HANNAH

EUNICE
D.
SERANA, petitioner,
vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
REYES, R.T., J.:
CAN the Sandiganbayan try a government scholaran ** accused, along with her brother, of
swindling government funds?
MAAARI bang litisin ng Sandiganbayan ang isang iskolar ng bayan, at ang kanyang
kapatid, na kapwa pinararatangan ng estafa ng pera ng bayan?
The jurisdictional question is posed in this petition for certiorari assailing the Resolutions 1 of
the Sandiganbayan, Fifth Division, denying petitioners motion to quash the information and
her motion for reconsideration.
The Antecedents
Petitioner Hannah Eunice D. Serana was a senior student of the University of the
Philippines-Cebu. A student of a state university is known as a government scholar. She
was appointed by then President Joseph Estrada on December 21, 1999 as a student
regent of UP, to serve a one-year term starting January 1, 2000 and ending on December
31, 2000.
In the early part of 2000, petitioner discussed with President Estrada the renovation of
Vinzons Hall Annex in UP Diliman.2 On September 4, 2000, petitioner, with her siblings and
relatives, registered with the Securities and Exchange Commission the Office of the
Student Regent Foundation, Inc. (OSRFI).3
One of the projects of the OSRFI was the renovation of the Vinzons Hall Annex. 4 President
Estrada gave Fifteen Million Pesos (P15,000,000.00) to the OSRFI as financial assistance
for the proposed renovation. The source of the funds, according to the information, was the
Office of the President.
The renovation of Vinzons Hall Annex failed to materialize. 5 The succeeding student regent,
Kristine Clare Bugayong, and Christine Jill De Guzman, Secretary General of the KASAMA
sa U.P., a system-wide alliance of student councils within the state university, consequently
filed a complaint for Malversation of Public Funds and Property with the Office of the
Ombudsman.6

On July 3, 2003, the Ombudsman, after due investigation, found probable cause to indict
petitioner and her brother Jade Ian D. Serana for estafa, docketed as Criminal Case No.
27819 of the Sandiganbayan.7 The Information reads:
The undersigned Special Prosecution Officer III, Office of the Special Prosecutor, hereby
accuses HANNAH EUNICE D. SERANA and JADE IAN D. SERANA of the crime of
Estafa, defined and penalized under Paragraph 2(a), Article 315 of the Revised Penal
Code, as amended committed as follows:
That on October, 24, 2000, or sometime prior or subsequent thereto, in Quezon City,
Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, abovenamed accused, HANNAH EUNICE D. SERANA, a high-ranking public officer, being
then the Student Regent of the University of the Philippines, Diliman, Quezon City, while
in the performance of her official functions, committing the offense in relation to her
office and taking advantage of her position, with intent to gain, conspiring with her
brother, JADE IAN D. SERANA, a private individual, did then and there wilfully,
unlawfully and feloniously defraud the government by falsely and fraudulently
representing to former President Joseph Ejercito Estrada that the renovation of the
Vinzons Hall of the University of the Philippines will be renovated and renamed as
"President Joseph Ejercito Estrada Student Hall," and for which purpose accused
HANNAH EUNICE D. SERANA requested the amount of FIFTEEN MILLION PESOS
(P15,000,000.00), Philippine Currency, from the Office of the President, and the latter
relying and believing on said false pretenses and misrepresentation gave and delivered
to said accused Land Bank Check No. 91353 dated October 24, 2000 in the amount of
FIFTEEN MILLION PESOS (P15,000,000.00), which check was subsequently encashed
by accused Jade Ian D. Serana on October 25, 2000 and misappropriated for their
personal use and benefit, and despite repeated demands made upon the accused for
them to return aforesaid amount, the said accused failed and refused to do so to the
damage and prejudice of the government in the aforesaid amount.
CONTRARY TO LAW. (Underscoring supplied)
Petitioner moved to quash the information. She claimed that the Sandiganbayan does not
have any jurisdiction over the offense charged or over her person, in her capacity as UP
student regent.
Petitioner claimed that Republic Act (R.A.) No. 3019, as amended by R.A. No. 8249,
enumerates the crimes or offenses over which the Sandiganbayan has jurisdiction. 8 It has
no jurisdiction over the crime of estafa.9 It only has jurisdiction over crimes covered by Title
VII, Chapter II, Section 2 (Crimes Committed by Public Officers), Book II of the Revised
Penal Code (RPC). Estafa falling under Title X, Chapter VI (Crimes Against Property), Book
II of the RPC is not within the Sandiganbayans jurisdiction.

