Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 113092 September 1, 1994

MARTIN CENTENO, petitioner,
vs.
HON. VICTORIA VILLALON-PORNILLOS, Presiding Judge of the
Regional Trial Court of Malolos, Bulacan, Branch 10, and THE PEOPLE
OF THE PHILIPPINES, respondents.
Santiago V. Marcos, Jr. for petitioner.

REGALADO, J.:
It is indeed unfortunate that a group of elderly men, who were moved
by their desire to devote their remaining years to the service of their
Creator by forming their own civic organization for that purpose, should
find themselves enmeshed in a criminal case for making a solicitation
from a community member allegedly without the required permit from
the Department of Social Welfare and Development.
The records of this case reveal that sometime in the last quarter of
1985, the officers of a civic organization known as the Samahang
Katandaan ng Nayon ng Tikay launched a fund drive for the purpose of
renovating the chapel of Barrio Tikay, Malolos, Bulacan. Petitioner
Martin Centeno, the chairman of the group, together with Vicente Yco,
approached Judge Adoracion G. Angeles, a resident of Tikay, and

solicited from her a contribution of P1,500.00. It is admitted that the

solicitation was made without a permit from the Department of Social
Welfare and Development.
As a consequence, based on the complaint of Judge Angeles, an
information 1 was filed against petitioner Martin Centeno, together with
Religio Evaristo and Vicente Yco, for violation of Presidential Decree No.
1564, or the Solicitation Permit Law, before the Municipal Trial Court of
Malolos, Bulacan, Branch 2, and docketed as Criminal Case No. 2602.
Petitioner filed a motion to quash the information 2 on the ground that the
facts alleged therein do not constitute an offense, claiming that
Presidential Decree No. 1564 only covers solicitations made for charitable
or public welfare purposes, but not those made for a religious purpose such
as the construction of a chapel. This was denied 3 by the trial court, and
petitioner's motion for reconsideration having met the same fate, trial on
the merits ensued.
On December 29, 1992, the said trial court rendered judgment 4 finding
accused Vicente Yco and petitioner Centeno guilty beyond reasonable
doubt and sentencing them to each pay a fine of P200.00. Nevertheless,
the trial court recommended that the accused be pardoned on the basis of
its finding that they acted in good faith, plus the fact that it believed that
the latter should not have been criminally liable were it not for the
existence of Presidential Decree
No. 1564 which the court opined it had the duty to apply in the instant
case.
Both accused Centeno and Yco appealed to the Regional Trial Court of
Malolos, Bulacan, Branch 10. However, accused Yco subsequently
withdrew his appeal, hence the case proceeded only with respect to
petitioner Centeno. On May 21, 1993, respondent Judge VillalonPornillos affirmed the decision of the lower court but modified the
penalty, allegedly because of the perversity of the act committed which
caused damage and prejudice to the complainant, by sentencing
petitioner Centeno to suffer an increased penalty of imprisonment of 6
months and a fine of P1,000.00, without subsidiary imprisonment in

case of insolvency. 5 The motion for reconsideration of the decision was

denied by the court. 6
Thus it is that a fine of P200.00 imposed as a penalty by the lowest
court in the judicial hierarchy eventually reached this highest tribunal,
challenged on the sole issue of whether solicitations for religious
purposes are within the ambit of Presidential Decree No. 1564.
Quantitatively, the financial sanction is a nominal imposition but, on a
question of principle, it is not a trifling matter. This Court is gratified
that it can now grant this case the benefit of a final adjudication.
Petitioner questions the applicability of Presidential Decree No. 1564 to
solicitations for contributions intended for religious purposes with the
submissions that (1) the term "religious purpose" is not expressly
included in the provisions of the statute, hence what the law does not
include, it excludes;
(2) penal laws are to be construed strictly against the State and
liberally in favor of the accused; and (3) to subject to State regulation
solicitations made for a religious purpose would constitute an
abridgment of the right to freedom of religion guaranteed under the
Constitution.
Presidential Decree No. 1564 (which amended Act No. 4075, otherwise
known as the Solicitation Permit Law), provides as follows:
Sec. 2. Any person, corporation, organization, or
association desiring to solicit or receive contributions for
charitable or public welfare purposes shall first secure a
permit from the Regional Offices of the Department of
Social Services and Development as provided in the
Integrated Reorganization Plan. Upon the filing of a
written application for a permit in the form prescribed
by the Regional Offices of the Department of Social
Services and Development, the Regional Director or his
duly authorized representative may, in his discretion,
issue a permanent or temporary permit or disapprove

the application. In the interest of the public, he may in

his discretion renew or revoke any permit issued under
Act 4075.
The main issue to be resolved here is whether the phrase "charitable
purposes" should be construed in its broadest sense so as to include a
religious purpose. We hold in the negative.
I. Indeed, it is an elementary rule of statutory construction that the
express mention of one person, thing, act, or consequence excludes all
others. This rule is expressed in the familiar maxim "expressio unius est
exclusio alterius." Where a statute, by its terms, is expressly limited to
certain matters, it may not, by interpretation or construction, be
extended to others. The rule proceeds from the premise that the
legislature would not have made specified enumerations in a statute
had the intention been not to restrict its meaning and to confine its
terms to those expressly mentioned. 7
It will be observed that the 1987 Constitution, as well as several other
statutes, treat the words "charitable" and "religious" separately and
independently of each other. Thus, the word "charitable" is only one of
three descriptive words used in Section 28 (3), Article VI of the
Constitution which provides that "charitable institutions, churches and
personages . . ., and all lands, buildings, and improvements, actually,
directly, and exclusively used for religious, charitable, or educational
purposes shall be exempt from taxation." There are certain provisions in
statutes wherein these two terms are likewise dissociated and
individually mentioned, as for instance, Sections 26 (e) (corporations
exempt from income tax) and 28 (8) (E) (exclusions from gross income)
of the National Internal Revenue Code; Section 88 (purposes for the
organization of non-stock corporations) of the Corporation Code; and
Section 234 (b) (exemptions from real property tax) of the Local
Government Code.
That these legislative enactments specifically spelled out "charitable"
and "religious" in an enumeration, whereas Presidential Decree No. 1564

merely stated "charitable or public welfare purposes," only goes to show

that the framers of the law in question never intended to include
solicitations for religious purposes within its coverage. Otherwise, there
is no reason why it would not have so stated expressly.
All contributions designed to promote the work of the church are
"charitable" in nature, since religious activities depend for their support
on voluntary contributions. 8 However, "religious purpose" is not
interchangeable with the expression "charitable purpose." While it is true
that there is no religious purpose which is not also a charitable purpose,
yet the converse is not equally true, for there may be a "charitable"
purpose which is not "religious" in the legal sense of the term. 9 Although
the term "charitable" may include matters which are "religious," it is a
broader term and includes matters which are not "religious," and,
accordingly, there is a distinction between "charitable purpose" and
"religious purpose," except where the two terms are obviously used
synonymously, or where the distinction has been done away with by
statute.10 The word "charitable," therefore, like most other words, is
capable of different significations. For example, in the law, exempting
charitable uses from taxation, it has a very wide meaning, but under
Presidential Decree No. 1564 which is a penal law, it cannot be given such a
broad application since it would be prejudicial to petitioners.
To illustrate, the rule is that tax exemptions are generally construed
strictly against the taxpayer. However, there are cases wherein claims
for exemption from tax for "religious purposes" have been liberally
construed as covered in the law granting tax exemptions for "charitable
purposes." Thus, the term "charitable purposes," within the meaning of
a statute providing that the succession of any property passing to or for
the use of any institution for purposes only of public charity shall not be
subject to succession tax, is deemed to include religious purposes. 11 A
gift for "religious purposes" was considered as a bequest for "charitable use"
as regards exemption from inheritance tax. 12
On the other hand, to subsume the "religious" purpose of the
solicitation within the concept of "charitable" purpose which under

Presidential Decree
No. 1564 requires a prior permit from the Department of Social Services
and Development, under paid of penal liability in the absence thereof,
would be prejudicial to petitioner. Accordingly, the term "charitable"
should be strictly construed so as to exclude solicitations for "religious"
purposes. Thereby, we adhere to the fundamental doctrine underlying
virtually all penal legislations that such interpretation should be
adopted as would favor the accused.
For, it is a well-entrenched rule that penal laws are to be construed
strictly against the State and liberally in favor of the accused. They are
not to be extended or enlarged by implications, intendments, analogies
or equitable considerations. They are not to be strained by construction
to spell out a new offense, enlarge the field of crime or multiply
felonies. Hence, in the interpretation of a penal statute, the tendency
is to subject it to careful scrutiny and to construe it with such strictness
as to safeguard the rights of the accused. If the statute is ambiguous
and admits of two reasonable but contradictory constructions, that
which operates in favor of a party accused under its provisions is to be
preferred. The principle is that acts in and of themselves innocent and
lawful cannot be held to be criminal unless there is a clear and
unequivocal expression of the legislative intent to make them such.
Whatever is not plainly within the provisions of a penal statute should
be regarded as without its intendment. 13
The purpose of strict construction is not to enable a guilty person to
escape punishment through a technicality but to provide a precise
definition of forbidden acts. 14 The word "charitable" is a matter of
description rather than of precise definition, and each case involving a
determination of that which is charitable must be decided on its own
particular facts and circumstances. 15 The law does not operate in
vacuo nor should its applicability be determined by circumstances in the
abstract.
Furthermore, in the provisions of the Constitution and the statutes
mentioned above, the enumerations therein given which include the

words "charitable" and "religious" make use of the disjunctive "or." In its
elementary sense, "or" as used in a statute is a disjunctive article
indicating an alternative. It often connects a series of words or
propositions indicating a choice of either. When "or" is used, the various
members of the enumeration are to be taken separately. 16 Accordingly,
"charitable" and "religious," which are integral parts of an enumeration
using the disjunctive "or" should be given different, distinct, and disparate
meanings. There is no compelling consideration why the same treatment or
usage of these words cannot be made applicable to the questioned
provisions of Presidential Decree No. 1564.
II. Petitioner next avers that solicitations for religious purposes cannot
be penalized under the law for, otherwise, it will constitute an
abridgment or restriction on the free exercise clause guaranteed under
the Constitution.
It may be conceded that the construction of a church is a social concern
of the people and, consequently, solicitations appurtenant thereto
would necessarily involve public welfare. Prefatorily, it is not
implausible that the regulatory powers of the State may, to a certain
degree, extend to solicitations of this nature. Considering, however,
that such an activity is within the cloak of the free exercise clause
under the right to freedom of religion guaranteed by the Constitution,
it becomes imperative to delve into the efficaciousness of a statutory
grant of the power to regulate the exercise of this constitutional right
and the allowable restrictions which may possibly be imposed thereon.
The constitutional inhibition of legislation on the subject of religion has
a double aspect. On the one hand, it forestalls compulsion by law of the
acceptance of any creed or the practice of any form of worship.
Freedom of conscience and freedom to adhere to such religious
organization or form of worship as the individual may choose cannot be
restricted by law. On the other hand, it safeguards the free exercise of
the chosen form of religion. Thus, the constitution embraces two
concepts, that is, freedom to believe and freedom to act. The first is
absolute but, in the nature of things, the second cannot be. Conduct

remains subject to regulation for the protection of society. The freedom

to act must have appropriate definitions to preserve the enforcement
of that protection. In every case, the power to regulate must be so
exercised, in attaining a permissible end, as not to unduly infringe on
the protected
freedom. 17
Whence, even the exercise of religion may be regulated, at some slight
inconvenience, in order that the State may protect its citizens from
injury. Without doubt, a State may protect its citizens from fraudulent
solicitation by requiring a stranger in the community, before permitting
him publicly to solicit funds for any purpose, to establish his identity
and his authority to act for the cause which he purports to represent.
The State is likewise free to regulate the time and manner of
solicitation generally, in the interest of public safety, peace, comfort,
or convenience. 18
It does not follow, therefore, from the constitutional guaranties of the
free exercise of religion that everything which may be so called can be
tolerated. 19 It has been said that a law advancing a legitimate
governmental interest is not necessarily invalid as one interfering with the
"free exercise" of religion merely because it also incidentally has a
detrimental effect on the adherents of one or more religion. 20 Thus, the
general regulation, in the public interest, of solicitation, which does not
involve any religious test and does not unreasonably obstruct or delay the
collection of funds, is not open to any constitutional objection, even
though the collection be for a religious purpose. Such regulation would not
constitute a prohibited previous restraint on the free exercise of religion or
interpose an inadmissible obstacle to its exercise. 21
Even with numerous regulative laws in existence, it is surprising how
many operations are carried on by persons and associations who,
secreting their activities under the guise of benevolent purposes,
succeed in cheating and defrauding a generous public. It is in fact
amazing how profitable the fraudulent schemes and practices are to
people who manipulate them. The State has authority under the

exercise of its police power to determine whether or not there shall be

restrictions on soliciting by unscrupulous persons or for unworthy causes
or for fraudulent purposes. That solicitation of contributions under the
guise of charitable and benevolent purposes is grossly abused is a
matter of common knowledge. Certainly the solicitation of
contributions in good faith for worthy purposes should not be denied,
but somewhere should be lodged the power to determine within
reasonable limits the worthy from the unworthy. 22 The objectionable
practices of unscrupulous persons are prejudicial to worthy and proper
charities which naturally suffer when the confidence of the public in
campaigns for the raising of money for charity is lessened or
destroyed. 23 Some regulation of public solicitation is, therefore, in the
public interest. 24
To conclude, solicitation for religious purposes may be subject to
proper regulation by the State in the exercise of police power. However,
in the case at bar, considering that solicitations intended for a religious
purpose are not within the coverage of Presidential Decree No. 1564, as
earlier demonstrated, petitioner cannot be held criminally liable
therefor.
As a final note, we reject the reason advanced by respondent judge for
increasing the penalty imposed by the trial court, premised on the
supposed perversity of petitioner's act which thereby caused damage to
the complainant. It must be here emphasized that the trial court, in the
dispositive portion of its decision, even recommended executive
clemency in favor of petitioner and the other accused after finding that
the latter acted in good faith in making the solicitation from the
complainant, an observation with which we fully agree. After all,
mistake upon a doubtful and difficult question of law can be the basis
of good faith, especially for a layman.
There is likewise nothing in the findings of respondent judge which
would indicate, impliedly or otherwise, that petitioner and his coaccused acted abusively or malevolently. This could be reflective upon
her objectivity, considering that the complainant in this case is herself

a judge of the Regional Trial Court at Kalookan City. It bears stressing at

this point that a judge is required to so behave at all times as to
promote public confidence in the integrity and impartiality of the
judiciary, 25 should be vigilant against any attempt to subvert its
independence, and must resist any pressure from whatever source. 26
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE, and petitioner Martin Centeno is ACQUITTED of the offense
charged, with costs de oficio.
SO ORDERED.
Narvasa, C.J. and Puno, JJ., concur.

G.R. Nos. 136149-51

September 19, 2000

PEOPLE OF THE PHILIPPINES, appellee,

vs.
WALPAN LADJAALAM y MIHAJIL alias "WARPAN," appellant.

above-named accused, Walpan Ladjaalam being then the owner of a

residential house located at Rio Hondo,4 this City, conspiring and
confederating together, mutually aiding and assisting x x x his coaccused wife Nur-in Ladjaalam and Ahmad Sailabbi y Hajaraini, did then
and there wilfully, unlawfully and feloniously, maintain said house as a
den, where regulated drug [was] used in any form."5

DECISION
PANGANIBAN, J.:
Republic Act No. 8294 penalizes simple illegal possession of firearms,
provided that the person arrested committed "no other crime."
Furthermore, if the person is held liable for murder or homicide, illegal
possession of firearms is an aggravating circumstance, but not a
separate offense. Hence, where an accused was convicted of direct
assault with multiple attempted homicide for firing an unlicensed M-14
rifle at several policemen who were about to serve a search warrant,
he cannot be held guilty of the separate offense of illegal possession of
firearms. Neither can such unlawful act be considered to have
aggravated the direct assault.
The Case
Walpan Ladjaalam y Mihajil, also known as "Warpan," appeals before us
the September 17, 1998 Decision1 of the Regional Trial Court (RTC) of
Zamboanga City (Branch 16), which found him guilty of three out of the
four charges lodged against him.
Filed against appellant were four Informations,2 all signed by Assistant
Regional State Prosecutor Ricardo G. Cabaron and dated September 25,
1997. The first Information3 was for maintaining a den for the use of
regulated drugs. It reads as follows:
"That on or about September 24, 1997, in the City of Zamboanga,
Philippines, and within the jurisdiction of this Honorable Court, the

The second Information6 charged appellant with illegal possession of

firearms and ammunition. We quote it below:
"That on or about September 24, 1997, in the City of Zamboanga,
Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, conspiring and confederating together, mutually
aiding and assisting with one another, without any justifiable reason or
purpose other than to use it in the commission of crime, did then and
there, wilfully, unlawfully, and feloniously have in their possession and
under their custody and control, the following weapons, to wit: one (1)
M14 rifle with SN 1555225 with magazines and seven (7) rounds of live
ammunition; two (2) magazines with twenty (20) and twenty[-one] (21)
rounds of live [ammunition]; one (1) homemade caliber .38 revolver
with five (5) live ammunition; one (1) M-79 (single) rifle with pouch and
with five (5) empty shell[s]; one (1) home made caliber .38 with SN311092 with five live ammunition and one empty shell of [a] cal. 38 x x
x Smith and Wesson; two (2) .38 Caliber paltik revolver with Serial
Number 311092 and one defaced M79 grenade launcher paltik, without
first having obtained the necessary license and or permit therefor from
authorities concerned, in flagrant violation of the aforementioned law." 7
The third Information,8 for multiple attempted murder with direct
assault, was worded thus:
"That on or about September 24, 1997, in the City of Zamboanga,
Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused being then armed with M-14 Armalite Rifles, M-16
Armalite Rifles and other assorted firearms and explosives, conspiring

and confederating together, mutually aiding and assisting x x x one

another and with intent to kill, did then and there wilfully, unlawfully
and feloniously try and attempt to kill SPO1 WILLIAM B. JONES, JR.,
PO3 ENRIQUE C. RIVERA[,] SPO1 AMADO A. MIRASOL, JR., and SPO1
RICARDO J. LACASTESANTOS, in the following manner, to wit: by then
and there firing their M-14 x x x Armalite Rifles, M-16 Armalite Rifles
and other assorted firearms and explosives, aimed and directed at the
fatal parts of the bodies of the above-named police officers, well
known to the accused as members of the Philippine National Police,
Zamboanga City Police Office, and as such, agents of a person in
authority, who at the time of the attack were engaged in the
performance of their duties, that is, on the occasion when said officers
were about to serve the Search Warrant legally issued by the Regional
Trial Court, this City, to the person of the accused thus commencing the
commission of crime of multiple murder directly by overt acts, and if
the accused did not accomplish their unlawful purpose, that is, to kill
the above-named Police Officers, it was not by reason of their own
voluntary desistance but rather because of the fact that all the abovenamed police officers were able to seek cover during the firing and
were not hit by the bullets and explosives fired by the accused and also
by the fact said police officers were able to wrestle with two (2) of the
accused namely: Walpan Ladjaalam y Mihajil a.k.a. Warpan and
Ahmad Sailabbi y Hajairani, who were subdued and subsequently placed
under arrest; whereas accused PO2 Nurhakim T. Hadjula was able to
make good his escape and has remained at-large."9
In the fourth Information, appellant was charged with illegal possession
of drugs.10
On December 21, 1997, the cases against Nur-in Ladjaalam and Ahmad
Sailabbi y Hajaraini were dismissed upon motion of the Office of the
City Prosecutor, which had conducted a reinvestigation of the cases as
ordered by the lower court. The accused were consequently released
from jail.

The arraignment of appellant on all four (4) charges took place on

January 6, 1998, during which he entered a plea of not guilty.11 After
pretrial, the assailed Decision was rendered, the dispositive part of
which reads:
"WHEREFORE, the Court finds accused WALPAN LADJAALAM y
MIHAJIL a.k.a. WARPAN "1. in Criminal Case No. 14636, GUILTY BEYOND REASONABLE
DOUBT of Violation of Section 15-A, Article III, of Republic Act
No. 6425, otherwise known as the Dangerous Drugs Act of 1972,
as amended, and SENTENCES said accused to the penalty
of RECLUSION PERPETUA and to pay a fine of FIVE HUNDRED
THOUSAND (P500,000.00) and to pay the costs;
"2. In Criminal Case No. 14637, NOT GUILTY of Violation of
Section 16, Article III, in relation to Section 21, Article IV, of
Republic Act No. 6425, otherwise known as the Dangerous Drugs
Act of 1972, as amended, and ACQUITS him of said crime with
costs de oficio;
"3. in Criminal Case No. 14638, GUILTY BEYOND REASONABLE
DOUBT of the crime of Illegal Possession of Firearm and
Ammunition penalized under Presidential Decree No. 1866, as
amended by Republic Act. No. 8294, and SENTENCES said
accused to suffer an indeterminate penalty of SIX (6) YEARS of
prision correccional as minimum to EIGHT (8) YEARS of prision
mayor as maximum and to pay a fine [of] THIRTY THOUSAND
(P30,000.00) and pay the costs;
"4. in Criminal Case No. 14639, GUILTY BEYOND REASONABLE
DOUBT of the crime of Direct Assault with Multiple Attempted
Homicide and SENTENCES said accused to an indeterminate
penalty of TWO (2) YEARS and FOUR (4) MONTHS of prision
correccional as minimum to SIX (6) YEARS of prision

correccional as maximum and to pay a fine of ONE THOUSAND

(P1,000.00) and to pay the costs." (emphasis in the original)
Hence, this appeal.12
The Facts

"SPO1 Mirasol, SPO2 Lacastesantos, PO3 Rivera, and PO3 Dela Pea who
were with the first group of policemen saw appellant fire an M14 rifle
towards them. They all knew appellant. When they were fired upon,
the group, together with SPO2 Gaganting, PO3 Obut and Superintendent
Soledad, sought cover at the concrete fence to observe the movements
at the second floor of the house while other policemen surrounded the
house (Ibid., March 4, 1998, pp. 50-51).

Prosecutions Version
In its Brief,13 the Office of the Solicitor General presents the facts in
this wise:
"At 1:45 p.m. of September 24, 1997, PO3 Allan Marcos Obut filed an
application for the issuance of a search warrant against appellant, his
wife and some John Does (Exh. C). After the search warrant was issued
about 2:30 p.m. of the same day, a briefing was conducted inside the
office of the Anti-Vice/Narcotics Unit of the Zamboanga City Police
Office in connection with the service of the search warrant. The
briefing was conducted by SPO2 Felipe Gaganting, Chief of the AntiVice/Narcotics Unit. During the briefing, PO3 Renato Dela Pea was
assigned as presentor of the warrant. SPO1 Ricardo Lacastesantos and
PO3 Enrique Rivera were designated to conduct the search. Other
policemen were assigned as perimeter guards (TSN, March 3, 1998, pp.
33-36).
"After the briefing, more than thirty (30) policemen headed by Police
Superintendent Edwin Soledad proceeded to the house of appellant and
his wife at Rio Hondo on board several police vehicles (TSN, March 4,
1998, p. 32; April 22, 1998, p. 54). Before they could reach appellants
house, three (3) persons sitting at a nearby store ran towards the house
shouting, [P]olice, raid, raid (Ibid., March 3, 1998, pp. 41, 43-44; April
23, 1998, p. 4). When the policemen were about ten (10) meters from
the main gate of the house, they were met by a rapid burst of gunfire
coming from the second floor of the house. There was also gunfire at
the back of the house (Ibid., March 5, 1998, pp. 14-16).

"In front of the house was an extension building connected to the

concrete fence (Ibid., pp. 45-46, 57-59, 73-76). Gaganting, Mirasol,
Lacastesantos, Gregorio, and Obut entered the door of the extension
building. Gaganting opened the main (steel) gate of the house. The
other members of the team then entered. Lacastesantos and Mirasol
entered the house through the main door and went inside the sala of
the ground floor while other policemen surrounded the house. Two (2)
old women were in the sala together with a young girl and three (3)
children. One of the old women took the children to the second floor
while the young girl remained seated at the corner (Ibid., pp. 19-21).
"Lacastesantos and Mirasol proceeded to the second floor where they
earlier saw appellant firing an M14 rifle at them through the window.
While they were going upstairs, appellant noticed their presence. He
went inside the bedroom and, after breaking and removing the
jalousies, jumped from the window to the roof of a neighboring house.
Seeing this, Mirasol rushed downstairs and asked help from the other
members of the raiding team to arrest appellant. Lacastesantos went to
the second floor and shouted to the policemen outside not to fire in the
direction of the second floor because there were children. Mirasol and
SPO1 Cesar Rabuya arrested appellant at the back of his house after a
brief chase (Ibid., pp. 21-23).
"At the second floor, Lacastesantos saw an M14 rifle (Exh. B-3) with
magazine on top of the sofa at the sala on the second floor (Ibid., P.
27). The rifle bore Serial No. 1555225. He removed the magazine from
the rifle and the bullet inside the chamber of the rifle. He counted
seventeen (17) live ammunition inside the magazine. He saw two (2)

more M14 rifle magazines on the sofa, one with twenty (20) live
ammunition (Exh. G-3) and another with twenty-one (21) live
ammunition (Exh. G-4). He likewise saw three (3) M16 rifle magazines
(Exh. G-2) in a corner at the second floor (TSN, March 5, 1998, pp. 2332, 53-57).
"After Lacastesantos and Mirasol entered appellants house, Rivera,
Dela Pea, Gregorio and Obut followed and entered the house. After
identifying themselves as members of the PNP Anti-Vice/Narcotics Unit,
Obut presented to the old women a copy of the search warrant. Dela
Pea and Rivera then searched appellants room on the ground floor in
the presence of Punong Barangay Elhano (TSN, March 3, 1998, pp. 4143). On top of a table was a pencil case (Exh. J) with fifty (50) folded
aluminum foils inside (Exhs. J-1 to J-50), each containing
methamphetamine hydrochloride or shabu.
"Other items were found during the search, namely, assorted coins in
different denominations (Exh. W; TSN, April 28, 1998, pp. 23-25), one
(1) homemade .38 caliber revolver (Exh. B-2) with five (5) live
[ammunition], one (1) M79 single rifle with [a] pouch containing five (5)
empty shells of an M79 rifle (Exh. B-4), and one (1) empty shell of an
M14 rifle (TSN, April 23, 1998, pp. 30-32).
"Rino Bartolome Locson was an informer of the Anti-Vice/Narcotics Unit
of the Zamboanga Police. [O]n the morning of September 24, 1997, he
was instructed by SPO2 Gaganting to go to appellants house to buy
shabu. Locson knew appellant as a seller of shabu (TSN, April 22,
1998, p. 5) and had been to appellants house about fifteen (15) times
before. He went to Rio Hondo and arrived at appellants house at 3:20
p.m. He bought P300.00 worth of shabu from appellant. The latter got
three (3) decks of shabu from his waist bag. Appellant instructed Locson
to go behind the curtain where there was a table. There were six (6)
persons already smoking. There was a lighted kerosene lamp made of a
medicine bottle placed on the table. They asked Locson to smoke
shabu and Locson obliged. He placed the three (3) decks of shabu he
bought on the table (Ibid., pp. 8-15).

