SPIRIT AND PURPOSE OF LAW (b) and (c), and the first sentence of par. (d), all of Sec.

b) and (c), and the first sentence of par. (d), all of Sec. 3, R.A. 7166,
apply to the May 11, 1992 elections (Annex "C", Petition).
Republic of the Philippines
SUPREME COURT Petitioner Manuel T. De Guia is an incumbent Member of the
Manila Sangguniang Bayan of the Municipality of Parañaque, Metro Manila,
EN BANC having been elected in the January 1988 local elections. He prays,
more particularly, for reversal of the position of respondent insofar as
G.R. No. 104712 May 6, 1992 it affects the municipality of Parañaque and all the other
MANUEL T. DE GUIA, in his capacity as Councilor of the municipalities in the Metro Manila Area. He claims that the second
Municipality of Parañaque, Metro Manila, petitioner, proviso of par. (c), Sec. 3 of R.A. 7166, which requires the
vs. apportionment into districts of said municipalities does not specify
HON. COMMISSION ON ELECTIONS, respondent. when the members of their Sangguniang Bayan will be elected by
district. He would consequently lean on par. (d) of Sec. 3, which
BELLOSILLO, J.: immediately succeeds par. (c), to support his view that the elected
members of these municipalities mentioned in par. (c) should
This is a petition for certiorari and prohibition assailing the validity continue to be elected at large in the May 11, 1992 elections.
and the enforcement by respondent Commission on Elections
(COMELEC) of its RESOLUTION NO. 2313, adopting rules and Paragraph (d) states that "[F]or purposes of the regular elections on
guidelines in the apportionment, by district, of the number of elective May 11, 1992, elective members of the Sangguniang Panlunsod and
members of the Sangguniang Panlalawigan in provinces with only Sangguniang Bayan shall be elected at large in accordance with
one (1) legislative district and the Sangguniang Bayan of existing laws. However, beginning with the regular elections in 1995,
municipalities in the Metro Manila Area for the preparation of the they shall be elected by district." Petitioner therefore insists that the
Project of District Apportionment by the Provincial Election elected members of the Sangguniang Bayan of Parañaque fall under
Supervisors and Election Registrars (Annex "A", Petition), this category so that they should continue to be elected at large until
RESOLUTION NO. 2379, approving the Project of District the 1995 regular elections.
Apportionment submitted pursuant to Resolution No. 2313 (Annex
"B", Petition), and RESOLUTION UND. 92-010 holding that pars. (a),

1
Before addressing the crux of the controversy, the Court observes
that petitioner does not allege that he is running for reelection, much
less, that he is prejudiced by the election, by district, in Parañaque.
As such, he does
not appear to have a locus standi, a standing in law, personal or
substantial interest. 1 He does not also allege any legal right that has
been violated by respondent. If for this alone, petitioner does not
appear to have any cause of action.
However, considering the importance of the issue involved,
concerning as it does the political exercise of qualified voters
affected by the apportionment, and petitioner alleging abuse of
discretion and violation of the Constitution by respondent, We
resolve to brush aside the question of procedural infirmity, even as
We perceive the petition to be one of declaratory relief. We so held
similarly through Mr. Justice Edgardo L. Paras in Osmeña
v. Commission on Elections. 2
Now on the meat of the dispute.
On November 18, 1991, Congress passed R.A. 7166, signed into law
by the President on November 26, 1991. It is "An Act Providing for
Synchronized National and Local Elections and for Electoral
Reforms, Authorizing Appropriations Therefor, and for Other
Purposes." At issue in this case is the proper interpretation of Sec. 3
thereof which provides:
2
Sec. 3. Elections of Members of the Sangguniang Panlalawigan,
Sangguniang Panlungsod and Sangguniang Bayan. — The elective
members of the Sangguniang Panlalawigan, Sangguniang
Panlungsod and Sangguniang Bayan shall be elected as follows:
(a) For provinces with two (2) or more legislative districts, the elective
members of the Sangguniang Panlalawigan shall be elected by
legislative districts . . .
(b) For provinces with only one (1) legislative district, the
Commission shall divide them into two (2) districts for purposes of
electing the members of the Sangguniang Panlalawigan . . .
(c) The number and election of elective members of the
Sangguniang Panlungsod and Sangguniang Bayan in the Metro
Manila Area, City of Cebu, City of Davao and any other city with two
(2) or more legislative districts shall continue to be governed by the
provisions of Sections 2 and 3 of Republic Act No. 6636 . .
. Provided, further, That, the Commission shall divide each of the
municipalities in Metro Manila Area into two (2) districts by barangay
for purposes of representation in the Sangguniang Bayan
. . . . and,
(d) For purposes of the regular elections on May 11, 1992, elective
members of the Sangguniang Panlungsod and Sangguniang Bayan
shall be elected at large in accordance with existing laws. However,
beginning with the regular elections in 1995, they shall be elected by
district . . . .
On November 20, 1991, respondent COMELEC, invoking authority of
the Constitution, the Omnibus Election Code, R.A. 6636, R.A. 6646
and R.A. 7166, 3 issued Resolution No. 2313 and the subsequent
resolutions in question.
On February 20, 1992, in view of the perceived ambiguity in the
meaning of par. (d), particularly in relation to par. (c), Sec. 3, R.A.
7166, petitioner filed with COMELEC a Motion for Clarification of its
Resolution No. 2313 inquiring whether the members of the
Sangguniang Bayan of Parañaque and the other municipalities of
Metro Manila enumerated therein, which are all single-district
municipalities, would be elected by district in May 11, 1992 or in the
1995 regular elections.
Meanwhile, on March 3, 1992 COMELEC issued Resolution No.
2379 approving the guidelines submitted by the Provincial Election
Supervisors and Municipal Election Registrars concerned pursuant to
Resolution No. 2313, and stating therein its purpose
recommending to Congress the districting/apportionment
Sangguniang Panlungsod and Sangguniang Bayan seats, i.e., to
reduce the number of candidates to be voted for in the May 11, 1992
synchronized elections. In this Project of Apportionment, Parañaque
together with the other twelve (12) municipalities in the Metro Manila
Area was divided into two (2) districts with six (6) elective councilors
for each district.
On March 10, 1992, COMELEC resolved petitioner's Motion for
Clarification by interpreting Sec. 3, R.A. 7166, to mean that the
election of elective members of the Sangguniang Bayan, by district,
of the thirteen (13) municipalities in the Metro Manila Area shall apply
in the May 11, 1992 elections (Resolution UND. 92-010, prom. March
10, 1992). Petitioner says that he received copy of Resolution UND.
92-010 on March 13, 1992.
On April 7, 1992, apparently not satisfied with this third Resolution of
COMELEC, petitioner filed the instant petition asserting that under
par. (d), Sec. 3 of R.A. 7166 the elective members of the
Sangguniang Panlungsod and the Sangguniang Bayan, for purposes
of the May 11, 1992 regular elections, shall be elected at large in
accordance with existing laws. He would include in this class of
sanggunian members to be elected at large those of the municipality
of Parañaque.
in Petitioner therefore imputes grave abuse of discretion to COMELEC
of in promulgating Resolution No. 2313, Resolution No. 2379 and
Resolution UND. 92-010 which clarifies, contrary to his view, that the
district apportionment of the municipalities in the Metro Manila Area
is applicable to the May 11, 1992 regular elections.
We have carefully examined pars. (a), (b), (c) and (d) of Sec. 3, R.A.
7166, and its precursor bills on synchronized elections, Senate Bill
3
No. 1861 and House Bill No. 34811, and We realize the web of
confusion generated by the seeming abstruseness in the language of
the law. Some framers of the law were even fazed at the empirical
implications of some of its provisions, particularly Sec. 3 thereof, and
they admitted in fact that said provisions were susceptible of varied
interpretations, as borne by the sponsorship and explanatory
speeches now spread in the Journals of Congress. Hence, We can
understand why petitioner would interpret Sec. 3 as he would. But if
we pursue his course, we may conclude in absurdity because then
there would have been no reason for R.A. 7166 to single out the
single-district provinces referred to in par. (b), and the municipalities
in the Metro Manila Area mentioned in the second proviso of par. (c),
to be apportioned at once into two (2) districts each if the members
of their respective sanggunian after all would still be elected at large
as they were in the 1988 elections.
No law is ever enacted that is intended to be meaningless, much
less inutile. We must therefore, as far as we can, divine its meaning,
its significance, its reason for being. As it has oft been held, the key
to open the door to what the legislature intended which is vaguely
expressed in the language of a statute is its purpose or the reason
which induced it to enact the statute. If the statute needs
construction, as it does in the present case, the most dominant in
that process is the purpose of the act. 4 Statutes should be
construed in the light of the object to be achieved and the evil or
mischief to be suppressed, 5 and they should be given such
construction as will advance the object, suppress the mischief, and
4
secure the benefits intended. 6 A construction should be rejected
that gives to the language used in a statute a meaning that does not
accomplish the purpose for which the statute was enacted, and that
tends to defeat the ends which are sought to be attained by the
enactment. 7
The reason for the promulgation of R.A. 7166 is shown in the
explanatory note of Senate Bill No. 1861 which states in part:
This bill proposes to set the national and local elections for May 11,
1992, and provide for the necessary implementing details. It also
endorses reforms and measures to ensure the conduct of free,
orderly, honest, peaceful and credible elections. Specifically, it seeks
to: (1) Reduce the number of positions to be voted for by providing
therein that the members of the Sangguniang Panlalawigan,
Sangguniang Panlungsod and Sangguniang Bayan be elected not at
large, but by district . . . .
That respondent COMELEC is cognizant of this legislative intent of
R.A. 7166 is reflected in the "WHEREAS" clauses constituting the
preamble to Resolution No. 2379. Thus —
WHEREAS, the Commission on Elections, in order to reduce the
number of candidates to be voted for in the May 11, 1992
synchronized elections recommended, among others, to the
Congress of the Philippines, the districting/apportionment of
sangguniang panlungsod and sangguniang bayan seats;
WHEREAS, the Congress of the Philippines passed Republic Act
7166, and approved by the President of the Philippines on November
26, 1991, adopting among others, the recommendation of the
Commission on Elections aforestated;
WHEREAS, pursuant to, and in implementation of Republic Act
7166, particularly Section 3 thereof, the Commission promulgated
Resolution No. 2313, directing the Provincial Election Supervisors
and Election Registrars concerned to submit, after consultation,
public hearings, and consensus-taking with the different sectors in
the community, the Project of District Apportionment of single
legislative-district provinces and municipalities in the Metro Manila
area;
WHEREAS, the established criteria/guidelines in the determination of
the district apportionment are as follows: a. compactness, contiguity
and adjacentness of territory; b. apportionment shall be based on the
1990 census of population; c. no municipality, in the case of
provinces, and no barangay, in the case of cities and municipalities,
shall be fragmented or apportioned into different districts.
This avowed policy of having sanggunian members elected by
district is also manifest from the four corners of Sec. 3 of R.A.
7166. 8 Thus, a careful analysis of the provisions of Sec. 3 shows
that the purpose of districting/apportionment of the sanggunian seats
is to reduce the number of positions to be voted for in the May 11,
1992, synchronized elections and ensure the efficiency of electoral
process. Considering that the single-district provinces and the
5
municipalities in the Metro Manila Area, which are all single-districts,
and under pars. (b) and (c) have already been apportioned into two
(2) districts, they will henceforth be electing the members of their
Sangguniang Panlalawigan and Sangguniang Bayan by district in the
coming May 11, 1992, elections, although under par. (d), the single-
district cities and all the municipalities outside the Metro Manila Area
which are all likewise single-districts, will have to continue electing at
large the members of their Sangguniang Panlungsod and
Sangguniang Bayan as they have yet to be apportioned. But
beginning the regular elections of 1995, they will all have to be
elected by district. By then, COMELEC would have had enough time
to apportion the single-district cities and the municipalities outside
the Metro Manila Area.
As they now stand in relation to the districting/apportionment of local
government units for purposes of election under Sec. 3 of R.A. 7166,
it is clear that: (1) for provinces with two (2) or more legislative
districts contemplated in par. (a), they shall continue to be elected by
district; (2) for provinces with single legislative districts, as they have
already been apportioned into two (2) districts each under par. (b),
they shall henceforth be elected likewise by district; (3) for cities with
two (2) or more legislative districts, e.g., the cities of Manila, Cebu
and Davao, they shall also continue to be elected by district under
the first part of par. (c); and (4) for the thirteen (13) municipalities in
the Metro Manila Area, which have already been apportioned into
two (2) districts each under the second proviso of par. (c), they shall
likewise be elected by district in the regular elections of May 11,
1992.

Then, that should leave us the Sangguniang Panlungsod of the

single-district cities and the Sangguniang Bayan of the municipalities
outside Metro Manila, which remain single-districts not having been
ordered apportioned under Sec. 3 of R.A. 7166. They will have to
continue to be elected at large in the May 11, 1992, elections,
although starting 1995 they shall all be elected by district to effect the
full implementation of the letter and spirit of R.A. 7166. That is the
true import of par. (d). Consequently, as We view it, where he
stands, petitioner must fall.
WHEREFORE, finding no abuse of discretion, much less grave, on
the part of respondent, and for lack of merit, the instant petition is
DISMISSED. No costs.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,

Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado,
Davide, Jr., Romero and Nocon, JJ., concur.

6
Republic of the Philippines The property subject matter of the case was formerly covered by
SUPREME COURT Original Certificate of Title No. P-1248, issued by virtue of Free
Manila Patent Application No. 192765, in favor of the spouses, Florencia H.
SECOND DIVISION de Enciso and Miguel Enciso. The said original certificate of title was
inscribed in the Registration Book for the Province of Camarines
G.R. No. 78687 January 31, 1989 Norte on December 10, 1961. On February 28, 1970, the patentees,
ELENA SALENILLAS AND BERNARDINO the Enciso spouses, by an Absolute Deed of Sale, sold the property
SALENILLAS, petitioners, in favor of the petitioners, the spouses Elena Salenillas and
vs. Bernardino Salenillas for a consideration of P900.00. Petitioner
HONORABLE COURT OF APPEALS and HONORABLE Elena Salenillas is a daughter of the Encisos. As a result of the
RAYMUNDO SEVA, JUDGE OF BRANCH 38 OF THE REGIONAL aforementioned sale, Transfer Certificate of Title No. T-8104 of the
TRIAL COURT OF CAMARINES NORTE and WILLIAM Register of Deeds of Camarines Norte was issued in the name of the
GUERRA, respondents. Salenillas, cancelling Original Certificate of Title No. P-1248. On
Jose L. Lapak for petitioners. June 30, 1971, the petitioners mortgaged the property now covered
Jose T. Atienza for private respondent. by T.C.T. No. T-8104 with the Rural Bank of Daet, Inc. The mortgage
was subsequently released on November 22, 1973 after the
SARMIENTO, J.: petitioners paid the amount of P1,000.00. Later, or on December 4,
1975, the petitioners again mortgaged the property, this time in favor
This petition for review on certiorari which seeks the reversal and of the Philippine National Bank Branch, Daet, Camarines Norte as
1 2
setting aside of the decision of the Court of Appeals dismissing security for a loan of P2,500.00.
the petition for certiorari against Judge Raymundo Seva of the
Regional Trial Court of Camarines Norte and the private respondent, For failure of the petitioners to pay their loan, extrajudicial foreclosure
William Guerra, involves a pure question of law i.e., the coverage proceeding, pursuant to Act No. 3135, was instituted by the
and application of Section 119 of Commonwealth Act No. 141, as Philippine National Bank against the mortgage and the property was
amended, known otherwise as the Public Land Act. sold at a public auction held on February 27, 1981. The private
respondent, William Guerra, emerged as the highest bidder in the
The facts are undisputed. said public auction and as a result thereof a "Certificate of Sale" was

7
issued to him by the Ex Officio Provincial Sheriff of Camarines Norte.
Ultimately, on July 12, 1983, a "Sheriff's Final Deed" was executed in
favor of the private respondent.
On August 17,1983, the Philippine National Bank filed with the
Regional Trial Court of Camarines Norte at Daet, a motion for a writ
of possession. The public respondent, Judge Raymundo Seva of the
trial court, acting on the motion, issued on September 22, 1983 an
order for the issuance of a writ of possession in favor of the private
respondent. When the deputy sheriff of Camarines Norte however,
attempted on November 17, 1983, to place the property in the
possession of the private respondent, the petitioners refused to
vacate and surrender the possession of the same and instead
offered to repurchase it under Section 119 of the Public Land Act. On
August 15, 1984, another motion, this time for the issuance of an
alias writ of possession was filed by the private respondent with the
trial court. The petitioners, on August 31, 1984, opposed the private
respondents' motion and instead made a formal offer to repurchase
the property. Notwithstanding the petitioners' opposition and formal
offer, the trial court judge on October 12, 1984 issued the alias writ of
possession prayed for the private respondent. The petitioners moved
for a reconsideration of the order but their motion was denied.
Undeterred by their initial setback, the petitioners elevated the case
to the respondent Court of Appeals by way of a petition
for certiorari claiming that the respondent trial court judge acted with
grave abuse of discretion in issuing the order dated October 12,
8
1984 granting the writ of possession, and the order dated October
22, 1984, denying their motion for reconsider consideration.
In a resolution dated January 23, 1985, the respondent appellate
court gave due course to the petition; required the parties to submit
simultaneous memoranda in support to their respective positions;
and restrained the trial court and the private respondent from
executing, implementing or otherwise giving effect to the assailed
writ of possession until further orders from the court. 3 However, in a
decision promulgated on September 17, 1986, the respondent Court
of Appeals dismissed the case for lack of merit. According to the
appellate court:
It must be noted that when the original owner, Florencia H. Enciso
whose title, OCT No. P-1248, was issued on August 9, 1961,
executed a deed of absolute sale on February 28, 1970 of the
property covered by said title to spouses Elena Salenillas and
Bernardino Salenillas, the five year period to repurchase the property
provided for in Section 119 of Commonwealth Act No. 141 as
amended could have already started. Prom this fact alone, the
petition should have been dismissed. However, granting that the
transfer from parent to child for a nominal sum may not be the
"conveyance" contemplated by the law. We will rule on the issue
raised by the petitioners. 4
xxx xxx xxx
Applying the case of Monge, et al. vs. Angeles, et al., 5 the appellate
court went on to hold that the five-year period of the petitioners to
repurchase under Section 119 of the Public Land Act had already
prescribed. The point of reckoning, ruled the respondent court in
consonance with Monge is from the date the petitioners mortgaged
the property on December 4, 1973. Thus, when the petitioners made
their formal offer to repurchase on August 31, 1984, the period had
clearly expired.
In an effort to still overturn the decision, the petitioners moved for
reconsideration. Their motion apparently went for naught because on
May 7, 1987, the respondent appellate court resolved to deny the
same. Hence, this petition.
Before us, the petitioners maintain that contrary to the rulings of the
courts below, their right to repurchase within five years under Section
119 of the Public Land Act has not yet prescribed. To support their
contention, the petitioners cite the cases of Paras vs. Court of
Appeals 6 and Manuel vs. Philippine National Bank, et al. 7
On the other side, the private respondent, in support of the appellate
court's decision, states that the sale of the contested property by the
patentees to the petitioners disqualified the latter from being legal
heirs vis-a-vis the said property. As such, they (the petitioners) no
longer enjoy the right granted to heirs under the provisions of Section
8
119 of the Public Land Act.
9
In fine, what need be determined and resolved here are: whether or
not the petitioners have the right to repurchase the contested
property under Section 119 of the Public Land Act; and assuming the
answer to the question is in the affirmative, whether or not their right
to repurchase had already prescribed.
We rule for the petitioners. They are granted by the law the right to
repurchase their property and their right to do so subsists.
Section 119 of the Public Land Act, as amended, provides in full:
Sec. 119. Every conveyance of land acquired under the free patent
or homestead provisions, when proper, shall be subject to
repurchase by the applicant, his widow, or legal heirs within a period
of five years from the date of the conveyance.
From the foregoing legal provision, it is explicit that only three
classes of persons are bestowed the right to repurchase — the
applicant-patentee, his widow, or other legal heirs. Consequently, the
contention of the private respondent sustained by the respondent
appellate court that the petitioners do not belong to any of those
classes of repurchasers because they acquired the property not
through inheritance but by sale, has no legal basis. The petitioners-
spouses are the daughter and son-in-law of the Encisos, patentees
of the contested property. At the very least, petitioner Elena
Salenillas, being a child of the Encisos, is a "legal heir" of the latter.
As such, and even on this score alone, she may therefore validly
repurchase. This must be so because Section 119 of the Public Land
Act, in speaking of "legal heirs," makes no distinction. Ubi lex non
distinguit nec nos distinguere debemos.
Moreover, to indorse the distinction made by the private respondent
and the appellate court would be to contravene the very purpose of
Section 119 of the Public Land Act which is to give the homesteader
or patentee every chance to preserve for himself and his family the
land that the State had gratuitously given him as a reward for his
9
labor in clearing and cultivating it. Considering that petitioner
Salenillas is a daughter of the spouses Florencia H. Enciso and
Miguel Enciso, there is no gainsaying that allowing her (Elena) and
her husband to repurchase the property would be more in keeping
with the spirit of the law. We have time and again said that between
two statutory interpretations, that which better serves the purpose of
the law should prevail.
Guided by the same purpose of the law, and proceeding to the other
issue here raised, we rule that the five-year period for the petitioners
to repurchase their property had not yet prescribed.
10
The case of Monge et al. vs. Angeles, et al., cited as authority by
the respondent Court of Appeals is inapplicable to the present
controversy. The facts obtaining there are substantially different from
those in this case. In Monge the conveyance involved was a pacto
de retro sale and not a foreclosure sale. More importantly, the
question raised there was whether the five-year period provided for
in Section 119 "should be counted from the date of the sale even if
10
the same is with an option to repurchase or from the date the
ownership of the land has become consolidated in favor of the
11
purchaser because of the homesteader's failure to redeem it. It is
therefore understandable why the Court ruled there as it did. A sale
on pacto de retro immediately vests title, ownership, and, generally
possession over the property on the vendee a retro, subject only to
the right of the vendor a retro to repurchase within the stipulated
period. It is an absolute sale with a resolutory condition.
The cases 12 pointed to by the petitioner in support of their position,
on the other hand, present facts that are quite identical to those in
the case at bar. Both cases involved properties the titles over which
were obtained either through homestead or free patent. These
properties were mortgaged to a bank as collateral for loans, and,
upon failure of the owners to pay their indebtedness, the mortgages
were foreclosed. In both instances, the Court ruled that the five-year
period to. repurchase a homestead sold at public auction or
foreclosure sale under Act 3135 begins on the day after the
expiration of the period of redemption when the deed of absolute
sale is executed thereby formally transferring the property to the
purchaser, and not otherwise. Taking into account that the mortgage
was foreclosed and the mortgaged property sold at a public auction
to the private respondent on February 27, 1981, with the "Sheriff's
Final Deed" issued on July 12, 1983, the two offers of the petitioners
to repurchase the first on November 17, 1983, and the second,
formally, on August 31, 1984 were both made within the prescribed
five-year period.
Now, as regards the redemption price, applying Sec. 30 of Rule 39 of
the Revised Rules of Court, the petitioners should reimburse the
private respondent the amount of the purchase price at the public
auction plus interest at the rate of one per centum per month up to
November 17, 1983, together with the amounts of assessments and
taxes on the property that the private respondent might have paid
after purchase and interest on the last named amount at the same
13
rate as that on the purchase price.

WHEREFORE, the petition is GRANTED. The Decision dated

September 17, 1986, and the Resolution dated May 7, 1987 of the
Court of Appeals, and the Orders dated September 22, 1983,
October 12, 1984, and October 22, 1984 of the Regional Trial Court
of Daet, Camarines Norte, are hereby REVERSED and SET ASIDE,
and another one ENTERED directing the private respondent to
reconvey the subject property and to execute the corresponding
deed of reconveyance therefor in favor of the petitioners upon the
return to him by the latter of the purchase price and the amounts, if
any, of assessments or taxes he paid plus interest of one (1%) per
centum per month on both amounts up to November 17, 1983.
No costs.

SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ.,
concur.

11
Republic of the Philippines COL. DIONY A. VENTURA, and CAPT. FRANCISCO T.
SUPREME COURT MALLILLIN, petitioners,
Manila vs.
EN BANC HON. MIANO C. ASUNCION, Presiding Judge, Branch 104,
REGIONAL TRIAL COURT, Q.C., LTC. JACINTO LIGOT
G.R. No. 93177 August 2, 1991 PA., respondents.
B/GEN. JOSE COMENDADOR, B/GEN, MARIELO BLANDO, No. 96948 August 2, 1991
CAPT. DANILO PIZARRO, CAPT. MANUEL ISON, COL. LUISITO B/GEN. JOSE COMENDADOR, B/GEN. MARCELO BLANDO,
SANCHEZ, LTC. ROMELINO GOJO, LTC. ARSENIO TECSON, CAPT. DANILO PIZARRO PN, CAPT. MANUEL ISON PN, LTC.
LTC. RAFAEL GALVEZ, LTC. TIBURCIO FUSILLERO, LTC. ROMELINO GOJO PN (M), LTC. ARSENIO TECSON PA, LTC.
ERICSON AURELIO, LTC. JACINTO LIGOT LTC. FRANKLIN RAFAEL GALVEZ PA, LTC. TIBURCIO FUSILLERO PA, LTC.
BRAWNER, MAJ. ALFREDO OLIVEROS, MAJ. CESAR DE LA ERICSON AURELIO PA, LTC. JACINTO LIGOT PA, LTC.
PERA, MAJ. LEUVINO VALENCIA, CAPT. FLORENCIO FLORES, FRANKLIN BRAWNER PA, MAJ. ALFREDO OLIVEROS PA, MAJ.
CAPT. JAIME JUNIO, CAPT. DANILO LIM, CAPT. ELMER AMON, CESAR DE LA PENA PN (M): MAJ. LEUVINO VALENCIA PA,
CAPT. VERGEL NACINO, and LT. JOEY SARROZA, petitioners, CAPT. FLORENCIO FLORES PA, CAPT. JAIME JUNIO PA, CAPT.
vs. DANILO LIM PA, CAPT. ELMER AMON PAF CAPT. VERGEL
GEN. RENATO S. DE VILLA, CHIEF OF STAFF, AFP, THE PTI NACINO, and LT. JOEY SARROZA, petitioners,
INVESTIGATING PANEL COMPOSED OF: COL. MANUEL S. vs.
MENDIOLA, COL. VIRTUD NORBERTO L. DAGZA MAJ. FELIX V. B/GEN. DEMETRIO CAMUA COL. HERMINIO A. MENDOZA, COL.
BALDONADO and MAJ. ESTELITO L. PORNEA and GENERAL ERNESTO B. YU, COL. ROMEO ODI COL. WILLY FLORENDO,
COURT-MARTIAL NO. 14 COMPOSED OF: B/GEN. DEMETRIO COL. DIONY A. VENTURA, and CAPT. FRANCISCO T.
CAMUA COL. HERMINIO A. MENDOZA, COL. ERNESTO B. YU, MALLILLIN PRESIDENT AND MEMBERS OF GENERAL COURT-
COL. ROMEO ODI, COL. WILLY FLORENDO, COL. DIONY A. MARTIAL NO. 14, respondents.
VENTURA and CAPT. FRANCISCO T. MALLILLIN, respondents. No. 97454 August 2, 1991
No. 95020 August 2, 1991 AFP CHIEF OF STAFF LT. GEN. RODOLFO BIAZON, DEPUTY
B/GEN. DEMETRIO CAMUA, COL. HERMIMO A. MENDOZA, COL. CHIEF OF STAFF MAJOR GEN. ALEXANDER AGUIRRE, PNP
ERNESTO B. YU, COL. ROMEO ODI, COL. WILLY FLORENDO, DIRECTOR GENERAL MAJOR GEN. CESAR NAZARENO and LT.

12
COL. ALBERTO OLARIO, Commanding Officer of the PNP/INP
Detention Center/Jail, petitioners,
vs.
HON. ANTONIO P. SOLANO, Presiding Judge, Regional Trial
Court, Quezon City, Branch 86, CAPTAIN REYNALDO S.
RAFAEL, 1 LT SERVANDO A. BAOANAN PN(M), 1 LT.
WILFREDO JIMENEZ PAF 1 LT. ATANACIO T. MACALAN JR
PMM 2LT ELISEO T. RASCO PC, 2LT JONAS CALLEJA PC, 2LT
JAIRUS JS GELVEZON III PMM 2LT JOSELITO CABREROS PMM
2LT MEMEL ROJAS PN(M) and 2LT HERMINIO L. CANTACO
PC, respondents.
Armando M. Marcelo and Rainier L. Madrid for petitioners Luisito
Sanchez, Tiburcio Fusillero, Ericson Aurelio, Levino Valencia, Danilo
Arnon Vergel Nacino, Florencio Flores, Benigno Junio and Joey
Sarroza.
Manuel Q. Malvar for Rafael Galvez and Danny Lim.
Manuel E. Valenzuela for Arsenio Tecson
Mariano R. Santiago for Alfredo Oliveros.
Ricardo J.M. Rivera for Manuel Ison.Castillo, Laman, Tan and
Pantaleon for Danilo Pizarro.
Alfredo Lazaro for Romelino Gojo.
Manuel A. Barcelona, Jr. for Jose Comendador.
Jonathan B.S. Rebong and Efren C. Carag for Marcelo Blando.
Pablito V. Sanidad for Franklin Brawner and Ericson Aurelio.
Efren C. Moncupa for All Tecson.
M.M. Lazaro & Associates for respondents Ligot and Ison .
Baldomero S.P. Gatbonton, Jr. for Jacinto Ligot.
13
Salvador B. Britanico for Cesar de la Pena.
Gilbert R.T. Reyes for Danilo Pizarro.
Ponce Enrile, Cayetano, Reyes & Manalastas for petitioners in G.R.
No. 93177.
The Solicitor General for respondents.
CRUZ, J.:
These four cases have been consolidated because they involve
practically the same parties and related issues arising from the same
incident.
The petitioners in G.R. Nos. 93177 and 96948 and the private
respondents in G.R. Nos. 95020 and 97454 are officers of the Armed
Forces of the Philippines facing prosecution for their alleged
participation in the failed coup d' etat that took place on December 1
to 9, 1989.
The charges against them are violation of Articles of War (AW) 67
(Mutiny), AW 96 (Conduct Unbecoming an Officer and a Gentleman)
and AW 94 (Various Crimes) in relation to Article 248 of the Revised
Penal Code (Murder).
In G.R. No. 93177, which is a petition for certiorari, prohibition
and mandamus, they are questioning the conduct of the Pre-Trial
Investigation PTI Panel constituted to investigate the charges against
them and the creation of the General Court Martial GCM convened to
try them.
In G.R. No. 96948, the petitioners, besides challenging the legality of
GCM No. 14, seek certiorari against its ruling denying them the right
to peremptory challenge as granted by Article 18 of Com. Act No.
408.
In G.R. No. 95020, the orders of the respondent judge of the
Regional Trial Court of Quezon City are assailed on certiorari on the
ground that he has no jurisdiction over GCM No. 14 and no authority
either to set aside its ruling denying bail to the private respondents.
In G.R. No. 97454, certiorari is also sought against the decision of
the Regional Trial Court of Quezon City in a petition for habeas
corpus directing the release of the private respondents. Jurisdictional
objections are likewise raised as in G.R. No. 95020.
I
Before the charges were referred to GCM No. 14, a Pre-Trial
Investigation PTI Panel had been constituted pursuant to Office
Order No. 16 dated January 14, 1990, to investigate the petitioners
in G.R. Nos. 93177 and 96948. The PTI Panel issued a uniform
subpoena dated January 30, 1990, individually addressed to the
petitioners, to wit:
You are hereby directed to appear in person before the undersigned
Pre-Trial Investigating Officers on 12 Feb 90 9:00 a.m. at Kiangan
Hall, Camp Crame Quezon City, then and there to submit your
counter-affidavit and the affidavits of your witnesses, if any, in the
pre-trial investigation of the charge/charges against you for violence
of AWs _______________. DO NOT SUBMIT A MOTION TO
DISMISS.
14
Failure to submit the aforementioned counter-affidavits on the date
above specified shall be deemed a waiver of your right to submit
controverting evidence.
On the same date, the petitioners acknowledged receipt of a copy of
the charge sheet, sworn statements of witnesses, and death and
medical certificates of victims of the rebellion.
At the first scheduled hearing, the petitioners challenged the
proceedings on various grounds, prompting the PTI Panel to grant
them 10 days within which to file their objections in writing This was
done through a Motion for Summary Dismissal dated February 21,
1990.
In a resolution dated February 27,1990, the PTI Panel denied the
motion and gave the petitioners 5 days from notice to submit their
respective counter-affidavits and the affidavits of their witnesses.
On March 7, 1990, the petitioners verbally moved for reconsideration
of the foregoing denial and the PTI Panel gave them 7 days within
which to reduce their motion to writing. This was done on March
14,1990.
The petitioners now claim that there was no pre-trial investigation of
the charges as mandated by Article of War 71, which provides:
Art. 71. Charges Action upon. — Charges and specifications must be
signed by a person subject to military law, and under the oath either
that he has personal knowledge of, or has investigated, the matters
set forth therein and that the same are true in fact, to the best of his
knowledge and belief.
No charge will be referred to a general court-martial for trial until after
a thorough and impartial investigation thereof shall have been made.
This investigation will include inquiries as to the truth of the matter
set forth in said charges, form of charges, and what disposition of the
case should be made in the interest of justice and discipline. At such
investigation full opportunity shall be given to the accused to cross-
examine witnesses against him if they are available and to present
anything he may desire in his own behalf, either in defense or
mitigation, and the investigating officer shall examine available
witnesses requested by the accused. If the charges are forwarded
after such investigation, they shall be accompanied by a statement of
the substance of the testimony taken on both sides. (Emphasis
supplied.)
They also allege that the initial hearing of the charges consisted
merely of a roll call and that no prosecution witnesses were
presented to reaffirm their affidavits. while the motion for summary
dismissal was denied, the motion for reconsideration remains
unresolved to date and they have not been able to submit their
counter-affidavits.
At the hearing of May 15, 1990, the petitioners in G.R. No. 96948
manifested that they were exercising their right to raise peremptory
challenges against the president and members of GCM No.14. They
15
invoked Article 18 of Com. Act No. 408 for this purpose. GCM No. 14
ruled, however, that peremptory challenges had been discontinued
under P.D. No. 39.
In G.R. No. 95020, Ltc Jacinto Ligot applied for bail on June 5, 1990,
but the application was denied by GCM No.14. He thereupon filed
with the Regional Trial Court of Quezon City a petition
for certiorari and mandamus with prayer for provisional liberty and a
writ of preliminary injunction. After considering the petition and the
answer thereto filed by the president and members of GCM No.14,
Judge Maximiano C. Asuncion issued an order granting provisional
liberty to Ligot.
On July 28, 1990, Ligot filed an urgent omnibus motion to enforce
the order for his release and to declare in contempt the commanding
officer of the PC/INP Jail for disobey 'ng the said order. He later also
complained that Generals De Villa and Aguirre had refused to
release him "pending final resolution of the appeal to be taken" to
this Court.
After hearing, the trial court reiterated its order for the provisional
liberty of Ligot, as well as of intervenors Ltc Franklin Brawner, Lt/Col.
Arsenio Tecson and Maj. Alfredo Oliveros, and later of additional
intervenors Ltc Romelino Gojo and Capt. Manuel Ison.
On August 22, 1990, the trial court rendered judgment inter alia:
(a) Declaring, that Section 13, Article III of the Constitution granting
the right to bail to all persons with the defined exception is applicable
and covers all military men facing court-martial proceedings.
Accordingly, the assailed orders of General Court- Martial No. 14
denying bail to petitioner and intervenors on the mistaken
assumption that bail does not apply to military men facing court-
martial proceedings on the ground that there is no precedent, are
hereby set aside and declared null and void. Respondent General
Court-Martial No. 14 is hereby directed to conduct proceedings on
the applications of bail of the petitioner, intervenors and which may
as well include other persons facing charges before General Court-
Martial No. 14.
Pending the proceedings on the applications for bail before General
Court-Martial No. 14, this Court reiterates its orders of release on the
provisional liberty of petitioner Jacinto Ligot as well as intervenors
Franklin Brawner and Arsenio Tecson.
On February 18, 1991, the private respondents in G.R. No. 97454
filed with this Court a petition for habeas corpuson the ground that
they were being detained in Camp Crame without charges. The
petition was referred to the Regional Trial Court of Quezon City,
where it was raffled to respondent Judge Antonio P. Solano. Finding
after hearing that no formal charges had been filed against the
petitioners after more than a year after their arrest, the trial court
ordered their release.
II
The Court has examined the records of this case and rules as
follows.
16
It appears that the petitioners in G.R. Nos. 93177 and 96948 were
given several opportunities to present their side at the pre-trial
investigation, first at the scheduled hearing of February 12, 1990,
and then again after the denial of their motion of February 21, 1990,
when they were given until March 7, 1990, to submit their counter-
affidavits. On that date, they filed instead a verbal motion for
reconsideration which they were again asked to submit in writing.
This they did on March 13, 1990. The motion was in effect denied
when the PTI Panel resolved to recommend that the charges be
referred to the General Court Martial for trial.
The said petitioners cannot now claim they have been denied due
process because the investigation was resolved against them owing
to their own failure to submit their counter-affidavits. They had been
expressly warned In the subpoena sent them that "failure to submit
the aforementioned counter-affidavits on the date above specified
shall be deemed a waiver of (their) right to submit controverting
evidence." They chose not to heed the warning. As their motions
appeared to be dilatory, the PTI Panel was justified in referring the
charges to GCM No. 14 without waiting for the petitioners to submit
their defense.
Due process is satisfied as long as the party is accorded an
opportunity to be heard.1âwphi1 If it is not availed of, it is deemed
waived or forfeited without violation of the Bill of Rights.
There was in our view substantial compliance with Article of War 71
by the PTI Panel. Moreover, it is now settled that "even a failure to
conduct a pre-trial investigation does not deprive a general court-
1
martial of jurisdiction." We so held in Arula v. Espino, thus:
xxx xxx xxx
But even a failure to conduct a pre-trial investigation does not
deprive a general court-martial of jurisdiction.
The better accepted concept of pre-trial investigation is that it is
directory, not mandatory, and in no way affects the jurisdiction of a
court-martial. In Humphrey v. Smith, 336 U.S. 695, 93 L ed 986
(1949), the Court said:
We do not think that the pre-trial investigation procedure by Article 70
(The Philippine counter-part is article of war 71, Commonwealth Act
408) can properly be construed as an indispensable pre-requisite to
the exercise of the Army General court martial jurisdiction.. The
Article does serve important functions in the administration of court-
martial procedures and does provide safeguards to an accused. Its
language is clearly such that a defendant could object to trial in the
absence of the required investigation. In that event the court-martial
could itself postpone trial pending the investigation. And the military
reviewing authorities could consider the same contention, reversing a
court- martial conviction where failure to comply with Article 70 has
substantially injured an accused. But we are not persuaded that
Congress intended to make otherwise valid court-martial judgments
wholly void because pre-trial investigations fall short of the standards
prescribed by Article 70. That Congress has not required analogous
pre-trial procedure for Navy court-martial is an indication that the
17
investigatory plan was not intended to be exalted to the jurisdictional
level.
xxx xxx xxx
Shortly after enactment of Article 70 in 1920 the Judge Advocate
General of the Army did hold that where there had been no pre-trial
investigation, court-martial proceedings were void ab initio. But this
holding has been expressly repudiated in later holdings of the Judge
Advocate General. This later interpretation has been that the pre-trial
requirements of Article 70 are directory, not mandatory, and in no
way effect the jurisdiction of a court-martial. The War Department's
interpretation was pointedly called to the attention of Congress in
1947 after which Congress amended Article 70 but left unchanged
the language here under consideration. compensable pre-requisite to
the exercise of Army general court-martial jurisdiction
A trial before a general court-martial convened without any pretrial
investigation under article of war 71 would of course be altogether
irregular but the court-martial might nevertheless have jurisdiction.
Significantly, this rule is similar to the one obtaining in criminal
procedure in the civil courts to the effect that absence of preliminary
investigation does not go into the jurisdiction of the court but merely
to the regularity of the proceedings.
As to what law should govern the conduct of the preliminary
investigation, that issue was resolved more than two years ago
in Kapunan v. De Villa,2 where we declared:
The Court finds that, contrary to the contention of petitioners, there
was substantial compliance with the requirements of law as provided
in the Articles of War and P.D. No. 77, as amended by P.D. No. 911.
The amended charge sheets, charging petitioners and their co-
respondents with mutiny and conduct unbecoming an officer, were
signed by Maj. Antonio Ruiz, a person subject to military law, after he
had investigated the matter through an evaluation of the pertinent
records, including the reports of respondent AFP Board of Officers,
and was convinced of the truth of the testimonies on record. The
charge sheets were sworn to by Maj. Ruiz, the "accuser," in
accordance with and in the manner provided under Art. 71 of the
Articles of War. Considering that P.D. No. 77, as amended by P.D.
No. 911, is only of suppletory application, the fact that the charge
sheets were not certified in the manner provided under said decrees,
i.e., that the officer administering the oath has personally examined
the affiant and that he is satisfied that they voluntarily executed and
understood its affidavit, does not invalidate said charge sheets.
Thereafter, a "pretrial investigation" was conducted by respondent
Maj. Baldonado, wherein, pursuant to P.D. No. 77, as amended by
P.D. No. 911, petitioners were subpoenaed and required to file their
counter-affidavit. However, instead of doing so, they filed an untitled
pleading seeking the dismissal of the charges against them. That
petitioners were not able to confront the witnesses against them was
their own doing, for they never even asked Maj. Baldonado to
subpoena said witnesses so that they may be made to answer
18
clarificatory questions in accordance with P. D, No. 77, as amended
by P.D. No. 911.
The petitioners also allege that GCM No. 14 has not been constitute
in accordance with Article 8 of the Articles of War because General
Order No. M-6, which supposedly convened the body, was not
signed by Gen. Renato de Villa as Chief of Staff.
Article of War No. 8 reads:
Art. 8. General Courts-Martial. — The President of the Philippines,
the Chief of Staff of the Armed Forces of the Philippines, the Chief of
Constabulary and, when empowered by the President, the
commanding officer of a major command or task force, the
commanding officer of a division, the commanding officer of a military
area, the superintendent of the Military Academy, the commanding
officer of a separate brigade or body of troops may appoint general
courts-martial; but when any such commander is the accuser or the
prosecutor of the person or persons to be tried, the court shall be
appointed by superior competent authority. ...
While it is true that General Order No. M-6 was not signed by Gen.
De Villa, there is no doubt that he authorized it because the order
itself said it was issued "By Command of General De Villa" and it has
not been shown to be spurious. As observed by the Solicitor
General, the Summary Disposition Form showed that Gen. De Villa,
as Chief of Staff, AFP, actually constituted GCM No. 14 and
appointed its president and members. It is significant that General De
Villa has not disauthorized or revoked or in any way disowned the
said order, as he would certainly have done if his authority had been
improperly invoked. On the contrary, as the principal respondent in
G.R. No. 93177, he sustained General Order No. M 6 in the
Comment filed for him and the other respondents by the Solicitor
General.
Coming now to the right to peremptory challenge, we note that this
was originally provided for under Article 18 of Com. Act No. 408
(Articles of War), as amended by Rep. Act No. 242, on June 12,
1948, to wit:
Art. 18. Challenges. — Members of general or special courts-martial
may be challenged by the accused or the trial judge advocate for
cause stated to the court. The court shall determine the relevancy
and validity thereof, and shall not receive a challenge to more than
one member at a time. Challenges by the trial judge advocate shall
ordinarily be presented and decided before those by the accused are
offered. Each side shall be entitled to the peremptory challenge, but
the law member of the court shall not be challenged except for
cause.
The history of peremptory challenge was traced in Martelino v.
3
Alejandro, thus:
In the early formative years of the infant Philippine Army, after the
passage in 1935 of Commonwealth Act No. 1 (otherwise known as
the National Defense Act), except for a handful of Philippine Scout
officers and graduates of the United States military and naval
academies who were on duty with the Philippine Army, there was a
19
complete dearth of officers learned in military law, its aside from the
fact that the officer corps of the developing army was numerically
made equate for the demands of the strictly military aspects of the
national defense program. Because of these considerations it was
then felt that peremptory challenges should not in the meanwhile be
permitted and that only challenges for cause, in any number, would
be allowed. Thus Article 18 of the Articles of War (Commonwealth
Act No. 408), as worded on September 14, 1938, the date of the
approval of the Act, made no mention or reference to any peremptory
challenge by either the trial judge advocate of a court- martial or by
the accused. After December 17,1958, when the Manual for Courts-
Martial of the Philippine Army became effective, the Judge Advocate
General's Service of the Philippine Army conducted a continuing and
intensive program of training and education in military law,
encompassing the length and breadth of the Philippines. This
program was pursued until the outbreak of World War 11 in the
Pacific on December 7, 1941. After the formal surrender of Japan to
the allies in 1945, the officer corps of the Armed Forces of the
Philippines had expanded to a very large number, and a great many
of the officers had been indoctrinated in military law. It was in these
environmental circumstances that Article of War 18 was amended on
June 12,1948 to entitle "each side" to one peremptory challenge,
with the sole proviso that "the law member of court shall not be
challenged except for cause.
On September 27,1972, President Marcos issued General Order No.
8, empowering the Chief of Staff of the Armed Forces to create
military tribunals "to try and decide cases of military personnel and
such other cases as may be referred to them.
On November 7,1972, he promulgated P.D. No. 39 (Governing the
Creation, Composition, Jurisdiction, Procedure, and other matters
relevant to military Tribunals). This decree disallowed the peremptory
challenge, thus:
No peremptory challenge shall be allowed. Challenges for cause
may be entertained to insure impartiality and good faith. Challenges
shall immediately be heard and determined by a majority of the
members excluding the challenged member. A tie vote does not
disqualify the challenged member. A successfully challenged
member shall be immediately replaced.
On June 11, 1978, President Marcos promulgated P.D. No. 1498, or
the National Security Code, which was a compilation and codification
of decrees, general orders, LOI and policies intended "to meet the
continuing threats to the existence, security and stability of the
State." The modified rule on challenges under P.D. No. 39 was
embodied in this decree.
On January 17,1981, President Marcos issued Proc. No. 2045
proclaiming the termination of the state of martial law throughout the
Philippines. The proclamation revoked General Order No. 8 and
declared the dissolution of the military tribunals created pursuant
thereto upon final determination of the cases pending therein.
20
P.D. No. 39 was issued to implement General Order No. 8 and the
other general orders mentioned therein. With the termination of
martial law and the dissolution of the military tribunals created
thereunder, the reason for the existence of P.D. No. 39 ceased
automatically.
It is a basic canon of statutory construction that when the reason of
the law ceases, the law itself ceases. Cessante ratione legis, cessat
ipsa lex. This principle is also expressed in the maxim ratio legis est
anima: the reason of law is its soul.
Applying these rules, we hold that the withdrawal of the right to
peremptory challenge in L P.D. No. 39 became ineffective when the
apparatus of martial law was dismantled with the issuance of
Proclamation No. 2045, As a result, the old rule embodied in Article
18 of Com. Act No. 408 was automatically revived and now again
allows the right to peremptory challenge.
We do not agree with the respondents in G.R. No. 96948 that the
right to peremptory challenge remains withdrawn under P.D. No. 39.
To repeat for emphasis, this decree was itself withdrawn when
martial law was lifted on January 17, 1981. Indeed, even if not so
withdrawn, it could still be considered no longer operative, having
been cast out under the new dispensation as, in the words of the
Freedom Constitution, one of the "iniquitous vestiges of the previous
regime.
The military tribunal was one of the most oppressive instruments of
martial law. It is curious that the present government should invoke
the rules of that discredited body to justify its action against the
accused officers.
The Court realizes that the recognition of the right to peremptory
challenge may be exploited by a respondent in a court-martial trial to
delay the proceedings and defer his deserved Punishment. It is
hoped that the accused officers in the cases at bar will not be so
motivated. At any rate, the wisdom of Com. Act No. 408, in the light
of present circumstances, is a matter addressed to the law-makers
and not to this Court. The judiciary can only interpret and apply the
laws without regard to its own misgivings on their adverse effects.
This is a problem only the political departments can resolve.
The petitioners in G.R. Nos. 95020 and 97454 question the propriety
of the petition for certiorari and mandamus and the petition
for habeas corpus filed by the private respondents with the Regional
Trial Courts of Quezon City. It is argued that since the private
respondents are officers of the Armed Forces accused of violations
of the Articles of War, the respondent courts have no authority to
order their release and otherwise interfere with the court-martial
proceedings.
The petitioners further contend that under Sec. 9(3) of BP 1 29, the
Court of Appeals is vested with "exclusive appellate jurisdiction over
all final judgments, decisions, resolutions, orders, or awards of
21
Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions." Rather irrelevantly, the petitioners also cite
the case of Yang v. Court of Appeals4 where this Court held that
"appeals from the Professional Regulation Commission are now
exclusively cognizable by the Court of Appeals.
It should be noted that the aforecited provision and the case cited
refer to ordinary appeals and not to the remedies employed by the
accused officers before the respondent courts.
In Martelino, we observed as follows:
It is true that civil courts as a rule exercise no supervision or
correcting power over the proceedings of courts-martial, and that
mere errors in their proceedings are not open to consideration. The
single inquiry, the test, is jurisdiction. But it is equally true that in the
exercise of their undoubted discretion, courts-martial may commit
such an abuse of discretion — what in the language of Rule 65 is
referred to as "grave abuse of discretion" — as to give rise to a
defect in their jurisdiction. This is precisely the point at issue in this
action suggested by its nature as one for certiorari and prohibition ...
.
The Regional Trial Court has concurrent jurisdiction with the Court of
Appeals and the Supreme Court over petitions for certiorari,
prohibition or mandamus against inferior courts and other bodies and
on petitions for habeas corpusand quo warranto.5 In the absence of a
law providing that the decisions, orders and ruling of a court-martial
or the Office of the Chief of Staff can be questioned only before the
Court of Appeals and the Supreme Court, we hold that the Regional
Trial Court can exercise similar jurisdiction.
We find that the right to bail invoked by the private respondents in
G.R. Nos. 95020 has traditionally not been recognized and is not
available in the military, as an exception to the general rule
embodied in the Bill of Rights. This much was suggested in Arula,
where we observed that "the right to a speedy trial is given more
emphasis in the military where the right to bail does not exist.
The justification for this exception was well explained by the Solicitor
General as follows:
The unique structure of the military should be enough reason to
exempt military men from the constitutional coverage on the right to
bail.
Aside from structural peculiarity, it is vital to note that mutinous
soldiers operate within the framework of democratic system, are
allowed the fiduciary use of firearms by the government for the
discharge of their duties and responsibilities and are paid out of
revenues collected from the people. All other insurgent elements
carry out their activities outside of and against the existing political
system.
xxx xxx xxx
National security considerations should also impress upon this
Honorable Court that release on bail of respondents constitutes a
22
damaging precedent. Imagine a scenario of say 1,000 putschists
roaming the streets of the Metropolis on bail, or if the assailed July
25,1990 Order were sustained, on "provisional" bail. The sheer
number alone is already discomforting. But, the truly disquieting
thought is that they could freely resume their heinous activity which
could very well result in the overthrow of duly constituted authorities,
including this Honorable Court, and replace the same with a system
consonant with their own concept of government and justice.
The argument that denial from the military of the right to bail would
violate the equal protection clause is not acceptable. This guaranty
requires equal treatment only of persons or things similarly situated
and does not apply where the subject of the treatment is substantially
different from others. The accused officers can complain if they are
denied bail and other members of the military are not. But they
cannot say they have been discriminated against because they are
not allowed the same right that is extended to civilians.
On the contention of the private respondents in G.R. No. 97454 that
they had not been charged after more than one year from their
arrest, our finding is that there was substantial compliance with the
requirements of due process and the right to a speedy trial.
The petition for habeas corpus was directly filed with this Court on
February 18, 1991, and was referred to the Regional Trial Court of
Quezon City for raffle, hearing and decision. It was heard on
February 26, 1991, by the respondent court, where the petitioners
submitted the charge memorandum and specifications against the
private respondents dated January 30, 1991. On February 12, 1991,
pursuant to Office Order No. 31-91, the PTI panel was created and
initial investigation was scheduled on March 12, 1991 at 2:00 p.m.
On March 20, 1991, the private respondents received the copies of
the charges, charge sheets and specifications and were required to
submit their counter-affidavits on or before April 11, 1991. There was
indeed a delay of more than one year in the investigation and
preparation of the charges against the private respondents.
However, this was explained by the Solicitor General thus:
... The AFP Special Investigating Committee was able to complete it
pre-charge investigation only after one (1) year because hundreds of
officers and thousands of enlisted men were involved in the failed
coup. All of them, as well as other witnesses, had to be interviewed
or investigated, and these inevitably took months to finish. The pre-
charge investigation was rendered doubly difficult by the fact that
those involved were dispersed and scattered throughout the
Philippines. In some cases, command units, such as the Scout
Rangers, have already been disbanded. After the charges were
completed, the same still had to pass review and approval by the
AFP Chief of Staff.
While accepting this explanation, the Court nevertheless must
reiterate the following admonition:
23
This Court as protector of the rights of the people, must stress the
point that if the participation of petitioner in several coup attempts for
which he is confined on orders of Adjutant General Jorge Agcaoili
cannot be established and no charges can be filed against him or the
existence of a prima facie case warranting trial before a military
commission is wanting, it behooves respondent then Major General
Rodolfo Biazon (now General) to release petitioner. Respondents
must also be reminded that even if a military officer is arrested
pursuant to Article 70 of then Articles of War, indefinite confinement
is not sanctioned, as Article 71 thereof mandates that immediate
steps must be taken to try the person accused or to dissmiss the
charge and release him. Any officer who is responsible for
unnecessary delay in investigating or carrying the case to a final
conclusion may even be punished as a court martial may direct.6
It should be noted, finally, that after the decision was rendered by
Judge Solano on February 26, 1991, the government filed a notice of
appeal ad cautelam and a motion for reconsideration, the latter was
ultimately denied, after hearing, on March 4, 1991. The 48- hour
period for appeal under Rule 41, Section 18, of the Rules of Court
did not run until after notice of such denial was received by the
petitioners on March 12, 1991. Contrary to the private respondents'
contention, therefore, the decision had not yet become final and
executory when the special civil action in G.R. No. 97454 was filed
with this Court on March 12, 1991.
III
Regarding the propriety of the petitions at bar, it is well to reiterate
the following observations of the Court in Arula:
The referral of charges to a court-martial involves the exercise of
judgment and discretion (AW 71). A petition for certiorari, in order to
prosper, must be based on jurisdictional grounds because, as long
as the respondent acted with jurisdiction, any error committed by him
or it in the exercise thereof will amount to nothing more than an error
of judgment which may be reviewed or corrected only by appeal.
Even an abuse of discretion is not sufficient by itself to justify the
issuance of a writ of certiorari.
As in that case, we find that the respondents in G.R. No. 93177 have
not acted with grave abuse of discretion or without or in excess of
jurisdiction to justify the intervention of the Court and the reversal of
the acts complained of by the petitioners. Such action is indicated,
however, in G.R. No. 96948, where we find that the right to
peremptory challenge should not have been denied, and in G.R.
Nos. 95020 and 97454, where the private respondents should not
have been ordered released.
ACCORDINGLY, in G.R. No. 93177, the petition is DISMISSED for
lack of merit. In G.R. No. 96948, the petition is GRANTED, and the
respondents are DIRECTED to allow the petitioners to exercise the
right of peremptory challenge under Article 18 of the Articles of War.
In G.R. Nos. 95020 and 97454, the petitions are also GRANTED,
and the orders of the respondent courts for the release of the private
respondents are hereby REVERSED and SET ASIDE. No costs.
SO ORDERED.
24
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras,
Feliciano, Gancayco, Padilla, Bidin, Griño-Aquino, Medialdea,
Regalado and Davide, Jr., JJ., concur.
Separate Opinions
SARMIENTO, J., concurring:
I concur with the ponencia of my esteemed colleague, Mr. Justice
Cruz, but I dissent insofar as he would deny bail to accused military
personnel.
The Constitution explicitly grants the right to bail to "all persons"
before conviction, with the only exception of "those charged with
offenses punishable by reclusion perpetua when evidence of guilt is
strong."1 The Charter also states that "[T]he right to bail shall not be
impaired even if the writ of habeas corpus is suspended."2 To deny
the military officers here concerned of the right to bail is to
circumscribe the inclusive meaning of "all persons" — the coverage
of the right.
I believe that military officers fall within "persons".
The picture conjured up by the Solicitor General of "a scenario of say
1,000 putschists roaming the streets of the Metropolis on bail, or if
the assailed July 25, 1990 Order were sustained, on "provisional"
bail [t]he sheer number alone is already discomforting . . . [b]ut, the
truly disquieting thought is that they could freely resume their
heinous activity which could very well result in the overthrow of duly
constituted authorities, including this Honorable Court, and replace
the same with a system consonant with their own concept of
government and justice."3 But would a scenario of 1,000 murderers
or drug pushers roaming the streets of the metropolis justify a denial
of the right to bail? Would not that dark picture painted by the
Solicitor General be reproduced by 1,000 "equally dangerous"
elements of society?

We gave bail Senator Enrile and General Brawner. I find no reason

why the petitioners should not be granted the same right.
The majority would point to tradition, supposed to be firmly settled,
as an argument to deny bail. I submit, however, that tradition is no
argument. First, the Constitution does not say it. Second, we are a
government of laws, not tradition.
If there are precedents that attest to the contrary, I submit that a
reexamination is in order.

