Manila Prince Hotel vs.

Government Service Insurance System

G.R. No. 122156, February 3, 1997
Bellosillo, J.:
Statutory Construction; Self-executing provisions vs. Need for Implementing Legislation
Digest made by: Gonzaga, Via Kathleen Anne B.

Facts:
The Filipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges,
and concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos, is invoked by petitioner in its bid to acquire 51% of the shares of the Manila
Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain
that the provision is not self-executing but requires an implementing legislation for its
enforcement.

The controversy arose when respondent Government Service Insurance System (GSIS), decided
to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent
MHC. In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner
Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC
or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, which bid for the
same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner.

Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the
execution of the necessary contracts, petitioner in a letter to respondent GSIS matched the
bid price of P44.00 per share tendered by Renong Berhad. In a subsequent letter, petitioner sent a
manager's check issued by Philtrust Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid
Security to match the bid of the Malaysian Group, Messrs. Renong Berhad . . . which respondent
GSIS refused to accept.

Petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the
Manila Hotel has been identified with the Filipino nation and has practically become a historical
monument which reflects the vibrancy of Philippine heritage and culture. Petitioner also argues
that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel
which is owned by respondent GSIS, a government-owned and controlled corporation, the hotel
business of respondent GSIS being a part of the tourism industry is unquestionably a part of the
national economy. Thus, any transaction involving 51% of the shares of stock of the MHC is
clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987
Constitution, applies.

Respondents maintain that Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a
statement of principle and policy since it is not a self-executing provision and requires
implementing legislation(s). . . . Thus, for the said provision to operate, there must be existing laws
"to lay down conditions under which business may be done."
Issue:
Whether or not Section 10, paragraph 2, Article XII of the Constitution is self-executing.

Ruling:
Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the
constitution that law or contract whether promulgated by the legislative or by the executive branch
or entered into by private persons for private purposes is null and void and without any force and
effect.

Thus, since the Constitution is the fundamental paramount and supreme law of the nation, it is
deemed written in every statute and contract. Admittedly, some constitutions are merely
declarations of policies and principles. Their provisions command the legislature to enact laws and
carry out the purposes of the framers who merely establish an outline of government providing for
the different departments of the governmental machinery and securing certain fundamental and
inalienable rights of citizens.

A provision which lays down a general principle, such as those found in Art. II of the 1987
Constitution, is usually not self-executing. But a provision which is complete in itself and becomes
operative without the aid of supplementary or enabling legislation, or that which supplies sufficient
rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus, a
constitutional provision is self-executing if the nature and extent of
the right conferred, and the liability imposed are fixed by the constitution itself, so that they can
be determined by an examination and construction of its terms, and there is no language indicating
that the subject is referred to the legislature for action.

Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which
is complete in itself and which needs no further guidelines or implementing laws or rules for its
enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable. When our Constitution mandates that [i]n the grant of
rights, privileges, and concessions covering national economy and patrimony, the State shall give
preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred.

And when our Constitution declares that a right exists in certain specified circumstances an action
may be maintained to enforce such right notwithstanding the absence of any legislation on the
subject; consequently, if there is no statute especially enacted to enforce such constitutional right,
such right enforces itself by its own inherent potency and puissance, and from which all legislations
must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium.

National Federation of Labor vs. NLRC

327 SCRA 158, G.R. No. 127718, March 2, 2000.
De Leon, Jr. J.:
Statutory Construction; Verba legis; Plain meaning rule
Digest made by: Gonzaga, Via Kathleen Anne B.

Facts:

Petitioners are bona fide members of the National Federation of Labor (NFL), a legitimate labor
organization duly registered with the Department of Labor and Employment. They were employed
by private respondents Charlie Reith and Susie Galle Reith, general manager and owner,
respectively, of the 354-hectare Patalon Coconut Estate located at Patalon, Zamboanga City.
Patalon Coconut Estate was engaged in growing agricultural products and in raising livestock.

In 1988, Congress enacted into law Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), which mandated the compulsory acquisition of
all covered agricultural lands for distribution to qualified farmer beneficiaries under the so-called
Comprehensive Agrarian Reform Programme (CARP).

