Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-19650 September 29, 1966
CALTEX (PHILIPPINES), INC., petitioner-appellee,
vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.
Office of the Solicitor General for respondent and appellant.
Ross, Selph and Carrascoso for petitioner and appellee.
CASTRO, J .:
In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid
the groundwork for a promotional scheme calculated to drum up patronage for its oil products.
Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual
number of liters a hooded gas pump at each Caltex station will dispense during a specified period.
Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their
immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners
and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be
paid, no purchase of Caltex products required to be made. Entry forms are to be made available
upon request at each Caltex station where a sealed can will be provided for the deposit of
accomplished entry stubs.
A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest",
the contestant whose estimate is closest to the actual number of liters dispensed by the hooded
pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third.
Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac
hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver
set for third. The first-prize winner in each station will then be qualified to join in the "Regional
Contest" in seven different regions. The winning stubs of the qualified contestants in each region will
be deposited in a sealed can from which the first-prize, second-prize and third-prize winners of that
region will be drawn. The regional first-prize winners will be entitled to make a three-day all-
expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in order to take
part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-
prize winners will be placed inside a sealed can from which the drawing for the final first-prize,
second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage
are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of
the remaining four participants.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest
but also for the transmission of communications relative thereto, representations were made by
Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view
sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of
which read as follows:
SECTION 1954. Absolutely non-mailable matter. No matter belonging to any of the
following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the Philippines,
or be delivered to its addressee by any officer or employee of the Bureau of Posts:
Written or printed matter in any form advertising, describing, or in any manner pertaining to,
or conveying or purporting to convey any information concerning any lottery, gift enterprise,
or similar scheme depending in whole or in part upon lot or chance, or any scheme, device,
or enterprise for obtaining any money or property of any kind by means of false or fraudulent
pretenses, representations, or promises.
"SECTION 1982. Fraud orders.Upon satisfactory evidence that any person or company is
engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or
of any real or personal property by lot, chance, or drawing of any kind, or that any person or
company is conducting any scheme, device, or enterprise for obtaining money or property of
any kind through the mails by means of false or fraudulent pretenses, representations, or
promises, the Director of Posts may instruct any postmaster or other officer or employee of
the Bureau to return to the person, depositing the same in the mails, with the word
"fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of
whatever class mailed by or addressed to such person or company or the representative or
agent of such person or company.
SECTION 1983. Deprivation of use of money order system and telegraphic transfer
service.The Director of Posts may, upon evidence satisfactory to him that any person or
company is engaged in conducting any lottery, gift enterprise or scheme for the distribution
of money, or of any real or personal property by lot, chance, or drawing of any kind, or that
any person or company is conducting any scheme, device, or enterprise for obtaining money
or property of any kind through the mails by means of false or fraudulent pretenses,
representations, or promise, forbid the issue or payment by any postmaster of any postal
money order or telegraphic transfer to said person or company or to the agent of any such
person or company, whether such agent is acting as an individual or as a firm, bank,
corporation, or association of any kind, and may provide by regulation for the return to the
remitters of the sums named in money orders or telegraphic transfers drawn in favor of such
person or company or its agent.
The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in
which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its
position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed,
the then Acting Postmaster General opined that the scheme falls within the purview of the provisions
aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960,
Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities,
condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on
an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General
maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a
"gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960
not only denied the use of the mails for purposes of the proposed contest but as well threatened that
if the contest was conducted, "a fraud order will have to be issued against it (Caltex) and all its
representatives".
Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief
against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its
'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to
allow petitioner the use of the mails to bring the contest to the attention of the public". After issues
were joined and upon the respective memoranda of the parties, the trial court rendered judgment as
follows:
In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded
Pump Contest' announced to be conducted by the petitioner under the rules marked as
Annex B of the petitioner does not violate the Postal Law and the respondent has no right to
bar the public distribution of said rules by the mails.
The respondent appealed.
The parties are now before us, arrayed against each other upon two basic issues: first, whether the
petition states a sufficient cause of action for declaratory relief; and second, whether the proposed
"Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable
legal basis for the remedy at the time it was invoked, declaratory relief is available to any person
"whose rights are affected by a statute . . . to determine any question of construction or validity
arising under the . . . statute and for a declaration of his rights thereunder" (now section 1, Rule 64,
Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the
matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party
seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved
must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-
3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576,
578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of the
appellant's stand being that the petition herein states no sufficient cause of action for declaratory
relief, our duty is to assay the factual bases thereof upon the foregoing crucible.
As we look in retrospect at the incidents that generated the present controversy, a number of
significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some
consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail
of all appropriate media to advertise and stimulate increased patronage for its products. In contrast,
the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the
power and the duty to suppress transgressions thereof particularly thru the issuance of fraud
orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-
mailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales
promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of
information thereon thru the mails, amongst other media, it was found expedient to request the
appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation
thereof in the proposed scheme and accordingly declined the request. A point of difference as to the
correct construction to be given to the applicable statute was thus reached. Communications in
which the parties expounded on their respective theories were exchanged. The confidence with
which the appellee insisted upon its position was matched only by the obstinacy with which the
appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the
appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it
and all its representatives."
Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent
assertion of its claim to the use of the mails for its proposed contest, and the challenge thereto and
consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live
controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic
assertion of a legal right on one side and a denial thereof on the other, concerning a real not a
mere theoretical question or issue. The contenders are as real as their interests are substantial.
