full payment of thesteel bars under Purchase Order No. 6035.52As shown by the records, the steel bars wereloaded at M/V Alberto only on January 12,199853 and reached Legaspi City on January

16, 1998.54 But as early as December 16,1997, LICOMCEN already informed FSI of themajor revision of the design and ordered thenon-delivery to the jobsite of the 50% of thesteel bars. Inexplicably, FSI continued the

delivery. Worse, it unloaded all the steel barsand delivered them to the jobsite and some tothe Tuanzon batching plant on January 17,1998,55 despite LICOMCEN’s order not to doso. FSI cannot now claim payment of the costof all these materials.

LICOMCEN, however, cannot deny liability for50% of the steel bars because, as mentioned, itordered their delivery to the jobsite. The steelbars had in fact been delivered to the jobsiteand inventoried by Cesar Cortez of ESCA,56contrary to LICOMCEN’s claim. The payment ofthese materials is, therefore, in order, pursuantto GC-41:

The Contractor shall receive compensation forreasonable expenses incurred in good faith forthe performance of the Contract and forreasonable expenses associated with thetermination of the Contract. x x x.57

We also uphold the denial of FSI’s claim forequipment and labor standard costs, as noconvincing evidence was presented to prove it.The list of rented equipment58 and the list ofworkers59 offered by FSI and which wereadmitted by CIAC, are far from being clear andconvincing proof that FSI actually incurred theexpenses stated therein.

As aptly said by the CA, FSI should havepresented convincing pieces of documentaryevidence, such as the lease contract or thereceipts of payment issued by the owners of therented equipment, to establish the claim. As toits claimed labor expenses, the list ofemployees does not categorically prove thatthese listed employees were actually employedat the construction site during the suspension.Hence, even assuming that LICOMCEN failed tosubmit evidence to rebut these lists, they donot ipso facto translate into duly proven facts.FSI still had the burden of proving its cause ofaction, because it is the one assertingentitlement to an affirmative relief.60 On thisscore, FSI failed. The CA, therefore, committedno reversible error in denying the claim.

FSI’s claim for unrealized profit has to berejected too. GC-41 specifically provided that:

x x x The Contractor shall have no claim foranticipated profits on the work thus terminated,nor any other claim, except for work actuallyperformed at the time of complete



discontinuance, including any variationsauthorized by the LICOMCEN,INCORPORATED/Engineer to be done under thesection dealing with variation, after the date ofsaid order, and for any claims for variationsaccruing up to the date of said notice oftermination.61 (Emphasis supplied)

The provision was agreed upon by the partiesfreely, and significantly, FSI did not questionthis. It is not for the Court to change thestipulations in the contract when they are notillegal. Article 1306 of the Civil Code providesthat the contracting parties may establish suchstipulations, clauses, terms and conditions asthey may deem convenient, provided they arenot contrary to law, morals, good customs,public order, or public policy.62 Besides, noconvincing proof was offered to prove the claim.In light of the foregoing, the CA, therefore,correctly denied the claim for unrealized profit.

Similarly, we agree with the CIAC and the CAthat LICOMCEN should bear the cost ofarbitrat ion as it adamantly refused to pay FSI’s

just and valid claim, prompting the latter toinstitute a petition for arbitration.

In sum, we find no reason to disturb thedecision of the CA. It cannot be faulted fordenying FSI’s motion for reconsiderationthrough a mere Minute Resolution, for as weheld in Ortigas and Company LimitedPartnership v. Velasco:63

The filing of a motion for reconsideration,authorized by Rule 52 of the Rules of Court,does not impose on the Court the obligation todeal individually and specifically with thegrounds relied upon therefor, in much the sameway that the Court does in its judgment or finalorder as regards the issues raised andsubmitted for decision. This would be a uselessformality or ritual invariably involving merely areiteration of the reasons already set forth inthe judgment or final order for rejecting thearguments advanced by the movant; and itwould be a needless act, too, with respect toissues raised for the first time, these being, x xx deemed waived because not asserted at thefirst opportunity. It suffices for the Court to

deal generally and summarily with the motionfor reconsideration, and merely state a legalground for its denial (Sec. 14, Art. VIII,Constitution); i.e., the motion contains merelya reiteration or rehash of arguments already

submitted to and pronounced without merit bythe Court in its judgment, or the basic issueshave already been passed upon, or the motiondiscloses no substantial argument or cogentreason to warrant reconsideration ormodification of the judgment or final order; orthe arguments in the motion are toounsubstantial to require consideration, etc.

WHEREFORE, the herein petitions for review areDENIED, and the assailed Decision andResolutions of the Court of Appeals areAFFIRMED.

SO ORDERED.

[G.R. NO. 168222 : April 18, 2006]

SPS. TEODULO RUMARATE, (deceased) and

ROSITA RUMARATE; deceased TEODULORUMARATE is represented herein by hisHeirs/Substitutes, namely, ANASTACIARUMARATE, CELSO RUMARATE, MARINARUMARATE, ROMEO RUMARATE, GUILLERMORUMARATE, FIDEL RUMARATE, MERLINDARUMARATE, MARISSA RUMARATE, CLEMENCIARUMARATE, SANCHO RUMARATE and NENITARUMARATE, Petitioners, v. HILARIOHERNANDEZ, JOAQUIN HERNANDEZ,SALVADOR HERNANDEZ, BENJAMIN

HERNANDEZ, LEONORA HERNANDEZ-LAZA,VICTORIA HERNANDEZ-MERCURIO,RODRIGOHERNANDEZ, BERNARDOHERNANDEZ, LOURDES HERNANDEZ-CABIDA,MARIO SALVATIERRA, ADELAIDA FONTILA-CIPRIANO, and THE REGISTER OF DEEDS OFQUEZON PROVINCE, Respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

Assailed in this Petition for Review is the May26, 2005 Decision1 of the Court of Appeals inCA-G.R. CV No. 57053, which reversed and setaside the March 31, 1997 Decision2 of theRegional Trial Court of Calauag, Quezon, Branch63, in Civil Case No. C-964, declaringpetitioners as owners of Lot No. 379 with anarea of 187,765 square meters and located inBarrio Catimo,3 Municipality of Guinayangan,Province of Quezon.