"While they were smoking shabu, Locson heard gunfire coming from
appellants house. They all stood and entered appellants compound but
were instructed to pass [through] the other side. They met appellant at
the back of his house. Appellant told them to escape because the
police are already here. They scampered and ran away because there
were already shots. Locson jumped over the fence and ran towards the
seashore. Upon reaching a place near the Fisheries School, he took a
tricycle and went home (Ibid., pp. 17-19).
"The following day, September 25, 1997, he went to the police station
and executed an affidavit (Exh. M) narrating what transpired at
appellants house [o]n the afternoon of September 24, 1997.
"After the search and before returning to the police station, P03 Dela
Pea prepared a Receipt for Property Seized (Exh. P & 3) listing the
properties seized during the search. The receipt was signed by Dela
Pea as the seizure officer, and by Punong Barangay Hadji Hussin Elhano
and radio reporter Jun Cayona as witnesses. A copy of the receipt was
given to appellant but he refused to acknowledge the properties seized
(TSN, April 23, 1998, pp. 11-12).
"An examination conducted by Police Inspector Mercedes D. Diestro,
Forensic Chemist of the PNP Crime Laboratory Service Office 9, on the
paraffin casts taken from both hands of appellant yielded positive for
gunpowder nitrates (Exh. A-3), giving rise to the possibility that
appellant had fired a gun before the examination (TSN, March 3, 1998,
p. 11). Gunpowder residue examinations conducted on September 26,
1997 showed that the following firearms were fired (Exh. B-5): a .38
caliber revolver (homemade) with Serial No. 311092 (Exh. B-1), another
.38 caliber revolver (homemade) without a serial number (Exh. B-2), a
Cal. 7.62 mm M14 U.S. rifle with Serial No. 1555225 (Exh. B-3), and an
M79 rifle without a serial number (Exh. B-4). They were fired within
five (5) days prior to the examination (TSN, March 3, 1998, pp. 16-21).
"With respect to the crystalline substances, an examination conducted
by Police Inspector Susan M. Cayabyab, likewise a Forensic Chemist of

the PNP Crime Laboratory Service Office 9, on the fifty (50) pieces of
folded aluminum foils each containing white crystalline granules with a
total weight of 1.7426 grams (Exh. J-1 to J-50) yielded positive results
for the presence of methamphetamine hydrochloride (shabu) (Exh. L).
However, the examination of one (1) crystalline stone weighing 83.2674
grams (Exh. K) yielded negative results for the presence of
methamphetamine hydrochloride (Exh. L).
"The records of the Regional Operation and Plans Division of the PNP
Firearm and Explosive Section show that appellant had not
applied/filed any application for license to possess firearm and
ammunition or x x x been given authority to carry [a] firearm outside of
his residence (Exh. X)"14
Defenses Version
Appellant Ladjaalam agrees with the narration of facts given by the
lower court.15 Hence, we quote the pertinent parts of the assailed
Decision:
"Accused Walpan Ladjaalam y Mihajil a.k.a. Warpan, 30 years old,
married, gave his occupation as smuggling (tsn, p. 2, May 4, 1998). He
used to go to Labuan in Malaysia and bring cigarettes to the Philippines
without paying taxes (tsn, pp. 40-41, id). He said that his true name
[was] Abdul Nasser Abdurakman and that Warpan or Walpan Ladjaalam
[was] only his alias. However, he admitted that more people kn[e]w
him as Walpan Ladjaalam rather than Abdul Nasser Abdurakman (tsn.
pp. 39-40; 46-47, id). He testified that [o]n the afternoon of September
24, 1997, when he was arrested by the police, he was sleeping in the
house of Dandao, a relative of his wife. He was alone. He slept in
Dandaos house and not in his house because they ha[d] a sort of a
conference as Dandaos daughter was leaving for Saudi Arabia. He
noticed the presence of policemen in his neighborhood at Aplaya, Rio
Hondo when he heard shots. He woke up and went out of the house and
that was the time that he was arrested. He said he was arrested xxx
[at] the other side of my house; at the other side of the fence where I

was sleeping. xxx. At the back of my house (tsn, p. 7, id.). He does not
know who arrested him considering that the one who arrested me
does not have nameplate. He was arrested by four (4) persons. Not one
of those who arrested him testified in Court. He was handcuffed and
placed inside a jeep parked at Rio Hondo Elementary School. According
to him, he did not fire a gun at the policemen from [t]he second floor
of his house. He said the policemen [were] the one[s] who fire[d] at
us (tsn, p. 5, id.). If he fired a gun at the policemen for sure they
[would] die [b]ecause the door is very near x x x the vicinity of my
house. He does not own the M14 rifle (Exh. B-3) which according to
policemen, he used in firing at them. The gun does not belong to him.
He does not have a gun like that (tsn, p. 15, id.). A policeman also owns
an M14 rifle but he does not know the policeman (tsn, pp. 16-17, id).
He said that the M79 rifle (Exh. B-4), the three (3) empty M16 rifle
magazines (Exh. G; G-1 to G-2), the two (2) M14 magazines with
live ammunition (Exh. G-3; G-4); the two (2) caliber .38 revolvers
(Exhs. B-1; B-2), the fifty (50) aluminum foils each containing shabu
(Exhs. J-1 to J-50) placed inside a pencil case (Exh. J, the assorted
coins placed inside a blue bag (Exh. W) and the white crystalline stone
(Exh. K) all do not belong to him. He said that the policemen just
produced those things as their evidence. The firearms do not belong to
him. They were brought by the policemen (tsn, p. 43, May 4, 1998).
Regarding the blue bag containing assorted coins, he said: that is not
ours, I think this (is) theirs, xxx they just brought that as their
evidence (tsn, pp. 15-24, id.)
"Walpan Ladjaalam declared there were occupants who were renting his
extension house. He affirmed that he owns that house. Four (4) persons
were staying in the extension house. He could only recognize the
husband whose name is Momoy. They are from Jolo. They left the place
already because they were afraid when the police raided the place.
(tsn, pp. 8-10, May 4, 1998). He does not know prosecution witness Rino
Locson y Bartolome. Although Locson recognized him, in his case he
does not know Locson and he does not recognize him (tsn, p.11, id). He
did not sell anything to Locson and did not entertain him. He is not
selling shabu but he knows for a fact that there are plenty of person

who are engaged in selling shabu in that place, in that area known as
Aplaya, Rio Hondo. One of them is Hadji Agbi (tsn, pp.11-14, id).
"After his arrest Walpan Ladjaalam was brought to the police station
where he stayed for one day and one night before he was transferred to
the City jail. While at the police station, he was not able to take a
bath. He smokes two packs of cigarette a day. While he was at the
police station, he smoked [a] cigarette given to him by his younger
sister. He lighted the cigarettes with [a] match. From the police
station, he was brought to the PNP Regional Office at R.T. Lim
Boulevard where he was subject to paraffin examination (tsn, pp. 2426, May 4, 1998).
"During the raid conducted on his house, his cousin Boy Ladjaalam,
Ating Sapadi, and Jecar (Sikkal) Usman, the younger brother of his wife
were killed. Walpan Ladjaalam said that he saw that it was the
policeman who shot them[,] only I do not know his name." They were
killed at the back of his house. He said that no charges were filed
against the one responsible for their death (tsn, pp. 30-33- May 4,
1998).
"Anilhawa Ahamad, more or less 80 years old, a widow was in the house
of Walpan Ladjaalam whom he calls Hadji Id at the time the police
raided the house. She is the mother of Ahma Sailabbi. She was together
with Babo Dandan, two small children and a helper when soldiers
entered the house. (W)hen they arrived, they kept on firing (their
guns) even inside the house (tsn, p.5, May 5, 1998). They were armed
with short and long firearms. They searched the house and scattered
things and got what they wanted. They entered the room of Walpan
Ladjaalam. They tried to open a bag containing jewelry. When Anilhawa
tried to bring the bag outside the room, they grabbed the bag from her
and poked a gun at her. At that time Walpan Ladjaalam was not in the
house. Ahamad Sailabbi was also not in the house. A Search Warrant was
shown to Anilhawa after the search was conducted and just before the
policemen left the place. Anilhawa Ahamad said that it was already
late in the afternoon[;] before they left that was the time the Search

Warrant (was) given to us by xxx Barangay Captain Hussin Elhano (tsn,

pp.6-8, May 5, 1998). Barangay Chairman Elhano arrived already late
in the afternoon, almost sundown (tsn, p. 9, id). Anilhaw declared that
aside from a bag containing jewelry and a bag full of money, she had
not seen anything else that was taken from Walpan Ladjaalams house
(tsn, pp. 9-12, id).
"Akmad (Ahmad) Sailabbi, 37 years old, married testified that about
4:00 oclock [o]n the afternoon of September 24, 1997, ha was standing
in front of his house when policemen arrived and immediately arrested
him. He was about to go to the City Proper to buy articles he was
intending to bring to Sabah. He had around P50,000.00 placed inside a
waist bag tied around his waist. The policemen told him to lie down in
prone position and a policeman searched his back. They pulled his waist
bag and took his DiaStar wrist watch. He was shot three times and was
hit on the forehead leaving a scar. His injury was not treated. He was
taken to the police station where he was detained for one day and one
night. He was detained at the City Jail for three months and five days
after which he was released (tsn, pp. 25-29, May 5, 1998).
"Melba Usma, 20 years old, a widow, testified that [o]n the afternoon of
September 24, 1997, she was in the house of her parents lying together
with her husband Sikkal Usma. There is only one house between her
parents house and the house of Walpan Ladjaalam. Her husband Sikkal
Usman is the brother of Nur-in Ladjaalam, Walpans wife. When Melba
heard shots, she went downstairs. A policeman was looking for her
husband. The policeman called her husband. When her husband went
down, he was instructed by the policeman to lie down in prone
position. Then the policeman shot her husband. The policeman had two
other companions who also shot her husband while he was lying down in
prone position (tsn, pp.2-7, May 5, 1998).
"Murkisa Usman, 30 years old, married, declared that [o]n the afternoon
of September 24, 1997, she was sitting at the door of her house
watching her children playing when a motorcyle, driven by a person,
stopped near her house. The driver was Gaganting whom she called a

soldier. He went down from his motorcycle, pulled a gun and poked it
at Murkisa. Murkisa stood up and raised her hands. She got her children
and when she was about to enter the room of her house, Gaganting
again poked a gun at her and there was a shot. As a result of firing,
three persons died, namely, Sikkal Usman, Boy Ladjaalam and Atip
Sapali Sali (tsn, pp. 8-10, May 5, 1998).
"Barangay Captain Hadji Hussin Elhano, 51 years old, testified that
about 4:00 o clock [o]n the afternoon of September 24, 1997, he was
fetched by two policemen at Catabangan where he was attending a
seminar. Because of traffic along the way, they arrived at the Rio Hondo
already late in the afternoon. He saw policemen were already inside
the house. Upon entering the gate, he saw Walpan at the gate already
handcuffed. Walpan called him but the police advised him not to
approach Walpan. The search was already over and things were already
taken inside the house. When he went inside the house, he saw the
things that they (policemen) searched, the firearms and the shabu
(tsn, p. 17. May 8, 1998). He did not see the Search Warrant. What was
shown to him were the things recovered during the search which were
being listed. They were being counted and placed on a table. Upon
seeing the things that were recovered during the search, I just signed
the receipt (Exh. "P"; "P-1") of the things x x x taken during the search"
(tsn, pp. 17-18. May 8, 1998). He saw three dead bodies at the side of
the fence when he went to the other side of the house. The three
persons were killed outside the fence of Walpan Ladjaalam (tsn, p. 18,
id)."16
The Trial Courts Ruling
The trial court observed that the house of appellant was raided on
September 24, 1997 by virtue of Search Warrant No. 20 issued on the
same day. However, the lower court nullified the said Warrant because
it had been issued for more than one specific offense,17 in violation of
Section 3, Rule 126 of the Rules of Court.18 The courta quo ruled:

"It should be stated at the outset that Search Warrant No. 20 is totally
null and void because it was issued for more than one specific offense
x x x contrary to Section 3, Rule 1[2]6 of the Rules of Court which
provides that A search warrant shall not issue but upon probable
cause in connection with one specific offense xxx. In Tambasan vs.
People, 246 SCRA 184 (1995), the Supreme Court ruled that a search
warrant for more than one offense - a scatter shot warrant - violates
Section 3, Rule 126 of the [R]evised Rules of Court and is totally null
and void."19(emphasis in the original)
Nevertheless, the trial court deemed appellants arrest as valid. It
emphasized that he had shot at the officers who were trying to serve
the void search warrant. This fact was established by the testimonies of
several police officers,20 who were participants in the raid, and
confirmed by the laboratory report on the paraffin tests conducted on
the firearms and appellant.21 Additionally, the judge noted that
Appellant Ladjaalam, based on his statements in his Counter Affidavit,
impliedly contradicted his assertions in open court that there had been
no exchange of gunfire during the raid.22 The trial court concluded that
the testimonies of these officers must prevail over appellants narration
that he was not in his house when the raid was conducted.
Prescinding from this point, the court a quo validated the arrest of
appellant, reasoning thus:
"Under the circumstances, the policemen had authority to pursue and
arrest Walpan Ladjaalam and confiscate the firearm he used in
shooting at the policemen and to enter his house to effect said arrest
and confiscation of the firearm. Under Rule 113, Section 5 (a), of the
Rules of Court, A peace officer or a private person may, without a
warrant, arrest a person xxx (w)hen in his presence, the person to be
arrested has committed, is actually committing, or is attempting to
commit an offense. An offense is committed in the presence or within
the view of an officer, within the meaning of the rule authorizing an
arrest without a warrant, when the officer sees the offense, although
at a distance, or hears the disturbances created thereby and proceeds

at once to the scene thereof. At the time the policemen entered the
house of accused Walpan Ladjaalam after he had fired shots at the
policemen who intended to serve the Search Warrant to him, the
accused was engaged in the commission of a crime, and was pursued
and arrested after he committed the crime of shooting at the
policemen who were about to serve the Search Warrant."23
As a consequence of the legal arrest, the seizure of the following was
also deemed valid: the M14 rifle (with a magazine containing seventeen
live ammunition)24 used by appellant against the police elements, two
M14 magazines, and three other M16 rifle magazines.25 The trial court
observed that these items were in "plain view" of the pursuing police
officers. Moreover, it added that these same items were "evidence [of]
the commission of a crime and/or contraband and therefore, subject to
seizure"26 since appellant "had not applied for a license to possess
firearm and had not been given authority to carry firearm outside his
residence."27
For being incredible and unsupported by evidence, appellants claim
that the items that were seized by the police officers had been planted
was disbelieved by the trial court. It ruled that if the police officers
wanted to plant evidence to incriminate him, they could have done so
during the previous raids or those conducted after his arrest. To its
mind, it was unbelievable that they would choose to plant evidence,
when they were accompanied by the barangay chairman and a radio
reporter who might testify against them. It then dismissed these
allegations, saying that frame-up, like alibi, was an inherently weak
defense.28
The trial court also convicted the accused of the crime of maintaining a
drug den. It reasoned as follows:
"The testimony of Rino Bartolome Locson, corroborated by SPO1 Ricardo
Lacastesantos and SPO1 Amado Mirasol, Jr. clearly established that
Walpan Ladjaalam operated and maintained a drug den in his extension
house where shabu or methamphetamine hydrochloride, a regulated

drug, was sold, and where persons or customers bought and used shabu
or methamphetamine hydrochloride by burning the said regulated drug
and sniffing its smoke with the use of an aluminum foil tooter. A drug
den is a lair or hideaway where prohibited or regulated drugs are used
in any form or are found. Its existence [may be] proved not only by
direct evidence but may also be established by proof of facts and
circumstances, including evidence of the general reputation of the
house, or its general reputation among police officers. The
uncorroborated testimony of accused Walpan Ladjaalam
a.k.a. Warpan that he did not maintain an extension house or a room
where drug users who allegedly buy shabu from him inhales or smokes
shabu cannot prevail over the testimonies of Locson, SPO1
Lacastesantos, and SPO1 Mirasol. He admitted that he is the owner of
the extension house but he alleged that there were four (4) occupants
who rented that extension house. He knew the name of only one of the
four occupants who are allegedly from Jolo, a certain Momoy, the
husband. Aside from being uncorroborated, Walpans testimony was not
elaborated by evidence as to when or for how long was the extension
house rented, the amount of rental paid, or by any other document
showing that the extension house was in fact rented. The defense of
denial put up by accused Walpan Ladjaalam a.k.a. 'Warpan is a weak
defense. Denial is the weakest defense and cannot prevail over the
positive and categorical testimonies of the prosecution witnesses.
Denials, if unsubstantiated by clear and convincing evidence, are
negative and self-serving evidence which deserve no weight in law and
cannot be given evidentiary weight over the testimony of credible
witnesses who testify on affirmative matters. As between the positive
declaration of the prosecution witnesses and the negative statements of
the accused, the former deserve more credence."29
In conclusion, the trial court explained appellants liability in this
manner:
"x x x. The act of the accused in firing an M14 rifle to the policemen
who were about to enter his house to serve a search warrant
constitutes the crime of direct assault with multiple attempted

homicide[,] not multiple attempted murder with direct assault[,]

considering that no policeman was hit and injured by the accused and
no circumstance was proved to qualify the attempted killing to
attempted murder.

his house to serve a search warrant upon him which led to an exchange
of fire between Ladjaalam and the police officer.

"The accused Walpan Ladjaalam a.k.a. Warpan cannot be held liable

[for] the crime of Violation of Section 16, Article III, in relation to
Section 21, Article IV, of Republic Act 6425 otherwise known as the
Dangerous Drugs Act of 1992, as amended, because the fifty (50) pieces
of folded aluminum foils having a total weight of 1.7426 grams all
containing methamphetamine hydrochloride or shabu allegedly found in
his house are inadmissible as evidence against him considering that they
were seized after [a] search conducted by virtue of Search Warrant No.
20 which is totally null and void as it was issued for more than one
offense, and were not found in plain viewof the police officers who
seized them. Neither could the accused be held liable for illegal
possession of firearms and ammunition except for the (1) M14 rifle with
Serial Number 1555225 and with magazine containing fifteen (15) live
ammunition and two more M14 rifle magazines with twenty (20) and
twenty-one (21) live ammunition respectively considering that the
policemen who recovered or seized the other firearms and ammunition
did not testify in court. The blue bag containing assorted coins cannot
be returned to the accused Walpan Ladjaalam a.k.a. Warpan because
according to the accused the blue bag and assorted coins do not belong
to him[;] instead the said assorted coins should be turned over to the
National Treasury."30

"The trial court erred when it denied the appellant the right and
opportunity for an ocular inspection of the scene of the firefight and
where the house of the appellant [was] located.

II

III
"The trial court erred when it ruled that the presumption of regularity
in the performance of their duties [excluded] the claim of the appellant
that the firearms and methamphetamine hydrochloride (i.e. shabu)
were planted by the police."31
In the interest of simplicity, we shall take up these issues seriatim: (a)
denial of the request for ocular inspection, (b) credibility of the
prosecution witnesses, and (c) the defense of frame-up. In addition, we
shall also discuss the proper crimes and penalties to be imposed on
appellant.
The Courts Ruling
The appeal has no merit.
First Issue: Denial of Request for Ocular Inspection

The Issues
In his Brief, appellant submits the following Assignment of Errors:
I
"The trial court erred when it concluded that appellant Walpan
Ladjaalam y Mihajil [had] fired first at the police officers who went to

Appellant insists that the trial court erred in denying his request for an
ocular inspection of the Ladjaalam residence. He argues that an ocular
inspection would have afforded the lower court "a better perspective
and an idea with respect to the scene of the crime."32 We do not agree.
We fail to see the need for an ocular inspection in this case, especially
in the light of the clear testimonies of the prosecution witnesses. 33 We
note in particular that the defense had even requested SPO1 Amado

Mirasol Jr. to sketch the subject premises to give the lower court a
fairly good idea of appellants house.34 Viewing the site of the raid
would have only delayed the proceedings.35 Moreover, the question
whether to view the setting of a relevant event has long been
recognized to be within the discretion of the trial judge. 36 Here, there is
no reason to disturb the exercise of that discretion. 37

xxx

xxx

xxx

PROSECUTOR NUVAL:
Q: Now, you said you were able to enter the house after the gate was
opened by your colleague Felipe Gaganting ... I will reform that
question.

Second Issue: Credibility of Prosecution Witnesses

Q: Who opened the gate Mr. Witness?
Appellant, in essence, questions the credibility of the prosecution
witnesses.38 Suffice it to state that the trial courts assessment of their
credibility is generally accorded respect, even finality.39 After carefully
examining the records and finding no material inconsistencies to
support appellants claim, we cannot exempt this case from the general
rule.40 Quite the contrary, the testimonies of these witnesses positively
showed that appellant had fired upon the approaching police elements,
and that he had subsequently attempted to escape. SPO1 Amado Mirasol
Jr.41 testified thus:

A: SPO2 Felipe Gaganting, Efren Gregorio and Allan Marcos Obut.

Q: And, at that time you were hiding at the concrete fence?
A: Yes.
Q: Now, when this gate was opened, you said you went inside the
house, right?

"PROSECUTOR NUVAL:

A: Yes.

Q: And, this trail is towards the front of the house of the accused?

Q: What did you see inside the house?

A: Yes.

A: I, together with SPO1 Ricardo Lacastesantos, entered the main door

of the house of Walfran [sic] Ladjaalam at the ground floor. We went
inside the sala on the ground floor of his house[;] I saw two old woman.

Q: And its there where you were met by a volley of fire?

A: Yes, Your Honor.

xxx

xxx

xxx

COURT:

PROSECUTOR NUVAL:

Q: How far were you from the concrete fen[c]e when you were met by
a volley of fire? ... You said you were fired upon?

Q: Now, what did you do with these two old women?

A: More or less, five (5) meters.

A: I did not mind those two old women because those two women were
sitting on the ground floor. I was concentrating on the second floor

because Ladjaalam was firing towards our group so, I, together with
Ricardo Lacastesantos, went upstairs to the second floor of the house.
Q: Were you able to go to the second floor of the house?

Q: What happened when you were there?

A: We immediately went out and I asked the assistance of the members
of the raiding team and the investigator of the unit especially SPO1
Cesar Rabuya. I was able to manage to arrest Walfan Ladjaalam."42

A: Yes.
Q: What happened when you were already on the second floor?
A: While we were proceeding to the second floor, Walfan [sic]
Ladjaalam, noticed our presence and immediately went inside the
bedroom [o]n the second floor and he went immediately and jumped
from the window of his house x x x leading to the roof of the neighbors
house.
xxx

xxx

xxx

What happened thereafter was narrated by Senior Police Officer

Ricardo Lacastesantos,43 as follows:
"Q: What did you notice [o]n the second floor?
A: I went where the firing came from, so, I saw [an] M14 rifle and I
shouted from the outside, do not fire at the second floor because
there [are] a lot of children here.
Q: Now, that rifle you said [was an] M14, where did you find this?

COURT:

A: At the sala set.

Reform. That is leading

Q: This sala set where is this located?

Q: What happened when you entered and he jumped to the roofing of

the neighbors house?

A: Located [on] the second floor of the house.

Q: Is there a sala [o]n the second floor?

A: Immediately, I myself, we immediately went downstairs and asked

the assistance of the members of the raiding team to arrest Walfan
Ladjaalam.
xxx

xxx

xxx

A: Yes.
Q: Can you still identify that M14 rifle which you said you recovered
from the sale set?

PROSECUTOR NUVAL:

A: Yes.

Q: Were you able to go down?

Q: Why can you identify that?

A: Yes.

A: The Serial No. of M14 is 1555225 and I marked it with my initial.

Q: Now, I have here M14 rifle[;] will you please tell us where is the
Serial No. of this?

Q: The M16 magazines [were] empty?

A: Empty.

A: 1555225 and I put my initial, RJL.

Q: How about the M14?
FISCAL NUVAL:
A: Found with [ammunition].
This is already marked as our Exhibit B-3 with magazine, one
magazine and seven round [ammunition].

xxx

xxx

Q: After recovering this, what did you do with this firearm?

Q: So, where are the three M16 magazines?

A: When I recovered it I removed the bullets inside the chamber[.] I

removed the magazine and I turned it over to the investigator.

A: In the corner.

xxx

Q: What did you do with [these] three magazines of M16?

Q: Where did you turn it over?
A: I turned [them] over to the investigator.
A: At the crime scene.
Q: Can you identify them?
Q: Now, that magazine, can you still identify this?
A: Yes, because of my initials[.]
A: Yes.
Q: Where are your initials?
Q: Why?
A: On the magazines.
A: I put x x x markings.
Q: RJL?
xxx

xxx

xxx
A: RJL."44

COURT:
So, a[si]de from the magazine attached to the M14 rifle you found six
more magazines?
A: Yes, so, all in all six magazines, three empty M16 rifle magazines and
three M14.

These were confirmed by the results of the paraffin tests conducted on

appellant and on the weapons seized during the raid. Both of his hands
as well as the weapons, particularly the M-14 which he had used, were
positive for gunpowder nitrate. Police Inspector Mercedes Delfin-Diestro
explained in open court:

"Q: Okay. Now, what was the result of your examination, Madam
Witness?

A: Because of the traces of brown residue, it could be possible that the

gun was fired before the incident x x x.

A: The result of the examination [was] that both hands of the subject
person, ha[d] presence of gun powder nitrates.

COURT:
Q: There is also black residue?

Q: What do you mean Madam Witness, what does that indicate?

A: Yes.
A: It indicates there is presence of powder nitrates.
Q: What does it indicate?
Q: Can we conclude that he fired a gun?
A: It indicates that the firearm was recently fired.
A: I cannot conclude that he fired a gun because there are so many
circumstances [why] a person [would be] positive on his hands for gun
powder nitrates.

Q: And, where is this swab used at the time of the swabbing of this
Exhibit?

Q: But, most likely, he fired a gun?

A: This one.

A: Yes.

PROSECUTOR NUVAL:
xxx

xxx

xxx

May we ask that this be marked as Exhibit B-3-A.

PROSECUTOR NUVAL:

COURT:

Q: What about, Madam Witness this Exhibit B-3, which is the M14
rifle. What did you do with this?

Q: The firing there indicates that the gun was recently fired, during the
incident?

A: SPO3 Abu did the swabbing both in the chamber and the barrel
wherein I observed there [were] black and traces of brown residue on
the bolt, chamber and in the barrel.

A: Yes.
Q: And also before the incident it was fired because of the brown
residue?

Q: And, that indicates Madam Witness...?

A: Yes, Your Honor."45 (emphasis supplied)
A: It indicates that the gun was fired.
Q: Recently?

Duly proven from the foregoing were the two elements 46 of the crime of
illegal possession of firearms. Undoubtedly, the established fact that

appellant had fired an M-14 rifle upon the approaching police officers
clearly showed the existence of the firearm or weapon and his
possession thereof. Sufficing to satisfy the second element was the
prosecutions Certification47 stating that he had not filed any application
for license to possess a firearm, and that he had not been given
authority to carry any outside his residence.48 Further, it should be
pointed out that his possession and use of an M-14 rifle were obviously
unauthorized because this weapon could not be licensed in favor of, or
carried by, a private individual.49
Third Issue: Defense of Frame-up
From the convoluted arguments strewn before us by appellant, we
gather that the main defense he raises is frame-up. He claims that the
items seized from his house were "planted," and that the entire
Zamboanga police force was out to get him at all cost.
This Court has invariably held that the defense of frame-up is
inherently weak, since it is easy to fabricate, but terribly difficult to
disprove.50 Absent any showing of an improper motive on the part of the
police officers,51coupled with the presumption of regularity in the
performance of their duty, such defense cannot be given much
credence.52 Indeed, after examining the records of this case, we
conclude that appellant has failed to substantiate his claim. On the
contrary, his statements in his Counter Affidavit are inconsistent with
his testimony during the trial.53 He testified thus:
"Q Now, Mr. Witness, do you remember having executed an Affidavit/ a
Counter-Affidavit?

FISCAL NUVAL:
Q . . . . Walpan Ladjaalam, whose signature is this?
(Showing)
A Yes, Sir. This is mine.
Q Now, in paragraph[s] 1,2,3,4,5,6,7 and 8; you stated in this CounterAffidavit which I quote: that I was resting and sleeping when I heard
the gunshots and I noticed that the shots were directed towards our
house.. and I inspected and x x x we were attacked by armed persons..
and I was apprehended by the persons who attacked x x x our house;
[the] house you are referring to [in] this paragraph, whose house [are
you] referring to, is this [what] you are referring to [as] your house or
the house of your neighbors [from] which you said you heard gunshots?
A Our house.
Q Now, in paragraph 6 of your Counter-Affidavit you stated and I quote:
that [o]n that afternoon of September 24, 1997, I was at home in my
house Aplaya, Riohondo, Bo. Campo Muslim, my companions in my
house [were] the two old women and my children, is this correct?
A They were not there.
Q Now, in that statement Mr. Witness, you said that you were at home
in [your] house at Aplaya, Riohondo, Bo. Campo Muslim[;] which is
which now, you were in your house or you were in your neighbors[]
house at that time when you heard gunshots?

A I could not remember.

A I was in the house near my house.
Q I have here a Counter-Affidavit and it was signed before this
representation on the 8th day of December 1997[;] tell us whose
signature is this appearing above the typewritten name

Q So, your statement particularly paragraph 6 of your Counter-Affidavit

that you were at home in [your] house at Aplaya Riohondo Bo. Campo
Muslim, is x x x not correct?