Pursuant to R.A. No. 6657, the Patalon Coconut Estate was awarded to the Patalon Estate Agrarian
Reform Association (PEARA), a cooperative accredited by the Department of Agrarian Reform
(DAR), of which petitioners are members and co-owners.

As a result of this acquisition, private respondents shut down the operation of the Patalon Coconut
Estate and the employment of the petitioners was severed on July 31, 1994. Petitioners did not
receive any separation pay.

Subsequently, the cooperative took over the estate. Being beneficiaries of the Patalon Coconut
Estate pursuant to the CARP, the petitioners became part-owners of the land. Petitioners,
thereafter, filed individual complaints before the Regional Arbitration Branch (RAB) of the
National Labor Relations Commission (NLRC) in Zamboanga City, praying for their reinstatement
with full back wages on the ground that they were illegally dismissed.

RAB dismissed the complaints for lack of merit. However, ordered respondents thru [sic] its
owner-manager or its duly authorized representative to pay complainants’ separation pay in view
of the latter’s cessation of operations or forced sale, and for 13th month differential pay. NLRC on
appeal, set aside the decision of RAB ordering respondents to pay separation pay and 13th month
differentials stating that, the severance of employer-employee relationship between the parties
came about INVOLUNTARILY, as a result of an act of the State. MR Denied. Hence, this petition.
Issue:

Whether or not an employer that was compelled to cease its operation because of the compulsory
acquisition by the government of its land for purposes of agrarian reform, is liable to pay separation
pay to its affected employees

Ruling:

No. Petitioners contend that they are entitled to separation pay citing Article 283 of the Labor
Code. Article 283 of the Labor Code applies in cases of closures of establishment and reduction
of personnel. The peculiar circumstances in the case at bar, however, involves neither the closure
of an establishment nor a reduction of personnel as contemplated under the aforesaid article. When
the Patalon Coconut Estate was closed because a large portion of the estate was acquired by DAR
pursuant to CARP, the ownership of that large portion of the estate was precisely transferred to
PEARA and ultimately to the petitioners as members thereof and as agrarian lot beneficiaries.
Hence, Article 283 of the Labor Code is not applicable to the case at bench. In other words, Article
283 of the Labor Code does not contemplate a situation where the closure of the business
establishment is forced upon the employer and ultimately for the benefit of the employees.

Capital and management sectors must also be protected under a regime of justice and the rule of
law. The petition is denied.
Co Kim Cham vs. Valdez
75 Phil 113, No. L-5., September 17, 1945
Feria, J.:
Statutory Construction; Adherence to the Language of the Statute
Digest made by: Gonzaga, Via Kathleen Anne B.

Facts:
Petitioner Co Kim Cham had a pending Civil Case with the Court of First Instance of Manila
initiated during the time of the Japanese occupation.

The respondent judge, Judge Arsenio Dizon, refused to continue hearings on the case which were
initiated during the Japanese military occupation on the ground that the proclamation issued by
General MacArthur that “all laws, regulations and processes of any other government in the
Philippines than that of the said Commonwealth are null and void and without legal effect in areas
of the Philippines free of enemy occupation and control” had the effect of invalidating and
nullifying all judicial proceedings and judgments of the court of the Philippines during the
Japanese military occupation, and that the lower courts have no jurisdiction to take cognizance of
and continue judicial proceedings pending in the courts of the defunct Republic of the Philippines
in the absence of an enabling law granting such authority.

Respondent additionally contends that the government established during the Japanese occupation
were no de facto government.

Issues:
1. Whether or not judicial acts and proceedings of the court made during the Japanese
occupation were valid and remained valid even after the liberation or reoccupation of the
Philippines by the United States and Filipino forces.
2. Whether or not the October 23, 1944 proclamation issued by General MacArthur declaring
that “all laws, regulations and processes of any other government in the Philippines than that of
the said Commonwealth are null and void and without legal effect in areas of the Philippines free
of enemy occupation and control” has invalidated all judgments and judicial acts and proceedings
of the courts.
3. Whether or not those courts could continue hearing the cases pending before them, if the
said judicial acts and proceedings were not invalidated by MacArthur’s proclamation.