The facts show that on September 1, 1992,petitioner spouses Teodulo Rumarate (Teodulo)and Rosita Rumarate filed an action forreconveyance of real property and/or quieting



of title with damages against respondent heirsof the late spouses Cipriano Hernandez andJulia Zoleta.4 Teodulo averred that Lot No. 379was previously possessed and cultivated by hisgodfather, Santiago Guerrero (Santiago), abachelor, who used to live with the Rumaratefamily in San Pablo City. Between 1923 and1924, Santiago and the Rumarate familytransferred residence to avail of the landdistribution in Catimo, Guinayangan, Quezon.From 1925 to 1928, Santiago occupied Lot No.379 cultivating five hectares thereof. Beforemoving to Kagakag, Lopez, Quezon in 1929,Santiago orally bequeathed his rights over LotNo. 379 to Teodulo and entrusted to him a copyof a Decision of the Court of First Instance (CFI)of Tayabas dated April 21, 1925 recognizing his(Santiago) rights over Lot No. 379.5 Since

Teodulo was only 14 years old then, his fatherhelped him cultivate the land.6 Their familythereafter cleared the land, built a house7 andplanted coconut trees, corn, palay andvegetables thereon.8 In 1960, Santiagoexecuted an "Affidavit (quit-claim)"9 ratifyingthe transfer of his rights over Lot No. 379 toTeodulo. Between 1960 and 1970, threeconflagrations razed the land reducing thenumber of coconut trees growing therein toonly 400, but by the time Teodulo testified in1992, the remaining portions of the land wasalmost entirely cultivated and planted withcoconuts, coffee, jackfruits, mangoes andvegetables.10 From 1929, Teodulo and later,his wife and 11 children possessed the land asowners and declared the same for taxation, theearliest being in 1961.11

In 1970, Teodulo discovered that spousesCipriano Hernandez and Julia Zoleta,respondents' predecessors-in-interest, wereable to obtain a title over Lot No. 379. He didnot immediately file a case against respondentsbecause he was advised to just remain on theland and pay the corresponding taxesthereon.12

Respondents, on the other hand, claimed thaton November 11, 1964, Santiago sold thequestioned lot to their parents, the spousesCipriano Hernandez and Julia Zoleta, forP9,000.00.13 Respondents alleged that on April21, 1925, the CFI of Tayabas rendered aDecision written in Spanish, declaring Lot No.379 as a public land and recognizing Santiagoas claimant thereof in Cadastral Proceeding No.

12. However, no title was issued to Santiagobecause he failed to file an Answer. SpousesCipriano Hernandez and Julia Zoleta filed amotion to re-open Cadastral Proceeding No. 12,alleging that though no title was issued in thename of Santiago, the same decision is,nevertheless, proof that Santiago was inpossession of Lot No. 379 since 1925 or formore than 30 years. Having succeeded in therights of Santiago, the spouses prayed thatCadastral Proceeding No. 12 be re-opened andthat the corresponding title over Lot No. 379 beissued in their name. On September 13, 1965,the CFI of Tayabas rendered a decisionadjudicating Lot No. 379 in favor of thespouses, in whose name Original Certificate ofTitle (OCT) No. O-1184414 was issued on thesame date.15 Cipriano Hernandez planted

coconut trees on the land through the help of acertain Fredo16 who was instituted ascaretaker. In 1970, Fredo informed CiprianoHernandez that he will no longer stay on theland because there are people instructing himto discontinue tilling the same.17

After the death of the spouses,18 respondentsexecuted a deed of partition over the subject lotand were issued TCT No. T - 237330 on June28, 1988 in lieu of OCT No. O-11844.19

Respondent Joaquin Hernandez (Joaquin)testified that in 1964, he accompanied hisfather in inspecting the lot which was thenplanted with coconut trees.20 Thereafter, hevisited the land twice, once in 1966 and theother in 1970. From 1966 up to the time hetestified, his family declared the lot for taxationand paid the taxes due thereon.21 Joaquinexplained that after the death of his father in1971, he no longer visited the land and it was

only when the complaint was filed against themwhen he learned that petitioners are in actualpossession of the property.22 He added that hissiblings had planned to convert Lot No. 379 intoa grazing land for cattle but decided to put it offfor fear of the rampant operations then of theNew People's Army between the years 1965-1970.23 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

On March 31, 1997, the trial court rendered adecision in favor of petitioners. It held that

since the latter possessed the land in theconcept of an owner since 1929, they becamethe owners thereof by acquisitive prescriptionafter the lapse of 10 years, pursuant to theCode of Civil Procedure. Thus, when Santiago



sold the lot to respondents' parents in 1964,the former no longer had the right over theproperty and therefore transmitted no title tosaid respondents. The dispositive portion of thetrial court's decision, reads:

WHEREFORE, in the light of all the foregoingconsiderations judgment is hereby rendered infavor of the plaintiffs and against thedefendants, to wit:

1. Declaring that the parcel of land (Lot No. 379of the Cadastral Survey of Guinayangan,Cadastral Case No. 12, LRC Cadastral RecordNo. 557), situated in Brgy. Katimo,Tagkawayan, Quezon had been fraudulently,deceitfully and mistakenly registered in thenames of the spouses Cipriano Hernandez andJulia Zoleta;

2. Declaring that herein defendants [heirs] ofspouses Cipriano Hernandez and Julia Zoletahave no better rights than theirparents/predecessors-in-interest, they havingstepped only on (sic) their shoes;

3. Declaring that the plaintiff Rosita VictorRumarate and substitute plaintiffs - [heirs] ofthe deceased Teodulo Rumarate are the true,real and legal owners/or the owners in fee

simple absolute of the above described parcelof land;

4. Ordering the defendants to convey theabove-described parcel of land to plaintiffRosita Victor Rumarate and to the substituteplaintiffs (heirs) of the deceased TeoduloRumarate;