A Yes, Sir. This is not correct."54

Crime and Punishment
The trial court convicted appellant of three crimes: (1) maintenance of
a drug den, (2) direct assault with attempted homicide, and (3) illegal
possession of firearms. We will discuss each of these.
Maintenance of a Drug Den
We agree with the trial court that appellant was guilty of maintenance
of a drug den, an offense for which he was correctly sentenced
to reclusion perpetua. His guilt was clearly established by the
testimony of Prosecution Witness Rino Bartolome Locson, who himself
had used the extension house of appellant as a drug den on several
occasions, including the time of the raid. The formers testimony was
corroborated by all the raiding police officers who testified before the
court. That appellant did not deny ownership of the house and its
extension lent credence to the prosecutions story.
Direct Assault with Multiple Attempted Homicide
The trial court was also correct in convicting appellant of direct
assault55 with multiple counts of attempted homicide. It found that
"[t]he act of the accused [of] firing an M14 rifle [at] the policemen[,]
who were about to enter his house to serve a search warrant x x x"
constituted such complex crime.56
We note that direct assault with the use of a weapon carries the
penalty of prision correccional in its medium and maximum periods,
while attempted homicide carries the penalty of prision
correccional.57 Hence, for the present complex crime, the penalty for
direct assault, which constitutes the "most serious crime," should be
imposed and applied in its maximum period.58
Illegal Possession of Firearms

Aside from finding appellant guilty of direct assault with multiple

attempted homicide, the trial court convicted him also of the separate
offense of illegal possession of firearms under PD 1866, as amended by
RA 8294, and sentenced him to 6 years of prision correccional to 8 years
of prision mayor.
The Office of the Solicitor General (OSG) disagrees, on the ground that
the trial court should not have applied the new law. It contends that
under the facts of the case, the applicable law should have been PD
1866, as worded prior to its amendment by RA 8294.
The trial courts ruling and the OSGs submission exemplify the legal
communitys difficulty in grappling with the changes brought about by
RA 8294. Hence, before us now are opposing views on how to interpret
Section 1 of the new law, which provides as follows:
"SECTION 1. Section 1 of Presidential Decree No. 1866, as amended, is
hereby further amended to read as follows:
"Section 1. Unlawful Manufacture, Sale, Acquisition, Disposition or
Possession of Firearms or Ammunition Instruments Used or Intended to
be Used in the Manufacture of Firearms or Ammunition. -- The penalty
of prision correccional in its maximum period and a fine of not less than
Fifteen thousand pesos (P15,000) shall be imposed upon any person who
shall unlawfully manufacture, deal in, acquire, dispose, or possess any
low powered firearm, such as rimfire handgun, .380 or .32 and other
firearm of similar firepower, part of firearm, ammunition, or machinery,
tool or instrument used or intended to be used in the manufacture of
any firearm or ammunition:Provided, That no other crime was
committed.
"The penalty of prision mayor in its minimum period and a fine of Thirty
thousand pesos (P30,000) shall be imposed if the firearm is classified as
high powered firearm which includes those with bores bigger in
diameter than .30 caliber and 9 millimeter such as caliber .40, .41, .44,
.45 and also lesser calibered firearms but considered powerful such as

caliber .357 and caliber .22 centerfire magnum and other firearms with
firing capability of full automatic and by burst of two or
three: Provided, however, That no other crime was committed by the
person arrested.

the provision. Based on these premises, the OSG concludes that the
applicable law is not RA 8294, but PD 1866 which, as worded prior the
new law, penalizes simple illegal possession of firearms even if another
crime is committed at the same time.60

"If homicide or murder is committed with the use of an unlicensed

firearm, such use of an unlicensed firearm shall be considered as an
aggravating circumstance.

Applying a different interpretation, the trial court posits that appellant

should be convicted of illegal possession of firearms, in addition to
direct assault with multiple attempted homicide. It did not explain its
ruling, however. Considering that it could not have been ignorant of
the proviso61 in the second paragraph, it seemed to have construed "no
other crime" as referring only to homicide and murder, in both of which
illegal possession of firearms is an aggravating circumstance. In other
words, if a crime other than murder or homicide is committed, a person
may still be convicted of illegal possession of firearms. In this case, the
other crime committed was direct assault with multiple attempted
homicide; hence, the trial court found appellant guilty of illegal
possession of firearms.

"If the violation of this Section is in furtherance of or incident to, or in

connection with the crime of rebellion or insurrection, sedition, or
attempted coup detat, such violation shall be absorbed as an element
of the crime of rebellion or insurrection, sedition, or attempted coup
detat.
"The same penalty shall be imposed upon the owner, president,
manager, director or other responsible officer of any public or private
firm, company, corporation or entity, who shall willfully or knowingly
allow any of the firearms owned by such firm, company, corporation or
entity to be used by any person or persons found guilty of violating the
provisions of the preceding paragraphs or willfully or knowingly allow
any of them to use unlicensed firearms or firearms without any legal
authority to be carried outside of their residence in the course of their
employment.
"The penalty of arresto mayor shall be imposed upon any person who
shall carry any licensed firearm outside his residence without legal
authority therefor."
Citing People v. Jayson,59 the OSG argues that the foregoing provision
does not cover the specific facts of this case. Since another crime -direct assault with multiple unlawful homicide -- was committed,
appellant cannot be convicted of simple illegal possession of firearms
under the second paragraph of the aforecited provision. Furthermore,
since there was no killing in this case, illegal possession cannot be
deemed as an aggravating circumstance under the third paragraph of

We cannot accept either of these interpretations because they ignore

the plain language of the statute. A simple reading thereof shows that if
an unlicensed firearm is used in the commission of any crime, there can
be no separate offense of simple illegal possession of firearms. Hence,
if the "other crime" is murder or homicide, illegal possession of firearms
becomes merely an aggravating circumstance, not a separate offense.
Since direct assault with multiple attempted homicide was committed
in this case, appellant can no longer be held liable for illegal possession
of firearms.
Moreover, penal laws are construed liberally in favor of the accused. 62 In
this case, the plain meaning of RA 8294s simple language is most
favorable to herein appellant. Verily, no other interpretation is
justified, for the language of the new law demonstrates the legislative
intent to favor the accused.63 Accordingly, appellant cannot be
convicted of two separate offenses of illegal possession of firearms and
direct assault with attempted homicide. Moreover, since the crime

committed was direct assault and not homicide or murder, illegal

possession of firearms cannot be deemed an aggravating circumstance.
We reject the OSGs contention that PD 1866, as worded prior to its
amendment by RA 8294, should be applied in this case. When the crime
was committed on September 24, 1997, the original language of PD
1866 had already been expressly superseded by RA 8294 which took
effect on July 6, 1997.64 In other words, no longer in existence was the
earlier provision of PD 1866, which justified a conviction for illegal
possession of firearms separate from any other crime. It was replaced
by RA 8294 which, among other amendments to PD 1866, contained the
specific proviso that "no other crime was committed."
1wphi1

Furthermore, the OSGs reliance on People v. Jayson65 is misplaced.

True, this Court sustained the conviction of appellant for illegal
possession of firearms, although he had also committed homicide. We
explained, however, that "the criminal case for homicide [was] not
before us for consideration."
Just as unacceptable is the interpretation of the trial court. We find no
justification for limiting the proviso in the second paragraph to murder
and homicide. The law is clear: the accused can be convicted of simple
illegal possession of firearms, provided that "no other crime was
committed by the person arrested." If the intention of the law in the
second paragraph were to refer only to homicide and murder, it should
have expressly said so, as it did in the third paragraph. Verily, where
the law does not distinguish, neither should we.
The Court is aware that this ruling effectively exonerates appellant of
illegal possession of an M-14 rifle, an offense which normally carries a
penalty heavier than that for direct assault. While the penalty for the
first isprision mayor, for the second it is only prision correccional.
Indeed, the accused may evade conviction for illegal possession of
firearms by using such weapons in committing an even lighter
offense,66 like alarm and scandal67or slight physical injuries,68 both of
which are punishable by arresto menor.69 This consequence, however,

necessarily arises from the language of RA 8294, whose wisdom is not

subject to the Courts review. Any perception that the result reached
here appears unwise should be addressed to Congress. Indeed, the
Court has no discretion to give statutes a new meaning detached from
the manifest intendment and language of the legislature. Our task is
constitutionally confined only to applying the law and jurisprudence 70 to
the proven facts, and we have done so in this case.
WHEREFORE, the appealed Decision is hereby AFFIRMED with
the MODIFICATION that appellant is found guilty only of two offenses:
(1) direct assault and multiple attempted homicide with the use of a
weapon, for which he is sentenced to 2 years and 4 months to 6 years
of prision correccional; and (2) maintaining a drug den, for which he
was correctly sentenced by the trial court to reclusion perpetua. Costs
against appellant.
Let a copy of this Decision be furnished the Congress of the Philippines
for a possible review, at its sound discretion, of RA 8294.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

G.R. No. L-69344

April 26, 1991

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and SPOUSES ANTONIO and CLARA
PASTOR, respondents.
Roberto L. Bautista for private respondents.

GRIO-AQUINO, J.:
The legal issue presented in this petition for review is whether or not
the tax amnesty payments made by the private respondents on October
23, 1973 bar an action for recovery of deficiency income taxes under
P.D.'s Nos. 23, 213 and 370.
On April 15, 1980, the Republic of the Philippines, through the Bureau
of Internal Revenue, commenced an action in the Court of First Instance
(now Regional Trial Court) of Manila, Branch XVI, to collect from the
spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes
for the years 1955 to 1959 in the amount of P17,117.08 with a 5%
surcharge and 1% monthly interest, and costs.
The Pastors filed a motion to dismiss the complaint, but the motion was
denied. On August 2, 1975, they filed an answer admitting there was
an assessment against them of P17,117.08 for income tax deficiency but
denying liability therefor. They contended that they had availed of the
tax amnesty under P.D.'s Nos. 23, 213 and 370 and had paid the
corresponding amnesty taxes amounting to P10,400 or 10% of their
reported untaxed income under P.D. 23, P2,951.20 or 20% of the
reported untaxed income under P.D. 213, and a final payment on
October 26, 1973 under P.D. 370 evidenced by the Government's Official
Receipt No. 1052388. Consequently, the Government is in estoppel to
demand and compel further payment of income taxes by them.
1wphi1

The parties agreed that there were no issues of fact to be litigated,

hence, the case was submitted for decision upon the pleadings and
memoranda on the lone legal question of: whether or not the payment
of deficiency income tax under the tax amnesty, P.D. 23, and its
acceptance by the Government operated to divest the Government of
the right to further recover from the taxpayer, even if there was an

existing assessment against the latter at the time he paid the amnesty
tax.
It is not disputed that as a result of an investigation made by the
Bureau of Internal Revenue in 1963, it was found that the private
respondents owed the Government P1,283,621.63 as income taxes for
the years 1955 to 1959, inclusive of the 50% surcharge and 1% monthly
interest. The defendants protested against the assessment. A
reinvestigation was conducted resulting in the drastic reduction of the
assessment to only P17,117.08.
It appears that on April 27, 1978, the private respondents offered to
pay the Bureau of Internal Revenue the sum of P5,000 by way of
compromise settlement of their income tax deficiency for the
questioned years, but Assistant Commissioner Bernardo Carpio, in a
letter addressed to the Pastor spouses, rejected the offer stating that
there was no legal or factual justification for accepting it. The
Government filed the action against the spouses in 1980, ten (10) years
after the assessment of the income tax deficiency was made.
On a motion for judgment on the pleadings filed by the Government,
which the spouses did not oppose, the trial court rendered a decision
on February 28, 1980, holding that the defendants spouses had settled
their income tax deficiency for the years 1955 to 1959, not under P.D.
23 or P.D. 370, but under P.D. 213, as shown in the Amnesty Income Tax
Returns' Summary Statement and the tax Payment Acceptance Order for
P2,951.20 with its corresponding official receipt, which returns also
contain the very assessment for the questioned years. By accepting the
payment of the amnesty income taxes, the Government, therefore,
waived its right to further recover deficiency incomes taxes "from the
defendants under the existing assessment against them because:
1. the defendants' amnesty income tax returns' Summary
Statement included therein the deficiency assessment for the
years 1955 to 1959;
2. tax amnesty payment was made by the defendants under
Presidential Decree No. 213, hence, it had the effect of
remission of the income tax deficiency for the years 1955 to
1959;
3. P.D. No. 23 as well as P.D. No. 213 do not make any
exceptions nor impose any conditions for their application,
hence, Revenue Regulation No. 7-73 which excludes certain

taxpayers from the coverage of P.D. No. 213 is null and void,
and
4. the acceptance of tax amnesty payment by the plaintiffappellant bars the recovery of deficiency taxes. (pp. 3-4, IAC
Decision, pp. 031-032, Rollo.)
The Government appealed to the Intermediate Appellant Court (AC G.R.
CV No. 68371 entitled, "Republic of the Philippines vs. Antonio Pastor, et
al."), alleging that the private respondents were not qualified to avail
of the tax amnesty under P.D. 213 for the benefits of that decree are
available only to persons who had no pending assessment for unpaid
taxes, as provided in Revenue Regulations Nos. 8-72 and 7-73. Since the
Pastors did in fact have a pending assessment against them, they were
precluded from availing of the amnesty granted in P.D.'s Nos. 23 and
213. The Government further argued that "tax exemptions should be
interpreted strictissimi jurisagainst the taxpayer."
The respondent spouses, on the other hand, alleged that P.D. 213
contains no exemptions from its coverage and that, under Letter of
Instruction LOI 129 dated September 18, 1973, the immunities granted
by P.D. 213 include:
II-Immunities Granted.
Upon payment of the amounts specified in the Decree, the
following shall be observed:
1. . . . .
2. The taxpayer shall not be subject to any investigation,
whether civil, criminal or administrative, insofar as his
declarations in the income tax returns are concerned nor shall
the same be used as evidence against, or to the prejudice of the
declarant in any proceeding before any court of law or body,
whether judicial, quasi-judicial or administrative, in which he is
a defendant or respondent, and he shall be exempt from any
liability arising from or incident to his failure to file his income
tax return and to pay the tax due thereon, as well as to any
liability for any other tax that may be due as a result of business
transactions from which such income, now voluntarily declared
may have been derived. (Emphasis supplied; p. 040, Rollo.)

There is nothing in the LOI which can be construed as authority for the
Bureau of Internal Revenue to introduce exceptions and/or conditions
to the coverage of the law.
On November 23, 1984, the Intermediate Appellate Court (now Court of
Appeals) rendered a decision dismissing the Government's appeal and
holding that the payment of deficiency income taxes by the Pastors
under PD. No. 213, and the acceptance thereof by the Government,
operated to divest the latter of its right to further recover deficiency
income taxes from the private respondents pursuant to the existing
deficiency tax assessment against them. The appellate court held that
if Revenue Regulation No. 7-73 did provide an exception to the
coverage of P.D. 213, such provision was null and void for being
contrary to, or restrictive of, the clear mandate of P.D. No. 213 which
the regulation should implement. Said revenue regulation may not
prevail over the provisions of the decree, for it would then be an act of
administrative legislation, not mere implementation, by the Bureau of
Internal Revenue.
On February 4, 1986, the Republic of the Philippines, through the
Solicitor General, filed this petition for review of the decision dated
November 23, 1984 of the Intermediate Appellate Court affirming the
dismissal, by the Court of First Instance of Manila, of the Government's
complaint against the respondent spouses.
The petition is devoid of merit.
Even assuming that the deficiency tax assessment of P17,117.08 against
the Pastor spouses were correct, since the latter have already paid
almost the equivalent amount to the Government by way of amnesty
taxes under P.D. No. 213, and were granted not merely an exemption,
but an amnesty, for their past tax failings, the Government is estopped
from collecting the difference between the deficiency tax assessment
and the amount already paid by them as amnesty tax.
A tax amnesty, being a general pardon or intentional overlooking
by the State of its authority to impose penalties on persons
otherwise guilty of evasion or violation of a revenue or tax law,
partakes of an absolute forgiveness or waiver by the
Government of its right to collect what otherwise would be due
it, and in this sense, prejudicial thereto, particularly to give tax
evaders, who wish to relent and are willing to reform a chance
to do so and thereby become a part of the new society with a

clean slate (Commission of Internal Revenue vs. Botelho Corp.

and Shipping Co., Inc., 20 SCRA 487).
The finding of the appellate court that the deficiency income taxes
were paid by the Pastors, and accepted by the Government, under P.D.
213, granting amnesty to persons who are required by law to file
income tax returns but who failed to do so, is entitled to the highest
respect and may not be disturbed except under exceptional
circumstances which have already become familiar (Rule 45, Sec. 4,
Rules of Court; e.g., where: (1) the conclusion is a finding grounded
entirely on speculation, surmise and conjecture; (2) the inference made
is manifestly mistaken; (3) there is grave abuse of discretion; (4) the
judgment is based on misapprehension of facts; (5) the Court of Appeals
went beyond the issues of the case and its findings are contrary to the
admissions of both the appellant and the appellee; (6) the findings of
fact of the Court of Appeals are contrary to those of the trial court; (7)
said findings of fact are conclusions without citation of specific
evidence in which they are based; (8) the facts set forth in the petition
as well as in the petitioner's main and reply briefs are not disputed by
the respondents; and (9) when the finding of fact of the Court of
Appeals is premised on the absense of evidence and is contradicted by
the evidence on record (Thelma Fernan vs. CA, et al., 181 SCRA
546, citing Tolentino vs. de Jesus, 56 SCRA 67; People vs. Traya, 147
SCRA 381), none of which is present in this case.
The rule is that in case of doubt, tax statutes are to be construed
strictly against the Government and liberally in favor of the taxpayer,
for taxes, being burdens, are not to be presumed beyond what the
applicable statute (in this case P.D. 213) expressly and clearly declares
(Commission of Internal Revenue vs. La Tondena, Inc. and CTA, 5 SCRA
665, citing Manila Railroad Company vs. Collector of Customs, 52 Phil,
950).
WHEREFORE, the petition for review is denied. No costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

G.R. No. L-23623 June 30, 1977

ACTING COMMISSIONER OF CUSTOMS, petitioner,
vs.
MANILA ELECTRIC COMPANY and COURT OF TAX
APPEALS, respondents.
Solicitor General Arturo A. Alafriz Assistant Solicitor General
Felicisimo R. Rosete and Solicitor Alejandro B. Afurong for petitioner.
Ross, Selph Salcedo, Del Rosario Bito & Misa for private respondent.

FERNANDO, J.:
The reversal by respondent Court of Tax Appeals of a determination by
the then Acting Commissioner of Customs, the late Norberto
Romualdez, Jr., that private respondent Manila Electric Company was
not exempt from the payment of the special import tax under Republic
Act No. 1394 1 for shipment to it of insulating oil, respondent Court
entertaining the contrary view 2 led to this petition for review. The
contention pressed in support of the petition is that as a tax exemption is
to be construed strictly, the decision of the respondent Court, which
assumed that insulating oil can be considered as insulators must be
reversed and set aside. The appealed decision of respondent Court in the
light of applicable authorities supplies the best refutation of such
contention. It must be sustained.
The appealed decision 3 set forth that petitioner Manila Electric Co., nor
private respondent, in appealing from a determination by the then Acting
Commissioner of Customs, now petitioner, "claims that it is exempt from
the special import tax not only by virtue of Section 6 of Republic Act No.
1394, which exempts from said tax equipment and spare parts for use in
industries, but also under Paragraph 9, Part Two, of its franchise, which

expressly exempts is insulators from all taxes of whatever kind and

nature. 4 It then made reference to the franchise of private respondent
Manila Electric Co.: "Par. 9. The grantee shall be liable to pay the same
taxes upon its real estate, buildings, plant (not including poles, wires,
transformers, and insulators), machinery and personal property as other
persons are or may be hereafter required by law to pay. In consideration of
Part Two of the franchise herein granted, to wit, the right to build and
maintain in the City of Manila and its suburbs a plant for the conveying and
furnishing of electric current for light, heat, and power, and to charge for
the same, the grantee shall pay to the City of Manila two and one-half per
centum of the gross earnings received from the business under this
franchise in the city and its suburbs: ... and shall be in lieu of all taxes and
assessments of whatsoever nature, and by whatsoever authority upon the
privileges, earnings, income, franchise, and poles, wires, transformers, and
insulators of the grantee, from which taxes and assessments the grantee is
hereby expressly exempted." 5 It noted that the above "exempts it from all
taxes of whatever nature, and by whatever authority, with respect to its
insulators in consideration for the payment of the percentage tax on its
gross earnings." 6

The question then, according to such decision of respondent Court is:

"Does the insulating oil in question come within the meaning of the
term 'insulator '?" 7 Then it went on: "insulating oils are mineral oils of high
di-electrics strength and high flash point employed in circuit breakers,
switches, transformers and other electric apparatus. An oil with a flash
point of 285 F and fire point of 310 F is considered safe. A clean, wellrefined oil will have a minimum dielectric of 22,00 volts, but the presence
of a slow as 0.01% water will reduce the di-electric strength drastically.
The insulating oils, therefore, cannot be stored for long periods because of
the danger of absorbing moisture. Impurities such as acids or alkalies also
detract from the strength of the oil. Since insulating oils are used for
cooling as well as for insulating, the viscosity should be low enough for free
circulation, and they should not gum. (Materials Handbook by George J.
Brady, 8th Edition 1956, pp. 421-423.) ... ." 8

The last portion of the appealed decision explained why the

determination of the Acting Commissioner of Customs must be
reversed: "There is no question that insulating oils of the type imported
by petitioner are 'used for cooling as well as for insulating,' and when
used in oil circuit breakers, they are 'required to maintain insulation
between the contacts inside the tank and the tank itself.' ... The
decision appealed from not being in accordance with law, the same is
hereby reversed. Respondent is ordered to refund to petitioner the sum
of P995.00 within thirty days from the date this decision becomes final,
without pronouncement as to costs." 9 It was therein made clear that
private respondent was not liable for the payment of the special import tax
under Republic Act No. 1394.
As noted at the outset, the decision speaks for itself. It cannot be
stigmatized as suffering from any flaw that would call for its reversal.
1. It is to be admitted, as contended by petitioner, that this Court is
committed to the principle that an exemption from taxation must be
justified by words too clear to be misread. As set forth in Commissioner
of Internal Revenue v. Guerrero: 10 "From 1906, in Catholic Church v.
Hastings to 1966, in Esso Standard Eastern, Inc. v. Acting Commissioner of
Customs, it has been the constant and uniform holding that exemption
from taxation is not favored and is never presumed, so that if granted it
must be strictly construed against the taxpayer. Affirmatively put, the law
frowns on exemption from taxation, hence, an exempting provision should
be construed strictissimi juris." 11 Such a ruling was reaffirmed in
subsequent decisions. 12 It does not mean, however, that petitioner should
prevail, for as was unequivocally set forth in the leading ease of Republic
Flour Mills v. Commissioner of Internal Revenue, 13 this Court speaking
through Justice J.B.L. Reyes. "It is true that in the construction of tax
statutes tax exemptions (and deductions are of this nature) are not favored
in the law, and are construed strictissimi juris against the taxpayer.
However, it is equally a recognized principle that where the provision of
the law is clear and unambiguous, so that there is no occasion for the
court's seeking the legislative intent, the law must be taken as it is, devoid
of judicial addition or subtraction. In this ease, we find the provision of
Section 186-A -whenever a tax free product is utilized, ... all

encompassing to comprehend tax-free raw materials, even if imported.

Where the law provided no qualification for the granting of the privilege,
the court is not at liberty to supply any. 14 That is what was done by
respondent Court of Tax Appeals. It showed fealty to this equally well.
settled doctrine. It construed the statutory provision as it is written. It is
precluded, in the language of ;the Republic Flour Mills opinion, considering
that the law is clear and ambiguous, to look further for any legislative
intent, as "the law must be taken as it is, devoid of judicial addition or
subtraction." 15 If there is an extended discussion of this point, it is due
solely to the emphasis placed on the matter by petitioner.

2. Moreover, the decision of respondent Court under review finds

support in Balbas v. Domingo. 16 Thus: "No other conclusion is possible in
view of the well-settled principle that this Court is bound by the finding of
facts of the Court of Tax Appeals, only questions of law being open to it for
determination. As stated in another decision, 'only errors of law, and not
rulings on the weight of evidence, are reviewable by this Court.' The facts
then as above ascertained cannot be disturbed. In our latest decision,
there is a categorical assertion that where the question is one of fact, it is
no longer reviewable. 17 Such a doctrine is not of limited application. It is a
recognition of the wide discretion enjoyed by the Court of Tax Appeals in
construing tax statutes. So it was categorically held in Alhambra Cigar and
Cigarette Manufacturing Co. v. Commissioner of Internal Revenue: 18 "Nor
as a matter of principle is it advisable for this Court to set aside the
conclusion reached by an agency such as the Court of Tax Appeals which is,
by the very nature of its function, dedicated exclusively to the study and
consideration of tax problems and has necessarily developed an expertice
on the subject, unless, as did not happen here, there has been an abuse or
improvident exercise of its authority. 19 That same approach was reflected
in Reyes v. Commissioner of Internal Revenue, 20 Chu Hoi Horn v. Court of
Tax Appeals, 21 Vi Ve Chemical Products v. Commissioner of
Customs, 22 and Nasiad v. Court of Tax Appeals. 23 The Vi Ve decision has
some relevance. There the stand of the state that the Court of Tax Appeals
could rightfully determine that '"priopionic glycine" is the same as glutamic
acid" 24 was considered as well within the authority of respondent Court. It
would be an affront to the sense of fairness and of justice if in another
case, respondent Court, in the exercise of its discretionary authority, after

determining that insulating oil comes within the term insulator, is not be
upheld.

WHEREFORE, the petition for review is dismissed. No costs.

Barredo, Antonio and Concepcion, Jr., JJ., concur.
Aquino, J., concurs in the result.

G.R. No. 108524 November 10, 1994

MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS, INC., petitioner,
vs.
DEPARTMENT OF FINANCE SECRETARY, COMMISSIONER OF THE
BUREAU OF INTERNAL REVENUE (BIR), AND REVENUE DISTRICT
OFFICER, BIR MISAMIS ORIENTAL, respondents.
Damasing Law Office for petitioner.

Sec. 103. Exempt Transactions. The following shall be

exempt from the value-added tax:
(a) Sale of nonfood agricultural, marine and forest
products in their original state by the primary producer
or the owner of the land where the same are produced;
(b) Sale or importation in their original state of
agricultural and marine food products, livestock and
poultry of a kind generally used as, or yielding or
producing foods for human consumption, and breeding
stock and genetic material therefor;

MENDOZA, J.:
This is a petition for prohibition and injunction seeking to nullify
Revenue Memorandum Circular No. 47-91 and enjoin the collection by
respondent revenue officials of the Value Added Tax (VAT) on the sale of
copra by members of petitioner organization. 1
Petitioner Misamis Oriental Association of Coco Traders, Inc. is a
domestic corporation whose members, individually or collectively, are
engaged in the buying and selling of copra in Misamis Oriental. The
petitioner alleges that prior to the issuance of Revenue Memorandum
Circular 47-91 on June 11, 1991, which implemented VAT Ruling 190-90,
copra was classified as agricultural food product under $ 103(b) of the
National Internal Revenue Code and, therefore, exempt from VAT at all
stages of production or distribution.
Respondents represent departments of the executive branch of
government charged with the generation of funds and the assessment,
levy and collection of taxes and other imposts.
The pertinent provision of the NIRC states:

Under 103(a), as above quoted, the sale of agricultural non-food

products in their original state is exempt from VAT only if the sale is
made by the primary producer or owner of the land from which the
same are produced. The sale made by any other person or entity, like a
trader or dealer, is not exempt from the tax. On the other hand, under
103(b) the sale of agricultural food products in their original state is
exempt from VAT at all stages of production or distribution regardless of
who the seller is.
The question is whether copra is an agricultural food or non-food
product for purposes of this provision of the NIRC. On June 11, 1991,
respondent Commissioner of Internal Revenue issued the circular in
question, classifying copra as an agricultural non-food product and
declaring it "exempt from VAT only if the sale is made by the primary
producer pursuant to Section 103(a) of the Tax Code, as amended." 2
The reclassification had the effect of denying to the petitioner the
exemption it previously enjoyed when copra was classified as an
agricultural food product under 103(b) of the NIRC. Petitioner
challenges RMC No. 47-91 on various grounds, which will be presently
discussed although not in the order raised in the petition for
prohibition.