25
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-9274 February 1, 1957
RUFINO LOPEZ & SONS, INC., petitioner,
vs.
THE COURT OF TAX APPEALS, respondent.
Isidro A. Vera and Eulalio F. Legaspi for petitioner.
Office of the Solicitor General Ambrosio Padila, Assistant Solicitor
General Ramon L. Avanceña and Solicitor Felicisimo R. Rosete for
respondent.
MONTEMAYOR, J.:
Petitioner appellant Rufino Lopez & Sons, Inc. is appealing from a
resolution of the Court of Tax Appeals dismissing its appeal from a
decision of the Collector of Customs for the Port of Manila, assessing
additional fees on petitioner for a certain importation of wire netting.
The facts are simple and undisputed. Lopez & Sons imported
hexagonal wire netting from Hamburg, Germany. The Manila
Collector of Customs assessed the corresponding customs duties on
the importation on the basis of consular and supplies invoices. Said
customs duties were paid and the shipments were released.
Subsequently, however, and freight of said wire netting and as a
result of the reassessment, additional customs duties in the amount
of P1,966.59 were levied and imposed upon petitioner. Failing to
26
secure a reconsideration of the reassessment and levy of additional
customs duties, Lopez & Sons appealed to the Court of Tax Appeals.
Acting upon a motion to dismiss the appeal, filed by the Solicitor
General on the ground of lack of jurisdiction, the Tax Court, by its
resolution of May 23, 1955, dismissed the appeal on the ground that
it had no jurisdiction to review decisions of the Collector of Customs
of Manila, citing section 7 of Republic Act No. 1125, creating said tax
court. From said resolution of dismissal, Lopez & Sons appealed to
us, seeking a reversal of said resolution of dismissal.
For purposes of reference, we are reproducing section 7 of Republic
Act No. 1125 relied upon by the Tax Court and the Solicitor General,
as well as Section 11 of the same Act invoked by the petitioner:
Sec. 7. Jurisdiction. — The Court of Tax Appeals shall exercise
exclusive appellate jurisdiction to review by appeal, as herein
provided —
(1) Decisions of the Collector of Internal Revenue in cases involving
disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other matters
arising under the National Internal Revenue Code or other law or part
of law administered by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving
liability for customs duties, fees or other money charges, seizure,
detention or release of property affected; fines, forfeitures or other
penalties imposed in relation thereto, or other matters arising under
the Customs Law or other law or part of law administered by the
Bureau of Customs; and
(3) Decisions of provincial or city Board of Assessment Appeals in
case involving the assessment and taxation of real property or other
matters arising under the assessment Law, including rules and
regulations relative thereto.
xxx xxx xxx
SEC. 11. Who may appeal; effect of appeal. — Any person,
association or corporation adversely by a decision or ruling of the
Collector of Internal Revenue, the Collector of Customs or any
provincial or city Board of Assessment Appeals may file an appeal in
the Court of Tax Appeals within thirty days after the receipt of such
decision or ruling.
No appeal taken to the Court of Tax Appeals from the decision of the
Collector of Internal Revenue or the Collector of the Customs shall
suspend the payment, levy, distraint, and/or sale of any property of
the taxpayer for the satisfaction of his tax liability as provided by
existing law: Provided, however, that when in the opinion of the Court
the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interests of the
Government and/or the taxpayer the Court at any stage of the
proceeding may suspend the said collection and require the taxpayer
either to deposit the amount claimed or to file a surety bond for not
more than double the amount with the Court. (Emphasis supplied.)
27
There is really a discrepancy between Sections 7 and 11 above
reproduced. Section 7 provides that the Court of Tax Appeals has
exclusive appellate jurisdiction to review by appeal decisions of the
Collector of Internal Revenue, decisions of the Commissioner of
Customs and decisions of provincial or city Board of Assessment
Appeals on cases mentioned in said section. On the other hand,
section 11 of the same Republic Act in listing and enumerating the
persons and entities who may appeal as well as the effect of said
appeal, mentions those affected by a decision or ruling of the
Collector of Internal Revenue, the Collector of Customs or any
provincial or City Board of Assessment Appeals, and fails to mention
the Commissioner of Customs. Taken literally, a person affected by a
decision of the Collector of Customs may appeal to the Court of Tax
Appeals; and since no mention is made about decisions of the
Commissioner of Customs, a person affected by said decision may
not appeal to the Court of Tax Appeals. However, section 7 of the
Act above reproduced specially provides that the Court of Tax
Appeals has appellate jurisdiction to review decisions of
the Commissioner of Customs. That legal provision conferring
appellate jurisdiction on the Court of Tax Appeals to review decisions
of the Commissioner of Customs would be empty, meaningless, and
unenforceable because under Section 11, no person affected by the
decision of the Commissioner of customs may appeal to the Tax
Court. These two meaningless, and unenforceable because under
Section 11, should be harmonized and reconciled if possible, in order
to give effect to the whole Act.
We are in entire accord with the Tax Court and the Solicitor General
that a clerical error was committed in section 11, mentioning therein
the Collector of Customs. It should be, as it was meant to be, the
Commissioner of Customs. There are several reasons in support of
this view. Under the Customs Law, found in sections 1137 to 1419 of
the Revised Administrative Code, the Commissioner of Customs
(Insular Collector of Customs) is the Chief of the Bureau of Customs
and has jurisdiction over the whole country as regards the
enforcement of the Customs Law, whereas, there are about sixteen
Collectors of Customs for the sixteen collection districts and principal
parts of entry into which the Philippines has been divided. These
Collectors of Customs are subordinates of the Commissioner of
Customs over whom he has supervision and control (section 1152,
Revised Administrative Code). Pursuant to said supervision and
control, under section 1405 of the Revised Administrative Code,
when any new or unsettled question shall be determined by the
Collector of Customs, he shall, if matter is not otherwise carried upon
for review in ordinary course, notify the Commissioner of his
decision, submitting an adequate statement of acts involved. What is
more important is the provision of section 1380, which reproduce
below:
SEC. 1380. Review by Commissioner. — The person aggrieved by
the decision of the Collector of Customs in any matter presented
upon protest or by his action in any case of seizure may, within
fifteen days after notification in writing by the collector of his action or
28
decision, give written notice to the collector signifying his desore to
have the matter reviewed by the Commissioner.
Thereupon, the Collector of Customs shall forthwith transmit all the
papers in the cause to the Commissioner, who shall approve, modify,
or reverse the action of his subordinate and shall take such steps
and make such order or orders as may be necessary to give effect to
his decision.
Under this section, any person affected or aggrieved by the decision
of the Collector of Customs may appeal the decision to the
Commissioner of Customs. From all this, it is clear if we followed the
literal meaning and wording of section 11 of Republic Act No. 1125,
in the sense that persons affected by a decision of the Collector of
Customs may appeal directly tot he Court of Tax Appeals, then the
supervision and control of the Commissioner of Customs over his
Collector of Customs, and his right to review their decisions upon
appeal to him by the persons affected by said decision would, not
only be gravely affected, but even destroyed. We cannot believe that
was the intention of the Legislature in passing Republic Act No.
1125. It is more reasonable and logical to hold that in Section 11 of
the Act, the Legislature meant and intended to say, the
Commissioner of Customs, instead of Collector of Customs in the
first paragraph and the first part of the second paragraph of said
section. In thus holding, the Court are not exactly indulging in judicial
legislation. They are merely endeavoring to rectify and correct a
clearly clerical error in the wording of a statute, in order to give due
course and carry out the evident intention of the Legislature. This the
Courts should and can validly do. Under the rules of statutory
construction, it is not the letter but rather the spirit of the law and
intention of the Legislature that is important and which matters.
When the interpretation of a statute according to the exact and literal
import of its words would lead to absurd or mischievous results, or
would contravene the clear purposes of the Legislature, it should be
construed according to its spirit and reason, disregarding as far as
necessary, the latter of the law. Statutes may be extended to cover
cases not within the literal meaning of the terms, for that which is
clearly within the intention of the Legislature in enacting the law is as
much within the statute as if it were within the latter. Here the error
(clerical and misprint) is plain and obvious. It is within the province of
the courts to correct said error. This is not to correct the act of the
Legislature, but rather to carry out and give due course to the true
intention of said Legislature. (Black on Interpretation of Laws, 2nd
edition, pp. 66-67; 157-158.).
Furthermore, section 11 of Republic Act 1125 may well be regarded
as a mere complement or implementation of section 7. Since section
7 provides that the Tax Court has jurisdiction to review by appeal,
decisions of the Collector of Internal Revenue. decisions of the
Commissioner of Customs, and decisions of provincial or city Boards
of Assessment Appeals, so section 11 naturally provides that
persons adversely affected by said decisions may appeal to the Tax
Court. However, in enumerating the governmental bodies or
agencies rendering said decisions that may be appealed, it
29
erroneously listed the Collector instead of the Commissioner, of
Customs. The error is plain.
As a matter of fact, the Court of Tax Appeals in its resolution of
dismissal of May 23, 1955 cites in support thereof a resolution
promulgated by it on January 22, 1955 in C.T.A. Case No. 17,
entitled "Acting Collector of Customs vs.Acting Commissioner of
Customs", wherein it said:
The phrase "Collector of Customs" appearing in the above-
mentioned provision (section 11) of Republic Act No. 1125 is clearly
an oversight on the part of Congress. It should read "Commissioner
of Customs" to make the provision conform with section 7 of the said
Republic Act section 1380 of the Revised Administrative Code.
Petitioner contends that the literal meaning of Section 11 of Republic
Act No. 1125 should be adopted in the sense that the Court of Tax
Appeals has concurrent jurisdiction with the Commissioner of
Customs over Appeals from decisions of Collectors of Customs, so
that a person adversely affected by a decision of a Collector of
Customs is given the choice of appealing the said decision either to
the Commissioner of Customs or to the Courts of Tax Appeals. We
find contention unteable. In the first place, the two remedies
suggested are entirely different, one from the other; an appeal to the
Commissioner of Customs is purely administrative, whereas, appeal
to the Court of Tax Appeal is manifestly judicial. And it is a sound
rule that before one resorts to the Courts, the administrative remedy
provided by law should first be exhausted. In the second place, the
two remedies suggested by the petitioner would result in confusion Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo Labrador,
because a person adversely affected by a decision of a Collector of Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.
Customs could not be sure where to seek the remedy, whether with
the Commissioner of Customs or with the Court of Tax Appeals, and
it might even be difficult for him to decide because, if he took the
appeal directly to the Tax Court, that would ordinarily cut off his
remedy before the Commissioner of Customs for the reason that,
should the Court of Tax Appeals decide against him, he may not
appeal said decision to the Commissioner of Customs because the
Commissioner as an administrative officer may not review the
decision of the Court. On the other hand, if the person affected by a
decision of a Collector of Customs took his appeal to the
Commissioner of Customs, and there receives an adverse decision,
he may yet appeal therefrom to the Court of Tax Appeals. In the third
place, even if the person affected by an adverse ruling of the
Collector of Customs took his appeal to the Court of Tax Appeals, as
advocated by counsel for the petitioner, under the literal meaning of
section 11, the Tax Court may refuse to entertain said appeal, as
was done in the present case, on the ground that under section 7 of
Republic Act No. 1125, it had no jurisdiction to review a decision of
the Collector of Customs, section 7 clearly limiting its appellate
jurisdiction to review decisions of the Commissioner of Customs.
In view of the foregoing, we hold that under the law, particularly, the
Customs Law and Republic Act No. 1125, the Court of Tax Appeals
has no jurisdiction to review by appeal, decisions of the Collector of
Customs. The appealed order of dismissal is hereby affirmed, with
costs.

30
Republic of the Philippines way of absolute sale. 2 One year later, on April 22, 1964, Eustaquia
SUPREME COURT Padua, his sister, sold her own share to the same vendees, in an
Manila instrument denominated "Con Pacto de Retro Sale," for the sum of P
EN BANC 440.00. 3
G.R. No. 72873 May 28, 1987
CARLOS ALONZO and CASIMIRA ALONZO, petitioners, By virtue of such agreements, the petitioners occupied, after the said
vs. sales, an area corresponding to two-fifths of the said lot, representing
INTERMEDIATE APPELLATE COURT and TECLA the portions sold to them. The vendees subsequently enclosed the
PADUA, respondents. same with a fence. In 1975, with their consent, their son Eduardo
Perpetuo L.B. Alonzo for petitioners. Alonzo and his wife built a semi-concrete house on a part of the
Luis R. Reyes for private respondent. enclosed area.4

CRUZ, J.:
The question is sometimes asked, in serious inquiry or in curious
conjecture, whether we are a court of law or a court of justice. Do we
apply the law even if it is unjust or do we administer justice even
against the law? Thus queried, we do not equivocate. The answer is
that we do neither because we are a court both of law and of justice.
We apply the law with justice for that is our mission and purpose in
the scheme of our Republic. This case is an illustration.
Five brothers and sisters inherited in equal pro indiviso shares a
parcel of land registered in 'the name of their deceased parents
under OCT No. 10977 of the Registry of Deeds of Tarlac. 1
On February 25, 1976, Mariano Padua, one of the five coheirs,
sought to redeem the area sold to the spouses Alonzo, but his
complaint was dismissed when it appeared that he was an American
citizen .5 On May 27, 1977, however, Tecla Padua, another co-heir,
filed her own complaint invoking the same right of redemption
claimed by her brother. 6
The trial court * also dismiss this complaint, now on the ground that
the right had lapsed, not having been exercised within thirty days
from notice of the sales in 1963 and 1964. Although there was no
written notice, it was held that actual knowledge of the sales by the
7
co-heirs satisfied the requirement of the law.

On March 15, 1963, one of them, Celestino Padua, transferred his In truth, such actual notice as acquired by the co-heirs cannot be
undivided share of the herein petitioners for the sum of P550.00 by plausibly denied. The other co-heirs, including Tecla Padua, lived on

31
the same lot, which consisted of only 604 square meters, including
8
the portions sold to the petitioners . Eustaquia herself, who had
sold her portion, was staying in the same house with her sister Tecla,
who later claimed redemption petition. 9 Moreover, the petitioners
and the private respondents were close friends and neighbors whose
children went to school together. 10
It is highly improbable that the other co-heirs were unaware of the
sales and that they thought, as they alleged, that the area occupied
by the petitioners had merely been mortgaged by Celestino and
Eustaquia. In the circumstances just narrated, it was impossible for
Tecla not to know that the area occupied by the petitioners had been
purchased by them from the other. co-heirs. Especially significant
was the erection thereon of the permanent semi-concrete structure
by the petitioners' son, which was done without objection on her part
or of any of the other co-heirs.
The only real question in this case, therefore, is the correct
interpretation and application of the pertinent law as invoked,
interestingly enough, by both the petitioners and the private
respondents. This is Article 1088 of the Civil Code, providing as
follows:
Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the
price of the sale, provided they do so within the period of one month
from the time they were notified in writing of the sale by the vendor.
32
In reversing the trial court, the respondent court ** declared that the
notice required by the said article was written notice and that actual
notice would not suffice as a substitute. Citing the same case of De
Conejero v. Court of Appeals 11 applied by the trial court, the
respondent court held that that decision, interpreting a like rule in
Article 1623, stressed the need for written notice although no
particular form was required.
Thus, according to Justice J.B.L. Reyes, who was the ponente of the
Court, furnishing the co-heirs with a copy of the deed of sale of the
property subject to redemption would satisfy the requirement for
written notice. "So long, therefore, as the latter (i.e., the
redemptioner) is informed in writing of the sale and the particulars
thereof," he declared, "the thirty days for redemption start running. "
In the earlier decision of Butte v. UY, 12 " the Court, speaking
through the same learned jurist, emphasized that the written notice
should be given by the vendor and not the vendees, conformably to
a similar requirement under Article 1623, reading as follows:
Art. 1623. The right of legal pre-emption or redemption shall not be
exercised except within thirty days from the notice in writing by the
prospective vendor, or by the vendors, as the case may be. The
deed of sale shall not be recorded in the Registry of Property, unless
accompanied by an affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of the adjoining
owners.
As "it is thus apparent that the Philippine legislature in Article 1623
deliberately selected a particular method of giving notice, and that
notice must be deemed exclusive," the Court held that notice given
by the vendees and not the vendor would not toll the running of the
30-day period.
The petition before us appears to be an illustration of the Holmes
dictum that "hard cases make bad laws" as the petitioners obviously
cannot argue against the fact that there was really no written notice
given by the vendors to their co-heirs. Strictly applied and
interpreted, Article 1088 can lead to only one conclusion, to wit, that
in view of such deficiency, the 30 day period for redemption had not
begun to run, much less expired in 1977.
But as has also been aptly observed, we test a law by its results; and
likewise, we may add, by its purposes. It is a cardinal rule that, in
seeking the meaning of the law, the first concern of the judge should
be to discover in its provisions the in tent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way
as to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good
motives of the legislature, is to render justice.
33
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we
must keep them so. To be sure, there are some laws that, while
generally valid, may seem arbitrary when applied in a particular case
because of its peculiar circumstances. In such a situation, we are not
bound, because only of our nature and functions, to apply them just
the same, in slavish obedience to their language. What we do
instead is find a balance between the word and the will, that justice
may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not
unfeelingly apply the law as it is worded, yielding like robots to the
literal command without regard to its cause and consequence.
"Courts are apt to err by sticking too closely to the words of a law,"
so we are warned, by Justice Holmes again, "where these words
import a policy that goes beyond them." 13 While we admittedly may
not legislate, we nevertheless have the power to interpret the law in
such a way as to reflect the will of the legislature. While we may not
read into the law a purpose that is not there, we nevertheless have
the right to read out of it the reason for its enactment. In doing so, we
defer not to "the letter that killeth" but to "the spirit that vivifieth," to
give effect to the law maker's will.
The spirit, rather than the letter of a statute determines its
construction, hence, a statute must be read according to its spirit or
intent. For what is within the spirit is within the letter but although it is
not within the letter thereof, and that which is within the letter but not
within the spirit is not within the statute. Stated differently, a thing
which is within the intent of the lawmaker is as much within the
statute as if within the letter; and a thing which is within the letter of
the statute is not within the statute unless within the intent of the
lawmakers. 14
In requiring written notice, Article 1088 seeks to ensure that the
redemptioner is properly notified of the sale and to indicate the date
of such notice as the starting time of the 30-day period of
redemption. Considering the shortness of the period, it is really
necessary, as a general rule, to pinpoint the precise date it is
supposed to begin, to obviate any problem of alleged delays,
sometimes consisting of only a day or two.
The instant case presents no such problem because the right of
redemption was invoked not days but years after the sales were
made in 1963 and 1964. The complaint was filed by Tecla Padua in
1977, thirteen years after the first sale and fourteen years after the
second sale. The delay invoked by the petitioners extends to more
than a decade, assuming of course that there was a valid notice that
tolled the running of the period of redemption.
Was there a valid notice? Granting that the law requires the notice to
be written, would such notice be necessary in this case? Assuming
there was a valid notice although it was not in writing. would there be
any question that the 30-day period for redemption had expired long
before the complaint was filed in 1977?
34
In the face of the established facts, we cannot accept the private
respondents' pretense that they were unaware of the sales made by
their brother and sister in 1963 and 1964. By requiring written proof
of such notice, we would be closing our eyes to the obvious truth in
favor of their palpably false claim of ignorance, thus exalting the
letter of the law over its purpose. The purpose is clear enough: to
make sure that the redemptioners are duly notified. We are satisfied
that in this case the other brothers and sisters were actually
informed, although not in writing, of the sales made in 1963 and
1964, and that such notice was sufficient.
Now, when did the 30-day period of redemption begin?
While we do not here declare that this period started from the dates
of such sales in 1963 and 1964, we do say that sometime between
those years and 1976, when the first complaint for redemption was
filed, the other co-heirs were actually informed of the sale and that
thereafter the 30-day period started running and ultimately expired.
This could have happened any time during the interval of thirteen
years, when none of the co-heirs made a move to redeem the
properties sold. By 1977, in other words, when Tecla Padua filed her
complaint, the right of redemption had already been extinguished
because the period for its exercise had already expired.
The following doctrine is also worth noting:
While the general rule is, that to charge a party with laches in the
assertion of an alleged right it is essential that he should have
knowledge of the facts upon which he bases his claim, yet if the
circumstances were such as should have induced inquiry, and the
means of ascertaining the truth were readily available upon inquiry,
but the party neglects to make it, he will be chargeable with laches,
the same as if he had known the facts. 15
It was the perfectly natural thing for the co-heirs to wonder why the
spouses Alonzo, who were not among them, should enclose a
portion of the inherited lot and build thereon a house of strong
materials. This definitely was not the act of a temporary possessor or
a mere mortgagee. This certainly looked like an act of ownership.
Yet, given this unseemly situation, none of the co-heirs saw fit to
object or at least inquire, to ascertain the facts, which were readily
available. It took all of thirteen years before one of them chose to
claim the right of redemption, but then it was already too late.
We realize that in arriving at our conclusion today, we are deviating
from the strict letter of the law, which the respondent court
understandably applied pursuant to existing jurisprudence. The said
court acted properly as it had no competence to reverse the
doctrines laid down by this Court in the above-cited cases. In fact,
and this should be clearly stressed, we ourselves are not abandoning
the De Conejero and Buttle doctrines. What we are doing simply is
adopting an exception to the general rule, in view of the peculiar
circumstances of this case.
The co-heirs in this case were undeniably informed of the sales
although no notice in writing was given them. And there is no doubt
35
either that the 30-day period began and ended during the 14 years
between the sales in question and the filing of the complaint for
redemption in 1977, without the co-heirs exercising their right of
redemption. These are the justifications for this exception.
More than twenty centuries ago, Justinian defined justice "as the
constant and perpetual wish to render every one his due." 16 That
wish continues to motivate this Court when it assesses the facts and
the law in every case brought to it for decision. Justice is always an
essential ingredient of its decisions. Thus when the facts warrants,
we interpret the law in a way that will render justice, presuming that it
was the intention of the lawmaker, to begin with, that the law be
dispensed with justice. So we have done in this case.
WHEREFORE, the petition is granted. The decision of the
respondent court is REVERSED and that of the trial court is
reinstated, without any pronouncement as to costs. It is so ordered.
Teehankee, C.J., Yap, Narvasa, Melencio-Herrera Gutierrez, Jr.,
Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
Fernan and Feliciano, JJ., are on leave.
DOCTRINE OF NECESSARY IMPLICATION
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 88979 February 7, 1992
LYDIA O. CHUA, petitioner,
vs.
THE CIVIL SERVICE COMMISSION, THE NATIONAL IRRIGATION
ADMINISTRATION and THE DEPARTMENT OF BUDGET AND
MANAGEMENT, respondents.
PADILLA, J.:
Pursuant to the policy of streamlining and trimming the bureaucracy,
Republic Act No. 6683 was approved on 2 December 1988 providing
for benefits for early retirement and voluntary separation from the
government service as well as for involuntary separation due to
reorganization. Deemed qualified to avail of its benefits are those
enumerated in Sec. 2 of the Act, as follows:
Sec. 2. Coverage. — This Act shall cover all appointive officials and
employees of the National Government, including government-
owned or controlled corporations with original charters, as well as the
personnel of all local government units. The benefits authorized
under this Act shall apply to all regular, temporary, casual and
emergency employees, regardless of age, who have rendered at
36
least a total of two (2) consecutive years of government service as of
the date of separation. Uniformed personnel of the Armed Forces of
the Philippines including those of the PC-INP are excluded from the
coverage of this Act.
Petitioner Lydia Chua believing that she is qualified to avail of the
benefits of the program, filed an application on 30 January 1989 with
respondent National Irrigation Administration (NIA) which, however,
denied the same; instead, she was offered separation benefits
equivalent to one half (1/2) month basic pay for every year of service
commencing from 1980. A recourse by petitioner to the Civil Service
Commission yielded negative results. 1 Her letter for reconsideration
dated 25 April 1989 pleaded thus:
xxx xxx xxx
With due respect, I think the interpretation of the Honorable
Commissioner of RA 6683 does not conform with the beneficent
purpose of the law. The law merely requires that a government
employee whether regular, temporary, emergency, or casual, should
have two consecutive years of government service in order to be
entitled to its benefits. I more than meet the requirement. Persons
who are not entitled are consultants, experts and contractual(s). As
to the budget needed, the law provides that the Department of
Budget and Management will shoulder a certain portion of the
benefits to be allotted to government corporations. Moreover,
personnel of these NIA special projects art entitled to the regular
benefits, such (sic) leaves, compulsory retirement and the like. There
is no reason why we should not be entitled to RA 6683.
xxx xxx xxx 2
Denying the plea for reconsideration, the Civil Service Commission
(CSC) emphasized:
xxx xxx xxx
We regret to inform you that your request cannot be granted. The
provision of Section 3.1 of Joint DBM-CSC Circular Letter No. 89-1
does not only require an applicant to have two years of satisfactory
service on the date of separation/retirement but further requires said
applicant to be on a casual, emergency, temporary or regular
employment status as of December 2, 1988, the date of enactment
of R.A. 6683. The law does not contemplate contractual employees
in the coverage.
Inasmuch as your employment as of December 31, 1988, the date of
your separation from the service, is co-terminous with the NIA project
which is contractual in nature, this Commission shall sustain its
original decision.
3
xxx xxx xxx
In view of such denial, petitioner is before this Court by way of a
special civil action for certiorari, insisting that she is entitled to the
benefits granted under Republic Act No. 6683. Her arguments:
It is submitted that R.A. 6683, as well as Section 3.1 of the Joint
DBM-CSC Circular Letter No. 89-1 requires an applicant to be on a
37
casual, emergency, temporary or regular employment status.
Likewise, the provisions of Section 23 (sic) of the Joint DBM-CSC
Circular Letter No. 88-1, implementing guidelines of R.A. No. 6683,
provides:
"2.3 Excluded from the benefits under R.A. No. 6683 are the
following:
a) Experts and Consultants hired by agencies for a limited period to
perform specific activities or services with a definite expected
output: i.e. membership in Task Force, Part-Time,
Consultant/Employees.
b) Uniformed personnel of the Armed Forces of the Philippines
including those of the Philippine Constabulary and Integrated
National Police (PC-INP).
c) Appointive officials and employees who retire or elect to be
separated from the service for optional retirement with gratuity under
R.A. No. 1616, 4968 or with pension under R.A. No. 186, as
amended by R.A. No. 6680 or P.D. No. 1146, an amended, or vice-
versa.
d) Officials and employees who retired voluntarily prior to the
enactment of this law and have received the corresponding benefits
of that retirement/separation.
e) Officials and employees with pending cases punishable by
mandatory separation from the service under existing civil service
laws, rules and regulations; provided that if such officials and
employees apply in writing within the prescriptive period for the
availment of the benefits herein authorized, shall be allowed only if
acquitted or cleared of all charges and their application accepted and
approved by the head of office concerned."
Based on the above exclusions, herein petitioner does not belong to
any one of them. Ms. Chua is a full time employee of NIA entitled to
all the regular benefits provided for by the Civil Service Commission.
She held a permanent status as Personnel Assistant A, a position
which belongs to the Administrative Service. . . . If casuals and
emergency employees were given the benefit of R.A. 6683 with more
reason that this petitioner who was holding a permanent status as
Personnel Assistant A and has rendered almost 15 years of faithful,
continuous service in the government should be similarly rewarded
4
by the beneficient (sic) purpose of the law.
The NIA and the Civil Service Commission reiterate in their comment
petitioner's exclusion from the benefits of Republic Act No. 6683,
because:
1. Petitioner's employment is co-terminous with the project per
appointment papers kept by the Administrative Service in the head
office of NIA (the service record was issued by the Watershed
Management and Erosion Control Project (WMECP), Pantabangan,
Nueva Ecija). The project, funded by the World Bank, was completed
as of 31 December 1988, after which petitioner's position
became functus officio.
2. Petitioner is not a regular and career employee of NIA — her
position is not included in its regular plantilla. She belongs to the
38
non-career service (Sec. 6, P.D. No. 807) which is inherently short-
lived, temporary and transient; on the other hand, retirement
presupposes employment for a long period. The most that a non-
career personnel can expect upon the expiration of his employment
is financial assistance. Petitioner is not even qualified to retire under
the GSIS law.
3. Assuming arguendo that petitioner's appointment is permanent,
security of tenure is available only for the term of office (i.e., duration
of project).
4. The objective of Republic Act No. 6683 is not really to grant
separation or retirement benefits but reorganization 5to streamline
government functions. The application of the law must be made
consistent with the purpose for which it was enacted. Thus, as the
expressed purpose of the law is to reorganize the government, it will
not have any application to special projects such as the WMECP
which exists only for a short and definite period. This being the
nature of special projects, there is no necessity for offering its
personnel early retirement benefits just to induce voluntary
separation as a step to reorganization. In fact, there is even no need
of reorganizing the WMECP considering its short and limited life-
span. 6
5. The law applies only to employees of the national government,
government-owned or controlled corporations with original charters
and local government units.
Due to the impossibility of reconciling the conflicting interpretations of
the parties, the Court is called upon to define the different classes of
employees in the public sector (i.e. government civil servants).
Who are regular employees? The Labor Code in Art. 280 (P.D. No.
492, as amended) deems an employment regular where the
employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the
employer. No equivalent definition can be found in P.D.No. 807
(promulgated on 6 October 1975, which superseded the Civil Service
Act of 1965 — R.A. No. 2260) or in the Administrative Code of 1987
(Executive Order No. 292 promulgated on 25 July 1987). The Early
Retirement Law itself (Rep. Act No. 6683) merely includes such class
of employees (regular employees) in its coverage, unmindful that no
such specie is employed in the public sector.
The appointment status of government employees in the career
service is classified as follows:
1. permanent — one issued to a person who has met the
requirements of the position to which appointment is made, in
accordance with the provisions of the Civil Service Act and the Rules
7
and Standards promulgated in pursuance thereof;
2. temporary — In the absence of appropriate eligibles and it
becomes necessary in the public interest to fill a vacancy, a
temporary appointment should be issued to a person who meets all
the requirements for the position to which he is being appointed
except the appropriate civil service eligibility: Provided, That such
temporary appointment shall not exceed twelve months, but the
appointee may be replaced sooner if a qualified civil service eligible
becomes available. 8
39
The Administrative Code of 1987 characterizes the Career
Service as:
(1) Open Career positions for appointment to which prior qualification
in an appropriate examination is required;
(2) Closed Career positions which are scientific, or highly technical in
nature; these include the faculty and academic staff of state colleges
and universities, and scientific and technical positions in scientific or
research institutions which shall establish and maintain their own
merit systems;
(3) Positions in the Career Executive Service; namely,
Undersecretary, Assistant Secretary, Bureau Director, Assistant
Bureau Director, Regional Director, Assistant Regional Director,
Chief of Department Service and other officers of equivalent rank as
may be identified by the Career Executive Service Board, all of
whom are appointed by the President.
(4) Career officers, other than those in the Career Executive Service,
who are appointed by the President, such as the Foreign Service
Officers in the Department of Foreign Affairs;
(5) Commission officers and enlisted men of the Armed Forces which
shall maintain a separate merit system;
(6) Personnel of government-owned or controlled corporations,
whether performing governmental or proprietary functions, who do
not fall under the non-career service; and
(7) Permanent laborers, whether skilled, semi-skilled, or unskilled. 9
The Non-Career Service, on the other hand, is characterized by:
. . . (1) entrance on bases other than those of the usual tests of merit
and fitness utilized for the career service; and (2) tenure which is
limited to a period specified by law, or which is coterminous with that
of the appointing authority or subject to his pleasure, or which is
limited to the duration of a particular project for which purpose
employment was made.
Included in the non-career service are:
1. elective officials and their personal or confidential staff;
2. secretaries and other officials of Cabinet rank who hold their
positions at the pleasure of the President and their personal
confidential staff(s);
3. Chairman and Members of Commissions and boards with fixed
terms of office and their personal or confidential staff;
4. contractual personnel or those whose employment in the
government is in accordance with a special contract to undertake a
specific work or job requiring special or technical skills not available
in the employing agency, to be accomplished within a specific period,
which in no case shall exceed one year and performs or
accomplishes the specific work or job, under his own responsibility
with a minimum of direction and supervision from the hiring agency.
10
5. emergency and seasonal personnel.
There is another type of non-career employee:
Casual — where and when employment is not permanent but
occasional, unpredictable, sporadic and brief in nature (Caro v.
Rilloroza, 102 Phil. 70; Manuel v. P.P. Gocheco Lumber Co., 96 Phil.
945)
Consider petitioner's record of service:
40
Service with the government commenced on 2 December 1974
designated as a laborer holding emergency status with the NIA —
Upper Pampanga River Project, R & R Division. 11 From 24 March
1975 to 31 August 1975, she was a research aide
with temporary status on the same project. On 1 September 1975 to
31 December 1976, she was with the NIA-FES III; R & R Division,
then on 1 January 1977 to 31 May 1980, she was with NIA — UPR
IIS (Upper Pampanga River Integrated Irrigation Systems) DRD. On
1 June 1980, she went to NIA — W.M.E.C.P. (Watershed
Management & Erosion Control Project) retaining the status
of temporary employee. While with this project, her designation was
changed to personnel assistant on 5 November 1981; starting 9 July
1982, the status became permanent until the completion of the
project on 31 December 1988. The appointment paper 12attached to
the OSG's comment lists her status as co-terminus with the Project.
The employment status of personnel hired under foreign — assisted
projects is considered co-terminous, that is, they are considered
employees for the duration of the project or until the completion or
cessation of said project (CSC Memorandum Circular No. 39, S.
1990, 27 June 1990).
Republic Act No. 6683 seeks to cover and benefits regular,
temporary, casual and emergency employees who have rendered at
least a total of two (2) consecutive years government service.
Resolution No. 87-104 of the CSC, 21 April 1987, provides:
WHEREAS, pursuant to Executive Order No. 966 dated June 22,
1984, the Civil Service Commission is charged with the function of
determining creditable services for retiring officers and employees of What substantial differences exist, if any, between casual,
the national government; emergency, seasonal, project, co-terminous or contractual
personnel? All are tenurial employees with no fixed term, non-career,
WHEREAS, Section 4 (b) of the same Executive Order No. 966 and temporary. The 12 May 1989 CSC letter of
13
provides that all previous services by an officer/employee pursuant to denial characterized herein petitioner's employment as co-
a duly approved appointment to a position in the Civil Service are terminous with the NIA project which in turn was contractual in
considered creditable services, while Section 6 (a) thereof states that nature. The OSG says petitioner's status is co-terminous with the
services rendered on contractual, emergency or casual status are Project. CSC Memorandum Circular No. 11, series of 1991 (5 April
non-creditable services; 1991) characterizes the status of a co-terminous employee —
(3) Co-terminous status shall be issued to a person whose entrance
WHEREAS, there is a need to clarify the aforesaid provisions in the service is characterized by confidentiality by the appointing
inasmuch as some contractual, emergency or casual employment authority or that which is subject to his pleasure or co-existent with
are covered by contracts or appointments duly approved by the his tenure.
Commission.
The foregoing status (co-terminous) may be further classified into the
NOW, therefore, the Commission resolved that services rendered on following:
contractual, emergency or casual status, irrespective of the mode or a) co-terminous with the project — When the appointment is co-
manner of payment therefor shall be considered as creditable for existent with the duration of a particular project for which purpose
retirement purposes subject to the following conditions: (emphasis employment was made or subject to the availability of funds for the
provided) same;
1. These services are supported by approved appointments, official b) co-terminous with the appointing authority — when appointment is
records and/or other competent evidence. Parties/agencies co-existent with the tenure of the appointing authority.
concerned shall submit the necessary proof of said services; c) co-terminous with the incumbent — when appointment is co-
2. Said services are on full time basis and rendered prior to June 22, existent with the appointee, in that after the resignation, separation
1984, the effectivity date of Executive Order No. 966; and or termination of the services of the incumbent the position shall be
3. The services for the three (3) years period prior to retirement are deemed automatically abolished; and
continuous and fulfill the service requirement for retirement.

41
d) co-terminous with a specific period, e.g. "co-terminous for a period
of 3 years" — the appointment is for a specific period and upon
expiration thereof, the position is deemed abolished.
It is stressed, however, that in the last two classifications (c) and (d),
what is termed co-terminous is the position, and not the appointee-
employee. Further, in (c) the security of tenure of the appointee is
guaranteed during his incumbency; in (d) the security of tenure is
limited to a specific period.
A co-terminous employee is a non-career civil servant,
like casual and emergency employees. We see no solid reason why
the latter are extended benefits under the Early Retirement Law but
the former are not. It will be noted that Rep. Act No. 6683 expressly
extends its benefits for early retirement to regular, temporary,
casual and emergency employees. But specifically excluded from the
benefits are uniformed personnel of the AFP including those of the
PC-INP. It can be argued that, expressio unius est exclusio alterius.
The legislature would not have made a specific enumeration in a
statute had not the intention been to restrict its meaning and confine
14
its terms and benefits to those expressly mentioned or casus
omissus pro omisso habendus est — A person, object or thing
omitted from an enumeration must be held to have been omitted
intentionally. 15 Yet adherence to these legal maxims can result in
incongruities and in a violation of the equal protection clause of the
Constitution.
42
The case of Fegurin, et al. v. NLRC, et al., 16 comes to mind where,
workers belonging to a work pool, hired and re-hired continuously
from one project to another were considered non-project-regular and
permanent employees.
Petitioner Lydia Chua was hired and re-hired in four (4) successive
projects during a span of fifteen (15) years. Although no proof of the
existence of a work pool can be assumed, her service record cannot
be disregarded.
Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person shall
be deprived of life, liberty, or property without due process of law, nor
shall any person be denied the equal protection of the laws."
. . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled that the
equal protection clause applies only to persons or things identically
situated and does not bar a reasonable classification of the subject
of legislation, and a classification is reasonable where (1) it is based
on substantial distinctions which make real differences; (2) these are
germane to the purpose of the law; (3) the classification applies not
only to present conditions but also to future conditions which are
substantially identical to those of the present; (4) the classification
applies only to those who belong to the same class. 17
Applying the criteria set forth above, the Early Retirement Law would
violate the equal protection clause were we to sustain respondents'
submission that the benefits of said law are to be denied a class of
government employees who are similarly situated as those covered
by said law. The maxim of Expressio unius est exclusio
alterius should not be the applicable maxim in this case but the
doctrine of necessary implication which holds that:
No statute can be enacted that can provide all the details involved in
its application. There is always an omission that may not meet a
particular situation. What is thought, at the time of enactment, to be
an all-embracing legislation may be inadequate to provide for the
unfolding events of the future. So-called gaps in the law develop as
the law is enforced. One of the rules of statutory construction used to
fill in the gap is the doctrine of necessary implication. The doctrine
states that what is implied in a statute is as much a part thereof as
that which is expressed. Every statute is understood, by implication,
to contain all such provisions as may be necessary to effectuate its
object and purpose, or to make effective rights, powers, privileges or
jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its
terms. Ex necessitate legis. And every statutory grant of power, right
or privilege is deemed to include all incidental power, right or
privilege. This is so because the greater includes the lesser,
18
expressed in the Maxim, in eo plus sit, simper inest et minus.
During the sponsorship speech of Congressman Dragon (re: Early
Retirement Law), in response to Congressman Dimaporo's
interpellation on coverage of state university employees who are
extended appointments for one (1) year, renewable for two (2) or
three (3) years, 19 he explained:
43
This Bill covers only those who would like to go on early retirement
and voluntary separation. It is irrespective of the actual status or
nature of the appointment one received, but if he opts to retire under
this, then he is covered.
It will be noted that, presently Pending in Congress, is House Bill No.
33399 (a proposal to extend the scope of the Early Retirement Law).
Its wording supports the submission that Rep. Act No. 6683 indeed
overlooked a qualified group of civil servants. Sec. 3 of said House
bill, on coverage of early retirement, would provide:
Sec. 3. Coverage. — It will cover all employees of the national
government, including government-owned or controlled corporations,
as well as the personnel of all local government units. The benefits
authorized under this Act shall apply to all regular, temporary,
casual, emergency and contractual employees, regardless of age,
who have rendered at least a total of two (2) consecutive years
government service as of the date of separation. The term
"contractual employees" as used in this Act does not include experts
and consultants hired by agencies for a limited period to perform
specific activities or services with definite expected output.
Uniformed personnel of the Armed Forces of the Philippines,
including those of the PC-INP are excluded from the coverage of this
Act. (emphasis supplied)
The objective of the Early Retirement or Voluntary Separation Law is
to trim the bureaucracy, hence, vacated positions are deemed
abolished upon early/voluntary retirement of their occupants. Will the
inclusion of co-terminous personnel (like the petitioner) defeat such
objective? In their case, upon termination of the project and
separation of the project personnel from the service, the term of
employment is considered expired, the officefunctus officio. Casual,
temporary and contractual personnel serve for shorter periods, and
yet, they only have to establish two (2) years of continuous service to
qualify. This, incidentally, negates the OSG's argument that co-
terminous or project employment is inherently short-lived, temporary
and transient, whereas, retirement presupposes employment for a
long period. Here, violation of the equal protection clause of the
Constitution becomes glaring because casuals are not even in the
plantilla, and yet, they are entitled to the benefits of early retirement.
How can the objective of the Early Retirement Law of trimming the
bureaucracy be achieved by granting early retirement benefits to a
group of employees (casual) without plantilla positions? There would,
in such a case, be no abolition of permanent positions or
streamlining of functions; it would merely be a removal of excess
personnel; but the positions remain, and future appointments can be
made thereto.
Co-terminous or project personnel, on the other hand, who have
rendered years of continuous service should be included in the
coverage of the Early Retirement Law, as long as they file their
application prior to the expiration of their term, and as long as they
comply with CSC regulations promulgated for such purpose. In this
connection, Memorandum Circular No. 14, Series of 1990 (5 March
20
1990) implementing Rep. Act No. 6850, requires, as a condition to
44
qualify for the grant of eligibility, an aggregate or total of seven (7)
years of government service which need not be continuous, in the
career or non-career service, whether appointive, elective, casual,
emergency, seasonal, contractual or co-terminous including military
and police service, as evaluated and confirmed by the Civil Service
Commission. 21 A similar regulation should be promulgated for the
inclusion in Rep. Act No. 6683 of co-terminous personnel who
survive the test of time. This would be in keeping with the coverage
of "all social legislations enacted to promote the physical and mental
well-being of public servants"22 After all, co-terminous personnel, are
also obligated to the government for GSIS contributions, medicare
and income tax payments, with the general disadvantage of
transience.
In fine, the Court believes, and so holds, that the denial by the
respondents NIA and CSC of petitioner's application for early
retirement benefits under Rep. Act No. 6683 is unreasonable,
unjustified, and oppressive, as petitioner had filed an application for
voluntary retirement within a reasonable period and she is entitled to
the benefits of said law. While the application was filed after
expiration of her term, we can give allowance for the fact that she
originally filed the application on her own without the assistance of
counsel. In the interest of substantial justice, her application must be
granted; after all she served the government not only for two (2)
years — the minimum requirement under the law but for almost
fifteen (15) years in four (4) successive governmental projects.
WHEREFORE, the petition is GRANTED.
Let this case be remanded to the CSC-NIA for a favorable disposition
of petitioner's application for early retirement benefits under Rep. Act
No. 6683, in accordance with the pronouncements in this decision.
SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Cruz, Paras, Feliciano, Bidin,
Griño-Aquino, Medialdea, Regalado, Davide, Jr., Romero and
Nocon, JJ., concur.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur but only insofar as our rulings are applied to RA 6683
applicants.

Separate Opinions
GUTIERREZ, JR., J., concurring:
I concur but only insofar as our rulings are applied to RA 6683
applicants.

45
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-37251 August 31, 1981
CITY OF MANILA and CITY TREASURER, petitioners-appellants,
vs.
JUDGE AMADOR E. GOMEZ of the Court of First Instance of
Manila and ESSO PHILIPPINES, INC., respondents-appellees.
AQUINO, J.:
This case is about the legality of the additional one-half percent (½%)
realty tax imposed by the City of Manila.
Section 64 of the Revised Charter of Manila, Republic Act No. 409,
which took effect on June 18, 1949, fixes the annual realty tax at one
and one-half percent (1-½ %).
On the other hand, section 4 of the Special Education Fund Law,
Republic Act No. 5447, which took effect on January 1, 1969,
imposed "an annual additional tax of one per centum on the
assessed value of real property in addition to the real property tax
regularly levied thereon under existing laws" but "the total real
property tax shall not exceed a maximum of three per centrum.
That maximum limit gave the municipal board of Manila the Idea of
fixing the realty tax at three percent. So, by means of Ordinance No.
46
7125, approved by the city mayor on December 26, 1971 and
effective beginning the third quarter of 1972, the board imposed
an additional one-half percent realty tax. The ordinance reads:
SECTION 1. An additional annual realty tax of one-half percent
(1/2%), or in short a total of three percent (3%) realty tax (1-½%
pursuant to the Revised Charter of Manila; 1% per Republic Act No.
5447; and ½% per this Ordinance) on the assessed value ... is
hereby levied and imposed.
Esso Philippines, Inc. paid under protest the sum of P16,092.69 as
additional one-half percent realty tax for the third quarter of 1972 on
its land and machineries located in Manila.
On November 9, 1972, Esso filed a complaint in the Court of First
Instance of Manila for the recovery of the said amount. It contended
that the additional one-half percent tax is void because it is not
authorized by the city charter nor by any law (Civil Case No. 88827).
After hearing, the trial court declared the tax ordinance void and
ordered the city treasurer of Manila to refund to Esso the said tax.
The City of Manila and its treasurer appealed to this Court under
Republic Act No. 5440 (which superseded Rule 42 of the Rules of
Court).
The only issue is the validity of the tax ordinance or the legality of the
additional one-half percent realty tax.
The petitioners in their manifestation of March 17, 1981 averred that
the said tax ordinance is still in force; that Ordinance No. 7566, which
was enacted on September 10, 1974, imposed a two percent tax on
commercial real properties (like the real properties of Esso and that
that two percent tax plus the one percent tax under the Special
Education Fund Law gives a total of three percent realty tax on
commercial properties.
Esso Philippines, Inc., now Petrophil Corporation, in its manifestation
of March 2, 1981, revealed that up to this time it has been paying the
additional one-half percent tax and that from 1975 to 1980 it paid the
total sum of P4,206,240.71 as three percent tax on its real
properties.
In this connection, it is relevant to note that section 39(2) of the Real
Property Tax Code, Presidential Decree No. 464, which took effect
on June 1, 1974, provides that a city council may, by ordinance,
impose a realty tax "of not less than one half of one percent but not
more than two percent of the assessed value of real property".
Section 41 of the said Code reaffirms the one percent tax on real
property for the Special Education Fund in addition to the basic two
percent realty tax.
So, there is no question now that the additional one-half percent
realty tax is valid under the Real Property Tax Code. What is in
controversy is the legality of the additional one-half percent realty tax
for the two-year period from the third quarter of 1972 up to the
second quarter of 1974.
47
We hold that the doctrine of implications in statutory construction
sustains the City of Manila's contention that the additional one-half
percent realty tax is sanctioned by the provision in section 4 of the
Special Education Fund Law that "the total real property tax shall not
exceed a maximum of three per centum.
The doctrine of implications means that "that which is plainly implied
in the language of a statute is as much a part of it as that which is
expressed" (In re McCulloch Dick, 38 Phil. 41, 45, 90; 82 C.J.S. 632,
73 Am Jur 2nd 404).
While the 1949 Revised Charter of Manila fixed the realty tax at one
and a half percent, on the other hand, the 1968 Special Education
Fund Law definitively fixed three percent as the maximum real
property tax of which one percent would accrue to the Special
Education Fund.
The obvious implication is that an additional one-half percent tax
could be imposed by municipal corporations. Inferentially, that law
fixed at two percent the realty tax that would accrue to a city or
municipality.
And the fact that the 1974 Real Property Tax Code specifically fixes
the real property tax at two percent confirms the prior intention of the
lawmaker to impose two percent as the realty tax proper. That was
also the avowed intention of the questioned ordinance.
In invalidating the ordinance, the trial court upheld the view of Esso
Philippines, Inc, that the Special Education Fund Law refers to a
contingency where the application of the additional one percent
realty tax would have the effect of raising the total realty tax to more
than three percent and that it cannot be construed as an authority to
impose an additional realty tax beyond the one percent fixed by the
said law.
At first glance, that appears to be a specious or reasonable
contention. But the fact remains that the city charter fixed the realty
tax at 1-½% and the later law, the Special Education Fund Law,
provides for three percent as the maximum realty tax of which one
percent would be earmarked for the education fund.
The unavoidable inference is that the later law authorized the
imposition of an additional one-half percent realty tax since the
contingency referred to by the complaining taxpayer would not arise
in the City of Manila.
As repeatedly observed, section 4 of the Special Education Fund
Law, as confirmed by the Real Property Tax Code, in prescribing a
total realty tax of three percent impliedly authorizes the augmentation
by one-half percent of the pre-existing one and one- half percent
realty tax.
WHEREFORE, the decision of the trial court is reversed and set
aside. The complaint of Esso Philippines, Inc. for recovery of the
realty tax paid under protest is dismissed. No costs.
SO ORDERED.
Barredo (Chairman), Concepcion Jr., Fernandez and De Castro, JJ.,
concur.
Justice Abad Santos is on leave.
Justice Fernandez was designated to sit in the Second Division.

It is true, as contended by the taxpayer, that the power of a municipal

corporation to levy a tax should be expressly granted and should not
be merely inferred. But in this case, the power to impose a realty tax
is not controverted. What is disputed is the amount thereof, whether
one and one-half percent only or two percent. (See sec. 2 of Rep.
Act No. 2264.)

48
CASUS OMISSU Before Us is a Petition for Review on Certiorari under Rule 45 of the
- Chavez v JBC GR no. 202242 July 17, 2012 Basic Rules of Civil Procedure, assailing the Decision[1] of the Court of
guidelines in statutory construction – legislative intent) Appeals in CA-G.R. SP No. 60495, dated 20 January 2003, which
affirmed the Decision[2] of the Office of the President, dated 26
FIRST DIVISION March 1999, and the Resolution[3] dated 11 August 2000, reinstating
the grant to respondent St. James Hospital, Inc. of a Locational
SPOUSES NEREO and NIEVA DELFINO, Clearance and a Certificate of Locational Viability (CLV) for its
Petitioners, expansion as a four-storey, forty-bed capacity hospital.

- versus - St. James Hospital was established in 1990 as a two-storey, ten-bed

capacity hospital in Mariquita Pueblo Subdivision in Santa Rosa,
ST. JAMES HOSPITAL, INC. and HON. RONALDO B. ZAMORA, Laguna. In 1994, it applied for a permit with the Housing and Land
EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT, Use Regulatory Board (HLURB) to expand its hospital into a four-
Respondents. G.R. No. 166735 storey, forty-bed capacity medical institution. Thus, on 23 November
1994, Reynaldo Pambid, HLURB Deputized Zoning Administrator for
Present: Santa Rosa, Laguna, issued a temporary clearance for the
expansion of said hospital. Said issuance was challenged by herein
PANGANIBAN, CJ petitioners spouses Nereo and Nieva Delfino, residents of Mariquita
Chairperson, Pueblo Subdivision, on the ground that the proposed expansion is in
YNARES-SANTIAGO, violation of the provisions of the 1981 Santa Rosa Municipal Zoning
AUSTRIA-MARTINEZ, Ordinance. Thereafter, Mr. Pambid referred the matter for evaluation
CALLEJO, SR., and by his superiors.
CHICO-NAZARIO, JJ.
On 19 April 1995, HLURB Regional Office No. IV Director Alfredo M.
Promulgated: Tan II issued a letter explaining that the issuance of a temporary
clearance is not allowed under existing laws for it may be
September 5, 2006 erroneously construed as a permit to start construction. Director Tan,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x however, opined that under existing HLURB guidelines, CLVs may
be issued to certain projects for purposes of securing an
DECISION Environment Compliance Certification (ECC) from the Department of
Environment and Natural Resources (DENR).
CHICO-NAZARIO, J.:
On the strength of said opinion, Mr. Pambid revoked the temporary
clearance issued to St. James Hospital and declared the expansion
as not viable. The municipal engineer of Santa Rosa, Laguna, also

49
suspended the hospitals building permit, while DENR Regional
Executive Director Antonio Principe issued a cease and desist order
on 16 August 1995. Nevertheless, upon written representation of the
hospitals operator, Dr. Jose P. Santiago, that the St. JamesHospital
will retain the same number of beds maintained in the hospital, Mr.
Pambid issued a CLV dated 29 October 1995 for the hospitals
expansion project. Upon protest from the petitioners, Mr. Pambid
thereafter suspended the issued CLV.
In the interim, the Sangguniang Panlalawigan of Laguna passed on
11 December 1995 Resolution No. 811, approving the 1991
Comprehensive Land Use Plan (CLUP) or the Comprehensive
Zoning Ordinance of the Municipality of Santa Rosa, Laguna. Under
the new Zoning Ordinance, hospitals are now excluded from the list
of viable institutions within the residential zone of Santa Rosa,
Laguna.
Oblivious of the approval of the 1991 Zoning Ordinance, Mr. Pambid
issued on 1 February 1996 a Certificate of Zoning Compliance or
Locational Clearance for the two-storey, ten-bed St. James Hospital
citing as basis the provisions of the 1981 Santa Rosa Municipal
Zoning Ordinance. On 14 March 1996, Mr. Pambid likewise issued a
CLV for a four-storey, forty-bed hospital expansion project in favor of
St. James Hospital.
These issuances of Mr. Pambid were, however, invalidated by
HLURB Director Tan on 25 April 1996, as it violated, according to
Director Tan, the provisions of the 1991 Zoning Ordinance. As a
result thereof, Mr. Pambidsuspended the locational clearance issued
to St. James Hospital and elevated the matter to the HLURB for
disposition. According to Mr. Pambid, he received a copy of the new
Zoning Ordinance only on 14 February 1996, two weeks after issuing
the locational clearance.
50
On 16 May 1996, petitioners filed before the HLURB Regional Office
No. IV a letter-complaint against Mr. Pambid for issuing the CLV in
violation of both the 1981 and 1991 Zoning Ordinances, and against
Dr. Santiago for continuing with the expansion project despite the
invalidation of the CLV issued by Mr. Pambid.
In reply to petitioners complaint, St. James Hospital maintained that
there is a need to expand the existing hospital to address the acute
deficiency of medical facilities in the municipality, and that the project
is permissible under the new Zoning Ordinance. Furthermore, it
pointed out that the project has been favorably endorsed not only by
the residents of Mariquita Pueblo Subdivision, but also by the
residents of other neighboring communities. St. James Hospitalalso
argued that it has already incurred millions of pesos in losses for
every day of delay in the construction.
Pursuant to HLURB Rules, the case was elevated to the HLURB
Legal Services Group (LSG), and was assigned to Arbiter Erwin T.
Daga. During the course of the proceedings, Arbiter Daga issued the
following Orders:
1. Order dated December 6, 1996 (temporary restraining
order) enjoining St. James [Hospital] from continuing with its
expansion project;
2. Order dated December 11, 1996 ordering St. James
[Hospital] to cease and desist from proceeding with its expansion
project;
3. Order dated December 12, 1996 denying St. James
[Hospitals] motion to lift the temporary restraining order; and
4. Order dated December 14, 1996 ordering St. James
[Hospital] to again cease and desist from further work and
construction of the hospitals expansion building pending the
resolution of the case.[4]
On 4 March 1997, Dr. Santiago filed before the HLURB Board of
Commissioners a Motion seeking the inhibition of Arbiter Daga for
partiality, which was subsequently denied.
On 16 July 1997, after the parties have submitted their respective
position papers and draft decisions, Arbiter Daga rendered a
Decision in favor of petitioners, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered,
to wit:
1. The Locational Clearance dated February 1, 1996 issued
by public respondent Reynaldo Pambid to the expansion hospital
building of private respondent St. James Hospital, Inc. is hereby
revoked and set aside;
2. Ordering private respondent to demolish its two-storey
hospital expansion building within ONE MONTH at its cost and upon
failure to comply within the period given, pay complainants
P10,000.00 per day of delay;
3. Ordering private respondent to relocate its existing ten-bed
capacity hospital within ONE YEAR and thereafter to permanently
cease and desist from operating a hospital/clinic within a residential
zone, particularly in Mariquita Pueblo Subdivision, Dita, Sta. Rosa,
Laguna and failure to comply within the reglementary period given,
pay complainants the amount of P10,000.00 per day of delay;
4. Ordering private respondent to pay this Board
administrative fine of P20,000.00, aside from the other fines
previously imposed;
51
5. Ordering private respondent to pay this Board P5,000.00
per day beginning February 4, 1997 until the day that it ceased or
finished the construction of its expansion building as determined by
the Boards Regional Office No. IV;
6. Ordering private respondent to pay complainants FIVE
HUNDRED THOUSAND PESOS as moral damages, TWO MILLION
PESOS exemplary damages, TWO HUNDRED THOUSAND PESOS
as attorneys fees, and FIFTY THOUSAND PESOS cost of litigation;
The motion of private respondent dated 24 June 1997 is hereby
DENIED and its Counterclaim is hereby dismissed for lack of merit.
Without prejudice to the filing of criminal action that may be filed with
the proper court.[5]
Aggrieved by the aforecited Decision, St. James Hospital appealed
to the HLURB Board of Commissioners asserting that the proposed
expansion of the hospital conforms to the 1991 Zoning Ordinance.
Resolving said appeal, the HLURB effectively modified Arbiter Dagas
Decision, ruling that the existing hospital, with its original two-storey,
ten-bed capacity, is allowable under the old 1981 Zoning Ordinance
and may be allowed to continue as a medical institution within the
Mariquita Pueblo Subdivision even after the effectivity of the 1991
Zoning Ordinance. However, the HLURB opined that the new
construction of commercial buildings within the said residential zone,
such as the forty-bed capacity expansion building of St. James
Hospital, is repugnant to Section 2, Article VI of the 1991 Santa Rosa
Municipal Zoning Ordinance and, hence, should be disallowed. Thus,
on 13 January 1998, the HLURB Special Division rendered a
Decision, to wit:
WHEREFORE, the decision of the LSG dated July 16, 1997, is
hereby SET ASIDE and a new decision entered:

1. Declaring the original two-storey, ten-bed capacity St.
James Hospital, as allowable in the Mariquita Pueblo Subdivision,
Sta. Rosa, Laguna;
2. Ordering respondent St. James to set-up an efficient
hospital waste disposal system in conformity with the rules and
regulations and standards of the Department of Health, the
Department of Environment and Natural Resources and all other
concerned government agencies; and present a certification of
compliance to the Board from said agencies within ninety (90) days
from finality hereof; and
3. Revoking the Locational Clerance dated February 01,
1996 issued by respondent Pambid for the expansion Hospital
building of respondent St. James.[6]
The separate Motions for Reconsideration of both parties having
been denied by the HLURB, the parties elevated the case to the
Office of the President, which rendered a decision on 26 March 1999
in favor of St. James Hospital.According to the Office of the
President:
Without doubt, the establishment of a ten-bed capacity hospital, like
the existing St. James Hospital, is allowed within a residential zone.
This is expressly provided under Section 2, paragraph 1(d), Article VI
of the 1981 Sta. Rosa Municipal Zoning Ordinance, the law existing
at the time of the founding of the said hospital. The term hospital
was, however, deleted from the list of conforming establishments
within a residential zone in the recently approved 1991 CLUP or the
Comprehensive Zoning Ordinance of the Municipality of Sta. Rosa,
Laguna. The question now is whether or not the proposed expansion
of St. James Hospital, which will transform it into a four-storey, 40-
bed capacity hospital, is allowable under the 1991 zoning ordinance.
52
Stated differently, does the term institutional, as used in the said
ordinance, include hospitals and other medical establishments.
In construing words or phrases used in a law, the general rule is that,
in the absence of legislative intent to the contrary, they should be
given their plain, ordinary, and common usage meaning (Amadora
vs. Court of Appeals, 160 SCRA 315). For, words are presumed to
have been employed by the lawmaker in their ordinary and common
use and acceptation (People vs. Kottinger, 45 Phil. 352).
Under Section 2, Article VI of the 1991 Zoning Ordinance, certain
activities that are commercial and institutional in character are
allowed within the residential zone. St. James maintained the term
institutional includes hospitals and other medical establishments.
We agree. The word institutional used as it is in said ordinance
without qualification should be understood in its plain and ordinary
meaning. In law, the word institution is understood to mean an
establishment or place, especially one of public character or one
affecting a community (Blacks Law Dictionary, Revised 4th edition,
1968, p. 940). It may be private in character, designed for profit to
those composing the organization, or public and charitable in its
purposes.
From the above definition, it is clear that hospitals fall within the pale
of the term institution, a hospital being a public establishment and
that the nature of its business is for profit. The fact that hospitals are
not categorized as dwelling unit does not inevitably mean that it is
already a non-conforming establishment within a residential zone. As
provided under aforecited provision of the 1991 Zoning Ordinance,
settlement activities that are institutional in character are allowed
within the residential zone. Even the HLURB recognized St. James
as a medical institution within the residential zone of the Municipality
of Sta. Rosa, Laguna. Be that as it may, St. James Hospital may be
allowed to continue its business within the Mariquita Pueblo
Subdivision. To limit the term institutional to activities conducted
within the dwelling units of the residents would be unrealistic and
would contemplate undue restrictions to existing and lawful
establishments, like the St. James Hospital.
As a conforming establishment within the residential zone, St. James
Hospital may also be allowed to expand its present structure. It is not
disputed that the new zoning ordinance does not expressly prohibit
expansion of existing buildings within the residential zone. As
correctly observed by St. James, it would be an absurd requirement
if such establishment, like hospitals, would have the appearance of
residential units or that its use be incidental and subordinate to its
residential purposes. The parameters mentioned in the said
ordinance should only be applied to residential units.
Foregoing considered, the locational clearance and the
complementary certificate of locational viability may now be issued in
favor of St. James Hospital.
WHEREFORE, the grant to St. James Hospital, Inc., of a Locational
Clearance and a Certificate of Locational Viability (CLV) relative to its
expansion as a 4-storey, 40-bed capacity hospital dated February 1,
1996, is hereby REINSTATED. In all other respects, the Decision of
the Housing and Land Use Regulatory Board dated January 13,
1998 is AFFIRMED in toto.[7]
The Motion for Reconsideration of herein petitioners having been
denied in a Resolution dated 11 August 2000, petitioners appealed
to the Court of Appeals. In the assailed Decision dated 20 January
2003, the appellate court affirmed the Decision of the Office of the
President, adopting the latters conclusion that the
establishment/expansion of the St. James Hospital is not a
proscribed land use in the designated residential zone known as
Mariquita Pueblo Subdivision.
53
Petitioners Motion for Reconsideration was subsequently denied in a
Resolution dated 14 January 2005. Hence, the instant Petition.
From the facts of the case, it is undisputed that the Mariquita Pueblo
Subdivision located at Barangay Dita, Santa Rosa, Laguna, is
located within an area classified as a residential zone under both the
1981 and 1991 Zoning Ordinances. There is also no question that a
two-storey, ten-bed capacity hospital, such as St. James Hospital,
was allowed to be constructed within a residential zone under the
1981 Zoning Ordinance. Likewise, it is apparent that under the 1981
Zoning Ordinance, the proposed expansion of the St. James Hospital
into a four-storey, forty-bed capacity hospital would be disallowed as
it violates the restriction set by said Zoning Ordinance regarding
permissible activities within a residential zone, which specifically
limits any medical institution built within a residential zone to a two-
storey, ten-bed capacity structure.
Nonetheless, with the passage of the 1991 Zoning Ordinance, the
proposed expansion of the St. James Hospital must now be decided
in light of the provisions of the new Zoning Ordinance. Hence, the
pivotal issue now to be resolved in this Petition is whether or not the
proposed expansion of St. James Hospital into a four-storey, forty-
bed capacity medical institution may be permitted under the 1991
Zoning Ordinance. However, in order to settle the present
controversy, it is essential that we determine the effect of the
enactment of the 1991 Zoning Ordinance with respect to the
proposed expansion of the St. James Hospital in view of the deletion
therein of the phrase hospitals with not more than ten capacity from
those enumerated as allowable uses in a residential zone as
contained in Section 2, Article VI of the 1981 Zoning Ordinance.
Section 2, Article VI of the 1981 Zoning Ordinance states:
SECTION 2. REGULATIONS FOR URBAN CORE ZONE. This zone
shall be devoted to various settlement activities that are residential
and commercial, or institutional in character, subject to the following d) Clinics, hospitals with not more than ten (10) capacity
terms and conditions: e) Drugstores
f) Backyard gardens and raising of pigs, poultry and other animals
1. In the Residential Sector, only the following uses shall be and fowls provided:
allowed:
1. That they are only for family consumption
a) All types of dwelling units (one-family detached, two-family 2. No undue noise shall be created
detached, one-family semi-detached, two-family semi-detached and 3. No foul smell shall be emitted
multi-family of not more than 5 doors) 4. Other sanitary requirements enforced in the municipality

b) Home occupation, or the practice of ones profession or g) Boarding House

occupation, such as tailoring, dressmaking, banking, and like h) Parks and playground
provided that: i) Barangay tanod stations
j) Neighborhood assembly hall
b.1. Not more than five (5) outside assistants or helpers shall be k) Recreation centers[8]
employed;
On the other hand, Section 2, Article VI of the 1991 Zoning
b.2. The use of the dwelling unit for the home occupation shall be Ordinance reads:
clearly incidental and subordinate to its use for residential purpose by
its occupants; SECTION 2. REGULATIONS FOR RESIDENTIAL ZONE. This zone
shall be devoted to various settlements, activities that are residential,
b.3. As much as possible there shall be no change in the outside commercial, and institutional in character and other spaces designed
appearance of the building or premises; for recreational pursuit and maintenance of ecological balance of the
municipality, subject to the following terms and conditions:
b.4. No equipment or process shall be used in such home occupation
which creates noise, vibration, glare, fumes, odors, or electrical The following uses shall be allowed:
interference or outside the dwelling unit if conducted in a place other
than a single-family residence. In the case of electrical interference, 1. Single detached family dwellings
no equipment or process shall be used which creates visual or
audible interference in any radio or television receiver or causes 2. Semi-detached family dwelling
fluctuation in line voltage off the premises.
3. Two detached family dwelling
a) Elementary schools
b) High Schools and vocational schools 4. Two semi-detached family dwelling
c) Chapels, churches, and other place of worship

54
5. Multi-family dwelling with not more than five (5) families
residing
6. Residential Subdivision Projects
7. Home occupation for the practice of ones profession or for
engaging an in-house business such as dressmaking, tailoring,
baking, running a sari-sari store and the like, provided that:
7.1. Only members of the family residing within the premises
shall be engaged in such home occupation;
7.2. Maximum of five (5) outside helpers or assistants shall be
employed;
7.3. The use of the dwelling unit for home occupation shall be
clearly incidental and subordinate to its use for residential purpose by
its occupants and for the conduct of the home occupation, not more
than twenty-five (25%) percent of the floor area of the dwelling unit
shall be used;
7.4. As much as possible there shall be no change in the
outside appearance of the building premises;
7.5. No home occupation shall be conducted in any accessory
building;
7.6. No traffic shall be generated by such home occupation in
greater volume than would normally be expected in a residential
neighborhood and any need for parking generated by the conduct of
such home occupation shall be met off the street and in a place other
than in a required front yard;
7.7. No equipment or process shall be used in such home
occupation which created noise, vibration, glare, fumes, odors, or
55
electrical interference detectable to the normal sense off the lot, if the
occupation is conducted in a single family residence or outside the
dwelling unit if conducted in a place other than a single-family-
residence. In the case of electrical interference, no equipment or
process shall be used which created visual or audible interference in
any radio or television receiver or causes fluctuation in line voltage
off the premises.
8. Backyard gardens and raising of pigs, poultry and other
animals and fowls provided:
8.1. That they are only for family consumption;
8.2. No undue noise shall be created;
8.3. No foul smell shall be emitted; and
8.4. Other sanitary requirements enforced in the municipality
are complied with.
9. Barangay Tanod Stations.
10. Police outposts.[9]
The enactment of the 1991 Zoning Ordinance effectively repealed
the 1981 Zoning Ordinance. This intent to repeal is manifested in the
very wordings of the 1991 Zoning Ordinance. The complete title of
said Ordinance, An Ordinance Adopting a Comprehensive Zoning
Regulation for the Municipality of Santa Rosa, Laguna and Providing
for the Administration, Enforcement and Amendment Thereof. And
for the Repeal of all Ordinances in Conflict Therewith, as well as the
Repealing Clause[10] of the same Ordinance which states that all
other ordinances, rules or regulations that are in conflict with the
provisions of this ordinance are hereby repealed,[11] clearly express
the intent of the Sangguniang Bayan of Santa Rosa, Laguna, to
repeal any enactment that is inconsistent with the new Ordinance.
The inclusion of this general repealing provision in the Ordinance
predicated the intended repeal under the condition that a substantial
conflict must be found in existing and prior acts.
This is what is known as an implied repeal. Repeal by implication
proceeds on the premise that where a statute of later date clearly
reveals an intention on the part of the legislature to abrogate a prior
act on the subject, that intention must be given effect.[12] There are
two categories of implied repeal. The first is where the provisions in
the two acts on the same subject matter are in an irreconcilable
conflict, the latter act to the extent of the conflict constitutes an
implied repeal of the earlier one.[13] The second is if the later act
covers the whole subject of the earlier one and is clearly intended as
a substitute, it will operate to repeal the earlier law.[14] The second
category of repeal is only possible if the revised statute was intended
to cover the whole subject matter and as a complete and perfect
system in itself. It is the rule that a subsequent statute is deemed to
repeal a prior law if the former revises the whole subject matter of the
former statute.[15]
In the case at bar, there is no doubt that the 1991 Zoning Ordinance
not only covers the same, but embraces the whole subject matter
contained in the 1981 Zoning Ordinance, and was enacted to
substitute the latter. A perusal of the two pieces of legislation will
reveal that both Ordinances were enacted to guide, control, and
regulate the future growth and development of the Municipality of
Santa Rosa, Laguna, in accordance with the municipalitys
development plan, as well as to promote the general welfare of the
residents of the community by regulating the location and use of all
buildings and land within the municipality. However, unlike the 1981
Zoning Ordinance, the 1991 Zoning Ordinance clearly identifies the
development plan to which it is patterned after, specifically the
development plan adopted by the Sangguniang Bayan through
Kapasiyahan Blg. 20-91, dated 20 February 1991. Considering that
56
the 1981 Zoning Ordinance was not in furtherance of the later
development plan, consequently, there was the necessity to adopt a
new statute to effect the changes contained therein, hence, the
adoption of the 1991 Zoning Ordinance.
Since it is presumed that the Sangguniang Bayan knew of the
existence of the older Ordinance, by enacting the later law
embracing the complete subject matter of the 1981 Zoning
Ordinance, it must be concluded that the legislative body had
intended to repeal the former Ordinance. With respect to the
omission of the phrase hospitals with not more than ten capacity
from the 1991 Zoning Ordinance, we conclude that the Sangguniang
Bayan did intend to remove such building use from those allowed
within a residential zone. As ruled by this Court, when both intent and
scope clearly evince the idea of a repeal, then all parts and
provisions of the prior act that are omitted from the revised act are
deemed repealed.[16]
Likewise, it must be stressed at this juncture that a comprehensive
scrutiny of both Ordinances will disclose that the uses formerly
allowed within a residential zone under the 1981 Zoning Ordinance
such as schools, religious facilities and places of worship, and clinics
and hospitals have now been transferred to the institutional zone
under the 1991 Zoning Ordinance.[17] This clearly demonstrates the
intention of the Sangguniang Bayan to delimit the allowable uses in
the residential zone only to those expressly enumerated under
Section 2, Article VI of the 1991 Zoning Ordinance, which no longer
includes hospitals.
It is lamentable that both the Office of the President and the Court of
Appeals gave undue emphasis to the word institutional as mentioned
in Section 2, Article VI of the 1991 Zoning Ordinance and even went
through great lengths to define said term in order to include hospitals
under the ambit of said provision. However, they neglected the fact
that under Section 4, Article VI of said Ordinance[18], there is now
another zone, separate and distinct from a residential zone, which is
classified as institutional, wherein health facilities, such as hospitals,
are expressly enumerated among those structures allowed within
said zone.
Moreover, both the Office of the President and the appellate court
failed to consider that any meaning or interpretation to be given to
the term institutional as used in Section 2, Article VI must be
correspondingly limited by the explicit enumeration of allowable uses
contained in the same section. Whatever meaning the legislative
body had intended in employing the word institutional must be
discerned in light of the restrictive enumeration in the said
article.Under the legal maxim expressio unius est exclusio alterius,
the express mention of one thing in a law, means the exclusion of
others not expressly mentioned.[19] Thus, in interpreting the whole of
Section 2, Article VI, it must be understood that in expressly
enumerating the allowable uses within a residential zone, those not
included in the enumeration are deemed excluded. Hence, since
hospitals, among other things, are not among those enumerated as
allowable uses within the residential zone, the only inference to be
deduced from said exclusion is that said hospitals have been
deliberately eliminated from those structures permitted to be
constructed within a residential area in Santa Rosa, Laguna.
Furthermore, according to the rule of casus omissus in statutory
construction, a thing omitted must be considered to have been
omitted intentionally. Therefore, with the omission of the phrase
hospital with not more than ten capacity in the new Zoning
Ordinance, and the corresponding transfer of said allowable usage to
another zone classification, the only logical conclusion is that the
legislative body had intended that said use be removed from those
allowed within a residential zone. Thus, the construction of medical
institutions, such as St. James Hospital, within a residential zone is
now prohibited under the 1991 Zoning Ordinance.
57
Be that as it may, even if the St. James Hospital is now considered a
non-conforming structure under the 1991 Zoning Ordinance as it is
located in a residential zone where such use is no longer allowed,
said structure cannot now be considered illegal. This is because the
St. James Hospital was constructed during the effectivity of the 1981
Zoning Ordinance, and, as earlier stated, under the said Ordinance,
the construction of a two-storey, ten-bed capacity hospital within a
residential zone is explicitly allowed.
Having concluded that the St. James Hospital is now considered a
non-conforming structure under the 1991 Zoning Ordinance, we now
come to the issue of the legality of the proposed expansion of said
hospital into a four-storey, forty-bed medical institution. We shall
decide this said issue in accordance with the provisions of the 1991
Zoning Ordinance relating to non-conforming buildings, the
applicable law at the time of the proposal. As stated in Section 1 of
Article X of the 1991 Zoning Ordinance:
Section 1. EXISTING NON-CONFORMING USES AND BUILDINGS.
The lawful uses of any building, structure or land at the point of
adoption or amendment of this Ordinance may be continued,
although such does not conform with the provisions of this
Ordinance.
1. That no non-conforming use shall [be] enlarge[d] or increased or
exten[ded] to occupy a greater area or land that has already been
occupied by such use at the time of the adoption of this Ordinance,
or moved in whole or in part to any other portion of the lot parcel of
land where such [non]-conforming use exist at the time of the
adoption of this Ordinance.[20] (Emphasis ours.)
It is clear from the abovequoted provision of the 1991 Zoning
Ordinance that the expansion of a non-conforming building is
prohibited. Hence, we accordingly resolve that the expansion of the
St. James Hospital into a four-storey, forty-bed capacity medical
institution within the Mariquita Pueblo Subdivision is prohibited under CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-
the provisions of the 1991 Zoning Ordinance. MARTINEZ
Associate Justice Associate Justice
WHEREFORE, premises considered, the instant Petition is hereby
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No.
60495, dated 20 January 2003, is hereby REVERSED and SET
ASIDE and a new Decision entered: ROMEO J. CALLEJO, SR.
Associate Justice
1. Sustaining that the original two-storey, ten-bed capacity
St. James Hospital is allowable within the Mariquita Pueblo CERTIFICATION
Subdivision, Sta. Rosa, Laguna as long as it shall comply with the
provisions on existing non-conforming buildings under the 1991 Pursuant to Article VIII, Section 13 of the Constitution, it is hereby
Zoning Ordinance, as well as the rules and regulations and certified that the conclusions in the above Decision were reached in
standards of the Department of Health, Department of Environment consultation before the case was assigned to the writer of the opinion
and Natural Resources and all other concerned government of the Courts Division.
agencies; and
2. Prohibiting the proposed expansion of the St. James
Hospital into a four-storey, forty-bed capacity hospital, the proposed ARTEMIO V. PANGANIBAN
expansion being illegal under the 1991 Zoning Ordinance. Chief Justice

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

58
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 14129 July 31, 1962
PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
GUILLERMO MANANTAN, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant.
Padilla Law Office for defendant-appellee.
REGALA, J.:
This is an appeal of the Solicitor General from the order of the Court
of First Instance of Pangasinan dismissing the information against
the defendant.
The records show that the statement of the case and the facts, as
recited in the brief of plaintiff-appellant, is complete and accurate.
The same is, consequently, here adopted, to wit:
In an information filed by the Provincial Fiscal of Pangasinan in the
Court of First Instance of that Province, defendant Guillermo
Manantan was charged with a violation Section 54 of the Revised
Election Code. A preliminary investigation conducted by said court
resulted in the finding a probable cause that the crime charged as
committed by defendant. Thereafter, the trial started upon
defendant's plea of not guilty, the defense moved to dismiss the
information on the ground that as justice of the peace the defendant
is one of the officers enumerated in Section 54 of the Revised
Election Code. The lower court denied the motion to dismiss holding
that a justice of the peace is within the purview Section 54. A second
59
motion was filed by defense counsel who cited in support thereof the
decision of the Court of Appeals in People vs. Macaraeg, (CA-G.R.
No. 15613-R, 54 Off. Gaz., pp. 1873-76) where it was held that a
justice of the peace is excluded from the prohibition of Section 54 of
the Revised Election Code. Acting on this second motion to dismiss,
the answer of the prosecution, the reply of the defense, and the
opposition of the prosecution, the lower court dismissed the
information against the accused upon the authority of the ruling in
the case cited by the defense.
Both parties are submitting this case upon the determination of this
single question of law: Is a justice the peace included in the
prohibition of Section 54 of the Revised Election Code?
Section 54 of the said Code reads:
No justice, judge, fiscal, treasurer, or assessor of any province, no
officer or employee of the Army, no member of the national,
provincial, city, municipal or rural police force and no classified civil
service officer or employee shall aid any candidate, or exert any
influence in any manner in a election or take part therein, except to
vote, if entitled thereto, or to preserve public peace, if he is a peace
officer.
Defendant-appellee argues that a justice of the peace is not
comprehended among the officers enumerated in Section 54 of the
Revised Election Code. He submits the aforecited section was taken
from Section 449 of the Revised Administrative Code, which
provided the following:
SEC. 449. Persons prohibited from influencing elections. — No judge
of the First Instance, justice of the peace, or treasurer, fiscal or
assessor of any province and no officer or employee of the Philippine
Constabulary, or any Bureau or employee of the classified civil
service, shall aid any candidate or exert influence in any manner in
any election or take part therein otherwise than exercising the right to
vote.

When, therefore, section 54 of the Revised Election Code omitted
the words "justice of the peace," the omission revealed the intention
of the Legislature to exclude justices of the peace from its operation.
The above argument overlooks one fundamental fact. It is to be
noted that under Section 449 of the Revised Administrative Code,
the word "judge" was modified or qualified by the phrase "of First
instance", while under Section 54 of the Revised Election Code, no
such modification exists. In other words, justices of the peace were
expressly included in Section 449 of the Revised Administrative
Code because the kinds of judges therein were specified, i.e., judge
of the First Instance and justice of the peace. In Section 54, however,
there was no necessity therefore to include justices of the peace in
the enumeration because the legislature had availed itself of the
more generic and broader term, "judge." It was a term not modified
by any word or phrase and was intended to comprehend all kinds of
judges, like judges of the courts of First Instance, Judges of the
courts of Agrarian Relations, judges of the courts of Industrial
Relations, and justices of the peace.
It is a well known fact that a justice of the peace is sometimes
addressed as "judge" in this jurisdiction. It is because a justice of the
peace is indeed a judge. A "judge" is a public officer, who, by virtue
of his office, is clothed with judicial authority (U.S. v. Clark, 25 Fed.
Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a
public officer lawfully appointed to decide litigated questions
according to law. In its most extensive sense the term includes all
officers appointed to decide litigated questions while acting in that
capacity, including justices of the peace, and even jurors, it is said,
who are judges of facts."
A review of the history of the Revised Election Code will help to
justify and clarify the above conclusion.
60
The first election law in the Philippines was Act 1582 enacted by the
Philippine Commission in 1907, and which was later amended by
Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4 amendments,
however, only Act No. 1709 has a relation to the discussion of the
instant case as shall be shown later.) Act No. 1582, with its
subsequent 4 amendments were later on incorporated Chapter 18 of
the Administrative Code. Under the Philippine Legislature, several
amendments were made through the passage of Acts Nos. 2310,
3336 and 3387. (Again, of these last 3 amendments, only Act No.
3587 has pertinent to the case at bar as shall be seen later.) During
the time of the Commonwealth, the National Assembly passed
Commonwealth Act No. 23 and later on enacted Commonwealth Act
No. 357, which was the law enforced until June 1947, when the
Revised Election Code was approved. Included as its basic
provisions are the provisions of Commonwealth Acts Nos. 233, 357,
605, 666, 657. The present Code was further amended by Republic
Acts Nos. 599, 867, 2242 and again, during the session of Congress
in 1960, amended by Rep. Acts Nos. 3036 and 3038. In the history
of our election law, the following should be noted:
Under Act 1582, Section 29, it was provided:
No public officer shall offer himself as a candidate for elections, nor
shall he be eligible during the time that he holds said public office to
election at any municipal, provincial or Assembly election, except for
reelection to the position which he may be holding, and no judge of
the First Instance, justice of the peace, provincial fiscal, or officer or
employee of the Philippine Constabulary or of the Bureau of
Education shall aid any candidate or influence in any manner or take
part in any municipal, provincial, or Assembly election under the
penalty of being deprived of his office and being disqualified to hold
any public office whatsoever for a term of 5 year: Provide, however,
That the foregoing provisions shall not be construe to deprive any
person otherwise qualified of the right to vote it any election."
(Enacted January 9, 1907; Took effect on January 15, 1907.)

Then, in Act 1709, Sec. 6, it was likewise provided:
. . . No judge of the First Instance, Justice of the peace provincial
fiscal or officer or employee of the Bureau of Constabulary or of the
Bureau of Education shall aid any candidate or influence in any
manner to take part in any municipal provincial or Assembly election.
Any person violating the provisions of this section shall be deprived
of his office or employment and shall be disqualified to hold any
public office or employment whatever for a term of 5 years, Provided,
however, that the foregoing provisions shall not be construed to
deprive any person otherwise qualified of the right to vote at any
election. (Enacted on August 31, 1907; Took effect on September
15, 1907.)
Again, when the existing election laws were incorporated in the
Administrative Code on March 10, 1917, the provisions in question
read:
SEC. 449. Persons prohibited from influencing elections. — No judge
of the First Instance, justice of the peace, or treasurer, fiscal or
assessor of any province and no officer or employee of the Philippine
Constabulary or any Bureau or employee of the classified civil
service, shall aid any candidate or exert influence in any manner in
any election or take part therein otherwise than exercising the right to
vote. (Emphasis supplied)
After the Administrative Code, the next pertinent legislation was Act
No. 3387. This Act reads:
SEC. 2636. Officers and employees meddling with the election. —
Any judge of the First Instance, justice of the peace, treasurer, fiscal
or assessor of any province, any officer or employee of the Philippine
Constabulary or of the police of any municipality, or any officer or
employee of any Bureau of the classified civil service, who aids any
61
candidate or violated in any manner the provisions of this section or
takes part in any election otherwise by exercising the right to vote,
shall be punished by a fine of not less than P100.00 nor more than
P2,000.00, or by imprisonment for not less than 2 months nor more
than 2 years, and in all cases by disqualification from public office
and deprivation of the right of suffrage for a period of 5 years.
(Approved December 3, 1927.) (Emphasis supplied.)
Subsequently, however, Commonwealth Act No. 357 was enacted
on August 22, 1938. This law provided in Section 48:
SEC. 48. Active Interventation of Public Officers and Employees. —
No justice, judge, fiscal, treasurer or assessor of any province, no
officer or employee of the Army, the Constabulary of the national,
provincial, municipal or rural police, and no classified civil service
officer or employee shall aid any candidate, nor exert influence in
any manner in any election nor take part therein, except to vote, if
entitled thereto, or to preserve public peace, if he is a peace officer.
This last law was the legislation from which Section 54 of the
Revised Election Code was taken.
It will thus be observed from the foregoing narration of the legislative
development or history of Section 54 of the Revised Election Code
that the first omission of the word "justice of the peace" was effected
in Section 48 of Commonwealth Act No. 357 and not in the present
code as averred by defendant-appellee. Note carefully, however, that
in the two instances when the words "justice of the peace" were
omitted (in Com. Act No. 357 and Rep. Act No. 180), the word
"judge" which preceded in the enumeration did not carry the
qualification "of the First Instance." In other words, whenever the
word "judge" was qualified by the phrase "of the First Instance", the
words "justice of the peace" would follow; however, if the law simply
said "judge," the words "justice of the peace" were omitted.
The above-mentioned pattern of congressional phraseology would
seem to justify the conclusion that when the legislature omitted the
words "justice of the peace" in Rep. Act No. 180, it did not intend to
exempt the said officer from its operation. Rather, it had considered
the said officer as already comprehended in the broader term
"judge".
It is unfortunate and regrettable that the last World War had
destroyed congressional records which might have offered some
explanation of the discussion of Com. Act No. 357 which legislation,
as indicated above, has eliminated for the first time the words "justice
of the peace." Having been completely destroyed, all efforts to seek
deeper and additional clarifications from these records proved futile.
Nevertheless, the conclusions drawn from the historical background
of Rep. Act No. 180 is sufficiently borne out by reason hid equity.
Defendant further argues that he cannot possibly be among the
officers enumerated in Section 54 inasmuch as under that said
section, the word "judge" is modified or qualified by the phrase "of
any province." The last mentioned phrase, defendant submits,
cannot then refer to a justice of the peace since the latter is not an
officer of a province but of a municipality.
Defendant's argument in that respect is too strained. If it is true that
the phrase "of any province" necessarily removes justices of the
peace from the enumeration for the reason that they are municipal
and not provincial officials, then the same thing may be said of the
Justices of the Supreme Court and of the Court of Appeals. They are
national officials. Yet, can there be any doubt that Justices of the
Supreme Court and of the Court of Appeals are not included in the
prohibition? The more sensible and logical interpretation of the said
phrase is that it qualifies fiscals, treasurers and assessors who are
generally known as provincial officers.
The rule of "casus omisus pro omisso habendus est" is likewise
invoked by the defendant-appellee. Under the said rule, a person,
62
object or thing omitted from an enumeration must be held to have
been omitted intentionally. If that rule is applicable to the present,
then indeed, justices of the peace must be held to have been
intentionally and deliberately exempted from the operation of Section
54 of the Revised Election Code.
The rule has no applicability to the case at bar. The maxim "casus
omisus" can operate and apply only if and when the omission has
been clearly established. In the case under consideration, it has
already been shown that the legislature did not exclude or omit
justices of the peace from the enumeration of officers precluded from
engaging in partisan political activities. Rather, they were merely
called by another term. In the new law, or Section 54 of the Revised
Election Code, justices of the peace were just called "judges."
In insisting on the application of the rule of "casus omisus" to this
case, defendant-appellee cites authorities to the effect that the said
rule, being restrictive in nature, has more particular application to
statutes that should be strictly construed. It is pointed out that
Section 54 must be strictly construed against the government since
proceedings under it are criminal in nature and the jurisprudence is
settled that penal statutes should be strictly interpreted against the
state.
Amplifying on the above argument regarding strict interpretation of
penal statutes, defendant asserts that the spirit of fair play and due
process demand such strict construction in order to give "fair warning
of what the law intends to do, if a certain line is passed, in language
that the common world will understand." (Justice Holmes, in McBoyle
v. U.S., 283 U.S. 25, L. Ed. 816).
The application of the rule of "casus omisus" does not proceed from
the mere fact that a case is criminal in nature, but rather from a
reasonable certainty that a particular person, object or thing has
been omitted from a legislative enumeration. In the present case,
and for reasons already mentioned, there has been no such
omission. There has only been a substitution of terms.
The rule that penal statutes are given a strict construction is not the
only factor controlling the interpretation of such laws; instead, the
rule merely serves as an additional, single factor to be considered as
an aid in determining the meaning of penal laws. This has been
recognized time and again by decisions of various courts. (3
Sutherland, Statutory Construction, p. 56.) Thus, cases will
frequently be found enunciating the principle that the intent of the
legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is to be
noted that a strict construction should not be permitted to defeat the
policy and purposes of the statute (Ash Sheep Co. v. U.S., 252 U.S.
159). The court may consider the spirit and reason of a statute, as in
this particular instance, where a literal meaning would lead to
absurdity, contradiction, injustice, or would defeat the clear purpose
of the law makers (Crawford, Interpretation of Laws, Sec. 78, p. 294).
A Federal District court in the U.S. has well said:
The strict construction of a criminal statute does not mean such
construction of it as to deprive it of the meaning intended. Penal
statutes must be construed in the sense which best harmonizes with
their intent and purpose. (U.S. v. Betteridge 43 F. Supp. 53, 56, cited
in 3 Sutherland Statutory Construction 56.)
As well stated by the Supreme Court of the United States, the
language of criminal statutes, frequently, has been narrowed where
the letter includes situations inconsistent with the legislative plan
(U.S. v. Katz, 271 U.S. 354; See also Ernest Brunchen, Interpretation
of the Written Law (1915) 25 Yale L.J. 129.)
Another reason in support of the conclusion reached herein is the
fact that the purpose of the statute is to enlarge the officers within its
purview. Justices of the Supreme Court, the Court of Appeals, and
various judges, such as the judges of the Court of Industrial
63
Relations, judges of the Court of Agrarian Relations, etc., who were
not included in the prohibition under the old statute, are now within
its encompass. If such were the evident purpose, can the legislature
intend to eliminate the justice of the peace within its orbit? Certainly
not. This point is fully explained in the brief of the Solicitor General,
to wit:
On the other hand, when the legislature eliminated the phrases
"Judge of First Instance" and justice of the peace", found in Section
449 of the Revised Administrative Code, and used "judge" in lieu
thereof, the obvious intention was to include in the scope of the term
not just one class of judges but all judges, whether of first Instance
justices of the peace or special courts, such as judges of the Court of
Industrial Relations. . . . .
The weakest link in our judicial system is the justice of the peace
court, and to so construe the law as to allow a judge thereof to
engage in partisan political activities would weaken rather than
strengthen the judiciary. On the other hand, there are cogent
reasons found in the Revised Election Code itself why justices of the
peace should be prohibited from electioneering. Along with Justices
of the appellate courts and judges of the Court of First Instance, they
are given authority and jurisdiction over certain election cases (See
Secs. 103, 104, 117-123). Justices of the peace are authorized to
hear and decided inclusion and exclusion cases, and if they are
permitted to campaign for candidates for an elective office the
impartiality of their decisions in election cases would be open to
serious doubt. We do not believe that the legislature had, in Section
54 of the Revised Election Code, intended to create such an
unfortunate situation. (pp. 708, Appellant's Brief.)
Another factor which fortifies the conclusion reached herein is the
fact that the administrative or executive department has regarded
justices of the peace within the purview of Section 54 of the Revised
Election Code.

In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary
of Justice, etc. (G.R. No. L-12601), this Court did not give due course
to the petition for certiorari and prohibition with preliminary injunction
against the respondents, for not setting aside, among others,
Administrative Order No. 237, dated March 31, 1957, of the
President of the Philippines, dismissing the petitioner as justice of the
peace of Carmen, Agusan. It is worthy of note that one of the causes
of the separation of the petitioner was the fact that he was found
guilty in engaging in electioneering, contrary to the provisions of the
Election Code.
Defendant-appellee calls the attention of this Court to House Bill No.
2676, which was filed on January 25, 1955. In that proposed
legislation, under Section 56, justices of the peace are already
expressly included among the officers enjoined from active political
participation. The argument is that with the filing of the said House
Bill, Congress impliedly acknowledged that existing laws do not
prohibit justices of the peace from partisan political activities.
The argument is unacceptable. To begin with, House Bill No. 2676
was a proposed amendment to Rep. Act No. 180 as a whole and not
merely to section 54 of said Rep. Act No. 180. In other words, House
Bill No. 2676 was a proposed re-codification of the existing election
laws at the time that it was filed. Besides, the proposed amendment,
until it has become a law, cannot be considered to contain or
manifest any legislative intent. If the motives, opinions, and the
reasons expressed by the individual members of the legislature even
in debates, cannot be properly taken into consideration in
ascertaining the meaning of a statute (Crawford, Statutory
Construction, Sec. 213, pp. 375-376), a fortiori what weight can We
give to a mere draft of a bill.
On law reason and public policy, defendant-appellee's contention
that justices of the peace are not covered by the injunction of Section
64
54 must be rejected. To accept it is to render ineffective a policy so
clearly and emphatically laid down by the legislature.
Our law-making body has consistently prohibited justices of the
peace from participating in partisan politics. They were prohibited
under the old Election Law since 1907 (Act No. 1582 and Act No.
1709). Likewise, they were so enjoined by the Revised
Administrative Code. Another which expressed the prohibition to
them was Act No. 3387, and later, Com. Act No. 357.
Lastly, it is observed that both the Court of Appeals and the trial court
applied the rule of "expressio unius, est exclusion alterius" in arriving
at the conclusion that justices of the peace are not covered by
Section 54. Said the Court of Appeals: "Anyway, guided by the rule
of exclusion, otherwise known as expressio unius est exclusion
alterius, it would not be beyond reason to infer that there was an
intention of omitting the term "justice of the peace from Section 54 of
the Revised Election Code. . . ."
The rule has no application. If the legislature had intended to exclude
a justice of the peace from the purview of Section 54, neither the trial
court nor the Court of Appeals has given the reason for the
exclusion. Indeed, there appears no reason for the alleged change.
Hence, the rule of expressio unius est exclusion alterius has been
erroneously applied. (Appellant's Brief, p. 6.)
Where a statute appears on its face to limit the operation of its
provisions to particular persons or things by enumerating them, but
no reason exists why other persons or things not so enumerated
should not have been included, and manifest injustice will follow by
not so including them, the maxim expressio unius est exclusion
alterius, should not be invoked. (Blevins v. Mullally 135 p. 307, 22
Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered by the
trial court should be set aside and this case is remanded for trial on
the merits.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera and

Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.

65
STARE DECISIS 2000, recommending dismissal of the criminal cases filed against
herein petitioners, be reversed and set aside.

Art 8, Civil CODE The antecedent facts are as follows.

On July 22, 1998, the Fact-Finding and Intelligence Bureau of the
THIRD DIVISION Office of the Ombudsman filed a Complaint-Affidavit docketed as
OMB-0-98-1500, charging herein petitioners with Illegal Use of Public
CARMELO F. LAZATIN, MARINO A. MORALES, TEODORO L. Funds as defined and penalized under Article 220 of the Revised
DAVID and ANGELITO A. PELAYO, Penal Code and violation of Section 3, paragraphs (a) and (e) of
Petitioner, Republic Act (R.A.) No. 3019, as amended.

- versus - The complaint alleged that there were irregularities in the use by then
Congressman Carmello F. Lazatin of his Countrywide Development
HON. ANIANO A. DESIERTO as OMBUDSMAN, and Fund (CDF) for the calendar year 1996, i.e., he was both proponent
SANDIGANBAYAN, THIRD DIVISION, and implementer of the projects funded from his CDF; he signed
Respondents. G.R. No. 147097 vouchers and supporting papers pertinent to the disbursement as
Present: Disbursing Officer; and he received, as claimant, eighteen (18)
YNARES-SANTIAGO, J., checks amounting to P4,868,277.08. Thus, petitioner Lazatin, with
Chairperson, the help of petitioners Marino A. Morales, Angelito A. Pelayo and
CARPIO,* Teodoro L. David, was allegedly able to convert his CDF into cash.
CORONA,** A preliminary investigation was conducted and, thereafter, the
NACHURA, and Evaluation and Preliminary Investigation Bureau (EPIB) issued a
PERALTA, JJ. Resolution[2] dated May 29, 2000 recommending the filing against
Promulgated: herein petitioners of fourteen (14) counts each of Malversation of
Public Funds and violation of Section 3 (e) of R.A. No. 3019. Said
June 5, 2009 Resolution was approved by the Ombudsman; hence, twenty-eight
(28) Informations docketed as Criminal Case Nos. 26087 to 26114
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - x were filed against herein petitioners before the Sandiganbayan.
Petitioner Lazatin and his co-petitioners then filed their respective
DECISION Motions for Reconsideration/Reinvestigation, which motions were
granted by the Sandiganbayan (Third Division). The Sandiganbayan
PERALTA, J.: also ordered the prosecution to re-evaluate the cases against
This resolves the petition for certiorari under Rule 65 of the Rules of petitioners.
Court, praying that the Ombudsman's disapproval of the Office of the
Special Prosecutor's (OSP) Resolution[1] dated September 18,

66
Subsequently, the OSP submitted to the Ombudsman its
Resolution[3] dated September 18, 2000. It recommended the
dismissal of the cases against petitioners for lack or insufficiency of
evidence.
The Ombudsman, however, ordered the Office of the Legal Affairs
(OLA) to review the OSP Resolution. In a Memorandum[4] dated
October 24, 2000, the OLA recommended that the OSP Resolution
be disapproved and the OSP be directed to proceed with the trial of
the cases against petitioners. On October 27, 2000, the Ombudsman
adopted the OLA Memorandum, thereby disapproving the OSP
Resolution dated September 18, 2000 and ordering the aggressive
prosecution of the subject cases. The cases were then returned to
the Sandiganbayan for continuation of criminal proceedings.
Thus, petitioners filed the instant petition.
Petitioners allege that:
I.
THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF
DISCRETION OR ACTED WITHOUT OR IN EXCESS OF HIS
JURISDICTION.
II.
THE QUESTIONED RESOLUTION WAS BASED ON
MISAPPREHENSION OF FACTS, SPECULATIONS, SURMISES
AND CONJECTURES.[5]
Amplifying their arguments, petitioners asseverate that the
Ombudsman had no authority to overturn the OSP's Resolution
dismissing the cases against petitioners because, under Section 13,
Article XI of the 1987 Constitution, the Ombudsman is clothed only
with the power to watch, investigate and recommend the filing of
proper cases against erring officials, but it was not granted the power
to prosecute. They point out that under the Constitution, the power to
prosecute belongs to the OSP (formerly the Tanodbayan), which was
67
intended by the framers to be a separate and distinct entity from the
Office of the Ombudsman. Petitioners conclude that, as provided by
the Constitution, the OSP being a separate and distinct entity, the
Ombudsman should have no power and authority over the OSP.
Thus, petitioners maintain that R.A. No. 6770 (The Ombudsman Act
of 1989), which made the OSP an organic component of the Office of
the Ombudsman, should be struck down for being unconstitutional.
Next, petitioners insist that they should be absolved from any liability
because the checks were issued to petitioner Lazatin allegedly as
reimbursement for the advances he made from his personal funds for
expenses incurred to ensure the immediate implementation of
projects that are badly needed by the Pinatubo victims.
The Court finds the petition unmeritorious.
Petitioners' attack against the constitutionality of R.A. No. 6770 is
stale. It has long been settled that the provisions of R.A. No. 6770
granting the Office of the Ombudsman prosecutorial powers and
placing the OSP under said office have no constitutional infirmity.
The issue of whether said provisions of R.A. No. 6770 violated the
Constitution had been fully dissected as far back as 1995 in Acop v.
Office of the Ombudsman.[6]
Therein, the Court held that giving prosecutorial powers to the
Ombudsman is in accordance with the Constitution as paragraph 8,
Section 13, Article XI provides that the Ombudsman shall exercise
such other functions or duties as may be provided by law. Elucidating
on this matter, the Court stated:
x x x While the intention to withhold prosecutorial powers from the
Ombudsman was indeed present, the Commission [referring to the
Constitutional Commission of 1986] did not hesitate to recommend
that the Legislature could, through statute, prescribe such other
powers, functions, and duties to the Ombudsman. x x x As finally
approved by the Commission after several amendments, this is now
embodied in paragraph 8, Section 13, Article XI (Accountability of
Public Officers) of the Constitution, which provides:
Sec.13. The Office of the Ombudsman shall have the following
powers, functions, and duties:
xxxx
Promulgate its rules and procedure and exercise such other
functions or duties as may be provided by law.
Expounding on this power of Congress to prescribe other powers,
functions, and duties to the Ombudsman, we quote Commissioners
Colayco and Monsod during interpellation by Commissioner Rodrigo:
xxxx
MR. RODRIGO: Precisely, I am coming to that. The last of the
enumerated functions of the Ombudsman is: to exercise such
powers or perform such functions or duties as may be provided by
law. So, the legislature may vest him with powers taken away from
the Tanodbayan, may it not?
MR. COLAYCO: Yes.
MR. MONSOD: Yes.
xxxx
MR. RODRIGO: Madam President. Section 5 reads: The
Tanodbayan shall continue to function and exercise its powers as
provided by law.
MR. COLAYCO: That is correct, because it is under P.D. No. 1630.
68
MR. RODRIGO: So, if it is provided by law, it can be taken away by
law, I suppose.
MR. COLAYCO: That is correct.
MR. RODRIGO: And precisely, Section 12(6) says that among the
functions that can be performed by the Ombudsman are such
functions or duties as may be provided by law. The sponsors
admitted that the legislature later on might remove some powers
from the Tanodbayan and transfer these to the Ombudsman.
MR. COLAYCO: Madam President, that is correct.
xxxx
MR. RODRIGO: Madam President, what I am worried about is, if we
create a constitutional body which has neither punitive nor
prosecutory powers but only persuasive powers, we might be raising
the hopes of our people too much and then disappoint them.
MR. MONSOD: I agree with the Commissioner.
MR. RODRIGO: Anyway, since we state that the powers of the
Ombudsman can later on be implemented by the legislature, why not
leave this to the legislature?
xxxx
MR. MONSOD: (reacting to statements of Commissioner Blas Ople):
xxxx
With respect to the argument that he is a toothless animal, we would
like to say that we are promoting the concept in its form at the
present, but we are also saying that he can exercise such powers
and functions as may be provided by law in accordance with the
direction of the thinking of Commissioner Rodrigo. We do not think
that at this time we should prescribe this, but we leave it up to
Congress at some future time if it feels that it may need to designate
what powers the Ombudsman need in order that he be more
effective. This is not foreclosed.
So, this is a reversible disability, unlike that of a eunuch; it is not an
irreversible disability.[7]
The constitutionality of Section 3 of R.A. No. 6770, which subsumed
the OSP under the Office of the Ombudsman, was likewise upheld
by the Court in Acop. It was explained, thus:
x x x the petitioners conclude that the inclusion of the Office of the
Special Prosecutor as among the offices under the Office of the
Ombudsman in Section 3 of R.A. No. 6770 (An Act Providing for the
Functional and Structural Organization of the Office of the
Ombudsman and for Other Purposes) is unconstitutional and void.
The contention is not impressed with merit. x x x
xxxx
x x x Section 7 of Article XI expressly provides that the then existing
Tanodbayan, to be henceforth known as the Office of the Special
Prosecutor, shall continue to function and exercise its powers as now
or hereafter may be provided by law, except those conferred on the
Office of the Ombudsman created under this Constitution. The
underscored phrase evidently refers to the Tanodbayan's powers
under P.D. No. 1630 or subsequent amendatory legislation. It follows
then that Congress may remove any of the Tanodbayan's/Special
Prosecutor's powers under P.D. No. 1630 or grant it other powers,
except those powers conferred by the Constitution on the Office of
the Ombudsman.
Pursuing the present line of reasoning, when one considers that by
express mandate of paragraph 8, Section 13, Article XI of the
Constitution, the Ombudsman may exercise such other powers or
perform functions or duties as may be provided by law, it is
69
indubitable then that Congress has the power to place the Office of
the Special Prosecutor under the Office of the Ombudsman. In the
same vein, Congress may remove some of the powers granted to the
Tanodbayan by P.D. No. 1630 and transfer them to the Ombudsman;
or grant the Office of the Special Prosecutor such other powers and
functions and duties as Congress may deem fit and wise. This
Congress did through the passage of R.A. No. 6770.[8]
The foregoing ruling of the Court has been reiterated in Camanag v.
Guerrero.[9] More recently, in Office of the Ombudsman v.
Valera,[10] the Court, basing its ratio decidendi on its ruling in Acop
and Camanag, declared that the OSP is merely a component of the
Office of the Ombudsman and may only act under the supervision
and control, and upon authority of the Ombudsman and ruled that
under R.A. No. 6770, the power to preventively suspend is lodged
only with the Ombudsman and Deputy Ombudsman.[11] The Court's
ruling in Acop that the authority of the Ombudsman to prosecute
based on R.A. No. 6770 was authorized by the Constitution was also
made the foundation for the decision in Perez v. Sandiganbayan,[12]
where it was held that the power to prosecute carries with it the
power to authorize the filing of informations, which power had not
been delegated to the OSP. It is, therefore, beyond cavil that under
the Constitution, Congress was not proscribed from legislating the
grant of additional powers to the Ombudsman or placing the OSP
under the Office of the Ombudsman.
Petitioners now assert that the Court's ruling on the constitutionality
of the provisions of R.A. No. 6770 should be revisited and the
principle of stare decisis set aside. Again, this contention deserves
scant consideration.
The doctrine of stare decisis et non quieta movere (to adhere to
precedents and not to unsettle things which are established) is
embodied in Article 8 of the Civil Code of the Philippines which
provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines.
It was further explained in Fermin v. People[13] as follows:
The doctrine of stare decisis enjoins adherence to judicial
precedents. It requires courts in a country to follow the rule
established in a decision of the Supreme Court thereof. That decision
becomes a judicial precedent to be followed in subsequent cases by
all courts in the land. The doctrine of stare decisis is based on the
principle that once a question of law has been examined and
decided, it should be deemed settled and closed to further
argument.[14]
In Chinese Young Men's Christian Association of the Philippine
Islands v. Remington Steel Corporation,[15] the Court expounded on
the importance of the foregoing doctrine, stating that:
The doctrine of stare decisis is one of policy grounded on the
necessity for securing certainty and stability of judicial decisions,
thus:
Time and again, the court has held that it is a very desirable and
necessary judicial practice that when a court has laid down a
principle of law as applicable to a certain state of facts, it will adhere
to that principle and apply it to all future cases in which the facts are
substantially the same. Stare decisis et non quieta movere. Stand by
the decisions and disturb not what is settled. Stare decisis simply
means that for the sake of certainty, a conclusion reached in one
case should be applied to those that follow if the facts are
substantially the same, even though the parties may be different. It
proceeds from the first principle of justice that, absent any powerful
countervailing considerations, like cases ought to be decided alike.
Thus, where the same questions relating to the same event have
been put forward by the parties similarly situated as in a previous
70
case litigated and decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the same issue.[16]
The doctrine has assumed such value in our judicial system that the
Court has ruled that [a]bandonment thereof must be based only on
strong and compelling reasons, otherwise, the becoming virtue of
predictability which is expected from this Court would be
immeasurably affected and the public's confidence in the stability of
the solemn pronouncements diminished.[17] Verily, only upon
showing that circumstances attendant in a particular case override
the great benefits derived by our judicial system from the doctrine of
stare decisis, can the courts be justified in setting aside the same.
In this case, petitioners have not shown any strong, compelling
reason to convince the Court that the doctrine of stare decisis should
not be applied to this case. They have not successfully demonstrated
how or why it would be grave abuse of discretion for the
Ombudsman, who has been validly conferred by law with the power
of control and supervision over the OSP, to disapprove or overturn
any resolution issued by the latter.
The second issue advanced by petitioners is that the Ombudsman's
disapproval of the OSP Resolution recommending dismissal of the
cases is based on misapprehension of facts, speculations, surmises
and conjectures. The question is really whether the Ombudsman
correctly ruled that there was enough evidence to support a finding of
probable cause. That issue, however, pertains to a mere error of
judgment. It must be stressed that certiorari is a remedy meant to
correct only errors of jurisdiction, not errors of judgment. This has
been emphasized in First Corporation v. Former Sixth Division of the
Court of Appeals,[18] to wit:
It is a fundamental aphorism in law that a review of facts and
evidence is not the province of the extraordinary remedy of certiorari,
which is extra ordinem - beyond the ambit of appeal. In certiorari
proceedings, judicial review does not go as far as to examine and
assess the evidence of the parties and to weigh the probative value
thereof. It does not include an inquiry as to the correctness of the
evaluation of evidence. Any error committed in the evaluation of
evidence is merely an error of judgment that cannot be remedied by
certiorari. An error of judgment is one which the court may commit in
the exercise of its jurisdiction. An error of jurisdiction is one where
the act complained of was issued by the court without or in excess of
jurisdiction, or with grave abuse of discretion, which is tantamount to
lack or in excess of jurisdiction and which error is correctible only by
the extraordinary writ of certiorari. Certiorari will not be issued to cure
errors of the trial court in its appreciation of the evidence of the
parties, or its conclusions anchored on the said findings and its
conclusions of law. It is not for this Court to re-examine conflicting
evidence, re-evaluate the credibility of the witnesses or substitute the
findings of fact of the court a quo.[19]
Evidently, the issue of whether the evidence indeed supports a
finding of probable cause would necessitate an examination and re-
evaluation of the evidence upon which the Ombudsman based its
disapproval of the OSP Resolution.Hence, the Petition for Certiorari
should not be given due course.
Likewise noteworthy is the holding of the Court in Presidential Ad
Hoc Fact-Finding Committee on Behest Loans v. Desierto,[20]
imparting the value of the Ombudsman's independence, stating thus:
Under Sections 12 and 13, Article XI of the 1987 Constitution and RA
6770 (The Ombudsman Act of 1989), the Ombudsman has the
power to investigate and prosecute any act or omission of a public
officer or employee when such act or omission appears to be illegal,
unjust, improper or inefficient. It has been the consistent ruling of the
Court not to interfere with the Ombudsman's exercise of his
investigatory and prosecutory powers as long as his rulings are
supported by substantial evidence.Envisioned as the champion of
the people and preserver of the integrity of public service, he has
71
wide latitude in exercising his powers and is free from intervention
from the three branches of government. This is to ensure that his
Office is insulated from any outside pressure and improper
influence.[21]
Indeed, for the Court to overturn the Ombudsman's finding of
probable cause, it is imperative for petitioners to clearly prove that
said public official acted with grave abuse of discretion. In
Presidential Commission on Good Government v. Desierto,[22] the
Court elaborated on what constitutes such abuse, to wit:
Grave abuse of discretion implies a capricious and whimsical
exercise of judgment tantamount to lack of jurisdiction. The
Ombudsman's exercise of power must have been done in an
arbitrary or despotic manner which must be so patent and gross as
to amount to an evasion of a positive duty or a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law. x x
x[23]
In this case, petitioners failed to demonstrate that the Ombudsman
acted in a manner described above. Clearly, the Ombudsman was
acting in accordance with R.A. No. 6770 and properly exercised its
power of control and supervision over the OSP when it disapproved
the Resolution dated September 18, 2000.
It should also be noted that the petition does not question any order
or action of the Sandiganbayan Third Division; hence, it should not
have been included as a respondent in this petition.
IN VIEW OF THE FOREGOING, the petition is DISMISSED for lack
of merit. No costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

ANTONIO T. CARPIO RENATO C. CORONA

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Third Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairpersons Attestation, I certify that the conclusions in the
above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