5. Ordering the Register of Deeds for QuezonProvince in Lucena City to cancel Transfer

Certificate of Title No. T-237330 and to issue inlieu thereof a new certificate of title in favor ofplaintiff Rosita Victor Rumarate and thesubstitute plaintiffs (heirs) of the deceasedplaintiff Teodulo Rumarate, in accordance withlaw and settled jurisprudence; andcralawlibrary

6. Ordering the defendants to pay the costs ofthe suit .ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

SO ORDERED.24

Respondents appealed to the Court of Appealswhich on May 26, 2005, reversed and set asidethe decision of the trial court. It ruled thatTeodulo did not acquire title over Lot No. 379,

either by donation or acquisitive prescription;that Teodulo's bare allegation that Santiagoorally bequeathed to him the litigated lot isinsufficient to prove such transfer of ownership;and that even assuming that the property wastruly donated by Santiago to Teodulo in 1929,or in the 1960 Affidavit, said conveyance is voidfor not complying with the formalities of a validdonation which require the donation and theacceptance thereof by the donee to beembodied in a public instrument. Bothrequirements, however, are absent in this casebecause in 1929, the alleged donation was notreduced to writing while the purported 1960donation was never accepted in a publicdocument by Teodulo. The appellate court thussurmised that since it was not established thatSantiago donated Lot No. 379 to Teodulo, it

follows that the latter also failed to prove thathe possessed the land adversely, exclusivelyand in the concept of an owner, a vital requisitebefore one may acquire title by acquisitiveprescription. In conclusion, the Court of Appealsruled that even assuming further that Teodulohad a right over the property, his cause ofaction is now barred by laches because he filedan action only in 1992 notwithstandingknowledge as early as 1970 of the issuance oftitle in the name of spouses Cipriano Hernandezand Julia Zoleta. The decretal portion of thedecision states:

WHEREFORE, premises considered, the instantappeal is GRANTED. The assailed March 31,1997 decision of the Regional Trial Court ofCalauag, Quezon, Branch 63, in Civil Case No.C-964 is hereby REVERSED and SET ASIDE. Nocosts.

SO ORDERED.25

Hence, the instant appeal.

The issue to be resolved is to whom should LotNo. 379 be awarded? To petitioners whopossessed and cultivated the lot since 1929 upto the present, but do not have a certificate oftitle over the property, or to respondents whohave a certificate of title but are not inpossession of the controverted lot?cralawlibrary

In an action for quieting of title, the court istasked to determine the respective rights of theparties so that the complainant and thoseclaiming under him may be forever free fromany danger of hostile claim.26 Under Article



47627 of the Civil Code, the remedy may beavailed of only when, by reason of anyinstrument, record, claim, encumbrance orproceeding, which appears valid but is, in fact,invalid, ineffective, voidable or unenforceable, acloud is thereby cast on the complainant's titleto real property or any interest therein. Article477 of the same Code states that the plaintiffmust have legal or equitable title to, or interestin the real property which is the subject matterof the suit.

For an action to quiet title to prosper, twoindispensable requisites must concur, namely:(1) the plaintiff or complainant has a legal or anequitable title to or interest in the real propertysubject of the action; and (2) the deed, claim,encumbrance or proceeding claimed to becasting cloud on his title must be shown to bein fact invalid or inoperative despite its primafacieappearance of validity or legal efficacy.28

In Evangelista v. Santiago,29 it was held thattitle to real property refers to that upon whichownership is based. It is the evidence of theright of the owner or the extent of his interest,by which means he can maintain control and,as a rule, assert a right to exclusive possessionand enjoyment of the property.

In the instant case, we find that Teodulo'sopen, continuous, exclusive, notoriouspossession and occupation of Lot No. 379, inthe concept of an owner for more than 30 yearsvested him and his heirs title over the said lot.The law applicable at the time Teodulocompleted his 30-year possession (from 1929to 1959) of Lot No. 379, in the concept of anowner was Sec. 48(b) of Commonwealth ActNo. 141 or the Public Land Act, as amended by

Republic Act (RA) No. 1942, effective June 22,195730 which provides:

Sec. 48. The following-described citizens of thePhilippines, occupying lands of the publicdomain or claiming to own any such lands or aninterest therein, but whose titles have not beenperfected or completed, may apply to the Courtof First Instance (now Regional Trial Courts) ofthe province where the land is located forconfirmation of their claims and the issuance of

a certificate of title thereafter, under the LandRegistration Act (now Property RegistrationDecree), to wit:

x x x x

(b) Those who by themselves or through theirpredecessors-in-interest have been, incontinuous, exclusive, and notorious possessionand occupation of agricultural lands of thepublic domain, under a bona fide claim ofacquisition or ownership, for at least thirtyyears immediately preceding the filing of theapplication for confirmation of title, exceptwhen prevented by war or force majeure. Thoseshall be conclusively presumed to haveperformed all the conditions essential to agovernment grant and shall be entitled to acertificate of title under the provisions of thischapter.

When the conditions specified therein arecomplied with, the possessor is deemed to haveacquired, by operation of law, a right to agovernment grant, without necessity of acertificate of title being issued, and the landceases to be part of the public domain. Theconfirmation proceedings would, in truth belittle more than a formality, at the most limitedto ascertaining whether the possession claimedis of the required character and length of time;and registration thereunder would not confertitle, but simply recognize a title alreadyvested. The proceedings would not originallyconvert the land from public to private land, butonly confirm such conversion already effectedby operation of law from the moment therequired period of possession becamecomplete.31

In the instant case, the trial court gave full faithand credence to the testimony of Teodulo andhis witnesses that his (Teodulo's) possession ofthe land since 1929 was open, continuous,

adverse, exclusive, and in the concept of anowner. It is a settled rule in civil cases as wellas in criminal cases that in the matter ofcredibility of witnesses, the findings of the trialcourts are given great weight and highestdegree of respect by the appellate courtconsidering that the latter is in a better positionto decide the question, having heard thewitnesses themselves and observed theirdeportment and manner of testifying during thetrial.32

A careful examination of the evidence on recordshows that Teodulo possessed and occupied LotNo. 379 in the concept of an owner. Since1929, Teodulo cultivated the controverted land,



built his home, and raised his 11 childrenthereon. In 1957, he filed a homesteadapplication over Lot No. 379 but failed topursue the same.33 After his demise, all his 11children, the youngest being 28 years old,34continued to till the land. From 1929 to 1960,Santiago never challenged Teodulo's possessionof Lot No. 379 nor demanded or received theproduce of said land. For 31 years Santiagonever exercised any act of ownership over LotNo. 379. And, in 1960, he confirmed that he isno longer interested in asserting any right overthe land by executing in favor of Teodulo aquitclaim.