First. Petitioner contends that the Bureau of Food and Drug of the
Department of Health and not the BIR is the competent government
agency to determine the proper classification of food products.
Petitioner cites the opinion of Dr. Quintin Kintanar of the Bureau of
Food and Drug to the effect that copra should be considered "food"
because it is produced from coconut which is food and 80% of coconut
products are edible.
On the other hand, the respondents argue that the opinion of the BIR,
as the government agency charged with the implementation and
interpretation of the tax laws, is entitled to great respect.
We agree with respondents. In interpreting 103(a) and (b) of the NIRC,
the Commissioner of Internal Revenue gave it a strict construction
consistent with the rule that tax exemptions must be strictly construed
against the taxpayer and liberally in favor of the state. Indeed, even Dr.
Kintanar said that his classification of copra as food was based on "the
broader definition of food which includes agricultural commodities and
other components used in the manufacture/processing of food." The full
text of his letter reads:
10 April 1991
Mr. VICTOR A. DEOFERIO, JR.
Chairman VAT Review Committee
Bureau of Internal Revenue
Diliman, Quezon City
Dear Mr. Deoferio:
This is to clarify a previous communication made by this
Office about copra in a letter dated 05 December 1990
stating that copra is not classified as food. The
statement was made in the context of BFAD's regulatory
responsibilities which focus mainly on foods that are

processed and packaged, and thereby copra is not

covered.
However, in the broader definition of food which include
agricultural commodities and other components used in
the manufacture/ processing of food, it is our opinion
that copra should be classified as an agricultural food
product since copra is produced from coconut meat
which is food and based on available information, more
than 80% of products derived from copra are edible
products.
Moreover, as the government agency charged with the enforcement of
the law, the opinion of the Commissioner of Internal Revenue, in the
absence of any showing that it is plainly wrong, is entitled to great
weight. Indeed, the ruling was made by the Commissioner of Internal
Revenue in the exercise of his power under 245 of the NIRC to "make
rulings or opinions in connection with the implementation of the
provisions of internal revenue laws,including rulings on the
classification of articles for sales tax and similar purposes."
Second. Petitioner complains that it was denied due process because it
was not heard before the ruling was made. There is a distinction in
administrative law between legislative rules and interpretative
rules. 3 There would be force in petitioner's argument if the circular in
question were in the nature of a legislative rule. But it is not. It is a mere
interpretative rule.
The reason for this distinction is that a legislative rule is in the nature
of subordinate legislation, designed to implement a primary legislation
by providing the details thereof. In the same way that laws must have
the benefit of public hearing, it is generally required that before a
legislative rule is adopted there must be hearing. In this connection,
the Administrative Code of 1987 provides:

Public Participation. If not otherwise required by law,

an agency shall, as far as practicable, publish or
circulate notices of proposed rules and afford interested
parties the opportunity to submit their views prior to the
adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be
valid unless the proposed rates shall have been
published in a newspaper of general circulation at least
two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases
shall be observed. 4
In addition such rule must be published. 5 On the other hand,
interpretative rules are designed to provide guidelines to the law which the
administrative agency is in charge of enforcing.
Accordingly, in considering a legislative rule a court is free to make
three inquiries: (i) whether the rule is within the delegated authority of
the administrative agency; (ii) whether it is reasonable; and (iii)
whether it was issued pursuant to proper procedure. But the court is
not free to substitute its judgment as to the desirability or wisdom of
the rule for the legislative body, by its delegation of administrative
judgment, has committed those questions to administrative judgments
and not to judicial judgments. In the case of an interpretative rule, the
inquiry is not into the validity but into the correctness or propriety of
the rule. As a matter of power a court, when confronted with an
interpretative rule, is free to (i) give the force of law to the rule; (ii) go
to the opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative
rule. 6
In the case at bar, we find no reason for holding that respondent
Commissioner erred in not considering copra as an "agricultural food
product" within the meaning of 103(b) of the NIRC. As the Solicitor

General contends, "copra per se is not food, that is, it is not intended
for human consumption. Simply stated, nobody eats copra for food."
That previous Commissioners considered it so, is not reason for holding
that the present interpretation is wrong. The Commissioner of Internal
Revenue is not bound by the ruling of his predecessors. 7 To the contrary,
the overruling of decisions is inherent in the interpretation of laws.
Third. Petitioner likewise claims that RMC No. 47-91 is discriminatory
and violative of the equal protection clause of the Constitution because
while coconut farmers and copra producers are exempt, traders and
dealers are not, although both sell copra in its original state.
Petitioners add that oil millers do not enjoy tax credit out of the VAT
payment of traders and dealers.
The argument has no merit. There is a material or substantial
difference between coconut farmers and copra producers, on the one
hand, and copra traders and dealers, on the other. The former produce
and sell copra, the latter merely sell copra. The Constitution does not
forbid the differential treatment of persons so long as there is a
reasonable basis for classifying them differently. 8
It is not true that oil millers are exempt from VAT. Pursuant to 102 of
the NIRC, they are subject to 10% VAT on the sale of services. Under
104 of the Tax Code, they are allowed to credit the input tax on the
sale of copra by traders and dealers, but there is no tax credit if the
sale is made directly by the copra producer as the sale is VAT exempt.
In the same manner, copra traders and dealers are allowed to credit the
input tax on the sale of copra by other traders and dealers, but there is
no tax credit if the sale is made by the producer.
Fourth. It is finally argued that RMC No. 47-91 is counterproductive
because traders and dealers would be forced to buy copra from coconut
farmers who are exempt from the VAT and that to the extent that
prices are reduced the government would lose revenues as the 10% tax
base is correspondingly diminished.

This is not so. The sale of agricultural non-food products is exempt from
VAT only when made by the primary producer or owner of the land from
which the same is produced, but in the case of agricultural food
products their sale in their original state is exempt at all stages of
production or distribution. At any rate, the argument that the
classification of copra as agricultural non-food product is
counterproductive is a question of wisdom or policy which should be
addressed to respondent officials and to Congress.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado and Puno, JJ., concur.

G.R. No. L-17888

October 29, 1968

RESINS, INCORPORATED, petitioner,

vs.
AUDITOR GENERAL OF THE PHILIPPINES and THE CENTRAL BANK OF
THE PHILIPPINES, respondents.
Lichauco Picazo & Agcaoili for petitioner.
Assistant Solicitor General Jose P. Alejandro, Solicitor Jorge R. Coquia
and Central Bank Legal Counsel for respondents.
FERNANDO, J.:
Petitioner here, as did petitioner in Casco Philippine Chemical Co., Inc.
v. Gimenez,1 would seek a refund2 from respondent Central Bank on the
claim that it was exempt from the margin fee under Republic Act No.
2609 for the importation of urea and formaldehyde, as separate units,
used for the production of synthetic glue of which it was a
manufacturer. Since the specific language of the Act speak of "urea
formaldehyde,"3 and petitioner admittedly did import urea and
formaldehyde separately, its plea could be granted only if we could
construe the above provision of law to read "urea and formaldehyde." In
the above Casco decision, we could not see our way clear to doing so.
We still cannot see it that way. Hence, this petition must fail.
Our inability to indulge petitioner in the aforecited Casco petition was
made clear by the present Chief Justice. Thus: "Hence, 'urea
formaldehyde' is clearly a finished product, which is patently distinct
and different from 'urea' and 'formaldehyde', as separate articles used
in the manufacture of the synthetic resins known as 'urea
formaldehyde'. Petitioner contends, however, that the bill approved in
Congress contained the copulative conjunction 'and' between the terms
'urea' and 'formaldehyde', and that the members of Congress intended
to exempt 'urea' and 'formaldehyde' separately as essential elements in
the manufacture of the synthetic resin glue called 'urea. fomaldehyde'

not the latter as a finished product, citing in support of this view the
statements made on the floor of the Senate, during the consideration of
the bill before said House, by members thereof. But, said individual
statements do not necessarily reflect the view of the Senate. Much less
do they indicate the intent of the House of Representatives ...
Furthermore, it is well settled that the enrolled bill which uses the
term 'urea formaldehyde' instead of 'urea and formaldehyde' is
conclusive upon the courts as regards the tenor of the measure passed
by Congress and approved by the President ... If there has been any
mistake in the printing of the bill before it was certified by the officers
of Congress and approved by the Executive on which we cannot
speculate, without jeopardizing the principle of separation of powers
and undermining one of the cornerstones of our democratic system
the remedy is by amendment or curative legislation, not by judicial
decree."
To which we can only add that deference to the scope and implication
of the function entrusted by the Constitution to the judiciary leaves us
no other alternative. For nothing is better settled than that the first
and fundamental duty of courts is to apply the law as they find it, not
as they would like it to be. Fidelity to such a task precludes
construction or interpretation, unless application is impossible or
inadequate without it.4 Such is not the case in the situation presented
here. So we have held in Casco Philippine Chemical Co., Inc. v.
Gimenez. We do so again.
Then, again, there is merit in the contention of the Solicitor General,
as counsel for respondent Central Bank, and the Auditor General, that
as a refund undoubtedly partakes of a nature of an exemption, it
cannot be allowed unless granted in the most explicit and categorical
language. As was held by us in Commissioner of Internal Revenue vs.
Guerrero:5 "From 1906, in Catholic Church vs. Hastings to 1966, in Esso
Standard Eastern, Inc. vs. Acting Commissioner of Customs, it has been
the constant and uniform holding that exemption from taxation is not
favored and is never presumed, so that if granted it must be strictly

construed against the taxpayer. Affirmatively put, the law frowns on

exemption from taxation, hence, an exempting provision should be
construedstrictissimi juris." Certainly, whatever may be said of the
statutory language found in Republic Act 2609, it would be going too far
to assert that there was such a clear and manifest intention of
legislative will as to compel such a refund.
One last matter. Petitioner would assail as devoid of support in law the
action taken by the respondent Auditor General in an indorsement to
the respondent Central Bank6 causing it to overrule its previous
resolution and to adopt the view in such indorsement to the effect that
the importation of urea and of formaldehyde, as separate units, did not
come within the purview of the statutory language that granted such
exemption. It does not admit of doubt that the respondent Auditor
General's interpretation amounts to a literal adherence to the statute
as enacted. As such, it cannot be said to be contrary to law. As a matter
of fact, it is any other view, as is evident from the above, that is
susceptible to well-founded criticism, as lacking legal basis. Under the
circumstances, the respondent Auditor General was merely complying
with his duty in thus calling the attention of respondent Central Bank.
The limit of his constitutional function was clearly set forth in Guevara
v. Gimenez,7 the opinion being rendered by the present Chief Justice.
Thus: "Under our Constitution, the authority of the Auditor General, in
connection with expenditures of the Government is limited to the
auditing of expenditures of funds or property pertaining to, or held in
trust by, the Government or the provinces or municipalities thereof
(Article XI, section 2, of the Constitution). Such function is limited to a
determination of whether there is a law appropriating funds for a given
purpose; whether a contract, made by the property officer, has been
entered into in comformity with said appropriation law; whether the
goods or services covered by said contract have been delivered or
rendered in pursuance of the provisions thereof, as attested to by the
proper officer; and whether payment therefor has been authorized by
the officials of the corresponding department or bureau. If these
requirements have been fulfilled, it is the ministerial duty of the

Auditor General to approve and pass in audit the voucher and treasury
warrant for said payment. He has no discretion or authority to
disapprove said payment upon the ground that the aforementioned
contract was unwise or that the amount stipulated therein is
unreasonable. If he entertains such belief, he may do no more than
discharge the duty imposed upon him by the Constitution (Article XI,
section 2), 'to bring to the attention of the proper administrative
officer expenditures of funds or property which, in his opinion, are
irregular, unnecessary, excessive or extravagant.' This duty implies a
negation of the power to refuse and disapprove payment of such
expenditures, for its disapproval, if he had authority therefor, would
bring to the attention of the aforementioned administrative officer the
reasons for the adverse action thus taken by the General Auditing
office, and, hence, render the imposition of said duty unnecessary."
In the same way that the Auditor General, by virtue of the above
function, which is intended to implement the constitutional mandate
that no money can be paid out of the treasury except in the pursuance
of appropriation made by law,8 must carefully see to it that there is in
fact such statutory enactment, no refund, which likewise represents a
diminution of public funds in the treasury, should be allowed unless the
law clearly so provides. The Auditor General would be sadly remiss in
the discharge of his responsibility under the Constitution if, having the
statute before him, he allows such a refund when, under the terms
thereof, it cannot be done. His actuation here cannot be stigmatized as
violative of any legal precept; as a matter of fact, it is precisely in
accordance with the constitutional mandate.
WHEREFORE, this petition is denied, with costs against petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro,
Angeles and Capistrano, JJ., concur.
Zaldivar, J., is on leave.

G.R. No. 140230 December 15, 2005

COMMISSIONER OF INTERNAL REVENUE, Petitioner,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondent.
DECISION
GARCIA, J.:
In this petition for review on certiorari, the Commissioner of Internal
Revenue (Commissioner) seeks the review and reversal of the
September 17, 1999 Decision1 of the Court of Appeals (CA) in CA-G.R.
No. SP 47895, affirming, in effect, the February 18, 1998 decision2 of
the Court of Tax Appeals (CTA) in C.T.A. Case No. 5178, a claim for tax
refund/credit instituted by respondent Philippine Long Distance
Company (PLDT) against petitioner for taxes it paid to the Bureau of
Internal Revenue (BIR) in connection with its importation in 1992 to
1994 of equipment, machineries and spare parts.

On March 15, 1994, PLDT addressed a letter to the BIR seeking a

confirmatory ruling on its tax exemption privilege under Section 12 of
R.A. 7082, which reads:
Sec. 12. The grantee shall be liable to pay the same taxes on their
real estate, buildings, and personal property, exclusive of this
franchise, as other persons or corporations are now or hereafter may be
required by law to pay. In addition thereto, the grantee, shall pay a
franchise tax equivalent to three percent (3%) of all gross receipts of
the telephone or other telecommunications businesses transacted under
this franchise by the grantee, its successors or assigns, and the said
percentage shall be in lieu of all taxes on this franchise or earnings
thereof: Provided, That the grantee shall continue to be liable for
income taxes payable under Title II of the National Internal Revenue
Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter
enactment is amended or repealed, in which case the amendment or
repeal shall be applicable thereto. (Emphasis supplied).
Responding, the BIR issued on April 19, 1994 Ruling No. UN-14094,3 pertinently reading, as follows:

The facts:
PLDT shall be subject only to the following taxes, to wit:
PLDT is a grantee of a franchise under Republic Act (R.A.) No. 7082 to
install, operate and maintain a telecommunications system throughout
the Philippines.
For equipment, machineries and spare parts it imported for its business
on different dates from October 1, 1992 to May 31, 1994, PLDT paid the
BIR the amount of P164,510,953.00, broken down as follows: (a)
compensating tax of P126,713,037.00; advance sales tax
of P12,460,219.00 and other internal revenue taxes ofP25,337,697.00.
For similar importations made between March 1994 to May 31, 1994,
PLDT paidP116,041,333.00 value-added tax (VAT).

xxx xxx xxx

7. The 3% franchise tax on gross receipts which shall be in lieu of all
taxes on its franchise or earnings thereof.
xxx xxx xxx
The "in lieu of all taxes" provision under Section 12 of RA 7082 clearly
exempts PLDT from all taxes including the 10% value-added tax (VAT)
prescribed by Section 101 (a) of the same Code on its importations of
equipment, machineries and spare parts necessary in the conduct of its

business covered by the franchise, except the aforementioned

enumerated taxes for which PLDT is expressly made liable.

Total amount claimed P126,713.037.00

Less:

xxx xxx xxx

a) Amount already prescribed: xxx
In view thereof, this Office hereby holds that PLDT, is exempt from
VAT on its importation of equipment, machineries and spare parts
needed in its franchise operations.

Total P 38,015,132.00
b) Waived by petitioner

Armed with the foregoing BIR ruling, PLDT filed on December 2, 1994 a
claim4 for tax credit/refund of the VAT, compensating taxes, advance
sales taxes and other taxes it had been paying "in connection with its
importation of various equipment, machineries and spare parts needed
for its operations". With its claim not having been acted upon by the
BIR, and obviously to forestall the running of the prescriptive period
therefor, PLDT filed with the CTA a petition for review,5 therein seeking
a refund of, or the issuance of a tax credit certificate in, the amount
ofP280,552,286.00, representing compensating taxes, advance sales
taxes, VAT and other internal revenue taxes alleged to have been
erroneously paid on its importations from October 1992 to May 1994.
The petition was docketed in said court as CTA Case No. 5178.
On February 18, 1998, the CTA rendered a decision6 granting PLDTs
petition, pertinently saying:

(Exh. B-216) P 1,440,874.00 P39,456,006.00

Amount refundable P87,257,031.00
ADVANCE SALES TAX
Total amount claimed P12,460.219.00
Less amount already prescribed: P5,043,828.00
Amount refundable P7,416,391.00
OTHER BIR TAXES
Total amount claimed P25,337,697.00

This Court has noted that petitioner has included in its claim receipts
covering the period prior to December 16, 1992, thus, prescribed and
barred from recovery. In conclusion, We find that the petitioner is
entitled to the reduced amount of P223,265,276.00 after excluding
from the final computation those taxes that were paid prior to
December 16, 1992 as they fall outside the two-year prescriptive period
for claiming for a refund as provided by law. The computation of the
refundable amount is summarized as follows:
COMPENSATING TAX

Less amount already prescribed: 11,187,740.00

Amount refundable P14,149,957.00
VALUE ADDED TAX
Total amount claimed P116.041,333.00
Less amount waived by petitioner

(unaccounted receipts) 1,599,436.00

Amount refundable P114,441,897.00
TOTAL AMOUNT REFUNDABLE P223,265,276.00,
============
(Breakdown omitted)
and accordingly disposed, as follows:
WHEREFORE, in view of all the foregoing, this Court finds the instant
petition meritorious and in accordance with law. Accordingly,
respondent is hereby ordered to REFUND or to ISSUE in favor of
petitioner a Tax Credit Certificate in the reduced amount
of P223,265,276.00 representing erroneously paid value-added taxes,
compensating taxes, advance sales taxes and other BIR taxes on its
importation of equipments (sic), machineries and spare parts for the
period covering the taxable years 1992 to 1994.
Noticeably, the CTA decision, penned by then Associate Justice Ramon
O. de Veyra, with then CTA Presiding Judge Ernesto D. Acosta,
concurring, is punctuated by a dissenting opinion7 of Associate Judge
Amancio Q. Saga who maintained that the phrase "in lieu of all taxes"
found in Section 12 of R.A. No. 7082, supra, refers to exemption from
"direct taxes only" and does not cover "indirect taxes", such as VAT,
compensating tax and advance sales tax.
In time, the BIR Commissioner moved for a reconsideration but the CTA,
in its Resolution8 of May 7, 1998, denied the motion, with Judge
Amancio Q. Saga reiterating his dissent.9
Unable to accept the CTA decision, the BIR Commissioner elevated the
matter to the Court of Appeals (CA) by way of petition for review,
thereat docketed as CA-G.R. No. 47895.

As stated at the outset hereof, the appellate court, in the herein

challenged Decision10 dated September 17, 1999, dismissed the BIRs
petition, thereby effectively affirming the CTAs judgment.
Relying on its ruling in an earlier case between the same parties and
involving the same issue CA-G.R. SP No. 40811, decided 16 February
1998 the appellate court partly wrote in its assailed decision:
This Court has already spoken on the issue of what taxes are referred to
in the phrase "in lieu of all taxes" found in Section 12 of R.A. 7082.
There are no reasons to deviate from the ruling and the same must be
followed pursuant to the doctrine of stare decisis. xxx. "Stare decisis et
non quieta movere. Stand by the decision and disturb not what is
settled."
Hence, this recourse by the BIR Commissioner on the lone assigned
error that:
THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT IS
EXEMPT FROM THE PAYMENT OF VALUE-ADDED TAXES, COMPENSATING
TAXES, ADVANCE SALES TAXES AND OTHER BIR TAXES ON ITS
IMPORTATIONS, BY VIRTUE OF THE PROVISION IN ITS FRANCHISE THAT
THE 3% FRANCHISE TAX ON ITS GROSS RECEIPTS SHALL BE IN LIEU OF ALL
TAXES ON ITS FRANCHISE OR EARNINGS THEREOF.
There is no doubt that, insofar as the Court of Appeals is concerned,
the issue petitioner presently raises had been resolved by that court in
CA-G.R. SP No. 40811, entitled Commissioner of Internal Revenue vs.
Philippine Long Distance Company. There, the Sixteenth Division of the
appellate court declared that under the express provision of Section 12
of R.A. 7082, supra, "the payment [by PLDT] of the 3% franchise tax of
[its] gross receipts shall be in lieu of all taxes" exempts PLDT from
payment of compensating tax, advance sales tax, VAT and other internal
revenue taxes on its importation of various equipment, machinery and
spare parts for the use of its telecommunications system.

Dissatisfied with the CA decision in that case, the BIR Commissioner

initially filed with this Court a motion for time to file a petition for
review, docketed in this Court as G.R. No. 134386. However, on the last
day for the filing of the intended petition, the then BIR Commissioner
had a change of heart and instead manifested11 that he will no longer
pursue G.R. No. 134386, there being no compelling grounds to disagree
with the Court of Appeals decision in CA-G.R. 40811. Consequently, on
September 28, 1998, the Court issued a Resolution12 in G.R. No. 134386
notifying the parties that "no petition" was filed in said case and that
the CA judgment sought to be reviewed therein "has now become final
and executory". Pursuant to said Resolution, an Entry of Judgment 13 was
issued by the Court of Appeals in CA-G.R. SP No. 40811. Hence, the CAs
dismissal of CA-G.R. No. 47895 on the additional ground of stare
decisis.
Under the doctrine of stare decisis et non quieta movere, a point of law
already established will, generally, be followed by the same
determining court and by all courts of lower rank in subsequent cases
where the same legal issue is raised.14 For reasons needing no
belaboring, however, the Court is not at all concluded by the ruling of
the Court of Appeals in its earlier CA-G.R. SP No. 47895.
The Court has time and again stated that the rule on stare
decisis promotes stability in the law and should, therefore, be accorded
respect. However, blind adherence to precedents, simply as precedent,
no longer rules. More important than anything else is that the court is
right,15 thus its duty to abandon any doctrine found to be in violation of
the law in force.16
As it were, the former BIR Commissioners decision not to pursue his
petition in G.R. No. 134386 denied the BIR, at least as early as in that
case, the opportunity to obtain from the Court an authoritative
interpretation of Section 12 of R.A. 7082. All is, however, not lost. For,
the government is not estopped by acts or errors of its agents,
particularly on matters involving taxes. Corollarily, the erroneous
application of tax laws by public officers does not preclude the

subsequent correct application thereof.17 Withal, the errors of certain

administrative officers, if that be the case, should never be allowed to
jeopardize the governments financial position.18
Hence, the need to address the main issue tendered herein.
According to the Court of Appeals, the "in lieu of all taxes" clause found
in Section 12 of PLDTs franchise (R.A. 7082) covers all taxes, whether
direct or indirect; and that said section states, in no uncertain terms,
that PLDTs payment of the 3% franchise tax on all its gross receipts
from businesses transacted by it under its franchise is in lieu of all taxes
on the franchise or earnings thereof. In fine, the appellate court,
agreeing with PLDT, posits the view that the word "all" encompasses any
and all taxes collectible under the National Internal Revenue Code
(NIRC), save those specifically mentioned in PLDTs franchise, such as
income and real property taxes.
The BIR Commissioner excepts. He submits that the exempting "in lieu
of all taxes" clause covers direct taxes only, adding that for indirect
taxes to be included in the exemption, the intention to include must be
specific and unmistakable. He thus faults the Court of Appeals for
erroneously declaring PLDT exempt from payment of VAT and other
indirect taxes on its importations. To the Commissioner, PLDTs claimed
entitlement to tax refund/credit is without basis inasmuch as the 3%
franchise tax being imposed on PLDT is not a substitute for or in lieu of
indirect taxes.
The sole issue at hand is whether or not PLDT, given the tax component
of its franchise, is exempt from paying VAT, compensating taxes,
advance sales taxes and internal revenue taxes on its importations.
Based on the possibility of shifting the incidence of taxation, or as to
who shall bear the burden of taxation, taxes may be classified into
either direct tax or indirect tax.