To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction
hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the
appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a
fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an
imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing
declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955).
And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that
merely the appellee's "desires are thwarted by its own doubts, or by the fears of others" which
admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable
controversy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing:
Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).
We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law to a given set
of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The
infirmity of this pose lies in the fact that it proceeds from the assumption that, if the circumstances
here presented, the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of
discovering and expounding the meaning and intention of the authors of the law with respect to its
application to a given case, where that intention is rendered doubtful, amongst others, by reason of
the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p.
1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the
coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction
or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can
amount to nothing more than an advisory opinion the handing down of which is anathema to a
declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the
disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed
and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the
battle lines drawn, in a manner of speaking, the propriety nay, the necessity of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a
full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132
and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny
declaratory relief to the appellee in the situation into which it has been cast, would be to force it to
choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as
to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be
faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not
only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with
its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it
abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect
a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these
considerations in one equation and in the spirit of liberality with which the Rules of Court are to be
interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) which, in
the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights
and duties under a law we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.
The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in
this case if he believes that it will not have the final and pacifying function that a declaratory
judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this,
he obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting the law
shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial
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 abide thereby but also of those in duty bound to enforce
obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will
terminate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a
corporation engaged in promotional advertising was advised by the county prosecutor that its
proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion
were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to
determine the legality of its sales promotion plan. In parimateria, see also: Bunis vs. Conway, 17
App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J.
Super. 124, 82 A. 2d., 903.
In fine, we hold that the appellee has made out a case for declaratory relief.
2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to, any information concerning "any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these words hinges the resolution of the second issue posed
in this appeal.
Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs.
Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal authorities
under the abovementioned provisions of the Postal Law, this Court declared that
While countless definitions of lottery have been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme Court, in analogous cases having to do with
the power of the United States Postmaster General, viz.: The term "lottery" extends to all
schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize
concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of
a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892],
147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and
Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio
[1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)
Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too
obvious in the disputed scheme to be the subject of contention. Consequently as the appellant
himself concedes, the field of inquiry is narrowed down to the existence of the element of
consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the
same case just cited, this Court has laid down a definitive yard-stick in the following terms
In respect to the last element of consideration, the law does not condemn the gratuitous
distribution of property by chance, if no consideration is derived directly or indirectly from the
party receiving the chance, but does condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or indirectly for the chance to draw a prize.
Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which
the invitation to participate therein is couched. Thus
No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy
anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at
your favorite Caltex dealer will dispense from to , and win valuable prizes . . . ." .
Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any
service be rendered, or any value whatsoever be given for the privilege to participate. A prospective
contestant has but to go to a Caltex station, request for the entry form which is available on demand,
and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned
inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery.
Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance, in
order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El
Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only
appear to be, but actually is, a gratuitous distribution of property by chance.
There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex
products simply to win a prize would actually be indirectly paying a consideration for the privilege to
join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of
any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs
reiterating, does not have to buy anything or to give anything of value.1awphl. nt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would
naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to
prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The
required element of consideration does not consist of the benefit derived by the proponent of the
contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788,
is whether the participant pays a valuable consideration for the chance, and not whether those
conducting the enterprise receive something of value in return for the distribution of the prize.
Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the
sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:
The fact that the holder of the drawing expects thereby to receive, or in fact does receive,
some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration.Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98
S.W., 2d., 844" (54 C.J.S., p. 849).
Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest"
proposed by the appellee is not a lottery that may be administratively and adversely dealt with under
the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of
any real or personal property by lot, chance, or drawing of any kind", which is equally prescribed?
Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration,
this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing
effect as an instrument of both curative and preventive justice. Recalling that the appellant's action
was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration, may
nevertheless be a gift enterprise in which that element is not essential, the determination of whether
or not the proposed contest wanting in consideration as we have found it to be is a prohibited
gift enterprise, cannot be passed over sub silencio.
While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words,
there appears to be a consensus among lexicographers and standard authorities that the term is
commonly applied to a sporting artifice of under which goods are sold for their market value but by
way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur.,
654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed.,
p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed,
507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted,
there is no sale of anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the
appellee's products.
Going a step farther, however, and assuming that the appellee's contest can be encompassed within
the broadest sweep that the term "gift enterprise" is capable of being extended, we think that the
appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are
indeed holding that a gift enterprise involving an award by chance, even in default of the element of
consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192,
178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford
vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only
one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes
within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and
consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P.
563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851,
citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp.
590-594). The apparent conflict of opinions is explained by the fact that the specific statutory
provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms
"lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by statute. (54
C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater
Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is,
therefore, that every case must be resolved upon the particular phraseology of the applicable
statutory provision.
Taking this cue, we note that in the Postal Law, the term in question is used in association with the
word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal
hermeneutics noscitur a sociis which Opinion 217 aforesaid also relied upon although only insofar
as the element of chance is concerned it is only logical that the term under a construction should
be accorded no other meaning than that which is consistent with the nature of the word associated
therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the
determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is
axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed
matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift
enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839,
143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a
chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the
contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been
held
Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not
resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and
Phrases, perm. ed., p. 695, emphasis supplied).
we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to
hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift
enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding none in the contest here in question, we rule that the
appellee may not be denied the use of the mails for purposes thereof.
Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory
relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the
appellee does not transgress the provisions of the Postal Law.
ACCORDINGLY, the judgment appealed from is affirmed. No costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.










Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17931 February 28, 1963
CASCO PHILIPPINE CHEMICAL CO., INC., petitioner,
vs.
HON. PEDRO GIMENEZ, in his capacity as Auditor General of the Philippines,
and HON. ISMAEL MATHAY, in his capacity as Auditor of the Central Bank, respondents.
Jalandoni& Jamir for petitioner.
Officer of the Solicitor General for respondents.
CONCEPCION, J .:
This is a petition for review of a decision of the Auditor General denying a claim for refund of
petitioner Casco Philippine Chemical Co., Inc.
The main facts are not disputed. Pursuant to the provisions of Republic Act No. 2609, otherwise
known as the Foreign Exchange Margin Fee Law, the Central Bank of the Philippines issued on July
1, 1959, its Circular No. 95. fixing a uniform margin fee of 25% on foreign exchange transactions. To
supplement the circular, the Bank later promulgated a memorandum establishing the procedure for
applications for exemption from the payment of said fee, as provided in said Republic Act No. 2609.
Several times in November and December 1959, petitioner Casco Philippine Chemical Co., Inc.
which is engaged in the manufacture of synthetic resin glues, used in bonding lumber and veneer by
plywood and hardwood producers bought foreign exchange for the importation of urea and
formaldehyde which are the main raw materials in the production of said glues and paid
therefor the aforementioned margin fee aggregating P33,765.42. In May, 1960, petitioner made
another purchase of foreign exchange and paid the sum of P6,345.72 as margin fee therefor.
Prior thereto, petitioner had sought the refund of the first sum of P33,765.42, relying upon Resolution
No. 1529 of the Monetary Board of said Bank, dated November 3, 1959, declaring that the separate
importation of urea and formaldehyde is exempt from said fee. Soon after the last importation of
these products, petitioner made a similar request for refund of the sum of P6,345.72 paid as margin
fee therefor. Although the Central Bank issued the corresponding margin fee vouchers for the refund
of said amounts, the Auditor of the Bank refused to pass in audit and approve said vouchers, upon
the ground that the exemption granted by the Monetary Board for petitioner's separate importations
of urea and formaldehyde is not in accord with the provisions of section 2, paragraph XVIII of
Republic Act No. 2609. On appeal taken by petitioner, the Auditor General subsequently affirmed
said action of the Auditor of the Bank. Hence, this petition for review.
The only question for determination in this case is whether or not "urea" and "formaldehyde" are
exempt by law from the payment of the aforesaid margin fee. The pertinent portion of Section 2 of
Republic Act No. 2609 reads:
The margin established by the Monetary Board pursuant to the provision of section one
hereof shall not be imposed upon the sale of foreign exchange for the importation of the
following:.
x xx x xx x xx
XVIII. Urea formaldehyde for the manufacture of plywood and hardboard when imported by
and for the exclusive use of end-users.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted
and approved by this Honorable Court, without prejudice to the parties adducing other
evidence to prove their case not covered by this stipulation of facts. 1wph1.t
Petitioner maintains that the term "urea formaldehyde" appearing in this provision should be
construed as "ureaand formaldehyde" (emphasis supplied) and that respondents herein, the Auditor
General and the Auditor of the Central Bank, have erred in holding otherwise. In this connection, it
should be noted that, whereas "urea" and "formaldehyde" are the principal raw materials in the
manufacture of synthetic resin glues, the National Institute of Science and Technology has
expressed, through its Commissioner, the view that:
Urea formaldehyde is not a chemical solution. It is the synthetic resin formed as a
condensation product from definite proportions of urea and formaldehyde under certain
conditions relating to temperature, acidity, and time of reaction. This produce when applied in
water solution and extended with inexpensive fillers constitutes a fairly low cost adhesive for
use in the manufacture of plywood.
Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct and different from
urea" and "formaldehyde", as separate articles used in the manufacture of the synthetic resin known
as "urea formaldehyde". Petitioner contends, however, that the bill approved in Congress contained
the copulative conjunction "and" between the terms "urea" and "formaldehyde", and that the
members of Congress intended to exempt "urea" and "formaldehyde" separately as essential
elements in the manufacture of the synthetic resin glue called "urea" formaldehyde", not the latter as
a finished product, citing in support of this view the statements made on the floor of the Senate,
during the consideration of the bill before said House, by members thereof. But, said individual
statements do not necessarily reflect the view of the Senate. Much less do they indicate the intent of
the House of Representatives (see Song Kiat Chocolate Factory vs. Central Bank, 54 Off. Gaz., 615;
Mayon Motors Inc. vs. Acting Commissioner of Internal Revenue, L-15000 [March 29, 1961]; Manila
Jockey Club, Inc. vs. Games & Amusement Board, L-12727 [February 29, 1960]). Furthermore, it is
well settled that the enrolled bill which uses the term "urea formaldehyde" instead of "urea and
formaldehyde" is conclusive upon the courts as regards the tenor of the measure passed by
Congress and approved by the President (Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag vs.