72
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 191475 December 11, 2013
PHILIPPINE CARPET MANUFACTURING CORPORATION,
PACIFIC CARPET MANUFACTURING CORPORATION, MR.
PATRICIO LIM and MR. DAVID LIM, Petitioners,
vs.
IGNACIO B. TAGYAMON,PABLITO L. LUNA, FE B. BADA YOS,
GRACE B. MARCOS, ROGELIO C. NEMIS, ROBERTO B. ILAO,
ANICIA D. DELA CRUZ and CYNTHIA L. COMANDAO,
Respondents.
DECISION
PERALTA, J.:
The Case
This is a petition for review on certiorari under Rule 45 of the Rules
of Court assailing the Court of Appeals (CA) Decision1 dated July 7,
2009 and Resolution2 dated February 26, 2010 in CA-G.R. SP No.
105236. The assailed decision granted the petition for certiorari filed
by respondents Ignacio B. Tagyamon (Tagyamon), Pablito I. Luna
(Luna), Fe B. Badayos (Badayos), Grace B. Marcos (Marcos),
Rogelio C. Nemis (Nemis), Roberto B. Ilao (Ilao), Anicia D. Dela Cruz
(Dela Cruz), and Cynthia L. Comandao (Comandao), the dispositive
portion of which reads:
WHEREFORE, the petition is GRANTED. The private respondent is
hereby ordered to reinstate the petitioners with full backwages less
the amounts they received as separation pays. In case reinstatement
would no longer be feasible because the positions previously held no
longer exist, the private respondent shall pay them backwages plus,
in lieu of reinstatement, separation pays equal to one (1) month pay,
73
or one-half (1/2) month pay for every year of service, whichever is
higher. In addition, the private respondent is hereby ordered to pay
the petitioners moral damages in the amount of ₱20,000.00 each.
SO ORDERED.3
The Facts
Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a
corporation registered in the Philippines engaged in the business of
manufacturing wool and yarn carpets and rugs.4 Respondents were
its regular and permanent employees, but were affected by
petitioner’s retrenchment and voluntary retirement programs.
On March 15, 2004, Tagyamon,5 Luna,6 Badayos,7 Dela Cruz,8 and
Comandao9 received a uniformly worded Memorandum of dismissal,
to wit:
This is to inform you that in view of a slump in the market demand for
our products due to the un-competitiveness of our price, the
company is constrained to reduce the number of its workforce. The
long-term effects of September 11 and the war in the Middle East
have greatly affected the viability of our business and we are left with
no recourse but to reorganize and downsize our organizational
structure.
We wish to inform you that we are implementing a retrenchment
program in accordance with Article 283 of the Labor Code of the
Philippines, as amended, and its implementing rules and regulations.
In this connection, we regret to advise you that you are one of those
affected by the said exercise, and your employment shall be
terminated effective at the close of working hours on April 15, 2004.
Accordingly, you shall be paid your separation pay as mandated by
law. You will no longer be required to report for work during the 30-
day notice period in order to give you more time to look for
alternative employment. However, you will be paid the salary
corresponding to the said period. We shall process your clearance
and other documents and you may claim the payables due you on
March 31, 2004.
Thank you for your services and good luck to your future
endeavors.10
As to Marcos, Ilao, and Nemis, they claimed that they were
dismissed effective March 31, 2004, together with fifteen (15) other
employees on the ground of lack of market/slump in demand.11
PCMC, however, claimed that they availed of the company’s
voluntary retirement program and, in fact, voluntarily executed their
respective Deeds of Release, Waiver, and Quitclaim.12
Claiming that they were aggrieved by PCMC’s decision to terminate
their employment, respondents filed separate complaints for illegal
dismissal against PCMC, Pacific Carpet Manufacturing Corporation,
Mr. Patricio Lim and Mr. David Lim. These cases were later
consolidated. Respondents primarily relied on the Supreme Court’s
decision in Philippine Carpet Employees Association (PHILCEA) v.
Hon. Sto. Tomas (Philcea case),13 as to the validity of the
company’s retrenchment program. They further explained that PCMC
did not, in fact, suffer losses shown by its acts prior to and
subsequent to their termination.14 They also insisted that their
acceptance of separation pay and signing of quitclaim is not a bar to
the pursuit of illegal dismissal case.15
PCMC, for its part, defended its decision to terminate the services of
respondents being a necessary management prerogative. It pointed
out that as an employer, it had no obligation to keep in its employ
more workers than are necessary for the operation of his business.
Thus, there was an authorized cause for dismissal. Petitioners also
stressed that respondents belatedly filed their complaint as they
allowed almost three years to pass making the principle of laches
applicable. Considering that respondents accepted their separation
pay and voluntarily executed deeds of release, waiver and quitclaim,
PCMC invoked the principle of estoppel on the part of respondents to
74
question their separation from the service. Finally, as to Marcos, Ilao
and Nemis, PCMC emphasized that they were not dismissed from
employment, but in fact they voluntarily retired from employment to
take advantage of the company’s program.16
On August 23, 2007, Labor Arbiter (LA) Donato G. Quinto, Jr.
rendered a Decision dismissing the complaint for lack of merit.17 The
LA found no flaw in respondents’ termination as they voluntarily
opted to retire and were subsequently re-employed on a contractual
basis then regularized, terminated from employment and were paid
separation benefits.18 In view of respondents’ belated filing of the
complaint, the LA concluded that such action is a mere afterthought
designed primarily for respondents to collect more money, taking
advantage of the 2006 Supreme Court decision.19
On appeal, the National Labor Relations Commission (NLRC)
sustained the LA decision.20 In addition to the LA ratiocination, the
NLRC emphasized the application of the principle of laches for
respondents’ inaction for an unreasonable period.
Still undaunted, respondents elevated the matter to the CA in a
petition for certiorari. In reversing the earlier decisions of the LA and
the NLRC, the CA refused to apply the principle of laches, because
the case was instituted prior to the expiration of the prescriptive
period set by law which is four years. It stressed that said principle
cannot be invoked earlier than the expiration of the prescriptive
period.21 Citing the Court’s decision in the Philcea case, the CA
applied the doctrine of stare decisis, in view of the similar factual
circumstances of the cases. As to Ilao, Nemis and Marcos, while
acknowledging their voluntary resignation, the CA found the same
not a bar to the illegal dismissal case because they did so on the
mistaken belief that PCMC was losing money.22 With the foregoing
findings, the CA ordered that respondents be reinstated with full
backwages less the amounts they received as separation pay. In
case of impossibility of reinstatement, the CA ordered PCMC to pay
respondents backwages and in lieu of reinstatement, separation pay
equal to one month pay or ½ month pay for every year of service
whichever is higher, plus moral damages.23
The Issues
Aggrieved, petitioners come before the Court in this petition for
review on certiorari based on this ground, to wit:
IN RENDERING ITS DISPUTED DECISION AND RESOLUTION,
THE COURT A QUO HAS DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND/OR
ESTABLISHED JURISPRUDENCE.
a) Res Judicata should not be followed if to follow it is to perpetuate
error (Philippine Trust Co., and Smith Bell & Co. vs. Mitchell, 59 Phil.
30, 36 (1933). The (Supreme) Court is not precluded from rectifying
errors of judgment if blind and stubborn adherence to the doctrine of
immutability of final judgments would involve the sacrifice of justice
for technicality (Heirs of Maura So vs. Obliosca, G.R. No. 147082,
January 28, 2008, 542 SCRA 406)
b) Not all waivers and quitclaims are invalid as against public policy.
Waivers that represent a voluntary and reasonable settlement of the
laborer’s claims are legitimate and should be respected by the Court
as the law between the parties (Gamogamo vs. PNOC Shipping and
Transport Corp., G.R. No. 141707, May 2, 2002; Alcasero vs. NLRC,
288 SCRA 129) Where the persons making the waiver has done so
voluntarily, with a full understanding thereof, and the consideration
for the quitclaim is credible and reasonable, the transaction must be
recognized as valid and binding undertaking (Periquet vs. NLRC, 186
SCRA 724 [1990]; Magsalin vs. Coca Cola Bottlers Phils., Inc. vs.
National Organization of Working Men (N.O.W.M.], G.R. No. 148492,
May 2, 2003).24
Petitioners contend that the Philcea case decided by this Court and
relied upon by the CA in the assailed decision was based on
75
erroneous factual findings, inapplicable financial statement, as well
as erroneous analysis of such financial statements.25 They, thus,
implore the Court to revisit the cited case in order to dispense with
substantial justice.26 They explain that the Court made conclusions
based on erroneous information. Petitioners also insist that the
doctrines of res judicata and law of the case are not applicable,
considering that this case does not involve the same parties as the
Philcea case.27 They likewise point out that not all respondents were
involuntarily separated on the ground of redundancy as some of
them voluntarily availed of the company’s Voluntary Separation
Program.28They further contend that respondents are guilty not only
of laches but also of estoppel in view of their inaction for an
unreasonable length of time to assail the alleged illegal dismissal and
in voluntarily executing a release, quitclaim and waiver.29
The Court’s Ruling
Laches
Laches has been defined as the failure or neglect for an
unreasonable and unexplained length of time to do that which by
exercising due diligence, could or should have been done earlier,
thus, giving rise to a presumption that the party entitled to assert it
either has abandoned or declined to assert it.30 It has been
repeatedly31 held by the Court that:
x x x Laches is a doctrine in equity while prescription is based on
law. Our courts are basically courts of law not courts of equity. Thus,
laches cannot be invoked to resist the enforcement of an existing
legal right. x x x Courts exercising equity jurisdiction are bound by
rules of law and have no arbitrary discretion to disregard them. In
Zabat Jr. v. Court of Appeals x x x, this Court was more emphatic in
upholding the rules of procedure. We said therein:
As for equity which has been aptly described as a "justice outside
legality," this is applied only in the absence of, and never against,
statutory law or, as in this case, judicial rules of procedure. Aequetas
nunguam contravenit legis. The pertinent positive rules being present
here, they should preempt and prevail over all abstract arguments
based only on equity.
Thus, where the claim was filed within the [four-year] statutory
period, recovery therefore cannot be barred by laches. Courts should
never apply the doctrine of laches earlier than the expiration of time
limited for the commencement of actions at law."32
An action for reinstatement by reason of illegal dismissal is one
based on an injury to the complainants’ rights which should be
brought within four years from the time of their dismissal pursuant to
Article 114633 of the Civil Code. Respondents’ complaint filed almost
3 years after their alleged illegal dismissal was still well within the
prescriptive period. Laches cannot, therefore, be invoked yet.34 To
be sure, laches may be applied only upon the most convincing
evidence of deliberate inaction, for the rights of laborers are
protected under the social justice provisions of the Constitution and
under the Civil Code.35
Stare Decisis
The main issue sought to be determined in this case is the validity of
respondents’ dismissal from employment. Petitioners contend that
they either voluntarily retired from the service or terminated from
employment based on an authorized cause. The LA and the NLRC
are one in saying that the dismissal was legal. The CA, however, no
longer discussed the validity of the ground of termination. Rather, it
applied the Court’s decision in the Philcea case where the same
ground was thoroughly discussed. In other words, the appellate court
applied the doctrine of stare decisis and reached the same
conclusion as the earlier case.
76
Under the doctrine of stare decisis, when a court has laid down a
principle of law as applicable to a certain state of facts, it will adhere
to that principle and apply it to all future cases in which the facts are
substantially the same, even though the parties may be different.36
Where the facts are essentially different, however, stare decisis does
not apply, for a perfectly sound principle as applied to one set of
facts might be entirely inappropriate when a factual variant is
introduced.37
The question, therefore, is whether the factual circumstances of this
present case are substantially the same as the Philcea case.
We answer in the affirmative.
This case and the Philcea case involve the same period which is
March to April 2004; the issuance of Memorandum to employees
informing them of the implementation of the cost reduction program;
the implementation of the voluntary retirement program and
retrenchment program, except that this case involves different
employees; the execution of deeds of release, waiver, and quitclaim,
and the acceptance of separation pay by the affected employees.
The illegality of the basis of the implementation of both voluntary
retirement and retrenchment programs of petitioners had been
thoroughly ruled upon by the Court in the Philcea case. It discussed
the requisites of both retrenchment and redundancy as authorized
causes of termination and that petitioners failed to substantiate them.
In ascertaining the bases of the termination of employees, it took into
consideration petitioners’ claim of business losses; the purchase of
machinery and equipment after the termination, the declaration of
cash dividends to stockholders, the hiring of 100 new employees
after the retrenchment, and the authorization of full blast overtime
work for six hours daily. These, said the Court, are inconsistent with
petitioners’ claim that there was a slump in the demand for its
products which compelled them to implement the termination
programs. In arriving at its conclusions, the Court took note of
petitioners’ net sales, gross and net profits, as well as net income.
The Court, thus, reached the conclusion that the retrenchment
effected by PCMC is invalid due to a substantive defect. We quote
hereunder the Court’s pronouncement in the Philcea case, to wit:
Respondents failed to adduce clear and convincing evidence to
prove the confluence of the essential requisites for a valid
retrenchment of its employees. We believe that respondents acted in
bad faith in terminating the employment of the members of petitioner
Union.
Contrary to the claim of respondents that the Corporation was
experiencing business losses, respondent Corporation, in fact,
amassed substantial earnings from 1999 to 2003. It found no need to
appropriate its retained earnings except on March 23, 2001, when it
appropriated ₱60,000,000.00 to increase production capacity. x x x
xxxx
The evidence on record belies the ₱22,820,151.00 net income loss
in 2004 as projected by the SOLE. On March 29, 2004, the Board of
Directors approved the appropriation of ₱20,000,000.00 to purchase
machinery to improve its facilities, and declared cash dividends to
stockholders at ₱30.00 per share. x x x
xxxx
It bears stressing that the appropriation of ₱20,000,000.00 by the
respondent Corporation on September 16, 2004 was made barely
five months after the 77 Union members were dismissed on the
ground that respondent Corporation was suffering from "chronic
depression." Cash dividends were likewise declared on March 29,
2004, barely two weeks after it implemented its "retrenchment
program."
77
If respondent Corporation were to be believed that it had to retrench
employees due to the debilitating slump in demand for its products
resulting in severe losses, how could it justify the purchase of
₱20,000,000.00 worth of machinery and equipment? There is
likewise no justification for the hiring of more than 100 new
employees, more than the number of those who were retrenched, as
well as the order authorizing full blast overtime work for six hours
daily. All these are inconsistent with the intransigent claim that
respondent Corporation was impelled to retrench its employees
precisely because of low demand for its products and other external
causes.
xxxx
That respondents acted in bad faith in retrenching the 77 members of
petitioner is buttressed by the fact that Diaz issued his Memorandum
announcing the cost-reduction program on March 9, 2004, after
receipt of the February 10, 2004 letter of the Union president which
included the proposal for additional benefits and wage increases to
be incorporated in the CBA for the ensuing year. Petitioner and its
members had no inkling, before February 10, 2004, that respondent
Corporation would terminate their employment. Moreover,
respondent Corporation failed to exhaust all other means to avoid
further losses without retrenching its employees, such as utilizing the
latter's respective forced vacation leaves. Respondents also failed to
use fair and reasonable criteria in implementing the retrenchment
program, and instead chose to retrench 77 of the members of
petitioner out of the dismissed 88 employees. Worse, respondent
Corporation hired new employees and even rehired the others who
had been "retrenched."
As shown by the SGV & Co. Audit Report, as of year end December
31, 2003, respondent Corporation increased its net sales by more
than ₱8,000,000.00. Respondents failed to prove that there was a
drastic or severe decrease in the product sales or that it suffered
severe business losses within an interval of three (3) months from
January 2004 to March 9, 2004 when Diaz issued said
Memorandum. Such claim of a depressed market as of March 9,
2004 was only a pretext to retaliate against petitioner Union and
thereby frustrate its demands for more monetary benefits and, at the
same time, justify the dismissal of the 77 Union members.
xxxx
In contrast, in this case, the retrenchment effected by respondent
Corporation is invalid due to a substantive defect, non-compliance
with the substantial requirements to effect a valid retrenchment; it
necessarily follows that the termination of the employment of
petitioner Union's members on such ground is, likewise, illegal. As
such, they (petitioner Union's members) are entitled to reinstatement
with full backwages.38
We find no reason to depart from the above conclusions which are
based on the Court’s examination of the evidence presented by the
parties therein. As the respondents here were similarly situated as
the union members in the Philcea case, and considering that the
questioned dismissal from the service was based on the same
grounds under the same circumstances, there is no need to relitigate
the issues presented herein. In short, we adopt the Court’s earlier
findings that there was no valid ground to terminate the employees.
A closer look at petitioners’ arguments would show that they want the
Court to re-examine our decision in the Philcea case allegedly on the
ground that the conclusions therein were based on erroneous
interpretation of the evidence presented.
Indeed, in Abaria v. National Labor Relations Commission,39
although the Court was confronted with the same issue of the legality
of a strike that has already been determined in a previous case, the
Court refused to apply the doctrine of stare decisis insofar as the
award of backwages was concerned because of the clear erroneous
78
application of the law. We held therein that the Court abandons or
overrules precedents whenever it realizes that it erred in the prior
decision.40 The Court’s pronouncement in that case is instructive:
The doctrine though is not cast in stone for upon a showing that
circumstances attendant in a particular case override the great
benefits derived by our judicial system from the doctrine of stare
decisis, the Court is justified in setting it aside. For the Court, as the
highest court of the land, may be guided but is not controlled by
precedent. Thus, the Court, especially with a new membership, is not
obliged to follow blindly a particular decision that it determines, after
re-examination, to call for a rectification.41
The Abaria case, however, is not applicable in this case.1âwphi1
There is no reason to abandon the
Court’s ruling in the Philcea case.
Do we apply the aforesaid decision to all the respondents herein?
Again, we answer in the affirmative.
Just like the union members in the Philcea case, respondents
Tagyamon, Luna, Badayos, Dela Cruz, and Comandao received
similarly worded memorandum of dismissal effective April 15, 2004
based on the same ground of slump in the market demand for the
company’s products. As such, they are similarly situated in all
aspects as the union members. With respect to respondents Marcos,
Nemis and Ilao, although they applied for voluntary retirement, the
same was not accepted by petitioner. Instead, it issued notice of
termination dated March 6, 2004 to these same employees.42 And
while it is true that petitioner paid them separation pay, the payment
was in the nature of separation and not retirement pay. In other
words, payment was made because of the implementation of the
retrenchment program and not because of retirement.43 As their
application for availing of the company’s voluntary retirement
program was based on the wrong premise, the intent to retire was
not clearly established, or rather that the retirement is involuntary.
Thus, they shall be considered discharged from employment.44
Consequently, they shall be treated as if they are in the same footing
as the other respondents herein and the union members in the
Philcea case.
Waivers, Releases and Quitclaims
"As a rule, deeds of release and quitclaim cannot bar employees
from demanding benefits to which they are legally entitled or from
contesting the legality of their dismissal. The acceptance of those
benefits would not amount to estoppel."45 To excuse respondents
from complying with the terms of their waivers, they must locate their
case within any of three narrow grounds: (1) the employer used fraud
or deceit in obtaining the waivers; (2) the consideration the employer
paid is incredible and unreasonable; or (3) the terms of the waiver
are contrary to law, public order, public policy, morals, or good
customs or prejudicial to a third person with a right recognized by
law.46The instant case falls under the first situation.
As the ground for termination of employment was illegal, the
quitclaims are deemed illegal as the employees’ consent had been
vitiated by mistake or fraud. The law looks with disfavor upon
quitclaims and releases by employees pressured into signing by
unscrupulous employers minded to evade legal responsibilities.47
The circumstances show that petitioner’s misrepresentation led its
employees, specifically respondents herein, to believe that the
company was suffering losses which necessitated the
implementation of the voluntary retirement and retrenchment
programs, and eventually the execution of the deeds of release,
waiver and quitclaim.48
It can safely be concluded that economic necessity constrained
respondents to accept petitioners’ monetary offer and sign the deeds
of release, waiver and quitclaim. That respondents are supervisors
and not rank-and-file employees does not make them less
susceptible to financial offers, faced as they were with the prospect
of unemployment. The Court has allowed supervisory employees to
79
seek payment of benefits and a manager to sue for illegal dismissal
even though, for a consideration, they executed deeds of quitclaims
releasing their employers from liability.49
x x x There is no nexus between intelligence, or even the position
which the employee held in the company when it concerns the
pressure which the employer may exert upon the free will of the
employee who is asked to sign a release and quitclaim. A lowly
employee or a sales manager, as in the present case, who is
confronted with the same dilemma of whether [to sign] a release and
quitclaim and accept what the company offers them, or [to refuse] to
sign and walk out without receiving anything, may do succumb to the
same pressure, being very well aware that it is going to take quite a
while before he can recover whatever he is entitled to, because it is
only after a protracted legal battle starting from the labor arbiter level,
all the way to this Court, can he receive anything at all. The Court
understands that such a risk of not receiving anything whatsoever,
coupled with the probability of not immediately getting any gainful
employment or means of livelihood in the meantime, constitutes
enough pressure upon anyone who is asked to sign a release and
quitclaim in exchange of some amount of money which may be way
below what he may be entitled to based on company practice and
policy or by law.50
The amounts already received by respondents as consideration for
signing the releases and quitclaims should be deducted from their
respective monetary awards.51
WHEREFORE, premises considered, the petition is hereby DENIED.
The Court of Appeals Decision dated July 7, 2009 and Resolution
dated February 26, 2010 in CA-G.R. SP No. 105236 are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice Chairperson
TERESITA J. LEONARDO-DE CASTRO*
Associate Justice

ROBERTO A. ABAD
Associate Justice
MARVIC MARIO VICTOR F. LEONEN
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the
opinion of the Court's Division.
PRESBITERO J. VELASCO, JR.
Associate Justice Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson's Attestation, I certify that the conclusions in
theabove Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

80
THIRD DIVISION
March 25, 2015
G.R. No. 176908
PURISIMO M. CABAOBAS, EXUPERIO C. MOLINA, GILBERTO V.
OPINION, VICENTE R. LAURON, RAMON M. DE PAZ, JR.,
ZACARIAS E. CARBO, JULITO G. ABARRACOSO, DOMINGO B.
GLORIA, and FRANCISCO P. CUMPIO, Petitioners,
vs.
PEPSI-COLA PRODUCTS. PHILIPPINES, INC., Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court, assailing the Court ofAppeals (CA) Decision1 dated July 31,
2006, and its Resolution2 dated February 21, 2007 in CA-G.R. S.P.
No. 81712. The assailed decision denied the petition for certiorari
filed by petitioners Purisimo M. Cabaobas, Exuperio C. Molina,
Gilberto V. Opinion, Vicente R. Lauron, Ramon M. De Paz, Jr.,
Zacarias E. Carbo, Julito G. Abarracoso, Domingo B. Gloria and
Francisco P. Cumpio, seeking a partial nullification of the Decision3
dated September 11, 2002 of the National Labor Relations
Commission (NLRC) in NLRC Certified Case No. V-000001-2000.4
The NLRC dismissed petitioners' complaints for illegal dismissal and
declared the retrenchment program of respondent Pepsi-Cola
Products Philippines, Inc. as a valid exercise of management
prerogative.
The facts follow.
Respondent Pepsi-Cola Products Philippines, Inc. (PCPPI) is a
domestic corporation engaged in the manufacturing, bottling and
81
distribution of soft drink products, which operates plants all over the
country, one of which is the Tanauan Plant in Tanauan, Leyte.
In 1999, PCPPI’s Tanauan Plant allegedly incurred business losses
in the total amount of Twenty-Nine Million One Hundred Sixty-Seven
Thousand and Three Hundred Ninety (P29,167,390.00) Pesos. To
avert further losses, PCPPI implemented a company-wide
retrenchment program denominated as Corporate-wide Rightsizing
Program (CRP) from 1999 to 2000, and retrenched forty-seven (47)
employees of its Tanauan Plant on July 31, 1999.
On September 24, 1999, twenty-seven (27) of said employees,5 led
by Anecito Molon (Molon, et al.), filed complaints for illegal dismissal
before the NLRC which were docketed as NLRC RAB Cases Nos.
VIII-9-0432-99 to 9-0458-99, entitled "Molon, et al. v. Pepsi-Cola
Products, Philippines, Inc."
On January 15, 2000, petitioners, who are permanent and regular
employees of the Tanauan Plant, received their respective letters,
informing them of the cessation of their employment on February 15,
2000, pursuant to PCPPI's CRP. Petitioners then filed their
respective complaints for illegal dismissal before the National Labor
Relations Commission Regional Arbitration Branch No. VIII in
Tacloban City. Said complaints were docketed as NLRC RAB VIII-
03-0246-00 to 03-0259-00, entitled "Kempis, et al. v. Pepsi-Cola
Products, Philippines, Inc."
In their Consolidated Position Paper,6 petitioners alleged that PCPPI
was not facing serious financial losses because after their
termination, it regularized four (4) employees and hired replacements
for the forty-seven (47) previously dismissed employees. They also
alleged that PCPPI's CRP was just designed to prevent their union,
Leyte Pepsi-Cola Employees Union-Associated Labor Union
(LEPCEU-ALU), from becoming the certified bargaining agent of
PCPPI's rank-and-file employees.

In its Position Paper,7 PCPPI countered that petitioners were
dismissed pursuant to its CRP to save the company from total
bankruptcy and collapse; thus, it sent notices of termination to them
and to the Department of Labor and Employment. In support of its
argument that its CRP is a valid exercise of management
prerogative, PCPPI submitted audited financial statements showing
that it suffered financial reverses in 1998 in the total amount of
SEVEN HUNDRED MILLION (P700,000,000.00) PESOS, TWENTY-
SEVEN MILLION (P27,000,000.00) PESOS of which was allegedly
incurred in the Tanauan Plant in 1999.
On December 15, 2000, Labor Arbiter Vito C. Bose rendered a
Decision8 finding the dismissal of petitioners as illegal, the
dispositive portion of which reads:
WHEREFORE, premises duly considered, judgment is hereby
rendered finding the dismissal of the ten (10) complainants herein
illegal. Consequently, respondent Pepsi-Cola Products Phils., Inc.
(PCPPI) is ordered to reinstate them to their former positions without
loss of seniority rights and to pay them full backwages and other
benefits reckoned from February 16, 2000 until they are actually
reinstated, which as of date amounted to NINE HUNDRED FORTY-
SEVEN THOUSAND FIVE HUNDRED FIFTY-EIGHT PESOS AND
THIRTY-TWO CENTAVOS (P947,558.32) inclusive of the 10%
attorney's fees.
Other claims are dismissed for lack of merit.
SO ORDERED.9
PCPPI appealed from the Decision of the Labor Arbiter to the Fourth
Division of the NLRC of Tacloban City. Meanwhile, the NLRC
consolidated all other cases involving PCPPI and its dismissed
employees.
82
On September 11, 2002, the NLRC rendered a Consolidated
Decision,10 the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered:
(1)DECLARING, in NLRC Certified Case No. V-000001-2000 (NLRC
NCR CC No. 000171-99), Pepsi-Cola Products Philippines,
Incorporated, not guilty of union busting/unfair labor practice, and
dismissing LEPCEU-ALU's Notice of Strike dated July 19, 1999;
(2)DECLARING, in the subsumed NLRC Case No. 7-0301-99,
LEPCEU-ALU's strike on July 23, 1999 ILLEGAL for having been
conducted without legal authority and without observing the 7-day
strike vote notice requirement as provided in Section 2 and Section 7
of Rule XXII, Book V of the Omnibus Rules Implementing Art. 263 (c)
and (f) of the Labor Code, but DENYING PEPSI-COLA's
supplemental prayer to declare loss of employment status of union
leaders and some of its members as identification of officers and
members, and the knowing participation of union officers in the illegal
strike, or that of the officers and members in illegal acts during the
strike, have not been established;
(3)DISMISSING in the subsumed NLRC Injunction Case No. V-
000013- 99, LEPCEU-ALU's Petition for a Writ of Preliminary
Injunction with Prayer for the Issuance of Temporary Restraining
Order, because Pepsi Cola had already implemented its Corporate-
wide CRP in the exercise of management prerogative. Moreover,
LEPCEU-ALU had adequate remedy in law;
(4)DISMISSING, in subsumed case NLRC RAB VIII Cases Nos. 9-
0432- 99 to 9-0459-99 (Molon, et al. vs. PCPPI) all the complaints for
Illegal Dismissal except that of Saunder Santiago T. Remandaban III,
for having been validly and finally settled by the parties, and
ORDERING PEPSI COLA Products Phils., Inc. to reinstate Saunder
Santiago T. Remandaban III to his former position without loss of
seniority rights but without backwages;
(5)Nullifying, in NLRC Consolidated Case No. V-000071-01 (RAB
VIII cases nos. 3-0246-2000 to 3-0258-2000; Kempis, et al. vs.
PCPPI), the Executive Labor Arbiter's Decisions dated December 15,
2000, and DISMISSING the complaints for illegal dismissal, and in its
stead DECLARING the retrenchment program of Pepsi Cola
Products Phils., Inc. pursuant to its CRP, a valid exercise of
management prerogatives; Further, ORDERING Pepsi Cola
Products Philippines, Inc. to pay the following complainants their
package separation benefits of 1 & ½ months salary for every year of
service, plus commutation of all vacation and sick leave credits in the
respective amounts hereunder indicated opposite their names:
1. ARTEMIO S. KEMPIS – P167,486.80
2. EXUPERIO C. MOLINA –168,196.38
3. GILBERTO V. OPINION –31,799.74
4. PURISIMO M. CABAOBAS –165,466.09
5. VICENTE P. LAURON –167,325.86
6. RAMON M. DE PAZ, JR. -109,652.98
7. ZACARIAS E. CARBO –160,376.47
8. JULITO C. ABARRACOSO –161,366.44
9. DOMINGO B. GLORIA –26,119.26
10. FRANCISCO P. CUMPIO –165,204.41
(6) DECLARING, in NLRC Injunction Case No. V-000003-2001,
Pepsi- Cola's Petition for Injunction and Application for immediate
issuance of Temporary Restraining Order, moot and academic, and
DISMISSING the same; Further, DECLARING moot and academic
all incidents to the case of Kempis, et al. vs. PCPPI (NLRC Case No.
V-000071-2000 relating to the execution or implementation of the
nullified Decision dated December 15, 2000, and likewise, nullifying
them.
All other claims and petitions are dismissed for want of merit.
83
SO ORDERED.11
Petitioners and PCPPI filed their respective motions for
reconsideration of the consolidated decision, which the NLRC denied
in a Resolution12 dated September 15, 2003. Dissatisfied,
petitioners filed a petition for certiorari with the CA [docketed as CA-
G.R. SP No. 81712 and raffled to the Eighteenth (18th) Division]. On
July 31, 2006, the CA rendered a Decision, denying their petition and
affirming the NLRC Decision dated September 11, 2002, the
dispositive portion of which reads:
WHEREFORE, premises considered, the petition filed in this case is
hereby DENIED and the decision dated September 11, 2002, and
the resolution dated September 15, 2003, promulgated by the
National Labor Relations Commission, Fourth Division in NLRC
Certified Case No. V- 000001-2000 (NCR CC. No. 000171-99) are
hereby AFFIRMED.
SO ORDERED.13
On February 21, 2007, the CA 18th Division issued a Resolution14
denying petitioners' motion for reconsideration.
In contrast, when Molon, et al. earlier questioned the consolidated
decision of the NLRC via a petition for certiorari[docketed as CA-
G.R. SP No. 82354 and raffled to its Twentieth (20th) Division], the
CA rendered on March 31, 2006 a Decision15 granting their petition
and reversing the same NLRC Decision dated September 11, 2002,
the dispositive portion of which states:
IN LIGHT OF ALL THE FOREGOING, the instant petition is
GRANTED. The decision of the NLRC dated September 11, 2002 is
hereby REVERSED and SET ASIDE and judgment is rendered as
follows:
Declaring the strike conducted on July 23, 1999 as legal, it falling
under the exception of Article 263, Labor Code;
Declaring the manner by which the corporate rightsizing program or
retrenchment was effected by PEPSI-COLA to be contrary to the
prescribed rules and procedure;
Declaring that petitioners were illegally terminated. Their
reinstatement to their former positions or its equivalent is hereby
ordered, without loss of seniority rights and privileges and PEPSI-
COLA is also ordered the payment of their backwages from the time
of their illegal dismissal up to the date of their actual reinstatement. If
reinstatement is not feasible because of strained relations or
abolition of their respective positions, the payment of separation pay
equivalent to 1 month salary for every year of service, a fraction of at
least 6 months shall be considered a whole year. The monetary
considerations received by some of the employees shall be deducted
from the total amount they ought to receive from the company.
Attorney's fees equivalent to 10% of the amount which petitioners
may recover pursuant to Article 111 of the Labor Code is also
awarded.
No pronouncement as to costs.
SO ORDERED.16
Aggrieved, petitioners come before the Court in this petition for
review on certiorari assailing the CA 18th Division Decision dated
July 31, 2006, and its Resolution dated February 21, 2007 on these
grounds:
A.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER
EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW
WHEN IT IGNORED THE EARLIER DECISION OF THE
TWENTIETH DIVISION ON THE SAME FACTUAL AND LEGAL
ISSUES.
B.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER
EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW
84
WHEN IT REFUSED TO REVERSE THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION, FOURTH
DIVISION, DESPITE PRIVATE RESPONDENT’S FAILURE TO
COMPLY WITH THE REQUISITES OF A VALID RETRENCHMENT.
C.
THE HONORABLE COURT OF APPEALS, SPECIAL FORMER
EIGHTEENTH DIVISION, COMMITTED AN ERROR OF LAW
WHEN IT AFFIRMED THE DECISION OF THE NATIONAL LABOR
RELATIONS COMMISSION, FOURTH DIVISION, DECLARING AS
LEGAL THE ILLEGAL DISMISSAL OF PETITIONERS AND
DISMISSING THEIR COMPLAINTS FOR ILLEGAL DISMISSAL.17
The three issues raised by petitioners boil down to the legality of their
dismissal pursuant to PCPPI's retrenchment program.1âwphi1
The petition has no merit.
During the pendency of the petition, the Court rendered a Decision
dated February 18, 2013 in the related case of Pepsi-Cola Products
Philippines, Inc. v. Molon,18 the dispositive portion of which reads:
WHEREFORE, the petition is GRANTED. The assailed March 31,
2006 Decision and September 18, 2006 Resolution of the Court of
Appeals in CA-G.R. SP No. 82354 are hereby REVERSED and SET
ASIDE. Accordingly, the September 11, 2002 Decision of the
National Labor Relations Commission is hereby REINSTATED
insofar as (1) it dismissed subsumed cases NLRC-RAB VIII Case
Nos. 9-0432-99 to 9- 0458-99 and; (2) ordered the reinstatement of
respondent Saunder Santiago Remandaban III without loss of
seniority rights but without backwages in NLRC-RAB VIII Case No.
9-0459-99.
SO ORDERED.
Subsumed cases NLRC-RAB VIII Case Nos. 9-0432-99 to 9-0458-99
pertain to the dismissal of the complaints for illegal dismissal filed by
Molon, et al., the 27 former co-employees of petitioners in PCPPI.
On the issue of whether the retrenchment of the petitioners' former
co-employees was in accord with law, the Court ruled that PCPPI
had validly implemented its retrenchment program, viz.:
Essentially, the prerogative of an employer to retrench its employees
must be exercised only as a last resort, considering that it will lead to
the loss of the employees' livelihood. It is justified only when all other
less drastic means have been tried and found insufficient or
inadequate. Corollary thereto, the employer must prove the
requirements for a valid retrenchment by clear and convincing
evidence; otherwise, said ground for termination would be
susceptible to abuse by scheming employers who might be merely
feigning losses or reverses in their business ventures in order to
ease out employees. These requirements are:
(1)That retrenchment is reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected,
are reasonably imminent as perceived objectively and in good faith
by the employer;
(2)That the employer served written notice both to the employees
and to the Department of Labor and Employment at least one month
prior to the intended date of retrenchment;
(3)That the employer pays the retrenched employees separation pay
equivalent to one (1) month pay or at least one-half (½) month pay
for every year of service, whichever is higher;
(4)That the employer exercises its prerogative to retrench employees
in good faith for the advancement of its interest and not to defeat or
circumvent the employees’ right to security of tenure; and
85
(5)That the employer used fair and reasonable criteria in ascertaining
who would be dismissed and who would be retained among the
employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.
In due regard of these requisites, the Court observes that Pepsi had
validly implemented its retrenchment program:
(1) Records disclose that both the CA and the NLRC had already
determined that Pepsi complied with the requirements of substantial
loss and due notice to both the DOLE and the workers to be
retrenched. The pertinent portion of the CA’s March 31, 2006
Decision reads:
In the present action, the NLRC held that PEPSI- COLA’s financial
statements are substantial evidence which carry great credibility and
reliability viewed in light of the financial crisis that hit the country
which saw multinational corporations closing shops and walking
away, or adapting [sic] their own corporate rightsizing program. Since
these findings are supported by evidence submitted before the
NLRC, we resolve to respect the same. x x x x The notice
requirement was also complied with by PEPSI-COLA when it served
notice of the corporate rightsizing program to the DOLE and to the
fourteen (14) employees who will be affected thereby at least one (1)
month prior to the date of retrenchment. (Citations omitted)
It is axiomatic that absent any clear showing of abuse, arbitrariness
or capriciousness, the findings of fact by the NLRC, especially when
affirmed by the CA – as in this case – are binding and conclusive
upon the Court. Thus, given that there lies no discretionary abuse
with respect to the foregoing findings, the Court sees no reason to
deviate from the same.
(2)Records also show that the respondents had already been paid
the requisite separation pay as evidenced by the September 1999
quitclaims signed by them. Effectively, the said quitclaims serve inter
alia the purpose of acknowledging receipt of their respective
separation pays. Appositely, respondents never questioned that
separation pay arising from their retrenchment was indeed paid by
Pepsi to them. As such, the foregoing fact is now deemed
conclusive.
(3)Contrary to the CA’s observation that Pepsi had singled out
members of the LEPCEU-ALU in implementing its retrenchment
program, records reveal that the members of the company union
(i.e., LEPCEU- UOEF#49) were likewise among those retrenched.
Also, as aptly pointed out by the NLRC, Pepsi’s Corporate
Rightsizing Program was a company-wide program which had
already been implemented in its other plants in Bacolod, Iloilo,
Davao, General Santos and Zamboanga. Consequently, given the
general applicability of its retrenchment program, Pepsi could not
have intended to decimate LEPCEU-ALU’s membership, much less
impinge upon its right to self- organization, when it employed the
same.
In fact, it is apropos to mention that Pepsi and its employees entered
into a collective bargaining agreement on October 17, 1995 which
contained a union shop clause requiring membership in LEPCEU-
UOEF#49, the incumbent bargaining union, as a condition for
continued employment. In this regard, Pepsi had all the reasons to
assume that all employees in the bargaining unit were all members
of LEPCEU- UOEF#49; otherwise, the latter would have already lost
their employment. In other words, Pepsi need not implement a
retrenchment program just to get rid of LEPCEU-ALU members
considering that the union shop clause already gave it ample
justification to terminate them. It is then hardly believable that union
affiliations were even considered by Pepsi in the selection of the
employees to be retrenched.
86
Moreover, it must be underscored that Pepsi’s management exerted
conscious efforts to incorporate employee participation during the
implementation of its retrenchment program. Records indicate that
Pepsi had initiated sit-downs with its employees to review the criteria
on which the selection of who to be retrenched would be based. This
is evidenced by the report of NCMB Region VIII Director Juanito
Geonzon which states that "Pepsi’s] [m]anagement conceded on the
proposal to review the criteria and to sit down for more positive steps
to resolve the issue."
Lastly, the allegation that the retrenchment program was a mere
subterfuge to dismiss the respondents considering Pepsi’s
subsequent hiring of replacement workers cannot be given credence
for lack of sufficient evidence to support the same.
Verily, the foregoing incidents clearly negate the claim that the
retrenchment was undertaken by Pepsi in bad faith.
(5) On the final requirement of fair and reasonable criteria for
determining who would or would not be dismissed, records indicate
that Pepsi did proceed to implement its rightsizing program based on
fair and reasonable criteria recommended by the company
supervisors.
Therefore, as all the requisites for a valid retrenchment are extant,
the Court finds Pepsi’s rightsizing program and the consequent
dismissal of respondents in accord with law.19
In view of the Court's ruling in Pepsi-Cola Products Philippines, Inc.
v. Molon,20 PCPPI contends that the petition for review on certiorari
should be denied and the CA decision should be affirmed under the
principle of stare decisis.
The Court sustains PCPPI's contention.
The principle of stare decisis et non quieta movere (to adhere to
precedents and not to unsettle things which are established) is well
entrenched in Article 8 of the New Civil Code which states that
judicial decisions applying or interpreting the laws or the Constitution
shall form part of the legal system of the Philippines.
In Pepsi-Cola Products Philippines, Incorporated v. Pagdanganan,21
the Court explained such principle in this wise:
The doctrine of stare decisis embodies the legal maxim that a
principle or rule of law which has been established by the decision of
a court of controlling jurisdiction will be followed in other cases
involving a similar situation. It is founded on the necessity for
securing certainty and stability in the law and does not require
identity of or privity of parties. This is unmistakable from the wordings
of Article 8 of the Civil Code. It is even said that such decisions
"assume the same authority as the statute itself and, until
authoritatively abandoned, necessarily become, to the extent that
they are applicable, the criteria which must control the actuations not
only of those called upon to decide thereby but also of those in duty
bound to enforce obedience thereto." Abandonment thereof must be
based only on strong and compelling reasons, otherwise, the
becoming virtue of predictability which is expected from this Court
would be immeasurably affected and the public’s confidence in the
stability of the solemn pronouncements diminished.22
In Philippine Carpet Manufacturing Corporation v. Tagyamon,23 the
Court further held:
Under the doctrine of stare decisis, when a court has laid down a
principle of law as applicable to a certain state of facts, it will adhere
to that principle and apply it to all future cases in which the facts are
substantially the same, even though the parties may be different.
Where the facts are essentially different, however, stare decisis does
not apply, for a perfectly sound principle as applied to one set of
87
facts might be entirely inappropriate when a factual variant is
introduced.24
Guided by the jurisprudence on stare decisis, the remaining question
is whether the factual circumstances of this present case are
substantially the same as the Pepsi-Cola Products Philippines, Inc. v.
Molon case.25
The Court rules in the affirmative.
There is no dispute that the issues, subject matters and causes of
action between the parties in Pepsi-Cola Products Philippines, Inc. v.
Molon26 and the present case are identical, namely, the validity of
PCPPI's retrenchment program, and the legality of its employees'
termination. There is also substantial identity of parties because
there is a community of interest between the parties in the first case
and the parties in the second case, even if the latter was not
impleaded in the first case.27 The respondents in Pepsi-Cola
Products Philippines, Inc. v. Molon28 are petitioners' former co-
employees and co-union members of LEPCEU-ALU who were also
terminated pursuant to the PCPPI's retrenchment program. The only
difference between the two cases is the date of the employees'
termination, i.e., Molon, et al. belong to the first batch of employees
retrenched on July 31, 1999, while petitioners belong to the second
batch retrenched on February 15, 2000. That the validity of the same
PCPPI retrenchment program had already been passed upon and,
thereafter, sustained in the related case of Pepsi-Cola Products
Philippines, Inc. v. Molon,29 albeit involving different parties, impels
the Court to accord a similar disposition and uphold the legality of
same program. To be sure, the Court is well aware of the
pronouncement in Philippine Carpet Manufacturing Corporation v.
Tagyamon,30 that:
The doctrine though is not cast in stone for upon a showing that
circumstances attendant in a particular case override the great
benefits derived by our judicial system from the doctrine of stare
decisis, the Court is justified in setting it aside. For the Court, as the
highest court of the land, may be guided but is not controlled by
precedent. Thus, the Court, especially with a new membership, is not
obliged to follow blindly a particular decision that it determines, after
re-examination, to call for a rectification.
However, abandonment of the ruling in Pepsi-Cola Products
Philippines, Inc. v. Molon31 on the same issue of the validity of
PCPPI's retrenchment program must be based only on strong and
compelling reasons. After a careful review of the records, the Court
finds no such reasons were shown to obtain in this case.
Even upon evaluation of petitioners' arguments on its supposed
merits, the Court still finds no reason to disturb the CA ruling that
affirmed the NLRC. In their petition for review on certiorari,
petitioners argue that PCPPI failed to prove that it was suffering from
financial losses, and that its financial statements were perplexing. In
support of their argument, they cite the observation of the Labor
Arbiter that the alleged losses amounting to P1.2 billion in PCPPI's
audited financial statements included those of two subsidiaries that
were not yet in commercial operation, interest payments on short-
term and long-term debts, and the adverse effect of the peso
devaluation.32 They also cite the Dissenting Opinion of
Commissioner Edgardo M. Enerlan that the Majority decision ignored
the previous financial statement and relied on the new document
presented by PCPPI during the appeal stage, and that the
accountant admitted that the financial statement as of and for the
year ended June 30, 2000 and 1999 are still incomplete.33They also
insist that PCPPI failed to explain its acts of regularizing four (4)
employees and hiring sixty-three (63) replacements and additional
workers.
Petitioners' arguments are untenable.
At the outset, the issues petitioners raised would entail an inquiry into
the factual veracity of the evidence presented by the parties, the
determination of which is not the Court's statutory function. Indeed,
88
petitioners are asking the Court to sift through the evidence on
record and pass upon whether PCPPI had, in fact, suffered from
serious business losses. That task, however, would be contrary to
the well-settled principle that the Court is not a trier of facts, and
cannot re-examine and re-evaluate the probative value of the
evidence presented to the Labor Arbiter, and the NLRC, which
formed the basis of the questioned CA decision.34
At any rate, the Court finds that the September 11, 2002 NLRC
Decision has exhaustively discussed PCPPI's compliance with the
requirement that for a retrenchment to be valid, such must be
reasonably necessary and likely to prevent business losses which, if
already incurred, are not merely de minimis, but substantial, serious,
actual and real, to wit:
More pertinent would have been SGV & Co.'s report to the
stockholder. It says:
The accompanying statement of assets, liabilities and home office
account of Tanauan Operations of Pepsi- Cola Products Philippines,
Inc. ('company') as of June 30, 1999 and the related statement of
income for the year then ended, are integral parts of the financial
statements of the company taken as a whole. In 1999, the
Company's Tanauan Operations incurred a net loss of P29,167,390
as reported in such plant's financial statement (ANNEX I) which
forms part of the audited consolidated financial statements as of and
for the year ended June 30, 1999, to which we have rendered our
opinion dated October 28, 1999, attached hereto as ANNEX II.
On the other hand, the accompanying financial statements as of and
for the year ended June 30, 2000 of the company's Tanauan Plant
operations, which reported a net loss P22,327,175 (ANNEX III) are
included in the financial statements of the company taken as a whole
as also hereto attached (as ANNEX IV). The financial statements
were accordingly derived from the Company's accounting records,
with certain adjustments and are subject to any additional
adjustments as may be disclosed upon the completion of an audit of
the financial statements of the company taken as a whole, which is
currently in progress. Since the audit of the company's financial
statements as of and for the year ended June 2000 has not yet been
completed, we are unable to express and we do not express our
opinion on the statement of assets, liabilities and home office
account of Tanauan operations of the company as of June 30, 2000
and the related statement if income for the year then ended.
The statements of assets, liabilities and home office account and the
related statements of income of the company's Tanauan Operations
are not intended to be a complete presentation of the company's
financial statement as of end for the year ended June 30, 2000 and
1999.
The letter of SGV & Co. was accompanied by a consolidat[ed]
statement of Income and Deficit (supplementary schedule) showing a
net loss of P29,167,000. in the company's Tanauan Operations as of
June 30, 1999, and P22,328,000 as of June 2000. This illustrates
that the income statements and the balance sheets pertaining to the
Tanauan Plant Operations as prepared by Rodante F. Ramos were
audited by SGV & Co. This situation would have been avoided had
the persistent requests for ample opportunity to present evidence
made by the respondent were not persistently denied by the
Executive Labor Arbiter.
At least the Income Statements and the Balance Sheets regularly
prepared and submitted by AVR-Asst. Controller Rodante Ramos to
SGV & Co. for audit are substantial evidence which carry great
credibility and responsibility viewed in the light of the financial crisis
that hit the country which saw multinational corporations closing
shops and walking away, or adapting their own corporate rightsizing
programs.35
The aforequoted NLRC ruling also explains why there is no merit in
Commissioner Enerlan's contention that the incomplete financial
89
statements as of and for the year ended June 30, 2000 and 1999 are
inconclusive to establish that PCPPI incurred serious business
losses. Given that the financial statements are incomplete, the
independent auditing firm, SGV & Co., aptly explained nonetheless
that they were derived from the PCPPI's accounting records, and
were subject to further adjustments upon the completion of the audit
of financial statements of the company taken as a whole, which was
then in progress. The Court thus agrees with the CA and the NLRC
that the letter of SGV & Co., accompanied by a consolidated
Statement of Income and Deficit showing a net loss of P29,167,000.
in the company's Tanauan Operations as of June 30, 1999, and
P22,328,000 as of June 2000,36 is sufficient and convincing proof of
serious business losses which justified PCPPI's retrenchment
program. After all, the settled rule in quasi-judicial proceedings is that
proof beyond reasonable doubt is not required in determining the
legality of an employer's dismissal of an employee, and not even a
preponderance of evidence is necessary, as substantial evidence is
considered sufficient.37 Substantial evidence is more than a mere
scintilla of evidence or relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds,
equally reasonable, might conceivably opine otherwise.38
There is likewise no merit in Commissioner Enerlan's dissenting
opinion that the majority decision ignored the previous financial
statement and relied on the new document presented by PCPPI
during the appeal stage. Such act of the majority is sanctioned by no
less than Article 221 of the Labor Code, as amended, and Section
10, Rule VII of the 2011 NLRC Rules of Procedure which provide
that in any proceeding before the Commission or any of the Labor
Arbiters, the rules of evidence prevailing in courts of law or equity
shall not be controlling and it is the spirit and intention of the Code
that the Commission and its members and the Labor Arbiters shall
use every and all reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities of
law or procedure, all in the interest of due process.
On PCPPI's alleged failure to explain its acts of regularizing four (4)
employees and hiring sixty-thee (63) replacements and additional
workers, the Court upholds the NLRC's correct ruling thereon, viz.:
Let Us squarely tackle this issue of replacements in the cases of the
complainants in this case. We bear in mind that replacements refer
to the regular workers subjected to retrenchment, occupying regular
positions in the company structure. Artemio Kempis, a filer mechanic
with a salary of P9,366.00 was replaced by Rogelio Castil. Rogelio
Castil was hired through an agency named Helpmate Janitorial
Services. Castil’s employer is Helpmate Janitorial Services. How can
a janitorial service employee perform function of a filer mechanic?
How much does Pepsi Cola pay Helpmate Janitorial Services for the
contract of service? These questions immediately come to mind.
Being not a regular employee of Pepsi Cola, he is not a replacement
of Kempis. The idea of rightsizing is to reduce the number of workers
and related functions and trim down, streamline, or simplify the
structure of the organization to the level of utmost efficiency and
productivity in order to realize profit and survive. After the CRP shall
have been implemented, the desired size of the corporation is
attained. Engaging the services of service contractors does not
expand the size of the corporate structure. In this sense, the
retrenched workers were not replaced.
The same is true in the case of Exuperio C. Molina who was
allegedly replaced by Eddie Piamonte, an employee of, again,
Helpmate Janitorial Services; of Gilberto V. Opinion who was
allegedly replaced by Norlito Ulahay, an employee of Nestor Ortiga
General Services; of Purisimo M. Cabasbas who was allegedly
replaced by Christopher Albadrigo, an employee of Helpmate
Janitorial Services; of Vicente R. Lauron who was allegedly replaced
by Wendylen Bron, an employee of Doublt "N" General Services; of
Ramon M. de Paz, who was disabled, and replaced by Alex Dieta, an
employee of Nestor Ortiga General Services; and of Zacarias E.
Carbo who was allegedly replaced by an employee of Double "N"
General Services. x x x39
90
On petitioners' contention that the true motive of the retrenchment
program was to prevent their union, LEPCEU-ALU, from becoming
the certified bargaining agent of all the rank-and-file employees of
PCPPI, such issue of union-busting was duly resolved in the
September 11, 2002 NLRC Decision, as follows:
The issue of union busting has been debunked by Us in the Certified
Notice of Strike Case No. V-000001-2000. We said in that case that
Pepsi Cola, in the selection of workers to be retrenched, did not take
into consideration union affiliation because the unit was supposed to
be composed of all members of good standing of LEPCEU-
UOEF#49 there being a "UNION SHOP" provision in the existing
CBA. In the conciliation conference, PEPSI COLA expressed its
willingness to sit down with unions and review the criteria. When this
was suggested by the conciliator, the idea was then and there
rejected by the unions, giving the impression that the real conflict
was inter-union. There being no cooperation from the unions, PEPSI
COLA went on with the first batch of retrenchment involving 47
workers. It bears stressing that all 47 workers signed individual
release and quitclaims and settled their complaints with respondent
Pepsi Cola, apparently with the assistance of LEPCEU-ALU. It is
awkward for LEPCEU-ALU to argue that a serious corporate-wide
rightsizing program cannot be implemented in PEPSI-COLA
Tanauan Plant because a nascent unrecognized union would
probably be busted. Even the Executive Labor Arbiter did not take
this issue up in his Decision. The issue does not merit
consideration.40
Significantly, the foregoing NLRC ruling was validated in Pepsi-Cola
Products Philippines, Inc. v. Molon,41 thus:
Mindful of their nature, the Court finds it difficult to attribute any act of
union busting or ULP on the part of Pepsi considering that it
retrenched its employees in good faith. As earlier discussed, Pepsi
tried to sit-down with its employees to arrive at mutually beneficial
criteria which would have been adopted for their intended
retrenchment. In the same vein, Pepsi’s cooperation during the MARTIN S. VILLARAMA. JR.
NCMB-supervised conciliation conferences can also be gleaned from Associate Justice BIENVENIDO L. REYES
the records. Furthermore, the fact that Pepsi’s rightsizing program Associate Justice
was implemented on a company-wide basis dilutes respondents’ FRANCIS H. JARDELEZA
claim that Pepsi’s retrenchment scheme was calculated to stymie its Associate Justice
union activities, much less diminish its constituency. Therefore,
absent any perceived threat to LEPCEU-ALU’s existence or a ATTESTATION
violation of respondents’ right to self-organization–as demonstrated I attest that the conclusions in the above Decision been reached in
by the foregoing actuations–Pepsi cannot be said to have committed consultation before the case was assigned to the writer of the opinion
union busting or ULP in this case. of the Court's Division.

Finally, this case does not fall within any of the recognized PRESBITERO J. VELASCO, JR.
exceptions42 to the rule that only questions of law are proper in a Associate JusticeChairperson
petition for review on certiorari under Rule 45 of the Rules of Court.
Settled is the rule that factual findings of labor officials, who are CERTIFICATION
deemed to have acquired expertise in matters within their respective Pursuant to Section 13, Article VIII of the Constitution and the
jurisdiction, are generally accorded not only respect but even finality, Division Chairperson's Attestation, it is hereby certified that the
and bind us when supported by substantial evidence.43Certainly, it is conclusions in the above Decision had been reached in consultation
not the Court's function to assess and evaluate the evidence all over before the case was assigned to the writer of the opinion of the
again, particularly where the findings of both the CA and the NLRC Court's Division.
coincide.44 MARIA LOURDES P.A. SERENO
Chief Justice
WHEREFORE, the petition is DENIED. The Court of Appeals
Decision dated July 31, 2006, and its Resolution dated February 21,
2007 in CA-G.R. SP No. 81712, are AFFIRMED. CERTIFIED TRUE
SO ORDERED. COPYWILFREDO V. LAPITAN
Division Clerk of Court
DIOSDADO M. PERALTA Third Division
Associate Justice

WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate JusticeChairperson,
Third Division

91
CONSTRUCTION AND INTERPRETATION OF WORDS AND In G.R. No. 161090, petitioner-spouses Romeo Ll. Plopenio and
PHRASES Rosielinda Plopenio assail the Decision1 and Order2of the SAC-RTC
Branch 23, Naga City, in Civil Case No. 2003-007.
WHEN THE LAW DOES NOT DISTINGUISH, COURTS SHOULD
NOT DISTINGUISH (UBI LEX NON DISTINGUIT NEC NOS In G.R. No. 161092, petitioner Eduardo Ll. Plopenio (Eduardo)
DISTINGUERE DEBEMOS) questions the Decision3 and Order4 of the same court in Civil Case
No. 2003-004.
Republic of the Philippines
SUPREME COURT THE FACTS
Manila
SECOND DIVISION Petitioner-spouses own 11.8643 hectares of coconut land in
Caramoan, Camarines Sur, while petitioner Eduardo owns 22.8349
G.R. No. 161090 July 4, 2012 hectares of coconut land in the same locality. In 2000, the land of
SPOUSES ROMEO LL. PLOPENIO and ROSIELINDA PLOPENIO their brother Gavino Plopenio, likewise located in Caramoan,
represented by GAVINO Camarines Sur, was valued by the Department of Agrarian Reform
PLOPENIO,Petitioners, Adjudication Board (DARAB) at P51,125.60 per hectare in DARAB
vs. Case No. V-LV-040-CS-00. On this basis, petitioners offered their
DEPARTMENT OF AGRARIAN REFORM and LAND BANK OF THE entire landholdings to the Department of Agrarian Reform (DAR) for
PHILIPPINES, Respondents. acquisition and distribution pursuant to Republic Act No. (R.A.) 6657,
x-----------------------x or the Comprehensive Agrarian Reform Law.5
G.R. No. 161092
EDUARDO LL. PLOPENIO represented by GAVINO PLOPENIO, On 26 October 2001, public respondent Land Bank sent a Notice of
Petitioner, Valuation and Adjudication valuing the land of petitioner-spouses at
vs.
DEPARTMENT OF AGRARIAN REFORM and LAND BANK OF THE P23,485.00 per hectare6 and that of petitioner Eduardo at
PHILIPPINES, Respondents. P22,856.62 per hectare.7 Dissatisfied with Land Bank’s offer,
DECISION petitioners rejected the Notice of Valuation and Acquisition and
SERENO, J.: referred the matter to the Provincial Agrarian Reform Adjudicator
(PARAD) of Camarines Sur for summary administrative
In these consolidated Rule 45 Petitions, we rule on the proper mode proceedings.8
of appeal from the decision of a Regional Trial Court (RTC)
designated as a Special Agrarian Court (SAC). The PARAD affirmed the valuation made by Land Bank in a Decision
dated 5 September 2002, a copy of which petitioners received on 27
September 2002.9

92
On 11 October 2002, or 14 days thereafter, petitioners filed their
Motion for Reconsideration.10 The PARAD denied their Motion in an
Order dated 20 November 2002, which petitioners received on 21
December 2002.11
Petitioners then filed separate Petitions before the SAC-RTC on 6
January 2003, or 16 days after their receipt of the PARAD’s Order.
They explained that they were allowed to file their appeal 15 days
from the receipt of the Order of denial of their Motion for
Reconsideration. Since the 15th day fell on a Sunday, they reasoned
that they should be allowed to file their appeal until 6 January
2003.12
In its Answer, Land Bank alleged that the Decision of the PARAD
had already attained finality after the lapse of the 15-day period,
counted from petitioners’ receipt of the PARAD’s Decision. Thus, it
argued that the SAC-RTC should no longer entertain the Petitions.13
In its assailed Decisions, the SAC-RTC ruled that the Decision of the
PARAD had already attained finality because petitioners failed to file
their Petitions on time. The lower court thus dismissed the appeal in
this wise:
WHEREFORE, with all the foregoing this court finds merit in
[respondent Land Bank’s] special and affirmative defense, that the
filing of these petitions is now barred by prior final and executory
judgment hence wanting of a valid cause of action.
The petitions therefore are hereby ordered dismissed for lack of valid
cause of action.
SO ORDERED.14
Petitioners moved for reconsideration of the SAC-RTC’s Decision,
but their motions were denied for lack of merit.15
93
From the Decisions and Orders of the SAC-RTC, petitioners then
filed the instant Petitions for Review directly before this Court. On 24
July 2006, we resolved to consolidate the cases at bar, considering
that the factual milieu and legal issues involved in both cases are
similar in nature.
THE COURT’S RULING
At the outset, we rule that the consolidated Petitions are immediately
dismissible because petitioners resorted to a wrongful mode of
appeal by filing the instant Rule 45 Petitions directly with this Court.
Section 60 of the Comprehensive Agrarian Reform Law provides:
Section 60. Appeals. – An appeal may be taken from the decision of
the Special Agrarian Courts by filing a petition for review with the
Court of Appeals within fifteen (15) days from receipt of notice of the
decision; otherwise, the decision shall become final.
An appeal from the decision of the Court of Appeals, or from any
order, ruling or decision of the DAR, as the case may be, shall be by
a petition for review with the Supreme Court within a non-extendible
period of fifteen (15) days from receipt of a copy of said decision.
(Emphasis supplied)
Clearly, following the letter of the Comprehensive Agrarian Reform
Law, petitioners should have appealed the SAC-RTC Decision to the
Court of Appeals.
Petitioners propose to carve out an exception to this rule by arguing
that because the instant Petitions raise only pure questions of law,
the proper mode of appeal is via a Rule 45 Petition to this Court.16
We do not agree. While the general rule is that appeals raising pure
questions of law from decisions of RTCs are taken to this Court via a
Rule 45 petition, decisions of trial courtsdesignated as SACs are only
appealable to the Court of Appeals.

We have repeatedly ruled that the right to appeal is a remedy of
statutory origin. As such, this right must be exercised only in the
manner and in accordance with the provisions of the law authorizing
its exercise.17 The special jurisdiction of the SAC-RTC is conferred
and regulated by the Comprehensive Agrarian Reform Law, and
appeals therefrom are governed by Section 60 thereof. That law
expressly states that appeals from SACs must be taken to the Court
of Appeals without making a distinction between appeals raising
questions of fact and those dealing purely with questions of law. Ubi
lex non distinguit nec nos distinguere debemus. Where the law does
not distinguish, neither should we. Consequently, we rule that the
only mode of appeal from decisions of the SAC-RTC is via a Rule 42
petition for review18 to the Court of Appeals, without any distinction
as to whether the appeal raises questions of fact, questions of law, or
mixed questions of fact and law.
Furthermore, even if we were to allow the appeals to prosper, we find
that the Petitions before the SAC-RTC were filed out of time.
Under the 1994 DARAB Rules of Procedure (1994 DARAB Rules),
which were effective during the pendency of this case before the
PARAD, the decision of the adjudicator on land valuation and on the
preliminary determination and payment of just compensation shall be
brought directly to the SAC within 15 days from receipt of the notice
thereof.19 Parties aggrieved by the adjudicator’s decision are
allowed to file one motion for reconsideration.20
In the event of a denial of the motion for reconsideration, the 1994
DARAB Rules provide:
SECTION 12. x x x. The filing of a motion for reconsideration shall
suspend the running of the period within which the appeal must be
perfected. If a motion for reconsideration is denied, the movant shall
have the right to perfect his appeal during the remainder of the
period for appeal, reckoned from receipt of the resolution of denial. If
94
the decision is reversed on reconsideration, the aggrieved party shall
have fifteen (15) days from receipt of the resolution of reversal within
which to perfect his appeal. 21
While a petition for the fixing of just compensation filed with the RTC-
SAC is not an appeal from the PARAD’s decision, but an original
action before the court a quo,22 the rule in Section 12 of the 1994
DARAB Rules should find analogous application. A party aggrieved
by the PARAD’s decision is given 15 days to file the original petition
before the SAC-RTC. The pendency of a motion for reconsideration
of the decision suspends the running of the period within which the
petition may be filed before the RTC-SAC. Consequently, upon
receipt of the order denying the motion for reconsideration, the
reglementary period for filing the petition before the
RTC-SAC again commences to run.
In this case, petitioners received a copy of the PAIZAD Decision on
27 September 2002. 23
They filed their Motion for Reconsideration thereof on 11 October
2002, or 14 days from their receipt of a copy of the Decision. 24 On
21 December 2002, they received the Order denying their motion. 25
Hence, petitioners only had one more day within which to file their
Petitions with the SAC-RTC for the determination of just
compensation for their respective properties. Since 22 December
2002 tell on a Sunday, they had until 23 December 2002 to file their
Petitions. However, they only filed their Petitions on 6 January 2001,
or 16 days after they received the Order denying their Motion for
Reconsideration. Clea1ly, the Petitions before the SAC-RTC were
filed out of time.
From the foregoing discussion, \W therefore find that the instant
Petitions should be denied.
WHEREFORE, in view of the foregoing, the consolidated Petitions
for Review are hereby DENIED, and the assailed Decisions and
Orders of the Special Agrarian Court-Regional Trial Court, Branch
23, Naga City in Civil Case Nos. 2003-007 and 2003-2004 are
hereby AFFIRMED.
SO ORDERED.
MARIA LOURDES P.A. SERENO
Associate justice

WE CONCUR:
ANTONIO T. CARPIO
Senior Associate Justice Chairperson

ARTURO D. BRION
Associate Justice JOSE PORTUGAL PEREZ
Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

I certify that the conclusion in the above Decision had been reached
in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended

95
Republic of the Philippines petitioner Philippine British Assurance Co., Inc., so the attached
SUPREME COURT properties were released.
Manila
On December 28, 1984, the trial court rendered a Decision, the
FIRST DIVISION dispositive portion of which reads:

G.R. No. 72005 May 29, 1987 WHEREFORE, plaintiff's Motion for Summary Judgment is hereby
GRANTED, and judgment is rendered in favor of the plaintiff and
PHILIPPINE BRITISH ASSURANCE CO., INC., petitioner, against the defendant Varian Industrial Corporation, and the latter is
vs. hereby ordered:
HONORABLE INTERMEDIATE APPELLATE COURT; SYCWIN
COATING & WIRES, INC., and DOMINADOR CACPAL, CHIEF 1. To pay plaintiff the amount of P1,401,468.00, the principal
DEPUTY SHERRIF OF MANILA, respondents. obligation with 12% interest per annum from the date of default until
fully paid;
GANCAYCO, J.:
2. To pay plaintiff 5% of the principal obligation as liquidated
This is a Petition for Review on certiorari of the Resolution dated damages;
September 12, 1985 of the Intermediate Appellate Court in AC-G.R.
No. CR-05409 1 granting private respondent's motion for execution 3. To pay plaintiff P30,000.00 as exemplary damages;
pending appeal and ordering the issuance of the corresponding writ
of execution on the counterbond to lift attachment filed by petitioner. 4. To pay plaintiff 15% of P1,401,468.00, the principal
The focal issue that emerges is whether an order of execution obligation, as and for attorney's fees; and
pending appeal of a judgment maybe enforced on the said bond. In
the Resolution of September 25, 1985 2 this Court as prayed for, 5. To pay the costs of suit.
without necessarily giving due course to the petition, issued a
temporary restraining order enjoining the respondents from enforcing Accordingly, the counterclaim of the defendant is hereby
the order complaint of. DISMISSED for lack of merit.