She also argued that it was President Estrada, not the government, that was duped. Even
assuming that she received the P15,000,000.00, that amount came from Estrada, not from
the coffers of the government.10
Petitioner likewise posited that the Sandiganbayan had no jurisdiction over her person. As a
student regent, she was not a public officer since she merely represented her peers, in
contrast to the other regents who held their positions in an ex officio capacity. She addsed
that she was a simple student and did not receive any salary as a student regent.

Accused-movants claim that being merely a member in representation of the student

body, she was never a public officer since she never received any compensation nor
does she fall under Salary Grade 27, is of no moment, in view of the express provision of
Section 4 of Republic Act No. 8249 which provides:
Sec. 4. Jurisdiction The Sandiganbayan shall exercise exclusive original jurisdiction in
all cases involving:
(A) x x x

She further contended that she had no power or authority to receive monies or funds. Such
power was vested with the Board of Regents (BOR) as a whole. Since it was not alleged in
the information that it was among her functions or duties to receive funds, or that the crime
was committed in connection with her official functions, the same is beyond the jurisdiction
of the Sandiganbayan citing the case of Soller v. Sandiganbayan.11
The Ombudsman opposed the motion. 12 It disputed petitioners interpretation of the law.
Section 4(b) of Presidential Decree (P.D.) No. 1606 clearly contains the catch -all phrase "in
relation to office," thus, the Sandiganbayan has jurisdiction over the charges against
petitioner. In the same breath, the prosecution countered that the source of the money is a
matter of defense. It should be threshed out during a full-blown trial. 13

(1) Officials of the executive branch occupying the positions of regional director and
higher, otherwise classified as Grade "27" and higher, of the Compensation and Position
Classification Act of 1989 (Republic Act No. 6758), specifically including:
xxxx
(g) Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations. (Italics
supplied)

According to the Ombudsman, petitioner, despite her protestations, iwas a public officer. As
a member of the BOR, she hads the general powers of administration and exerciseds the
corporate powers of UP. Based on Mechems definition of a public office, petitioners stance
that she was not compensated, hence, not a public officer, is erroneous. Compensation is
not an essential part of public office. Parenthetically, compensation has been interpreted to
include allowances. By this definition, petitioner was compensated.14

It is very clear from the aforequoted provision that the Sandiganbayan has original
exclusive jurisdiction over all offenses involving the officials enumerated in subsection
(g), irrespective of their salary grades, because the primordial consideration in the
inclusion of these officials is the nature of their responsibilities and functions.

Sandiganbayan Disposition

A meticulous review of the existing Charter of the University of the Philippines reveals
that the Board of Regents, to which accused-movant belongs, exclusively exercises the
general powers of administration and corporate powers in the university, such as: 1) To
receive and appropriate to the ends specified by law such sums as may be provided by
law for the support of the university; 2) To prescribe rules for its own government and to
enact for the government of the university such general ordinances and regulations, not
contrary to law, as are consistent with the purposes of the university; and 3) To appoint,
on recommendation of the President of the University, professors, instructors, lecturers
and other employees of the University; to fix their compensation, hours of service, and
such other duties and conditions as it may deem proper; to grant to them in its discretion
leave of absence under such regulations as it may promulgate, any other provisions of
law to the contrary notwithstanding, and to remove them for cause after an investigation
and hearing shall have been had.