Rulings:
1. The judicial acts and proceedings of the court were good and valid. The governments by
the Philippine Executive Commission and the Republic of the Philippines during the Japanese
military occupation being de facto governments, it necessarily follows that the judicial acts and
proceedings of the court of justice of those governments, which are not of a political complexion,
were good and valid. Those not only judicial but also legislative acts of de facto government, which
are not of a political complexion, remained good and valid after the liberation or reoccupation of
the Philippines by the American and Filipino forces under the leadership of General Douglas
MacArthur.

2. The phrase “processes of any other government” is broad and may refer not only to the
judicial processes, but also to administrative or legislative, as well as constitutional, processes of
the Republic of the Philippines or other governmental agencies established in the Islands during
the Japanese occupation. Taking into consideration the fact that, as above indicated, according to
the well-known principles of international law all judgements and judicial proceedings, which are
not of a political complexion, of the de facto governments during the Japanese military occupation
were good and valid before and remained so after the occupied territory had come again into the
power of the titular sovereign, it should be presumed that it was not, and could not have been, the
intention of General Douglas MacArthur, in using the phrase “processes of any other government”
in said proclamation, to refer to judicial processes, in violation of said principles of international
law.

3. Although in theory the authority of the local civil and judicial administration is suspended
as a matter of course as soon as military occupation takes place, in practice the invader does not
usually take the administration of justice into his own hands but continues the ordinary courts or
tribunals to administer the laws of the country which he is enjoined, unless absolutely prevented,
to respect. An Executive Order of President McKinley to the Secretary of War states that “in
practice, they (the municipal laws) are not usually abrogated but are allowed to remain in force
and to be administered by the ordinary tribunals substantially as they were before the occupation.
This enlightened practice is, so far as possible, to be adhered to on the present occasion.” And
Taylor in this connection says: “From a theoretical point of view it may be said that the conqueror
is armed with the right to substitute his arbitrary will for all pre-existing forms of government,
legislative, executive and judicial. From the stand-point of actual practice such arbitrary will is
restrained by the provision of the law of nations which compels the conqueror to continue local
laws and institution so far as military necessity will permit.” Undoubtedly, this practice has been
adopted in order that the ordinary pursuits and business of society may not be unnecessarily
deranged, inasmuch as belligerent occupation is essentially provisional, and the government
established by the occupant of transient character.
Philippine Airlines vs. Court of Appeals
G.R. No. L-49188, January 30, 1990.
Guttierez, Jr., J.:
Statutory Construction; Departure from Literal Construction
Digest made by: Gonzaga, Via Kathleen Anne B.

Facts:
Amelia Tan commenced a complaint for damages before the Court of First Instance against
Philippine Airlines, Inc. (PAL). The Court rendered a judgment in favor of the former and against
the latter.

PAL filed its appeal with the Court of Appeals (CA), and the appellate court affirmed the judgment
of the lower court with the modification that PAL is condemned to pay the latter the sum of P25,
000.00 as damages and P5, 000.00 as attorney’s fee.

Judgment became final and executory and was correspondingly entered in the case, which was
remanded to the trial court for execution. The trial court upon the motion of Amelia Tan issued an
order of execution with the corresponding writ in favor of the respondent. Said writ was duly
referred to Deputy Sheriff Reyes for enforcement.

Four months later, Amelia Tan moved for the issuance of an alias writ of execution, stating that
the judgment rendered by the lower court, and affirmed with modification by the CA, remained
unsatisfied. PAL opposed the motion, stating that it had already fully paid its obligation to plaintiff
through the issuance of checks payable to the deputy sheriff who later did not appear with his
return and instead absconded.

The CA denied the issuance of the alias writ for being premature. After two months the CA granted
her an alias writ of execution for the full satisfaction of the judgment rendered, when she filed
another motion. Deputy Sheriff del Rosario is appointed special sheriff for enforcement thereof.
PAL filed an urgent motion to quash the alias writ of execution stating that no return of the writ
had as yet been made by Deputy Sheriff Reyes and that judgment debt had already been fully
satisfied by the former as evidenced by the cash vouchers signed and received by the executing
sheriff.