Indeed, all these prove that Teodulo possessedand cultivated the land as owner thereof since1929. While the oral donation in 1929 as wellas the 1960 quitclaim ceding Lot No. 379 toTeodulo are void for non-compliance with theformalities of donation, they neverthelessexplain Teodulo and his family's long years ofoccupation and cultivation of said lot and thenature of their possession thereof.

In Bautista v. Poblete,35 the Court sustainedthe registration of a parcel of land in the nameof the successors-in-interest of the doneenotwithstanding the invalidity of the donationinasmuch as said donee possessed the propertyin the concept of an owner. Thus'

There is no question that the donation inquestion is invalid because it involves animmovable property and the donation was notmade in a public document as required byArticle 633 of the old Civil Code, in connectionwith Article 1328 of the same Code (concerninggifts propter nuptias), but it does not followthat said donation may not serve as basis of

acquisitive prescription when on the strengththereof the donee has taken possession of theproperty adversely and in the concept of owner.

It follows therefore that Teodulo's open,continuous, exclusive, and notorious possessionand occupation of Lot No. 379 for 30 years, orfrom 1929 to 1959 in the concept of an owner,earned him title over the lot in accordance withSec. 48 (b) of the Public Land Act. Consideringthat Lot No. 379 became the private property of

Teodulo in 1959, Santiago had no more right tosell the same to spouses Cipriano Hernandezand Julia Zoleta in 1964. Consequently, thelatter and herein respondents did not acquire

ownership over Lot No. 379 and the titlesissued in their name are void.

Interestingly, respondents adopted the theorythat Santiago acquired title over Lot No. 379not from the April 21, 1925 Decision of the CFIof Tayabas which merely recognized his rightsover said lot, but from his more than 30 yearsof possession since 1925 up to 1964 when hesold same lot to their (respondents)predecessors-in-interest, the spouses CiprianoHernandez and Julia Zoleta. On the basis ofsaid claim, said spouses filed an action for, andsuccessfully obtained, confirmation of imperfecttitle over Lot No. 379, pursuant to Sec. 48 (b)of the Public Land Act.

However, the records do not support theargument of respondents that Santiago'salleged possession and cultivation of Lot No.379 is in the nature contemplated by the PublicLand Act which requires more than constructivepossession and casual cultivation. As explainedby the Court in Director of Lands v.Intermediate Appellate Court:36

It must be underscored that the law speaks of"possession and occupation." Since these wordsare separated by the conjunction and, the clearintention of the law is not to make onesynonymous with the other. Possession isbroader than occupation because it includesconstructive possession. When, therefore, thelaw adds the word occupation, it seeks todelimit the all-encompassing effect ofconstructive possession. Taken together withthe words open, continuous, exclusive andnotorious, the word occupation serves tohighlight the fact that for one to qualify underparagraph (b) of the aforesaid section, his

possession of the land must not be mere fiction.As this Court stated, through then Mr. JusticeJose P. Laurel, in Lasam v. The Director ofLands:

"x x x Counsel for the applicant invokes thedoctrine laid down by us in Ramos v. Director ofLands (39 Phil. 175, 180). (See also Rosales v.Director of Lands, 51 Phil. 302, 304). But itshould be observed that the application of thedoctrine of constructive possession in that case

is subject to certain qualifications, and thiscourt was careful to observe that among thesequalifications is 'one particularly relating to thesize of the tract in controversy with reference tothe portion actually in possession of the



claimant.' While, therefore, 'possession in theeyes of the law does not mean that a man hasto have his feet on every square meter ofground before it can be said that he is inpossession', possession under paragraph 6 ofsection 54 of Act No. 926, as amended byparagraph (b) of section 45 of Act No. 2874, isnot gained by mere nominal claim. The mereplanting of a sign or symbol of possessioncannot justify a Magellan-like claim of dominionover an immense tract of territory. Possessionas a means of acquiring ownership, while it maybe constructive, is not a mere fiction x x x."

Earlier, in Ramirez v. The Director of Lands, thisCourt noted:

"x x x The mere fact of declaring uncultivatedland for taxation purposes and visiting it everyonce in a while, as was done by him, does notconstitute acts of possession."

In the instant case, Santiago's short-livedpossession and cultivation of Lot No. 379 couldnot vest him title. While he tilled the land in1925, he ceased to possess and cultivate thesame since 1928. He abandoned the propertyand allowed Teodulo to exercise all acts ofownership. His brief possession of Lot No. 379could not thus vest him title. Nemo potest plus

juris ad alium transferre quam ipse habet. Noone can transfer a greater right to another thanhe himself has. Hence, spouses CiprianoHernandez and Julia Zoleta and hereinrespondents did not acquire any right over thequestioned lot and the title issued in theirnames are void, because of the legal truismthat the spring cannot rise higher than thesource.37

Furthermore, spouses Cipriano Hernandez andJulia Zoleta cannot be considered as purchasersin good faith because they had knowledge offacts and circumstances that would impel areasonably cautious man to make suchinquiry.38 The Court notes that Santiago wasnot residing in Lot No. 379 at the time of thesale. He was already 81 years old, too old tocultivate and maintain an 18-hectare land.These circumstances should have prompted thespouses to further inquire who was actually

tilling the land. Had they done so, they wouldhave found that Teodulo and his family are theones possessing and cultivating the land asowners thereof.