In context, direct taxes are those that are exacted from the very person
who, it is intended or desired, should pay them; 19 they are impositions
for which a taxpayer is directly liable on the transaction or business he
is engaged in.20
On the other hand, indirect taxes are those that are demanded, in the
first instance, from, or are paid by, one person in the expectation and
intention that he can shift the burden to someone else.21 Stated
elsewise, indirect taxes are taxes wherein the liability for the payment
of the tax falls on one person but the burden thereof can be shifted or
passed on to another person, such as when the tax is imposed upon
goods before reaching the consumer who ultimately pays for it. When
the seller passes on the tax to his buyer, he, in effect, shifts the tax
burden, not the liability to pay it, to the purchaser as part of the price
of goods sold or services rendered.
To put the situation in graphic terms, by tacking the VAT due to the
selling price, the seller remains the person primarily and legally liable
for the payment of the tax. What is shifted only to the intermediate
buyer and ultimately to the final purchaser is the burden of the
tax.22 Stated differently, a seller who is directly and legally liable for
payment of an indirect tax, such as the VAT on goods or services, is not
necessarily the person who ultimately bears the burden of the same
tax. It is the final purchaser or end-user of such goods or services who,
although not directly and legally liable for the payment thereof,
ultimately bears the burden of the tax.23
There can be no serious argument that PLDT, vis--vis its payment of
internal revenue taxes on its importations in question, is effectively
claiming exemption from taxes not falling under the category of direct
taxes. The claim covers VAT, advance sales tax and compensating tax.
The NIRC classifies VAT as "an indirect tax the amount of [which] may
be shifted or passed on to the buyer, transferee or lessee of the
goods".24 As aptly pointed out by Judge Amancio Q. Saga in his dissent in
C.T.A. Case No. 5178, the 10% VAT on importation of goods partakes of

an excise tax levied on the privilege of importing articles. It is not a tax

on the franchise of a business enterprise or on its earnings. It is
imposed on all taxpayers who import goods (unless such importation
falls under the category of an exempt transaction under Sec. 109 of the
Revenue Code) whether or not the goods will eventually be sold,
bartered, exchanged or utilized for personal consumption. The VAT on
importation replaces the advance sales tax payable by regular
importers who import articles for sale or as raw materials in the
manufacture of finished articles for sale.25
Advance sales tax has the attributes of an indirect tax because the taxpaying importer of goods for sale or of raw materials to be processed
into merchandise can shift the tax or, to borrow from Philippine
Acetylene Co, Inc. vs. Commissioner of Internal Revenue, 26 lay the
"economic burden of the tax", on the purchaser, by subsequently adding
the tax to the selling price of the imported article or finished product.
Compensating tax also partakes of the nature of an excise tax payable
by all persons who import articles, whether in the course of business or
not.27 The rationale for compensating tax is to place, for tax purposes,
persons purchasing from merchants in the Philippines on a more or less
equal basis with those who buy directly from foreign countries. 28
It bears to stress that the liability for the payment of the indirect taxes
lies only with the seller of the goods or services, not in the buyer
thereof. Thus, one cannot invoke ones exemption privilege to avoid the
passing on or the shifting of the VAT to him by the
manufacturers/suppliers of the goods he purchased.29 Hence, it is
important to determine if the tax exemption granted to a taxpayer
specifically includes the indirect tax which is shifted to him as part of
the purchase price, otherwise it is presumed that the tax exemption
embraces only those taxes for which the buyer is directly liable. 30
Time and again, the Court has stated that taxation is the rule,
exemption is the exception. Accordingly, statutes granting tax
exemptions must be construed in strictissimi juris against the taxpayer

and liberally in favor of the taxing authority.31 To him, therefore, who

claims a refund or exemption from tax payments rests the burden of
justifying the exemption by words too plain to be mistaken and too
categorical to be misinterpreted.32
As may be noted, the clause "in lieu of all taxes" in Section 12 of RA
7082 is immediately followed by the limiting or qualifying clause "on
this franchise or earnings thereof", suggesting that the exemption is
limited to taxes imposed directly on PLDT since taxes pertaining to
PLDTs franchise or earnings are its direct liability. Accordingly, indirect
taxes, not being taxes on PLDTs franchise or earnings, are outside the
purview of the "in lieu" provision.
If we were to adhere to the appellate courts interpretation of the law
that the "in lieu of all taxes" clauseencompasses the totality of all taxes
collectible under the Revenue Code, then, the immediately following
limiting clause "on this franchise and its earnings" would be nothing
more than a pure jargon bereft of effect and meaning whatsoever.
Needless to stress, this kind of interpretation cannot be accorded a
governing sway following the familiar legal maxim redendo singula
singulis meaning, take the words distributively and apply the reference.
Under this principle, each word or phrase must be given its proper
connection in order to give it proper force and effect, rendering none
of them useless or superfluous. 33
Significantly, in Manila Electric Company [Meralco] vs. Vera,34 the Court
declared the relatively broader exempting clause "shall be in lieu of all
taxes and assessments of whatsoever nature upon the privileges
earnings, income franchise ... of the grantee" written in par. # 9 of
Meralcos franchise as not so all encompassing as to embrace indirect
tax, like compensating tax. There, the Court said:
It is a well-settled rule or principle in taxation that a compensating tax
is an excise tax one that is imposed on the performance of an act,
the engaging in an occupation, or the enjoyment of a privilege. A tax

levied upon property because of its ownership is a direct tax, whereas

one levied upon property because of its use is an excise duty. .
The compensating tax being imposed upon MERALCO, is an impost on
its use of imported articles and is not in the nature of a direct tax on
the articles themselves, the latter tax falling within the exemption.
Thus, inInternational Business Machine Corporation vs. Collector of
Internal Revenue, which involved the collection of a compensating
tax from the plaintiff-petitioner on business machines imported by it,
this Court stated in unequivocal terms that "it is not the act of
importation that is taxed under section 190 but the uses of imported
goods not subjected to a sales tax" because the "compensating tax was
expressly designated as a substitute to make up or compensate for the
revenue lost to the government through the avoidance of sales taxes by
means of direct purchases abroad.
xxx xxx xxx
xxx If it had been the legislative intent to exempt MERALCO from
paying a tax on the use of imported equipments, the legislative body
could have easily done so by expanding the provision of paragraph 9 and
adding to the exemption such words as "compensating tax" or
"purchases from abroad for use in its business," and the like.
It may be so that in Maceda vs. Macaraig, Jr.35 the Court held that an
exemption from "all taxes" granted to the National Power Corporation
(NPC) under its charter36 includes both direct and indirect taxes. But far
from providing PLDT comfort, Maceda in fact supports the case of
herein petitioner, the correct lesson of Macedabeing that an exemption
from "all taxes" excludes indirect taxes, unless the exempting statute,
like NPCs charter, is so couched as to include indirect tax from the
exemption. Wrote the Court:
xxx However, the amendment under Republic Act No. 6395 enumerated
the details covered by the exemption. Subsequently, P.D. 380, made
even more specific the details of the exemption of NPC to cover, among

others, both direct and indirect taxes on all petroleum products used in
its operation. Presidential Decree No. 938 [NPCs amended charter)
amended the tax exemption by simplifying the same law in general
terms. It succinctly exempts NPC from "all forms of taxes, duties fees
."
The use of the phrase "all forms" of taxes demonstrate the intention of
the law to give NPC all the tax exemptions it has been enjoying before.
.
xxx xxx xxx
It is evident from the provisions of P.D. No. 938 that its purpose is to
maintain the tax exemption of NPC from all forms of taxes including
indirect taxes as provided under R.A. No. 6395 and P.D. 380 if it is to
attain its goals. (Italics in the original; words in bracket added)
Of similar import is what we said in Borja vs. Collector of Internal
Revenue.37 There, the Court upheld the decision of the CTA denying a
claim for refund of the compensating taxes paid on the importation of
materials and equipment by a grantee of a heat and power legislative
franchise containing an "in lieu" provision, rationalizing as follows:
xxx Moreover, the petitioners alleged exemption from the payment of
compensating tax in the present case is not clear or expressed; unlike
the exemption from the payment of income tax which was clear and
expressed in the Carcar case. Unless it appears clearly and manifestly
that an exemption is intended, the provision is to be construed strictly
against the party claiming exemption. xxx.
Jurisprudence thus teaches that imparting the "in lieu of all
taxes" clause a literal meaning, as did the Court of Appeals and the CTA
before it, is fallacious. It is basic that in construing a statute, it is the
duty of courts to seek the real intent of the legislature, even if, by so
doing, they may limit the literal meaning of the broad language. 38

It cannot be over-emphasized that tax exemption represents a loss of

revenue to the government and must, therefore, not rest on vague
inference. When claimed, it must be strictly construed against the
taxpayer who must prove that he falls under the exception. And, if an
exemption is found to exist, it must not be enlarged by construction,
since the reasonable presumption is that the state has granted in
express terms all it intended to grant at all, and that, unless the
privilege is limited to the very terms of the statute the favor would be
extended beyond dispute in ordinary cases.39
All told, we fail to see how Section 12 of RA 7082 operates as granting
PLDT blanket exemption from payment of indirect taxes, which, in the
ultimate analysis, are not taxes on its franchise or earnings. PLDT has
not shown its eligibility for the desired exemption. None should be
granted.
As a final consideration, the Court takes particular stock, as the CTA
earlier did, of PLDTs allegation that the Bureau of Customs assessed
the company for advance sales tax and compensating tax for
importations entered between October 1, 1992 and May 31, 1994 when
the value-added tax system already replaced, if not totally eliminated,
advance sales and compensating taxes.40 Indeed, pursuant to Executive
Order No. 27341 which took effect on January 1, 1988, a multi-stage
value-added tax was put into place to replace the tax on original and
subsequent sales tax.42 It stands to reason then, as urged by PLDT, that
compensating tax and advance sales tax were no longer collectible
internal revenue taxes under the NILRC when the Bureau of Customs
made the assessments in question and collected the corresponding tax.
Stated a bit differently, PLDT was no longer under legal obligation to
pay compensating tax and advance sales tax on its importation from
1992 to 1994.
Parenthetically, petitioner has not made an issue about PLDTs
allegations concerning the abolition of the provisions of the Tax Code
imposing the payment of compensating and advance sales tax on
importations and the non-existence of these taxes during the period

under review. On the contrary, petitioner admits that the VAT on

importation of goods has "replace[d] the compensating tax and advance
sales tax under the old Tax Code".43
Given the above perspective, the amount PLDT paid in the concept of
advance sales tax and compensating tax on the 1992 to 1994
importations were, in context, erroneous tax payments and would
theoretically be refundable. It should be emphasized, however, that,
such importations were, when made, already subject to VAT.
Factoring in the fact that a portion of the claim was barred by
prescription, the CTA had determined that PLDT is entitled to a total
refundable amount of P94,673,422.00 (P87,257,031.00 of compensating
tax + P7,416,391.00 =P94,673,422.00). Accordingly, it behooves the BIR
to grant a refund of the advance sales tax and compensating tax in the
total amount of P94,673,422.00, subject to the condition that PLDT
present proof of payment of the corresponding VAT on said transactions.
WHEREFORE, the petition is partially GRANTED. The Decision of the
Court of Appeals in CA-G.R. No. 47895 dated September 17, 1999
is MODIFIED. The Commissioner of Internal Revenue is ORDERED to
issue a Tax Credit Certificate or to refund to PLDT only the
of P94,673,422.00 advance sales tax and compensating tax erroneously
collected by the Bureau of Customs from October 1, 1992 to May 31,
1994, less the VAT which may have been due on the importations in
question, but have otherwise remained uncollected.
SO ORDERED.

G.R. No. 127240

March 27, 2000

ONG CHIA, petitioner,

vs.
REPUBLIC OF THE PHILIPPINES and THE COURT OF
APPEALS, respondents.
MENDOZA, J.:
This is a petition for review of the decision1 of the Court of Appeals
reversing the decision of the Regional Trial Court, Branch 24, Koronadal,
South Cotabato2 admitting petitioner Ong Chia to Philippine citizenship.
The facts are as follows:
Petitioner was born on January 1, 1923 in Amoy, China. In 1932, as a
nine-year old boy, he arrived at the port of Manila on board the vessel
"Angking." Since then, he has stayed in the Philippines where he found
employment and eventually started his own business, married a
Filipina, with whom he had four children. On July 4, 1989, at the age of
66, he filed a verified petition to be admitted as a Filipino citizen under
C.A. No. 473, otherwise known as the Revised Naturalization Law, as
amended. Petitioner, after stating his qualifications as required in 2,
and lack of the disqualifications enumerated in 3 of the law, stated
17. That he has heretofore made (a) petition for citizenship
under the provisions of Letter of Instruction No. 270 with the
Special Committee on Naturalization, Office of the Solicitor
General, Manila, docketed as SCN Case No. 031776, but the
same was not acted upon owing to the fact that the said Special
Committee on Naturalization was not reconstituted after the
February, 1986 revolution such that processing of petitions for
naturalization by administrative process was suspended;

During the hearings, petitioner testified as to his qualifications and

presented three witnesses to corroborate his testimony. So impressed
was Prosecutor Isaac Alvero V. Moran with the testimony of petitioner
that, upon being asked by the court whether the State intended to
present any witness present any witness against him, he remarked:
Actually, Your Honor, with the testimony of the petitioner
himself which is rather surprising, in the sense that he seems to
be well-versed with the major portion of the history of the
Philippines, so, on our part, we are convinced, Your Honor
Please, that petitioner really deserves to be admitted as a
citizen of the Philippines.And for this reason, we do not wish
to present any evidence to counteract or refute the testimony
of the witnesses for the petitioner, as well as the petitioner
himself.3
Accordingly, on August 25, 1999, the trial court granted the petition and
admitted petitioner to Philippine citizenship. The State, however,
through the Office of the Solicitor General, appealed all the names by
which he is or had been known; (2) failed to state all his former placer
of residence in violation of C.A. No. 473, 7; (3) failed to conduct
himself in a proper and irreproachable manner during his entire stay in
the Philippines, in violation of 2; (4) has no known lucrative trade or
occupation and his previous incomes have been insufficient or
misdeclared, also in contravention of 2; and (5) failed to support his
petition with the appropriate documentary evidence. 4
Annexed to the State's appellant's brief was a copy of a 1977 petition
for naturalization filed by petitioner with the Special Committee on
Naturalization in SCN Case No. 031767,5 in which petitioner stated that
in addition to his name of "Ong Chia," he had likewise been known since
childhood as "Loreto Chia Ong." As petitioner, however, failed to state
this other name in his 1989 petition for naturalization, it was contended
that his petition must fail.6The state also annexed income tax
returns7 allegedly filed by petitioner from 1973 to 1977 to show that his

net income could hardly support himself and his family. To prove that
petitioner failed to conduct himself in a proper and irreproachable
manner during his stay in the Philippines, the State contended that,
although petitioner claimed that he and Ramona Villaruel had been
married twice, once before a judge in 1953, and then again in church in
1977, petitioner actually lived with his wife without the benefit of
marriage from 1953 until they were married in 1977. It was alleged that
petitioner failed to present his 1953 marriage contract, if there be any.
The State also annexed a copy of petitioner's 1977 marriage
contract8 and a Joint-Affidavit9 executed by petitioner and his wife.
These documents show that when petitioner married Ramona Villaruel
on February 23, 1977, no marriage license had been required in
accordance with Art. 76 of the Civil Code because petitioner and
Ramona Villaruel had been living together as husband and wife since
1953 without the benefit of marriage. This, according to the State,
belies his claim that when he started living with his wife in 1953, they
had already been married.
The State also argued that, as shown by petitioner's Immigrant
Certificate of Residence, 10 petitioner resided at "J.M. Basa Street,
Iloilo," but he did not include said address in the petition.
On November 15, 1996, the Court of Appeals rendered its decision
which, as already noted, reversed the trial court and denied petitioner's
application for naturalization. It ruled that due to the importance
naturalization cases, the State is not precluded from raising questions
not presented in the lower court and brought up for the first time on
appeal. 11 The appellate court held:
As correctly observed by the Office of the Solicitor General,
petitioner Ong Chia failed to state in this present petition for
naturalization his other name, "LORETO CHIA ONG," which name
appeared in his previous application under Letter of Instruction
No. 270. Names and pseudonyms must be stated in the petition
for naturalization and failure to include the same militates
against a decision in his favor. . . This is a mandatory

requirement to allow those persons who know (petitioner) by

those other names to come forward and inform the authorities
of any legal objection which might adversely affect his
application for citizenship.
Furthermore, Ong Chia failed to disclose in his petition for
naturalization that he formerly resided in "J.M. Basa St., Iloilo"
and "Alimodian, Iloilo." Section 7 of the Revised Naturalization
Law requires the applicant to state in his petition "his present
and former places of residence." This requirement is mandatory
and failure of the petitioner to comply with it is fatal to the
petition. As explained by the Court, the reason for the provision
is to give the public, as well as the investigating agencies of the
government, upon the publication of the petition, an
opportunity to be informed thereof and voice their objections
against the petitioner. By failing to comply with this provision,
the petitioner is depriving the public and said agencies of such
opportunity, thus defeating the purpose of the law. . .
Ong Chia had not also conducted himself in a proper and
irreproachable manner when he lived-in with his wife for
several years, and sired four children out of wedlock. It has
been the consistent ruling that the "applicant's 8-year
cohabitation with his wife without the benefit of clergy and
begetting by her three children out of wedlock is a conduct far
from being proper and irreproachable as required by the Revised
Naturalization Law", and therefore disqualifies him from
becoming a citizen of the Philippines by naturalization . . .
Lastly, petitioner Ong Chia's alleged annual income in 1961 of
P5,000.00, exclusive of bonuses, commissions and allowances, is
not lucrative income. His failure to file an income tax return
"because he is not liable for income tax yet" confirms that his
income is low. . . "It is not only that the person having the
employment gets enough for his ordinary necessities in life. It
must be shown that the employment gives one an income such

that there is an appreciable margin of his income over expenses

as to be able to provide for an adequate support in the event of
unemployment, sickness, or disability to work and thus avoid
one's becoming the object of charity or public charge." . . . Now
that they are in their old age, petitioner Ong Chia and his wife
are living on the allowance given to them by their children. The
monthly pension given by the elder children of the applicant
cannot be added to his income to make it lucrative because like
bonuses, commissions and allowances, said pensions are
contingent, speculative and precarious. . .
Hence, this petition based on the following assignment of errors:
I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN
RULING THAT IN NATURALIZATION CASES, THE APPELLATE COURT
CAN DENY AN APPLICATION FOR PHILIPPINE CITIZENSHIP ON THE
BASIS OF DOCUMENTS NOT PRESENTED BEFORE THE TRIAL COURT
AND NOT FORMING PART OF THE RECORDS OF THE CASE.
II. THE FINDING OF THE COURT OF APPEALS THAT THE
PETITIONER HAS BEEN KNOWN BY SOME OTHER NAME NOT
STATED IN HIS PETITION IS NOT SUPPORTED BY THE EVIDENCE ON
RECORD.
III. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE
PETITIONER STATED IN HIS PETITION AND ITS ANNEXES HIS
PRESENT AND FORMER PLACES OF RESIDENCE.
IV. THE FINDING OF THE COURT OF APPEALS THAT THE
PETITIONER FAILED TO CONDUCT HIMSELF IN A PROPER AND
IRREPROACHABLE MANNER IS NOT SUPPORTED BY THE EVIDENCE
ON RECORD.
Petitioner's principal contention is that the appellate court erred in
considering the documents which had merely been annexed by the
State to its appellant's brief and, on the basis of which, justified the

reversal of the trial court's decision. Not having been presented and
formally offered as evidence, they are mere "scrap(s) of paper devoid
of any evidentiary value," 12 so it was argued, because under Rule 132,
34 of the Revised Rules on Evidence, the court shall consider no
evidence which has not been formally offered.
The contention has no merit. Petitioner failed to note Rule 143
Rules of Court which provides that

13

of the

These rules shall not apply to land registration, cadastral and

election cases, naturalization and insolvency proceedings, and
other cases not herein provided for, except by analogy or in a
suppletory character and whenever practicable and convenient.
(Emphasis added).
Prescinding from the above, the rule on formal offer of evidence (Rule
132, 34) now being invoked by petitioner is clearly not applicable to
the present case involving a petition for naturalization. The only
instance when said rules may be applied by analogy or suppletorily in
such cases is when it is "practicable and convenient." That is not the
case here, since reliance upon the documents presented by the State
for the first time on appeal, in fact, appears to be the more practical
and convenient course of action considering that decisions in
naturalization proceedings are not covered by the rule on res
judicata. 14 Consequently, a final favorable judgment does not preclude
the State from later on moving for a revocation of the grant of
naturalization on the basis of the same documents.
Petitioner claims that as a result of the failure of the State to present
and formally offer its documentary evidence before the trial court, he
was denied the right to object against their authenticity, effectively
depriving him of his fundamental right to procedural due process. 15 We
are not persuaded. Indeed, the reason for the rule prohibiting the
admission of evidence which has not been formally offered is to afford
the opposite party the chance to object to their
admissibility. 16 Petitioner cannot claim that he was deprived of the

right to object to the authenticity of the documents submitted to the

appellate court by the State. He could have included his objections, as
he, in fact, did, in the brief he filed with the Court of Appeals. thus:
The authenticity of the alleged petition for naturalization (SCN
Case No. 031767) which was supposedly filed by Ong Chia under
LOI 270 has not been established. In fact, the case number of
the alleged petition for naturalization. . . is 031767 while the
case number of the petition actually filed by the appellee
is031776. Thus, said document is totally unreliable and should
not be considered by the Honorable Court in resolving the
instant appeal. 17
Indeed, the objection is flimsy as the alleged discrepancy is trivial, and,
at most, can be accounted for as a typographical error on the part of
petitioner himself. That "SCN Case No. 031767," a copy of which was
annexed to the petition, is the correct case number is confirmed by the
Evaluation Sheet 18 of the Special Committee on Naturalization which
was also docketed as "SCN Case No. 031767." Other than this, petitioner
offered no evidence to disprove the authenticity of the documents
presented by the State.
Furthermore, the Court notes that these documents namely, the
petition in SCN Case No. 031767, petitioner's marriage contract, the
joint affidavit executed by him and his wife, and petitioner's income
tax returns are all public documents. As such, they have been
executed under oath. They are thus reliable. Since petitioner failed to
make a satisfactory showing of any flaw or irregularity that may cast
doubt on the authenticity of these documents, it is our conclusion that
the appellate court did not err in relying upon them.
One last point. The above discussion would have been enough to
dispose of this case, but to settle all the issues raised, we shall briefly
discuss the effect of petitioner's failure to include the address "J.M.
Basa St., Iloilo" in his petition, in accordance with 7, C.A. No. 473. This
address appears on petitioner's Immigrant Certificate of Residence, a

document which forms part of the records as Annex A of his 1989

petition for naturalization. Petitioner admits that he failed to mention
said address in his petition, but argues that since the Immigrant
Certificate of Residence containing it had been fully published, 19 with
the petition and the other annexes, such publication constitutes
substantial compliance with 7. 20 This is allegedly because the
publication effectively satisfied the objective sought to be achieved by
such requirement, i.e., to give investigating agencies of the
government the opportunity to check on the background of the
applicant and prevent suppression of information regarding any possible
misbehavior on his part in any community where he may have lived at
one time or another. 21 It is settled, however, that naturalization laws
should be rigidly enforced and strictly construed in favor of the
government and against the applicant. 22 As noted by the State, C.A.
No. 473, 7 clearly provides that the applicant for naturalization shall
set forth in the petition his present and former places of
residence. 23 This provision and the rule of strict application of the law
in naturalization cases defeat petitioner's argument of "substantial
compliance" with the requirement under the Revised Naturalization
Law. On this ground alone, the instant petition ought to be denied.
1wphi1.nt

WHEREFORE, the decision of the Court of Appeals is AFFIRMED and the

instant petition is hereby DENIED.
SO ORDERED.
Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.

G.R. No. 100970 September 2, 1992

FINMAN GENERAL ASSURANCE CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and JULIA
SURPOSA, respondents.

Streets, Bacolod City after attending the celebration of the "Maskarra

Annual Festival."
Thereafter, private respondent and the other beneficiaries of said
insurance policy filed a written notice of claim with the petitioner
insurance company which denied said claim contending that murder and
assault are not within the scope of the coverage of the insurance policy.

Aquino and Associates for petitioner.

Public Attorney's Office for private respondent.

NOCON, J.:
This is a petition for certiorari with a prayer for the issuance of a
restraining order and preliminary mandatory injunction to annul and set
aside the decision of the Court of Appeals dated July 11,
1991, 1 affirming the decision dated March 20, 1990 of the Insurance
Commission 2 in ordering petitioner Finman General Assurance Corporation
to pay private respondent Julia Surposa the proceeds of the personal
accident Insurance policy with interest.
It appears on record that on October 22, 1986, deceased, Carlie Surposa
was insured with petitioner Finman General Assurance Corporation
under Finman General Teachers Protection Plan Master Policy No. 2005
and Individual Policy No. 08924 with his parents, spouses Julia and
Carlos Surposa, and brothers Christopher, Charles, Chester and Clifton,
all surnamed, Surposa, as beneficiaries. 3
While said insurance policy was in full force and effect, the insured,
Carlie Surposa, died on October 18, 1988 as a result of a stab wound
inflicted by one of the three (3) unidentified men without provocation
and warning on the part of the former as he and his cousin, Winston
Surposa, were waiting for a ride on their way home along Rizal-Locsin

On February 24, 1989, private respondent filed a complaint with the

Insurance Commission which subsequently rendered a decision, the
pertinent portion of which reads:
In the light of the foregoing. we find respondent liable
to pay complainant the sum of P15,000.00 representing
the proceeds of the policy with interest. As no evidence
was submitted to prove the claim for mortuary aid in the
sum of P1,000.00, the same cannot be entertained.
WHEREFORE, judgment is hereby rendered ordering
respondent to pay complainant the sum of P15,000.00
with legal interest from the date of the filing of the
complaint until fully satisfied. With costs. 4
On July 11, 1991, the appellate court affirmed said decision.
Hence, petitioner filed this petition alleging grove abuse of discretion
on the part of the appellate court in applying the principle of "expresso
unius exclusio alterius" in a personal accident insurance policy since
death resulting from murder and/or assault are impliedly excluded in
said insurance policy considering that the cause of death of the insured
was not accidental but rather a deliberate and intentional act of the
assailant in killing the former as indicated by the location of the lone
stab wound on the insured. Therefore, said death was committed with
deliberate intent which, by the very nature of a personal accident
insurance policy, cannot be indemnified.

We do not agree.
The terms "accident" and "accidental" as used in
insurance contracts have not acquired any technical
meaning, and are construed by the courts in their
ordinary and common acceptation. Thus, the terms have
been taken to mean that which happen by chance or
fortuitously, without intention and design, and which is
unexpected, unusual, and unforeseen. An accident is an
event that takes place without one's foresight or
expectation an event that proceeds from an unknown
cause, or is an unusual effect of a known cause and,
therefore, not expected.
. . . The generally accepted rule is that, death or injury
does not result from accident or accidental means
within the terms of an accident-policy if it is the natural
result of the insured's voluntary act, unaccompanied by
anything unforeseen except the death or injury. There is
no accident when a deliberate act is performed unless
some additional, unexpected, independent, and
unforeseen happening occurs which produces or brings
about the result of injury or death. In other words,
where the death or injury is not the natural or probable
result of the insured's voluntary act, or if something
unforeseen occurs in the doing of the act which
produces the injury, the resulting death is within the
protection of the policies insuring against death or injury
from accident. 5
As correctly pointed out by the respondent appellate court in its
decision:
In the case at bar, it cannot be pretended that Carlie
Surposa died in the course of an assault or murder as a
result of his voluntary act considering the very nature of

these crimes. In the first place, the insured and his

companion were on their way home from attending a
festival. They were confronted by unidentified persons.
The record is barren of any circumstance showing how
the stab wound was inflicted. Nor can it be pretended
that the malefactor aimed at the insured precisely
because the killer wanted to take his life. In any event,
while the act may not exempt the unknown perpetrator
from criminal liability, the fact remains that the
happening was a pure accident on the part of the victim.
The insured died from an event that took place without
his foresight or expectation, an event that proceeded
from an unusual effect of a known cause and, therefore,
not expected. Neither can it be said that where was a
capricious desire on the part of the accused to expose
his life to danger considering that he was just going
home after attending a festival. 6
Furthermore, the personal accident insurance policy involved herein
specifically enumerated only ten (10) circumstances wherein no liability
attaches to petitioner insurance company for any injury, disability or
loss suffered by the insured as a result of any of the stimulated causes.
The principle of " expresso unius exclusio alterius" the mention of
one thing implies the exclusion of another thing is therefore
applicable in the instant case since murder and assault, not having been
expressly included in the enumeration of the circumstances that would
negate liability in said insurance policy cannot be considered by
implication to discharge the petitioner insurance company from liability
for, any injury, disability or loss suffered by the insured. Thus, the
failure of the petitioner insurance company to include death resulting
from murder or assault among the prohibited risks leads inevitably to
the conclusion that it did not intend to limit or exempt itself from
liability for such death.
Article 1377 of the Civil Code of the Philippines provides that:

The interpretation of obscure words or stipulations in a

contract shall not favor the party who caused the
obscurity.
Moreover,
it is well settled that contracts of insurance are to be
construed liberally in favor of the insured and strictly
against the insurer. Thus ambiguity in the words of an
insurance contract should be interpreted in favor of its
beneficiary. 7
WHEREFORE, finding no irreversible error in the decision of the
respondent Court of Appeals, the petition forcertiorari with restraining
order and preliminary injunction is hereby DENIED for lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Melo, JJ., concur.

FIRST DIVISION
GOVERNMENT SERVICE G.R. No. 176832
INSURANCE SYSTEM,
Petitioner,

Trial Court (RTC) Judge of Branch 17, Manila and served as such until his
death in 2001.

Present:

Records[4] show that on November 30, 2000, Judge Vicencio suffered loss of
consciousness due to pericardial effusion. He was admitted at
the Makati Medical Center where he was diagnosed with Adenocarcinoma of
the Left Lung with Metastases to Pedicardium. He underwent intravenous
chemotherapy. He was confined from November 30, 2000 to May 7, 2001.

PUNO, C.J., Chairperson,

- versus - CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.

On May 31, 2001, Judge Vicencio died. Per his Death Certificate,[5] the
immediate cause of his death was Cardiopulmonary Arrest, and the
antecedent cause was T/C Fatal Arrythmia. No underlying cause of death
was indicated in his Death Certificate. He was survived by his wife,
respondent Mrs. Vicencio, and daughter, Mary Joy Celine Vicencio.

MARIAN T. VICENCIO, Promulgated:

Respondent. May 21, 2009
x------------------------------------------------x

Respondent Mrs. Vicencio applied for the death benefits of her late
husband with petitioner Government Service Insurance System (GSIS) but
her application was denied by Mr. Marcelino S. Alejo, Manager of the GSIS
Employees Compensation Department, on the ground that the illness which
caused Judge Vicencios death is not considered an occupational disease and
there is no showing that his work as RTC Judge has increased his risk of
contracting said ailment.[6] Respondent Mrs. Vicencio filed a motion for
reconsideration, but the same was denied.[7]

DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari [1] under Rule 45 of the Rules of
Court seeking to reverse and set aside the Decision [2] of the Court of
Appeals (CA) in CA-GR SP No. 74790 which set aside the Decision [3] of the
Employees Compensation Commission (ECC) in ECC Case No. GM-14245702. The ECC denied respondent Marian T. Vicencios (Mrs. Vicencios) claim
for the death benefits of her husband, the late Judge Honorato S. Vicencio
(Judge Vicencio).
The facts are established.
Judge Vicencio entered government service in 1964 as a Legal Researcher
of the Development Bank of the Philippines (DBP). In 1966, after passing
the bar examinations, he became an Assistant Attorney. He rose from the
ranks until he was promoted to Senior Bank Attorney, which position he
held until his retirement from DBP in 1985.
In 1987, Judge Vicencio re-entered government service as Assistant Fiscal
for the City of Manila. In 1992, he was appointed as Judge of Branch 27,
Metropolitan Trial Court of Manila. In 1999, he was appointed as Regional

On June 17, 2002, respondent Mrs. Vicencio appealed to the ECC but the
same was dismissed.[8]
Respondent Mrs. Vicencio filed a petition for review under Rule 43 of the
Rules of Court with the CA. The CA reversed and set aside the Decision of
the ECC as follows:
WHEREFORE, premises considered, this Petition
is GRANTED. The Decision of the Employees Compensation
Commission, dated November 6, 2002, in ECC Case No. GM14245-702 is hereby REVERSED and SET ASIDE. The GSIS
is ORDERED to grant the claim for the death benefits of
Judge Honorato S. Vicencio under the Employees
Compensation Act. No costs.[9]
Petitioner GSIS filed a motion for reconsideration, but the same was denied
by the CA in its Resolution dated February 26, 2007. [10]
Hence, this Petition.