Lopez Vito, 78 Phil. 1; Macias vs. Comm. on Elections, L-18684, September 14, 1961). If there has
been any mistake in the printing ofthe bill before it was certified by the officers of Congress and
approved by the Executive on which we cannot speculate, without jeopardizing the principle of
separation of powers and undermining one of the cornerstones of our democratic system the
remedy is by amendment or curative legislation, not by judicial decree.
WHEREFORE, the decision appealed from is hereby affirmed, with costs against the petitioner. It is
so ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala
and Makalintal, JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION
G.R. No. 102858 July 28, 1997
THE DIRECTOR OF LANDS, petitioner,
vs.
COURT OF APPEALS and TEODORO ABISTADO, substituted by MARGARITA, MARISSA,
MARIBEL, ARNOLD and MARY ANN, all surnamed ABISTO, respondents.
PANGANIBAN, J .:

Is newspaper publication of the notice of initial hearing in an original land registration case
mandatory or directory?
Statement of the Case
The Court of Appeals ruled that it was merely procedural and that the failure to cause such
publication did not deprive the trial court of its authority to grant the application. But the Solicitor
General disagreed and thus filed this petition to set aside the Decision
1
promulgated on July 3, 1991
and the subsequent Resolution
2
promulgated on November 19, 1991 by Respondent Court of
Appeals
3
in CA-G.R. CV No. 23719. The dispositive portion of the challenged Decision reads:
4

WHEREFORE, premises considered, the judgment of dismissal appealed from is hereby set
aside, and a new one entered confirming the registration and title of applicant, TeodoroAbistado,
Filipino, a resident of Barangay 7, PoblacionMamburao, Occidental Mindoro, now deceased and
substituted by Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado,
represented by their aunt, Miss JosefaAbistado, Filipinos, residents of PoblacionMamburao,
Occidental Mindoro, to the parcel of land covered under MSI (IV-A-8) 315-D located in
PoblacionMamburao, Occidental Mindoro.
The oppositions filed by the Republic of the Philippines and private oppositor are hereby
dismissed for want of evidence.
Upon the finality of this decision and payment of the corresponding taxes due on this land, let
an order for the issuance of a decree be issued.
The Facts
On December 8, 1986, Private Respondent TeodoroAbistado filed a petition for original registration
of his title over 648 square meters of land under Presidential Decree (PD) No. 1529.
5
The application
was docketed as Land Registration Case (LRC) No. 86 and assigned to Branch 44 of the Regional Trial
Court of Mamburao, Occidental Mindoro.
6
However, during the pendency of his petition, applicant died.
Hence, his heirs Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado
represented by their aunt JosefaAbistado, who was appointed their guardian ad litem, were substituted as
applicants.
The land registration court in its decision dated June 13, 1989 dismissed the petition "for want of
jurisdiction." However, it found that the applicants through their predecessors-in-interest had been in
open, continuous, exclusive and peaceful possession of the subject land since 1938.
In dismissing the petition, the trial court reasoned:
7

. . . However, the Court noted that applicants failed to comply with the provisions of Section 23 (1)
of PD 1529, requiring the Applicants to publish the notice of Initial Hearing (Exh. "E") in a
newspaper of general circulation in the Philippines. Exhibit "E" was only published in the Official
Gazette (Exhibits "F" and "G"). Consequently, the Court is of the well considered view that it has
not legally acquired jurisdiction over the instant application for want of compliance with the
mandatory provision requiring publication of the notice of initial hearing in a newspaper of general
circulation.
The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982, which in its pertinent
portion provides:
8

It bears emphasis that the publication requirement under Section 23 [of PD 1529] has a two-fold
purpose; the first, which is mentioned in the provision of the aforequoted provision refers to
publication in the Official Gazette, and is jurisdictional; while the second, which is mentioned in
the opening clause of the same paragraph, refers to publication not only in the Official Gazette
but also in a newspaper of general circulation, and is procedural. Neither one nor the other is
dispensable. As to the first, publication in the Official Gazette is indispensably necessary because
without it, the court would be powerless to assume jurisdiction over a particular land registration
case. As to the second, publication of the notice of initial hearing also in a newspaper of general
circulation is indispensably necessary as a requirement of procedural due process; otherwise,
any decision that the court may promulgate in the case would be legally infirm.
Unsatisfied, private respondents appealed to Respondent Court of Appeals which, as earlier
explained, set aside the decision of the trial court and ordered the registration of the title in the name
of TeodoroAbistado.
The subsequent motion for reconsideration was denied in the challenged CA Resolution dared
November 19, 1991.
The Director of Lands represented by the Solicitor General thus elevated this recourse to us. This
Court notes that the petitioner's counsel anchored his petition on Rule 65. This is an error. His
remedy should be based on Rule 45 because he is appealing a final disposition of the Court of
Appeals. Hence, we shall treat his petition as one for review under Rule 45, and not
for certiorari under Rule 65.
The Issue
Petitioner alleges that Respondent Court of Appeals committed "grave abuse of discretion"
10
in
holding
. . . that publication of the petition for registration of title in LRC Case No. 86 need not be
published in a newspaper of general circulation, and in not dismissing LRC Case No. 86 for
want of such publication.