In the same vein, respondents could not beconsidered as third persons or purchasers ingood faith and for value or those who buy theproperty and pay a full and fair price for thesame39 because they merely inherited Lot No.379 from spouses Cipriano Hernandez and JuliaZoleta.

Then too, even if Santiago acquired title overLot No. 379 by virtue of the April 21, 1925Decision of the CFI of Tayabas, and not onaccount of his alleged 30-year possessionthereof, we will still arrive at the sameconclusion. This is so because the declaration ofthis Court that petitioners are the rightfulowners of the controverted lot is based onTeodulo's own possession and occupation ofsaid lot under a bona fide claim of acquisition ofownership, regardless of the manner by whichSantiago acquired ownership over same lot.

On the issue of prescription, the settled rule isthat an action for quieting of title isimprescriptible, as in the instant case, wherethe person seeking relief is in possession of thedisputed property. A person in actualpossession of a piece of land under claim ofownership may wait until his possession isdisturbed or his title is attacked before takingsteps to vindicate his right, and that hisundisturbed possession gives him thecontinuing right to seek the aid of a court ofequity to ascertain and determine the nature ofthe adverse claim of a third party and its effecton his title.40 Considering that petitionersherein continuously possessed Lot No. 379since 1929 up to the present, their right toinstitute a suit to clear the cloud over their titlecannot be barred by the statute of limitations.

Neither could petitioners' action be barred bylaches because they continuously enjoyed thepossession of the land and harvested the fruitsthereof up to the present to the exclusion ofand without any interference from respondents.They cannot therefore be said to have slept ontheir rights as they in fact exercised the sameby continuously possessing Lot No. 379.

On the contrary, we find that it is respondentswho are actually guilty of laches. Though not

specifically pleaded, the Court can properlyaddress the issue of laches based onpetitioners' allegation in the complaint that"[n]either spouses Cipriano Hernandez and JuliaZoleta x x x nor [herein respondents] had taken



steps to possess or lay adverse claim to saidparcel of land from the date of their registrationof title in November, 1965 up to thepresent."41 Such averment is sufficient toimpute abandonment of right on the part ofrespondents. At any rate, laches need not bespecifically pleaded. On its own initiative, acourt may consider it in determining the rightsof the parties.42

The failure or neglect, for an unreasonablelength of time to do that which by exercisingdue diligence could or should have been doneearlier constitutes laches. It is negligence oromission to assert a right within a reasonabletime, warranting a presumption that the partyentitled to assert it has either abandoned it ordeclined to assert it. While it is by expressprovision of law that no title to registered landin derogation of that of the registered ownershall be acquired by prescription or adversepossession, it is likewise an enshrined rule thateven a registered owner may be barred fromrecovering possession of property by virtue oflaches.43

In applying the doctrine of laches, we haveruled that where a party allows the followingnumber of years to lapse from the emergenceof his cause of action without enforcing hisclaim, laches sets in: 36 years; 12 years; 50years; 34 years; 37 years; 32 years; 20 years;47 years; 11 years; 25 years; 40 years; 19years; 27 years; 7 years; 44 years; 4 years;and 67 years.44

The elements of laches are: (1) conduct of aparty on the basis of which the other partyseeks a remedy; (2) delay in asserting one'srights, despite having had knowledge or notice

of the other party's conduct and having beenafforded an opportunity to institute a suit; (3)lack of knowledge or notice on the part of aparty that the person against whom laches isimputed would assert the right; and (4) injuryor prejudice to the party asserting laches in theevent the suit is allowed to prosper.45

All these elements are present in this case.Petitioners' continuous possession andoccupation of Lot No. 379 should have

prompted the respondents to file an actionagainst petitioners, but they chose not to.Respondents cannot deny knowledge of saidpossession by petitioners as they even assertedin their Answer that in 1970, Teodulo ousted

the tenant they (respondents) instituted in thelot. From 1970 up to the filing of petitioners'complaint in 1992, or after 22 years,respondents never bothered to assert any rightover Lot No. 379. Respondent JoaquinHernandez testified that he and his siblings hada plan to convert the land into a grazing landfor cattle but decided to put it off for fear of therampant operations of the New People's Armybetween the years 1965-1970. However, evenafter said years, respondents took no step toimplement their plan. Worse, among thesiblings of spouses Cipriano Hernandez andJulia Zoleta who are all living in thePhilippines,46 only Joaquin Hernandez visitedthe land and only thrice, i.e., once in eachyears of 1964, 1966 and 1970. Thereafter, notone of them paid visit to Lot No. 379, up to the

time Joaquin Hernandez testified in 1996,47despite the fact that two of them are living onlyin Calauag, Quezon; one in Agdangan,Quezon;48 and two in Lucena City.49 Neitherdid they send a notice or correspondence topetitioners invoking their right over theproperty. From all indications, the late spousesCipriano Hernandez and Julia Zoleta as wellrespondents, have neglected Lot No. 379. Wereit not for this action instituted by petitioners in1992, their conflicting claims over the propertycould not have been settled. It goes withoutsaying that to lose a property that has been inthe family from 1929 up to the present, or for77 years will certainly cause irreparablepecuniary and moral injury to petitioners,especially so if the same ancestral land will belost under most unfair circumstances in favor ofrespondents who appear to have no realinterest in cultivating the same.

Finally, payment of taxes alone will not savethe day for respondents. Only a positive andcategorical assertion of their supposed rightsagainst petitioners would rule out theapplication of laches. It means taking theoffensive by instituting legal means to wrestpossession of the property which, however, isabsent in this case. Respondents' payment oftaxes alone, without possession could hardly beconstrued as an exercise of ownership. Whatstands out is their overwhelming passivity byallowing petitioners to exercise acts ofownership and to enjoy the fruits of thelitigated lot for 22 years without anyinterference.



In sum, the Court finds that Lot No. 379 shouldbe adjudicated in favor of petitioners.

One last point. Notwithstanding this Court'sdeclaration that Lot No. 379 should be awardedin favor of petitioners, their title over the sameis imperfect and is still subject to the filing ofthe proper application for confirmation of titleunder Section 48 (b) of the Public Land Act,where the State and other oppositors may begiven the chance to be heard. It was thereforepremature for the trial court to direct theRegister of Deeds of Lucena City to issue acertificate of title in the name of petitioners.