The sole issue is whether or not respondent Mrs. Vicencios claim for death
benefits under Presidential Decree No. 626 (P.D. No. 626), as amended, is
compensable.
Petitioner GSIS argues that based on the medical records in this case, Judge
Vicencios underlying cause of death was Adenocarcinoma of the Lungs with
Metastases. According to petitioner GSIS, the cause of death stated in his
Death Certificate, Cardiopulmonary Arrest T/C Fatal Arrythmia, was a mere
complication of his lung cancer. However, the attending physician did not
fill up the portion on the Death Certificate to indicate that the underlying
cause (which was left in blank) was Adenocarcinoma of the Lungs with
Metastases. Adenocarcinoma of the Lungs is not an occupational disease
listed under the law.Pursuant to Annex A of the Amended Rules on
Employees Compensation, lung cancer is occupational only with respect to
vinyl chloride workers and plastic workers. According to petitioner GSIS,
respondent Mrs. Vicencio failed to show by substantial evidence that the
risk of contracting the same was increased by his working conditions.
On the one hand, respondent Mrs. Vicencio contends that per the
Death Certificate of her husband, the cause of his death was
Cardiopulmonary Arrest T/C Fatal Arrythmia. According to respondent Mrs.
Vicencio, the CA correctly found that the requisites for cardiovascular
disease to be compensable under paragraph (r) of ECC Resolution No.
432[11] were satisfied; hence, the death of her husband is compensable.
Respondent Mrs. Vicencio adds that assuming only lung cancer
the cause of death of her husband, the same is still compensable.
argues that the CA correctly held that the nature of work and
corresponding difficulties brought about by Judge Vicencios duties
work contributed to the development of his illness.

was
She
the
and

We affirm the decision of the CA.

P.D. No. 626, as amended, defines compensable sickness as "any
illness definitely accepted as an occupational disease listed by the
Commission, or any illness caused by employment subject to proof by the
employee that the risk of contracting the same is increased by the working
conditions." Under Section 1 (b), Rule III, of the Amended Rules on
Employees' Compensation, for the sickness and the resulting disability or
death to be compensable, the same must be an "occupational disease"
included in the list provided (Annex "A"), with the conditions set therein
satisfied; otherwise, the claimant must show proof that the risk of
contracting it is increased by the working conditions. Otherwise stated, for

sickness and the resulting death of an employee to be compensable, the

claimant must show either: (1) that it is a result of an occupational disease
listed under Annex "A" of the Amended Rules on Employees' Compensation
with the conditions set therein satisfied; or (2) if not so listed, that the risk
of contracting the disease is increased by the working conditions.
First, we hold that the CA correctly considered Cardiopulmonary
Arrest T/C Fatal Arrythmia in this case a cardiovascular disease a listed
disease under Annex A of the Amended Rules on Employees Compensation.
The Death Certificate of Judge Vicencio clearly indicates that the
cause of his death is Cardiopulmonary Arrest T/C Fatal Arrythmia. Whether,
however, the same was a mere complication of his lung cancer as
contended by petitioner GSIS or related to an underlying cardiovascular
disease is not established by the records of this case and, thus, remains
uncertain.
It must be remembered that P.D. No. 626, as amended, is a social
legislation whose primordial purpose is to provide meaningful protection to
the working class against the hazards of disability, illness and other
contingencies resulting in the loss of income. Thus, the official agents
charged by law to implement social justice guaranteed by the Constitution
should adopt a liberal attitude in favor of the employee in deciding claims
for compensability especially where there is some basis in the facts for
inferring a work-connection with the illness or injury, as the case may be. It
is only this kind of interpretation that can give meaning and substance to
the compassionate spirit of the law as embodied in Article 4 of the New
Labor Code which states that all doubts in the implementation and
interpretation of the provisions of the Labor Code including their
implementing rules and regulations should be resolved in favor of labor.[12]
Guided by this policy, we therefore hold that Cardiopulmonary
Arrest T/C Fatal Arrythmia, the cause of death stated in Judge Vicencios
Death Certificate, should be considered as a cardiovascular disease - a
listed disease under Annex A of the Amended Rules on Employees
Compensation.
Considering the stress and pressures of work inherent in the duties
of a judge and it was established that Judge Vicencio was doing work in his
office a few days immediately before the moment of his cardiac arrest,
[13]
we sustain the findings of the CA that the requisites for cardiovascular
disease to be compensable under paragraph (r) of ECC Resolution No. 432
are satisfied in the case at bar.

Granting, however, that the only cause of Judge Vicencios death is

lung cancer, we are still one with the CA in its finding that the working
conditions of the late Judge Vicencio contributed to the development of his
lung cancer.
It is true that under Annex A of the Amended Rules on Employees
Compensation, lung cancer is occupational only with respect to vinyl
chloride workers and plastic workers. However, this will not bar a claim for
benefits under the law if the complainant can adduce substantial evidence
that the risk of contracting the illness is increased or aggravated by the
working conditions to which the employee is exposed to.
It is well-settled that the degree of proof required under P.D. No.
626 is merely substantial evidence, which means, "such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion."
What the law requires is a reasonable work-connection and not a direct
causal relation. It is enough that the hypothesis on which the workman's
claim is based is probable. Medical opinion to the contrary can be
disregarded especially where there is some basis in the facts for inferring a
work-connection. Probability, not certainty, is the touchstone. [14] It is not
required that the employment be the sole factor in the growth,
development or acceleration of a claimants illness to entitle him to the
benefits provided for. It is enough that his employment contributed, even if
to a small degree, to the development of the disease.[15]
The late Judge Vicencio was a frontline officer in the
administration of justice, being the most visible living representation of
this country's legal and judicial system. [16] It is undisputed that throughout
his noble career from Fiscal to Metropolitan Trial Court Judge, and, finally,
to RTC Judge, his work dealt with stressful daily work hours, and constant
and long-term contact with voluminous and dusty records.We also take
judicial notice that Judge Vicencios workplace at the Manila City Hall had
long been a place with sub-standard offices of judges and prosecutors
overflowing with records of cases covered up in dust and are poorly
ventilated. All these, taken together, necessarily contributed to the
development of his lung illness.
The
case
of Dator
v.
Commission[17] should be instructive:

Employees

Compensation

Until now the cause of cancer is not known. Despite

this fact, however, the Employees' Compensation
Commission has listed some kinds of cancer as

compensable. There is no reason why cancer of the lungs

should not be considered as a compensable disease. The
deceased worked as a librarian for about 15 years. During
all that period she was exposed to dusty books and other
deleterious substances in the library under unsanitary
conditions. (eiomphasis added)
On a final note, it bears stressing that the late Judge Vicencio
worked in the government for a total of 37 years. [18] He is survived by his
wife, respondent Mrs. Vicencio, and a daughter. Their claim for death
benefits has been pending since 2001. As the public agency charged by law
in implementing P.D. No. 626, petitioner GSIS should not lose sight of the
fact that the constitutional guarantee of social justice towards labor
demands a liberal attitude in favor of the employee in deciding claims for
compensability.
IN VIEW WHEREOF, the petition is DENIED. The decision of the
Court of Appeals is affirmed. No costs.
SO ORDERED.

REYNATO S. PUNO
Chief Justice

G.R. No. L-44899 April 22, 1981

MARIA E. MANAHAN, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and GSIS (LAS PIAS
MUNICIPAL HIGH SCHOOL),respondents.

FERNANDEZ, J.:

The Government Service Insurance System affirmed the denial of the

claim on the ground that enteric fever or paratyphoid is similar in
effect to typhoid fever, in the sense that both are produced by
Salmonella organisms.
The petitioner appealed to the Employees' Compensation Commission
which affirmed the decision of the Government Service Insurance
System on a finding that the ailment of the deceased, enteric fever,
was not induced by or aggravated by the nature of the duties of Nazario
Manahan, Jr. as a teacher. 2

This is a petition to review the decision of the Employees'

Compensation Commission in ECC Case No. 0070 (Nazario Manahan, Jr.,
deceased), entitled "Maria Manahan, Appellant, versus Government
Service Insurance System, (Las Pias Municipal High School),
Respondent" affirming the decision of the Government Service
Insurance System which denied the claim for death benefit. 1

To support her theory that the disease of Nazario Manahan, Jr., enteric
fever, resulted from his employment as classroom teacher of the Las
Pias Municipal High School, the petitioner cites the following
authority:

The claimant, petitioner herein, Maria E. Manahan, is the widow of

Nazario Manahan, Jr., who died of "Enteric Fever" while employed as
classroom teacher in Las Pias Municipal High School, Las Pias Rizal, on
May 8, 1975.

OF ENTERIC FEVER

The petitioner filed a claim with the Government Service Insurance for
death benefit under Presidential Decree 626. In a letter dated June 19,
1975, the Government Service Insurance denied the claim on a finding
that the ailment of Nazario Manahan, Jr., typhoid fever, is not an
occupational disease.
The petitioner filed a motion for reconsideration on the ground that the
deceased, Nazario Manahan, Jr., was in perfect health when admitted
to the service and that the ailment of said deceased was attributable to
his employment.

EPIDEMOLOGY AND PATHOLOGY

THE SOURCE OF INFECTION is feces or urine from

patients and carriers. Family contacts may be transient
carriers and 2 to 5% of patients become chronic carriers.
In poorly sanitized communities, water is the most
frequent vehicle of transmission; food, especially milk,
is the next most important. In modern urban areas,
food, contaminated by healthy carriers who are food
handlers, is the principal vehicle. Flies may spread the
organism from feces to food. Direct contact infection is
infrequent.
The organism enters the body through the
gastrointestinal tract, invading the blood stream by way
of the lymphatic channels. There is hyperplasia and
often ulceration of Pyeris patches, especially in the

ileum and cecum. When the ulcers heals, no scar results.

The kidneys and liver usually show cloudly swelling and
the latter may reveal a patchy necrosis The spleen is
enlarged and soft. Rarely, the lungs show pneumonic
changes. (Merck Manual 10th Edit., P. 842) 3

Because of these circumstances, the illness that claimed the life of the
deceased could have had its onset months before December 10, 1974.
Such being the case, his cause of action accrued before December 10,
1974.
In the case of Corales vs. ECI (L-44063, Feb. 27, 1979), We ruled that:

The factual findings of the respondent Commission indicate that the

deceased was in perfect health when he entered government service on
July 20, 1969, and that in the course of his employment in 1974, he was
treated for epigastric pain. He succumbed to enteric fever on May 8,
1975.
Enteric fever is referred to in medical books as typhoid fever (Dorlands
Illustrated Medical Dictionary, 24th Ed., p. 548) or paratyphoid fever
(Harrison's Principles of Internal Medicine, 6th Ed., p. 817). Its
symptoms include abdominal pain (id., p. 810). In discussing the clinical
manifestations of the disease, Mr. Harrison states that recovery (from
enteric or paratyphoid fever) may be followed by continued excretion
of the causative organism in the stools for several months (id., p. 817).
This lingering nature of the species producing enteric fever points out
the possibility that the illness which afflicted the deceased in 1974 was
the same as, or at least, related to, his 1975 illness.
The medical record of the deceased shows that he had a history of
ulcer-like symptoms (p. 3, ECC rec.). This butresses the claimant's claim
that her husband had been suffer from ulcer several months before his
death on May 8, 1975. This is likewise sustained by the medical
certificate (p. 12, ECC rec.) issued by Dr. Aquilles Bernabe to the effect
that "Nazario Manahan was treated for epigastric pain probably due to
hyper-acidity on December 10, 1974." Epigastric pain is a symptom of
ulcer, and ulcer is a common complication of typhoid fever. There is
even such a thing as "typhoidal ulcer" (p. 812, supra).

... Article 294, Title III (Transitory and Final Provisions)

of the New Labor Code provides that all actions and
claims accruing prior to the effectivity of this Code shall
be determined in accordance with the laws in force at
the time of their accrual and under the third paragraph
of Article 292, Title 11 Prescription of Offenses and
Claims, workmen's compensation claims accruing prior to
the effectivity of this Code and during the period from
November 1, 1974 up to December 31, 1974 shall be
processed and adjudicated in accordance with the laws
and rules at the time their causes of action accrued.
Hence, this Court applied the provisions of the
Workmen's Compensation Act, as amended, on passing
upon petitioner's claim.
Pursuant to such doctrine and applying now the provisions of the
Workmen's Compensation Act in this case, the presumption of
compensability subsists in favor of the claimant.
In any case, We have always maintained that in case of doubt, the same
should be resolved in favor of the worker, and that social legislations
like the Workmen's Compensation Act and the Labor Code should be
liberally construed to attain their laudable objective, i.e., to give relief
to the workman and/or his dependents in the event that the former
should die or sustain an injury.
Moreover, the constitutional guarantee of social justice and protection
to labor make Us take a second look at the evidence presented by the
claimant.

As a teacher of the Las Pias Municipal High School at Las Pias Rizal,
the deceased used to eat his meals at the school canteen. He also used
the toilet and other facilities of the school. Said the respondent
Commission," ... it is not improbable that the deceased might have
contracted the illness during those rare moments that he was away
from his family, since it is medically accepted that enteric fever is
caused by salmonella organisms which are acquired by ingestion of
contaminated food or drinks. Contamination of food or water may come
from the excretion of animals such as rodents flies, or human beings
who are sick or who are carriers, or infection in meat of animals as
food. Meat, milk and eggs are the foods most frequently involved in the
transmission of this type of species, since the organism may multiply
even before ingestion. ..." These findings of the respondent Commission
lead to the conclusion that the risk of contracting the fatal illness was
increased by the decedent's working condition.
In view of the foregoing, the petition for review is meritorious.
WHEREFORE, the decision of the Employees' Compensation Commission
sought to be reviewed is hereby set aside the Government Service
Insurance System is ordered:
1. To pay the petitioner the amount of SIX THOUSAND PESOS
(P6,000.00) as death compensation benefit;
2. To pay the petitioner the amount of SIX HUNDRED PESOS (P600.00) as
attorney's fees;
3. To reimburse the petitioner expenses incurred for medical services,
hospitalization and medicines of the deceased Nazario Manahan, Jr.,
duly supported by proper receipts; and
4. To pay administrative fees.
SO ORDERED.

Teehankee (Chairman), Makasiar, Guerrero and De Castro, JJ., concur.

G.R. No. 78617 June 18, 1990

SALVADOR LAZO, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT SERVICE
INSURANCE SYSTEM (CENTRAL BANK OF THE
PHILIPPINES), respondents.
Oscar P. Paguinto for petitioner.

PADILLA, J.:
This is an appeal from the decision of the respondent Employees
Compensation Commission (ECC) in ECC Case No. 2883 which affirmed
the dismissal of petitioner's claim for compensation against the
Government Service Insurance System (GSIS).
The petitioner, Salvador Lazo, is a security guard of the Central Bank of
the Philippines assigned to its main office in Malate, Manila. His regular
tour of duty is from 2:00 o'clock in the afternoon to 10:00 o'clock in the
evening. On 18 June 1986, the petitioner rendered duty from 2:00
o'clock in the afternoon to 10:00 o'clock in the evening. But, as the
security guard who was to relieve him failed to arrive, the petitioner
rendered overtime duty up to 5:00 o'clock in the morning of 19 June
1986, when he asked permission from his superior to leave early in
order to take home to Binangonan, Rizal, his sack of rice.
On his way home, at about 6:00 o'clock in the morning of 19 June 1986,
the passenger jeepney the petitioner was riding on turned turtle due to
slippery road. As a result, he sustained injuries and was taken to the
Angono Emergency Hospital for treatment. He was later transferred to
the National Orthopedic Hospital where he was confined until 25 July
1986.

For the injuries he sustained, petitioner filed a claim for disability

benefits under PD 626, as amended. His claim, however, was denied by
the GSIS for the reason that
It appears that after performing your regular duties as
Security Guard from 2:00 P.M. to 10:00 P.M. on June 18,
1986, you rendered overtime duty from 10:00 P.M. to
5:06 A.M. of the following day; that at about 5:06 A.M.
after asking permission from your superior you were
allowed to leave the Office to do certain personal
matter that of bringing home a sack of rice and that,
while on your way home, you met a vehicular accident
that resulted to (sic) your injuries. From the foregoing
informations, it is evident that you were not at your
work place performing your duties when the incident
occurred. 1
It was held that the condition for compensability had not been
satisfied.
Upon review of the case, the respondent Employees Compensation
Commission affirmed the decision since the accident which involved the
petitioner occurred far from his work place and while he was attending
to a personal matter.
Hence, the present recourse.
The petitioner contends that the injuries he sustained due to the
vehicular accident on his way home from work should be construed as
"arising out of or in the course of employment" and thus, compensable.
In support of his prayer for the reversal of the decision, the petitioner
cites the case of Pedro Baldebrin vs. Workmen's Compensation
Commission, 2 where the Court awarded compensation to the petitioner
therein who figured in an accident on his way home from his official station
at Pagadian City to his place of residence at Aurora, Zamboanga del Sur. In

the accident, petitioner's left eye was hit by a pebble while he was riding
on a bus.

Respondents claim that the Baldebrin ruling is a deviation from cases

earlier decided and hence, not applicable to the present case.
The Court has carefully considered the petition and the arguments of
the parties and finds that the petitioner's submission is meritorious.
Liberally interpreting the employees compensation law to give effect to
its compassionate spirit as a social legislation 3 in Vda. de Torbela u.
ECC, 4 the Court held:
It is a fact that Jose P. Torbela, Sr. died on March 3, 1975
at about 5:45 o'clock in the morning due to injuries
sustained by him in a vehicular accident while he was on
his way to school from Bacolod City, where he lived, to
Hinigaran, Negros Occidental where the school of which
he was the principal was located and that at the time of
the accident he had in his possession official papers he
allegedly worked on in his residence on the eve of his
death. The claim is compensable. When an employee is
accidentally injured at a point reasonably proximate to
the place at work, while he is going to and from his
work, such injury is deemed to have arisen out of and in
the course of his employment.
Again in Alano v. ECC, 5 it was reiterated:
Dedicacion de Vera, a government employee during her
lifetime, worked as principal of Salinap Community
School in San Carlos City, Pangasinan. Her tour of duty
was from 7:30 a.m. to 5:30 p.m. On November 29, 1976,
at 7:00 A-M., while she was waiting for a ride at Plaza
Jaycee in San Carlos City on her way to the school, she
was bumped and run over by a speeding Toyota mini-bus
which resulted in her instantaneous death. ...

In this case, it is not disputed that the deceased died

while going to her place of work. She was at the place
where, as the petitioner puts it, her job necessarily
required her to be if she was to reach her place of work
on time. There was nothing private or personal about
the school principal's being at the place of the accident.
She was there because her employment required her to
be there.
More recently, in Vano vs. GSIS & ECC, 6 this Court, applying the above
quoted decisions, enunciated:
Filomeno Vano was a letter carrier of the Bureau of Posts
in Tagbilaran City. On July 31, 1983, a Sunday, at around
3:30 p.m. Vano was driving his motorcycle with his son
as backrider allegedly on his way to his station in
Tagbilaran for his work the following day, Monday. As
they were approaching Hinawanan Bridge in Loay, Bohol,
the motorcycle skidded, causing its passengers to be
thrown overboard. Vano's head hit the bridge's railing
which rendered him unconscious. He was taken to the
Engelwood Hospital where he was declared dead on
arrival due to severe hemorrhage.
We see no reason to deviate from the foregoing rulings.
Like the deceased in these two (2) aforementioned
cases, it was established that petitioner's husband in the
case at bar was on his way to his place of work when he
met the accident. His death, therefore, is compensable
under the law as an employment accident.
In the above cases, the employees were on their way to work. In the
case at bar, petitioner had come from work and was on his way home,
just like in the Baldebrin case, where the employee "... figured in an
accident when he was ping home from his official station at Pagadian

City to his place of residence at Aurora, Zamboanga del

Sur ...." 7 Baldebrin, the Court said:
The principal issue is whether petitioner's injury comes
within the meaning of and intendment of the phrase
'arising out of and in the course of employment.'(Section
2, Workmen's Compensation Act). InPhilippine Engineer's
Syndicate, Inc. vs. Flora S. Martin and Workmen's
Compensation Commission,4 SCRA 356, We held that
'where an employee, after working hours, attempted to
ride on the platform of a service truck of the company
near his place of work, and, while thus attempting,
slipped and fell to the ground and was run over by the
truck, resulting in his death, the accident may be said to
have arisen out of or in the course of employment, for
which reason his death is compensable. The fact
standing alone, that the truck was in motion when the
employee boarded, is insufficient to justify the
conclusion that he had been notoriously negligent,
where it does not appear that the truck was running at a
great speed.'And, in a later case, Iloilo Dock &
Engineering Co. vs. Workmen's Compensation
Commission, 26 SCRA 102, 103, We ruled that
'(e)mployment includes not only the actual doing of the
work, but a reasonable margin of time and space
necessary to be used in passing to and from the place
where the work is to be done. If the employee be
injured while passing, with the express or implied
consent of the employer, to or from his work by a way
over the employer's premises, or over those of another
in such proximity and relation as to be in practical
effect a part of the employer's premises, the injury is
one arising out of and in the course of the employment
as much as though it had happened while the employee
was engaged in his work at the place of its performance.
(Emphasis supplied)

In the case at bar, it can be seen that petitioner left his station at the
Central Bank several hours after his regular time off, because the
reliever did not arrive, and so petitioner was asked to go on overtime.
After permission to leave was given, he went home. There is no
evidence on record that petitioner deviated from his usual, regular
homeward route or that interruptions occurred in the journey.
While the presumption of compensability and theory of aggravation
under the Workmen's Compensation Act (under which
the Baldebrin case was decided) may have been abandoned under the
New Labor Code, 8 it is significant that the liberality of the law in general
in favor of the workingman still subsists. As agent charged by the law to
implement social justice guaranteed and secured by the Constitution, the
Employees Compensation Commission should adopt a liberal attitude in
favor of the employee in deciding claims for compensability, especially
where there is some basis in the facts for inferring a work connection to
the accident.
This kind of interpretation gives meaning and substance to the
compassionate spirit of the law as embodied in Article 4 of the New
Labor Code which states that 'all doubts in the implementation and
interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor.'
The policy then is to extend the applicability of the decree (PD 626) to
as many employees who can avail of the benefits thereunder. This is in
consonance with the avowed policy of the State to give maximum aid
and protection to labor. 9
There is no reason, in principle, why employees should not be
protected for a reasonable period of time prior to or after working
hours and for a reasonable distance before reaching or after leaving the
employer's premises. 10
If the Vano ruling awarded compensation to an employee who was on
his way from home to his work station one day before an official

working day, there is no reason to deny compensation for accidental

injury occurring while he is on his way home one hour after he had left
his work station.
We are constrained not to consider the defense of the street peril
doctrine and instead interpret the law liberally in favor of the
employee because the Employees Compensation Act, like the Workmen's
Compensation Act, is basically a social legislation designed to afford
relief to the working men and women in our society.
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE.
Let the case be remanded to the ECC and the GSIS for disposition in
accordance with this decision.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Sarmiento and Regalado, JJ.,
concur.

G.R. No. 85024

January 23, 1991

The petitioner's application for income benefits claim payment was

granted but only for permanent partial disability (PPD) compensation or
for a period of nineteen months starting from August 16, 1981 up to
March 1983.

DOMINGO VICENTE, petitioner,

vs.
EMPLOYEES' COMPENSATION COMMISSION, respondent.

Olandesca Law Offices for petitioner.

On March 14, 1983, the petitioner requested the General Manager of

the GSIS to reconsider the award given him and prayed that the same
be extended beyond nineteen months invoking the findings of his
attending physician, as indicated in the latter's Certification. As a
consequence of his motion for reconsideration, and on the basis of the
"Summary of Findings and Recommendation" of the Medical Services
Center of the GSIS, the petitioner was granted the equivalent of an
additional four (4) months benefits. Still unsatisfied, the petitioner
again sent a letter to the GSIS Disability Compensation Department
Manager on November 6, 1986, insisting that he (petitioner) should be
compensated no less than for "permanent total disability." On June 30,
1987, the said manager informed the petitioner that his request had
been denied. Undaunted, the petitioner sought reconsideration and as a
result of which, on September 10, 1987, his case was elevated to the
respondent Employees Compensation Commission (ECC). Later, or on
October 1, 1987, the petitioner notified the respondent Commission
that he was confined at the Veterans Memorial Medical Center for "CVA
probably thrombosis of the left middle cerebral artery."
5

SARMIENTO, J.:

Central to this petition for certiorari which assails the decision dated
August 24, 1988 of the Employees' Compensation Commission (ECC) in
ECC Case No. 3764, affirming the decision of the Government Service
Insurance System (GSIS), is the question on whether the petitioner
suffers from permanent total disability as he claims, or from permanent
partial disability as held by the respondent Commission.
1

The undisputed facts of the case are as follows:

The petitioner, Domingo Vicente, was formerly employed as a nursing
attendant at the Veterans Memorial Medical Center in Quezon City. On
August 5, 1981, at the age of forty-five, and after having rendered
more than twenty-five years of government service, he applied for
optional retirement (effective August 16, 1981) under the provisions of
Section 12(c) of Republic Act No. 1616, giving as reason therefor his
inability to continue working as a result of his physical disability. The
petitioner likewise filed with the Government Service Insurance System
(GSIS) an application for "income benefits claim for payment" under
Presidential Decree (PD) No. 626, as amended. Both applications were
accompanied by the necessary supporting papers, among them being a
"Physician's Certification" issued by the petitioner's attending doctor at
the Veterans Memorial Medical Center, Dr. Avelino A. Lopez, M.D.,
F.P.C.S., ** F.I.C.S. *** (Section Chief, General, Thoracic & Peripheral
Surgery, Surgical Department, Veterans Medical Center, Hilaga Avenue,
Quezon City), who had diagnosed the petitioner as suffering from:
2

Osteoarthritis, multiple;
Hypertensive Cardiovascular Disease;
Cardiomegaly; and
Left Ventricular Hypertrophy;
and classified him as being under "permanent total disability."

There was nothing he could do but wait and hope.

Finally, on August 24, 1988, the respondent rendered a decision
affirming the ruling of the GSIS Employees' Disability Compensation and
dismissed the petitioner's appeal.
Hence this recourse.
Before us, the petitioner maintains that his disability is "permanent
total" and not "permanent partial" as classified by the respondent
Commission. In support of his position, the petitioner points to the
clinical evaluation and certification earlier adverted to issued by his
attending physicians at the Veterans Memorial Medical Center. He
likewise contends that contrary to the respondent's ruling, his
subsequent confinement in the hospital from August 31, 1987 to
September 6, 1987, when he was found suffering from "CVA probably
thrombosis," was a direct result of his other ailments as previously
diagnosed (before his retirement) by his attending physician and the
Personnel Physician of the Center, Dr. Salud C. Palattao.