The records disclose that private respondent Sycwin Coating &
Wires, Inc., filed a complaint for collection of a sum of money against
Varian Industrial Corporation before the Regional Trial Court of
Quezon City. During the pendency of the suit, private respondent
succeeded in attaching some of the properties of Varian Industrial
Corporation upon the posting of a supersedeas bond. 3 The latter in
turn posted a counterbond in the sum of P1,400, 000.00 4 thru
SO ORDERED. 5
Varian Industrial Corporation appealed the decision to the
respondent Court. Sycwin then filed a petition for execution pending
appeal against the properties of Varian in respondent Court. Varian
was required to file its comment but none was filed. In the Resolution
of July 5, 1985, respondent Court ordered the execution pending

96
appeal as prayed for. 6 However, the writ of execution was returned
unsatisfied as Varian failed to deliver the previously attached
personal properties upon demand. In a Petition dated August 13,
1985 filed with respondent Court Sycwin prayed that the surety
(herein petitioner) be ordered to pay the value of its bond. 7 In
compliance with the Resolution of August 23, 1985 of the respondent
Court herein petitioner filed its comment. 8 In the Resolution of
September 12, 1985, 9 the respondent Court granted the petition.
Hence this action.
It is the submission of private respondent Sycwin that without a
previous motion for reconsideration of the questioned resolution,
certiorari would not lie. While as a general rule a motion for
reconsideration has been considered a condition sine qua non for
the granting of a writ of certiorari, this rule does not apply when
special circumstances warrant immediate or more direct action. 10 It
has been held further that a motion for reconsideration may be
dispensed with in cases like this where execution had been ordered
and the need for relief was extremely urgent. 11
The counterbond provides:
WHEREAS, in the above-entitled case pending in the Regional Trial
Court, National Capital Judicial Region, Branch LXXXV, Quezon
City, an order of Attachment was issued against abovenamed
Defendant;
WHEREAS, the Defendant, for the purpose of lifting and/or
dissolving the order of attachment issued against them in the above-
en-titled case, have offered to file a counterbond in the sum of
PESOS ONE MILLION FOUR HUNDRED THOUSAND ONLY
(P1,400,000.00), Philippine Currency, as provided for in Section 5,
Rule 57 of the Revised Rules of Court.
97
NOW, THEREFORE, we, VARIAN INDUSTRIAL CORPORATION,
as Principal and the PHILIPPINE BRITISH ASSURANCE
COMPANY, INC., a corporation duly organized and existing under
and by virtue of the laws of the Philippines, as Surety, in
consideration of the above and of the lifting or dissolution of the
order of attachment, hereby jointly and severally, bind ourselves in
favor of the above Plaintiff in the sum of PESOS ONE MILLION
FOUR HUNDRED THOUSAND ONLY (P1,400,000.00), Philippine
Currency, under the condition that in case the Plaintiff recovers
judgment in the action, and Defendant will, on demand, re-deliver the
attached property so released to the Officer of the Court and the
same shall be applied to the payment of the judgment, or in default
thereof, the defendant and Surety will, on demand, pay to the
Plaintiff the full value of the property released.
EXECUTED at Manila, Philippines, this 28th day of June, 1984. 12
Sections 5, 12, and 17 of Rule 57 of the Revised Rules of Court also
provide:
SEC. 5. Manner of attaching property. — The officer executing the
order shall without delay attach, to await judgment and execution in
the action, all the properties of the party against whom the order is
issued in the province, not exempt from execution, or so much
thereof as may be sufficient to satisfy the applicant's demand, unless
the former makes a deposit with the clerk or judge of the court from
which the order issued, or gives a counter-bond executed to the
applicant, in an amount sufficient to satisfy such demand besides
costs, or in an amount equal to the value of the property which is
about to be attached, to secure payment to the applicant of any
judgement ment which he may recover in the action. The officer shall
also forthwith serve a copy of the applicant's affidavit and bond, and
of the order of attachment, on the adverse party, if he be found within
the province.
SEC. 12. Discharge of attachment upon giving counterbond.
— At any time after an order of attachment has been granted, the
party whose property has been attached, or the person appearing on
his behalf, may, upon reasonable notice to the applicant, apply to the
judge who granted the order, or to the judge of the court in which the
action is pending, for an order discharging the attachment wholly or
in part on the security given. The judge shall, after hearing, order the
discharge of the attachment if a cash deposit is made, or a counter-
bond executed to the attaching creditor is filed, on behalf of the
adverse party, with the clerk or judge of the court where the
application is made, in an amount equal to the value of the property
attached as determined by the judge, to secure the payment of any
judgment that the attaching creditor may recover in the action. Upon
the filing of such counter-bond, copy thereof shall forthwith be served
on the attaching creditor or his lawyer. Upon the discharge of an
attachment in accordance with the provisions of this section the
property attached, or the proceeds of any sale thereof, shall be
delivered to the party making the deposit or giving the counterbond
aforesaid standing in place of the property so released. Should such
counterbond for any reason be found to be, or become, insufficient,
and the party furnishing the same fail to file an additional
counterbond, the attaching creditor may apply for a new order of
attachment.
SEC. 17. When execution returned unsatisfied, recovery had
upon bond. — If the execution be returned unsatisfied in whole or in
part, the surety or sureties on any counter-bond given pursuant to
the provisions of this rule to secure the payment of the judgment
shall become charged on such counter- bond, and bound to pay to
the judgement creditor upon demand, the amount due under the
judgment, which amount may be recovered from such surety or
sureties after notice and summary hearing in the same action.
(Emphasis supplied.)
98
Under Sections 5 and 12, Rule 57 above reproduced it is provided
that the counterbond is intended to secure the payment of "any
judgment" that the attaching creditor may recover in the action.
Under Section 17 of same rule it provides that when "the execution
be returned unsatisfied in whole or in part" it is only then that
"payment of the judgment shall become charged on such
counterbond."
The counterbond was issued in accordance with the provisions of
Section 5, Rule 57 of the Rules of Court as provided in the second
paragraph aforecited which is deemed reproduced as part of the
counterbond. In the third paragraph it is also stipulated that the
counterbond is to be "applied for the payment of the judgment."
Neither the rules nor the provisions of the counterbond limited its
application to a final and executory judgment. Indeed, it is specified
that it applies to the payment of any judgment that maybe recovered
by plaintiff. Thus, the only logical conclusion is that an execution of
any judgment including one pending appeal if returned unsatisfied
maybe charged against such a counterbond.
It is well recognized rule that where the law does not distinguish,
courts should not distinguish. Ubi lex non distinguish nec nos
distinguere debemos. 13 "The rule, founded on logic, is a corollary of
the principle that general words and phrases in a statute should
ordinarily be accorded their natural and general significance. 14 The
rule requires that a general term or phrase should not be reduced
into parts and one part distinguished from the other so as to justify its
exclusion from the operation of the law. 15 In other words, there
should be no distinction in the application of a statute where none is
indicated.16 For courts are not authorized to distinguish where the
law makes no distinction. They should instead administer the law not
as they think it ought to be but as they find it and without regard to
consequences. 17
A corollary of the principle is the rule that where the law does not
make any exception, courts may not except something therefrom, SO ORDERED.
unless there is compelling reason apparent in the law to justify it.18
Thus where a statute grants a person against whom possession of Yap (Chairman), Narvasa, Melencio-Herrera, Cruz and Sarmiento,
"any land" is unlawfully withheld the right to bring an action for JJ., concur.
unlawful detainer, this Court held that the phrase "any land" includes
all kinds of land, whether agricultural, residential, or mineral.19 Since Feliciano, J., is on leave.
the law in this case does not make any distinction nor intended to
make any exception, when it speaks of "any judgment" which maybe
charged against the counterbond, it should be interpreted to refer not
only to a final and executory judgment in the case but also a
judgment pending appeal.

All that is required is that the conditions provided for by law are
complied with, as outlined in the case of Towers Assurance
Corporation v. Ororama Supermart, 20

Under Section 17, in order that the judgment creditor might recover
from the surety on the counterbond, it is necessary (1) that the
execution be first issued against the principal debtor and that such
execution was returned unsatisfied in whole or in part; (2) that the
creditor make a demand upon the surety for the satisfaction of the
judgment, and (3) that the surety be given notice and a summary
hearing on the same action as to his liability for the judgment under
his counterbond.

The rule therefore, is that the counterbond to lift attachment that is

issued in accordance with the provisions of Section 5, Rule 57, of the
Rules of Court, shall be charged with the payment of any judgment
that is returned unsatisfied. It covers not only a final and executory
judgement but also the execution of a judgment pending appeal.

WHEREFORE, the petition is hereby DISMISSED for lack of merit

and the restraining order issued on September 25, 1985 is hereby
dissolved with costs against petitioner.

99
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 115245 July 11, 1995
JUANITO C. PILAR, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of
Court assailing the Resolution dated April 28, 1994 of the
Commission on Elections (COMELEC) in UND No. 94-040.
I with the offices of the Commission the full, true and itemized
On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of
candidacy for the position of member of the Sangguniang
Panlalawigan of the Province of Isabela.
On March 25, 1992, petitioner withdrew his certificate of candidacy.
In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993 and
February 13, 1994 respectively, the COMELEC imposed upon
petitioner the fine of Ten Thousand Pesos (P10,000.00) for failure to
file his statement of contributions and expenditures.
In M.R. No. 94-0594 dated February 24, 1994, the COMELEC
denied the motion for reconsideration of petitioner and deemed final
M.R. Nos. 93-2654 and 94-0065 (Rollo, p. 14).
100
Petitioner went to the COMELEC En Banc (UND No. 94-040), which
denied the petition in a Resolution dated April 28, 1994 (Rollo, pp.
10-13).
Hence, this petition for certiorari.
We dismiss the petition.
II
Section 14 of R.A. No. 7166 entitled "An Act Providing for
Synchronized National and Local Elections and for Electoral
Reforms, Authorizing Appropriations Therefor, and for Other
Purposes" provides as follows:
Statement of Contributions and Expenditures: Effect of Failure to File
Statement. Every candidate and treasurer of the political party shall,
within thirty (30) days after the day of the election, file in duplicate
statement of all contributions and expenditures in connection with the
election.
No person elected to any public office shall enter upon the duties of
his office until he has filed the statement of contributions and
expenditures herein required.
The same prohibition shall apply if the political party which
nominated the winning candidate fails to file the statement required
herein within the period prescribed by this Act.
Except candidates for elective barangay office, failure to file the
statements or reports in connection with electoral contributions and
expenditures as required herein shall constitute an administrative
offense for which the offenders shall be liable to pay an
administrative fine ranging from One Thousand Pesos ( P1,000.00)
to Thirty Thousand Pesos (P30,000.00), in the discretion of the
Commission.
The fine shall be paid within thirty (30) days from receipt of notice of
such failure; otherwise, it shall be enforceable by a writ of execution
issued by the Commission against the properties of the offender.
It shall be the duty of every city or municipal election registrar to
advise in writing, by personal delivery or registered mail, within five
(5) days from the date of election all candidates residing in his
jurisdiction to comply with their obligation to file their statements of
contributions and expenditures.
For the commission of a second or subsequent offense under this
Section, the administrative fine shall be from Two Thousand Pesos
(P2,000.00) to Sixty Thousand Pesos (P60,000.00), in the discretion
of the Commission. In addition, the offender shall be subject to
perpetual disqualification to hold public office (Emphasis supplied).
To implement the provisions of law relative to election contributions
and expenditures, the COMELEC promulgated on January 13, 1992
Resolution No. 2348 (Re: Rules and Regulations Governing Electoral
Contributions and Expenditures in Connection with the National and
Local Elections on
May 11, 1992). The pertinent provisions of said Resolution are:
Sec. 13. Statement of contributions and expenditures:
Reminders to candidates to file statements. Within five (5) days from
the day of the election, the Law Department of the Commission, the
regional election director of the National Capital Region, the
provincial election supervisors and the election registrars shall advise
in writing by personal delivery or registered mail all candidates who
filed their certificates of candidacy with them to comply with their
obligation to file their statements of contributions and expenditures in
connection with the elections. Every election registrar shall also
101
advise all candidates residing in his jurisdiction to comply with said
obligation (Emphasis supplied).
Sec. 17. Effect of failure to file statement. (a) No person
elected to any public office shall enter upon the duties of his office
until he has filed the statement of contributions and expenditures
herein required.
The same prohibition shall apply if the political party which
nominated the winning candidates fails to file the statement required
within the period prescribed by law.
(b) Except candidates for elective barangay office, failure to file
statements or reports in connection with the electoral contributions
and expenditures as required herein shall constitute an
administrative offense for which the offenders shall be liable to pay
an administrative fine ranging from One Thousand Pesos (P1,000) to
Thirty Thousand Pesos (P30,000), in the discretion of the
Commission.
The fine shall be paid within thirty (30) days from receipt of notice of
such failure; otherwise, it shall be enforceable by a writ of execution
issued by the Commission against the properties of the offender.
For the commission of a second or subsequent offense under this
section, the administrative fine shall be from Two Thousand Pesos
(P2,000) to Sixty Thousand Pesos (P60,000), in the discretion of the
Commission. In addition, the offender shall be subject to perpetual
disqualification to hold public office.
Petitioner argues that he cannot be held liable for failure to file a
statement of contributions and expenditures because he was a "non-
candidate," having withdrawn his certificates of candidacy three days
after its filing. Petitioner posits that "it is . . . clear from the law that
candidate must have entered the political contest, and should have
either won or lost" (Rollo, p. 39).
Petitioner's argument is without merit.
Section 14 of R.A. No. 7166 states that "every candidate" has the
obligation to file his statement of contributions and expenditures.
Well-recognized is the rule that where the law does not distinguish,
courts should not distinguish, Ubi lex non distinguit nec nos
distinguere debemos (Philippine British Assurance Co. Inc. v.
Intermediate Appellate Court, 150 SCRA 520 [1987]; cf Olfato v.
Commission on Elections, 103 SCRA 741 [1981]). No distinction is to
be made in the application of a law where none is indicated (Lo
Cham v. Ocampo, 77 Phil. 636 [1946]).
In the case at bench, as the law makes no distinction or qualification
as to whether the candidate pursued his candidacy or withdrew the
same, the term "every candidate" must be deemed to refer not only
to a candidate who pursued his campaign, but also to one who
withdrew his candidacy.
The COMELEC, the body tasked with the enforcement and
administration of all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum, and recall (The
Constitution of the Republic of the Philippines, Art. IX(C), Sec. 2[1]),
issued Resolution No. 2348 in implementation or interpretation of the
provisions of Republic Act No. 7166 on election contributions and
expenditures. Section 13 of Resolution No. 2348 categorically refers
to "all candidates who filed their certificates of candidacy."
Furthermore, Section 14 of the law uses the word "shall." As a
general rule, the use of the word "shall" in a statute implies that the
statute is mandatory, and imposes a duty which may be enforced ,
particularly if public policy is in favor of this meaning or where public
102
interest is involved. We apply the general rule (Baranda v. Gustilo,
165 SCRA 757 [1988]; Diokno v. Rehabilitation Finance Corporation,
91 Phil. 608 [1952]).
The state has an interest in seeing that the electoral process is
clean, and ultimately expressive of the true will of the electorate. One
way of attaining such objective is to pass legislation regulating
contributions and expenditures of candidates, and compelling the
publication of the same. Admittedly, contributions and expenditures
are made for the purpose of influencing the results of the elections
(B.P. Blg. 881, Sec. 94; Resolution No. 2348, Sec. 1). Thus, laws
and regulations prescribe what contributions are prohibited (B.P. Blg.
881, Sec. 95, Resolution No. 2348, Sec. 4), or unlawful (B.P. Blg.
881, Sec. 96), and what expenditures are authorized (B.P. Blg. 881,
Sec. 102; R.A. No. 7166, Sec. 13; Resolution No. 2348, Sec. 7) or
lawful (Resolution No. 2348, Sec. 8).
Such statutes are not peculiar to the Philippines. In "corrupt and
illegal practices acts" of several states in the United States, as well
as in federal statutes, expenditures of candidates are regulated by
requiring the filing of statements of expenses and by limiting the
amount of money that may be spent by a candidate. Some statutes
also regulate the solicitation of campaign contributions (26 Am Jur
2d, Elections § 287). These laws are designed to compel publicity
with respect to matters contained in the statements and to prevent,
by such publicity, the improper use of moneys devoted by candidates
to the furtherance of their ambitions (26 Am Jur 2d, Elections § 289).
These statutes also enable voters to evaluate the influences exerted
on behalf of candidates by the contributors, and to furnish evidence
of corrupt practices for annulment of elections (Sparkman v. Saylor
[Court of Appeals of Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
State courts have also ruled that such provisions are mandatory as
to the requirement of filing (State ex rel. Butchofsky v. Crawford
[Court of Civil Appeals of Texas], 269 S.W. 2d 536 [1954]; Best v.
Sidebottom, 270 Ky. 423,109 S.W. 2d 826 [1937]; Sparkman v.
Saylor, supra.)
It is not improbable that a candidate who withdrew his candidacy has
accepted contributions and incurred expenditures, even in the short
span of his campaign. The evil sought to be prevented by the law is
not all too remote.
It is notesworthy that Resolution No. 2348 even contemplates the
situation where a candidate may not have received any contribution
or made any expenditure. Such a candidate is not excused from filing
a statement, and is in fact required to file a statement to that effect.
Under Section 15 of Resolution No. 2348, it is provided that "[i]f a
candidate or treasurer of the party has received no contribution,
made no expenditure, or has no pending obligation, the statement
shall reflect such fact."
Lastly, we note that under the fourth paragraph of Section 73 of the
B.P. Blg. 881 or the Omnibus Election Code of the Philippines, it is
provided that "[t]he filing or withdrawal of certificate of candidacy
shall not affect whatever civil, criminal or administrative liabilities
which a candidate may have incurred." Petitioner's withdrawal of his
candidacy did not extinguish his liability for the administrative fine.
WHEREFORE, the petition is DISMISSED.
Narvasa, C.J., Feliciano, Regalado, Davide, Jr., Romero, Bellosillo,
Puno, Vitug, Mendoza and Francisco, JJ., concur.
Kapunan, J., is on leave.
Separate Opinions
MELO, J., dissenting:
103
The majority opinion is to the effect that every candidate, including
one who has withdrawn his certificate of candidacy, is obliged to file
his statement of contributions and expenditures in line with Section
14 of Republic Act No. 7166 vis-a-vis the pertinent portions of
Comelec Resolution No. 2348. I must concede that the use of the
word "shall" in the main statute as well as the implementing rules
generally suggest mandatoriness as to cover all candidates.
But is an anspirant for public office who had a sudden change of
heart, so to speak, still considered a candidate to begin with? I am of
the impression that he is not and is thus not bound to render an
accounting subsequent to election for the simple reason that the term
'candidate' is used to designate a person who actually submits
himself and is voted for at our election (Santos vs. Miranda, 35 Phil.
643, 648 (1916) citing State vs. Hirsch, 125 Ind., 207; 9 L.R.A. 107;
Moreno, Philippine Law Dictionary, 1972 2nd ed., p. 84) Certainly,
one who withdraws his certificate of candidacy 3 days after the filing
thereof, can not be voted for at an election. And considering the
shortness of the period of 3 days from the filing to the withdrawal of
the certificate of candidacy, petitioner cannot be accused, as indeed
there is no such charge, of utilizing his aborted candidacy for
purposes to raise funds or to extort money from other candidates in
exchange for the withdrawal.
I, therefore, vote to grant the petition.
Padilla, J., concurs.
Separate Opinions
MELO, J., dissenting:
The majority opinion is to the effect that every candidate, including
one who has withdrawn his certificate of candidacy, is obliged to file
his statement of contributions and expenditures in line with Section
14 of Republic Act No. 7166 vis-a-vis the pertinent portions of
Comelec Resolution No. 2348. I must concede that the use of the
word "shall" in the main statute as well as the implementing rules
generally suggest mandatoriness as to cover all candidates.
But is an aspirant for public office who had a sudden change of
heart, so to speak, still considered a candidate to begin with? I am of
the impression that he is not and is thus not bound to render an
accounting subsequent to election for the simple reason that the term
'candidate' is used to designate a person who actually submits
himself and is voted for at our election (Santos vs. Miranda, 35 Phil.
643, 648 (1916) citing State vs. Hirsch, 125 Ind., 207; 9 L.R.A. 107;
Moreno, Philippine Law Dictionary, 1972 2nd ed., p. 84) Certainly,
one who withdraws his certificate of candidacy 3 days after the filing
thereof, can not be voted for at an election. And considering the
shortness of the period of 3 days from the filing to the withdrawal of
the certificate of candidacy, petitioner cannot be accused, as indeed
there is no such charge, of utilizing his aborted candidacy for
purposes to raise funds or to extort money from other candidates in
exchange for the withdrawal.
I, therefore, vote to grant the petition.
Padilla, J., concurs.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110898 February 20, 1996
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
104
HON. JUDGE ANTONIO C. EVANGELISTA, as Presiding Judge of
Branch XXI, 10th Judicial Region, RTC of Misamis Oriental, Cagayan
de Oro City, and GRILDO S. TUGONON, respondents.
DECISION
MENDOZA, J.:
Private respondent Grildo S. Tugonan was charged with frustrated
homicide in the Regional Trial Court of Misamis Oriental (Branch 21),
the information against him alleging
That on or about the 26th day of May, 1988, at more or less 9:00
o'clock in the evening at Barangay Publican+.3, Municipality of
Villanueva, Province of Misamis Oriental, Republic of the Philippines
and within the jurisdiction of this Honorable Court, the above-named
accused with intent to kill and with the use of a knife, which he was
then conveniently provided of, did then and there willfully, unlawfully
and feloniously assault, attack and stab Roque T. Bade thereby
inflicting upon him the following injuries, to wit:
Stab wound, right iliac area,
0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.
thus performing all the acts of execution which would produce the
crime of Homicide as a consequence but which, nevertheless, did
not produce it by reason of causes independent of the will of the
accused, that is by timely medical attendance which prevented his
death.
CONTRARY TO and in violation of Article 249 in relation to Article 6
of the Revised Penal Code.
After trial he was found guilty and sentenced to one year of prision
correccional in its minimum period and ordered to pay to the
offended party P5,000.00 for medical expense, without subsidiary
imprisonment, and the costs. The RTC appreciated in his favor the
privileged mitigating circumstances of incomplete self-defense and
the mitigating circumstance of voluntary surrender.
On appeal the Court of Appeals affirmed private respondent's
conviction but modified his sentence by imposing on him an
indeterminate penalty of 2 months of arresto mayor, as minimum, to
2 years and 4 months of prision correccional, as maximum.1
On December 21, 1992, respondent Judge Antonio C. Evangelista of
the RTC set the case for repromulgation on January 4, 1993.
On December 28, 1992, private respondent filed a petition for
probation,2 alleging that (1) he possessed all the qualifications and
none of the disqualifications for probation under P.D. No. 968, as
amended; (2) the Court of Appeals has in fact reduced the penalty
imposed on him by the trial court; (3) in its resolution, the Court of
Appeals took no action on a petition for probation which he had
earlier filed with it so that the petition could be filed with the trial
court; (4) in the trial court's decision, two mitigating circumstances of
incomplete self-defense and voluntarily surrender were appreciated
in his favor; and (5) in Santos To v. Paño,3 the Supreme Court
upheld the right of the accused to probation notwithstanding the fact
that he had appealed from his conviction by the trial court.
On February 2, 1993, the RTC ordered private respondent to report
for interview to the Provincial Probation Officer. The Provincial
Probation Officer on the other hand was required to submit his report
with recommendation to the court within 60 days.4
On February 18, 1993, Chief Probation and Parole Officer Isias B.
Valdehueza recommended denial of private respondent's application
105
for probation on the ground that by appealing the sentence of the
trial court, when he could have then applied for probation, private
respondent waived the right to make his application. The Probation
Officer thought the present case to be distinguishable from Santos
To v. Paño in the sense that in this case the original sentence
imposed on private respondent by the trial court (1 year of
imprisonment) was probationable and there was no reason for
private respondent not to have filed his application for probation
then, whereas in Santos To v. Paño the penalty only became
probationable after it had been reduced as a result of the appeal.
On April 16, 1993 Valdehueza reiterated5 his "respectful
recommendation that private respondent's application for probation
be denied and that a warrant of arrest be issued for him to serve his
sentence in jail."
The RTC set aside the Probation Officer's recommendation and
granted private respondent's application for probation in its order of
April 23, 1993,6 Hence this petition by the prosecution.
The issue in this case is whether the RTC committed a grave abuse
of its discretion by granting private respondent's application for
probation despite the fact that he had appealed from the judgment of
his conviction of the trial court.
The Court holds that it did.
Until its amendment by P.D. No. 1990 in 1986, it was possible under
P.D. No. 986, otherwise known as the Probation Law, for the
accused to take his chances on appeal by allowing probation to be
granted even after an accused had appealed his sentence and failed
to obtain an acquittal, just so long as he had not yet started to serve
the sentence.7 Accordingly, in Santos To v. Paño, it was held that
the fact that the accused had appealed did not bar him from applying
for probation especially because it was as a result of the appeal that
his sentence was reduced and made the probationable limit.
The law was, however, amended by P.D. No. 1990 which took effect
on January 15, 19868 precisely to put a stop to the practice of
appealing from judgments of conviction even if the sentence is
probationable for the purpose of securing an acquittal and applying
for probation only if the accused fails in his bid. Thus, as amended by
P.D. No, 1990, §4 of the Probation Law now reads:
§4. Grant of Probation. Subject to the provisions of this
Decree, the trial court may, after it shall have convicted and
sentenced a defendant, and upon application by said defendant
within the period for perfecting an appeal, suspend the execution of
the sentence and place the defendant on probation for such period
and upon such terms and conditions as it may deem best; Provided,
That no application for probation shall be entertained or granted if
the defendant has perfected the appeal from the judgment of
conviction.
Probation may be granted whether the sentence imposes a term of
imprisonment or a fine only. An application for probation shall be filed
with the trial court. The filing of the application shall be deemed a
waiver of the right to appeal.
An order granting or denying probation shall not be appealable.
(Emphasis added).
Since private respondent filed his application for probation on
December 28, 1992, after P.D. No. 1990 had taken effect,9 it is
covered by the prohibition that "no application for probation shall be
entertained or granted if the defendant has perfected the appeal from
the judgment of conviction" and that "the filing of the application shall
be deemed a waiver of the right to appeal," Having appealed from
the judgment of the trial court and having applied for probation only
106
after the Court of Appeals had affirmed his conviction, private
respondent was clearly precluded from the benefits of probation.
Private respondent argues, however, that a distinction should be
drawn between meritorious appeals (like his appeal notwithstanding
the appellate court's affirmance of his conviction) and unmeritorious
appeals. But the law does not make any distinction and so neither
should the Court. In fact if an appeal is truly meritorious the accused
would be set free and not only given probation. Private respondent's
original sentence (1 year of prision correccional in its minimum
period) and the modified sentence imposed by the Court of Appeals
(2 months of arresto mayor, as minimum, to 2 years and 4 months of
prision correccional, as maximum) are probationable. Thus the fact
that he appealed meant that private respondent was taking his
chances which the law precisely frowns upon. This is precisely the
evil that the amendment in P.D. No. 1990 sought to correct, since in
the words of the preamble to the amendatory law, "probation was not
intended as an escape hatch and should not be used to obstruct and
delay the administration of justice, but should be availed of at the first
opportunity by offenders who are willing to be reformed and
rehabilitated."
The ruling of the RTC that "[h]aving not perfected an appeal against
the Court of Appeals decision, [private respondent] is, therefore, not
covered by [the amendment in] P.D. 1990" is an obvious misreading
of the law. The perfection of the appeal referred in the law refers to
the .appeal taken from a judgment of conviction by the trial court and
not that of the appellate court, since under the law an application for
probation is filed with the trial court which can only grant the same
"after it shall have convicted and sentenced [the] defendant, and
upon application by said defendant within the period for perfecting an
appeal. "Accordingly, in Llamado v. Court of Appeals, 10 it was held
that the petitioner who had appealed his sentence could not
subsequently apply for probation.
WHEREFORE, the petition is GRANTED and the order of April 23,
1993 of the Regional Trial Court of Misamis Oriental (Branch 21)
granting probation to private respondent Grildo S. Tugonon is SET
ASIDE.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

107
EXCEPTIONS IN THE STATUTE That on or about the 3rd day of April 1987, in the municipality of
Makati, Metro Manila, Philippines and within the jurisdiction of this
Republic of the Philippines Honorable Court, the above-named accused, did, then and there
SUPREME COURT willfully, unlawfully and feloniously make or draw and issue to
Manila ROBERTO Z. LORAYEZ, to apply on account or for value a
Depositors Trust Company Check No. 3371 antedated March 31,
SECOND DIVISION 1987, payable to herein complainant in the total amount of U.S.
$2,500.00 equivalent to P50,000.00, said accused well knowing that
G.R. No. 87416 April 8, 1991 at the time of issue he had no sufficient funds in or credit with drawee
bank for payment of such check in full upon its presentment which
CECILIO S. DE VILLA, petitioner, check when presented to the drawee bank within ninety (90) days
vs. from the date thereof was subsequently dishonored for the reason
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE "INSUFFICIENT FUNDS" and despite receipt of notice of such
PHILIPPINES, HONORABLE JOB B. MADAYAG, and ROBERTO Z. dishonor said accused failed to pay said ROBERTO Z. LORAYEZ
LORAYES, respondents. the amount of P50,000.00 of said check or to make arrangement for
full payment of the same within five (5) banking days after receiving
San Jose Enriquez, Lacas Santos & Borje for petitioner. said notice.
Eduardo R. Robles for private respondent.
After arraignment and after private respondent had testified on direct
PARAS, J.: examination, petitioner moved to dismiss the Information on the
following grounds: (a) Respondent court has no jurisdiction over the
This petition for review on certiorari seeks to reverse and set aside offense charged; and (b) That no offense was committed since the
the decision* of the Court of Appeals promulgated on February 1, check involved was payable in dollars, hence, the obligation created
1989 in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa vs. Judge is null and void pursuant to Republic Act No. 529 (An Act to Assure
Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the Uniform Value of Philippine Coin and Currency).
petition for certiorari filed therein.
On July 19, 1988, respondent court issued its first questioned orders
The factual backdrop of this case, as found by the Court of Appeals, stating:
is as follows:
Accused's motion to dismiss dated July 5, 1988, is denied for lack of
On October 5, 1987, petitioner Cecilio S. de Villa was charged before merit.
the Regional Trial Court of the National Capital Judicial Region
(Makati, Branch 145) with violation of Batas Pambansa Bilang 22, Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks,
allegedly committed as follows: provided they are either drawn and issued in the Philippines though
payable outside thereof, or made payable and dishonored in the

108
Philippines though drawn and issued outside thereof, are within the
coverage of said law. The law likewise applied to checks drawn
against current accounts in foreign currency.
Petitioner moved for reconsideration but his motion was
subsequently denied by respondent court in its order dated
September 6, 1988, and which reads:
Accused's motion for reconsideration, dated August 9, 1988, which
was opposed by the prosecution, is denied for lack of merit.1âwphi1
The Bouncing Checks Law is applicable to checks drawn against
current accounts in foreign currency (Proceedings of the Batasang
Pambansa, February 7, 1979, p. 1376, cited in Makati RTC Judge
(now Manila City Fiscal) Jesus F. Guerrero's The Ramifications of
the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision, pp.
20-22).
A petition for certiorari seeking to declare the nullity of the
aforequoted orders dated July 19, 1988 and September 6, 1988 was
filed by the petitioner in the Court of Appeals wherein he contended:
(a) That since the questioned check was drawn against the
dollar account of petitioner with a foreign bank, respondent court has
no jurisdiction over the same or with accounts outside the territorial
jurisdiction of the Philippines and that Batas Pambansa Bilang 22
could have not contemplated extending its coverage over dollar
accounts;
(b) That assuming that the subject check was issued in
connection with a private transaction between petitioner and private
respondent, the payment could not be legally paid in dollars as it
would violate Republic Act No. 529; and
(c) That the obligation arising from the issuance of the
questioned check is null and void and is not enforceable with the
Philippines either in a civil or criminal suit. Upon such premises,
109
petitioner concludes that the dishonor of the questioned check
cannot be said to have violated the provisions of Batas Pambansa
Bilang 22. (Rollo, Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the
decretal portion of which reads:
WHEREFORE, the petition is hereby dismissed. Costs against
petitioner.
SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
A motion for reconsideration of the said decision was filed by the
petitioner on February 7, 1989 (Rollo, Petition, p. 6) but the same
was denied by the Court of Appeals in its resolution dated March 3,
1989 (Rollo, Annex "B", p. 26).
Hence, this petition.
In its resolution dated November 13, 1989, the Second Division of
this Court gave due course to the petition and required the parties to
submit simultaneously their respective memoranda (Rollo,
Resolution, p. 81).
The sole issue in this case is whether or not the Regional Trial Court
of Makati has jurisdiction over the case in question.
The petition is without merit.
Jurisdiction is the power with which courts are invested for
administering justice, that is, for hearing and deciding cases (Velunta
vs. Philippine Constabulary, 157 SCRA 147 [1988]).
Jurisdiction in general, is either over the nature of the action, over the
subject matter, over the person of the defendant, or over the issues
framed in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]).
Jurisdiction over the subject matter is determined by the statute in
force at the time of commencement of the action (De la Cruz vs.
Moya, 160 SCRA 538 [1988]).
The trial court's jurisdiction over the case, subject of this review, can
not be questioned.
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically
provide that:
Sec. 10. Place of the commission of the offense. The
complaint or information is sufficient if it can be understood therefrom
that the offense was committed or some of the essential ingredients
thereof occured at some place within the jurisdiction of the court,
unless the particular place wherein it was committed constitutes an
essential element of the offense or is necessary for identifying the
offense charged.
Sec. 15. Place where action is to be instituted. (a) Subject
to existing laws, in all criminal prosecutions the action shall be
instituted and tried in the court of the municipality or territory where
the offense was committed or any of the essential ingredients thereof
took place.
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987]
cited in the case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the
Supreme Court ruled "that jurisdiction or venue is determined by the
allegations in the information."
The information under consideration specifically alleged that the
offense was committed in Makati, Metro Manila and therefore, the
same is controlling and sufficient to vest jurisdiction upon the
110
Regional Trial Court of Makati. The Court acquires jurisdiction over
the case and over the person of the accused upon the filing of a
complaint or information in court which initiates a criminal action
(Republic vs. Sunga, 162 SCRA 191 [1988]).
Moreover, it has been held in the case of Que v. People of the
Philippines (154 SCRA 160 [1987] cited in the case of People vs.
Grospe, 157 SCRA 154 [1988]) that "the determinative factor (in
determining venue) is the place of the issuance of the check."
On the matter of venue for violation of Batas Pambansa Bilang 22,
the Ministry of Justice, citing the case of People vs. Yabut (76 SCRA
624 [1977], laid down the following guidelines in Memorandum
Circular No. 4 dated December 15, 1981, the pertinent portion of
which reads:
(1) Venue of the offense lies at the place where the check was
executed and delivered; (2) the place where the check was written,
signed or dated does not necessarily fix the place where it was
executed, as what is of decisive importance is the delivery thereof
which is the final act essential to its consummation as an obligation; .
. . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua,
October 28, 1980)." (See The Law on Bouncing Checks Analyzed by
Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 &
12, October-December, 1983, p. 14).
It is undisputed that the check in question was executed and
delivered by the petitioner to herein private respondent at Makati,
Metro Manila.
However, petitioner argues that the check in question was drawn
against the dollar account of petitioner with a foreign bank, and is
therefore, not covered by the Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not distinguish the currency
involved in the case. As the trial court correctly ruled in its order
dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks,
provided they are either drawn and issued in the Philippines though
payable outside thereof . . . are within the coverage of said law.
THE SPEAKER. The Gentleman may proceed.
MR. TUPAY. Mr. Speaker, it has been mentioned by one of the
Gentlemen who interpellated that any check may be involved, like
U.S. dollar checks, etc. We are talking about checks in our country.
There are U.S. dollar checks, checks, in our currency, and many
others.

It is a cardinal principle in statutory construction that where the law THE SPEAKER. The Sponsor may answer that inquiry.
does not distinguish courts should not distinguish.1âwphi1
Parenthetically, the rule is that where the law does not make any MR. MENDOZA. The bill refers to any check, Mr. Speaker,
exception, courts may not except something unless compelling and this check may be a check in whatever currency. This would not
reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC, even be limited to U.S. dollar checks. The check may be in French
150 SCRA 520 [1987]). francs or Japanese yen or deutschunorhs. (sic.) If drawn, then this
bill will apply.
More importantly, it is well established that courts may avail
themselves of the actual proceedings of the legislative body to assist MR TUPAY. So it include U.S. dollar checks.
in determining the construction of a statute of doubtful meaning
(Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there MR. MENDOZA. Yes, Mr. Speaker.
is doubts as to what a provision of a statute means, the meaning put
to the provision during the legislative deliberation or discussion on xxx xxx xxx
the bill may be adopted (Arenas vs. City of San Carlos, 82 SCRA
318 [1978]). (p. 1376, Records of the Batasan, Volume III; Emphasis supplied).

The records of the Batasan, Vol. III, unmistakably show that the PREMISES CONSIDERED, the petition is DISMISSED for lack of
intention of the lawmakers is to apply the law to whatever currency merit.
may be the subject thereof. The discussion on the floor of the then
Batasang Pambansa fully sustains this view, as follows: Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

xxx xxx xxx

THE SPEAKER. The Gentleman from Basilan is recognized.

MR. TUPAY. Parliamentary inquiry, Mr. Speaker.

111
GENERAL AND SPECIAL TERMS
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-14787 January 28, 1961
COLGATE-PALMOLIVE PHILIPPINE, INC., petitioner,
vs.
HON. PEDRO M. GIMENEZ as Auditor General and ISMAEL
MATHAY as AUDITOR OF THE CENTRAL BANK OF THE
PHILIPPINES, respondents.
Ross, Selph and Carrascoso for petitioner.
Office of the Solicitor General for respondents.
GUTIERREZ DAVID, J.:
The petitioner Colgate-Palmolive Philippines, Inc. is a corporation
duly organized and existing under Philippine laws engaged in the
manufacture of toilet preparations and household remedies. On
several occasions, it imported from abroad various materials such as
irish moss extract, sodium benzoate, sodium saccharinate
precipitated calcium carbonate and dicalcium phosphate, for use as
stabilizers and flavoring of the dental cream it manufactures. For
every importation made of these materials, the petitioner paid to the
Central Bank of the Philippines the 17% special excise tax on the
foreign exchange used for the payment of the cost, transportation
and other charges incident thereto, pursuant to Republic Act No.
601, as amended, commonly known as the Exchange Tax Law.
112
On March 14, 1956, the petitioner filed with the Central Bank three
applications for refund of the 17% special excise tax it had paid in the
aggregate sum of P113,343.99. The claim for refund was based on
section 2 of Republic Act 601, which provides that "foreign exchange
used for the payment of the cost, transportation and/or other charges
incident to the importation into the Philippines of . . . stabilizer and
flavors . . . shall be refunded to any importer making application
therefor, upon satisfactory proof of actual importation under the rules
and regulations to be promulgated pursuant to section seven
thereof." After the applications were processed by the officer-in-
charge of the Exchange Tax Administration of the Central Bank, that
official advised, the petitioner that of the total sum of P113,343.99
claimed by it for refund, the amount of P23,958.13 representing the
17% special excise tax on the foreign exchange used to import irish
moss extract, sodium benzoate and precipitated calcium carbonate
had been approved. The auditor of the Central Bank, however,
refused to pass in audit its claims for refund even for the reduced
amount fixed by the Officer-in-Charge of the Exchange Tax
Administration, on the theory that toothpaste stabilizers and flavors
are not exempt under section 2 of the Exchange Tax Law.
Petitioner appealed to the Auditor General, but the latter or,
December 4, 1958 affirmed the ruling of the auditor of the Central
Bank, maintaining that the term "stabilizer and flavors" mentioned in
section 2 of the Exchange Tax Law refers only to those used in the
preparation or manufacture of food or food products. Not satisfied,
the petitioner brought the case to this Court thru the present petition
for review.
The decisive issue to be resolved is whether or not the foreign
exchange used by petitioner for the importation of dental cream
stabilizers and flavors is exempt from the 17% special excise tax
imposed by the Exchange Tax Law, (Republic Act No. 601) so as to
entitle it to refund under section 2 thereof, which reads as follows:
SEC, 2. The tax collected under the preceding section on foreign
exchange used for the payment of the cost, transportation and/or
other charges incident to importation into the Philippines of rice, flour,
canned milk, cattle and beef, canned fish, soya beans, butterfat,
chocolate, malt syrup, tapioca, stabilizer and flavors, vitamin
concentrate, fertilizer, poultry feed; textbooks, reference books, and
supplementary readers approved by the Board of Textbooks and/or
established public or private educational institutions; newsprint
imported by or for publishers for use in the publication of books,
pamphlets, magazines and newspapers; book paper, book cloth,
chip board imported for the printing of supplementary readers
(approved by the Board of Textbooks) to be supplied to the
Government under contracts perfected before the approval of this
Act, the quantity thereof to be certified by the Director of Printing;
anesthetics, anti-biotics, vitamins, hormones, x-ray films, laboratory
reagents, biologicals, dental supplies, and pharmaceutical drugs
necessary for compounding medicines; medical and hospital
supplies listed in the appendix to this Act, in quantities to be certified
by the Director of Hospitals as actually needed by the hospitals
applying therefor; drugs and medicines listed in the said appendix;
and such other drugs and medicines as may be certified by the
Secretary of Health from time to time to promote and protect the
health of the people of the Philippines shall be refunded to any
importer making application therefor, upon satisfactory proof of
actual importation under the rules and regulations to be promulgated
pursuant to section seven thereof." (Emphasis supplied.)
The ruling of the Auditor General that the term "stabilizer and flavors"
as used in the law refers only to those materials actually used in the
preparation or manufacture of food and food products is based,
apparently, on the principle of statutory construction that "general
terms may be restricted by specific words, with the result that the
general language will be limited by the specific language which
indicates the statute's object and purpose." (Statutory Construction
by Crawford, 1940 ed. p. 324-325.) The rule, however, is, in our
113
opinion, applicable only to cases where, except for one general term,
all the items in an enumeration belong to or fall under one specific
class. In the case at bar, it is true that the term "stabilizer and flavors"
is preceded by a number of articles that may be classified as food or
food products, but it is likewise true that the other items immediately
following it do not belong to the same classification. Thus "fertilizer"
and "poultry feed" do not fall under the category of food or food
products because they are used in the farming and poultry industries,
respectively. "Vitamin concentrate" appears to be more of a medicine
than food or food product, for, as matter of fact, vitamins are among
those enumerated in the list of medicines and drugs appearing in the
appendix to the law. It should also here be stated that "cattle", which
is among those listed preceding the term in question, includes not
only those intended for slaughter but also those for breeding
purposes. Again, it is noteworthy that under, Republic Act No. 814
amending the above-quoted section of Republic Act No. 601,
"industrial starch", which does not always refer to food for human
consumption, was added among the items grouped with "stabilizer
and flavors". Thus, on the basis of the grouping of the articles alone,
it cannot validly be maintained that the term "stabilizer and flavors"
as used in the above-quoted provision of the Exchange Tax Law
refers only to those used in the manufacture of food and food
products. This view is supported by the principle "Ubi lex non
distinguish nec nos distinguire debemos", or "where the law does not
distinguish, neither do we distinguish". (Ligget & Myers Tobacco
Company vs. Collector of Internal Revenue, 53 Off. Gaz. No. 15,
page 4831). Since the law does not distinguish between "stabilizer
and flavors" used in the preparation of food and those used in the
manufacture of toothpaste or dental cream, we are not authorized to
make any distinction and must construe the words in their general
sense. The rule of construction that general and unlimited terms are
restrained and limited by particular recitals when used in connection
with them, does not require the rejection of general terms entirely. It
is intended merely as an aid in ascertaining the intention of the
legislature and is to be taken in connection with other rules of
construction. (See Handbook of the Construction and Interpretation
of Laws by Black, p. 215.216, 2nd ed.)

Having arrived at the above conclusion, we deem it now idle to pass

upon the other questions raised by the parties.

WHEREFORE, the decision under review is reversed and the

respondents are hereby ordered to audit petitioners applications for
refund which were approved by the Officer-in-Charge of the
Exchange Tax Administration in the total amount of P23,958.13.

Bengzon, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,

Paredes and Dizon, JJ., concur.
Labrador, J., reserves his vote.

114
EJUSDEM GENERIS Petitioner Pelizloy Realty Corporation ("Pelizloy") owns Palm Grove
Resort, which is designed for recreation and which has facilities like
Republic of the Philippines swimming pools, a spa and function halls. It is located at Asin,
SUPREME COURT Angalisan, Municipality of Tuba, Province of Benguet.
Baguio City
On December 8, 2005, the Provincial Board of the Province of
THIRD DIVISION Benguet approved Provincial Tax Ordinance No. 05-107, otherwise
known as the Benguet Revenue Code of 2005 ("Tax Ordinance").
G.R. No. 183137 April 10, 2013 Section 59, Article X of the Tax Ordinance levied a ten percent (10%)
amusement tax on gross receipts from admissions to "resorts,
PELIZLOY REALTY CORPORATION, represented herein by its swimming pools, bath houses, hot springs and tourist spots."
President, GREGORY K. LOY, Petitioner, Specifically, it provides the following:
vs.
THE PROVINCE OF BENGUET, Respondent. Article Ten: Amusement Tax on Admission

DECISION Section 59. Imposition of Tax. There is hereby levied a tax to be

collected from the proprietors, lessees, or operators of theaters,
LEONEN, J.: cinemas, concert halls, circuses, cockpits, dancing halls, dancing
schools, night or day clubs, and other places of amusement at the
The principal issue in this case is the scope of authority of a province rate of thirty percent (30%) of the gross receipts from admission fees;
to impose an amusement tax. and

This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court praying that the December 10, 2007 decision of the
Regional Trial Court,- Branch 62, La Trinidad, Benguet in Civil Case
No. 06-CV-2232 be reversed and set aside and a new one issued in
which: ( 1) respondent Province of Benguet is declared as having no
authority to levy amusement taxes on admission fees for resorts,
swimming pools, bath houses, hot springs, tourist spots, and other
places for recreation; (2) Section 59, Article X of the Benguet
Provincial Revenue Code of 2005 is declared null and void; and (3)
the respondent Province of Benguet is permanently enjoined from
enforcing Section 59, Article X of the Benguet Provincial Revenue
Code of 2005.
A tax of ten percent (10%) of gross receipts from admission fees for
boxing, resorts, swimming pools, bath houses, hot springs, and
tourist spots is likewise levied. [Emphasis and underscoring supplied]
Section 162 of the Tax Ordinance provided that the Tax Ordinance
shall take effect on January 1, 2006.
It was Pelizloy's position that the Tax Ordinance's imposition of a
10% amusement tax on gross receipts from admission fees for
resorts, swimming pools, bath houses, hot springs, and tourist spots
is an ultra vires act on the part of the Province of Benguet. Thus, it
filed an appeal/petition before the Secretary of Justice on January
27, 2006.

115

The appeal/petition was filed within the thirty (30)-day period from the
effectivity of a tax ordinance allowed by Section 187 of Republic Act
No. 7160, otherwise known as the Local Government Code (LGC).1
The appeal/petition was docketed as MSO-OSJ Case No. 03-2006.
Under Section 187 of the LGC, the Secretary of Justice has sixty (60)
days from receipt of the appeal to render a decision. After the lapse
of which, the aggrieved party may file appropriate proceedings with a
court of competent jurisdiction.
Treating the Secretary of Justice's failure to decide on its
appeal/petition within the sixty (60) days provided by Section 187 of
the LGC as an implied denial of such appeal/petition, Pelizloy filed a
Petition for Declaratory Relief and Injunction before the Regional
Trial Court, Branch 62, La Trinidad, Benguet. The petition was
docketed as Civil Case No. 06-CV-2232.
Pelizloy argued that Section 59, Article X of the Tax Ordinance
imposed a percentage tax in violation of the limitation on the taxing
powers of local government units (LGUs) under Section 133 (i) of the
LGC. Thus, it was null and void ab initio. Section 133 (i) of the LGC
provides:
Section 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise
of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
xxx
(i) Percentage or value-added tax (VAT) on sales, barters or
exchanges or similar transactions on goods or services except as
otherwise provided herein
116
The Province of Benguet assailed the Petition for Declaratory Relief
and Injunction as an improper remedy. It alleged that once a tax
liability has attached, the only remedy of a taxpayer is to pay the tax
and to sue for recovery after exhausting administrative remedies.2
On substantive grounds, the Province of Benguet argued that the
phrase ‘other places of amusement’ in Section 140 (a) of the LGC3
encompasses resorts, swimming pools, bath houses, hot springs,
and tourist spots since "Article 220 (b) (sic)" of the LGC defines
"amusement" as "pleasurable diversion and entertainment x x x
synonymous to relaxation, avocation, pastime, or fun."4 However,
the Province of Benguet erroneously cited Section 220 (b) of the
LGC. Section 220 of the LGC refers to valuation of real property for
real estate tax purposes. Section 131 (b) of the LGC, the provision
which actually defines "amusement", states:
Section 131. Definition of Terms. - When used in this Title, the term:
xxx
(b) "Amusement" is a pleasurable diversion and entertainment. It is
synonymous to relaxation, avocation, pastime, or fun On December
10, 2007, the RTC rendered the assailed Decision dismissing the
Petition for Declaratory Relief and Injunction for lack of merit.
Procedurally, the RTC ruled that Declaratory Relief was a proper
remedy. On the validity of Section 59, Article X of the Tax Ordinance,
the RTC noted that, while Section 59, Article X imposes a
percentage tax, Section 133 (i) of the LGC itself allowed for
exceptions. It noted that what the LGC prohibits is not the imposition
by LGUs of percentage taxes in general but the "imposition and levy
of percentage tax on sales, barters, etc., on goods and services
only."5 It further gave credence to the Province of Benguet's
assertion that resorts, swimming pools, bath houses, hot springs,
and tourist spots are encompassed by the phrase ‘other places of
amusement’ in Section 140 of the LGC.
On May 21, 2008, the RTC denied Pelizloy’s Motion for
Reconsideration.
Aggrieved, Pelizloy filed the present petition on June 10, 2008 on
pure questions of law. It assailed the legality of Section 59, Article X
of the Tax Ordinance as being a (supposedly) prohibited percentage
tax per Section 133 (i) of the LGC.
In its Comment, the Province of Benguet, erroneously citing Section
40 of the LGC, argued that Section 59, Article X of the Tax
Ordinance does not levy a percentage tax "because the imposition is
not based on the total gross receipts of services of the petitioner but
solely and actually limited on the gross receipts of the admission fees
collected."6 In addition, it argued that provinces can validly impose
amusement taxes on resorts, swimming pools, bath houses, hot
springs, and tourist spots, these being ‘amusement places’.
For resolution in this petition are the following issues:
1. Whether or not Section 59, Article X of Provincial Tax Ordinance
No. 05-107, otherwise known as the Benguet Revenue Code of
2005, levies a percentage tax.
2. Whether or not provinces are authorized to impose amusement
taxes on admission fees to resorts, swimming pools, bath houses,
hot springs, and tourist spots for being "amusement places" under
the Local Government Code.
The power to tax "is an attribute of sovereignty,"7 and as such,
inheres in the State. Such, however, is not true for provinces, cities,
municipalities and barangays as they are not the sovereign;8 rather,
117
they are mere "territorial and political subdivisions of the Republic of
the Philippines".9
The rule governing the taxing power of provinces, cities,
muncipalities and barangays is summarized in Icard v. City Council
of Baguio:10
It is settled that a municipal corporation unlike a sovereign state is
clothed with no inherent power of taxation. The charter or statute
must plainly show an intent to confer that power or the municipality,
cannot assume it. And the power when granted is to be construed in
strictissimi juris. Any doubt or ambiguity arising out of the term used
in granting that power must be resolved against the municipality.
Inferences, implications, deductions – all these – have no place in
the interpretation of the taxing power of a municipal corporation.11
[Underscoring supplied]
Therefore, the power of a province to tax is limited to the extent that
such power is delegated to it either by the Constitution or by statute.
Section 5, Article X of the 1987 Constitution is clear on this point:
Section 5. Each local government unit shall have the power to create
its own sources of revenues and to levy taxes, fees and charges
subject to such guidelines and limitations as the Congress may
provide, consistent with the basic policy of local autonomy. Such
taxes, fees, and charges shall accrue exclusively to the local
governments. [Underscoring supplied]
Per Section 5, Article X of the 1987 Constitution, "the power to tax is
no longer vested exclusively on Congress; local legislative bodies
are now given direct authority to levy taxes, fees and other
charges."12 Nevertheless, such authority is "subject to such
guidelines and limitations as the Congress may provide".13
In conformity with Section 3, Article X of the 1987 Constitution,14
Congress enacted Republic Act No. 7160, otherwise known as the
Local Government Code of 1991. Book II of the LGC governs local
taxation and fiscal matters.
Relevant provisions of Book II of the LGC establish the parameters
of the taxing powers of LGUS found below.
First, Section 130 provides for the following fundamental principles
governing the taxing powers of LGUs:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's
ability to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory;
d. not be contrary to law, public policy, national economic policy, or in
the restraint of trade.
3. The collection of local taxes, fees, charges and other impositions
shall in no case be let to any private person.
4. The revenue collected pursuant to the provisions of the LGC shall
inure solely to the benefit of, and be subject to the disposition by, the
LGU levying the tax, fee, charge or other imposition unless otherwise
specifically provided by the LGC.
5. Each LGU shall, as far as practicable, evolve a progressive
system of taxation.
118
Second, Section 133 provides for the common limitations on the
taxing powers of LGUs. Specifically, Section 133 (i) prohibits the levy
by LGUs of percentage or value-added tax (VAT) on sales, barters or
exchanges or similar transactions on goods or services except as
otherwise provided by the LGC.
As it is Pelizloy’s contention that Section 59, Article X of the Tax
Ordinance levies a prohibited percentage tax, it is crucial to
understand first the concept of a percentage tax.
In Commissioner of Internal Revenue v. Citytrust Investment Phils.
Inc.,15 the Supreme Court defined percentage tax as a "tax
measured by a certain percentage of the gross selling price or gross
value in money of goods sold, bartered or imported; or of the gross
receipts or earnings derived by any person engaged in the sale of
services." Also, Republic Act No. 8424, otherwise known as the
National Internal Revenue Code (NIRC), in Section 125, Title V,16
lists amusement taxes as among the (other) percentage taxes which
are levied regardless of whether or not a taxpayer is already liable to
pay value-added tax (VAT).
Amusement taxes are fixed at a certain percentage of the gross
receipts incurred by certain specified establishments.
Thus, applying the definition in CIR v. Citytrust and drawing from the
treatment of amusement taxes by the NIRC, amusement taxes are
percentage taxes as correctly argued by Pelizloy.
However, provinces are not barred from levying amusement taxes
even if amusement taxes are a form of percentage taxes. Section
133 (i) of the LGC prohibits the levy of percentage taxes "except as
otherwise provided" by the LGC.
Section 140 of the LGC provides:

SECTION 140. Amusement Tax - (a) The province may levy an
amusement tax to be collected from the proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses, boxing stadia,
and other places of amusement at a rate of not more than thirty
percent (30%) of the gross receipts from admission fees.
(b) In the case of theaters of cinemas, the tax shall first be deducted
and withheld by their proprietors, lessees, or operators and paid to
the provincial treasurer before the gross receipts are divided
between said proprietors, lessees, or operators and the distributors
of the cinematographic films.
(c) The holding of operas, concerts, dramas, recitals, painting and art
exhibitions, flower shows, musical programs, literary and oratorical
presentations, except pop, rock, or similar concerts shall be exempt
from the payment of the tax herein imposed.
(d) The Sangguniang Panlalawigan may prescribe the time, manner,
terms and conditions for the payment of tax. In case of fraud or
failure to pay the tax, the Sangguniang Panlalawigan may impose
such surcharges, interests and penalties.
(e) The proceeds from the amusement tax shall be shared equally by
the province and the municipality where such amusement places are
located. [Underscoring supplied]
Evidently, Section 140 of the LGC carves a clear exception to the
general rule in Section 133 (i). Section 140 expressly allows for the
imposition by provinces of amusement taxes on "the proprietors,
lessees, or operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement."
However, resorts, swimming pools, bath houses, hot springs, and
tourist spots are not among those places expressly mentioned by
119
Section 140 of the LGC as being subject to amusement taxes. Thus,
the determination of whether amusement taxes may be levied on
admissions to resorts, swimming pools, bath houses, hot springs,
and tourist spots hinges on whether the phrase ‘other places of
amusement’ encompasses resorts, swimming pools, bath houses,
hot springs, and tourist spots.
Under the principle of ejusdem generis, "where a general word or
phrase follows an enumeration of particular and specific words of the
same class or where the latter follow the former, the general word or
phrase is to be construed to include, or to be restricted to persons,
things or cases akin to, resembling, or of the same kind or class as
those specifically mentioned."17
The purpose and rationale of the principle was explained by the
Court in National Power Corporation v. Angas18 as follows:
The purpose of the rule on ejusdem generis is to give effect to both
the particular and general words, by treating the particular words as
indicating the class and the general words as including all that is
embraced in said class, although not specifically named by the
particular words. This is justified on the ground that if the lawmaking
body intended the general terms to be used in their unrestricted
sense, it would have not made an enumeration of particular subjects
but would have used only general terms. [2 Sutherland, Statutory
Construction, 3rd ed., pp. 395-400].19
In Philippine Basketball Association v. Court of Appeals,20 the
Supreme Court had an opportunity to interpret a starkly similar
provision or the counterpart provision of Section 140 of the LGC in
the Local Tax Code then in effect. Petitioner Philippine Basketball
Association (PBA) contended that it was subject to the imposition by
LGUs of amusement taxes (as opposed to amusement taxes
imposed by the national government).1âwphi1 In support of its
contentions, it cited Section 13 of Presidential Decree No. 231,
otherwise known as the Local Tax Code of 1973, (which is
analogous to Section 140 of the LGC) providing the following:
Section 13. Amusement tax on admission. - The province shall
impose a tax on admission to be collected from the proprietors,
lessees, or operators of theaters, cinematographs, concert halls,
circuses and other places of amusement xxx.
Applying the principle of ejusdem generis, the Supreme Court
rejected PBA's assertions and noted that:
In determining the meaning of the phrase 'other places of
amusement', one must refer to the prior enumeration of theaters,
cinematographs, concert halls and circuses with artistic expression
as their common characteristic. Professional basketball games do
not fall under the same category as theaters, cinematographs,
concert halls and circuses as the latter basically belong to artistic
forms of entertainment while the former caters to sports and
gaming.21 [Underscoring supplied]
However, even as the phrase ‘other places of amusement’ was
already clarified in Philippine Basketball Association, Section 140 of
the LGC adds to the enumeration of 'places of amusement' which
may properly be subject to amusement tax. Section 140 specifically
mentions 'boxing stadia' in addition to "theaters, cinematographs,
concert halls and circuses" which were already mentioned in PD No.
231. Also, 'artistic expression' as a characteristic does not pertain to
'boxing stadia'.
In the present case, the Court need not embark on a laborious effort
at statutory construction. Section 131 (c) of the LGC already provides
a clear definition of ‘amusement places’:
Section 131. Definition of Terms. - When used in this Title, the term:
120
xxx
(c) "Amusement Places" include theaters, cinemas, concert halls,
circuses and other places of amusement where one seeks admission
to entertain oneself by seeing or viewing the show or performances
[Underscoring supplied]
Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia
are bound by a common typifying characteristic in that they are all
venues primarily for the staging of spectacles or the holding of public
shows, exhibitions, performances, and other events meant to be
viewed by an audience. Accordingly, ‘other places of amusement’
must be interpreted in light of the typifying characteristic of being
venues "where one seeks admission to entertain oneself by seeing
or viewing the show or performances" or being venues primarily used
to stage spectacles or hold public shows, exhibitions, performances,
and other events meant to be viewed by an audience.
As defined in The New Oxford American Dictionary,22 ‘show’ means
"a spectacle or display of something, typically an impressive one";23
while ‘performance’ means "an act of staging or presenting a play, a
concert, or other form of entertainment."24 As such, the ordinary
definitions of the words ‘show’ and ‘performance’ denote not only
visual engagement (i.e., the seeing or viewing of things) but also
active doing (e.g., displaying, staging or presenting) such that actions
are manifested to, and (correspondingly) perceived by an audience.
Considering these, it is clear that resorts, swimming pools, bath
houses, hot springs and tourist spots cannot be considered venues
primarily "where one seeks admission to entertain oneself by seeing
or viewing the show or performances". While it is true that they may
be venues where people are visually engaged, they are not primarily
venues for their proprietors or operators to actively display, stage or
present shows and/or performances.
Thus, resorts, swimming pools, bath houses, hot springs and tourist
spots do not belong to the same category or class as theaters,
cinemas, concert halls, circuses, and boxing stadia. It follows that
they cannot be considered as among the ‘other places of
amusement’ contemplated by Section 140 of the LGC and which
may properly be subject to amusement taxes.
At this juncture, it is helpful to recall this Court’s pronouncements in
Icard:
The power to tax when granted to a province is to be construed in
strictissimi juris. Any doubt or ambiguity arising out of the term used
in granting that power must be resolved against the province.
Inferences, implications, deductions – all these – have no place in
the interpretation of the taxing power of a province.25
In this case, the definition of' amusement places' in Section 131 (c) of
the LGC is a clear basis for determining what constitutes the 'other
places of amusement' which may properly be subject to amusement
tax impositions by provinces. There is no reason for going beyond
such basis. To do otherwise would be to countenance an arbitrary
interpretation/application of a tax law and to inflict an injustice on
unassuming taxpayers.
The previous pronouncements notwithstanding, it will be noted that it
is only the second paragraph of Section 59, Article X of the Tax
Ordinance which imposes amusement taxes on "resorts, swimming
pools, bath houses, hot springs, and tourist spots". The first
paragraph of Section 59, Article X of the Tax Ordinance refers to
"theaters, cinemas, concert halls, circuses, cockpits, dancing halls,
dancing schools, night or day clubs, and other places of
amusement".1âwphi1 In any case, the issues raised by Pelizloy are
pertinent only with respect to the second paragraph of Section 59,
Article X of the Tax Ordinance. Thus, there is no reason to invalidate
the first paragraph of Section 59, Article X of the Tax Ordinance. Any
121
declaration as to the Province of Benguet's lack of authority to levy
amusement taxes must be limited to admission fees to resorts,
swimming pools, bath houses, hot springs and tourist spots.
Moreover, the second paragraph of Section 59, Article X of the Tax
Ordinance is not limited to resorts, swimming pools, bath houses, hot
springs, and tourist spots but also covers admission fees for boxing.
As Section 140 of the LGC allows for the imposition of amusement
taxes on gross receipts from admission fees to boxing stadia,
Section 59, Article X of the Tax Ordinance must be sustained with
respect to admission fees from boxing stadia.
WHEREFORE, the petition for review on certiorari is GRANTED. The
second paragraph of Section 59, Article X of the Benguet Provincial
Revenue Code of 2005, in so far as it imposes amusement taxes on
admission fees to resorts, swimming pools, bath houses, hot springs
and tourist spots, is declared null and void. Respondent Province of
Benguet is permanently enjoined from enforcing the second
paragraph of Section 59, Article X of the Benguet Provincial Revenue
Code of 2005 with respect to resorts, swimming pools, bath houses,
hot springs and tourist spots.
SO ORDERED.
MARVIC MARIO VICTOR F. LEONEN
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice ROBERTO A. ABAD
Associate Justice
JOSE CATRAL MENDOZA
Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