Nevertheless, the imperfect title of petitionersover Lot No. 379 is enough to defeat thecertificate of title issued to respondents.50

WHEREFORE, the petition is GRANTED and theMay 26, 2005 Decision of the Court of Appealsin C.A. GR. CV No. 57053, is REVERSED andSET ASIDE. The March 31, 1997 Decision of theRegional Trial Court of Calauag, Quezon, Branch63, in Civil Case No. C-964, awarding Lot No.379 in favor petitioners and ordering thecancellation of respondents' Transfer Certificateof Title No. T - 237330, is REINSTATED with theMODIFICATION deleting the trial court's orderdirecting the Register of Deed of Lucena City toissue a certificate of title in the name ofpetitioners.

SO ORDERED.

G.R. No. L-31711 September 30, 1971

ANTONIO J. VILLEGAS as Mayor of the Cityof Manila and MANUEL D. LAPID, Petitioners-

Appellants, v. ABELARDO SUBIDO as CivilService Commissioner, EDUARDO Z.

ROMUALDEZ as Secretary of Finance, JOSER. GLORIA as Acting Asst. City Treasurer ofManila, and HON. CONRADO M. VASQUEZas Presiding Judge of Branch V, Court ofFirst Instance of Manila, Respondents-

Appellees.

FERNANDO, J. :

Petitioner Antonio J. Villegas, in this appealfrom a decision of the lower court dismissing aspecial civil action for prohibition, quo

warranto and mandamus would lay claim as theMayor of the City of Manila to the power ofappointment of the Assistant City Treasurer towhich office the other petitioner, Manuel D.Lapid, was by him named even if under its

Charter 1 such a prerogative is expressly vestedin the President of the Philippines. 2 He wouldinvoke a provision in the Decentralization Act tothe effect that all "other employees, exceptteachers, paid out of provincial, city ormunicipal general funds, and other local fundsshall, subject to civil service law, rules andregulations, be appointed by the provincialgovernor, city or municipal mayor uponrecommendation of the office headconcerned." 3 He is not deterred by the rathergeneral and in explicit character of suchstatutory language as he contends for aconstruction rather generous, if notlatitudinarian, in scope purportedly inconsonance with the avowed purpose of the Actof enlarging boundaries of local autonomy.Respondent Abelardo Subido, who wasproceeded against as Commissioner of the CivilService, 4 takes a stand diametrically oppositenot only because there is no legal basis for sucha claim in the light of what is expresslyordained in the City Charter but also becausesuch an interpretation of the provision relatedupon would disregard the well-settled doctrinethat implied repeals are not favored. The lowercourt, in a well-written decision by theHonorable Conrado M. Vasquez, accepted sucha view. After a careful study of the matter, wecannot discern any error. Weaffirm.chanroblesvirtualawlibrary chanroblesvirtual law library

The facts as found by the lower court follows:"In a letter dated June 3, 1968, respondentEduardo Z. Romualdez, Secretary of Finance,authorized respondent Jose R. Gloria of theOffice of the City Treasurer of Manila to assumethe duties of Assistant City Treasurer effectiveJune 1, 1968, vice Felino Fineza who retiredfrom the government service on May 31, 1968.In administrative Order No. 40, series of 1968,dated June 17, 1968, petitioner Antonio J.Villegas, Mayor of the City of Manila, directedrespondent Gloria to desist and refrain from

exercising the duties and functions of theAssistant City Treasurer,' on the ground thatrespondent Romualdez "is not empowered tomake such designation." On January 1, 1969,Mayor Villegas, appointed petitioner Manuel D.Lapid, chief of the cash division of the Office ofthe City Treasurer of Manila, as Assistant CityTreasurer. In a 1st endorsement datedFebruary 14, 1969, respondent AbelardoSubido, Commissioner of Civil Servicedisapproved the appointment of Lapid, basinghis action, on an opinion of the Secretary ofJustice dated September 19, 1968 to the effectthat the appointment of Assistant ProvincialTreasurers is still governed by Section 2088 (A)of the Revised Administrative Code, and not bySection 4 of the Decentralization Law, RepublicAct No. 5185." 5 chanrobles virtual law library



Thereafter on February 25, 1969, to quoteanew from the appealed decision: "MayorVillegas and Manuel D. Lapid filed the instantpetition for prohibition, quowarranto andmandamus , with application forwrit of preliminary injunction, praying that

judgment be rendered to declare illegal andvoid ab initio the authorization given byrespondent Romualdez to respondent Gloria toassume the duties of assistant city treasurer ofManila, and that a writ of mandamus be issuedto respondent Commissioner of Civil ServiceSubido commanding him to approve theappointment of petitioner Lapid to the saidoffice in accordance with the civil ServiceRules." 6 It was not until the filing of the petitionthat respondent Jose R. Gloria was nominatedby the President of the Philippines to theposition of Assistant City treasurer of Manilaand thereafter duly confirmed. After the casewas submitted for judgment on the pleadingsand the documentary exhibits stipulated by theparties, the court rendered its decision onAugust 4, 1969 dismissing the petition. Hencethis appeal by way ofcertiorari. chanroblesvirtualawlibrary chanroblesvirtual law library

With this Tribunal, as with the court below, thedecisive question is the applicable law. TheCharter of the City of Manila, enacted in 1949,in express terms did confer on the President ofthe Philippines, with the consent of theCommission on Appointments, the power toappoint the Assistant City Treasurer. 7 On theother hand, support for the petition is premisedon the expansive interpretation that would beaccorded the general provisions found in theDecentralization Act of 1967 to the effect that itis a city mayor who has the power to appoint allother employees paid out of city or local fundssubject to civil service law, rules andregulations. 8 chanrobles virtual law library

It is understandable why the choice for the

lower court was not difficult to make. What hasbeen so clearly ordained in the Charter iscontrolling. It survives in the face of theassertion that the additional power grantedlocal officials to appoint employees paid out oflocal funds would suffice to transfer suchauthority to petitioner Mayor. A perusal of thewords of the statute, even if far from searchingwould not justify such an interpretation. This isall more evident, considering the fidelitymanifested by this Court to the doctrine thatlooks with less than favor on implied appeals.