Petitioner points out that under Section 23 of PD 1529, the notice of initial hearing shall be
"published both in the Official Gazette and in a newspaper of general circulation." According to
petitioner, publication in the Official Gazette is "necessary to confer jurisdiction upon the trial court,
and . . . in . . . a newspaper of general circulation to comply with the notice requirement of due
process."
Private respondents, on the other hand, contend that failure to comply with the requirement of
publication in a newspaper of general circulation is a mere "procedural defect." They add that
publication in the Official Gazette is sufficient to confer jurisdiction.
In reversing the decision of the trial court, Respondent Court of Appeals ruled:
. . . although the requirement of publication in the Official Gazette and in a newspaper of general
circulation is couched in mandatory terms, it cannot be gainsaid that the law also mandates with
equal force that publication in the Official Gazette shall be sufficient to confer jurisdiction upon the
court.
Further, Respondent Court found that the oppositors were afforded the opportunity "to explain
matters fully and present their side." Thus, it justified its disposition in this wise:
. . . We do not see how the lack of compliance with the required procedure prejudiced them in any
way. Moreover, the other requirements of: publication in the Official Gazette, personal notice by
mailing, and posting at the site and other conspicuous places, were complied with and these are
sufficient to notify any party who is minded to make any objection of the application for
registration.
The Court's Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of Presidential Decree No. 1529 requiring publication of the notice of
initial hearing reads as follows:
Sec. 23.Notice of initial hearing, publication, etc. The court shall, within five days from
filing of the application, issue an order setting the date and hour of the initial hearing which
shall not be earlier than forty-five days nor later than ninety days from the date of the order.
The public shall be given notice of initial hearing of the application for land registration by
means of (1) publication; (2) mailing; and (3) posting.
1. By publication.
Upon receipt of the order of the court setting the time for initial hearing, the Commissioner of
Land Registration shall cause a notice of initial hearing to be published once in the Official
Gazette and once in a newspaper of general circulation in the Philippines: Provided,
however, that the publication in the Official Gazette shall be sufficient to confer jurisdiction
upon the court. Said notice shall be addressed to all persons appearing to have an interest in
the land involved including the adjoining owners so far as known, and "to all whom it may
concern." Said notice shall also require all persons concerned to appear in court at a certain
date and time to show cause why the prayer of said application shall not be granted.
xxxxxxxxx
Admittedly, the above provision provides in clear and categorical terms that publication in the Official
Gazette suffices to confer jurisdiction upon the land registration court. However, the question boils
down to whether, absent any publication in a newspaper of general circulation, the land registration
court can validly confirm and register the title of private respondents.
We answer this query in the negative. This answer is impelled by the demands of statutory
construction and the due process rationale behind the publication requirement.
The law used the term "shall" in prescribing the work to be done by the Commissioner of Land
Registration upon the latter's receipt of the court order setting the time for initial hearing. The said
word denotes an imperative and thus indicates the mandatory character of a statute.
15
While
concededly such literal mandate is not an absolute rule in statutory construction, as its import ultimately
depends upon its context in the entire provision, we hold that in the present case the term must be
understood in its normal mandatory meaning. In Republic vs. Marasigan,
16
the Court through Mr. Justice
Hilario G. Davide, Jr. held that Section 23 of PD 1529 requires notice of the initial hearing by means of (1)
publication, (2) mailing and (3) posting, all of which must be complied with. "If the intention of the law
were otherwise, said section would not have stressed in detail the requirements of mailing of notices to all
persons named in the petition who, per Section 15 of the Decree, include owners of adjoining properties,
and occupants of the land." Indeed, if mailing of notices is essential, then by parity of reasoning,
publication in a newspaper of general circulation is likewise imperative since the law included such
requirement in its detailed provision.
It should be noted further that land registration is a proceeding in rem.
17
Being in rem, such
proceeding requires constructive seizure of the land as against all persons, including the state, who have
rights to or interests in the property. Anin rem proceeding is validated essentially through publication. This
being so, the process must strictly be complied with. Otherwise, persons who may be interested or whose
rights may be adversely affected would be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner seeking the inscription of realty in the land
registration court must prove by satisfactory and conclusive evidence not only his ownership thereof but
the identity of the same, for he is in the same situation as one who institutes an action for recovery of
realty.
18
He must prove his title against the whole world. This task, which rests upon the applicant, can
best be achieved when all persons concerned nay, "the whole world" who have rights to or interests
in the subject property are notified and effectively invited to come to court and show cause why the
application should not be granted. The elementary norms of due process require that before the claimed
property is taken from concerned parties and registered in the name of the applicant, said parties must be
given notice and opportunity to oppose.
It may be asked why publication in a newspaper of general circulation should be deemed mandatory
when the law already requires notice by publication in the Official Gazette as well as by mailing and
posting, all of which have already been complied with in the case at hand. The reason is due
process and the reality that the Official Gazette is not as widely read and circulated as newspapers
and is oftentimes delayed in its circulation, such that the notices published therein may not reach the
interested parties on time, if at all. Additionally, such parties may not be owners of neighboring
properties, and may in fact not own any other real estate. In sum, the all-encompassingin rem nature
of land registration cases, the consequences of default orders issued against the whole world and
the objective of disseminating the notice in as wide a manner as possible demand a mandatory
construction of the requirements for publication, mailing and posting.