122
EN BANC
[G.R. No. 89483. August 30, 1990.]
REPUBLIC OF THE PHILIPPINES THRU: THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT (PCGG), AFP ANTI-
GRAFT BOARD, COL. ERNESTO A. PUNSALANG and PETER T.
TABANG, Petitioners,
v.
HON. EUTROPIO MIGRINO, as Presiding Judge, Regional Trial
Court, NCJR, Branch 151, Pasig,
Metro Manila and TROADIO TECSON, Respondents
The Solicitor General, for Petitioners
Pacifico B. Advincula for Private Respondent.
DECISION
CORTES, J.:
This case puts in issue the authority of the Presidential Commission
on Good Government (PCGG), through the New Armed Forces of
the Philippines Anti-Graft Board (hereinafter referred to as the
"Board"), to investigate and cause the prosecution of petitioner, a
retired military officer, for violation of Republic Acts Nos. 3019 and
1379
Assailed by the Republic in this petition for certiorari, prohibition
and/or mandamus with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order are the orders of
respondent judge in Civil Case No. 57092 Branch 151 of the
Regional Trial Court of Pasig, Metro Manila: (1) dated June 23, 1989,
denying petitioners’ Motion to Dismiss and Opposition, and (2) dated
June 26, 1989, granting private respondent’s application for the
issuance of a writ of preliminary injunction. Thus, the petition seeks
123
the annulment of the two orders, the issuance of an injunction to
enjoin respondent judge from proceeding with Civil Case No. 57092
and, finally, the dismissal of the case before the trial court.
The controversy traces its roots to the order of then PCGG Chairman
Jovito R. Salonga, dated May 13, 1986, which created the New
Armed Forces of the Philippines Anti-Graft Board. The Board was
created to "investigate the unexplained wealth and corrupt practices
of AFP personnel, both retired and in active service." The order
further stated that" [t]he Board shall be primarily charged with the
task of investigating cases of alleged violations of the Anti-Graft and
Corrupt Practices Act (Republic Act No. 3019, as amended) and
shall make the necessary recommendations to appropriate
government agencies and instrumentalities with respect to the action
to be taken thereon based on its findings."cralaw virtua1aw library
Acting on information received by the Board, which indicated the
acquisition of wealth beyond his lawful income, private respondent
Lt. Col. Troadio Tecson (ret.) was required by the Board to submit his
explanation/comment together with his supporting evidence by
October 31, 1987 [Annex "B", Petition]. Private respondent
requested, and was granted, several postponements, but was unable
to produce his supporting evidence because they were allegedly in
the custody of his bookkeeper who had gone abroad.
Just the same, the Board proceeded with its investigation and
submitted its resolution, dated June 30, 1988, recommending that
private respondent be prosecuted and tried for violation of Rep. Act
No. 3019, as amended, and Rep. Act No. 1379, as
amended.chanrobles lawlibrary : rednad
The case was set for preliminary investigation by the PCGG. Private
respondent moved to dismiss the case on the following grounds: (1)
that the PCGG has no jurisdiction over his person; (2) that the action
against him under Rep. Act No. 1379 has already prescribed; (3) that
E.O. No. 14, insofar as it suspended the provisions of Rep. Act No.
1379 on prescription of actions, was inapplicable to his case; and (4)
that having retired from the AFP on May 9, 1984, he was now
beyond the reach of Rep. Act No. 3019. The Board opposed the
motion to dismiss.
In a resolution dated February 8, 1989, the PCGG denied the motion
to dismiss for lack of merit. Private respondent moved for
reconsideration but this was denied by the PCGG in a resolution
dated March 8, 1989. Private respondent was directed to submit his
counter-affidavit and other controverting evidence on March 20, 1989
at 2:00 p.m.
On March 13, 1989, private respondent filed a petition for prohibition
with preliminary injunction with the Regional Trial Court in Pasig,
Metro Manila. The case was docketed as Case No. 57092 and
raffled to Branch 151, respondent judge’s court. Petitioner filed a
motion to dismiss and opposed the application for the issuance of a
writ of preliminary injunction on the principal ground that the Regional
Trial Court had no jurisdiction over the Board, citing the case of
PCGG v. Peña, G.R. No. 77663, April 12, 1988, 159 SCRA 556.
Private respondent opposed the motion to dismiss. Petitioner replied
to the opposition.
On June 23, 1989, respondent judge denied petitioner’s motion to
dismiss. On June 26, 1989, respondent judge granted the application
for the issuance of a writ of preliminary injunction, enjoining
petitioners from investigating or prosecuting private respondent
under Rep. Acts Nos. 3019 and 1379 upon the filing of a bond in the
amount of Twenty Thousand Pesos (P20,000.00).
Hence, the instant petition.
On August 29, 1989, the Court issued a restraining order enjoining
respondent judge from enforcing his orders dated June 23, 1989 and
June 26, 1989 and from proceeding with Civil Case No. 57092.
124
Private respondent filed his comment, to which petitioners filed a
reply. A rejoinder to the reply was filed by private Respondent. The
Court gave due course to the petition and the parties filed their
memoranda. Thereafter, the case was deemed submitted.
The issues raised in the petition are as follows:chanrob1es virtual
1aw library
I.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED
HIS DISCRETION OR ACTED WITHOUT OR IN EXCESS OF
JURISDICTION IN ASSUMING JURISDICTION OVER AND
INTERFERING WITH THE ORDERS AND FUNCTIONS OF THE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT.
II.
WHETHER, OR NOT RESPONDENT JUDGE GRAVELY ABUSED
HIS DISCRETION OR ACTED WITHOUT OR IN EXCESS OF
JURISDICTION IN ISSUING THE ASSAILED ORDER DATED JUNE
26, 1989 ENJOINING PETITIONERS FROM INVESTIGATING AND
PROSECUTING PRIVATE RESPONDENT FOR VIOLATION OF
REPUBLIC ACT NO. 3019, OTHERWISE KNOWN AS ANTI-GRAFT
AND CORRUPT PRACTICES ACT AND REPUBLIC ACT NO. 1379,
OTHERWISE KNOWN AS AN ACT FOR THE FORFEITURE OF
UNLAWFULLY ACQUIRED PROPERTY [Rollo, p. 19].
As to the first issue, petitioner contends that following the ruling of
the Court in PCGG v. Peña the Board, being a creation and/or
extension of the PCGG, is beyond the jurisdiction of the Regional
Trial Court. On the second issue, petitioner strongly argues that the
private respondent’s case falls within the jurisdiction of the PCGG.
The pivotal issue is the second one. On this point, private
respondent’s position is as follows:chanrob1es virtual 1aw library
1. . . . he is not one of the subordinates contemplated in Executive
Orders 1 , 2 , 14 and 14-A as the alleged illegal acts being imputed
to him, that of alleged amassing wealth beyond his legal means while
Finance Officer of the Philippine Constabulary, are acts of his own
alone, not connected with his being a crony, business associate, etc.
or subordinate as the petition does not allege so. Hence the PCGG
has no jurisdiction to investigate him.
If indeed private respondent amassed wealth beyond his legal
means, the procedure laid down by Rep. Act 1379 as already
pointed out before be applied. And since, he has been separated
from the government more than four years ago, the action against
him under Republic Act 1379 has already prescribed.
2. . . . no action can be filed anymore against him now under
Republic Act 1379 for recovery of unexplained wealth for the reason
that he has retired more than four years ago.
3. . . . The order creating the AFP Anti-Graft Board (Annex "A",
Petition) is null and void. Nowhere in Executive Orders 1, 2, 14 and
14-A is there any authority given to the commission, its chairman and
members, to create Boards or bodies to be invested with powers
similar to the powers invested with the commission .. [Comment, pp.
6-7; Rollo, pp. 117-118]
1. The most important question to be resolved in this case is whether
or not private respondent may be investigated and caused to be
prosecuted by the Board, an agency of the PCGG, for violation of
Rep. Acts Nos. 3019 and 1379. According to petitioners, the PCGG
has the power to investigate and cause the prosecution of private
respondent because he is a "subordinate" of former President
Marcos. They cite the PCGG’s jurisdiction over
(a) The recovery of all ill-gotten wealth accumulated by former
President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates, whether located in the
Philippines or abroad, including the takeover or sequestration of all
125
business enterprises and entities owned or controlled by them,
during his administration, directly or through nominees, by taking
undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship. [E.O. No. 1, sec. 2.].
Undoubtedly, the alleged unlawful accumulation of wealth was done
during the administration of Pres. Marcos. However, what has to be
inquired into is whether or not private respondent acted as a
"subordinate" of Pres. Marcos within the contemplation of E.O. No. 1,
the law creating the PCGG, when he allegedly unlawfully acquired
the properties.
A close reading of E. O. No. 1 and related executive orders will
readily show what is contemplated within the term
"subordinate."cralaw virtua1aw library
The Whereas Clauses of E. O. No. 1 express the urgent need to
recover the ill-gotten wealth amassed by former President Ferdinand
E. Marcos, his immediate family, relatives, and close associates both
here and abroad.
E.O. No. 2 freezes "all assets and properties in the Philippines in
which former President Marcos and/or his wife, Mrs. Imelda
Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents, or nominees have any interest or
participation."cralaw virtua1aw library
Applying the rule in statutory construction known as ejusdem
generis, that is —
[W]here general words follow an enumeration of persons or things,
by words of a particular and specific meaning, such general words
are not to be construed in their widest extent, but are to be held as
applying only to persons or things of the same kind or class as those
specifically mentioned [Smith, Bell & Co., Ltd. v. Register of Deeds of
Davao, 96 Phil. 53, 58 (1954), citing Black on Interpretation of Laws,
2nd Ed., 203].
the term "subordinate" as used in E.O. Nos. 1 and 2 would refer to
one who enjoys a close association or relation with former Pres.
Marcos and/or his wife, similar to the immediate family member,
relative, and close associate in E.O. No. 1 and the close relative,
business associate, dummy, agent, or nominee in E.O. No. 2
Thus, as stated by the Court in Bataan Shipyard & Engineering Co.,
Inc. v. PCGG, G.R. No. 75885, May 27, 1987, 150 SCRA 181, 205-
206.
The situations envisaged and sought to be governed [by
Proclamation No. 3 and E.O. Nos. 1, 2 and 14] are self-evident,
these being:chanrob1es virtual 1aw library
1) that" (i)ll gotten properties (were) amassed by the leaders and
supporters of the previous regime" ;
a) more particularly, that" (i)ll-gotten wealth (was) accumulated by
former President Ferdinand E. Marcos, his immediate family,
relatives, subordinates, and close associates, . . . located in the
Philippines or abroad, xx (and) business enterprises and entities
(came to be) owned or controlled by them, during . . . (the Marcos)
administration, directly or through nominees, by taking undue
advantage of their public office and/or using their powers, authority,
influence, connections or relationship;"
b) otherwise stated, that "there are assets and properties pertaining
to former President Ferdinand E. Marcos, and/or his wife Mrs. Imelda
Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents or nominees which had been or were
acquired by them directly or indirectly, through or as a result of the
improper or illegal use of funds or properties owned by the
126
Government of the Philippines or any of its branches,
instrumentalities, enterprises, banks or financial institutions, or by
taking undue advantage of their office, authority, influence,
connections or relationship, resulting in their unjust enrichment and
causing grave damage and prejudice to the Filipino people and the
Republic of the Philippines" ;
c) that "said assets and properties are in the form of bank accounts,
deposits, trust accounts, shares of stocks, buildings, shopping
centers, condominiums, mansions, residences, estates, and other
kinds of real and personal properties in the Philippines and in various
countries of the world;" and.
2) that certain "business enterprises and properties (were) taken
over by the government of the Marcos Administration or by entities or
persons close to former President Marcos." [Footnotes deleted].
It does not suffice, as in this case, that the respondent is or was a
government official or employee during the administration of former
Pres. Marcos. There must be a prima facie showing that the
respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife. This
is so because otherwise the respondent’s case will fall under existing
general laws and procedures on the matter. Rep. Act No. 3019, the
Anti-Graft and Corrupt Practices Act, penalizes the corrupt practices
of any public officer. Under Rep. Act No. 1379 (An Act Declaring
Forfeited in Favor of the State Any Property Found to Have Been
Unlawfully Acquired By Any Public Officer or Employee and
Providing for the Procedure Therefor), whenever any public officer or
employee has acquired during his incumbency an amount of property
which is manifestly out of proportion to his salary as such public
officer or employee and to his other lawful income and the income
from legitimately acquired property, said property shall be presumed
prima facie to have been unlawfully acquired [Sec. 2]. The Solicitor
General shall file the petition and prosecute the case in behalf of the
Republic, after preliminary investigation by the provincial or city
prosecutor [Ibid].
Moreover, the record shows that private respondent was being
investigated for unlawfully acquired wealth under Rep. Acts Nos.
3019 and 1379, and not under E.O. Nos. 1, 2, 14 and 14-A.
Since private respondent was being investigated by the PCGG
through the AFP Anti-Graft Board it would have been presumed that
this was under Rep. Acts Nos. 3019 and 1379 in relation to E.O.
Nos. 1, 2, 14 and 14-A. But the record itself belies this
presumption:chanrob1es virtual 1aw library
(a) The letter of the chairman of the AFP Anti-Graft Board to private
respondent, dated October 16, 1987, states: "This letter is in
connection with the alleged information received by the AFP Anti-
Graft Board indicating your acquisition of wealth beyond legal means
of income in violation of Rep. Act No. 3019 known as the Anti-Graft
and Corrupt Practices Act." [Rollo, p. 39].
(b) The Resolution dated June 30, 1988 of the Board categorically
states:chanrob1es virtual 1aw library
I. PRELIMINARY STATEMENT:chanrob1es virtual 1aw library
This refers to the case against Col Troadio B. Tecson PC (Ret) for
alleged unexplained wealth pursuant to R.A. 3019, as amended,
otherwise known as Anti-Graft and Corrupt Practices Act and R.A.
1379, as amended, otherwise known as the "Act for Forfeiture of
Unlawfully Acquired Property." [Rollo, p. 43].
The resolution alleges that private respondent unlawfully
accumulated wealth by taking advantage of his office as Finance
Officer of the Philippine Constabulary. No attempt is made in the
127
Board’s resolution to link him or his accumulation of wealth to former
Pres. Marcos and/or his wife.
(c) The letter of the Board chairman to the chairman of the PCGG,
dated July 28, 1988, is clear:chanrob1es virtual 1aw library
Respectfully transmitted herewith for the prosecution before the
Sandiganbayan is the case folder of COLONEL TROADIO TECSON
(Ret) who after preliminary investigation of the case by the Board,
found a prima facie evidence against subject officer for violating
Section 8, R.A. 3019, as amended by BP 195, otherwise known as
the Anti-Graft and Corrupt Practices Act and R.A. 1379, otherwise
known as an Act for the Forfeiture of Unlawfully Acquired Property."
[Rollo, p. 46].
Moreover, from the allegations of petitioner in its memorandum, it
would appear that private respondent accumulated his wealth for his
own account. Petitioner quoted the letter of Ignacio Datahan, a
retired PC sergeant, to General Fidel Ramos, the material portion of
which reads:chanrob1es virtual 1aw library
. . . After an official in the military unit received an Allotment Advice
the same signed a cash advance voucher, let us say in the amount
of P5,000.00. Without much ado, outright, Col. Tecson paid the
amount. The official concerned was also made to sign the receipt
portion on the voucher the amount of which was left blank. Before
the voucher is passed for routine processing by Mrs. Leonor Cagas,
clerk of Col. Tecson and its facilitator, the maneuver began. The
amount on the face of the cash advance voucher is altered or
superimposed. The original amount of P5,000.00 was now made
say, P95,000.00. So it was actually the amount of P95,000.00 that
appeared on the records. The difference of P90,000.00 went to the
syndicate.
. . . Boy Tanyag, bookkeeper in Col. Tecson’s office took care of the
work.
. . . In the liquidation of the altered cash advance amount, names of
persons found in the Metropolitan Manila Telephone Directory with
fictitious addresses appeared as recipients or payees. Leonor and
Boy got their shares on commission basis of the looted amount while
the greater part went to Col. Tecson. [Rollo, pp. 184-185.].
Clearly, this alleged unlawful accumulation of wealth is not that
contemplated in E.O. Nos. 1, 2, 14 and 14-A.
2. It will not do to cite the order of the PCGG Chairman, dated May
13, 1986, creating the Board and authorizing it to investigate the
unexplained wealth and corrupt practices of AFP personnel, both
retired and in active service, to support the contention that PCGG
has jurisdiction over the case of private Respondent. The PCGG
cannot do more than what it was empowered to do. Its powers are
limited. Its task is limited to the recovery of the ill-gotten wealth of the
Marcoses, their relatives and cronies. The PCGG cannot, through an
order of its chairman, grant itself additional powers — powers not
contemplated in its enabling law.
3. Petitioner assails the trial court’s cognizance of the petition filed by
private Respondent. Particularly, petitioner argues that the trial court
cannot acquire jurisdiction over the PCGG. This matter has already
been settled in Peña, supra, where the Court ruled that those who
wish to question or challenge the PCGG’s acts or orders must seek
recourse in the Sandiganbayan, which is vested with exclusive and
original jurisdiction. The Sandiganbayan’s decisions and final orders
are in turn subject to review on certiorari exclusively by this Court.
[Ibid, at pp. 564-565].
The ruling in Peña was applied in PCGG v. Aquino, G.R. No. 77816,
June 30, 1988, 163 SCRA 363, Soriano III v. Yuson, G.R. No. 74910
128
(and five other cases), August 10, 1988, 164 SCRA 226 and Olaguer
v. RTC, NCJR, Br. 48, G.R. No. 81385, February 21, 1989, 170
SCRA 478, among others, to enjoin the regional trial courts from
interfering with the actions of the PCGG.
Respondent judge clearly acted without or in excess of his
jurisdiction when he took cognizance of Civil Case No. 57092 and
issued the writ of preliminary injunction against the PCGG
4. Thus, we are confronted with a situation wherein the PCGG acted
in excess of its jurisdiction and, hence, may be enjoined from doing
so, but the court that issued the injunction against the PCGG has not
been vested by law with jurisdiction over it and, thus, the injunction
issued was null and void.
The nullification of the assailed order of respondent judge issuing the
writ of preliminary injunction is therefore in order. Likewise,
respondent judge must be enjoined from proceeding with Civil Case
No. 57092.
But in view of the patent lack of authority of the PCGG to investigate
and cause the prosecution of private respondent for violation of Rep.
Acts Nos. 3019 and 1379, the PCGG must also be enjoined from
proceeding with the case, without prejudice to any action that may be
taken by the proper prosecutory agency. The rule of law mandates
that an agency of government be allowed to exercise only the
powers granted it.
5. The pronouncements made above should not be taken to mean
that the PCGG’s creation of the AFP Anti-Graft Board is a nullity and
that the PCGG has no authority to investigate and cause the
prosecution of members and former members of the Armed Forces
of the Philippines for violations of Rep. Acts Nos. 3019 and 1379.
The PCGG may investigate and cause the prosecution of active and
retired members of the AFP for violations of Rep. Acts Nos. 3019
and 1379 only in relation to E.O. Nos. 1, 2, 14 and 14-A, i.e., insofar
as they involve the recovery of the ill-gotten wealth of former Pres.
Marcos and his family and "cronies." But the PCGG would not have
jurisdiction over an ordinary case falling under Rep. Acts Nos. 3019
and 1379, as in the case at bar. E.O. Nos. 1, 2, 14 and 14-A did not
envision the PCGG as the investigator and prosecutor of all unlawful
accumulations of wealth. The PCGG was created for a specific and
limited purpose, as we have explained earlier, and necessarily its
powers must be construed with this in mind.
6. n his pleadings, private respondent contends that he may no
longer be prosecuted because of prescription. He relies on section 2
of Rep. Act No. 1379 which provides that" [t]he right to file such
petition [for forfeiture of unlawfully acquired wealth] shall prescribe
within four years from the date of resignation, dismissal or separation
or expiration of the term of the officer or employee concerned." He
retired on May 9, 1984, or more than six (6) years ago. However, it
must be pointed out that section 2 of Rep. Act No. 1379 should be
deemed amended or repealed by Article XI, section 15 of the 1987
Constitution which provides that" [t]he right of the State to recover
properties unlawfully acquired by public officials or employees, from
them or from their nominees or transferees, shall not be barred by
prescription, laches, or estoppel." Considering that sec. 2 of Rep. Act
No. 1379 was deemed amended or repealed before the prescriptive
period provided therein had lapsed insofar as private respondent is
concerned, we cannot say that he had already acquired a vested
right that may not be prejudiced by a subsequent enactment.
Moreover, to bar the Government from recovering ill-gotten wealth
would result in the validation or legitimization of the unlawful
acquisition, a consequence at variance with the clear intent of Rep.
Act No. 1379, which provides:chanrobles virtual lawlibrar
SEC. 11. Laws on prescription. — The laws concerning acquisitive
prescription and limitation of actions cannot be invoked by, nor shall
129
they benefit the respondent, in respect to any property unlawfully
acquired by him.
Thus, we hold that the appropriate prosecutory agencies, i.e., the city
or provincial prosecutor and the Solicitor General under sec. 2 of
Rep. Act No. 1379, may still investigate the case and file the petition
for the forfeiture of unlawfully acquired wealth against private
respondent, now a private citizen. (On the other hand, as regards
respondents for violations of Rep. Acts Nos. 3019 and 1379 who are
still in the government service, the agency granted the power to
investigate and prosecute them is the Office of the Ombudsman
[Rep. Act No. 6770]). Under Presidential Decree No. 1606, as
amended, and Batas Pambansa Blg. 195 violations of Rep. Acts
Nos. 3019 and 1379 shall be tried by the Sandiganbayan.
7. The Court hastens to add that this decision is without prejudice to
the prosecution of private respondent under the pertinent provisions
of the Revised Penal Code and other related penal laws.
WHEREFORE, the order of respondent judge dated June 26, 1989 in
Civil Case No. 57092 is NULLIFIED and SET ASIDE. Respondent
judge is ORDERED to dismiss Civil Case No. 57092. The temporary
restraining order issued by the Court on August 29, 1989 is MADE
PERMANENT. The PCGG is ENJOINED from proceeding with the
investigation and prosecution of private respondent in I.S. No. 37,
without prejudice to his investigation and prosecution by the
appropriate prosecutory agency.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Griño-Aquino, Medialdea and
Regalado, JJ., concur.
Sarmiento, J., on leave.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33693-94 May 31, 1979
MISAEL P. VERA, as Commissioner of Internal Revenue, and THE
FAIR TRADE BOARD, petitioner,
vs.
HON. SERAFIN R. CUEVAS, as Judge of the Court of First Instance
of Manila, Branch IV, INSTITUTE OF EVAPORATED FILLED MILK
MANUFACTURERS OF THE PHILIPPINES, INC., CONSOLIDATED
MILK COMPANY (PHIL.) INC., and MILK INDUSTRIES, INC.,
respondents.
Solicitor General Felix Q. Antonio and Solicitor Bernardo P. Pardo for
petitioners.
Sycip, Salazar, Luna, Manalo & Feliciano for private respondents.
DE CASTRO, J.:
This is a petition for certiorari with preliminary injunction to review the
decision rendered by respondent judge, in Civil Case No. 52276 and
in Special Civil Action No. 52383 both of the Court of First Instance
of Manila.
Plaintiffs, in Civil Case No. 52276 private respondents herein, are
engaged in the manufacture, sale and distribution of filled milk
products throughout the Philippines. The products of private
respondent, Consolidated Philippines Inc. are marketed and sold
under the brand Darigold whereas those of private respondent,
General Milk Company (Phil.), Inc., under the brand "Liberty;" and
130
those of private respondent, Milk Industries Inc., under the brand
"Dutch Baby." Private respondent, Institute of Evaporated Filled Milk
Manufacturers of the Philippines, is a corporation organized for the
principal purpose of upholding and maintaining at its highest the
standards of local filled milk industry, of which all the other private
respondents are members.
Civil Case No. 52276 is an action for declaratory relief with ex-parte
petition for preliminary injunction wherein plaintiffs pray for an
adjudication of their respective rights and obligations in relation to the
enforcement of Section 169 of the Tax Code against their filled milk
products.
The controversy arose from the order of defendant, Commissioner of
Internal Revenue now petitioner herein, requiring plaintiffs- private
respondents to withdraw from the market all of their filled milk
products which do not bear the inscription required by Section 169 of
the Tax Code within fifteen (15) days from receipt of the order with
the explicit warning that failure of plaintiffs' private respondents to
comply with said order will result in the institution of the necessary
action against any violation of the aforesaid order. Section 169 of the
Tax Code reads as follows:
Section 169. Inscription to be placed on skimmed milk. — All
condensed skimmed milk and all milk in whatever form, from which
the fatty part has been removed totally or in part, sold or put on sale
in the Philippines shall be clearly and legibly marked on its
immediate containers, and in all the language in which such
containers are marked, with the words, "This milk is not suitable for
nourishment for infants less than one year of age," or with other
equivalent words.
The Court issued a writ of preliminary injunction dated February 16,
1963 restraining the Commissioner of Internal Revenue from
requiring plaintiffs' private respondents to print on the labels of their
rifled milk products the words, "This milk is not suitable for
nourishment for infants less than one year of age or words of similar
import, " as directed by the above quoted provision of Law, and from
taking any action to enforce the above legal provision against the
plaintiffs' private respondents in connection with their rifled milk
products, pending the final determination of the case, Civil Case No.
52276, on the merits.
On July 25, 1969, however, the Office of the Solicitor General
brought an appeal from the said order by way of certiorari to the
Supreme Court. 1 In view thereof, the respondent court in the
meantime suspended disposition of these cases but in view of the
absence of any injunction or restraining order from the Supreme
Court, it resumed action on them until their final disposition therein.
Special Civil Action No. 52383, on the other hand, is an action for
prohibition and injunction with a petition for preliminary injunction.
Petitioners therein pray that the respondent Fair Trade Board desist
from further proceeding with FTB I.S. No. I . entitled "Antonio R. de
Joya vs. Institute of Evaporated Milk Manufacturers of the
Philippines, etc." pending final determination of Civil Case No.
52276. The facts of this special civil action show that on December 7,
1962, Antonio R. de Joya and Sufronio Carrasco, both in their
individual capacities and in their capacities as Public Relations
Counsel and President of the Philippine Association of Nutrition,
respectively, filed FTB I.S. No. 1 with Fair Trade Board for
misleading advertisement, mislabeling and/or misbranding. Among
other things, the complaint filed include the charge of omitting to
state in their labels any statement sufficient to Identify their filled milk
products as "imitation milk" or as an imitation of genuine cows milk.
and omitting to mark the immediate containers of their filled milk
products with the words: "This milk is not suitable for nourishment for
infants less than one year of age or with other equivalent words as
required under Section 169 of the Tax Code. The Board proceeded
131
to hear the complaint until it received the writ of preliminary injunction
issued by the Court of First Instance on March 19, 1963.
Upon agreement of the parties, Civil Case No. 52276 and Special
Civil Action No. 52383 were heard jointly being intimately related with
each other, with common facts and issues being also involved
therein. On April 16, 1971, the respondent court issued its decision,
the dispositive part of which reads as follows:
Wherefore, judgment is hereby rendered:
In Civil Case No. 52276:
(a) Perpetually restraining the defendant, Commissioner of
Internal Revenue, his agents, or employees from requiring plaintiffs
to print on the labels of their filled milk products the words: "This milk
is not suitable for nourishment for infants less than one year of age"
or words with equivalent import and declaring as nun and void and
without authority in law, the order of said defendant dated September
28, 1961, Annex A of the complaint, and the Ruling of the Secretary
of Finance, dated November 12, 1962, Annex G of the complaint;
and
In Special Civil Action No. 52383:
(b) Restraining perpetually the respondent Fair Trade Board, its
agents or employees from continuing in the investigation of the
complaints against petitioners docketed as FTB I.S. No. 2, or any
charges related to the manufacture or sale by the petitioners of their
filled milk products and declaring as null the proceedings so far
undertaken by the respondent Board on said complaints. (pp. 20- 21,
Rollo).
From the above decision of the respondent court, the Commissioner
of Internal Revenue and the Fair Trade Board joined together to file
the present petition for certiorari with preliminary injunction, assigning
the following errors:
I. THE LOWER COURT ERRED IN RULING THAT SEC.
TION 169 OF THE TAX CODE HAS BEEN REPEALED BY
IMPLICATION.
II. THE LOWER COURT ERRED IN RULING THAT SECTION
169 OF THE TAX CODE HAS LOST ITS TAX PURPOSE, AND
THAT COMMISSIONER NECESSARILY LOST HIS AUTHORITY
TO ENFORCE THE SAME AND THAT THE PROPER AUTHORITY
TO PROMOTE THE HEALTH OF INFANTS IS THE FOOD AND
DRUG ADMINISTRATION, THE SECRETARY OF HEALTH AND
THE SECRETARY OF JUSTICE, AS PROVIDED FOR IN RA 3720,
NOT THE COMMISSIONER OF INTERNAL REVENUE.
III. THE LOWER COURT ERRED IN RULING THAT THE
POWER TO INVESTIGATE AND TO PROSECUTE VIOLATIONS
OF FOOD LAWS IS ENTRUSTED TO THE FOOD AND DRUG
INSPECTION, THE FOOD AND DRUG ADMINISTRATION, THE
SECRETARY OF HEALTH AND THE SECRETARY OF JUSTICE,
AND THAT THE FAIR TRADE BOARD IS WITHOUT
JURISDICTION TO INVESTIGATE AND PROSECUTE ALLEGED
MISBRANDING, MISLABELLING AND/OR MISLEADING
ADVERTISEMENT OF FILLED MILK PRODUCTS. (pp, 4-5, Rollo).
The lower court did not err in ruling that Section 169 of the Tax Code
has been repealed by implication. Section 169 was enacted in 1939,
together with Section 141 (which imposed a Specific tax on skimmed
milk) and Section 177 (which penalized the sale of skimmed milk
without payment of the specific tax and without the legend required
by Section 169). However, Section 141 was expressly repealed by
Section 1 of Republic Act No. 344, and Section 177, by Section 1 of
Republic Act No. 463. By the express repeal of Sections 141 and
132
177, Section 169 became a merely declaratory provision, without a
tax purpose, or a penal sanction.
Moreover, it seems apparent that Section 169 of the Tax Code does
not apply to filled milk. The use of the specific and qualifying terms
"skimmed milk" in the headnote and "condensed skimmed milk" in
the text of the cited section, would restrict the scope of the general
clause "all milk, in whatever form, from which the fatty pat has been
removed totally or in part." In other words, the general clause is
restricted by the specific term "skimmed milk" under the familiar rule
of ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms they follow in the statute.
Skimmed milk is different from filled milk. According to the
"Definitions, Standards of Purity, Rules and Regulations of the Board
of Food Inspection," skimmed milk is milk in whatever form from
which the fatty part has been removed. Filled milk, on the other hand,
is any milk, whether or not condensed, evaporated concentrated,
powdered, dried, dessicated, to which has been added or which has
been blended or compounded with any fat or oil other than milk fat so
that the resulting product is an imitation or semblance of milk cream
or skim milk." The difference, therefore, between skimmed milk and
filled milk is that in the former, the fatty part has been removed while
in the latter, the fatty part is likewise removed but is substituted with
refined coconut oil or corn oil or both. It cannot then be readily or
safely assumed that Section 169 applies both to skimmed milk and
filled milk.
The Board of Food Inspection way back in 1961 rendered an opinion
that filled milk does not come within the purview of Section 169, it
being a product distinct from those specified in the said Section since
the removed fat portion of the milk has been replaced with coconut
oil and Vitamins A and D as fortifying substances (p. 58, Rollo). This
opinion bolsters the Court's stand as to its interpretation of the scope
of Section 169. Opinions and rulings of officials of the government
called upon to execute or implement administrative laws command
much respect and weight. (Asturias Sugar Central Inc. vs.
Commissioner of Customs, G. R. No. L-19337, September 30, 1969,
29 SCRA 617; Tan, et. al. vs. The Municipality of Pagbilao et. al., L-
14264, April 30, 1963, 7 SCRA 887; Grapilon vs. Municipal Council
of Carigara L-12347, May 30, 1961, 2 SCRA 103).
This Court is, likewise, induced to the belief that filled milk is suitable
for nourishment for infants of all ages. The Petitioners themselves
admitted that: "the filled milk products of the petitioners (now private
respondents) are safe, nutritious, wholesome and suitable for feeding
infants of all ages" (p. 44, Rollo) and that "up to the present, Filipino
infants fed since birth with filled milk have not suffered any defects,
illness or disease attributable to their having been fed with filled
milk." (p. 45, Rollo).
There would seem, therefore, to be no dispute that filled milk is
suitable for feeding infants of all ages. Being so, the declaration
required by Section 169 of the Tax Code that filled milk is not
suitable for nourishment for infants less than one year of age would,
in effect, constitute a deprivation of property without due. process of
law.
Section 169 is being enforced only against respondent
manufacturers of filled milk product and not as against
manufacturers, distributors or sellers of condensed skimmed milk
such as SIMILAC, SMA, BREMIL, ENFAMIL, OLAC, in which, as
admitted by the petitioner, the fatty part has been removed and
substituted with vegetable or corn oil. The enforcement of Section
169 against the private respondents only but not against other
persons similarly situated as the private respondents amounts to an
unconstitutional denial of the equal pro petition of the laws, for the
law, equally enforced, would similarly offend against the Constitution.
Yick Wo vs. Hopkins, 118 U.S. 356,30 L. ed. 220).
133
As stated in the early part of this decision, with the repeal of Sections
141 and 177 of the Tax Code, Section 169 has lost its tax purpose.
Since Section 169 is devoid of any tax purpose, petitioner
Commissioner necessarily lost his authority to enforce the same.
This was so held by his predecessor immediately after Sections 141
and 177 were repealed in General Circular No. V-85 as stated in
paragraph IX of the Partial Stipulation of facts entered into by the
parties, to wit:
... As the act of sewing skimmed milk without first paying the specific
tax thereon is no longer unlawful and the enforcement of the
requirement in regard to the placing of the proper legend on its
immediate containers is a subject which does not come within the
jurisdiction of the Bureau of Internal Revenue, the penal provisions of
Section 177 of the said Code having been repealed by Republic Act
No. 463. (p. 102, Rollo).
Petitioner's contention that he still has jurisdiction to enforce Section
169 by virtue of Section 3 of the Tax Code which provides that the
Bureau of Internal Revenue shall also "give effect to and administer
the supervisory and police power conferred to it by this Code or other
laws" is untenable. The Bureau of Internal Revenue may claim police
power only when necessary in the enforcement of its principal
powers and duties consisting of the "collection of all national internal
revenue taxes, fees and charges, and the enforcement of all
forfeitures, penalties and fines connected therewith." The
enforcement of Section 169 entails the promotion of the health of the
nation and is thus unconnected with any tax purpose. This is the
exclusive function of the Food and Drug Administration of the
Department of Health as provided for in Republic Act No. 3720. In
particular, Republic Act No. 3720 provides:
Section 9. ... It shall be the duty of the Board (Food and Drug
Inspection), conformably with the rules and regulations, to hold
hearings and conduct investigations relative to matters touching the
Administration of this Act, to investigate processes of food, drug and
cosmetic manufacture and to subject reports to the Food and Drug
Administrator, recommending food and drug standards for adoption.
Said Board shall also perform such additional functions, properly
within the scope of the administration thereof, as maybe assigned to
it by the Food and Drug Administrator. The decisions of the Board
shall be advisory to the Food and Drug Administrator.
Section 26. ...
xxx xxx xxx
(c) Hearing authorized or required by this Act shall be
conducted by the Board of Food and Drug Inspection which shall
submit recommendation to the Food and Drug Administrator.
believes that public interest will be adequately served by a suitable
written notice or warning.
The aforequoted provisions of law clearly show that petitioners,
Commissioner of Internal Revenue and the Fair Trade Board, are
without jurisdiction to investigate and to prosecute alleged
misbranding, mislabeling and/or misleading advertisements of filled
milk. The jurisdiction on the matters cited is vested upon the Board of
Food and Drug inspection and the Food and Drug Administrator, with
the Secretary of Health and the Secretary of Justice, also intervening
in case criminal prosecution has to be instituted. To hold that the
petitioners have also jurisdiction as would be the result were their
instant petition granted, would only cause overlapping of powers and
functions likely to produce confusion and conflict of official action
which is neither practical nor desirable.

(d) When it appears to the Food and Drug Administrator from WHEREFORE, the decision appealed from is hereby affirmed en
the reports of the Food and Drug Laboratory that any article of food toto. No costs.
or any drug or cosmetic secured pursuant to Section 28 of this Act is
adulterated or branded he shall cause notice thereof to be given to SO ORDERED.
the person or persons concerned and such person or persons shall
be given an opportunity to subject evidence impeaching the Teehankee, (Chairman), Fernandez, Melencio-Herrera, JJ., concur.
correctness of the finding or charge in question.

(e) When a violation of any provisions of this Act comes to the

knowledge of the Food and Drug Administrator of such character that
a criminal prosecution ought to be instituted against the offender, he
shall certify the facts to the Secretary of Justice through the
Secretary of Health, together with the chemists' report, the findings of
the Board of Food and Drug Inspection, or other documentary
evidence on which the charge is based.

(f) Nothing in this Act shall be construed as requiring the Food

and Drug Administrator to certify for prosecution pursuant to
subparagraph (e) hereof, minor violations of this Act whenever he

134
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47757-61 January 28, 1980
THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th
Assistant of Provincial Bohol VICENTE DE LA SERNA. JR., as
complainant all private prosecutor, petitioners,
vs.
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First
Instance of Bohol Branch II, ANO DACULLO, GERONIMO
OROYAN, MARIO APARICI, RUPERTO CAJES and MODESTO S
SUELLO, respondents.
AQUINO, J.:p
The legal issue in this case is whether Presidential Decree No. 772,
which penalizes squatting and similar acts, applies to agricultural
lands. The decree (which took effect on August 20, 1975) provides:
SECTION 1. Any person who, with the use of force, intimidation
or threat, or taking advantage of the absence or tolerance of the
landowner, succeeds in occupying or possessing the property of the
latter against his will for residential, commercial or any other
purposes, shall be punished by an imprisonment ranging from six
months to one year or a fine of not less than one thousand nor more
than five thousand pesos at the discretion of the court, with
subsidiary imprisonment in case of insolvency. (2nd paragraph is
omitted.)
The record shows that on October 25, 1977 Fiscal Abundio R. Ello
filed with the lower court separate informations against sixteen
135
persons charging them with squatting as penalized by Presidential
Decree No. 772. The information against Mario Aparici which is
similar to the other fifteen informations, reads:
That sometime in the year 1974 continuously up to the present at
barangay Magsaysay, municipality of Talibon, province of Bohol,
Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, with stealth and strategy, enter into, occupy
and cultivate a portion of a grazing land physically occupied,
possessed and claimed by Atty. Vicente de la Serna, Jr. as
successor to the pasture applicant Celestino de la Serna of Pasture
Lease Application No. 8919, accused's entrance into the area has
been and is still against the win of the offended party; did then and
there willfully, unlawfully, and feloniously squat and cultivate a
portion of the said grazing land; said cultivating has rendered a
nuisance to and has deprived the pasture applicant from the full use
thereof for which the land applied for has been intended, that is
preventing applicant's cattle from grazing the whole area, thereby
causing damage and prejudice to the said applicant-possessor-
occupant, Atty. Vicente de la Serna, Jr. (sic)
Five of the informations, wherein Ano Dacullo, Geronimo Oroyan,
Mario Aparici, Ruperto Cajes and Modesto Suello were the accused,
were raffled to Judge Vicente B. Echaves, Jr. of Branch II (Criminal
Cases Nos. 1824, 1828, 1832, 1833 and 1839, respectively).
Before the accused could be arraigned, Judge Echaves motu proprio
issued an omnibus order dated December 9, 1977 dismissing the
five informations on the grounds (1) that it was alleged that the
accused entered the land through "stealth and strategy", whereas
under the decree the entry should be effected "with the use of force,
intimidation or threat, or taking advantage of the absence or
tolerance of the landowner", and (2) that under the rule of ejusdem
generis the decree does not apply to the cultivation of a grazing land.
Because of that order, the fiscal amended the informations by using
in lieu of "stealth and strategy" the expression "with threat, and
taking advantage of the absence of the ranchowner and/or tolerance
of the said ranchowner". The fiscal asked that the dismissal order be
reconsidered and that the amended informations be admitted.
The lower court denied the motion. It insisted that the phrase "and for
other purposes" in the decree does not include agricultural purposes
because its preamble does not mention the Secretary of Agriculture
and makes reference to the affluent class.
From the order of dismissal, the fiscal appealed to this Court under
Republic Act No. 5440. The appeal is devoid of merit.
We hold that the lower court correctly ruled that the decree does not
apply to pasture lands because its preamble shows that it was
intended to apply to squatting in urban communities or more
particularly to illegal constructions in squatter areas made by well-to-
do individuals. The squating complained of involves pasture lands in
rural areas.
The preamble of the decree is quoted below:
WHEREAS, it came to my knowledge that despite the issuance of
Letter of Instruction No. 19 dated October 2, 1972, directing the
Secretaries of National Defense, Public Work. 9 and
communications, Social Welfare and the Director of Public Works,
the PHHC General Manager, the Presidential Assistant on Housing
and Rehabilitation Agency, Governors, City and Municipal Mayors,
and City and District Engineers, "to remove an illegal constructions
including buildings on and along esteros and river banks, those
along railroad tracks and those built without permits on public and
private property." squatting is still a major problem in urban
communities all over the country;
136
WHEREAS, many persons or entities found to have been unlawfully
occupying public and private lands belong to the affluent class;
WHEREAS, there is a need to further intensify the government's
drive against this illegal and nefarious practice.
It should be stressed that Letter of Instruction No. 19 refers to illegal
constructions on public and private property. It is complemented by
Letter of Instruction No. 19-A which provides for the relocation of
squatters in the interest of public health, safety and peace and order.
On the other hand, it should be noted that squatting on public
agricultural lands, like the grazing lands involved in this case, is
punished by Republic Act No. 947 which makes it unlawful for any
person, corporation or association to forcibly enter or occupy public
agricultural lands. That law provides:
SECTION 1. It shall be unlawful for any person corporation or
association to enter or occupy, through force, intimidation, threat,
strategy or stealth, any public agriculture land including such public
lands as are granted to private individuals under the provision of the
Public Land Act or any other laws providing for the of public
agriculture lands in the Philippines and are duly covered by the
corresponding applications for the notwithstanding standing the fact
that title thereto still remains in the Government or for any person,
natural or judicial to investigate induce or force another to commit
such acts.
Violations of the law are punished by a fine of not exceeding one
thousand or imprisonment for not more than one year, or both such
fine and imprisonment in the discretion of the court, with subsidiary
imprisonment in case of insolvency. (See People vs. Lapasaran 100
Phil. 40.)
The rule of ejusdem generis (of the same kind or species) invoked by
the trial court does not apply to this case. Here, the intent of the
decree is unmistakable. It is intended to apply only to urban
communities, particularly to illegal constructions. The rule of ejusdem
generis is merely a tool of statutory construction which is resorted to
when the legislative intent is uncertain (Genato Commercial Corp. vs.
Court of Tax Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50).

WHEREFORE, the trial court's order of dismissal is affirmed. No

costs.

SO ORDERED.

Barredo, Antonio, Concepcion Jr. and Abad Santos, J., concur.

137
EXPRESS MENTION AND IMPLIED EXCLUSION (EXPRESSIO It was assessed and ordered to pay by the Commissioner of Internal
UNIUS EST EXCLUSIO ALTERIUS) Revenue the total amount of P8,182,182.85[2] representing
deficiency millers tax and manufacturers sales tax,[3] among other
SECOND DIVISION deficiency taxes,[4] for taxable year 1987. The deficiency millers tax
was imposed on SPMCs sales of crude oil to United Coconut
SAN PABLO MANUFACTURING G.R. No. 147749 Chemicals, Inc. (UNICHEM) while the deficiency sales tax was
CORPORATION, applied on its sales of corn and edible oil as manufactured products.
Petitioner, SPMC opposed the assessments but the Commissioner denied its
Present: protest. SPMC appealed the denial of its protest to the Court of Tax
Appeals (CTA) by way of a petition for review docketed as CTA Case
PUNO, J., Chairperson, No. 5423.
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA, In its March 10, 2000 decision, the CTA cancelled SPMCs liability for
AZCUNA and deficiency manufacturers tax on the sales of corn and edible oils but
GARCIA, JJ. upheld the Commissioners assessment for the deficiency millers tax.
SPMC moved for the partial reconsideration of the CTA affirmation of
COMMISSIONER OF INTERNAL the millers tax assessment but it was denied.
REVENUE ,*
Respondent. Promulgated: SPMC elevated the case to the Court of Appeals via a petition for
review of the CTA decision insofar as it upheld the deficiency millers
June 22, 2006 tax assessment. In its July 19, 2000 resolution, the appellate court
dismissed the petition on the principal ground[5] that the verification
x - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - -x attached to it was signed merely by SPMCs chief financial officer ―
without the corporate secretarys certificate, board resolution or
DECISION power of attorney authorizing him to sign the verification and
certification against forum shopping. SPMC sought a reconsideration
CORONA, J.: of the resolution but the same was denied. Hence, this petition.
Did the Court of Appeals err when it dismissed SPMCs appeal?
In this petition for review under Rule 45 of the Rules of Court, San SPMC contends that its appeal should have been given due course
Pablo Manufacturing Corporation (SPMC) assails the July 19, since it substantially complied with the requirements on verification
2000[1] and April 3, 2001 resolutions of the Court of Appeals in CA- and certification against forum shopping. It insists on the liberal
G.R. SP No. 59139. application of the rules because, on the merits of the petition, SPMC
was not liable for the 3% millers tax. It maintains that the crude oil
SPMC is a domestic corporation engaged in the business of milling, which it sold to UNICHEM was actually exported by UNICHEM as an
manufacturing and exporting of coconut oil and other allied products.

138
ingredient of fatty acid and glycerine, hence, not subject to millers tax
pursuant to Section 168 of the 1987 Tax Code.
For SPMC, Section 168 of the 1987 Tax Code contemplates two
exemptions from the millers tax: (a) the milled products in their
original state were actually exported by the miller himself or by
another person, and (b) the milled products sold by the miller were
actually exported as an ingredient or part of any manufactured article
by the buyer or manufacturer of the milled products.The exportation
may be effected by the miller himself or by the buyer or manufacturer
of the milled products. Since UNICHEM, the buyer of SPMCs milled
products, subsequently exported said products, SPMC should be
exempted from the millers tax.
The petition must fail.
Under Rule 43, Section 5 of the Rules of Court, appeals from the
CTA and quasi-judicial agencies to the Court of Appeals should be
verified. A pleading required to be verified which lacks proper
verification shall be treated as an unsigned pleading.[6]
Moreover, a petition for review under Rule 43 requires a sworn
certification against forum shopping.[7] Failure of the petitioner to
comply with any of the requirements of a petition for review is
sufficient ground for the dismissal of the petition.[8]
A corporation may exercise the powers expressly conferred upon it
by the Corporation Code and those that are implied by or are
incidental to its existence through its board of directors and/or duly
authorized officers and agents.[9] Hence, physical acts, like the
signing of documents, can be performed only by natural persons duly
authorized for the purpose by corporate by-laws or by specific act of
the board of directors.[10] In the absence of authority from the board
of directors, no person, not even the officers of the corporation, can
bind the corporation.[11]
139
SPMCs petition in the Court of Appeals did not indicate that the
person who signed the verification/certification on non-forum
shopping was authorized to do so. SPMC merely relied on the
alleged inherent power of its chief financial officer to represent SPMC
in all matters regarding the finances of the corporation including,
among others, the filing of suits to defend or protect it from
assessments and to recover erroneously paid taxes. SPMC even
admitted that no power of attorney, secretarys certificate or board
resolution to prove the affiants authority was attached to the petition.
Thus, the petition was not properly verified. Since the petition lacked
proper verification, it was to be treated as an unsigned pleading
subject to dismissal.[12]
In PET Plans, Inc. v. Court of Appeals,[13] the Court upheld the
dismissal by the Court of Appeals of the petition on the ground that
the verification and certification against forum shopping was signed
by PET Plans, Inc.s first vice-president for legal affairs/corporate
secretary without any certification that he was authorized to sign in
behalf of the corporation.
In BPI Leasing Corporation v. Court of Appeals,[14] the Court ruled
that the petition should be dismissed outright on the ground that the
verification/certification against forum shopping was signed by BPI
Leasing Corporations counsel with no specific authority to do so.
Since the counsel was purportedly acting for the corporation, he
needed a resolution issued by the board of directors that specifically
authorized him to institute the petition and execute the certification.
Only then would his actions be legally binding on the corporation.[15]
In this case, therefore, the appellate court did not commit an error
when it dismissed the petition on the ground that it was signed by a
person who had not been issued any authority by the board of
directors to represent the corporation.
Neither can the Court subscribe to SPMCs claim of substantial
compliance or to its plea for a liberal application of the rules. Save for
the most persuasive of reasons, strict compliance with procedural
rules is enjoined to facilitate the orderly administration of justice.[16]
Substantial compliance will not suffice in a matter involving strict
observance such as the requirement on non-forum shopping,[17] as
well as verification. Utter disregard of the rules cannot justly be
rationalized by harping on the policy of liberal construction.[18]
But even if the fatal procedural infirmity were to be disregarded, the
petition must still fail for lack of merit.
As the CTA correctly ruled, SPMCs sale of crude coconut oil to
UNICHEM was subject to the 3% millers tax. Section 168 of the 1987
Tax Code provided:
Sec. 168. Percentage tax upon proprietors or operators of rope
factories, sugar central mills, coconut oil mills, palm oil mills, cassava
mills and desiccated coconut factories. Proprietors or operators of
rope factories, sugar central and mills, coconut oil mills, palm oil
mills, cassava mills and desiccated coconut factories, shall pay a tax
equivalent to three percent (3%) of the gross value in money of all
the rope, sugar, coconut oil, palm oil, cassava flour or starch,
dessicated coconut, manufactured, processed or milled by them,
including the by-product of the raw materials from which said articles
are produced, processed or manufactured, such tax to be based on
the actual selling price or market value of these articles at the time
they leave the factory or mill warehouse: Provided, however, That
this tax shall not apply to rope, coconut oil, palm oil and the by-
product of copra from which it is produced or manufactured and
dessicated coconut, if such rope, coconut oil, palm oil, copra by-
products and dessicated coconuts, shall be removed for exportation
by the proprietor or operator of the factory or the miller himself, and
are actually exported without returning to the Philippines, whether in
their original state or as an ingredient or part of any manufactured
140
article or products: Provided further, That where the planter or the
owner of the raw materials is the exporter of the aforementioned
milled or manufactured products, he shall be entitled to a tax credit of
the miller's taxes withheld by the proprietor or operator of the factory
or mill, corresponding to the quantity exported, which may be used
against any internal revenue tax directly due from him: and Provided,
finally, That credit for any sales, miller's or excise taxes paid on raw
materials or supplies used in the milling process shall not be allowed
against the miller's tax due, except in the case of a proprietor or
operator of a refined sugar factory as provided hereunder. (emphasis
supplied)
The language of the exempting clause of Section 168 of the 1987
Tax Code was clear. The tax exemption applied only to the
exportation of rope, coconut oil, palm oil, copra by-products and
dessicated coconuts, whether in their original state or as an
ingredient or part of any manufactured article or products, by the
proprietor or operator of the factory or by the miller himself.
The language of the exemption proviso did not warrant the
interpretation advanced by SPMC. Nowhere did it provide that the
exportation made by the purchaser of the materials enumerated in
the exempting clause or the manufacturer of products utilizing the
said materials was covered by the exemption. Since SPMCs
situation was not within the ambit of the exemption, it was subject to
the 3% millers tax imposed under Section 168 of the 1987 Tax Code.
SPMCs proposed interpretation unduly enlarged the scope of the
exemption clause. The rule is that the exemption must not be so
enlarged by construction since the reasonable presumption is that
the State has granted in express terms all it intended to grant and
that, unless the privilege is limited to the very terms of the statute,
the favor would be intended beyond what was meant.[19]
Where the law enumerates the subject or condition upon which it Associate Justice Associate Justice
applies, it is to be construed as excluding from its effects all those
not expressly mentioned. Expressio unius est exclusio alterius. CANCIO C. GARCIA
Anything that is not included in the enumeration is excluded Associate Justice
therefrom and a meaning that does not appear nor is intended or
reflected in the very language of the statute cannot be placed ATTESTATION
therein.[20] The rule proceeds from the premise that the legislature
would not have made specific enumerations in a statute if it had the I attest that the conclusions in the above Decision had been reached
intention not to restrict its meaning and confine its terms to those in consultation before the case was assigned to the writer of the
expressly mentioned.[21] opinion of the Courts Division.