In a Resolution dated November 14, 2003, the Sandiganbayan denied petitioners motion
for lack of merit.15 It ratiocinated:
The focal point in controversy is the jurisdiction of the Sandiganbayan over this case.
It is extremely erroneous to hold that only criminal offenses covered by Chapter II,
Section 2, Title VII, Book II of the Revised Penal Code are within the jurisdiction of this
Court. As correctly pointed out by the prosecution, Section 4(b) of R.A. 8249 provides
that the Sandiganbayan also has jurisdiction over other offenses committed by public
officials and employees in relation to their office. From this provision, there is no single
doubt that this Court has jurisdiction over the offense of estafa committed by a public
official in relation to his office.

Is accused-movant included in the contemplated provision of law?

It is well-established in corporation law that the corporation can act only through its board
of directors, or board of trustees in the case of non-stock corporations. The board of
directors or trustees, therefore, is the governing body of the corporation.
It is unmistakably evident that the Board of Regents of the University of the Philippines is
performing functions similar to those of the Board of Trustees of a non-stock corporation.
This draws to fore the conclusion that being a member of such board, accused-movant
undoubtedly falls within the category of public officials upon whom this Court is vested
with original exclusive jurisdiction, regardless of the fact that she does not occupy a
position classified as Salary Grade 27 or higher under the Compensation and Position
Classification Act of 1989.
Finally, this court finds that accused-movants contention that the same of P15 Million
was received from former President Estrada and not from the coffers of the government,
is a matter a defense that should be properly ventilated during the trial on the merits of
this case.16
On November 19, 2003, petitioner filed a motion for reconsideration. 17 The motion was
denied with finality in a Resolution dated February 4, 2004.18
Issue
Petitioner is now before this Court, contending that "THE RESPONDENT COURT
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR
EXCESS OF JURISDICTION IN NOT QUASHING THE INFORMATION AND DISMISING
THE CASE NOTWITHSTANDING THAT IS HAS NO JURISDICTION OVER THE
OFFENSE CHARGED IN THE INFORMATION."19
In her discussion, she reiterates her four-fold argument below, namely: (a) the
Sandiganbayan has no jurisdiction over estafa; (b) petitioner is not a public officer with
Salary Grade 27 and she paid her tuition fees; (c) the offense charged was not committed
in relation to her office; (d) the funds in question personally came from President Estrada,
not from the government.
Our Ruling

In Newsweek, Inc. v. Intermediate Appellate Court,23 the Court clearly explained and
illustrated the rule and the exceptions, thus:
As a general rule, an order denying a motion to dismiss is merely interlocutory and
cannot be subject of appeal until final judgment or order is rendered. (Sec. 2 of Rule
41). The ordinary procedure to be followed in such a case is to file an answer, go to trial
and if the decision is adverse, reiterate the issue on appeal from the final judgment. The
same rule applies to an order denying a motion to quash, except that instead of filing an
answer a plea is entered and no appeal lies from a judgment of acquittal.
This general rule is subject to certain exceptions. If the court, in denying the motion to
dismiss or motion to quash, acts without or in excess of jurisdiction or with grave abuse
of discretion, then certiorari or prohibition lies. The reason is that it would be unfair to
require the defendant or accused to undergo the ordeal and expense of a trial if the
court has no jurisdiction over the subject matter or offense, or is not the court of proper
venue, or if the denial of the motion to dismiss or motion to quash is made with grave
abuse of discretion or a whimsical and capricious exercise of judgment. In such cases,
the ordinary remedy of appeal cannot be plain and adequate. The following are a few
examples of the exceptions to the general rule.
In De Jesus v. Garcia (19 SCRA 554), upon the denial of a motion to dismiss based on
lack of jurisdiction over the subject matter, this Court granted the petition
for certiorari and prohibition against the City Court of Manila and directed the
respondent court to dismiss the case.
In Lopez v. City Judge (18 SCRA 616), upon the denial of a motion to quash based on
lack of jurisdiction over the offense, this Court granted the petition for prohibition and
enjoined the respondent court from further proceeding in the case.
In Enriquez v. Macadaeg (84 Phil. 674), upon the denial of a motion to dismiss based
on improper venue, this Court granted the petition for prohibition and enjoined the
respondent judge from taking cognizance of the case except to dismiss the same.