The decision now on appeal, to repeat, must beaffirmed.chanroblesvirtualawlibrary chanroblesvirtual law library

1. The inherent weakness of the contention ofpetitioner Mayor that would seize upon thevesting of the appointing power of all other"employees" except teachers paid out of localfunds to justify his choice of petitioner ManuelD. Lapid as Assistant City Treasurer is readilydisclosed. The Revised Administrative Codedistinguishes one in that category from an"officer" to designate those "whose duties, notbeing of a clerical or manual nature, may beconsidered to involve the exercise of discretionin the performance of the function ofgovernment, whether such duties are preciselydefined by law or not." 9 Clearly, the Assistantand City Treasurer is an officer, not anemployee. Then, too, Section 4 of theDecentralization Act relied upon by petitionerCity Mayor specifically enumerates, the officialsand their assistants whom he can appoint,specifically excluding therefrom citytreasurers. 10 The expansive interpretationcontended for is thusunwarranted. chanroblesvirtualawlibrary chanrobles virtual law library

Nor is the case strengthened for petitioner CityMayor by the invocation of Pineda v.Claudio . 11 It is not to be denied that in theopinion of the Court, penned by Justice Castro,undue interference with the power andprerogatives of a local executive is sought to beavoided, considering his primary responsibilityfor efficient governmental administration. Whatis not to be ignored though is that such aprinciple was announced in connection with theappointment of a department head, the chief ofpolice, who necessarily must enjoy the fullestconfidence of the local executive, one moreoverwhose appointment is expressly vested in thecity mayor. The principle therein announceddoes not extend as far as the choice of anassistant city treasurer whose functions do notrequire that much degree of confidence, not tomention the specific grant of such authority tothe President. Equally unavailing then

is Villegas v. Subido , 12

where this Court,through the then Justice Capistrano, recognizedthat the choice of who the city legal officershould be rests solely on the city mayor, suchan office requiring as it does the highest degreeof confidence. It bears repeating that thesituation in the case before us is of a differentcategory. The decision appealed from, then, isnot to be impugned as a failure to abide bycontrolling pronouncements of thisTribunal.chanroblesvirtualawlibrary chanroblesvirtual law library

2. Much less is reversal of the lower courtdecision justified on the plea that the aforesaidprovision in the Decentralization Act had theeffect of repealing what is specifically ordainedin the city charter. It has been the constant



holding of this Court that repeals by duplicationare not favored and will not be so declaredunless it be manifest that the legislature sointended. Such a doctrine goes as far back asUnited States v. Reyes, a 1908 decision. 13 It isnecessary then before such a repeal is deemedto exist that it be shown that the statutes orstatutory provisions deal with the same subjectmatter and that the latter be inconsistent withthe former. 14 There must be a showing ofrepugnancy clear and convincing in character.The language used in the latter statute must besuch as to render it irreconcilable with what hadbeen formerly enacted. An inconsistency thatfalls short of that standard does not suffice.What is needed is a manifest indication of thelegislative purpose to repeal. 15 chanroblesvirtual law library

More specifically, a subsequent statute, generalin character as to its terms and application, isnot to be construed as repealing a special orspecific enactment, unless the legislativepurpose to do so is manifest. This is so even ifthe provisions of the latter are sufficientlycomprehensive to include what was set forth inthe special act. This principle has likewise beenconsistently applied in decisions of this Courtfrom Manila Railroad Co. v. Rafferty , 16 decidedas far back as 1919. A citation from an opinionof Justice Tuason is illuminating. Thus: "Fromanother angle the presumption against repeal isstronger. A special law is not regarded ashaving been amended or repealed by a generallaw unless the intent to repeal or alter ismanifest. Generalia specialibus non derogant .And this is true although the terms of thegeneral act are broad enough to include thematter in the special statute. ... At any rate, inthe event harmony between provisions of thistype in the same law or in two laws isimpossible, the specific provision controlsunless the statute, considered in its entirety,indicates a contrary intention upon the part ofthe legislature. ... A general law is one which

embraces a class of subjects or places and doesnot omit any subject or place naturallybelonging to such class while a special act isone which relates to particular persons orthings of a class. 17 chanrobles virtual lawlibrary

WHEREFORE, the lower court decision of August4, 1969 is affirmed. Without pronouncement asto costs.

[G.R. No. L-38736. May 21, 1984.]

FELIPE G. TAC-AN, Petitioner , v.HONORABLE COURT OF APPEALS andELEUTERIO ACOPIADO, MAXIMINOACOPIADO, the SPOUSES JESUS

PAGHASIAN and PILARLIBETARIO, Respondents .

SYLLABUS

CIVIL LAW; CONTRACTS; REQUIREMENTS FORVALIDITY THEREOF; CONTRACTS WITH NON-CHRISTIANS GOVERNED BY ADMINISTRATIVECODE OF MINDANAO AND SULU.— Section 145of the Administrative Code of Mindanao andSulu requires, among others, the approval ofthe provincial governor of contracts oragreements with Non-Christians otherwise theyare null and void. Revocation by the provincialgovernor of his approval on the ground that hissignature was obtained thru a falserepresentation renders such agreements orcontracts null and void.

D E C I S I O N

ABAD SANTOS, J. :

The petitioner, Felipe G. Tac-An, is a lawyerwhose services were engaged by the brothersEleuterio Acopiado and Maximino Acopiado whowere accused of frustrated murder and theft oflarge cattle before the Municipal Court of New

Piñan, Zamboanga del Norte in March,1960.chanrobles virtual lawlibrary

On April 4, 1960, Tac-An caused a documententitled, "Deed of Quitclaim" to be thumb-marked by the Acopiado brothers whereby forthe sum of P1,200.00 representing his fees astheir lawyer in the criminal cases, theyconveyed to him a parcel of land with an areaof three hectares. The document wasacknowledged before Notary Public PacificoCimafranca on the same date who explained itscontents to the Acopiados.