Admittedly, there was failure to comply with the explicit publication requirement of the law. Private
respondents did not proffer any excuse; even if they had, it would not have mattered because the
statute itself allows no excuses. Ineludibly, this Court has no authority to dispense with such
mandatory requirement. The law is unambiguous and its rationale clear. Time and again, this Court
has declared that where the law speaks in clear and categorical language, there is no room for
interpretation, vacillation or equivocation; there is room only for application.
19
There is no alternative.
Thus, the application for land registration filed by private respondents must be dismissed without
prejudice to reapplication in the future, after all the legal requisites shall have been duly complied with.
WHEREFORE, the petition is GRANTED and the assailed Decision and Resolution are REVERSED
and SET ASIDE. The application of private respondent for land registration is DISMISSED without
prejudice. No costs.
SO ORDERED.


Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-29658 February 27, 1969
ENRIQUE V. MORALES, petitioner,
vs.
ABELARDO SUBIDO, as Commissioner of Civil Service, respondent.

R E S O L U T I O N

CASTRO, J .:
The petitioner's motions for reconsideration are directed specifically at the following portion of our
decision:
In the Senate, the Committee on Government Reorganization, to which House Bill 6951 was
referred, reported a substitute measure. It is to this substitute bill that section 10 of the Act
owes its present form and substance The provision of the substitute bill reads:
No person may be appointed chief of a city police agency unless he holds a
bachelor's degree and has served either in the Armed Forces of the Philippines or
the National Bureau of Investigation or police department of any city and has held the
rank of captain or its equivalent therein for at least three years or any high school
graduate who has served the police department of a city for at least 8 years with the
rank of captain and/or higher.
x xx x xx x xx
At the behest of Senator Francisco Rodrigo, the phrase "has served as officer in the Armed
Forces" was inserted so as to make the provision read:
No person may be appointed chief of a city police agency unless he holds a
bachelor's degree and has served either in the Armed Forces of the Philippines or
the National Bureau of Investigation or police department of any city and has held the
rank of captain or its equivalent therein for at least three years or any high school
graduate who has served the police department of a city or who has served as officer
of the Armed Forces for at least 8 years with the rank of captain and/or higher.
It is to be noted that the Rodrigo amendment was in the nature of an addition to the
phrase "who has served the police department of a city for at least 8 years with the
rank of captain and/or higher," under which the petitioner herein, who is at least a
high school graduate (both parties agree that the petitioner finished the second year
of the law course) could possibly qualify. However, somewhere in the legislative
process the phrase ["who has served the police department of a city or"] was
dropped and only the Rodrigo amendment was retained.
The present insistence of the petitioner is that the version of the provision, as amended at the behest
of Sen. Rodrigo, was the version approved by the Senate on third reading, and that when the bill
emerged from the conference committee the only change made in the provision was the insertion of
the phrase "or has served as chief of police with exemplary record".
In support of this assertion, the petitioner submitted certified photostatic copies of the different drafts
of House Bill 6951 showing the various changes made. In what purport to be the page proofs of the
bill as finally approved by both Houses of Congress (annex G), the following provision appears:
SEC. 10. Minimum qualifications for appointment as Chief of a Police Agency. No person
may be appointed chief of a city police agency unless he holds a bachelor's degree from a
recognized institution of learning and has served either the Armed Forces of the Philippines
or has served as chief of police with exemplary record or the National Bureau of Investigation
or the police department of any city and has held the rank of captain or its equivalent therein
for at least three years or any high school graduate who has served the police department of
a city or has served as officer in the Armed Forces for at least eight years from the rank of
captain and/or higher.
It is unmistakable up to this point that the phrase, "who has served the police department of a city or
was still part of the provision, but according to the petitioner the House bill division deleted the entire
provision and substituted what now is section 10 of the Police Act of 1966, which section reads:
Minimum qualification for appointment as Chief of Police Agency. No person may be
appointed chief of a city police agency unless he holds a bachelor's degree from a
recognized institution of learning and has served either in the Armed Forces of the
Philippines or the National Bureau of Investigation, or has served as chief of police with
exemplary record, or has served in the police department of any city with the rank of captain
or its equivalent therein for at least three years; or any high school graduate who has served
as officer in the Armed Forces for at least eight years with the rank of captain and/or higher.
The petitioner also submitted a certified photostatic copy of a memorandum which according to him
was signed by an employee in the Senate bill division, and can be found attached to the page proofs
of the bill, explaining the change in section 10, thus: .
Section 10 was recast for clarity (with the consent of Sen. Ganzon& Congressman Montano).
It would thus appear that the omission whether deliberate or unintended of the phrase, "who
has served the police department of a city or was made not at any stage of the legislative
proceedings but only in the course of the engrossment of the bill, more specifically in the
proofreading thereof; that the change was made not by Congress but only by an employee thereof;
and that what purportedly was a rewriting to suit some stylistic preferences was in truth an alteration
of meaning. It is for this reason that the petitioner would have us look searchingly into the matter.