The rule of expressio unius est exclusio alterius is a canon of REYNATO S. PUNO
restrictive interpretation.[22] Its application in this case is consistent Associate Justice
with the construction of tax exemptions in strictissimi jurisagainst the Chairperson, Second Division
taxpayer. To allow SPMCs claim for tax exemption will violate these
established principles and unduly derogate sovereign authority.
WHEREFORE, the petition is hereby DENIED. CERTIFICATION

Costs against petitioner. Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairpersons Attestation, I certify that the conclusions in the
SO ORDERED. above decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Associate Justice

ARTEMIO V. PANGANIBAN
WECONCUR: Chief Justice

REYNATO S. PUNO
Associate Justice
Chairperson

ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA

141
EN BANC
[G.R. No. 146943. October 4, 2002]
SARIO MALINIAS, petitioner, vs. THE COMMISSION ON
ELECTIONS, TEOFILO CORPUZ, ANACLETO TANGILAG and
VICTOR DOMINGUEZ, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review on certiorari[1] of the Resolutions of
the Commission on Elections (COMELEC for brevity) en banc[2]
dated June 10, 1999 and October 26, 2000. The assailed
Resolutions dismissed the complaint[3] filed by petitioner Sario
Malinias (Malinias for brevity) and Roy S. Pilando (Pilando for
brevity) for insufficiency of evidence to establish probable cause for
violation of Section 25 of Republic Act No. 6646[4] and Sections 232
and 261 (i) of Batas Pambansa Blg. 881.[5]
The Facts
Petitioner Malinias was a candidate for governor whereas Pilando
was a candidate for congressional representative of Mountain
Province in the May 11, 1998 elections.[6]
The Provincial Board of Canvassers held the canvassing of election
returns at the second floor of the Provincial Capitol Building in
Bontoc, Mountain Province from May 11, 1998 to May 15, 1998.[7]
On July 31, 1998, Malinias and Pilando filed a complaint with the
COMELECs Law Department for violation of Section 25 of R.A. No.
142
6646, and Sections 232 and 261 (i) of B.P. Blg. 881, against Victor
Dominguez, Teofilo Corpuz, Anacleto Tangilag, Thomas Bayugan,
Jose Bagwan who was then Provincial Election Supervisor, and the
members of the Provincial Board of Canvassers. Victor Dominguez
(Dominguez for brevity) was then the incumbent Congressman of
Poblacion, Sabangan, Mountain Province. Teofilo Corpuz (Corpuz
for brevity) was then the Provincial Director of the Philippine National
Police in Mountain Province while Anacleto Tangilag (Tangilag for
brevity) was then the Chief of Police of the Municipality of Bontoc,
Mountain Province.
Malinias and Pilando alleged that on May 15, 1998 a police
checkpoint at Nacagang, Sabangan, Mountain Province blocked
their supporters who were on their way to Bontoc, and prevented
them from proceeding to the Provincial Capitol Building. Malinias and
Pilando further alleged that policemen, upon orders of private
respondents, prevented their supporters, who nevertheless
eventually reached the Provincial Capitol Building, from entering the
capitol grounds.
In their complaint, Malinias and Pilando requested the COMELEC
and its Law Department to investigate and prosecute private
respondents for the following alleged unlawful acts.
3. That on May 15, 1998 at the site of the canvassing of election
returns for congressional and provincial returns located at the second
floor of the Provincial Capitol Building the public and particularly the
designated representatives/watchers of both affiants were prevented
from attending the canvassing.
xxx
4. That the aforementioned Mass-affidavits support our allegations in
this affidavit-complaint that we and our supporters were prevented
from attending the provincial canvassing because of the illegal
checkpoint/blockade set-up by policemen in Nakagang, Tambingan,
Sabangan, Mt. Province and as an evidence to these allegations,
Certification of the Police Station is hereto attached as Annex D and
affidavits of supporters hereto attached as Annex E, both made an
integral part of this affidavit-complaint; and that said mass-affidavits
show that the Provincial canvassing were not made public or (sic)
candidates and their representatives/watchers prevented because of
barricade, closure of canvassing rooms, blockade by armed
policemen that coerce or threaten the people, the candidates or their
representatives from attending the canvassing;[8]
In support of the complaint, several supporters of Malinias and
Pilando executed so-called mass affidavits uniformly asserting that
private respondents, among others, (1) prevented them from
attending the provincial canvassing, (2) padlocked the canvassing
area, and (3) threatened the people who wanted to enter the
canvassing room. They likewise alleged that the Provincial Board of
Canvassers never allowed the canvassing to be made public and
consented to the exclusion of the public or representatives of other
candidates except those of Dominguez.[9]
Consequently, the COMELECs Law Department conducted a
preliminary investigation during which only Corpuz and Tangilag
submitted their joint Counter-Affidavit.
In their Counter-Affidavit, Corpuz and Tangilag admitted ordering the
setting up of a checkpoint at Nacagang, Sabangan, Mountain
Province and securing the vicinity of the Provincial Capitol Building,
to wit:
3. We admit having ordered the setting up of check points in
Nakagang, Tambingan, Sabangan, Mountain Province; as in fact,
this is not the only checkpoint set up in the province. There are other
checkpoints established in other parts of the province, to enforce the
143
COMELEC gun ban and other pertinent rules issued by the
Commission on Election during the election period.
4. Policemen were posted within the vicinity of the capitol grounds in
response to earlier information that some groups were out to disrupt
the canvass proceedings which were being conducted in the second
floor of the Provincial Capitol Building. This is not remote considering
that this had happened in the past elections. In fact, during the
canvass proceeding on May 15, 1998 a large group of individuals
identified with no less than affiants-complainants Roy S. Pilando and
Sario Malinias was conducting a rally just in front of the capitol,
shouting invectives at certain candidates and their leaders. This
group likewise were holding placards and posted some in front of the
capitol building.
x x x[10]
After the investigation, in a study dated May 26, 1999, the
COMELECs Law Department recommended to the COMELEC en
banc the dismissal of the complaint for lack of probable cause.[11]
In a Resolution dated June 10, 1999, the COMELEC en banc
dismissed the complaint of Malinias and Pilando for insufficiency of
evidence to establish probable cause against private respondents.
On October 26, 2000, the COMELEC dismissed Malinias Motion for
Reconsideration.
Hence, Malinias filed the instant petition.
The Comelecs Ruling
In dismissing the complaint against private respondents, the
COMELEC ruled as follows:
As appearing in the Minutes of Provincial Canvass, complainant Roy
Pilando was present during the May 15, 1998 Provincial Canvass.
He even participated actively in a discussion with the members of the
Board and the counsel of Congressman Dominguez. The minutes
also disclosed that the lawyers of LAMMP, the watchers, supporters
of other candidates and representatives of the Integrated Bar of the
Philippines were present at one time or another during the canvass
proceedings. The minutes does not indicate any charges of
irregularities inside and within the vicinity of the canvassing room.
Pursuant to Comelec Res. No. 2968 promulgated on January 7,
1998, checkpoints were established in the entire country to
effectively implement the firearms ban during the election period from
January 11, 1998 to June 10, 1998. In Mountain Province, there
were fourteen (14) checkpoints established by the Philippine National
Police way before the start of the campaign period for the May 11,
1998 elections including the subject checkpoint at Nacagang,
Tambingan, Sabangan, Mountain Province. Thus, the checkpoint at
Sabangan, Mountain Province was not established as alleged only
upon request of Congressman Dominguez on May 15, 1998 but way
before the commencement of the campaign period. Granting
arguendo that the Congressman did make a request for a checkpoint
at Sitio Nacagang, it would be a mere surplusage as the same was
already existing.
Furthermore, an alleged text of a radio message requesting advice
from the PNP Provincial Director at Bontoc, Mt. Province was
attached to complainants affidavit-complaint. However, said person
by the name of Mr. Palicos was never presented to affirm the truth of
the contents and the signature appearing therein.[12]
Finding that Malinias failed to adduce new evidence, the COMELEC
dismissed Malinias Motion for Reconsideration.[13]
The Courts Ruling
144
The sole issue for resolution is whether the COMELEC gravely
abused its discretion in dismissing Malinias and Pilandos complaint
for insufficiency of evidence to establish probable cause for alleged
violation of Section 25 of R.A. No. 6646 and Sections 232 and 261 (i)
of B.P. 881.
We rule that the COMELEC did not commit grave abuse of
discretion.
For this Court to issue the extraordinary writ of certiorari, the tribunal
or administrative body must have issued the assailed decision, order
or resolution in a capricious and despotic manner.
There is grave abuse of discretion justifying the issuance of the writ
of certiorari when there is a capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction; where the power is
exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility, amounting to an evasion of positive
duty or to a virtual refusal to perform the duty enjoined, or to act at all
in contemplation of law.[14]
Such is not the situation in the instant case. The COMELEC
dismissed properly the complaint of Malinias and Pilando for
insufficient evidence, and committed no grave abuse of discretion
amounting to lack or excess of jurisdiction.
First, Malinias charged private respondents with alleged violation of
Section 25 of Republic Act No. 6646, quoted, as follows:
Sec. 25. Right to be Present and to Counsel During the Canvass.
Any registered political party, coalition of parties, through their
representatives, and any candidate has the right to be present and to
counsel during the canvass of the election returns; Provided, That
only one counsel may argue for each political party or candidate.
They shall have the right to examine the returns being canvassed
without touching them, make their observations thereon, and file their
challenge in accordance with the rules and regulations of the
Commission. No dilatory action shall be allowed by the board of
canvassers.
In the present case, Malinias miserably failed to substantiate his
claim that private respondents denied him his right to be present
during the canvassing. There was even no showing that Malinias
was within the vicinity of the Provincial Capitol Building or that private
respondents prevented him from entering the canvassing room.
As found by the COMELEC and admitted by Malinias, Pilando was
present and even participated actively in the canvassing.[15]
Malinias failed to show that his rights as a gubernatorial candidate
were prejudiced by the alleged failure of his supporters to attend the
canvassing. Malinias claimed that even though Pilando was present
during the canvassing, the latter was only able to enter the room
after eluding the policemen and passing through the rear entrance of
the Provincial Capitol Building.[16] This allegation, however, is not
supported by any clear and convincing evidence. Pilando himself,
who was purportedly prevented by policemen from entering the
canvassing room, failed to attest to the veracity of this statement
rendering the same self-serving and baseless.
In an analogous case where a political candidates watcher failed to
attend the canvass proceedings, this Court held:
Another matter which militates against the cause of petitioner is that
he has not shown that he suffered prejudice because of the failure of
his watcher to attend the canvassing. Had the watcher been present,
what substantive issues would he have raised? Petitioner does not
disclose. Could it be that even if the watcher was present, the result
of the canvassing would have been the same?
145
There is therefore no merit in petitioners claim that respondent
Commission on Elections gravely abused its discretion in issuing its
questioned decision. And, as emphatically stated in Sidro v.
Comelec, 102 SCRA 853, this Court has invariably followed the
principle that in the absence of any jurisdictional infirmity or an error
of law of the utmost gravity, the conclusion reached by the
respondent Commission on a matter that falls within its competence
is entitled to the utmost respect, xxx. There is justification in this case
to reiterate this principle.[17]
Assuming that Pilando in fact entered the canvassing room only after
successfully evading the policemen surrounding the Provincial
Capitol grounds, Pilando could have easily complained of this
alleged unlawful act during the canvass proceedings. He could have
immediately reported the matter to the Provincial Board of
Canvassers as a violation of Section 25 of R.A. No. 6646. However,
Pilando opted simply to raise questions on alleged irregularities in
the municipal canvassing.[18] While he had the opportunity to protest
the alleged intimidation committed by policemen against his person,
it is quite surprising that he never mentioned anything about it to the
Provincial Board of Canvassers.
Surprisingly, the COMELEC and private respondents apparently
overlooked that R.A. No. 6646 does not punish a violation of Section
25 of the law as a criminal election offense. Section 25 merely
highlights one of the recognized rights of a political party or
candidate during elections, aimed at providing an effective safeguard
against fraud or irregularities in the canvassing of election returns.
Section 27[19] of R.A. No. 6646, which specifies the election
offenses punishable under this law, does not include Section 25.
Malinias further claims that, in violation of this right, his supporters
were blocked by a checkpoint set-up at Nacagang, Sabangan,
Mountain Province. This allegation is devoid of any basis to merit a
reversal of the COMELECs ruling. Malinias supporters who were
purportedly blocked by the checkpoint did not confirm or corroborate
this allegation of Malinias.
Moreover, the police established checkpoints in the entire country to
implement the firearms ban during the election period. Clearly, this is
in consonance with the constitutionally ordained power of the
COMELEC to deputize government agencies and instrumentalities of
the Government for the exclusive purpose of ensuring free, orderly,
honest, peaceful and credible elections.[20]
Second, Malinias maintains that Corpuz and Tangilag entered the
canvassing room in blatant violation of Section 232 of B.P. Blg. 881.
His sole basis for this allegation is the affidavit of his supporters who
expressly stated that they saw Dominguez and Corpuz (only) enter
the canvassing room.[21] Malinias likewise contends that Corpuz and
Tangilag impliedly admitted that they were inside or at least within
the fifty (50) meter radius of the canvassing room as they were able
to mention the names of the persons who were inside the canvassing
room in their Counter-Affidavit.[22]
The provision of law which Corpuz and Tangilag allegedly violated is
quoted as follows:
Sec. 232. Persons not allowed inside the canvassing room. It shall
be unlawful for any officer or member of the Armed Forces of the
Philippines, including the Philippine Constabulary, or the Integrated
National Police or any peace officer or any armed or unarmed
persons belonging to an extra-legal police agency, special forces,
reaction forces, strike forces, home defense forces, barangay self-
defense units, barangay tanod, or of any member of the security or
police organizations or government ministries, commissions,
councils, bureaus, offices, instrumentalities, or government-owned or
controlled corporation or their subsidiaries or of any member of a
privately owned or operated security, investigative, protective or
intelligence agency performing identical or similar functions to enter
146
the room where the canvassing of the election returns are held by
the board of canvassers and within a radius of fifty meters from such
room: Provided, however, That the board of canvassers by a majority
vote, if it deems necessary, may make a call in writing for the detail
of policemen or any peace officers for their protection or for the
protection of the election documents and paraphernalia in the
possession of the board, or for the maintenance of peace and order,
in which case said policemen or peace officers, who shall be in
proper uniform, shall stay outside the room within a radius of thirty
meters near enough to be easily called by the board of canvassers at
any time.
Again, the COMELEC and private respondents overlooked that
Section 232 of B.P. Blg. 881 is not one of the election offenses
explicitly enumerated in Sections 261 and 262 of B.P. Blg. 881.
While Section 232 categorically states that it is unlawful for the
persons referred therein to enter the canvassing room, this act is not
one of the election offenses criminally punishable under Sections
261 and 262 of B.P. Blg. 881. Thus, the act involved in Section 232
of B.P. Blg. 881 is not punishable as a criminal election offense.
Section 264 of B.P. Blg. 881 provides that the penalty for an election
offense under Sections 261 and 262 is imprisonment of not less than
one year but not more than six years.
Under the rule of statutory construction of expressio unius est
exclusio alterius, there is no ground to order the COMELEC to
prosecute private respondents for alleged violation of Section 232 of
B.P. Blg. 881 precisely because this is a non-criminal act.
It is a settled rule of statutory construction that the express mention
of one person, thing, or consequence implies the exclusion of all
others. The rule is expressed in the familiar maxim, expressio unius
est exclusio alterius.
The rule of expressio unius est exclusio alterius is formulated in a
number of ways. One variation of the rule is the principle that what is
expressed puts an end to that which is implied. Expressium facit
cessare tacitum. Thus, where a statute, by its terms, is expressly
limited to certain matters, it may not, by interpretation or construction,
be extended to other matters.
xxx
The rule of expressio unius est exclusio alterius and its variations are
canons of restrictive interpretation. They are based on the rules of
logic and the natural workings of the human mind. They are
predicated upon ones own voluntary act and not upon that of others.
They proceed from the premise that the legislature would not have
made specified enumeration in a statute had the intention been not
to restrict its meaning and confine its terms to those expressly
mentioned.[23]
Also, since private respondents are being charged with a criminal
offense, a strict interpretation in favor of private respondents is
required in determining whether the acts mentioned in Section 232
are criminally punishable under Sections 261[24] and 262[25] of B.P.
Blg. 881. Since Sections 261 and 262, which lists the election
offenses punishable as crimes, do not include Section 232, a strict
interpretation means that private respondents cannot be held
criminally liable for violation of Section 232.
This is not to say that a violation of Section 232 of B.P. Blg. 881 is
without any sanction. Though not a criminal election offense, a
violation of Section 232 certainly warrants, after proper hearing, the
imposition of administrative penalties. Under Section 2, Article IX-C
of the Constitution, the COMELEC may recommend to the President
the imposition of disciplinary action on any officer or employee the
COMELEC has deputized for violation of its directive, order or
decision.[26] Also, under the Revised Administrative Code,[27] the
147
COMELEC may recommend to the proper authority the suspension
or removal of any government official or employee found guilty of
violation of election laws or failure to comply with COMELEC orders
or rulings.
In addition, a careful examination of the evidence presented by
Malinias shows that the same are insufficient to justify a finding of
grave abuse of discretion on the part of the COMELEC. Obviously,
the evidence relied upon by Malinias to support his charges
consisted mainly of affidavits prepared by his own supporters. The
affidavits of Malinias own supporters, being self-serving, cannot be
accepted at face value under the circumstances. As this Court has
often stated, reliance should not be placed on mere affidavits.[28]
Besides, if Corpuz really entered the canvassing room, then why did
Pilando and the representatives of other candidates, who were inside
the room, fail to question this alleged wrongful act during the
canvassing? Malinias contention that Corpuz and Tangilag impliedly
admitted they were inside the canvassing room because they
mentioned the names of the persons present during the canvassing
deserves scant consideration as the same is not supported by any
evidence.
Finally, Malinias asserts that private respondents should be held
liable for allegedly violating Section 261 (i) of B. P. Blg. 881 because
the latter engaged in partisan political activity. This provision states:
Sec. 261 (i) Intervention of public officers and employees. Any officer
or employee in the civil service, except those holding political offices;
any officer, employee, or member of the Armed Forces of the
Philippines, or any police force, special forces, home defense forces,
barangay self-defense units and all other para-military units that now
exist or which may hereafter be organized who, directly or indirectly,
intervenes in any election campaign or engages in any partisan
political activity, except to vote or to preserve public order, if he is a proof of grave abuse of discretion, arbitrariness, fraud or error of law,
peace officer. this Court may not review the factual findings of the COMELEC, nor
substitute its own findings on the sufficiency of evidence.[32]
Section 79, Article X of B.P. Blg. 881 defines the term partisan
political activity as an act designed to promote the election or defeat WHEREFORE, the instant Petition is DISMISSED. The assailed
of a particular candidate or candidates to a public office.[29] Malinias Resolutions of public respondent COMELEC are AFFIRMED. Costs
asserts that, in setting up a checkpoint at Nacagang, Tambingan, against petitioner.
Sabangan, Mountain Province and in closing the canvassing room,
Corpuz and Tangilag unduly interfered with his right to be present SO ORDERED.
and to counsel during the canvassing. This interference allegedly
favored the other candidate. Bellosillo, Acting C.J., Puno, Vitug, Panganiban, Quisumbing,
Ynares-Santiago, Austria-Martinez, Corona, Carpio-Morales, and
While Corpuz and Tangilag admitted ordering the setting up of the Callejo, Sr., JJ., concur.
checkpoint, they did so to enforce the COMELECs firearms ban,
pursuant to COMELEC Resolution No. 2968, among others.[30] Davide, Jr., C.J., Mendoza, and Sandoval-Gutierrez, JJ., on official
There was no clear indication that these police officers, in ordering leave.
the setting up of checkpoint, intended to favor the other candidates.
Neither was there proof to show that Corpuz and Tangilag
unreasonably exceeded their authority in implementing the
COMELEC rules. Further, there is no basis to rule that private
respondents arbitrarily deprived Malinias of his right to be present
and to counsel during the canvassing.

The act of Corpuz and Tangilag in setting up the checkpoint was

plainly in accordance with their avowed duty to maintain effectively
peace and order within the vicinity of the canvassing site. Thus, the
act is untainted with any color of political activity. There was also no
showing that the alleged closure of the provincial capitol grounds
favored the election of the other candidates.

In summary, we find that there is no proof that the COMELEC issued

the assailed resolutions with grave abuse of discretion. We add that
this Court has limited power to review findings of fact made by the
COMELEC pursuant to its constitutional authority to investigate and
prosecute actions for election offenses.[31] Thus, where there is no

148
Republic of the Philippines Before this Court is a Petition for Review on Certiorari under Rule 45
Supreme Court of the Rules of Court. Petitioner Sterling Selections Corporation
Baguio City (petitioner) is assailing the Decision[1] dated May 30, 2005 and the
Resolution[2] dated January 31, 2006 of the Court of Appeals (CA) in
SECOND DIVISION CA-G.R. SP No. 79889.

STERLING SELECTIONS CORPORATION, Petitioner is a company engaged in the fabrication of sterling silver
Petitioner, jewelry. Its products are manufactured in the home of its principal
stockholders, Asuncion Maria and Juan Luis Faustmann
- versus - (Faustmanns), located in Barangay (Brgy.) Mariana, New Manila,
Quezon City.[3]
LAGUNA LAKE DEVELOPMENT AUTHORITY (LLDA) and Sometime in 1992, one of petitioners neighbors in Brgy. Mariana filed
JOAQUIN G. MENDOZA, in his capacity as General Manager of a complaint with the Office of the Chairman of Brgy. Mariana against
LLDA, petitioner for creating loud unceasing noise and emitting toxic fumes,
Respondents. coming from the manufacturing plant of the latters predecessor,
G.R. No. 171427 Unson, Faustmann and Company, Inc.[4] During conciliation
proceedings, petitioners management undertook to relocate its
Present: operations within a month. The parties signed an Agreement to that
effect.[5] However, petitioner failed to abide by the undertaking and
CARPIO, J., continued to manufacture its products in its Brgy. Mariana workshop.
Chairperson,
NACHURA, On January 16, 1998, Alicia P. Maceda (Maceda), another neighbor
PERALTA, of petitioner, wrote a letter to the Brgy. Chairman to complain about
ABAD, and the loud noise and offensive toxic fumes coming from petitioners
MENDOZA, JJ. manufacturing plant.[6] She also filed a formal complaint with the
Department of Environment and Natural Resources (DENR)-National
Promulgated: Capital Region office. The complaint was endorsed by the DENR to
one of the agencies under it, respondent Laguna Lake Development
March 30, 2011 Authority (LLDA), which had territorial and functional jurisdiction over
x-----------------------------------------------------------------------------------x the matter.[7]
DECISION
Subsequently, the Monitoring and Enforcement Section-Pollution
NACHURA, J.: Control Division of LLDA conducted an inspection of petitioners
premises. According to the LLDA, it was observed that the
wastewater generated by petitioners operations was drained directly

149
to the sewer canal. However, since the wastewater was not yet for
disposal, no sample could be collected during the inspection.
On November 19, 1998, a Notice of Violation and a Cease and
Desist Order (CDO) were served on petitioner after it was found that
it was operating without an LLDA Clearance and Permit, as required
by Republic Act (R.A.) No. 4850.[8]
Meanwhile, Macedas complaint was endorsed by the LLDA to the
Office of the Mayor of Quezon City. After hearing and investigation,
the Office of the Mayor issued a Closure Order against petitioner
after finding that it was operating without the requisite business
permit, since it was running a jewelry manufacturing plant with an
Office Only permit, and for violation of Zoning and Environmental
Laws.[9]
Petitioner then filed a petition for mandamus before the Regional
Trial Court (RTC), Branch 167, Pasig City. Contending that, as a
cottage industry, its jewelry business is exempt from the requirement
to secure a permit from the LLDA, petitioner asked the court to order
the latter to issue a certificate of exemption in its favor. The RTC
denied the petition, ruling that mandamus does not lie to compel the
performance of a discretionary duty. Nonetheless, the RTC allowed
petitioner to file an amended petition for certiorari and
mandamus.[10]
In its amended petition, petitioner averred that its business was
classified as a cottage industry. It argued that under R.A. No. 6977,
the law prevailing at the time of its registration with the Securities and
Exchange Commission (SEC) in December 1996, cottage industry
was defined as one with assets worth P50,001.00 to
P500,000.00.[11] Since, based on its Articles of Incorporation and
Certified Public Accountant (CPA)s Balance Sheet, its total assets
when it was incorporated amounted only to P312,500.00, it qualified
as a cottage industry.
150
Intervenors Maceda, Ma. Corazon G. Logarta (Logarta), and Rosario
Charito Planas (Planas) filed a motion for intervention. Their Answer-
in-Intervention was subsequently admitted by the RTC.
On April 1, 2002, the RTC promulgated a decision[12] denying the
petition. In rejecting petitioners claim that it was a cottage industry,
the RTC said:
While it is true that plaintiff [petitioner]s economic activity is carried
on in a home, which incidentally gained the ire of the neighbors that
culminated in a complaint against the plaintiff, it was manned not with
the members of the family but by at least two hundred employees
who were strangers and not known to the community. Moreso, being
an accredited exporter recognized by the Bureau of Export Trade
Promotion, Department of Trade and Industry, seemed a deviation
from the connotation of small scale.
Worthy to note is the observation of respondent-intervenors that to
be considered a cottage industry, plaintiff should have been
registered under the [National Cottage Industries Development
Authority (NACIDA)], Section 12 of R.A. [No.] 3470 substantially
provides; (sic) that the plaintiff corporation who desires to avail of the
benefits and assistance of the law should have registered with the
board. In the absence of any indication that affirm the status of the
plaintiff corporation as a cottage industry, proof to the contrary may
be reasonably accepted, for he who alleged the affirmative of the
issue has the burden of proof and in this aspect plaintiff miserably
failed.
On the contention that LLDA Resolution No. 41, series of 1997,
exempt the plaintiff corporation from the requirements imposed by
the LLDA, the interpretation given by [the] government agency itself
should be given greater probative value. As a regulatory and quasi-
judicial body, the LLDA is mandated to pass upon, approve or
disapprove all plans, programs and project[s] proposed by local
government offices/agencies, public corporations and private
[corporations]. It is in the position to construe its own rules and
regulation. By implication, plaintiff corporation arrogates unto itself
the privilege bestowed upon a cottage industry. However, there is
nothing in the Resolution that includes jewelry making as included in
the term cottage industry.[13]
Thus, the RTC held that petitioner must subscribe to the rules and
regulations of the LLDA governing clearance.[14]
Petitioner filed a motion for reconsideration of the RTC decision. The
same was denied in an Order dated May 17, 2002. Hence, it filed a
Notice of Appeal. Subsequently, it filed its appeal with the CA.
In a Decision[15] dated May 30, 2005, the CA dismissed the appeal.
The CA brushed aside the issue of whether petitioner qualified as a
cottage industry. It said that even if petitioner belonged to that
category, it still needed to prove that its business was exempted by
law from the coverage of LLDA Resolution No. 41, Series of 1997.
Specifically, the CA cited Section 2(30) of said resolution, to wit:
Section 2. Exemptions. The following activities, projects, and
installations are exempt from the above subject requirements:
xxxx
30. Cottage Industries, including
- stuffed toys manufacturing
- handicrafts, and
- rattan/furniture manufacturing.[16]
The CA held that, following the principle of ejusdem generis, the
enumeration in the foregoing provision must be taken to include
businesses of the same kind, which were, as averred by the LLDA,
151
not as environmentally critical as those enumerated.[17] Thus, the
CA declared that the LLDA did not contemplate the inclusion of the
manufacture of jewelry in the exemptions.[18] Additionally, the CA
held that the opinions and rulings of officials of the government
called upon to execute or implement administrative laws command
respect and weight.[19] The CA further held that since petitioner was
claiming to be within the exemption, it had the duty to prove that the
law intended to include it, or that it is within the contemplation of the
law, to be exempted.[20]
Petitioner moved for the reconsideration of the Decision, but the CA
denied the same in a Resolution dated January 31, 2006. Hence,
petitioner filed this petition for review.
Petitioner argues that the CA committed the following errors:
1. The appellate court erred when it failed or refused to make a
definitive pronouncement as to whether petitioner qualifies as a
cottage industry. This, even after the appellate court (on page 7 of
the assailed Decision) scored the trial court for having failed to
consider the fact that the predicament of Sterling rests primarily on
the determination of its status, i.e., whether petitioner is a cottage
industry or not.
2. The appellate court erred when it deliberately ignored the
provisions of various statutes and regulations pertaining to cottage
industries, which if the same had been taken into account and
accorded due consideration, would have led the appellate court to
correctly conclude that petitioner is indeed a cottage industry.
3. The appellate court erred when it declared, after misapplying
the rules of statutory construction, that No. 30 of Sec. 2 of LLDA
Resolution No. 41, Series of 1997, does not serve to exempt
petitioner from the clearance requirement.[21]
Petitioner also argues that Section 2(30) of LLDA Resolution No. 41,
Series of 1997, contains no restriction limiting the exemptions to only
certain kinds of cottage industries.[22] It contends that the word
including connotes a sense of containing or comprising, and not a
sense of exclusivity or exclusion. The provision, petitioner points out,
is devoid of any restrictive or limiting words; thus, the LLDA should
avoid limiting the kinds or classes of cottage industriesexempted
from the clearance requirement.[23]
Next, petitioner avers that the CA erred when it refused to rule on
whether it qualified as a cottage industry. It claims that the CA
deliberately ignored the provisions in various statutes and regulations
pertaining to cottage industries, which would have led to the
conclusion that petitioner was such, and thus would fall within the
exemption.[24] Petitioner argues that its total assets were worth only
P312,500.00 during its incorporation, which, under R.A. No. 6977,
would qualify it as a cottage industry. Further, petitioner argues that,
even with the enactment of R.A. No. 8502, the Jewelry Industry
Development Act of 1998, jewelry-making remains a cottage
industry.[25]
Finally, petitioner puts in question the factual basis for the issuance
of the CDO by the LLDA.
By way of comment, intervenors Maceda, Logarta, and Planas allege
that petitioner has been operating illegally, violating ordinances and
laws, operating without the required permits and clearances, and
continuing its operations despite LLDAs issuance of a CDO.[26]
They further allege that petitioners business is located in an area
classified as R-1 or low density residential zone under Quezon City
Ordinance SP-918, Series of 2000, and preceding zoning
ordinances. Despite having only an Office Only permit, petitioner
deliberately uses the premises to manufacture jewelry.[27]
Intervenors also refute petitioners claim that it is exempted from
obtaining the required LLDA clearance because it is a cottage
industry. First, intervenors allege that petitioner is not registered with
the National Cottage Industries Development Authority (NACIDA).
152
Next, intervenors point out that, as admitted by petitioner itself, it
employs at least 229 employees who are strangers to the family, and
its operations yield annual sales of at least P25 million.[28]
Intervenors also aver that, in R.A. No. 8502, there is no provision
categorizing jewelry-making as a cottage industry. Going by the
classification of jewelry-making companies in the Implementing
Rules and Regulations of R.A. No. 8502[29] and petitioners financial
statements filed with the SEC, which state that petitioner had assets
amounting to P2,454,459.01 in 1999 and P4,628,900.80 in 1998,[30]
it cannot be characterized as a micro jewelry enterprise.
Next, intervenors insist that the LLDA has jurisdiction over petitioner.
They argue that LLDA Resolution No. 41, Series of 1997, does not in
any manner waive the LLDA jurisdiction even over those exempted
in the list of activities, projects, and installations. Jurisdiction is
provided for by law and cannot be diminished by an act of the
agency concerned. In fact, there is no provision of waiver of
jurisdiction contained in the said regulation. Exemption from securing
prior clearance before implementing an activity does not carry with it
a waiver of jurisdiction.[31]
Intevernors also point out that cottage industry, as contemplated
under LLDA Resolution No. 41, Series of 1997, includes only the
activities enumerated therein, namely, stuffed toys manufacturing,
handicrafts, and rattan/furniture manufacturing. Further, intervenors
aver that, under existing laws, the term cottage industry no longer
exists and has been deleted. Jewelry-making is now classified as an
independent and separate industry under R.A. No. 8502, apart from
the general term cottage industry. Therefore, petitioners activity
cannot be included as among those exempted from obtaining a
clearance from the LLDA because jewelry-making is not at all
mentioned as an exception to the general rule, intervenors claim.[32]
On the other hand, the LLDA and its former General Manager
Joaquin G. Mendoza (respondents) also filed their Comment.
Respondents narrated that in 1998, petitioner was found to be
operating its business without clearance and permit from the LLDA.
Accordingly, a Notice of Violation was issued against petitioner.
Subsequently, the LLDA conducted a public hearing, which was
attended by petitioner, its company physician, and legal counsels.
During the hearing, petitioner committed to relocate its facilities.
Meanwhile, the same would remain padlocked to erase all doubts of
its continued operation despite the Closure Order from the Quezon
City Mayors Office.[33] After the public hearing, the LLDA issued the
assailed CDO against petitioner. Thereafter, proceedings before the
RTC, then the CA, ensued, resulting in the now-assailed decision
and resolution.
In their Comment, respondents posit that petitioner is not a cottage
industry within the contemplation of the law. They argue that to
qualify as such, the conditions in the laws must be complied with.
Thus, while metalcraft activities are considered as cottage industry,
asset requirements and NACIDA registration requirements must also
be complied with.[34]
Respondents contend that petitioner cannot be considered a cottage
industry considering that it has assets way above the threshold fixed
in the law. Respondents aver that what petitioner claims as its assets
amounting to P312,500.00 refer only to the minimum paid-up capital
stock required by law for purposes of incorporation and registration
with the SEC. Respondents argue that petitioner would have other
properties contributed and owned for purposes of starting the
enterprise, such as furniture, fixtures, machinery, and equipment.
Likewise, respondents point out that petitioner actually has a
capitalization of P5 million, of which P1.25 million had been
subscribed. The amount subscribed minus the paid-up capital is a
subscription receivable from the incorporators and is an asset.[35]
153
Next, respondents argue that the CA did not err in ruling that
petitioner is not exempted from securing a clearance from the LLDA.
The respondents posit that, under LLDA Resolution No. 41, Series of
1997, the cottage industriesexempted are those of the same nature
and category as those enumerated therein, following the principle of
ejusdem generis.[36] The activities enumerated, respondents claim,
are those whose operations are basically dry and whose
environmental impact is not so significant.[37] Likewise, respondents
argue that, following the principle expressio unius est exclusio
alterius, the express mention of the three activities excluded all other
cottage industries. If the LLDA had intended to exempt all types of
cottage industries, it would not have made an enumeration of those
exempt activities, respondents posit.[38]
In its Reply, petitioner claims that intervenors are illegally
suppressing petitioners legitimate business because it is competing
with the jewelry business of intervenor Logartas cousin.[39]
Petitioner claims that Logartas cousin also operates his business
within the same area as its facilities. It further claims that there is a
total of 34 other businesses, including a manufacturer of garments, a
wholesaler of cement, and a manufacturer of leather bags, operating
in the same supposedly-residential zone where its office is
located.[40] Petitioner also accuses intervenors Maceda and Planas
of going to court with unclean hands, considering that they also run
businesses in the same area.[41]
Petitioner also denies that Mrs. Faustmann, then operating Unson,
Faustmann and Company, Inc., reneged on a promise, made in
1992, to relocate the companys operations. Petitioner claims that
Mrs. Faustmann was pressured into signing the Agreement before
the Lupon, through threats and intimidation. As to the later complaint,
petitioner claims that intervenors succeeded in pressing residents to
sign the complaint, but those who signed were in fact from other
streets, further away from its office.[42]
Petitioner also claims that there was no public hearing conducted
before the Quezon City Mayors Office issued and enforced the CDO.
Petitioner likewise insists that its business qualifies as a cottage
industry.[43] It maintains that pertinent laws have identified jewelry-
making as a cottage industry. The Cottage Industry Technology
Center (CITC) designates jewelry-making as one of the industries it
actively assists. Petitioner also maintains that its paid-up capital
qualifies its business as a cottage industry.[44]
The petition is unmeritorious; hence, the same is denied.
The main issue to be resolved is whether petitioner is exempted from
complying with the requirement to obtain a clearance from the LLDA
to operate its business.
Petitioner insists that it is exempted from complying with the
clearance requirements because it is a cottage industry. In order to
resolve this issue, a review of the laws pertinent to cottage industries
is in order.
Section 11 of R.A. No. 3470, approved on June 16, 1962, defined
cottage industry as an economic activity in a small scale which is
carried on mainly in the homes or in other places for profit and which
is mainly done with the help of the members of the family. Among the
activities considered as a cottage industry is metalcraft such as
making of jewelries, knives, boloes (sic), scissors, razors, silverwares
and brassworks (sic).[45]
The same law required persons, corporations, partnerships, or
associations that wished to avail of the benefits of the law to register
with the NACIDA.[46]
In 1968, R.A. No. 5326 amended certain sections of R.A. No. 3470.
In particular, Section 11 was amended to read:
154
SEC. 11. Definition. The term cottage industry as used in this Act
shall mean an economic activity in a small scale carried on mainly in
the homes or in other places for profit and mainly done with the help
of the members of the family with capitalization not exceeding fifteen
thousand pesos. The term shall also include economic activities
carried on by students of public and private schools, within school
premises, as a cooperative effort, under supervision of a teacher or
other person approved by and acting under the supervision and
control of school authorities, either as part of or in addition to
ordinary vocational training, provided all profits shall accrue to the
students working therein. it shall include the following: x x x (5) metal
craft such as making of jewelries, knives, boloes (sic), scissors,
razors, silverwares and brassworks (sic); x x x All cottage industries
shall be owned and operated by Filipino citizens, or by a corporation,
partnership or cooperative, at least seventy-five per cent of the
capital or investment of which is owned by Filipino citizens. All
members of its Board of Directors shall be Filipino citizens.
The word capitalization as used in this section shall mean the total
current assets and fixed assets, excluding the value of the land and
building leased, rented and/or used at least six months of each year.
For purpose of this Act, any and all branches, agencies, outlets or
divisions of a licensed cottage industry shall be collated to determine
the capitalization thereof.
R.A. No. 3470 was further amended on October 22, 1975, by
Presidential Decree (P.D.) No. 817. The first sentence of Section 11
was amended, to read:
The term cottage industry as used in this Act shall mean an
economic activity carried on in the homes or in other places for profit,
with a capitalization of not exceeding P100,000 at the time of
registration.

In 1981, then President Ferdinand Marcos issued P.D. No. 1788, the
Cottage Industries Development Decree of 1981, amending and
consolidating R.A. Nos. 3470 and 5326, P.D. No. 817, and other
related Laws, Decrees, Executive Orders, Letters of Instructions, and
Acts concerning the NACIDA. Section 10 of P.D. No. 1788 states:
Section 10. Cottage Industry The term cottage industry shall mean a
modest economic activity for profit using primarily indigenous raw
materials in the production of various articles of the country.
Provided, however, that all cottage industries shall be owned and
operated by Filipino citizens, or by corporations, partnerships, or
cooperatives at least seventy-five percent (75%) of the capital
investment of which shall be owned by Filipino citizens. Provided,
further, that the total assets of which shall not exceed one hundred
thousand pesos (P100,000.00) at the time of registration with the
NACIDA. Provided, finally that the maximum total assets allowable
for cottage industries for purposes of registration may be modified
and/or increased accordingly by the NACIDA Board subject to the
approval of the President of the Republic of the Philippines.
For facility of implementation, coordination and statistical gathering,
cottage industries shall be classified as follows:
xxxx
a) Metalcraft Industry That sector using metals or its alloys as
principal raw material component in producing articles such as
brasswares, cutlery items, fabricated tools, implements and
equipment and other items requiring a certain degree of
craftsmanship in the making thereof including the making of jewelry
items involving the use metals and/or its alloys in combination with
semiprecious or artificial stones.
Executive Order (E.O.) No. 917, issued on October 15, 1983,
amended the definition of cottage industry by increasing the
capitalization requirement to a maximum of P250,000.00, which
155
amount may be modified or increased accordingly, subject to the
approval of the President.[47]
In 1986, the National Economic Development Authority (NEDA)
redefined cottage, small and medium scale industries. Considered as
cottage industries were enterprises, excluding agriculture, with total
assets after financing of over P500,000.00 but less than P5
million.[48]
When Corazon Aquino became President, she issued E.O. No. 133,
reorganizing the Department of Trade and Industry (DTI). Section 18
thereof provided that the NACIDA was reorganized into the CITC,
and its functions, other than technology development and training,
were transferred to the Bureau of Small and Medium Business
Development and relevant line operating units of the DTI.
In 1990, Congress enacted R.A. No. 6977, the Magna Carta for
Small Enterprises. The capitalization for a cottage enterprise was
changed, viz.:
SEC. 3. Small and Medium Enterprises as Beneficiaries. Small and
medium enterprise shall be defined as any business activity or
enterprise engaged in industry, agribusiness and/or services,
whether single proprietorship, cooperative, partnership or corporation
whose total assets, inclusive of those arising from loans but
exclusive of the land on which the particular business entitys office,
plant, and equipment are situated, must have value falling under the
following categories:
micro : less than P50,000
cottage : P50,001 P500,000
small : P500,001 P5,000,000
medium: P5,000,001 P20,000,000
In a generic sense, all enterprises with total assets of Five million
pesos (P5,000,000) and below shall be called small enterprises.
R.A. No. 6977 was amended by R.A. No. 8289 in 1998. Amending
Section 1 of R.A. No. 6977, the term cottage industry or cottage
enterprise was completely eliminated:
SEC. 3. Small and Medium Enterprise as Beneficiaries. Small and
Medium Enterprise shall be defined as any business activity or
enterprise engaged in industry, agribusiness and/or services,
whether single proprietorship, cooperative, partnership or corporation
whose total assets, inclusive of those arising from loans but
exclusive of the land on which the particular business entitys office,
plant, and equipment are situated, must have value falling under the
following categories:
micro : less than P1,500,001
small : P1,500,001 P15,000,000
medium: P15,000,001 P60,000,00
The above definitions shall be subject to review and adjustment by
the said Council motu proprio or upon recommendation of sectoral
organization(s) taking into account inflation and other economic
indicators. The Council may use as variables the number of
employees, equity capital and asset size.
Finally, in 1998, Congress enacted R.A. No. 8502, the Jewelry
Industry Development Act of 1998, a law to support, promote, and
encourage the growth and development of the predominantly small
and medium scale jewelry industries. R.A. No. 8502 did not use the
term cottage industry; instead, it characterized businesses engaged
in jewelry-making as:
a) micro jewelry enterprise less than P1,500,001
156
b) small scale jewelry enterprise P1,500,001 P15,000,000
c) medium jewelry enterprise P15,000,001 P60,000,000
d) large scale jewelry enterprise more than P60,000,000.[49]
On the other hand, the LLDA was created by R.A. No. 4850 to carry
out the development of the Laguna Lake region with due regard and
adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and
prevention of undue ecological disturbances, deterioration, and
pollution.[50]
The LLDA was granted the power to pass upon and approve or
disapprove all plans, programs, and projects proposed by the local
government offices/agencies within their regions, by public
corporations, and by private persons or enterprises, where such
plans, programs and/or projects are related to those of the Authority
for the development of the region, as well as to issue the necessary
clearance for the approved plans, programs and/or projects.[51]
Thus, in LLDA Resolution No. 41, Series of 1997, the LLDA specified
the development activities, projects, and installations required to
secure a clearance from the LLDA before these can be constructed,
operated, maintained, expanded, modified, or implemented by any
government office/agency or government corporation or private
person or enterprise.[52] Section 2 of the LLDA Resolution then set
out the activities exempted from complying with the clearance
requirement, to wit:
Section 2. Exemptions. The following activities, projects, [or]
installations are exempted from the above subject requirements:
xxxx
30. Cottage industries including
- stuffed toys manufacturing
- handicrafts and
- rattan/furniture manufacturing.
Contrary to the CAs pronouncement and to respondents claim, the
provision did not restrict the exemption to the three activities therein
mentioned.
The word include means to take in or comprise as a part of a
whole.[53]
Thus, this Court has previously held that it necessarily conveys the
very idea of non-exclusivity of the enumeration.[54] The principle of
expressio unius est exclusio alterius does not apply where other
circumstances indicate that the enumeration was not intended to be
exclusive, or where the enumeration is by way of example only.[55]
The maxim expressio unius est exclusio alterius does not apply when
words are mentioned by way of example.[56] Said legal maxim
should be applied only as a means of discovering legislative intent
which is not otherwise manifest.[57]
In another case, the Court said:
[T]he word involving, when understood in the sense of including, as
in including technical or financial assistance, necessarily implies that
there are activities other than those that are being included. In other
words, if an agreement includes technical or financial assistance,
there is [] apart from such assistance something else already in[,]
and covered or may be covered by, the said agreement.[58]
As the regulation stands, therefore, all cottage industries including,
but not limited to, those enumerated therein are exempted from
securing prior clearance from the LLDA. Hence, the CA erred in
ruling that only the three activities enumerated therein are exempted.
157
Next, the Court must determine if petitioner is in fact a cottage
industry entitled to claim the exemption under LLDA Resolution No.
41, Series of 1997.
That jewelry-making is one of the activities considered as a cottage
industry is undeniable. The laws bear this out. However, based on
these same laws, the nature of the activity is only one of several
factors to be considered in determining whether the same is a
cottage industry.
In view of the emphasis in law after law on the capitalization or asset
requirements, it is crystal clear that the same is a defining element in
determining if an enterprise is a cottage industry.
Petitioner argues that its assets amount to only P312,500.00,
representing its paid-up capital at the time of its SEC registration.
The law then in force was R.A. No. 6977, which, to recapitulate,
states:
SEC. 3. Small and Medium Enterprises as Beneficiaries. Small and
medium enterprise shall be defined as any business activity or
enterprise engaged in industry, agribusiness and/or services,
whether single proprietorship, cooperative, partnership or corporation
whose total assets, inclusive of those arising from loans but
exclusive of the land on which the particular business entitys office,
plant, and equipment are situated, must have value falling under the
following categories:
micro : less than P50,000
cottage: P50,001 P500,000
small : P500,001 P5,000,000
medium: P5,000,001 P20,000,000
In a generic sense, all enterprises with total assets of Five million
pesos (P5,000,000) and below shall be called small enterprises.
Accordingly, it should be considered as a cottage industry, petitioner
insists.
However, petitioners contention that its total assets amounts only to
P312,500.00 is misleading.
The P312,500.00 represents the total amount of the capital stock
already subscribed and paid up by the companys stockholders. It
does not, however, represent the totality of its assets, even at the
time of its registration. By the expert opinion of petitioners own
consultant, independent CPA Maximiano P. Sorongon, Jr., it does
not mean that the paid-up capital is the only source of funds of the
corporation for it to support its recurring operational requirements, as
well as its increased financial requirements later on, as and when the
business grows and expands.[59]
In other words, its paid-up capital is not the only asset of the
company. Under R.A. No. 6977, the term total assets was
understood to mean inclusive of those arising from loans but
exclusive of the land on which the particular business entitys office,
plant, and equipment are situated.
Assets consist of property of all kinds, real and personal, tangible
and intangible, including, inter alia, for certain purposes, patents and
causes of action which belong to any person, including a corporation
and the estate of a decedent. It is the entire property of a person,
association, corporation, or estate that is applicable or subject to the
payment of his, her, or its debts.[60]
Consider these details as found by the Board of Investments and set
forth in a Memorandum dated June 8, 1999 addressed to the
undersecretary of the DENR, listing the basic information of
petitioner as follows:
Name : Sterling Selections Corporation
158
Address : 55-A, 11th St., New Manila, Quezon City
Business Activity : Producer of gift items made of silver
Chairman & Managing Director: Asuncion Maria S. de Faustmann
SEC Registration : A 1996-10845 dated December 2, 1996
BOI Accreditation : 98-003 dated August 13, 1998 under R.A. 8502
BETP Accreditation : 98-0010 dated July 17, 1998 under R.A. 7844
No. of Employees : 189 (Direct Labor; Salaries & Allowances -
P16,064,000)
Value of Export Sales : P19,732,692.00
Total Sales : P37,160,340.00 (based on 1998 ITR)[61]
The same figures are reflected in petitioners own income
statement.[62] Petitioner cannot insist on using merely its paid-up
capital as basis to determine its assets. The law speaks of total
assets. Petitioners own evidence, i.e., balance sheets prepared by
CPAs it commissioned itself, shows that it has assets other than its
paid-up capital. According to the Consolidated Balance Sheet
presented by petitioner, it had assets amounting to P4,628,900.80 by
the end of 1998, and P1,746,328.17 by the end of 1997.[63]
Obviously, these amounts are over the maximum prescribed by law
for cottage industries.
Thus, the conclusion is that petitioner is not a cottage industry and,
hence, is not exempted from the requirement to secure an LLDA
clearance.
Further militating against petitioners claim is the RTCs astute
observation that being an accredited exporter recognized by the
Bureau of Export Trade Promotion (BETP) of the DTI seemed like a
deviation from the connotation of small scale.[64]
The Court notes that, to be accredited by the BETP as an exporter,
there are strict standards that the enterprise must meet. Under R.A.
No. 7844, the Export Development Act of 1994, an exporter is any
person, natural or juridical, licensed to do business in the Philippines,
engaged directly or indirectly in the production, manufacture or trade
of products or services, which earns at least fifty percent (50%) of its
normal operating revenues from the sale of its products or services
abroad for foreign currency.[65]
The same law provides for tax incentives to exporters, with the
qualification that the incentives shall be granted only upon
presentation of their BETP certification of the exporters eligibility.[66]
Qualified exporters applying for BETP certification must present a
report of their export revenue/sales for the immediately preceding
year.[67]
DTI Administrative Order No. 3, Series of 1995, provides for the
mechanisms of accreditation for exporters vis--vis the tax incentives
granted under R.A. No. 7844. Under Procedure for Accreditation of
Exporters, the following schedule of application fees was set forth:
Export Value Per Year Application Fee
$1M 5M Max. P1,000.00
Above $1M 5M Max. 2,000.00
Above $5M 10M Max. 3,000.00
Above $10M 15M Max. 4,000.00
Above $15M 5,000.00[68]
Consequently, an exporter must be able to generate and export
enough products, with an export value of $1 million per year, in order
to be accredited by the BETP for tax incentives. Petitioners
accreditation shows that it complied with this requirement.
Based on the foregoing, it is clear that petitioner cannot be
considered a cottage industry. Therefore, it is not exempted from
complying with the clearance requirement of the LLDA.
159
It is a doctrine of long-standing that factual findings of administrative
bodies on technical matters within their area of expertise should be
accorded not only respect but even finality if they are supported by
substantial evidence even if they are not overwhelming or
preponderant.[69] Courts will not interfere in matters which are
addressed to the sound discretion of the government agency
entrusted with regulation of activities coming under the special and
technical training and knowledge of such agency. The exercise of
administrative discretion is a policy decision and a matter that is best
discharged by the government agency concerned and not by the
courts.[70]
The motives of the intervenors for filing the complaint are no longer
relevant. Regardless of what these motives may have been, the fact
remains that the LLDA found petitioner to have violated the pertinent
environmental and regulatory laws.
The Court recognizes the right of petitioner to engage in business
and to profit from its industry. However, the exercise of the right must
conform to the laws and regulations laid down by the competent
authorities.
WHEREFORE, the foregoing premises considered, the Petition is
DENIED. The Decision dated May 30, 2005 and the Resolution
dated January 31, 2006 of the Court of Appeals in CA-G.R. SP No.
79889 are AFFIRMED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
 above Decision had been reached in consultation before the case
WE CONCUR: was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice
ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA
Associate Justice
ROBERTO A. ABAD
Associate Justice
JOSE CATRAL MENDOZA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, I certify that the conclusions in the

160
ASSOCIATED WORDS (NOSCITUR A SOCIIS)
- Chavez v JBC GR no. 202242 July 17, 2012 Basic
guidelines in statutory construction – legislative intent)
- Caltex PH v Palomar G.R. No. L-19650 September 29, 1966
(Same case under Definition)
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 106719 September 21, 1993
DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR.,
ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms.
ENYA N. LOPEZ, petitioners,
vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M.
VASQUEZ, and NCMH NURSES ASSOCIATION, represented by
RAOULITO GAYUTIN, respondents.
Renato J. Dilag and Benjamin C. Santos for petitioners.
Danilo C. Cunanan for respondent Ombudsman.
Crispin T. Reyes and Florencio T. Domingo for private respondent.
QUIASON, J.:
This is a Petition for Certiorari, Prohibition and Mandamus, with
Prayer for Preliminary Injunction or Temporary Restraining Order,
under Rule 65 of the Revised Rules of Court.
Principally, the petition seeks to nullify the Order of the Ombudsman
dated January 7, 1992, directing the preventive suspension of
petitioners,
161
Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr.,
Administrative Officer III; Conrado Rey Matias, Technical Assistant to
the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N.
Lopez, Supply Officer III, all of the National Center for Mental Health.
The petition also asks for an order directing the Ombudsman to
disqualify Director Raul Arnaw and Investigator Amy de Villa-Rosero,
of the Office of the Ombudsman, from participation in the preliminary
investigation of the charges against petitioner (Rollo, pp. 2-17;
Annexes to Petition, Rollo, pp. 19-21).
The questioned order was issued in connection with the
administrative complaint filed with the Ombudsman (OBM-ADM-0-
91-0151) by the private respondents against the petitioners for
violation of the Anti-Graft and Corrupt Practices Act.
According to the petition, the said order was issued upon the
recommendation of Director Raul Arnaw and Investigator Amy de
Villa-Rosero, without affording petitioners the opportunity to
controvert the charges filed against them. Petitioners had sought to
disqualify Director Arnaw and Investigator Villa-Rosero for manifest
partiality and bias (Rollo, pp. 4-15).
On September 10, 1992, this Court required respondents' Comment
on the petition.
On September 14 and September 22, 1992, petitioners filed a
"Supplemental Petition (Rollo, pp. 124-130); Annexes to
Supplemental Petition; Rollo pp. 140-163) and an "Urgent
Supplemental Manifestation" (Rollo, pp. 164-172; Annexes to Urgent
Supplemental Manifestation; Rollo, pp. 173-176), respectively,
averring developments that transpired after the filing of the petition
and stressing the urgency for the issuance of the writ of preliminary
injunction or temporary restraining order.
On September 22, 1992, this Court ". . . Resolved to REQUIRE the
respondents to MAINTAIN in the meantime, the STATUS QUO
pending filing of comments by said respondents on the original
supplemental manifestation" (Rollo, p. 177).
On September 29, 1992, petitioners filed a motion to direct
respondent Secretary of Health to comply with the Resolution dated
September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203). In
a Resolution dated October 1, 1992, this Court required respondent
Secretary of Health to comment on the said motion.
On September 29, 1992, in a pleading entitled "Omnibus
Submission," respondent NCMH Nurses Association submitted its
Comment to the Petition, Supplemental Petition and Urgent
Supplemental Manifestation. Included in said pleadings were the
motions to hold the lawyers of petitioners in contempt and to disbar
them (Rollo, pp. 210-267). Attached to the "Omnibus Submission" as
annexes were the orders and pleadings filed in Administrative Case
No. OBM-ADM-0-91-1051 against petitioners (Rollo, pp. 268-480).
The Motion for Disbarment charges the lawyers of petitioners with:
(1) unlawfully advising or otherwise causing or inducing their clients
— petitioners Buenaseda, et al., to openly defy, ignore, disregard,
disobey or otherwise violate, maliciously evade their preventive
suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2)
"unlawfully interfering with and obstructing the implementation of the
said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and
(3) violation of the Canons of the Code of Professional Responsibility
and of unprofessional and unethical conduct "by foisting blatant lies,
malicious falsehood and outrageous deception" and by committing
subornation of perjury, falsification and fabrication in their pleadings
(Omnibus Submission, pp. 52-54; Rollo, pp. 261-263).
On November 11, 1992, petitioners filed a "Manifestation and
Supplement to 'Motion to Direct Respondent Secretary of Health to
162
Comply with 22 September 1992 Resolution'" (Manifestation
attached to Rollo without pagination between pp. 613 and 614
thereof).
On November 13, 1992, the Solicitor General submitted its Comment
dated November 10, 1992, alleging that: (a) "despite the issuance of
the September 22, 1992 Resolution directing respondents to
maintain the status quo, respondent Secretary refuses to hold in
abeyance the implementation of petitioners' preventive suspension;
(b) the clear intent and spirit of the Resolution dated September 22,
1992 is to hold in abeyance the implementation of petitioners'
preventive suspension, the status quo obtaining the time of the filing
of the instant petition; (c) respondent Secretary's acts in refusing to
hold in abeyance implementation of petitioners' preventive
suspension and in tolerating and approving the acts of Dr. Abueva,
the OIC appointed to replace petitioner Buenaseda, are in violation
of the Resolution dated September 22, 1992; and
(d) therefore, respondent Secretary should be directed to comply
with the Resolution dated September 22, 1992 immediately, by
restoring the status quo ante contemplated by the aforesaid
resolution" (Comment attached to Rollo without paginations between
pp. 613-614 thereof).
In the Resolution dated November 25, 1992, this Court required
respondent Secretary to comply with the aforestated status quo
order, stating inter alia, that:
It appearing that the status quo ante litem motam, or the last
peaceable uncontested status which preceded the present
controversy was the situation obtaining at the time of the filing of the
petition at bar on September 7, 1992 wherein petitioners were then
actually occupying their respective positions, the Court hereby
ORDERS that petitioners be allowed to perform the duties of their
respective positions and to receive such salaries and benefits as
they may be lawfully entitled to, and that respondents and/or any and
all persons acting under their authority desist and refrain from
performing any act in violation of the aforementioned Resolution of
September 22, 1992 until further orders from the Court (Attached to
Rollo after p. 615 thereof).
On December 9, 1992, the Solicitor General, commenting on the
Petition, Supplemental Petition and Supplemental Manifestation,
stated that (a) "The authority of the Ombudsman is only to
recommend suspension and he has no direct power to suspend;"
and (b) "Assuming the Ombudsman has the power to directly
suspend a government official or employee, there are conditions
required by law for the exercise of such powers; [and] said conditions
have not been met in the instant case" (Attached to Rollo without
pagination).
In the pleading filed on January 25, 1993, petitioners adopted the
position of the Solicitor General that the Ombudsman can only
suspend government officials or employees connected with his
office. Petitioners also refuted private respondents' motion to disbar
petitioners' counsel and to cite them for contempt (Attached to Rollo
without pagination).
The crucial issue to resolve is whether the Ombudsman has the
power to suspend government officials and employees working in
offices other than the Office of the Ombudsman, pending the
investigation of the administrative complaints filed against said
officials and employees.
In upholding the power of the Ombudsman to preventively suspend
petitioners, respondents (Urgent Motion to Lift Status Quo, etc, dated
January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770,
which provides:
163
Sec. 24. Preventive Suspension. — The Ombudsman or his
Deputy may preventively suspend any officer or employee under his
authority pending an investigation, if in his judgment the evidence of
guilt is strong, and (a) the charge against such officer or employee
involves dishonesty, oppression or grave misconduct or neglect in
the performance of duty; (b) the charge would warrant removal from
the service; or (c) the respondent's continued stay in office may
prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated
by the Office of Ombudsman but not more than six months, without
pay, except when the delay in the disposition of the case by the
Office of the Ombudsman is due to the fault, negligence or petition of
the respondent, in which case the period of such delay shall not be
counted in computing the period of suspension herein provided.
Respondents argue that the power of preventive suspension given
the Ombudsman under Section 24 of R.A. No. 6770 was
contemplated by Section 13 (8) of Article XI of the 1987 Constitution,
which provides that the Ombudsman shall exercise such other power
or perform such functions or duties as may be provided by law."
On the other hand, the Solicitor General and the petitioners claim
that under the 1987 Constitution, the Ombudsman can only
recommend to the heads of the departments and other agencies the
preventive suspension of officials and employees facing
administrative investigation conducted by his office. Hence, he
cannot order the preventive suspension himself.
They invoke Section 13(3) of the 1987 Constitution which provides
that the Office of the Ombudsman shall have inter alia the power,
function, and duty to:
Direct the officer concerned to take appropriate action against a
public official or employee at fault, and recommend his removal,
suspension, demotion, fine, censure or prosecution, and ensure
compliance therewith.
The Solicitor General argues that under said provision of the
Constitutions, the Ombudsman has three distinct powers, namely: (1)
direct the officer concerned to take appropriate action against public
officials or employees at fault; (2) recommend their removal,
suspension, demotion fine, censure, or prosecution; and (3) compel
compliance with the recommendation (Comment dated December 3,
1992, pp. 9-10).
The line of argument of the Solicitor General is a siren call that can
easily mislead, unless one bears in mind that what the Ombudsman
imposed on petitioners was not a punitive but only a preventive
suspension.
When the constitution vested on the Ombudsman the power "to
recommend the suspension" of a public official or employees (Sec.
13 [3]), it referred to "suspension," as a punitive measure. All the
words associated with the word "suspension" in said provision
referred to penalties in administrative cases, e.g. removal, demotion,
fine, censure. Under the rule of Noscitor a sociis, the word
"suspension" should be given the same sense as the other words
with which it is associated. Where a particular word is equally
susceptible of various meanings, its correct construction may be
made specific by considering the company of terms in which it is
found or with which it is associated (Co Kim Chan v. Valdez Tan
Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA
247 [1966]).
Section 24 of R.A. No. 6770, which grants the Ombudsman the
power to preventively suspend public officials and employees facing
administrative charges before him, is a procedural, not a penal
statute. The preventive suspension is imposed after compliance with
164
the requisites therein set forth, as an aid in the investigation of the
administrative charges.
Under the Constitution, the Ombudsman is expressly authorized to
recommend to the appropriate official the discipline or prosecution of
erring public officials or employees. In order to make an intelligent
determination whether to recommend such actions, the Ombudsman
has to conduct an investigation. In turn, in order for him to conduct
such investigation in an expeditious and efficient manner, he may
need to suspend the respondent.
The need for the preventive suspension may arise from several
causes, among them, the danger of tampering or destruction of
evidence in the possession of respondent; the intimidation of
witnesses, etc. The Ombudsman should be given the discretion to
decide when the persons facing administrative charges should be
preventively suspended.
Penal statutes are strictly construed while procedural statutes are
liberally construed (Crawford, Statutory Construction, Interpretation
of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The
test in determining if a statute is penal is whether a penalty is
imposed for the punishment of a wrong to the public or for the
redress of an injury to an individual (59 Corpuz Juris, Sec. 658;
Crawford, Statutory Construction, pp. 496-497). A Code prescribing
the procedure in criminal cases is not a penal statute and is to be
interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).
The purpose of R.A. No. 6770 is to give the Ombudsman such
powers as he may need to perform efficiently the task committed to
him by the Constitution. Such being the case, said statute,
particularly its provisions dealing with procedure, should be given
such interpretation that will effectuate the purposes and objectives of
the Constitution. Any interpretation that will hamper the work of the
Ombudsman should be avoided.