On April 6, 1960, or two days after theexecution of the deed, the Acopiados told Tac-An that they were terminating his servicesbecause their wives and parents did not agreethat the land be given to pay for his services.They also said that they had hired anotherlawyer, a relative, to defend them. But Tac-Ancontinued to represent them.

In the case for frustrated murder, theAcopiados were acquitted. The cases for theft oflarge cattle were dismissed due to thedesistance of the complainants.

On April 2, 1961, Eleuterio sold his share of theland previously conveyed to Tac-An to Jesus



Paghasian and Pilar Libetario but the latter didnot take possession thereof.

In June, 1964, Tac-An appointed Irineo Villejo,a barrio captain, as his overseer in the land. OnJuly 2, 1964, Tac-An also secured the approvalof the Provincial Governor of Zamboanga delNorte to the Deed of Quitclaim. And on October7, 1964, Tac-An filed a complaint against theAcopiado brothers, Paghasian and Libetario inthe CFI of Zamboanga del Norte. He prayedthat he be declared the owner of the land; thatthe sale made in favor of Paghasian andLibetario be annulled; and that he be paiddamages, attorney’s fees, etc.

The Court of First Instance decided in favor ofTac-An whereupon the Acopiados, Et. Al.appealed to the Court of Appeals.

The Court of Appeals voided the transfer of theland to Tac-An but held that for his services inthe criminal cases he was entitled to the agreedupon amount of P1,200.00. The judgment ofthe Court of Appeals reads asfollows: jgc:chanrobles.com.ph

"WHEREFORE, the judgment appealed from ishereby reversed and set aside. In lieu thereof,another one is rendered ordering thedefendants Acopiados to pay the plaintiff thesum of P1,200.00 with interest at a legal ratefrom the date of the finality of this judgment

until full payment thereof. No pronouncementas to costs." (Rollo, pp. 40-41.)

Petitioner Tac-An prays that the decision of theCourt of Appeals be set aside and that thedecision of the Court of First Instance be upheldinstead.

The petition is not impressed with merit.

The Court of Appeals found as a fact that theAcopiado brothers fully understood the tenor of

the Deed of Quitclaim which they executed. Butthe Court of Appeals also found as a fact thatthe Acopiado brothers are Non-Christians, morespecifically Subanons, and that each is marriedto a Subanon. And because they are Non-Christians, the Court of Appeals applied Section145 of the Administrative Code of Mindanao andSulu which reads asfollows: jgc:chanrobles.com.ph

"Sec. 145. Contracts with Non-Christiansrequisites. — Save and except contracts of saleor barter of personal property and contracts ofpersonal service comprehended in chapterseventeen hereof no contract or agreementshall be made in the Department by any personwith any Moro or other non-Christian tribe orportion thereof the Department or with any

individual Moro or other non-Christianinhabitants of the same for the payment ordelivery of money or other things of value inpresent or in prospective, or in the manneraffecting or relating to any real property, unlesssuch contract or agreement be executed andapproved as follows: chanrob1es virtual 1awlibrary

x x x

"(b) It shall be executed before a judge of acourt of record, justice or auxilliary justice ofthe peace, or notary public, and shall bear theapproval of the provincial governor wherein thesame was executed or his representative dulyauthorized in writing for such purpose, indorsedupon it." cralaw virtua1aw library

It should be stated that under Section 146 ofthe same Code, contracts or agreements madein violation of Sec. 145 shall be "null andvoid."cralaw virtua1aw library

It should be recalled that on July 2, 1964, Tac-An secured the approval of the ProvincialGovernor of Zamboanga del Norte to the Deedof Quitclaim and that should have satisfied therequirement of Sec. 145 of the AdministrativeCode for Mindanao and Sulu. But it appearsthat on April 12, 1965, while Tac- An’s suit waspending in the trial court, the Governor of

Zamboanga del Norte revoked his approval forthe reasons stated therein.

The petitioner now asserts that the revocationof the approval which had been given by theProvincial Governor has no legal effect andcannot affect his right to the land which hadalready vested. But as Justice Conrado M.Vasquez, with Justices Mateo Canonoy andAmeurfina M. Herrera concurring,said: jgc:chanrobles.com.ph

"The approval by Provincial Governor FelipeArcuna appearing on the face of the Deed ofQuitclaim (Exh. "E") made on July 2, 1964 mayno longer be relied upon by the plaintiff in viewof the revocation thereof by the same official onApril 12, 1965 (Exh. 4). The revocation wasbased on the ground that the signature ofGovernor Azcuna was obtained thru a falserepresentation to the effect that the allegedtransaction was legal and voluntary when intruth and in fact, as found out later, the saidparcel of land was the subject matter of a courtlitigation; and, moreover, the non-Christianvendors were not brought before him forinterrogation, confirmation or ratification of thealleged deed of quitclaim. The fact that therevocation was made after the filing of instantaction on October 10, 1964 does not vitiate the



aforesaid action of the Provincial Governor.Significantly, no attempt was made to disprovethe truth of the reasons stated in the certificateof revocation (Exh. 4)." (Rollo, p. 37.)

The petitioner also argues that theAdministrative Code of Mindanao and Sulu wasrepealed on June 19, 1965 by Republic Act No.4252, hence the approval of the ProvincialGovernor became unnecessary Suffice it to saythat at times material to the case, i.e. when theDeed of Quitclaim was executed, when theapproval by the Provincial Governor was givenand when the approval was revoked, Sections145 and 146 of the Administrative Code ofMindanao and Sulu were in full force and effectand since they were substantive in nature therepealing statute cannot be given retroactiveeffect. It should also be stated that the land inquestion must be presumed to be conjugal innature and since the spouses of the Acopiadobrothers did not consent to its transfer to thepetitioner, the transaction was at leastvoidable.

WHEREFORE finding the petition to be lacking inmerit, the same is hereby dismissed with costsagainst the petitioner. chanrobles law library :red

SO ORDERED.