The petitioner wholly misconceives the function of the judiciary under our system of government. As
we observed explicitly in our decision, the enrolled Act in the office of the legislative secretary of the
President of the Philippines shows that section 10 is exactly as it is in the statute as officially
published in slip form by the Bureau of Printing. We cannot go behind the enrolled Act to discover
what really happened. The respect due to the other branches of the Government demands that we
act upon the faith and credit of what the officers of the said branches attest to as the official acts of
their respective departments. Otherwise we would be cast in the unenviable and unwanted role of a
sleuth trying to determine what actually did happen in the labyrinth of law-making with consequent
impairment of the integrity of the legislative process. The investigation which the petitioner would like
this Court to make can be better done in Congress. After all, House cleaning the immediate and
imperative need for which seems to be suggested by the petitioner can best be effected by the
occupants thereof. Expressed elsewise, this is a matter worthy of the attention not of an Oliver
Wendell Holmes but of a Sherlock Holmes.
What the first Mr. Justice Harlan said in Hardwood v. Wentworth
1
might aptly be said in answer to
the petitioner: "If there be danger, under the principles announced in Field v. Clark, 143 U.S. 649,
671, that the governor and the presiding officers of the two houses of a territorial legislature may
impose upon the people an act that was never passed in the form in which it is preserved in the
published statutes, how much greater is the danger of permitting the validity of a legislative
enactment to be questioned by evidence furnished by the general indorsements made by clerks
upon bills previous to their final passage and enrollment, indorsements usually so expressed as
not to be intelligible to any one except those who made them, and the scope and effect of which
cannot in many cases be understood unless supplemented by the recollection of clerks as to what
occurred in the hurry and confusion often attendant upon legislative proceedings."
2

Indeed the course suggested to us by the petitioner would be productive of nothing but mischief.
Both Marshall Field & Co. v. Clark and Harwood v. Wentworth involved claims similar to that made
by the petitioner in this case. In both the claims were rejected. Thus, in Marshall Field & Co. it was
contended that the Tariff Act of October 1, 1890 was a nullity because "it is shown by the
congressional records of proceedings, reports of committees of conference, and other papers
printed by authority of Congress, and having reference to House Bill 9416, that a section of the bill
as it finally passed, was not in the bill authenticated by the signatures of the presiding officers of the
respective houses of Congress, and approved by the President."
3
In rejecting the contention, the
United States Supreme Court held that the signing by the Speaker of the House of Representatives
and by the President of the Senate of an enrolled bill is an official attestation by the two houses that
such bill is the one that has passed Congress. And when the bill thus attested is signed by the
President and deposited in the archives, its authentication as a bill that has passed Congress should
be deemed complete and peachable.
4

In Harwood the claim was that an act of the legislature of Arizona "contained, at the time of it final
passage, provisions that were omitted from it without authority of the council or the house, before it
was presented, to the governor for his approval."
5
The Court reiterated its ruling in Marshall Field &
Co.
It is contended, however, that in this jurisdiction the journals of the legislature have been declared
conclusive upon the courts, the petitioner citing United States v. Pons.
6
The case cited is inapposite
of it does not involve a discrepancy between an enrolled bill and the journal. Rather the issue
tendered was whether evidence could be received to show that, contrary to the entries of the
journals, the legislature did not adjourn at midnight of February 28, 1914 but after, and that "the
hands of the clock were stayed in order to enable the legislature to effect an adjournment apparently
within the time fixed by the Governor's proclamation for the expiration of the special session." In
answering in the negative this Court held that if the clock was in fact stopped, "the resultant evil
might be slight as compared with that of altering the probative force and character of legislative
records, and making the proof of legislative action depend upon uncertain oral evidence, liable to
loss by death or absence, and so imperfect on account of the treachery of memory."
7
This Court
"passed over the question" whether the enrolled bill was conclusive as to its contents and mode of
passage.
It was not until 1947 that the question was presented Mabanao v. Lopez-Vito,
8
and we there held
that an enrolled bill "imports absolute verity and is binding on the courts". This Court held itself
bound by an authenticated resolution despite the fact that the vote of three-fourths of the members
of the Congress (as required by the Constitution to approve proposals for constitutional
amendments) was not actually obtained on account of the suspension of some members of the
House of Representative and the Senate.lawphi1.nt
Thus in Mabanag the enrolled bill theory was adopted. Whatever doubt there might have been as to
the status and force of the theory in the Philippines, in view of the dissent of three Justices
in Mabanag,
9
was finally laid to rest by the unanimous decision in Casco Philippine Chemical Co. v.
Gimenez.
10
Speaking for the Court, the then Justice (now Chief Justice) Concepcion said:
Furthermore it is well settled that the enrolled bill which uses the term "urea
formaldehyde" instead of "urea and formaldehyde" is conclusive upon the courts as
regards the tenor of the measure passed by Congress and approved by the President
(Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag vs. Lopez Vito, 78 Phil. 1; Macias vs.
Comm. on Elections, L-18684, September 14, 1961). If there has been any mistake in the
printing of the bill before it was certified by the officers of Congress and approved by the
Executive on which we cannot speculate, without jeopardizing the principle of separation
of powers and undermining one of the cornerstones of our democratic system the remedy
is by amendment or curative legislation, not by judicial decree.
By what we have essayed above we are not of course to be understood as holding that in all cases the
journals must yield to the enrolled bill. To be sure there are certain matters which the
Constitution
11
expressly requires must be entered on the journal of each house. To what extent the
validity of a legislative act may be affected by a failure to have such matters entered on the journal, is a
question which we do not now decide.
12
All we hold is that with respect to matters not expressly required
to be entered on the journal, the enrolled bill prevails in the event of any discrepancy.