A statute granting powers to an agency created by the Constitution
should be liberally construed for the advancement of the purposes
and objectives for which it was created (Cf. Department of Public
Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d)
213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).
In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a
preventive suspension is not a penalty, said:
Suspension is a preliminary step in an administrative investigation. If
after such investigation, the charges are established and the person
investigated is found guilty of acts warranting his removal, then he is
removed or dismissed. This is the penalty.
To support his theory that the Ombudsman can only preventively
suspend respondents in administrative cases who are employed in
his office, the Solicitor General leans heavily on the phrase "suspend
any officer or employee under his authority" in Section 24 of R.A. No.
6770.
The origin of the phrase can be traced to Section 694 of the Revised
Administrative Code, which dealt with preventive suspension and
which authorized the chief of a bureau or office to "suspend any
subordinate or employee in his bureau or under his authority pending
an investigation . . . ."
Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which
superseded Section 694 of the Revised Administrative Code also
authorized the chief of a bureau or office to "suspend any
subordinate officer or employees, in his bureau or under his
authority."
However, when the power to discipline government officials and
employees was extended to the Civil Service Commission by the
165
Civil Service Law of 1975 (P.D. No. 805), concurrently with the
President, the Department Secretaries and the heads of bureaus and
offices, the phrase "subordinate officer and employee in his bureau"
was deleted, appropriately leaving the phrase "under his authority."
Therefore, Section 41 of said law only mentions that the proper
disciplining authority may preventively suspend "any subordinate
officer or employee under his authority pending an investigation . . ."
(Sec. 41).
The Administrative Code of 1987 also empowered the proper
disciplining authority to "preventively suspend any subordinate officer
or employee under his authority pending an investigation" (Sec. 51).
The Ombudsman Law advisedly deleted the words "subordinate" and
"in his bureau," leaving the phrase to read "suspend any officer or
employee under his authority pending an investigation . . . ." The
conclusion that can be deduced from the deletion of the word
"subordinate" before and the words "in his bureau" after "officer or
employee" is that the Congress intended to empower the
Ombudsman to preventively suspend all officials and employees
under investigation by his office, irrespective of whether they are
employed "in his office" or in other offices of the government. The
moment a criminal or administrative complaint is filed with the
Ombudsman, the respondent therein is deemed to be "in his
authority" and he can proceed to determine whether said respondent
should be placed under preventive suspension.
In their petition, petitioners also claim that the Ombudsman
committed grave abuse of discretion amounting to lack of jurisdiction
when he issued the suspension order without affording petitioners
the opportunity to confront the charges against them during the
preliminary conference and even after petitioners had asked for the
disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-
13). Joining petitioners, the Solicitor General contends that assuming
arguendo that the Ombudsman has the power to preventively
suspend erring public officials and employees who are working in
other departments and offices, the questioned order remains null and
void for his failure to comply with the requisites in Section 24 of the
Ombudsman Law (Comment dated December 3, 1992, pp. 11-19).
Being a mere order for preventive suspension, the questioned order
of the Ombudsman was validly issued even without a full-blown
hearing and the formal presentation of evidence by the parties. In
Nera, supra, petitioner therein also claimed that the Secretary of
Health could not preventively suspend him before he could file his
answer to the administrative complaint. The contention of petitioners
herein can be dismissed perfunctorily by holding that the suspension
meted out was merely preventive and therefore, as held in Nera,
there was "nothing improper in suspending an officer pending his
investigation and before tho charges against him are heard . . . (Nera
v. Garcia., supra).
There is no question that under Section 24 of R.A. No. 6770, the
Ombudsman cannot order the preventive suspension of a
respondent unless the evidence of guilt is strong and (1) the charts
against such officer or employee involves dishonesty, oppression or
grave misconduct or neglect in the performance of duty; (2) the
charge would warrant removal from the service; or (3) the
respondent's continued stay in office may prejudice the case filed
against him.
The same conditions for the exercise of the power to preventively
suspend officials or employees under investigation were found in
Section 34 of R.A. No. 2260.
The import of the Nera decision is that the disciplining authority is
given the discretion to decide when the evidence of guilt is strong.
This fact is bolstered by Section 24 of R.A. No. 6770, which
expressly left such determination of guilt to the "judgment" of the
Ombudsman on the basis of the administrative complaint. In the case
166
at bench, the Ombudsman issued the order of preventive suspension
only after: (a) petitioners had filed their answer to the administrative
complaint and the "Motion for the Preventive Suspension" of
petitioners, which incorporated the charges in the criminal complaint
against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289;
Annex 4, Rollo,
pp. 290-296); (b) private respondent had filed a reply to the answer
of petitioners, specifying 23 cases of harassment by petitioners of the
members of the private respondent (Annex 6, Omnibus Submission,
Rollo, pp. 309-333); and (c) a preliminary conference wherein the
complainant and the respondents in the administrative case agreed
to submit their list of witnesses and documentary evidence.
Petitioners herein submitted on November 7, 1991 their list of
exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337) while
private respondents submitted their list of exhibits (Annex 9 of
Omnibus Submission, Rollo, pp. 338-348).
Under these circumstances, it can not be said that Director Raul
Arnaw and Investigator Amy de Villa-Rosero acted with manifest
partiality and bias in recommending the suspension of petitioners.
Neither can it be said that the Ombudsman had acted with grave
abuse of discretion in acting favorably on their recommendation.
The Motion for Contempt, which charges the lawyers of petitioners
with unlawfully causing or otherwise inducing their clients to openly
defy and disobey the preventive suspension as ordered by the
Ombudsman and the Secretary of Health can not prosper (Rollo, pp.
259-261). The Motion should be filed, as in fact such a motion was
filed, with the Ombudsman. At any rate, we find that the acts alleged
to constitute indirect contempt were legitimate measures taken by
said lawyers to question the validity and propriety of the preventive
suspension of their clients.
On the other hand, we take cognizance of the intemperate language
used by counsel for private respondents hurled against petitioners
and their counsel (Consolidated: (1) Comment on Private
Respondent" "Urgent Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private
Respondent's Comment and Supplemental Comment, pp. 4-5).
A lawyer should not be carried away in espousing his client's cause.
The language of a lawyer, both oral or written, must be respectful
and restrained in keeping with the dignity of the legal profession and
with his behavioral attitude toward his brethren in the profession
(Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive
language by counsel against the opposing counsel constitutes at the
same time a disrespect to the dignity of the court of justice. Besides,
the use of impassioned language in pleadings, more often than not,
creates more heat than light.
The Motion for Disbarment (Rollo, p. 261) has no place in the instant
special civil action, which is confined to questions of jurisdiction or
abuse of discretion for the purpose of relieving persons from the
arbitrary acts of judges and quasi-judicial officers. There is a set of
procedure for the discipline of members of the bar separate and
apart from the present special civil action.
WHEREFORE, the petition is DISMISSED and the Status quo
ordered to be maintained in the Resolution dated September 22,
1992 is LIFTED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Davide,
Jr., Romero, Nocon, Melo, Puno and Vitug, JJ., concur.
Feliciano, J., is on leave.
167
Separate Opinions
BELLOSILLO, J., concurring:
I agree that the Ombudsman has the authority, under Sec. 24 of R.A.
No. 6770, to preventively suspend any government official or
employee administratively charged before him pending the
investigation of the complaint, the reason being that respondent's
continued stay in office may prejudice the prosecution of the case.
However, in the case before us, I am afraid that the facts thus far
presented may not provide adequate basis to reasonably place
petitioners under preventive suspension. For, it is not enough to rule
that the Ombudsman has authority to suspend petitioners
preventively while the case is in progress before him. Equally
important is the determination whether it is necessary to issue the
preventive suspension under the circumstances. Regretfully, I cannot
see any sufficient basis to justify the preventive suspension. That is
why, I go for granting oral argument to the parties so that we can
truthfully determine whether the preventive suspension of
respondents are warranted by the facts. We may be suspending key
government officials and employees on the basis merely of
speculations which may not serve the ends of justice but which, on
the other hand, deprive them of their right to due process. The
simultaneous preventive suspension of top officials and employees
of the National Center for Mental Health may just disrupt, the
hospital's normal operations, much to the detriment of public service.
We may safely assume that it is not easy to replace them in their
respective functions as those substituting them may be taking over
for the first time. The proper care of mental patients may thus be
unduly jeopardized and their lives and limbs imperilled.
I would be amenable to holding oral argument to hear the parties if
only to have enough factual and legal bases to justify the preventive
suspension of petitioners.
 I would be amenable to holding oral argument to hear the parties if
# Separate Opinions only to have enough factual and legal bases to justify the preventive
suspension of petitioners.
BELLOSILLO, J., concurring:

I agree that the Ombudsman has the authority, under Sec. 24 of R.A.
No. 6770, to preventively suspend any government official or
employee administratively charged before him pending the
investigation of the complaint, the reason being that respondent's
continued stay in office may prejudice the prosecution of the case.

However, in the case before us, I am afraid that the facts thus far
presented may not provide adequate basis to reasonably place
petitioners under preventive suspension. For, it is not enough to rule
that the Ombudsman has authority to suspend petitioners
preventively while the case is in progress before him. Equally
important is the determination whether it is necessary to issue the
preventive suspension under the circumstances. Regretfully, I cannot
see any sufficient basis to justify the preventive suspension. That is
why, I go for granting oral argument to the parties so that we can
truthfully determine whether the preventive suspension of
respondents are warranted by the facts. We may be suspending key
government officials and employees on the basis merely of
speculations which may not serve the ends of justice but which, on
the other hand, deprive them of their right to due process. The
simultaneous preventive suspension of top officials and employees
of the National Center for Mental Health may just disrupt, the
hospital's normal operations, much to the detriment of public service.
We may safely assume that it is not easy to replace them in their
respective functions as those substituting them may be taking over
for the first time. The proper care of mental patients may thus be
unduly jeopardized and their lives and limbs imperilled.

168
FIRST DIVISION In 181 Informations, which are similarly worded except for the dates
of the commission of the crime and the age of the complainant, filed
before the Regional Trial Court (RTC) of Makati City, Branch 140,
PEOPLE OF THE PHILIPPINES, docketed as Criminal Cases Nos. 03-081 to 03-261, appellant was
Plaintiff-Appellee, accused of raping AAA,[2] allegedly committed as follows:

- versus - That in or about and sometime during the month of _________, in

ISIDRO FLORES y LAGUA,
Accused-Appellant.
Present:
the City of Makati, Metro Manila, Philippines, a place within the
jurisdiction of this Honorable Court, the above-named accused, being
G.R. No. 188315 the adopting father of complainant who was then _________ years
of age, did then and there willfully, unlawfully and feloniously had
carnal knowledge with [AAA] by means of force and intimidation and
against the will of the complainant.[3]

CORONA, C.J., Upon arraignment, appellant pleaded not guilty. During the pre-trial
Chairperson, conference, the parties stipulated on the following facts:
VELASCO, JR.,
LEONARDO-DE CASTRO, 1. AAA is below fifteen (15) years of age;
DEL CASTILLO, and 2. Appellant is the guardian of AAA; and
PEREZ, JJ. 3. AAA has been under the care and custody of appellant
and his wife since AAA was one and a half years old.[4]
Promulgated:
Thereafter, trial on the merits ensued.
August 25, 2010
x -----------------------------------------------x The following facts are undisputed:
DECISION
AAA lived with her adoptive mother, BBB,[5] since she was just a few
PEREZ, J. months old.[6] BBB is married to appellant, who was working abroad
for six (6) years. Appellant came home in 1997 and lived with AAA
On appeal is the 29 January 2009 Decision[1] of the Court of and BBB. BBB was working as a restaurant supervisor from 4:00
Appeals in CA-G.R. CR-H.C. No. 00726 finding appellant Isidro p.m. to 2:00 a.m. for six (6) days a week.
Flores y Lagua guilty beyond reasonable doubt of two (2) counts of Five (5) witnesses testified for the prosecution. They are the victim
rape. herself, Marvin Suello (Marvin), PO1 Evangeline Babor (PO1 Babor),
P/Sr Insp. Paul Ed Ortiz (P/Sr Insp. Ortiz), and Maximo Duran
(Duran).

169
The prosecutions version of the facts follows
In February 1999 at around 9:30 p.m., AAA, then 11 years old, was
sleeping inside the house when she felt and saw appellant touch her
thighs. AAA could see appellants face as there was a light coming
from the altar. AAA was naturally surprised and she asked appellant
why the latter did such a thing. Appellant did not answer but told her
not to mention the incident to anybody. AAA then saw appellant went
back to his bed and touch his private part. AAA immediately went
back to sleep.
The following day, at around the same time, and while BBB was at
work, appellant again touched AAA from her legs up to her breast.
AAA tried to resist but appellant threatened that he will kill her and
BBB.
Two (2) weeks after the incident, AAA was already asleep when she
suddenly woke up and saw appellant holding a knife. While pointing
the knife at AAAs neck, appellant removed his shorts, as well as
AAAs pajamas. He slowly parted AAAs legs and inserted his penis
into AAAs vagina. Meanwhile, AAA struggled and hit appellants
shoulders. Appellant was able to penetrate her twice before he got
out of the house. Two (2) days after, appellant again raped her by
inserting his organ into AAAs vagina. AAA recounted that appellant
raped her at least three (3) times a week at around the same time
until 15 October 2002, when she was 14 years old. After the last rape
incident, AAA did not go home after school and instead went to the
house of her friend, Marvin.[7]
On 16 October 2002, Marvin watched television with AAA from 5:00
p.m. to 8:00 p.m. Afterwards, AAA refused to go home. She told
Marvin that appellant would spank her for going home late. Marvin
asked AAA if there were other things that appellant might have done
to her, aside from spanking. At that point, AAA finally cried and
divulged that she has been raped by appellant. Marvin told AAA to
file a complaint.[8]
170
AAA stayed at her mothers friends house and came back on 18
October 2002. She, together with Marvin, went to Kagawad Ramon
Espena to seek assistance. Marvin went with the Barangay Tanod in
apprehending appellant, who at that time, was trying to escape.[9]
PO1 Babor was the duty investigator at the Womens and Children
Desk of Makati Police Station on 18 October 2002. She took down
the statements of AAA and her friend, Marvin. She then referred AAA
to the PNP Crime Laboratory to undergo medico-legal
examination.[10]
P/Sr. Insp. Ortiz confirmed that she conducted the medico-legal
examination on AAA. Results of the examination, as indicated in the
medico-legal report, show that the hymen is with presence of deep
healed laceration at 1 oclockand shallow healed laceration at 2
oclock positions at the time of examination. Said report concluded
that AAA is in a non-virgin state physically.[11] P/Sr. Insp. Ortiz
opined that the lacerations could have been caused by any solid
object, like the penis inserted at the genitalia.[12]
Duran and another Bantay Bayan member were at the barangay
outpost at 2:10 p.m. on 18 October 2002 when they were summoned
by Barangay Kagawad Ramon Espena. Acting on the complaint of
AAA, they were directed to proceed to the house of appellant to
invite him for questioning. Duran saw appellant about to board a
jeep. They stopped the jeep and asked appellant to alight therefrom
and invited him to the Bantay Bayan outpost. Appellant voluntarily
went with them. Appellant was then brought to the police station.[13]
Only appellant testified in his defense. While appellant admitted that
he was a strict father to AAA in that he would scold and spank her
whenever the latter would ran away, he denied raping AAA.[14] He
alleged that AAA has the propensity to make up stories and was
even once caught stealing money from her grandmother. Appellant
recalled that on 16 October 2002, AAA asked permission to go out to
buy a project. She never came home.[15]
On 27 August 2004, the RTC rendered judgment finding appellant
guilty beyond reasonable doubt of 181 counts of rape. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in
Criminal Cases Nos. 03-081 to 03-261, finding accused ISIDRO
FLORES y LAGUA, GUILTY BEYOND REASONABLE DOUBT of
ONE HUNDRED AND EIGHTY-ONE (181) counts of RAPE
penalized by RA 8353, Chapter 3, Article 266-A, par. 1(a) in relation
to Article 266-B par. 1. Taking into account the minority of [AAA],
adopted daughter of the accused, at the time of rape, and the fact
the offender is the adoptive father of the minor complainant,
accused, is hereby sentenced to suffer the penalty of DEATH for
each count of rape, and to pay [AAA] the amount of ONE HUNDRED
FIFTY THOUSAND PESOS (PHP 150,000.00) for moral damages
and FIFTY THOUSAND PESOS (PHP 50,000.00) for exemplary
damages for each count of rape.[16]
The trial court found that force and intimidation attended the
commission of the crime of rape through the testimony of the victim,
which the trial court deemed straightforward, consistent and credible.
The trial court also established that appellant is the adoptive father of
AAA since 1989 and that AAA was then a minor, as proven by the
birth certificate, testimonies of witnesses, and admission made by
AAA.[17] Finally, the trial court dismissed appellants defense of
denial as self-serving and which cannot prevail over AAAs positive
testimony.[18]
Upon denial of appellants motion for reconsideration, the case was
initially elevated to the Court of Appeals for its review pursuant to
People v. Mateo.[19] However, the Court of Appeals dismissed the
case in 23 August 2005 for failure of appellant to file his appellants
brief.[20] When the case was brought before us on automatic review,
171
we set aside the Resolution of the Court of Appeals and remanded it
back for appropriate action and disposition on the ground that review
by the Court of Appeals of the trial courts judgment imposing the
death penalty is automatic and mandatory.[21]
On 29 January 2009, the Court of Appeals affirmed the finding that
AAA was raped by appellant, but it did so only on two (2) counts.
The fallo of the Decision reads:
IN LIGHT OF ALL THE FOREGOING, the decision is hereby
rendered as follows:
1. Accused-appellant Isidro Flores y Lagua in Criminal Cases
Nos. 03-082 to 03-260, inclusive, is found not guilty on the ground of
reasonable doubt and is hereby acquitted;
2. Accused-appellant Isidro Flores y Lagua in Criminal Cases
Nos. 03-081 and 03-261 is hereby found guilty beyond reasonable
doubt of two (2) counts of rape and is sentenced to suffer the penalty
of reclusion perpetua for each count without eligibility for parole and
to pay the victim AAA (to be identified through the Information in this
case), the amount of P75,000.00 as civil indemnity, P75,000.00 as
moral damages and P25,000.00 as exemplary damages for each
count.[22]
The appellate court found that the guilt of appellant on the first and
last incidents of rape in Criminal Cases Nos. 03-081 and 03-261,
respectively, was proven by the prosecution beyond reasonable
doubt.[23] With respect to the other incidents, according to the
appellate court, the testimony of AAA was merely based on general
allegations that she was raped on the average of three (3) times a
week from February 1999 to 15 October 2002. Therefore, the
appellate court concluded that her statement is inadequate and
insufficient to prove the other charges of rape.[24]
On 17 February 2009, appellant filed a Notice of Appeal of the Court
of Appeals Decision. In a Resolution dated 26 October 2009, this
Court required the parties to simultaneously submit their respective
Supplemental Briefs. Appellant and the Office of the Solicitor General
(OSG) both filed their Manifestations stating that they will no longer
file any Supplemental Briefs, but instead, they will merely adopt their
Appellants and Appellee's Briefs, respectively.[25]
Appellant harps on the failure of AAA to actively defend herself or
resist the alleged assaults. Moreover, considering that the relatives
of AAA live only meters away from her and the frequency of the
alleged molestation, appellant proffers that it was impossible for them
not to notice the abuses. Appellant also questions the appreciation of
the circumstances of minority and relationship as basis for the
imposition of the death penalty. He contends that an adopting parent
is not included within the purview of qualifying relationships under
Article 266-B of the Revised Penal Code. Assuming arguendo that
an adopting parent may be construed as similar to a parent,
appellant argues that the term adopting parent must be given a
definite and technical meaning in that the process of adoption must
first be undertaken and a judicial decree to that matter must have
been issued.[26]
The OSG, on the other hand, avers that the positive and categorical
testimony of AAA that appellant sexually abused her, in tandem with
the medico-legal report, are more than sufficient to establish
appellants guilt beyond reasonable doubt. Moreover, appellant failed
to impute any ill motive on the part of AAA to falsely accuse him of
rape.[27]
The OSG insists that AAAs failure to report promptly the previous
incidents of rape does not dent her credibility. Appellants exercise of
moral ascendancy over AAA and that fact that she was under
172
physical threat during those times, could have instilled fear on AAA
from reporting said incidents.[28]
The OSG moved for modification of the penalty from death to
reclusion perpetua without eligibility for parole in light of Republic Act
No. 9346.[29]
After an extensive review of the records, we find no cogent reason to
overturn the decision of the Court of Appeals.
Appellant was charged with 181 counts of rape, all of which were
committed within the span of three (3) years or from February 1999
until 15 October 2002. We are in full accord with the acquittal of
appellant in the 179 counts of rape.Stated otherwise, we agree with
appellants conviction for two (2) counts of rape.
In rape cases, the victims credibility becomes the single most
important issue. For when a woman says she was raped, she says in
effect all that is necessary to show that rape was committed; thus, if
her testimony meets the test of credibility, the accused may be
convicted on the basis thereof.[30]
Both the trial court and the appellate court found AAAs testimony
credible. The RTC considered it straightforward and consistent on
material points, while the Court of Appeals described it as
spontaneous, forthright, clear and free-from-serious contradictions.
Well-entrenched is the legal precept that when the culpability or
innocence of an accused hinges on the issue of the credibility of
witnesses, the findings of fact of the Court of Appeals affirming those
of the trial court, when duly supported by sufficient and convincing
evidence, must be accorded the highest respect, even finality, by this
Court and are not to be disturbed on appeal.[31] We see no reason
in this case to depart from the principle.Moreover, we give due
deference to the trial courts assessment of AAAs credibility, having
had the opportunity to witnesses firsthand and note her demeanor, Q: At that time again, where was your [BBB]?
conduct, and attitude under grilling examination.[32] A: At work, sir.
Q: What happened after you noticed somebody climbing up your
Worthy of reiteration is the doctrine that when the offended party is of bed?
tender age and immature, courts are inclined to give credit to her A: I woke up and I saw him holding a bread knife.
account of what transpired, considering not only her relative xxxx
vulnerability but also the shame to which she would be exposed if the Q: Did you know who was this person who climbed your bed and
matter to which she testified is not true. When a girl, especially a who was holding a knife?
minor, says that she has been defiled, she says in effect all that is A: Yes, sir.
necessary to show that rape was inflicted on her.[33] Q: Who was that person?
A: Papa
Out of the 181 counts of rape charged against appellant, the Q: When you said Papa, you are referring to the accused?
prosecution was only able to prove two counts. Applying the ruling in A: Yes, sir.
People v. Garcia,[34] the Court of Appeals correctly declared, thus: Q: What happened next?
A: Tinusok nya yong kutsilyo sa leeg ko and he removed his shorts.
As to the other counts of rape (Criminal Cases Nos. 03-082 to 03- Q: At that time, what were you then wearing?
260) imputed against accused-appellant, We find him not guilty A: Pajama, sir.
beyond reasonable doubt as the testimony of AAA was merely based Q: What if any did the accused do to what you were wearing then?
on general allegations that she was raped by the accused-appellant A: He undressed me.
on the average of three (3) times a week from February 1999 to 15 Q: Which one did he remove?
October 2002. AAAs bare statement is evidently inadequate and A: My pajama.
insufficient to prove the other charges of rape as each and every Q: What about your upper garments?
charge of rape is a separate and distinct crime and that each of them A: He did not remove.
must be proven beyond reasonable doubt. On that score alone, the Q: After you said the accused remove his shorts and removed your
indefinite testimonial evidence that the victim was raped three times pajama, what happened?
a week is decidedly inadequate and grossly insufficient to establish A: He slowly parted my legs.
the guilt of accused-appellant therefore with the required quantum of Q: And then?
evidence.[35] A: He inserted his penis into my vagina.
As regards to the first incident of rape in 1999, AAA recounted how Q: What were you doing, were you resisting when he was doing
appellant forced her to have sexual intercourse with him, thus: that?
Q: What happened after two (2) weeks? A: I was resisting but my strength is no match to him. He was strong.
A: I was sleeping when somebody went on top of my head. Q: What sort of resistance were you putting up that time?
Q: Tell us about what time was this when this happened, when you A: Hinampas ko po siya sa braso.
said you noticed somebody climbing up your bed? Q: What was his response to your act of hitting his arms?
A: 9:30 in the evening. A: Wag daw po akong papalag at bubutasin nya ang leeg ko.[36]

173

Under Article 266-A(d) of the Revised Penal Code, rape is committed
by a man having carnal knowledge of a woman who is below 12
years of age. At that time of the commission of the first incident of
rape, AAA was only 11 years old, as evidenced by her birth
certificate.[37]
As regards the final incident of rape in 15 October 2002, AAA
narrated:
Q: You said this happened always, approximately three (3) times a
week, until when?
A: The last time was in October 15, 2002.
Q: This last incident, describe to us where did it happen again?
A: In our house.
Q: At about what time?
A: 9:30 in the evening.
Q: Narrate to us how did this incident happen?
A: The same. He went to my bed, holding a bread knife, pointing it to
me and he removed my shorts and he also undressed himself.
Q: Then?
A: And he inserted his sexual organ into my vagina and after the
incident, he left the house.[38]
Since AAA was already 13 years old at the time of the commission of
the last incident of rape, the applicable rule is Article 266-A(a) which
states that rape is committed by a man having carnal knowledge of a
woman through force, threat, or intimidation.
AAAs testimony that she was defiled by appellant was corroborated
by the medical findings of the medico-legal expert. The presence of
deep healed and shallow healed laceration only confirms AAAs claim
of rape.
In both rape incidents, the trial court applied Article 266-B of the
Revised Penal Code in imposing the penalty of death, which was
174
later modified by the Court of Appeals to reclusion perpetua pursuant
to Republic Act No. 9346. Article 266-B provides:
The death penalty shall also be imposed if the crime of rape is
committed with any of the following aggravating/qualifying
circumstances:
"l) When the victim is under eighteen (18) years of age and the
offender is a parent, ascendant, step-parent, guardian, relative by
consanguinity or affinity within the third civil degree, or the common-
law spouse of the parent of the victim;
xxxx
The Court of Appeals appreciated the qualifying circumstances of
minority and relationship in imposing the penalty of reclusion
perpetua. It relied on the established fact that AAA was still a minor
when she was raped and on the stipulated fact that appellant is her
guardian. One of the instances wherein the crime of rape may be
qualified is when the victim is a minor AND the accused is her
guardian. At this point, we cannot subscribe to this interpretation and
hence, we hold that the Court of Appeals erred in considering the
qualifying circumstance of relationship.
Indeed, it was stipulated during the pre-trial conference that
appellant is the guardian of AAA. However, we cannot simply invoke
this admission to consider guardianship as a qualifying circumstance
in the crime of rape. Circumstances that qualify a crime and increase
its penalty to death cannot be subject of stipulation. The accused
cannot be condemned to suffer the extreme penalty of death on the
basis of stipulations or admissions. This strict rule is warranted by
the gravity and irreversibility of capital punishment. To justify the
death penalty, the prosecution must specifically allege in the
information and prove during the trial the qualifying circumstances of
minority of the victim and her relationship to the offender.[39]
Jurisprudence dictates that the guardian must be a person who has
legal relationship with his ward. The theory that a guardian must be
legally appointed was first enunciated in the early case of People v.
De la Cruz.[40] The issue in said case was whether the aunt of a
rape victim could file a criminal complaint on behalf of her niece,
when the victims father was still living and residing in the Philippines.
The Solicitor-General contended that the aunt was the legal guardian
of the victim, thus, was competent to sign the information. The Court
rejected this contention and ruled as follow:
Article 344 of the Revised Penal Code, paragraph 3, is as follows:
"Tampoco puede procederse por causa de estupro, rapto, violacion
o abusos deshonestos, sino en virtud de denuncia de la parte
agraviada, o de sus padres, o abuelos o tutor, ni despues de
haberse otorgado al ofensor, perdon expreso por dichas partes,
segun los casos." Without passing at this time on the question
whether the tutor (legal guardian) may file a complaint in the
temporary absence of the parents or grandparents of the offended
party, it suffices to say that we cannot accept the view of the
Government that an aunt who has the temporary custody of a minor
in the absence of her father occupies the position of a tutor (legal
guardian). The word "tutor" (guardian) appearing in article 344,
supra, must be given the same meaning as in section 551 of the
Code of Civil Procedure, that is to say, a guardian legally appointed
in accordance with the provisions of Chapter XXVII of the Code of
Civil Procedure.[41]
Garcia was more direct in addressing the issue of when the accused
will be considered a guardian as a qualifying circumstance in the
crime of rape. In said case, appellant therein raped a 12-year-old girl.
The victim was left to the care of appellant, who is the live-in partner
175
of the victims aunt. The issue of whether appellant is considered a
guardian in the contemplation of the amendment to the law on rape
such that, the victim being a minor, he should be punished with the
higher penalty of death for the nine (9) crimes of rape was answered
in the negative by the Court. The underlying reason behind its ruling
was explained in this discourse:
In the law on rape, the role of a guardian is provided for in Article 344
of the Revised Penal Code, specifically as one who, aside from the
offended party, her parents or grandparents, is authorized to file the
sworn written complaint to commence the prosecution for that crime.
In People vs. De la Cruz, it was held that the guardian referred to in
the law is either a legal or judicial guardian as understood in the rules
on civil procedure.
xxxx
It would not be logical to say that the word "guardian" in the third
paragraph of Article 344 which is mentioned together with parents
and grandparents of the offended party would have a concept
different from the "guardian" in the recent amendments of Article 335
where he is also mentioned in the company of parents and
ascendants of the victim. In Article 344, the inclusion of the guardian
is only to invest him with the power to sign a sworn written complaint
to initiate the prosecution of four crimes against chastity, while his
inclusion in the enumeration of the offenders in Article 335 is to
authorize the imposition of the death penalty on him. With much
more reason, therefore, should the restrictive concept announced in
De la Cruz, that is, that he be a legal or judicial guardian, be required
in the latter article.
The Court notes from the transcripts of the proceedings in Congress
on this particular point that the formulators were not definitive on the
concept of "guardian" as it now appears in the attendant
circumstances added to the original provisions of Article 335 of the
Code. They took note of the status of a guardian as contemplated in
the law on rape but, apparently on pragmatic considerations to be
determined by the courts on an ad hoc basis, they agreed to just
state "guardian" without the qualification that he should be a legal or
judicial guardian. It was assumed, however, that he should at the
very least be a de facto guardian. Indeed, they must have been
aware of jurisprudence that the guardian envisaged in Article 335 of
the Code, even after its amendment by Republic Act No. 4111, would
either be a natural guardian, sometimes referred to as a legal or
statutory guardian, or a judicial guardian appointed by the court over
the person of the ward.
They did agree, however, that the additional attendant circumstances
introduced by Republic Act No. 7659 should be considered as
special qualifying circumstances specifically applicable to the crime
of rape and, accordingly, cannot be offset by mitigating
circumstances. The obvious ratiocination is that, just like the effect of
the attendant circumstances therefore added by Republic Act No.
4111, although the crime is still denominated as rape such
circumstances have changed the nature of simple rape by producing
a qualified form thereof punishable by the higher penalty of death.
xxxx
The law requires a legal or judicial guardian since it is the
consanguineous relation or the solemnity of judicial appointment
which impresses upon the guardian the lofty purpose of his office
and normally deters him from violating its objectives. Such
considerations do not obtain in appellant's case or, for that matter,
any person similarly circumstanced as a mere custodian of a ward or
another's property. The fiduciary powers granted to a real guardian
warrant the exacting sanctions should he betray the trust.
In results, therefore, that appellant cannot be considered as the
guardian falling within the ambit of the amendatory provision
176
introduced by Republic Act No. 7659. He would not fall either in the
category of the "common-law spouse of the parent of the victim" in
the same enumeration, since his liaison is with respect to the aunt of
[AAA]. Since both logic and fact conjointly demonstrate that he is
actually only a custodian, that is, a mere caretaker of the children
over whom he exercises a limited degree of authority for a temporary
period, we cannot impose the death penalty contemplated for a real
guardian under the amendments introduced by Republic Act No.
7659, since he does not fit into that category.[42]
People v. De la Cuesta[43] adhered to Garcia when it ruled that the
mere fact that the mother asked the accused to look after her child
while she was away did not constitute the relationship of guardian-
ward as contemplated by law.[44]
Garcia was further applied by analogy in People v. Delantar[45]
where it was held that the guardian envisioned in Section 31(c) of
Republic Act No. 7610 is a person who has a legal relationship with a
ward. In said case, accused was charged for violation of Section 5,
Article III of Republic Act No. 7610 when he pimped an 11 year old
child to at least two clients. The Court held that the prosecution failed
to establish filiation albeit it considered accused as a de facto
guardian. However, this was not sufficient to justify the imposition of
the higher penalty pursuant to the ruling in Garcia. In addition, the
Court construed the term guardian in this manner:
Further, according to the maxim noscitur a sociis, the correct
construction of a word or phrase susceptible of various meanings
may be made clear and specific by considering the company of
words in which it is found or with which it is associated.87Section
31(c) of R.A. No. 7610 contains a listing of the circumstances of
relationship between the perpetrator and the victim which will justify
the imposition of the maximum penalty, namely when the perpetrator
is an "ascendant, parent, guardian, stepparent or collateral relative
within the second degree of consanguinity or affinity." It should be each count. He is also ordered, for each count of rape, to pay the
noted that the words with which "guardian" is associated in the victim civil indemnity in the amount of P50,000.00, moral damages in
provision all denote a legal relationship. From this description we the amount of P50,000.00, and exemplary damages in the amount of
may safely deduce that the guardian envisioned by law is a person P30,000.00.
who has a legal relationship with a ward. This relationship may be
established either by being the wards biological parent (natural SO ORDERED.
guardian) or by adoption (legal guardian). Appellant is neither AAAs
biological parent nor is he AAAs adoptive father. Clearly, appellant is JOSE PORTUGAL PEREZ
not the "guardian" contemplated by law.[46] Associate Justice

WE CONCUR:
Be that as it may, this qualifying circumstance of being a guardian
was not even mentioned in the Informations. What was clearly stated RENATO C. CORONA
was that appellant was the adopting father of AAA, which the Chief Justice
prosecution nonetheless failed to establish. Chairperson

For failure of the prosecution to prove the qualifying circumstance of PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE
relationship, appellant could only be convicted for two (2) counts of CASTRO
simple rape, and not qualified rape. Associate Justice Associate Justice

We likewise reduce the Court of Appeals award of civil indemnity MARIANO C. DEL CASTILLO
from P75,000.00 to P50,000.00 and moral damages from Associate Justice
P75,000.00 to P50,000.00 in line with current jurisprudence.[47] The
award of exemplary damages in the amount of P25,000.00 should be CERTIFICATION
increased to P30,000.00 pursuant to People v. Guillermo.[48] While
no aggravating circumstance attended the commission of rapes, it Pursuant to Section 13, Article VIII of the Constitution, I hereby
was established during trial that appellant used a deadly weapon to certify that the conclusions in the above Decision were reached in
perpetrate the crime. Hence, the award of exemplary damages is consultation before the case was assigned to the writer of the opinion
proper. of the Courts Division.

WHEREFORE, the decision dated 29 January 2009 convicting Isidro

Flores y Lagua of the crime of rape in Criminal Cases Nos. 03-081
and 03-261 is hereby AFFIRMED with the MODIFICATION in that he RENATO C. CORONA
is held guilty beyond reasonable doubt of two counts of simple rape Chief Justice
only and sentenced to suffer the penalty of reclusion perpetua for

177
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 114323 July 23, 1998
OIL AND NATURAL GAS COMMISSION, petitioner,
vs.
COURT OF APPEALS and PACIFIC CEMENT COMPANY, INC.,
respondents.
MARTINEZ, J.:
This proceeding involves the enforcement of a foreign judgment
rendered by the Civil Judge of Dehra Dun, India in favor of the
petitioner, OIL AND NATURAL GAS COMMISSION and against the
private respondent, PACIFIC CEMENT COMPANY,
INCORPORATED.
The petitioner is a foreign corporation owned and controlled by the
Government of India while the private respondent is a private
corporation duly organized and existing under the laws of the
Philippines. The present conflict between the petitioner and the
private respondent has its roots in a contract entered into by and
between both parties on February 26, 1983 whereby the private
respondent undertook to supply the petitioner FOUR THOUSAND
THREE HUNDRED (4,300) metric tons of oil well cement. In
consideration therefor, the petitioner bound itself to pay the private
respondent the amount of FOUR HUNDRED SEVENTY-SEVEN
THOUSAND THREE HUNDRED U.S. DOLLARS ($477,300.00) by
opening an irrevocable, divisible, and confirmed letter of credit in
178
favor of the latter. The oil well cement was loaded on board the ship
MV SURUTANA NAVA at the port of Surigao City, Philippines for
delivery at Bombay and Calcutta, India. However, due to a dispute
between the shipowner and the private respondent, the cargo was
held up in Bangkok and did not reach its point destination.
Notwithstanding the fact that the private respondent had already
received payment and despite several demands made by the
petitioner, the private respondent failed to deliver the oil well cement.
Thereafter, negotiations ensued between the parties and they
agreed that the private respondent will replace the entire 4,300
metric tons of oil well cement with Class "G" cement cost free at the
petitioner's designated port. However, upon inspection, the Class "G"
cement did not conform to the petitioner's specifications. The
petitioner then informed the private respondent that it was referring
its claim to an arbitrator pursuant to Clause 16 of their contract which
stipulates:
Except where otherwise provided in the supply order/contract all
questions and disputes, relating to the meaning of the specification
designs, drawings and instructions herein before mentioned and as
to quality of workmanship of the items ordered or as to any other
question, claim, right or thing whatsoever, in any way arising out of or
relating to the supply order/contract design, drawing, specification,
instruction or these conditions or otherwise concerning the materials
or the execution or failure to execute the same during
stipulated/extended period or after the completion/abandonment
thereof shall be referred to the sole arbitration of the persons
appointed by Member of the Commission at the time of dispute. It will
be no objection to any such appointment that the arbitrator so
appointed is a Commission employer (sic) that he had to deal with
the matter to which the supply or contract relates and that in the
course of his duties as Commission's employee he had expressed
views on all or any of the matter in dispute or difference.
The arbitrator to whom the matter is originally referred being against the letter of credit No. 11/19
transferred or vacating his office or being unable to act for any
reason the Member of the Commission shall appoint another person dated 28.2.1983 US $ 477,300.00
to act as arbitrator in accordance with the terms of the
contract/supply order. Such person shall be entitled to proceed with 2. Re-imbursement of expenditure incurred
reference from the stage at which it was left by his predecessor.
Subject as aforesaid the provisions of the Arbitration Act, 1940, or by the claimant on the inspection team's
any Statutory modification or re-enactment there of and the rules
made there under and for the time being in force shall apply to the visit to Philippines in August 1985 US $ 3,881.00
arbitration proceedings under this clause.
3. L.C. Establishment charges incurred
The arbitrator may with the consent of parties enlarge the time, from
time to time, to make and publish the award. by the claimant US $ 1,252.82

The venue for arbitration shall be at Dehra dun. 1* 4. Loss of interest suffered by claimant

On July 23, 1988, the chosen arbitrator, one Shri N.N. Malhotra, from 21.6.83 to 23.7.88 US $ 417,169.95
resolved the dispute in petitioner's favor setting forth the arbitral
award as follows: Total amount of award US $ 899,603.77

NOW THEREFORE after considering all facts of the case, the
evidence, oral and documentarys adduced by the claimant and
carefully examining the various written statements, submissions,
letters, telexes, etc. sent by the respondent, and the oral arguments
addressed by the counsel for the claimants, I, N.N. Malhotra, Sole
Arbitrator, appointed under clause 16 of the supply order dated
26.2.1983, according to which the parties, i.e. M/S Oil and Natural
Gas Commission and the Pacific Cement Co., Inc. can refer the
dispute to the sole arbitration under the provision of the Arbitration
Act. 1940, do hereby award and direct as follows: —
In addition to the above, the respondent would also be liable to pay
to the claimant the interest at the rate of 6% on the above amount,
with effect from 24.7.1988 up to the actual date of payment by the
Respondent in full settlement of the claim as awarded or the date of
the decree, whichever is earlier.
I determine the cost at Rs. 70,000/- equivalent to US $5,000 towards
the expenses on Arbitration, legal expenses, stamps duly incurred by
the claimant. The cost will be shared by the parties in equal
proportion.

The Respondent will pay the following to the claimant: — Pronounced at Dehra Dun to-day, the 23rd of July 1988. 2

1. Amount received by the Respondent To enable the petitioner to execute the above award in its favor, it
filed a Petition before the Court of the Civil Judge in Dehra Dun. India

179
(hereinafter referred to as the foreign court for brevity), praying that
the decision of the arbitrator be made "the Rule of Court" in India.
The foreign court issued notices to the private respondent for filing
objections to the petition. The private respondent complied and sent
its objections dated January 16, 1989. Subsequently, the said court
directed the private respondent to pay the filing fees in order that the
latter's objections could be given consideration. Instead of paying the
required filing fees, the private respondent sent the following
communication addressed to the Civil judge of Dehra Dun:
The Civil Judge
Dehra Dun (U.P.) India
Re: Misc. Case No. 5 of 1989
M/S Pacific Cement Co.,
Inc. vs. ONGC Case
Sir:
1. We received your letter dated 28 April 1989 only last 18 May
1989.
2. Please inform us how much is the court fee to be paid. Your
letter did not mention the amount to be paid.
3. Kindly give us 15 days from receipt of your letter advising us
how much to pay to comply with the same.
Thank you for your kind consideration.
Pacific Cement Co., Inc.
By:
Jose Cortes, Jr.
President 3
Without responding to the above communication, the foreign court
refused to admit the private respondent's objections for failure to pay
the required filing fees, and thereafter issued an Order on February
7, 1990, to wit:
ORDER
Since objections filed by defendant have been rejected through Misc.
Suit No. 5 on 7.2.90, therefore, award should be made Rule of the
Court.
ORDER
Award dated 23.7.88, Paper No. 3/B-1 is made Rule of the Court. On
the basis of conditions of award decree is passed. Award Paper No.
3/B-1 shall be a part of the decree. The plaintiff shall also be entitled
to get from defendant (US$ 899,603.77 (US$ Eight Lakhs ninety nine
thousand six hundred and three point seventy seven only) along with
9% interest per annum till the last date of realisation. 4
Despite notice sent to the private respondent of the foregoing order
and several demands by the petitioner for compliance therewith, the
private respondent refused to pay the amount adjudged by the
foreign court as owing to the petitioner. Accordingly, the petitioner
filed a complaint with Branch 30 of the Regional Trial Court (RTC) of
Surigao City for the enforcement of the aforementioned judgment of
the foreign court. The private respondent moved to dismiss the
complaint on the following grounds: (1) plaintiffs lack of legal capacity
to sue; (2) lack of cause of action; and (3) plaintiffs claim or demand

180
has been waived, abandoned, or otherwise extinguished. The
petitioner filed its opposition to the said motion to dismiss, and the
private respondent, its rejoinder thereto. On January 3, 1992, the
RTC issued an order upholding the petitioner's legal capacity to sue,
albeit dismissing the complaint for lack of a valid cause of action. The
RTC held that the rule prohibiting foreign corporations transacting
business in the Philippines without a license from maintaining a suit
in Philippine courts admits of an exception, that is, when the foreign
corporation is suing on an isolated transaction as in this case. 5
Anent the issue of the sufficiency of the petitioner's cause of action,
however, the RTC found the referral of the dispute between the
parties to the arbitrator under Clause 16 of their contract erroneous.
According to the RTC,
[a] perusal of the shove-quoted clause (Clause 16) readily shows
that the matter covered by its terms is limited to "ALL QUESTIONS
AND DISPUTES, RELATING TO THE MEANING OF THE
SPECIFICATION, DESIGNS, DRAWINGS AND INSTRUCTIONS
HEREIN BEFORE MENTIONED and as to the QUALITY OF
WORKMANSHIP OF THE ITEMS ORDERED or as to any other
questions, claim, right or thing whatsoever, but qualified to "IN ANY
WAY ARISING OR RELATING TO THE SUPPLY
ORDER/CONTRACT, DESIGN, DRAWING, SPECIFICATION, etc.,"
repeating the enumeration in the opening sentence of the clause.
The court is inclined to go along with the observation of the
defendant that the breach, consisting of the non-delivery of the
purchased materials, should have been properly litigated before a
court of law, pursuant to Clause No. 15 of the Contract/Supply Order,
herein quoted, to wit:
"JURISDICTION
All questions, disputes and differences, arising under out of or in
connection with this supply order, shall be subject to the EXCLUSIVE
181
JURISDICTION OF THE COURT, within the local limits of whose
jurisdiction and the place from which this supply order is situated."6
The RTC characterized the erroneous submission of the dispute to
the arbitrator as a "mistake of law or fact amounting to want of
jurisdiction". Consequently, the proceedings had before the arbitrator
were null and void and the foreign court had therefore, adopted no
legal award which could be the source of an enforceable right. 7
The petitioner then appealed to the respondent Court of Appeals
which affirmed the dismissal of the complaint. In its decision, the
appellate court concurred with the RTC's ruling that the arbitrator did
not have jurisdiction over the dispute between the parties, thus, the
foreign court could not validly adopt the arbitrator's award. In
addition, the appellate court observed that the full text of the
judgment of the foreign court contains the dispositive portion only
and indicates no findings of fact and law as basis for the award.
Hence, the said judgment cannot be enforced by any Philippine court
as it would violate the constitutional provision that no decision shall
be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based. 8 The appellate
court ruled further that the dismissal of the private respondent's
objections for non-payment of the required legal fees, without the
foreign court first replying to the private respondent's query as to the
amount of legal fees to be paid, constituted want of notice or
violation of due process. Lastly, it pointed out that the arbitration
proceeding was defective because the arbitrator was appointed
solely by the petitioner, and the fact that the arbitrator was a former
employee of the latter gives rise to a presumed bias on his part in
favor of the petitioner. 9
A subsequent motion for reconsideration by the petitioner of the
appellate court's decision was denied, thus, this petition for review on
certiorari citing the following as grounds in support thereof:
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE LOWER COURT'S ORDER OF DISMISSAL
SINCE:
A. THE NON-DELIVERY OF THE CARGO WAS A MATTER
PROPERLY COGNIZABLE BY THE PROVISIONS OF CLAUSE 16
OF THE CONTRACT;
B. THE JUDGMENT OF THE CIVIL COURT OF DEHRADUN,
INDIA WAS AN AFFIRMATION OF THE FACTUAL AND LEGAL
FINDINGS OF THE ARBITRATOR AND THEREFORE
ENFORCEABLE IN THIS JURISDICTION;
C. EVIDENCE MUST BE RECEIVED TO REPEL THE EFFECT
OF A PRESUMPTIVE RIGHT UNDER A FOREIGN JUDGMENT. 10
The threshold issue is whether or not the arbitrator had jurisdiction
over the dispute between the petitioner and the private respondent
under Clause 16 of the contract. To reiterate, Clause 16 provides as
follows:
Except where otherwise provided in the supply order/contract all
questions and disputes, relating to the meaning of the specification
designs, drawings and instructions herein before mentioned and as
to quality of workmanship of the items ordered or as to any other
question, claim, right or thing whatsoever, in any way arising out of or
relating to the supply order/contract design, drawing, specification,
instruction or these conditions or otherwise concerning the materials
or the execution or failure to execute the same during
stipulated/extended period or after the completion/abandonment
thereof shall be referred to the sole arbitration of the persons
appointed by Member of the Commission at the time of dispute. It will
be no objection to any such appointment that the arbitrator so
appointed is a Commission employer (sic) that he had to deal with
the matter to which the supply or contract relates and that in the
182
course of his duties as Commission's employee he had expressed
views on all or any of the matter in dispute or difference. 11
The dispute between the parties had its origin in the non-delivery of
the 4,300 metric tons of oil well cement to the petitioner. The primary
question that may be posed, therefore, is whether or not the non-
delivery of the said cargo is a proper subject for arbitration under the
above-quoted Clause 16. The petitioner contends that the same was
a matter within the purview of Clause 16, particularly the phrase, ". . .
or as to any other questions, claim, right or thing whatsoever, in any
way arising or relating to the supply order/contract, design, drawing,
specification, instruction . . .". 12 It is argued that the foregoing
phrase allows considerable latitude so as to include non-delivery of
the cargo which was a "claim, right or thing relating to the supply
order/contract". The contention is bereft of merit. First of all, the
petitioner has misquoted the said phrase, shrewdly inserting a
comma between the words "supply order/contract" and "design"
where none actually exists. An accurate reproduction of the phrase
reads, ". . . or as to any other question, claim, right or thing
whatsoever, in any way arising out of or relating to the supply
order/contract design, drawing, specification, instruction or these
conditions . . .". The absence of a comma between the words "supply
order/contract" and "design" indicates that the former cannot be
taken separately but should be viewed in conjunction with the words
"design, drawing, specification, instruction or these conditions". It is
thus clear that to fall within the purview of this phrase, the "claim,
right or thing whatsoever" must arise out of or relate to the design,
drawing, specification, or instruction of the supply order/contract. The
petitioner also insists that the non-delivery of the cargo is not only
covered by the foregoing phrase but also by the phrase, ". . . or
otherwise concerning the materials or the execution or failure to
execute the same during the stipulated/extended period or after
completion/abandonment thereof . . .".
The doctrine of noscitur a sociis, although a rule in the construction
of statutes, is equally applicable in the ascertainment of the meaning
and scope of vague contractual stipulations, such as the
aforementioned phrase. According to the maxim noscitur a sociis,
where a particular word or phrase is ambiguous in itself or is equally
susceptible of various meanings, its correct construction may be
made clear and specific by considering the company of the words in
which it is found or with which it is associated, or stated differently, its
obscurity or doubt may be reviewed by reference to associated
words. 13 A close examination of Clause 16 reveals that it covers
three matters which may be submitted to arbitration namely,
(1) all questions and disputes, relating to the meaning of the
specification designs, drawings and instructions herein before
mentioned and as to quality of workmanship of the items ordered; or
(2) any other question, claim, right or thing whatsoever, in any
way arising out of or relating to the supply order/contract design,
drawing, specification, instruction or these conditions; or
(3) otherwise concerning the materials or the execution or failure
to execute the same during stipulated/extended period or after the
completion/abandonment thereof.
The first and second categories unmistakably refer to questions and
disputes relating to the design, drawing, instructions, specifications
or quality of the materials of the supply/order contract. In the third
category, the clause, "execution or failure to execute the same", may
be read as "execution or failure to execute the supply order/contract".
But in accordance with the doctrine of noscitur a sociis, this
reference to the supply order/contract must be construed in the light
of the preceding words with which it is associated, meaning to say,
as being limited only to the design, drawing, instructions,
specifications or quality of the materials of the supply order/contract.
The non-delivery of the oil well cement is definitely not in the nature
183
of a dispute arising from the failure to execute the supply
order/contract design, drawing, instructions, specifications or quality
of the materials. That Clause 16 should pertain only to matters
involving the technical aspects of the contract is but a logical
inference considering that the underlying purpose of a referral to
arbitration is for such technical matters to be deliberated upon by a
person possessed with the required skill and expertise which may be
otherwise absent in the regular courts.
This Court agrees with the appellate court in its ruling that the non-
delivery of the oil well cement is a matter properly cognizable by the
regular courts as stipulated by the parties in Clause 15 of their
contract:
All questions, disputes and differences, arising under out of or in
connection with this supply order, shall be subject to the exclusive
jurisdiction of the court, within the local limits of whose jurisdiction
and the place from which this supply order is situated. 14
The following fundamental principles in the interpretation of contracts
and other instruments served as our guide in arriving at the foregoing
conclusion:
Art. 1373. If some stipulation of any contract should admit of
several meanings, it shall be understood as bearing that import
which is most adequate to render it effectual. 15
Art. 1374. The various stipulations of a contract shall be
interpreted together, attributing the doubtful ones that sense which
may result from all of them taken jointly. 16
Sec. 11. Instrument construed so as to give effect to all
provisions. In the construction of an instrument, where there are
several provisions or particulars, such a construction is, if possible, to
be adopted as will give effect to all. 17

Thus, this Court has held that as in statutes, the provisions of a
contract should not be read in isolation from the rest of the
instrument but, on the contrary, interpreted in the light of the other
related provisions. 18 The whole and every part of a contract must
be considered in fixing the meaning of any of its harmonious whole.
Equally applicable is the canon of construction that in interpreting a
statute (or a contract as in this case), care should be taken that every
part thereof be given effect, on the theory that it was enacted as an
integrated measure and not as a hodge-podge of conflicting
provisions. The rule is that a construction that would render a
provision inoperative should be avoided; instead, apparently
inconsistent provisions should be reconciled whenever possible as
parts of a coordinated and harmonious whole. 19
The petitioner's interpretation that Clause 16 is of such latitude as to
contemplate even the non-delivery of the oil well cement would in
effect render Clause 15 a mere superfluity. A perusal of Clause 16
shows that the parties did not intend arbitration to be the sole means
of settling disputes. This is manifest from Clause 16 itself which is
prefixed with the proviso, "Except where otherwise provided in the
supply order/contract . . .", thus indicating that the jurisdiction of the
arbitrator is not all encompassing, and admits of exceptions as may
be provided elsewhere in the supply order/contract. We believe that
the correct interpretation to give effect to both stipulations in the
contract is for Clause 16 to be confined to all claims or disputes
arising from or relating to the design, drawing, instructions,
specifications or quality of the materials of the supply order/contract,
and for Clause 15 to cover all other claims or disputes.
The petitioner then asseverates that granting, for the sake of
argument, that the non-delivery of the oil well cement is not a proper
subject for arbitration, the failure of the replacement cement to
conform to the specifications of the contract is a matter clearly falling
within the ambit of Clause 16. In this contention, we find merit. When
184
the 4,300 metric tons of oil well cement were not delivered to the
petitioner, an agreement was forged between the latter and the
private respondent that Class "G" cement would be delivered to the
petitioner as replacement. Upon inspection, however, the
replacement cement was rejected as it did not conform to the
specifications of the contract. Only after this latter circumstance was
the matter brought before the arbitrator. Undoubtedly, what was
referred to arbitration was no longer the mere non-delivery of the
cargo at the first instance but also the failure of the replacement
cargo to conform to the specifications of the contract, a matter clearly
within the coverage of Clause 16.
The private respondent posits that it was under no legal obligation to
make replacement and that it undertook the latter only "in the spirit of
liberality and to foster good business relationship". 20 Hence, the
undertaking to deliver the replacement cement and its subsequent
failure to conform to specifications are not anymore subject of the
supply order/contract or any of the provisions thereof. We disagree.
As per Clause 7 of the supply order/contract, the private respondent
undertook to deliver the 4,300 metric tons of oil well cement at
"BOMBAY (INDIA) 2181 MT and CALCUTTA 2119 MT". 21 The
failure of the private respondent to deliver the cargo to the
designated places remains undisputed. Likewise, the fact that the
petitioner had already paid for the cost of the cement is not contested
by the private respondent. The private respondent claims, however,
that it never benefited from the transaction as it was not able to
recover the cargo that was unloaded at the port of Bangkok. 22 First
of all, whether or not the private respondent was able to recover the
cargo is immaterial to its subsisting duty to make good its promise to
deliver the cargo at the stipulated place of delivery. Secondly, we find
it difficult to believe this representation. In its Memorandum filed
before this Court, the private respondent asserted that the Civil Court
of Bangkok had already ruled that the non-delivery of the cargo was
due solely to the fault of the carrier. 23 It is, therefore, but logical to
assume that the necessary consequence of this finding is the
eventual recovery by the private respondent of the cargo or the value
thereof. What inspires credulity is not that the replacement was done
in the spirit of liberality but that it was undertaken precisely because
of the private respondent's recognition of its duty to do so under the
supply order/contract, Clause 16 of which remains in force and effect
until the full execution thereof.
We now go to the issue of whether or not the judgment of the foreign
court is enforceable in this jurisdiction in view of the private
respondent's allegation that it is bereft of any statement of facts and
law upon which the award in favor of the petitioner was based. The
pertinent portion of the judgment of the foreign court reads:
ORDER
Award dated 23.7.88, Paper No. 3/B-1 is made Rule of the Court. On
the basis of conditions of award decree is passed. Award Paper No.
3/B-1 shall be a part of the decree. The plaintiff shall also be entitled
to get from defendant (US$ 899,603.77 (US$ Eight Lakhs ninety nine
thousand six hundred and three point seventy seven only) along with
9% interest per annum till the last date of realisation. 24
As specified in the order of the Civil Judge of Dehra Dun, "Award
Paper No. 3/B-1 shall be a part of the decree". This is a categorical
declaration that the foreign court adopted the findings of facts and
law of the arbitrator as contained in the latter's Award Paper. Award
Paper No. 3/B-1, contains an exhaustive discussion of the respective
claims and defenses of the parties, and the arbitrator's evaluation of
the same. Inasmuch as the foregoing is deemed to have been
incorporated into the foreign court's judgment the appellate court was
in error when it described the latter to be a "simplistic decision
containing literally, only the dispositive portion". 25
185
The constitutional mandate that no decision shall be rendered by any
court without expressing therein dearly and distinctly the facts and
the law on which it is based does not preclude the validity of
"memorandum decisions" which adopt by reference the findings of
fact and conclusions of law contained in the decisions of inferior
tribunals. In Francisco v. Permskul, 26 this Court held that the
following memorandum decision of the Regional Trial Court of Makati
did not transgress the requirements of Section 14, Article VIII of the
Constitution:
MEMORANDUM DECISION
After a careful perusal, evaluation and study of the records of this
case, this Court hereby adopts by reference the findings of fact and
conclusions of law contained in the decision of the Metropolitan Trial
Court of Makati, Metro Manila, Branch 63 and finds that there is no
cogent reason to disturb the same.
WHEREFORE, judgment appealed from is hereby affirmed in toto.
27 (Emphasis supplied.)
This Court had occasion to make a similar pronouncement in the
earlier case of Romero v. Court of Appeals, 28 where the assailed
decision of the Court of Appeals adopted the findings and disposition
of the Court of Agrarian Relations in this wise:
We have, therefore, carefully reviewed the evidence and made a re-
assessment of the same, and We are persuaded, nay compelled, to
affirm the correctness of the trial court's factual findings and the
soundness of its conclusion. For judicial convenience and
expediency, therefore, We hereby adopt by way of reference, the
findings of facts and conclusions of the court a quo spread in its
decision, as integral part of this Our decision. 29 (Emphasis
supplied)
Hence, even in this jurisdiction, incorporation by reference is allowed
if only to avoid the cumbersome reproduction of the decision of the
lower courts, or portions thereof, in the decision of the higher court.
30 This is particularly true when the decision sought to be
incorporated is a lengthy and thorough discussion of the facts and
conclusions arrived at, as in this case, where Award Paper No. 3/B-1
consists of eighteen (18) single spaced pages.
Furthermore, the recognition to be accorded a foreign judgment is
not necessarily affected by the fact that the procedure in the courts of
the country in which such judgment was rendered differs from that of
the courts of the country in which the judgment is relied on. 31 This
Court has held that matters of remedy and procedure are governed
by the lex fori or the internal law of the forum. 32 Thus, if under the
procedural rules of the Civil Court of Dehra Dun, India, a valid
judgment may be rendered by adopting the arbitrator's findings, then
the same must be accorded respect. In the same vein, if the
procedure in the foreign court mandates that an Order of the Court
becomes final and executory upon failure to pay the necessary
docket fees, then the courts in this jurisdiction cannot invalidate the
order of the foreign court simply because our rules provide
otherwise.
The private respondent claims that its right to due process had been
blatantly violated, first by reason of the fact that the foreign court
never answered its queries as to the amount of docket fees to be
paid then refused to admit its objections for failure to pay the same,
and second, because of the presumed bias on the part of the
arbitrator who was a former employee of the petitioner.
Time and again this Court has held that the essence of due process
is to be found in the reasonable opportunity to be heard and submit
any evidence one may have in support of one's defense 33 or stated
otherwise, what is repugnant to due process is the denial of
opportunity to be heard. 34 Thus, there is no violation of due process
186
even if no hearing was conducted, where the party was given a
chance to explain his side of the controversy and he waived his right
to do so. 35
In the instant case, the private respondent does not deny the fact
that it was notified by the foreign court to file its objections to the
petition, and subsequently, to pay legal fees in order for its objections
to be given consideration. Instead of paying the legal fees, however,
the private respondent sent a communication to the foreign court
inquiring about the correct amount of fees to be paid. On the pretext
that it was yet awaiting the foreign court's reply, almost a year
passed without the private respondent paying the legal fees. Thus,
on February 2, 1990, the foreign court rejected the objections of the
private respondent and proceeded to adjudicate upon the petitioner's
claims. We cannot subscribe to the private respondent's claim that
the foreign court violated its right to due process when it failed to
reply to its queries nor when the latter rejected its objections for a
clearly meritorious ground. The private respondent was afforded
sufficient opportunity to be heard. It was not incumbent upon the
foreign court to reply to the private respondent's written
communication. On the contrary, a genuine concern for its cause
should have prompted the private respondent to ascertain with all
due diligence the correct amount of legal fees to be paid. The private
respondent did not act with prudence and diligence thus its plea that
they were not accorded the right to procedural due process cannot
elicit either approval or sympathy from this Court. 36
The private respondent bewails the presumed bias on the part of the
arbitrator who was a former employee of the petitioner. This point
deserves scant consideration in view of the following stipulation in
the contract:
. . . . It will be no objection any such appointment that the arbitrator
so appointed is a Commission employer (sic) that he had to deal with
the matter to which the supply or contract relates and that in the
course of his duties as Commission's employee he had expressed WHEREFORE, the instant petition is GRANTED, and the assailed
views on all or any of the matter in dispute or difference. 37 decision of the Court of Appeals sustaining the trial court's dismissal
(Emphasis supplied.) of the OIL AND NATURAL GAS COMMISSION's complaint in Civil
Case No. 4006 before Branch 30 of the RTC of Surigao City is
Finally, we reiterate hereunder our pronouncement in the case of REVERSED, and another in its stead is hereby rendered
Northwest Orient Airlines, Inc. v. Court of Appeals 38 that: ORDERING private respondent PACIFIC CEMENT COMPANY, INC.
to pay to petitioner the amounts adjudged in the foreign judgment
A foreign judgment is presumed to be valid and binding in the subject of said case.
country from which it comes, until the contrary is shown. It is also
proper to presume the regularity of the proceedings and the giving of SO ORDERED.
due notice therein.
Regalado, Melo and Puno, JJ., concur.
Under Section 50, Rule 39 of the Rules of Court, a judgment in an
action in personam of a tribunal of a foreign country having Mendoza, J., took no part.
jurisdiction to pronounce the same is presumptive evidence of a right
as between the parties and their successors-in-interest by a
subsequent title. The judgment may, however, be assailed by
evidence of want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. Also, under Section 3 of Rule
131, a court, whether of the Philippines or elsewhere, enjoys the
presumption that it was acting in the lawful exercise of jurisdiction
and has regularly performed its official duty. 39

Consequently, the party attacking a foreign judgment, the private

respondent herein, had the burden of overcoming the presumption of
its validity which it failed to do in the instant case.

The foreign judgment being valid, there is nothing else left to be

done than to order its enforcement, despite the fact that the
petitioner merely prays for the remand of the case to the RTC for
further proceedings. As this Court has ruled on the validity and
enforceability of the said foreign judgment in this jurisdiction, further
proceedings in the RTC for the reception of evidence to prove
otherwise are no longer necessary.

187