Deputy Sheriff del Rosario served a notice of garnishment on the depository bank of PAL, through
its manager and garnished the latter’s deposit. Hence, PAL brought the case to the Supreme Court
and filed a petition for certiorari.
THE ISSUES:
1. WON an alias writ of execution can be issued without prior return of the original writ by
the implementing officer.
2. WON payment of judgment to the implementing officer as directed in the writ of execution
constitutes satisfaction of judgment.
3. WON payment made in checks to the sheriff and under his name is a valid payment to
extinguish judgment of debt.
Ruling:

1. Yes. Technicality cannot be countenanced to defeat the execution of a judgment for execution
is the fruit and end of the suit and is very aptly called the life of the law. A judgment cannot be
rendered nugatory by unreasonable application of a strict rule of procedure. Vested right were
never intended to rest on the requirement of a return. So long as judgment is not satisfied, a plaintiff
is entitled to other writs of execution.

2. No. In general, a payment, in order to be effective to discharge an obligation, must be made to

the proper person. Article 1240 of the Civil Code provides:
“Payment made to the person in whose favor the obligation has been constituted, or his successor
in interest, or any person authorized to receive it.”
Under ordinary circumstances, payment by the judgment debtor in the case at bar, to the sheriff
should be valid payment to extinguish judgment of debt.
However, under the peculiar circumstances of this case, the payment to the absconding sheriff by
check in his name did not operate as a satisfaction of the judgment debt.

3. No. Article 1249 of the Civil Code provides:

“The payment of debts in money shall be made in the currency stipulated, and if it is not possible
to deliver such currency, then in the currency which is legal tender in the Philippines”.
Unless authorized to do so by law or by consent of the obligee, a public officer has no authority to
accept anything other than money in payment of an obligation under a judgment being executed.
Strictly speaking, the acceptance by the sheriff of the petitioner’s checks does not, per se, operate
as a discharge of the judgment of debt.

A check, whether manager’s check or ordinary check, is not legal tender, and an offer of a check
in payment of a debt is not a valid tender or payment and may be refused receipt by the oblige or
creditor. Hence, the obligation is not extinguished.

However, in the case at bar, it is out of the ordinary that checks intended for a particular payee are
made out in the name of another. The issuance of the checks in the name of the sheriff clearly
made possible the misappropriation of the funds that were withdrawn.

The Court of Appeals explained:

“Knowing as it does that the intended payment was for the respondent Amelia Tan, the
petitioner corporation, utilizing the services of its personnel who are or should be knowledgeable
about the accepted procedure and resulting consequences of the checks drawn, nevertheless, in
this instance, without prudence, departed from what is generally observed and done, and placed
as payee in the checks the name of the errant Sheriff and not the name of the rightful payee.
Petitioner thereby created a situation which permitted the said Sheriff to personally encash said
checks and misappropriate the proceeds thereof to his exclusive benefit. For the prejudice that
resulted, the petitioner himself must bear the fault…”
Having failed to employ the proper safeguards to protect itself, the judgment debtor whose act
made possible the loss had but itself to blame.

CHUA vs. CSC

G.R. No. 88979, February 07, 1992.
Padilla, J.:
Statutory Construction; Doctrine of Necessary Implication
Digest made by: Gonzaga, Via Kathleen Anne B.
Facts:
Republic Act No. 6683 provided 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. Petitioner Lydia Chua believing
that she is qualified to avail of the benefits of the program, filed an application 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, or almost fifteen (15) years in four (4) successive governmental projects.
A recourse by petitioner to the Civil Service Commission yielded negative results, citing that her
position is co-terminous with the NIA project which is contractual in nature and thus excluded by
the enumerations under Sec.3.1 of Joint DBM-CSC Circular Letter No. 89-1, i.e. casual,
emergency, temporary or regular employment. Petitioner appealed to the Supreme Court by way
of a special civil action for certiorari.
Issue:
Whether or not the petitioner is entitled to the benefits granted under Republic Act No. 6683.
Ruling:
Yes. Petition was granted. Petitioner was established to be a co-terminous employee, a non-career
civil servant, like casual and emergency employees. The Supreme Court sees 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 but the applicable maxim in this case is the doctrine of necessary
implication which holds that “what is implied in a statute is as much a part thereof as that which
is expressed”.
The Court believes, and so holds, that the denial by the respondents NIA and CSC of petitioner’s
application for early retirement benefits under R.A. 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. 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.