ACCORDINGLY, the motions for reconsideration are denied.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando and Capistrano,
JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6791 March 29, 1954
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
QUE PO LAY, defendant-appellant.
Prudencio de Guzman for appellant.
First Assistant Solicitor General RupertoKapunan, Jr., and Solicitor Lauro G. Marquez for appellee.
MONTEMAYOR, J .:
Que Po Lay is appealing from the decision of the Court of First Instance of Manila, finding him guilty
of violating Central Bank Circular No. 20 in connection with section 34 of Republic Act No. 265, and
sentencing him to suffer six months imprisonment, to pay a fine of P1,000 with subsidiary
imprisonment in case of insolvency, and to pay the costs.
The charge was that the appellant who was in possession of foreign exchange consisting of U.S.
dollars, U.S. checks and U.S. money orders amounting to about $7,000 failed to sell the same to the
Central Bank through its agents within one day following the receipt of such foreign exchange as
required by Circular No. 20. the appeal is based on the claim that said circular No. 20 was not
published in the Official Gazette prior to the act or omission imputed to the appellant, and that
consequently, said circular had no force and effect. It is contended that Commonwealth Act. No.,
638 and Act 2930 both require said circular to be published in the Official Gazette, it being an order
or notice of general applicability. The Solicitor General answering this contention says that
Commonwealth Act. No. 638 and 2930 do not require the publication in the Official Gazette of said
circular issued for the implementation of a law in order to have force and effect.
We agree with the Solicitor General that the laws in question do not require the publication of the
circulars, regulations and notices therein mentioned in order to become binding and effective. All that said
two laws provide is that laws, resolutions, decisions of the Supreme Court and Court of Appeals, notices
and documents required by law to be of no force and effect. In other words, said two Acts merely
enumerate and make a list of what should be published in the Official Gazette, presumably, for the
guidance of the different branches of the Government issuing same, and of the Bureau of Printing.
However, section 11 of the Revised Administrative Code provides that statutes passed by Congress shall,
in the absence of special provision, take effect at the beginning of the fifteenth day after the completion of
the publication of the statute in the Official Gazette. Article 2 of the new Civil Code (Republic Act No. 386)
equally provides that laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided. It is true that Circular No. 20 of the Central Bank is
not a statute or law but being issued for the implementation of the law authorizing its issuance, it has the
force and effect of law according to settled jurisprudence. (See U.S. vs. Tupasi Molina, 29 Phil., 119 and
authorities cited therein.) Moreover, as a rule, circulars and regulations especially like the Circular No. 20
of the Central Bank in question which prescribes a penalty for its violation should be published before
becoming effective, this, on the general principle and theory that before the public is bound by its
contents, especially its penal provisions, a law, regulation or circular must first be published and the
people officially and specifically informed of said contents and its penalties.
Our Old Civil code, ( Spanish Civil Code of 1889) has a similar provision about the effectivity of laws,
(Article 1 thereof), namely, that laws shall be binding twenty days after their promulgation, and that
their promulgation shall be understood as made on the day of the termination of the publication of
the laws in the Gazette. Manresa, commenting on this article is of the opinion that the word "laws"
include regulations and circulars issued in accordance with the same. He says:
El Tribunal Supremo, ha interpretado el articulo 1. del codigo Civil en Sentencia de 22 de
Junio de 1910, en el sentido de quebajo la denominaciongenerica de leyes, se
comprendentambien los Reglamentos, Realesdecretos, Instrucciones, Circulares y
Realesordenesdictadas de conformidad con lasmismaspor el Gobierno en uso de
supotestad. Tambien el poderejecutivo lo ha venidoentendiendoasi, como lo prueba el hecho
de quemuchas de susdisposicionescontienen la advertencia de queempiezan a regir el
mismodia de supublicacion en la Gaceta, advertenciaqueseriaperfectamenteinutilsi no fuera
de aplicacion al caso el articulo 1.o del Codigo Civil. (Manresa, Codigo Civil Espaol, Vol. I.
p. 52).
In the present case, although circular No. 20 of the Central Bank was issued in the year 1949, it was
not published until November 1951, that is, about 3 months after appellant's conviction of its
violation. It is clear that said circular, particularly its penal provision, did not have any legal effect and
bound no one until its publication in the Official Gazzette or after November 1951. In other words,
appellant could not be held liable for its violation, for it was not binding at the time he was found to
have failed to sell the foreign exchange in his possession thereof.
But the Solicitor General also contends that this question of non-publication of the Circular is being
raised for the first time on appeal in this Court, which cannot be done by appellant. Ordinarily, one
may raise on appeal any question of law or fact that has been raised in the court below and which is
within the issues made by the parties in their pleadings. (Section 19, Rule 48 of the Rules of Court).
But the question of non-publication is fundamental and decisive. If as a matter of fact Circular No. 20
had not been published as required by law before its violation, then in the eyes of the law there was
no such circular to be violated and consequently appellant committed no violation of the circular or
committed any offense, and the trial court may be said to have had no jurisdiction. This question
may be raised at any stage of the proceeding whether or not raised in the court below.
In view of the foregoing, we reverse the decision appealed from and acquit the appellant, with
costs de oficio.
Paras, C.J., Bengzon, Padilla, Reyes, Bautista Angelo, Labrador, Concepcion and Diokno,
JJ., concur.