The petition cannot be granted.

Preliminarily,
the
denial
quash is not correctible by certiorari.

is not a petition for certiorari, but for petitioners to go to trial, without prejudice to reiterating
the special defenses invoked in their motion to quash. 20Remedial measures as regards
interlocutory orders, such as a motion to quash, are frowned upon and often
dismissed.21 The evident reason for this rule is to avoid multiplicity of appeals in a single
action.22

of

motion

to

We would ordinarily dismiss this petition for certiorari outright on procedural grounds. Wellestablished is the rule that when a motion to quash in a criminal case is denied, the remedy

In Manalo v. Mariano (69 SCRA 80), upon the denial of a motion to dismiss based on
bar by prior judgment, this Court granted the petition for certiorari and directed the
respondent judge to dismiss the case.

In Yuviengco v. Dacuycuy (105 SCRA 668), upon the denial of a motion to dismiss
based on the Statute of Frauds, this Court granted the petition for certiorari and
dismissed the amended complaint.
In Tacas v. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after the
motion to quash based on double jeopardy was denied by respondent judge and
ordered him to desist from further action in the criminal case except to dismiss the
same.
In People v. Ramos (83 SCRA 11), the order denying the motion to quash based on
prescription was set aside on certiorari and the criminal case was dismissed by this
Court.24
We do not find the Sandiganbayan to have committed a grave abuse of discretion.
The
jurisdiction
set
by
P.D.
No.
R.A. No. 3019, as amended.

of
1606,

the
as

Sandiganbayan
amended,
not

is
by

We first address petitioners contention that the jurisdiction of the Sandiganbayan is

determined by Section 4 of R.A. No. 3019 (The Anti-Graft and Corrupt Practices Act, as
amended). We note that petitioner refers to Section 4 of the said law yet quotes Section 4
of P.D. No. 1606, as amended, in her motion to quash before the Sandiganbayan. 25 She
repeats the reference in the instant petition for certiorari26 and in her memorandum of
authorities.27

P.D. No. 1606 was later amended by P.D. No. 1861 on March 23, 1983, further altering the
Sandiganbayan jurisdiction. R.A. No. 7975 approved on March 30, 1995 made succeeding
amendments to P.D. No. 1606, which was again amended on February 5, 1997 by R.A. No.
8249. Section 4 of R.A. No. 8249 further modified the jurisdiction of the Sandiganbayan. As
it now stands, the Sandiganbayan has jurisdiction over the following:
Sec. 4. Jurisdiction. - The Sandiganbayan shall exercise exclusive original jurisdiction
in all cases involving:
A. Violations of Republic Act No. 3019, as amended, other known as the Anti-Graft
and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII,
Book II of the Revised Penal Code, where one or more of the accused are officials
occupying the following positions in the government, whether in a permanent, acting
or interim capacity, at the time of the commission of the offense:
(1) Officials of the executive branch occupying the positions of regional director and
higher, otherwise classified as Grade "27" and higher, of the Compensation and
Position Classification Act of 989 (Republic Act No. 6758), specifically including:
" (a) Provincial governors, vice-governors, members of the sangguniang panlalawigan,
and provincial treasurers, assessors, engineers, and other city department heads;
" (b) City mayor, vice-mayors, members of the sangguniang panlungsod, city
treasurers, assessors, engineers, and other city department heads;
"(c ) Officials of the diplomatic service occupying the position of consul and higher;