On the other hand, the respondent Commission argues that the

petitioner only suffers from "permanent partial disability" and not from
"permanent total disability." The findings of the petitioner's attending
physician is not binding on the GSIS, nor on the Commission, as the
proper evaluation of an employee's degree of disability exclusively
belongs to the GSIS medical experts who have specialized on the
subject.
The petition is impressed with merit.
Employee's disability under the Labor Code is classified into three
distinct categories: (a) temporary total disability; (b) permanent total
disability; and (c) permanent partial disability. Likewise, in Section
2, Rule VII of the Amended Rules on Employees Compensation, it is
provided that:
9

10

11

Sec. 2. Disability(a) A total disability is temporary if as a result

of the injury or sickness the employee is unable to perform any
gainful occupation for a continuous period not exceeding 120
days, except as otherwise provided in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury
or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding 120 days except
as otherwise provided for in Rule X of these Rules.
(c) A disability is partial permanent if as a result of the injury or
sickness the employee suffers a permanent partial loss of the
use of any part of his body.
Here, there is no question that the petitioner is not under "temporary
total disability" as defined by law. The respondent Commission's
decision classifying the petitioner's disability as "permanent partial"
attests, albeit indirectly, to this fact. Our focus therefore, as stated
earlier, is only in resolving out whether the petitioner suffers from
"permanent total disability" as he claims, or from "permanent partial
disability" as the respondent Commission would have us believe.
On the subject of "permanent total disability," the Court has stated, on
several occasions, that:
Other authoritative comments on the coverage of the term
"permanent total disability" as used in the Workmen's
Compensation Act, are (a) Comments and Annotations on the
Workmen's Compensation Act by Severo M. Pucan and Cornelio

R. Besinga, that "total disability does not mean a state of

absolute helplessness, but means disablement of the employee
to earn wages in the same kind of work, or a work of similar
nature, that he was trained for, or accustomed to perform, or
any kind of work which a person of his mentality and attainment
could do;" (b) Philippine Labor and Social Legislation by Justice
Ruperto Martin, that "permanent total disability means
disablement of an employee to earn wages in the same kind of
work, or work of a similar nature that he was trained for, or
accustomed to perform, or any other kind of work which a
person of his mentality and attainment could do . . .;" and (c)
Labor Standards and Welfare Legislation by Perfecto Fernandez
and Camilo Quiason that "permanent total disability means an
incapacity to perform gainful work which is expected to be
permanent. This status does not require a condition of complete
helplessness. Nor is it affected by the performance of occasional
odd jobs" (cited in Marcelino vs. Seven-up Bottling Co. of the
Philippines, 47 SCRA 343).
12

It may therefore be inferred from the Court's pronouncements that

while "permanent total disability" invariably results in an employee's
loss of work or inability to perform his usual work, "permanent partial
disability," on the other hand, occurs when an employee loses the use of
any particular anatomical part of his body which disables him to
continue with his former work. Stated otherwise, the test of whether or
not an employee suffers from "permanent total disability" is a showing
of the capacity of the employee to continue performing his work
notwithstanding the disability he incurred. Thus, if by reason of the
injury or sickness he sustained, the employee is unable to perform his
customary job for more than 120 days and he does not come within the
coverage of Rule X of the Amended Rules on Employees Compensability
(which, in a more detailed manner, describes what constitutes
temporary total disability), then the said employee undoubtedly suffers
from "permanent total disability" regardless of whether or not he loses
the use of any part of his body.
In the case at bar, the petitioner's permanent total disability is
established beyond doubt by several factors and
circumstances. Noteworthy is the fact that from all available
indications, it appears that the petitioner's application for optional
retirement on the basis of his ailments had been approved. The decision
of the respondent Commission even admits that the petitioner "retired
1wphi1

from government service at the age of 45." Considering that the

petitioner was only 45 years old when he retired and still entitled,
under good behavior, to 20 more years in service, the approval of his
optional retirement application proves that he was no longer fit to
continue in his employment. For optional retirement is allowed only
upon proof that the employee-applicant is already physically
incapacitated to render sound and efficient service.
13

14

15

Further, the appropriate physicians of the petitioner's employer, the

Veterans Memorial Medical Center, categorically certified that the
petitioner was classified under permanent total disability. On this
score, "the doctor's certification as to the nature of the claimant's
disability may be given credence as he normally would not make a false
certification." And, "[N]o physician in his right mind and who is aware
of the far-reaching and serious effect that his statements would cause
on a money claim filed with a government agency, would issue
certifications indiscriminately without even minding his own interests
and protection."
16

17

The fact that the petitioner was granted benefits amounting to the
equivalent of twenty-three months shows that the petitioner was
unable to perform any gainful occupation for a continuous period
exceeding 120 days. This kind of disability is precisely covered by
Section 2(b), Rule VII of the Amended Rules on Employees'
Compensability which we again quote, to wit:
Sec. 2. Disability(a) . . .
(b) A disability is total and permanent if as a result of the injury
or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding 120 days except
as otherwise provided for in Rule X of those Rules.
xxx

xxx

xxx

There being no showing, as we mentioned earlier, that the petitioner's

disability is "temporary total" as defined by the law, the inescapable
conclusion is that he suffers from permanent total disability.
The court takes this occasion to stress once more its abiding concern
for the welfare of government workers, especially the humble rank and
file, whose patience, industry, and dedication to duty have often gone
unheralded, but who, in spite of very little recognition, plod on
dutifully to perform their appointed tasks. It is for this reason that the

sympathy of the law on social security is toward its beneficiaries, and

the law, by its own terms, requires a construction of utmost liberality
in their favor. It is likewise for this reason that the Court disposes of
this case and ends a workingman's struggle for his just dues.
18

WHEREFORE, the decision of the respondent Employees' Compensation

Commission is SET ASIDE and another one is hereby ENTERED declaring
the petitioner to be suffering from permanent total disability.
Respondent Employees' Compensation Commission is accordingly
ORDERED to award the petitioner the benefits corresponding to his
permanent total disability.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and
Regalado, JJ., concur.

G.R. No. 96422 February 28, 1994

FRANCISCO S. TANTUICO, JR., petitioner,
vs.
HON. EUFEMIO DOMINGO, in his capacity as Chairman of the
Commission on Audit, ESTELITO SALVADOR, MARGARITO SILOT,
VALENTINA EUSTAQUIO, ANICIA CHICO and GERMINIA
PASCO,respondents.

signatures and bore a certification that petitioner was "cleared from

money, property and/or other accountabilities by this Commission"
(Rollo, p. 44).
After the EDSA Revolution, petitioner submitted his courtesy resignation
to President Corazon C. Aquino. He relinquished his office to the newly
appointed Chairman, now Executive Secretary Teofisto Guingona, Jr. on
March 10, 1986. That same day, he applied for retirement effective
immediately.

Kenny H. Tantuico for petitioner.

Petitioner sought a second clearance to cover the period from January
1, 1986 to March 9, 1986. All the signatures necessary to complete the
second clearance, except that of Chairman Guingona, were obtained.
The second clearance embodies a certificate that petitioner was
"cleared from money, property and/or accountability by this
Commission" (Rollo, p. 49). Chairman Guingona, however, failed to take
any action thereon.

The Solicitor General for respondents.

QUIASON, J.:
This is a petition for certiorari, prohibition and mandamus, with prayer
for temporary restraining order or preliminary injunction, under Rule 65
of the Revised Rules of Court.
The petition mainly questions the withholding of one-half of petitioner's
retirement benefits.
I
On January 26, 1980, petitioner was appointed Chairman of the
Commission on Audit (COA) to serve a term of seven years expiring on
January 26, 1987. Petitioner had discharged the functions of Chairman
of the COA in an acting capacity since 1975.
On December 31, 1985, petitioner applied for clearance from all money,
property and other accountabilities in preparation for his retirement.
He obtained the clearance applied for, which covered the period from
1976 to December 31, 1985. The clearance had all the required

Chairman Guingona was replaced by respondent Chairman. A year later,

respondent Chairman issued COA Office Order No. 87-10182 (Rollo, p.
50), which created a committee to inventory all equipment acquired
during the tenure of his two predecessors.
On May 7, 1987, respondent Chairman indorsed petitioner's retirement
application to the Government Service Insurance System (GSIS),
certifying, among other matters, that petitioner was cleared of money
and property accountability (Rollo, p. 52). The application was returned
to the COA pursuant to R.A. No. 1568, which vests in the COA the final
approval thereof.
On September 25, 1987, the inventory committee finally submitted its
report, recommending petitioner's clearance from property
accountability inasmuch as there was no showing that he personally
gained from the missing property or was primarily liable for the loss
thereof (Rollo, pp. 53-58).

Not satisfied with the report, respondent Chairman issued a

Memorandum directing the inventory committee to explain why no
action should be filed against its members for failure to complete a
physical inventory and verification of all equipment; for exceeding their
authority in recommending clearances for petitioner and Chairman
Guingona; and for recommending petitioner's clearance in total
disregard of Section 102 of P.D. No. 1445 (Government Auditing Code of
the Philippines). The members of the committee were subsequently
administratively charged.
On January 2, 1988, respondent Chairman created a special audit team
for the purpose of conducting a financial and compliance audit of the
COA transactions and accounts during the tenure of petitioner from
1976 to 1984 (COA Office Order 88-10677; Rollo, pp. 66-67).
On February 28, 1989, the special audit team submitted its report
stating: (i) that the audit consisted of selective review of post-audit
transactions in the head offices and the State Accounting and Auditing
Center; (ii) that the audit disclosed a number of deficiencies which
adversely affected the financial condition and operation of the COA,
such as violations of executive orders, presidential decrees and related
rules and regulations; and (iii) that there were some constraints in the
audit, such as the unavailability of records and documents, and
personnel movements and turnover. While the report did not make any
recommendation, it instead mentioned several officials and employees,
including petitioner, who may be responsible or accountable for the
questioned transactions (Rollo, pp. 73, 147-151).
Respondent Chairman rendered a Decision dated November 20, 1989, in
the administrative case filed against the principal members of the first
inventory committee. He found them guilty as charged and issued them
a reprimand. The other members were meted a stern warning, except
for one who was exonerated for not taking part in the preparation of
the inventory report.

In a letter dated December 21, 1989, a copy of which was received by

petitioner on December 27, 1989, respondent Chairman informed
petitioner of the approval of his application for retirement under R.A.
No. 1568, effective as of March 9, 1986 (Rollo, pp. 68-69). However,
respondent Chairman added:
. . . In view, however, of the audit findings and inventory
report adverted to above, payment of only one-half ()
of the money value of the benefits due you by reason of
such retirement will be allowed, subject to the
availability of funds and the usual accounting and
auditing rules. Payment of the balance of said
retirement benefits shall be subject to the final results
of the audit concerning your fiscal responsibility and/or
accountability as former Chairman of this Commission.
In a letter dated January 22, 1990, petitioner requested full payment of
his retirement benefits.
Petitioner was furnished a copy of the report of the special audit team
in the letter dated December 21, 1989 of respondent Chairman on
January 29, 1990, nearly a year after its completion. Attached to a copy
of the report was a letter dated November 14, 1989 from respondent
Chairman, who required petitioner to submit his comment within 30
days (Rollo, p. 153).
Petitioner submitted a letter-complaint, wherein he cited certain
defects in the manner the audit was conducted. He further claimed
that the re-audit was not authorized by law since it covered closed and
settled accounts.
Upon petitioner's request, he was furnished a set of documents which
he needed to prepare his comment. He was likewise given another 30days to submit it.

A series of correspondence between petitioner and respondent

Chairman ensued. On September 10, 1990, petitioner requested a copy
of the working papers on which the audit report was based. This was
denied by respondent Chairman, who claimed that under the State
Audit Manual, access to the working paper was restricted. Petitioner's
reconsideration was likewise denied and he was given a non-extendible
period of five days to submit his comment.
Instead of submitting his comment, petitioner sought several
clarifications and specification, and requested for 90 days within which
to submit his comment, considering that the report covered a ten-year
period of post-audited transactions. Ignoring petitioner's request,
respondent Chairman demanded an accounting of funds and a turn over
of the assets of the Fiscal Administration Foundation, Inc. within 30
days.

turnover of COA property assigned to him as agency

head.
xxx xxx xxx
The responsibility of the Chairman for the disbursement
and collection accounts of this Commission for CYs Sept.
'75 to Aug. '85, were completely post-audited, however
as of Dec. 31, 1985, the suspensions and disallowances
in the amounts of P36,196,962.11 and P28,762.36
respectively are still in the process of settlement (Rollo,
pp. 44-45).
Petitioner also applied for a second clearance to cover the period from
January 1 to March 9, 1986, which application had been signed by all
the officials, except the Chairman (Rollo, p. 49).

II
Petitioner then filed the instant petition. As prayed for by petitioner,
this Court issued a temporary restraining order on January 17, 1991.
Petitioner argues that notwithstanding the two clearances previously
issued, and respondent Chairman's certification that petitioner had
been cleared of money and property accountability, respondent
Chairman still refuses to release the remaining half of his retirement
benefits a purely ministerial act.
Petitioner was already issued an initial clearance during his tenure,
effective December 31, 1985 (Rollo, p. 44). All the required signatures
were present "is cleared from money, property and/or accountabilities
by this commission" with the following notation:
No property accountability under the Chairman's name
as the person. Final clearance as COA Chairman subject
to the completion of ongoing reconciliation of
Accounting & P(roperty) records and to complete

Whatever infirmities or limitations existed in said clearances were

cured after respondent Chairman favorably indorsed petitioner's
application for retirement to the Government Service Insurance System
and recommended its approval to take effect on March 10, 1986. In said
endorsement, respondent Chairman made it clear that there were no
pending administrative and criminal cases against petitioner (Rollo, p.
52).
Regardless of petitioner's monetary liability to the government that may
be discovered from the audit concerning his fiscal responsibility as
former COA Chairman, respondent Chairman cannot withhold the
benefits due petitioner under the retirement laws.
In Romana Cruz v. Hon. Francisco Tantuico, 166 SCRA 670 (1988), the
National Treasurer withheld the retirement benefits of an employee
because of his finding that she negligently allowed the anomalous
encashment of falsified treasury warrants.

In said case, where petitioner herein was one of the respondents, we

found that the employee had been cleared by the National Treasurer
from all money and property responsibility, and held that the
retirement pay accruing to a public officer may not be withheld and
applied to his indebtedness to the government.
In Tantuico, we cited Justice Laurel's essay on the rationale for the
benign ruling in favor of the retired employees, thus:
. . . Pension in this case is a bounty flowing from the
graciousness of the Government intended to reward past
services and, at the same time, to provide the pensioner
with the means with which to support himself and his
family. Unless otherwise clearly provided, the pension
should inure wholly to the benefit of the pensioner. It is
true that the withholding and application of the amount
involved was had under Section 624 of the
Administrative Code and not by any judicial process, but
if the gratuity could not be attached or levied upon
execution in view of the prohibition of Section 3 of Act
No. 4051, the appropriation thereof by administrative
action, if allowed, would lead to the same prohibited
result and enable the respondent to do indirectly what
they can not do directly under Section 3 of the Act No.
4051. Act No. 4051 is a later statute having been
approved on February 21, 1933, whereas the
Administrative Code of 1917 which embodies Section 624
relied upon by the respondents was approved on March
10 of that year. Considering Section 3 of Act No. 4051 as
an exception to the general authority granted in Section
624 of the Administrative Code, antagonism between the
two provisions is avoided (Hunt v. Hernandez, 64 Phil.
753 [1937]).

Elections), the benefits granted by said law to the Auditor General and
the Chairman and Members of the Commission on Elections shall not be
subject to garnishment, levy or execution. Likewise, under Section 33
of P.D. No. 1146, as amended (The Revised Government Service
Insurance Act of 1977), the benefits granted thereunder "shall not be
subject, among others, to attachment, garnishment, levy or other
processes."
Well-settled is the rule that retirement laws are liberally interpreted in
favor of the retiree because the intention is to provide for the retiree's
sustenance and comfort, when he is no longer capable of earning his
livelihood (Profeta vs. Drilon, 216 SCRA 777 [1992]).
Petitioner also wants us to enjoin the re-audit of his fiscal responsibility
or accountability, invoking the following grounds:
1. The re-audit involved settled and closed accounts
which under Section 52 of the Audit Code can no longer
be re-opened and reviewed;
2. The re-audit was initiated by respondent Chairman
alone, and not by the Commission as a collegial body;
3. The report of the special audit team that
recommended the re-audit is faulty as the team
members themselves admitted several constraints in
conducting the re-audit, e.g. unavailability of the
documents, frequent turn-over and movement of
personnel, etc.;
4. The re-audit covered transactions done even after
petitioner's retirement;
5. He was not given prior notice of the re-audit;

Under Section 4 of R.A. No. 1568 (An Act to Provide Life Pension to the
Auditor General and the Chairman or Any Member of the Commission of

6. He was not given access to the working papers; and

7. Respondents were barred by res judicata from

proceeding with the re-audit (Rollo, pp. 19-40).
The petition must fail insofar as it seeks to abort the completion of the
re-audit. While at the beginning petitioner raised objections to the
manner the audit was conducted and the authority of respondents to
re-open the same, he subsequently cooperated with the examination of
his accounts and transactions as a COA official.
With respect to the legal objections raised by petitioner to the partial
findings of the respondents with respect to his accountability, such
findings are still tentative. As petitioner has requested, he is entitled to
a reasonable time within which to submit his comment thereon.
But in order to prepare his comment, petitioner should be given access
to the working papers used by the special audit team. The audit report
covered a period of ten years (1976-1985) and involved numerous
transactions. It would be unfair to expect petitioner to comment on the
COA's findings of the report without giving him a chance to verify how
those findings were arrived at.
It has been seven years since petitioner's retirement. Since then he was
only paid half of his retirement benefits, with the other half being
withheld despite the issuance of two clearances and the approval of his
retirement application. As of the filing of this petition on December 21,
1990, no criminal or administrative charge had been filed against
petitioner in connection with his position as former Acting Chairman
and Chairman of the COA.
WHEREFORE, the petition is GRANTED insofar as it seeks to compel
respondent Chairman of the COA to pay petitioner's retirement benefits
in full and his monthly pensions beginning in March 1991.
The petition is DENIED insofar as it seeks to nullify COA Office Order No.
88-10677 and the audit report dated February 28, 1989 but petitioner
should be given full access to the working papers to enable him to

prepare his comment to any adverse findings in said report. The

temporary restraining order is LIFTED.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr.,
Romero, Nocon, Bellosillo, Melo, Puno, Vitug and Kapunan, JJ., concur.

G.R. No. 110170 February 21, 1994

ROLETO A. PAHILAN, petitioner,
vs.
RUDY A. TABALBA, COMMISSION ON ELECTIONS, and HONORABLE
JUDGE SINFOROSO V. TABAMO, JR., BRANCH 28, MAMBAJAO,
CAMIGUIN, respondents.
Pimentel, Apostol, Layosa & Sibayan Law Office for petitioner.
Marciano Ll. Aparte, Jr. for Rudy A. Tabalba.

REGALADO, J.:
This original action for certiorari impugns the Order 1 of respondent
Commission on Elections, dated January 19, 1993, dismissing the appeal
filed by petitioner Roleto A. Pahilan for the latter's failure to file a notice
of appeal with the Regional Trial Court of Mumbajao, Camiguin, and,
necessarily on the same rationale, the Resolution 2 promulgated by said
respondent on May 6, 1993 denying petitioner's motion for reconsideration.
Petitioner Pahilan and private respondent Tabalba were candidates for
Mayor of Guinsiliban, Camiguin during the local elections held on May
11, 1992. On May 13, 1992, the Municipal Board of Canvassers
proclaimed Tabalba as the duly elected Mayor of Guinsilban, the latter
having garnered 1,087 votes as against 806 votes for Pahilan.
Thereafter, Pahilan filed an election protest 3 which he sent by registered
mail on May 23, 1992, addressed to the Clerk of Court of the Regional Trial
Court of Mambajao, Camiguin, attaching thereto P200.00 in cash as
payment for docket fees. In a letter 4 dated May 28, 1992, the OIC-Clerk of
Court of the Regional Trial Court of Mambajao, Camiguin, Branch 28,
informed Pahilan that the correct fees that where supposed to be paid

amounted to P620.00, and that, accordingly, the petition would not be

entered in the court docket and summons would not be issued pending
payment of the balance of P420.00.

On June 16, 1992, upon receipt of the latter, Pahilan paid the required
balance in the total amount P470.00. 5
Subsequently, on June 22, 1992, Tabalba filed his answer with
Counterclaim, 6 alleging as one of his affirmative defenses lack of
jurisdiction on the part of the trial court to entertain the election protest
for having been filed beyond the ten-day period provided by law.
On August 17, 1992, Pahilan filed a Motion for Inhibition, dated August
14, 1992, because of alleged serious and grave doubts that the
presiding judge could impartially hear and decide his election protest
with the cold neutrality of an impartial judge, as the latter allegedly
belongs to and had supported a political group adverse to the candidacy
of petitioner.
On August 18, 1992, the trial court proceeded with the pre-trial
conference, heard the defense on the allegation of lack of jurisdiction
for non-payment of docket fees, and thereafter ordered the parties to
submit their respective memoranda.
Tabalba filed his Memorandum in Support of Affirmative Defense of Lack
of Jurisdiction, 7 dated September 4, 1992. Under date of September 22,
1992, Pahilan filed a Memorandum 8 as well as a Motion to Resolve Motion
for Inhibition Prior to Resolution of Affirmative Defenses. 9
On October 2, 1992, the trial court issued an Order 10 denying the motion
for inhibition and dismissing the election protest for "non-payment on time
of the required fees for filing an initiatory pleading." Pahilan's counsel
received a copy of said order on October 12, 1992 in Cagayan de Oro City.

On October 17, 1992 and within the 5-day period to appeal, Pahilan
filed a verified appeal brief 11 in respondent Commission on Elections,
with copies duly served on the Regional Trial Court of Mambajao, Camiguin
and the counsel for herein private respondent.
On December 12, 1992, the Comelec Contests Adjudication Department
directed the Clerk of Court, Regional Trial Court, Camiguin, Branch 28,
to immediately transmit the complete records of EP case No. 3(92)
which was being appealed by herein petitioner. 12 Thereafter, in a
letter 13 dated January 7, 1993, the said Clerk of Court informed
respondent Commission that "to this very late date, this office has not
received any notice of appeal from the aggrieved party." As a consequence,
respondent Commission, in an Order dated January 19, 1993, dismissed
Pahilan's verified appeal for failure to appeal within the prescribed period.
Pahilan filed a motion for reconsideration 14 of the order dismissing his
appeal. Both parties were required by respondent Commission to file their
respective memoranda. Finally, on May 6, 1993, respondent Commission
issued its aforestated resolution denying Pahilan's motion for
reconsideration.
Hence, this petition on the bases of the following assigned errors:
1. Whether or not respondent Commission validly
dismissed the verified "Appeal" of petitioner which
contains all the elements of a "notice of appeal" and
more expressive of the intent to elevate the case for
review by said appellate body, and furnishing copies
thereof to the respondent trial judge and counsel for the
adverse party, aside from the incomplete payment of
the appeal fee; and
2. Whether or not the respondent trial judge validly
dismissed the petition of protest of petitioner for nonpayment on time of the required fee.

We find cogency and merit in the petition.

The bone of contention in this petition is the alleged erroneous
dismissal of petitioner's appeal by respondent Commission because of
the failure of petitioner to file a notice of appeal before the Regional
Trial Court of Mambajao, Camiguin which, in turn, dismissed the
election protest of petitioner for non-payment of docket fees.
The COMELEC RULES OF PROCEDURE provide for the manner in which
appeals from decisions of courts in election contests shall be made, to
wit:
RULE 22 Appeals from Decisions of Courts
in Election Protest Cases
Sec. 1. Caption and title of appealed cases. In all
election contests involving the elections, returns, and
qualifications of municipal or barangay officials, the
party interposing the appeal shall be called the
"Appellant" and the adverse party the "Appellee", but
the title of the case shall remain as it was in the court
of origin.
xxx xxx xxx
Sec. 3. Notice of Appeal. Within five (5) days after
promulgation of the decision of the court, the aggrieved
party may file with said court a notice of appeal, and
serve a copy thereof upon the attorney of record of the
adverse party.
Sec. 4. Immediate transmittal of records of the
case. The Clerk of the court concerned shall, within
fifteen (15) days from the filing of the notice of appeal,
transmit to the Electoral Contests Adjudication
Department the complete records of the case, together

with all the evidence, including the original and three(3)

copies of the transcript of stenographic notes of the
proceedings.
Sec. 5. Filing of briefs. The Clerk of Court concerned,
upon receipt of the complete records of the case, shall
notify the appellant or his counsel to file with the
Electoral Contests Adjudication Department within thirty
(30) days from receipt of such notice, ten (10) legible
copies of his brief with proof of service thereof upon the
appellee.
Within thirty (30) days from receipt of the brief of the
appellant, the appellee shall file ten (10) legible copies
of his brief with proof of service thereof upon the
appellant.
xxx xxx xxx
Sec. 9. Grounds for dismissal of appeal. The appeal
may be dismissed upon motion of either party or at the
instance of the Commission on any of the following
grounds:
(a) Failure of the appellant to pay the appeal fee;
(b) Failure of the appellant to file copies of his brief
within the time provided by these rules;
(c) Want of specific assignment of errors in the
appellant's brief; and
(d) Failure to file notice of appeal within the prescribed
period.

In the case at bar, petitioner received a copy of the trial court's order
dismissing his election protest on October 12, 1992. As earlier stated,
herein petitioner, instead of filing a notice of appeal as required by the
rules, filed with respondent Commission a verified appeal brief within
the five-day reglementary period by registered mail under Registry
Receipt No. 43093, dated October 17, 1992. It will be noted, however,
that on even date, petitioner likewise sent by registered mail copies of
his appeal brief to the Regional Trial Court of Mambajao, Camiguin,
under Registry Receipt No. 43091, and to the counsel of herein private
respondent, under Registry Receipt No. 43092. 15
The question now posed by the foregoing factual situation is whether
the notice of appeal can be validly substituted by an appeal brief. We
firmly believe and so hold, under the considerations hereinunder
discussed, that the same may be allowed.
First, in cases where a record on appeal is required under the Rules of
Court, it has been consistently held that the filing or presentation and
approval of the record on appeal on time necessarily implies or involves
the filing of the notice of appeal, 16 because the act of taking or
perfecting an appeal is more expressive of the intention to appeal than the
filing of a mere notice to do so. 17
If the courts can deign to be indulgent and lenient in the interpretation
of the rules respecting ordinary civil actions involving private parties
representing private interests, with more reason should the rules
involving election cases, which are undoubtedly impressed with public
interest, be construed with the same or even greater forbearance and
liberality.
It has been frequently decided, it may be stated as a general rule
recognized by all courts, that statutes providing for election contests
are to be liberally construed to the end that the will of the people in
the choice of public officers may not be defeated by mere technical
objections. An election contest, unlike an ordinary action, is imbued
with public interest since it involves not only the adjudication of the

private interests of rival candidates but also the paramount need of

dispelling the uncertainty which beclouds the real choice of the
electorate with respect to who shall discharge the prerogatives of the
office within their gift. Moreover, it is neither fair nor just to keep in
office for an uncertain period one whose right to it is under suspicion. It
is imperative that his claim be immediately cleared not only for the
benefit of the winner but for the sake of public interest, which can only
be achieved by brushing aside technicalities of procedure with protract
and delay the trial of an ordinary
action. 18
For this reason, broad perspectives of public policy impose upon courts
the imperative duty to ascertain by all means within their command
who is the real candidate elected in as expeditious a manner as
possible, without being fettered by technicalities and procedural
barriers to the end that the will of the people may not be frustrated. 19
It is true that perfection of an appeal in the manner and within the
period laid down by law is not only mandatory but also jurisdictional,
and that the failure to perfect an appeal as required by the rules has
the effect of defeating the right of appeal of a party and precluding the
appellate court from acquiring jurisdiction over the case. 20Nevertheless,
in some instances, this Court has disregarded such unintended lapses so as
to give due course to appeals on the basis of strong and compelling
reasons, such as serving the ends of justice and preventing a grave
miscarriage thereof in the exercise of our equity
jurisdiction. 21
It is our considered opinion that public interest is of far greater
importance than the justifications of substantial justice and equity in
seeking an exception to the general rule. Hence, election cases, by
their very nature, should and ought to merit a similar exemption from a
strict application of technical rules of procedure.
Second, it has been shown and it is not even denied that the Regional
Trial Court of Camiguin, as well as the counsel for private respondent,

was furnished copies of the appeal brief which were sent by registered
mail on October 17, 1992, within the reglementary period to appeal.
This fact was never refuted by the Solicitor General in his Comment.
Concomitantly, although the Clerk of Court claimed that he had not
received any notice of appeal from herein petitioner, it would be safe
to assume, under the circumstances, that the appeal brief duly directed
mailed was received in the regular course of the
mail 22 and was, therefore, deemed filed with the trial court as of the date
of mailing.
Third, applying suppletorily the provisions of the Rules of
Court, 23 particularly Section 4, Rule 41 thereof, the requirement is that a
notice of appeal shall specify the parties to the appeal; shall designate the
judgment or order, or part thereof, appealed from; and shall specify the
court to which the appeal is taken. A perusal of herein petitioner's appeal
brief will disclose the following information: that the parties to the case
are Roleto A. Pahilan as protestant-appellant and Rudy A Tabalba as
protestee-appellee; that appellant therein is appealing from the order of
the Regional Trial Court of Mambajao, Camiguin, dismissing the petition for
election contest in Election Case No. 3(92); and that the appeal is being
made pursuant to Section 22 of Republic Act No. 7166, that is, before the
Commission on Elections.
Accordingly, there is no gainsaying the fact that the particulars which
ought to be reflected in the notice of appeal have been specifically and
categorically spelled out in the appeal brief of petitioner. Perforce, and
in light of the foregoing disquisitions, we find and so hold that
petitioner is entitled to the relief prayed for.
We now proceed to resolve the issue anent the dismissal of petitioner's
election protest by the Regional Trial Court for non-payment, or more
accurately the incomplete payment, of docket fees. Ordinarily, with the
reversal of the respondent Commission's questioned order, this case
should be remanded to said court for adjudication on the merits.
Considering, however, the exigencies of time appurtenant to the
disposition of election cases, and considering further that the issue has

at any rate been squarely raised in this petition, it is now incumbent

upon this Court to act on the propriety of the trial court's order
dismissing the election protest for failure of petitioner to pay
the correct amount of docket fees.
In dismissing petitioner's action, the trial court relied on the rulings
enunciated in the cases of Malimit vs. Degamo24 (an action for quo
warranto), Magaspi, et al. vs. Ramolete, et al. 25 (a suit for recovery of
possession and ownership of land), Lee vs. Republic 26 (a petition for
declaration of intention to become a Filipino citizen), Manchester
Development Corporation vs. Court of Appeals, et al. 27 (an action for a
sum of money and damages), Sun Insurance Office, Ltd., (SIOL) et
al. vs. Asuncion. 28 (a suit for a sum of money and damages), and Tacay, et
al. vs. Regional Trial Court of Tagum, Davao del Norte, etc., et al. 29 (an
action for damages). It bears emphasis that the foregoing cases, except
for Malimit vs.Degamo, are ordinary civil actions. This fact alone would
have sufficed for a declaration that there was no basis for the dismissal of
petitioner's protest for the simple reason that an election contest is not an
ordinary civil action. Consequently the rules governing ordinary civil
actions are not necessarily binding on special actions like an election
contest wherein public interest will be adversely affected.
The case of Malimit vs. Degamo, on its part, is not on all fours with the
present case. In that case, the petition forquo warranto was mailed to
the clerk of Court on December 14, 1959 and was received by the latter
on December 17, 1959. The docket fee was deemed paid only on
January 5, 1960, because the petitioner therein failed to prove his
allegation that a postal money order for the docket fee was attached to
his petition. Hence, the petition for quo warranto was correctly
dismissed.
In the case at bar, it cannot be gainsaid that the sum of P200.00 was
attached to the petition mailed to the Regional Trial Court of Camiguin
and this fact was even acknowledged by the Clerk of Court thereof
when he requested herein petitioner to pay the balance of the correct
docket fee. In Malimit, there was no docket fee paid at all at the time

of mailing; in the present case, the docket fee was paid except that the
amount given was not correct. Considering the fact that there was an
honest effort on the part of herein petitioner to pay the full amount of
docket fees, we are not inclined to insist on a stringent application of
the rules.
Furthermore, there are strong and compelling reasons to rule that the
doctrine we have established inManchester and cases subsequent
thereto cannot be made to apply to election cases.
As we have earlier stated, the cases cited are ordinary civil actions
whereas election cases are not. The rules which apply to ordinary civil
actions may not necessarily serve the purpose of election cases,
especially if we consider the fact that election laws are to be accorded
utmost liberality in their interpretation and application, bearing in
mind always that the will of the people must be upheld. Ordinary civil
actions would generally involve private interests while all elections
cases are, at all times, invested with public interest which cannot be
defeated by mere procedural or technical infirmities.
Again, the Court in Manchester made its ruling in view of its finding
that there existed the unethical practice of lawyers and parties of filing
an original complaint without specifying in the prayer the amount of
damages which, however, is stated in the body of the complaint. This
stratagem is clearly intended for no other purpose than to evade the
payment of the correct filing fees by misleading the docket clerk in the
assessment thereof. Thus, the court therein held that jurisdiction shall
be acquired only upon payment of the prescribed docket fee.
That ruling was later relaxed in the case of Sun Insurance which
allowed the subsequent payment of the correct docket fees provided it
is made within the reglementary period or before prescription has set
in. The reason given was that there was no intent on the part of the
petitioners therein to defraud the government, unlike the plaintiff in
the case of Manchester.

In Tacay, et al. vs. Tagum, et al., it was stated that this Court, inspired
by the doctrine laid down in Manchester,issued Circular No. 7 on March
24, 1988, which was aimed at the practice of certain parties who omit
from the prayer of their complaints any specification of the amount of
damages, the omission being clearly intended for no other purpose than
to evade the payment of the correct filing fees by deluding the docket
clerk in his assessment of the same. In all these cases, the rule was
applied for failure of the plaintiff to include in the prayer of the
complaint the total amount of damages sought against the defendant.
The reason for this, according to the Tacaycase, is because the amount
of damages will help determine two things: first, the jurisdiction of the
court; and, second, the amount of docket fees to be paid.
In the case now before us, and in election cases in general, it is not the
amount of damages, if any, that is sought to be recovered which vests
in the courts the jurisdiction to try the same. Rather, it is the nature of
the action which is determinative of jurisdiction. Thus, regardless of
the amount of damages claimed, the action will still have to be filed
with the Regional Trial Court. In such a case, the evil sought to be
avoided in Manchester and like cases will never arise. Peremptorily,
there will be no occasion to apply the rulings in the cases mentioned. In
addition, the filing fee to be paid in an election case is a fixed amount
of P300.00. There will consequently be no opportunity for a situation to
arise wherein an election contest will have to be dismissed for failure
to state the exact amount of damages and thus evince an intent to
deprive the Government of the docket fees due.
Finally, in Manchester, there was a deliberate attempt on the part of
the plaintiffs therein to evade payment of the correct docket fees. In
the case of petitioner, he already explained, and this we find
acceptable and justified, that "since the schedule of the new rates of
court fees was not then available and the filing of the petition for
election contests was done thru the mails, the old rates readily came to
mind, and this was the reason why only two hundred pesos was
remitted at the same time with the petition." 30

To summarize, the evil sought to be avoided in Manchester and similar

cases can never obtain in election cases since (1) the filing fee in an
election cases is fixed and not dependent on the amount of damages
sought to be recovered, if any; and (2) a claim for damages in an
election case is merely ancillary to the main cause of action and is not
even determinative of the court's jurisdiction which is governed by the
nature of the election filed.
WHEREFORE, the Order of the Commission on Elections dated January
19, 1993, as well as its Resolution promulgated on May 6, 1993, both in
EAC No. 24-92; and the Order of the Regional Trial court of Mambajao,
Camiguin, dated October 2, 1992, in Election Case No. 3(92) are hereby
REVERSED and SET ASIDE, and the records of this case are hereby
ordered REMANDED to the court a quo for the expeditious continuation
of the proceedings in and the adjudication of the election protest
pending therein as early as practicable.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Davide, Jr., Romero,
Nocon, Bellosillo, Melo, Quiason, Puno, Vitug and Kapunan, JJ., concur.

G.R. No. 166993 December 19, 2005

DSM CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,
vs.
COURT OF APPEALS and MEGAWORLD GLOBUS, Respondents.
DECISION

billings arose between the parties. Petitioner thus filed a complaint for
compulsory arbitration before the CIAC claiming payment for
approximately P97 Million as the outstanding balance due from
respondent pursuant to the agreements. On 19 October 2001, the CIAC
rendered a decision partially granting both petitioners and
respondents claims, with a net award of Sixty Two Million Seven
Hundred Sixty Thousand Five Hundred Fifty Eight Pesos and Forty Nine
Centavos (P62,760,558.49) in favor of petitioner.

Tinga, J.:
This case springs from this Courts Decision dated 2 March 2004 in G.R.
No. 153310, Megaworld Globus Asia Inc. v. DSM Construction and
Development Corp. (Megaworld), decided in favor of herein petitioner
DSM Construction. Said Decision having become final and executory, the
corresponding entry of judgment was made on 12 August 2004. This
petition centers on attempts, regrettably entertained by respondent
Court of Appeals, to thwart the execution of a final and executory
decision of this Court.
The Petition for Certiorari1 assails the Resolution2 dated 21 February
2005 of the Court of Appeals in CA-G.R. SP No.
88314.3 Said Resolution ordered the issuance of a temporary restraining
order (TRO)4 enjoining the enforcement of an Alias Writ of
Execution5 issued by the Construction Industry Arbitration Commission
(CIAC)6 in CIAC Case No. 22-2000 and ordering them to cease and desist
from proceeding with the scheduled execution sale on 1 March 2005 of
levied condominium units of the Salcedo Park condominium project
owned by Megaworld Globus Asia, Inc. (respondent).
The antecedent facts follow.
As can be gleaned from Megaworld, petitioner and respondent entered
into agreements for the construction of a condominium project owned
by respondent called "The Salcedo Park", with petitioner as contractor.
In the course of the projects construction, differences with respect to

This award was affirmed by the Court of Appeals, which however

permanently enjoined petitioner from registering its contractors lien
on all except six (6) units of the condominium project. 7 This step was in
line with respondents manifestation that the principal award
of P62,760,558.49 in petitioners favor can be covered by the value of
six (6) condominium units. Seven (7) condominium units, however, were
eventually levied upon as a result of respondents act of substituting
two (2) units for the one already paid for by the buyer-spouses, Shaul
and Rina Golan.8 The execution sale of the levied properties did not
push through after this Court issued a TRO dated 12 July 2002 upon
respondents filing of a petition in G.R. No. 153310.
Thereafter, the Court promulgated its Decision9 dated 2 March 2004
affirming the judgment of the Court of Appeals and lifting the TRO that
was then still in effect. Finding no merit in respondents motions for
reconsideration,10 the Court subsequently issued an entry of judgment
dated 12 August 2004.
Its judgment having become final and executory, the CIAC issued
an Order11 dated 3 November 2004 giving the parties ten (10) working
days within which to agree on the satisfaction of the arbitral award,
otherwise a writ of execution will be issued. As the parties could not
come to terms, the CIAC issued an alias writ of execution on 22
November 2004. The alias writ of execution provides in part:

You are hereby commanded, that of the goods and chattels of the
MEGAWORLD GLOBUS ASIA, INC., Respondent, you cause to be made the
amount of P62,760,558.49 with interest of 6% due on any balance
remaining until the award becomes executory. Thereafter, interest
of 12% per annum shall be applied on any balance remaining until
the full amount is paid; which Claimant recovered pursuant to the
Award promulgated by this Arbitral Tribunal on 19 October 2001 in Case
No. 22-2000 of the Construction Instrusty Arbitration Commission,
together with your lawful fees for the services of this execution, all in
Philippine currency, and that you render the same to said Claimant,
aside from your own fees on this execution, and that you likewise
return this Writ unto this Commission within fifteen (15) days from date
of receipt hereof, with your proceedings endorsed thereon. But if
sufficient personal property cannot be found whereof to satisfy this
execution and lawful fees thereon, then you are commanded that of
the lands and buildings of the said Respondent you make the said sum
of money in the manner required by the Rules of Court, and make
return of your proceedings with this Writ within thirty (30) days from
receipt hereof.12 (Emphasis in the original.)
On 26 November 2004, respondent sought to clarify if the writ of
execution shall be limited to six condominium units in consonance with
the Court of Appeals observation in its decision in the first case that
the petitioners claims can be satisfied by the value of only six units.
The CIAC replied in the negative. In an Order13 dated 3 December 2003,
it stated that nowhere in its Decision or in its Order dated 3 November
2004 did it provide that the payment of the judgment debt should be
made in the form of six condominium units. It expounded that the
mention of the six units was only brought up by the appellate court in
relation to the provisional remedy of securing the judgment debt which
is interim/temporary in nature.
In addition to the initial levy of seven units, which transpired during the
pendency of G.R. No 153310,14 three additional units were levied upon
on 20 December 2004 by Sheriffs Villamor R. Villegas and Norberto R.
Magsajo of the Regional Trial Court (RTC) of Makati. Subsequently, a

Notice of Sheriffs Sale was published, setting the auction sale of all ten
units on 1 March 2005.
On 25 January 2005, respondent filed a Petition15 with the Court of
Appeals to restrain the scheduled execution sale and to nullify the
orders of the CIAC issued pursuant thereto.16 In said Petition,
respondent claimed that the sheriffs exceeded their authority when
they included in the notice of execution sale five condominium units
fully paid for by its buyers. Respondent also asserted that the inclusion
of three additional units in the levy on execution was excessive,
thereby rendering the same void.
On 21 February 2005, the Court of Appeals issued the
questioned Resolution restraining the implementation of the alias writ,
as well as the holding of the auction sale for a period of sixty days from
notice thereof. Petitioner filed the instant petition imputing grave
abuse of discretion on the part of the Court of Appeals in taking
cognizance of respondents petition and in issuing the assailed
Resolution. Petitioner prayed for the issuance of a temporary
restraining order and/or a writ of preliminary injunction to enjoin the
Court of Appeals from acting on respondents petition.
The Court of Appeals rendered a Decision17 granting respondents
petition and declaring the CIACs assailed order null and void. This
decision was rendered on 19 April 2005, three days before the
expiration of the TRO. Such Decision of the Court of Appeals was
brought to the attention of this Court only on 23 May 2005. 18
On 27 April 2005, we issued a Resolution19 directing the parties to
maintain the status quo effective 22 April 2005, the date of the
expiration of the TRO issued by the Court of Appeals and continuing
until further orders from this Court. Since the main case had already
been resolved, however, the Court of Appeals merely held in abeyance
the resolution of respondents motion for clarification20 as well as
petitioners motion for reconsideration21 of its decision.

In its Comment [to petitioners] Supplemental Petition,22 respondent

contends that since the main case had already been resolved by the
Court of Appeals, petitioners remedy is to file a petition for review
under Rule 45 of the Revised Rules of Civil Procedure. Respondent
further asserts that prematurity, multiplicity of suit and lack of respect
for the hierarchy of courts afflict this petition, thereby necessitating its
dismissal.23
We need not dwell on this peripheral issue. Petitioner filed the instant
case precisely to question the Court of Appeals very jurisdiction over
respondents petition. In evoking this Courts authority by means of the
special civil action for certiorari, petitioner asserts that respondent
court committed a patently unlawful act amounting to lack or excess of
jurisdiction when it (i) entertained a petition which was obviously
dilatory and amounted to an obstruction of justice, and (ii) restrained
the CIAC without any valid ground.24 Obviously, if the Court of Appeals
has no jurisdiction over respondents petition in the first place, it would
not have the capacity to render judgment on the petition.
Even assuming that the rules of procedure had somehow not been
observed in this case, the Court finds that these objections can be
quelled in the higher ends of justice. Rule 1, Section 6 of the Rules of
Court provides that the Rules shall be liberally construed in order to
promote their objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. We have at times relaxed
procedural rules in the interest of substantial justice and in so doing,
we have pronounced that:
A rigid adherence to the technical rules of procedure disregards the
fundamental aim of procedure to serve as an aid to justice, not as a
means for its frustration, and the objective of the Rules of Court to
afford litigants just, speedy and inexpensive determination of their
controversy. Thus, excusable imperfections of form and technicalities of
procedure or lapses in the literal or rigid observance of a procedural
rule or non-jurisdictional deadline provided therein should be
overlooked and brushed aside as trivial and indecisive in the interest of

fair play and justice when public policy is not involved, no prejudice
has been caused the adverse party and the court has not been deprived
of its authority or jurisdiction. (Citations omitted) 25
Respondent itself admits that the issues in CA-G.R. SP. No. 88314 and in
the present case are the same.26 The suit is already before us under
Rule 65.27 To dismiss this petition on technical grounds and wait for it to
be elevated anew under the same grounds and arguments would be to
sanction a circuitous procedure that would serve no purpose except
prolong its resolution.
The disposition of the case on the merits is now in order. Generally, the
main question for resolution pertains to the validity of the Alias Writ of
Execution dated 22 November 2004. The particular issues are: (i)
whether the alias writ should have been expressly qualified in limiting
the execution to just six condominium units; (ii) whether the alias writ
conformed to the requirement under Section 8(e), Rule 39 of the Rules
of Civil Procedure that the specific amount due must be stated; (iii)
whether the 6% interest as specified in the alias writ should be applied
on a per annum basis, or on a flat rate. The Court shall also resolve
whether the Makati City RTC sheriffs acted correctly in levying the 10
condominium units, pursuant to such writ of execution.
From the outset, it bears stressing that the subject of petitioner and
respondents petitions is the execution of a final judgment affirmed by
no less than this Court. This being so, the appellate court should have
been doubly careful about entertaining an obviously dilatory petition
intended merely to delay the satisfaction of the judgment. Any lower
court or tribunal that trifles with the execution of a final and executory
judgment of the Supreme Court flirts with insulting the highest court of
the land. While we do not diminish the availability of judicial remedies
to the execution of final judgments of this Court, as may be sanctioned
under the Rules of Court, such actions could only prosper if they have
basis in fact and in law. Any court or tribunal that entertains such
baseless actions designed to thwart the execution of final judgments
acts with grave abuse of discretion tantamount to lack of

jurisdiction.28It is the positive duty of every court of the land to give full
recognition and effect to final and executory decisions, much less those
rendered by the Supreme Court.

By concentrating on the last sentence of the above dispositive portion,

respondent ignored the paragraph which precedes it where the Court of
Appeals stated:

The abuse of discretion amounting to lack or excess of jurisdiction in

this case was made manifest by the fact that the appellate court not
only took cognizance of the case and issued the assailed restraining
order. It eventually decided the case in petitioners (respondent herein)
favor as well notwithstanding the dearth of any basis for doing so.

However, justice and fair play dictate that the annotation of private
respondents lien should be limited to six (6) units of its choice and not
to all of the condominium units. As we noted in our January 17, 2002
Resolution, as clarified by the January 18, 2002 Resolution, private
respondents claim against petitioner in the amount of P62 Million can
be covered by the value of six (6) units of the condominium project. 30

We first examine the Alias Writ of Execution dated 22 November 2004.

As stated earlier, the said writ made no qualification as to specific
classes of property, such as condominium units, which should be
executed upon, much less any denominated quantity of properties. For
this, respondent imputed grave abuse of discretion on the part of the
CIAC. It contends that the Decision dated 14 February 2004 of the Court
of Appeals as affirmed by this Court limited petitioner to six
condominium units for the purpose of satisfying the arbitral award
rendered by the CIAC. The CIAC, in issuing the alias writ which enabled
the sheriffs to levy upon three additional units, was said to have
committed grave abuse of discretion it varied its own judgment as
against that affirmed by the Court of Appeals.
Respondents argument is absurd. It anchors its proposition on the last
sentence of the Decision dated 14 February 2002 of the Court of
Appeals which provides:
WHEREFORE, the herein petition is DISMISSED for lack of merit and the
appealed decision of the Construction Industry Arbitration Commission
is hereby AFFIRMED. The writ of preliminary injunction issued against
the enforcement of the September 28, 2001 decision of the
Construction Industry Arbitration Commission (CIAC) is
hereby LIFTED. The writ of preliminary mandatory injunction ordering
private respondent to withdraw its contractors lien on all, except six
of private respondents condominium units is hereby
made permanent.29(Emphasis supplied.)

As petitioner correctly argues, there is no ambiguity in the Court of

Appeals pronouncement, that is, that the principal award of P62
million can be covered by six condominium units. However, such
pronouncement did not make allowances for the interests of 6% and 12%
imposed by the CIAC because the alleged limit related merely to the
provisional remedy, not the eventual execution of the judgment. The
six unit limit was never intended by the Court of Appeals to operate in
perpetuity as to sanction recovery of the principal award sans legal
interest.
The reason for the imposition of the six unit limit can be better
understood when viewed in the context of the circumstances which led
the Court of Appeals to make such pronouncement. In fact, respondent
itself supplied the rationale when it narrated in its Comment,31 thus:
DSM, through its counsel, caused the publication in the November 20,
2001 issue of the Philippine Daily Inquirer a paid advertisement
announcing that all units of the Salcedo Park Towers Condominium are
subject to its contractors lien.
In addition, DSM also caused to be annotated on all condominium
certificates of title of the Salcedo Park Towers Condominium Entry No.
62921/T denominated as a "contractors lien."

Reacting on this adverse and damaging publicity, causes (sic) by DSM,

private respondent filed a Supplemental Petition with the Court of
Appeals for the cancellation of said entry.
One of petitioners [respondent herein] argument in the Supplemental
Petition was that the price range of its units is from P11 million to P13
million. Thus, just five or six units would suffice to cover payment of
the P62.7 million award.
The Court of Appeals granted the application for preliminary mandatory
injunction and noted in its Resolution dated January 17, 2002 that:
"x x x petitioner manifested that respondents claim of P62 million can
be covered by the sale of six (6) units. It is also worth noting that
petitioner was in fact willing to allow respondent to choose the units
upon which to effect the annotation of its lien." 32

The replacement increased the number of units levied upon from six (6)
to seven (7). This weakens respondents reliance on the purported six
(6)-unit limit since its own act renders it in estoppel. By estoppel is
meant that an admission or representation is rendered conclusive upon
the person making it and cannot be denied or disproved as against the
person relying thereon.34 Since respondent instigated the resultant
increase of the units levied upon, both petitioner and the CIAC cannot
be faulted for assuming that the rest of the condominium units may also
be levied upon on execution.
Next, respondent ascribes to the alias writ35 is the supposed failure to
state the specific amount due. This allegedly vests the sheriffs the
judicial function of determining the total amount ought to be satisfied
by the judgment.
We reiterate the questioned portion of the alias writ of execution:

In making the writ of preliminary mandatory injunction permanent, the

Court of Appeals was protecting respondents business standing from
damage caused by petitioners act of annotating its lien on all 209
condominium units. There is therefore no justification for respondents
claim that in satisfying the award in favor of petitioner, the latter and
the CIAC are limited to only six units.

You are hereby commanded, that of the goods and chattels of the
MEGAWORLD GLOBUS ASIA, INC., Respondent, you cause to be made the
amount of P62,760,558.49 with interest of 6% due on any balance
remaining until the award becomes executory. Thereafter, interest
of 12% per annum shall be applied on any balance remaining until
the full amount is paid; . . . .

Moreover, as correctly pointed out by petitioner, if there was indeed a

six unit limit, respondent itself breached the same. In a letter 33 to the
Register of Deeds of Makati City dated 6 May 2004, respondent asked
that the Notice of Levy/Attachment with Entry No. 70814/T-65317 as
well as the Decision with Entry No. 74154/65317 annotated at the back
of Condominium Certificate of Title No. 65320 (Unit 25A) of the Salcedo
Park condominium project be transferred to Condominium Certificates
of Title Nos. 65389 and 65395 (Units 14C and 16C, respectively) of the
same project. The substitution was made so that the unit already paid
for by its buyers can be transferred in the latters name free from all
liens and encumbrances.

Your lawful fees for the services of this execution shall not exceed four
per centum (4%) on the first P4,000.00 of the amount recovered and
two per centum (2%) in excess of P4,000.00 in accordance with Section
9(10), Rule 141 of the revised Rules of Court. (Emphasis in the original.)
The validity of the alias writ of execution hinges on its conformity to
Section 8(e), Rule 39 of the Revised Rules of Civil Procedure which
states, relative to the amount that should be specified in the writ of
execution:
Sec. 8 (e). In all cases, the writ of execution shall specifically state the
amount of the interest, costs, damages, rents or profits due as of the

date of the issuance of the writ, aside from the principal obligation
under the judgment. For this purpose, the motion for execution shall
specify the amounts of the foregoing reliefs sought by the movant.
A perusal of the alias writ convinces this Court that it complies
substantially with the requirements of law. It states the principal award
sought to be satisfied, as well as the percentage to be imposed thereon
as interest. It even specifies the lawful fees that are due to the sheriffs
for the satisfaction of the judgment.36 Respondent makes much of the
fact that petitioner made its own computation of the amount to be
satisfied which the sheriffs allegedly followed.
Rule 39, Sec. 8(e) cited above precisely requires the movant to specify
the amount sought to be satisfied so the Court fails to see why
petitioner should be faulted for doing so. If the objection hinges on the
fact that the exact mathematical computation did not appear in the
alias writ itself, respondent could easily have moved that said
computation be incorporated by the CIAC thereon. Such perceived
deficiency is certainly not sufficient to justify recourse to a special civil
action for certiorari to have the alias writ declared null and void in its
entirety.
As to the controversy on the application of the 6% rate of interest, the
proper forum for clarifying the same is the CIAC, not the Court of
Appeals. After all, the CIAC imposed said rate so it puzzles this Court
why respondent did not seek enlightenment therefrom when it filed its
Motion for Clarification relative to the purported six-unit limit. Be that
as it may, this Court herein notes that nowhere in any of its
jurisprudence had a legal rate of interest been imposed as a flat rate
rather than on a per annum basis.

Our conclusions on the validity of the Alias Writ of Execution stand

utterly apart from those propounded by the Court of Appeals in its 19
April 2005 Decision. Its rationale, briefly explained in 4 pages, does not
appear to consider the flip side of the arguments raised by respondent.
It does not even bother to cite, much less contest, the arguments
raised therein by respondents.
The 19 April 2005 Decision did not dwell on the other arguments posited
by respondent in support of its petition before the Court of Appeals
relative to the acts of the sheriffs in levying particular condominium
units in preparation to the auction sale. To give full resolution to this
case, these arguments should be disposed with at this juncture.
Respondents claimed before the Court of Appeals is that the sheriffs
exceeded their authority when they included five condominium units
fully paid for by buyers in the notice of execution sale. 37 According to
respondent, the unrecorded contracts to buy and sell take precedence
over the recorded levy of execution by virtue of the Subdivision and
Condominium Buyers Protective Decree (PD 957).
The Court is baffled why respondent is raising this issue and not the
purported buyers themselves. Rule 39, Section 1638 of the Revised Rules
of Civil Procedure lays down the procedure in cases where properties
levied upon are claimed by third persons. It is the third person claiming
the property who has to make an affidavit of his title or right to
possession thereof. Nowhere is it stated in said section that the
judgment obligor (respondent in this case) has to make the claim on the
third persons behalf. It is peculiar that respondent is belaboring the
point when the supposed buyers themselves did not even appear to lay
claim to the levied properties.
Moreover, respondents contention that the unregistered buyers right
over the property is superior to that of the judgment obligor has no
basis. The fact that the contracts to buy and sell are unregistered and
the properties in question are still in the name of respondent underlines
the fact that the sales are not absolute. The units are clearly still

owned by respondent and not by the alleged buyers. Under Section 51

of the Property Registration Decree (PD 1529), the act of registration is
the operative act which conveys or affects the land in so far as third
persons are concerned. As provided by said law:
Sec. 51. . . . no deed, mortgage, lease or other voluntary instrument,
except a will purporting to convey or affect registered land, shall take
effect as a conveyance or bind the land but shall operate only as a
contract between the parties and as evidence of authority to the
Register of Deeds to make registration.
...
Respondents reliance on jurisprudence holding that buyers rights of
ownership over condominium units even if unregistered are superior
over registered encumbrances is misplaced. The cases cited clearly
indicated that the parties involved were the condominium buyers
and mortgage creditors. A mortgage creditor is not synonymous to a
judgment creditor contrary to what respondent asserts. While the law
expects a mortgage creditor to inquire as a reasonably prudent man
would regarding the encumbrances on the property in question, no such
knowledge is imputed to a judgment creditor who merely seeks the
satisfaction of the judgment awarded in his favor.

petition rather than dismissing the case outright, it committed grave

abuse of discretion amounting to lack of jurisdiction.
One last point. The Court has noted the various dilatory tactics
employed by lawyers to resist the execution of judgments which had
already attained finality. In fact, the Court has been all too willing to
discipline counsels who engage in such behavior, either through
penalization for contempt39 or referral for administrative investigation
with the Integrated Bar of the Philippines40. Lawyers must be reminded
that in their zeal to protect the interests of their clients, they must not
overreach their commitment to the extent of frustrating the ends of
justice. The Court does not regard with favor lawyers who try to delay
the execution of cases which are already final and executory.
WHEREFORE, premises considered, the petition is GRANTED.
The Resolution dated 21 February 2005 and theDecision of the Court of
Appeals dated 19 April 2005 are VOIDED and SET ASIDE. Costs against
respondent.
The Construction Industry Arbitration Commission is ordered to proceed
with the execution of its Decision dated 19 October 2001 in CIAC Case
No. 22-2000.
SO ORDERED.

Based on the foregoing, the appellate court clearly had no authority to

take cognizance of the petition filed by respondent. By acting on the