We cannot bring ourselves to write this off as a mere clerical or typographical error. It bears
stressing that petitioner repeated this claim twice despite corrections made by the
Sandiganbayan.28
Her claim has no basis in law. It is P.D. No. 1606, as amended, rather than R.A. No. 3019,
as amended, that determines the jurisdiction of the Sandiganbayan. A brief legislative
history of the statute creating the Sandiganbayan is in order. The Sandiganbayan was
created by P.D. No. 1486, promulgated by then President Ferdinand E. Marcos on June 11,
1978. It was promulgated to attain the highest norms of official conduct required of public
officers and employees, based on the concept that public officers and employees shall
serve with the highest degree of responsibility, integrity, loyalty and efficiency and shall
remain at all times accountable to the people.29
P.D. No. 1486 was, in turn, amended by P.D. No. 1606 which was promulgated on
December 10, 1978. P.D. No. 1606 expanded the jurisdiction of the Sandiganbayan.30

" (d) Philippine army and air force colonels, naval captains, and all officers of higher
rank;
" (e) Officers of the Philippine National Police while occupying the position of provincial
director and those holding the rank of senior superintended or higher;
" (f) City and provincial prosecutors and their assistants, and officials and prosecutors
in the Office of the Ombudsman and special prosecutor;
" (g) Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations.
" (2) Members of Congress and officials thereof classified as Grade "27'" and up under
the Compensation and Position Classification Act of 1989;

" (3) Members of the judiciary without prejudice to the provisions of the Constitution;
" (4) Chairmen and members of Constitutional Commission, without prejudice to the
provisions of the Constitution; and
" (5) All other national and local officials classified as Grade "27'" and higher under the
Compensation and Position Classification Act of 1989.
B. Other offenses of felonies whether simple or complexed with other crimes
committed by the public officials and employees mentioned in subsection a of this
section in relation to their office.
C. Civil and criminal cases filed pursuant to and in connection with Executive Order
Nos. 1, 2, 14 and 14-A, issued in 1986.
" In cases where none of the accused are occupying positions corresponding to Salary
Grade "27'" or higher, as prescribed in the said Republic Act No. 6758, or military and
PNP officer mentioned above, exclusive original jurisdiction thereof shall be vested in
the proper regional court, metropolitan trial court, municipal trial court, and municipal
circuit trial court, as the case may be, pursuant to their respective jurisdictions as
provided in Batas Pambansa Blg. 129, as amended.
" The Sandiganbayan shall exercise exclusive appellate jurisdiction over final
judgments, resolutions or order of regional trial courts whether in the exercise of their
own original jurisdiction or of their appellate jurisdiction as herein provided.
" The Sandiganbayan shall have exclusive original jurisdiction over petitions for the
issuance of the writs of mandamus, prohibition, certiorari, habeas corpus, injunctions,
and other ancillary writs and processes in aid of its appellate jurisdiction and over
petitions of similar nature, including quo warranto, arising or that may arise in cases
filed or which may be filed under Executive Order Nos. 1, 2, 14 and 14-A, issued in
1986: Provided, That the jurisdiction over these petitions shall not be exclusive of the
Supreme Court.
" The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing
rules that the Supreme Court has promulgated and may thereafter promulgate,
relative to appeals/petitions for review to the Court of Appeals, shall apply to appeals
and petitions for review filed with the Sandiganbayan. In all cases elevated to the
Sandiganbayan and from the Sandiganbayan to the Supreme Court, the Office of the
Ombudsman, through its special prosecutor, shall represent the People of the
Philippines, except in cases filed pursuant to Executive Order Nos. 1, 2, 14 and 14-A,
issued in 1986.

" In case private individuals are charged as co-principals, accomplices or accessories

with the public officers or employees, including those employed in government-owned
or controlled corporations, they shall be tried jointly with said public officers and
employees in the proper courts which shall exercise exclusive jurisdiction over them.
" Any provisions of law or Rules of Court to the contrary notwithstanding, the criminal
action and the corresponding civil action for the recovery of civil liability shall, at all
times, be simultaneously instituted with, and jointly determined in, the same
proceeding by the Sandiganbayan or the appropriate courts, the filing of the criminal
action being deemed to necessarily carry with it the filing of the civil action, and no
right to reserve the filing such civil action separately from the criminal action shall be
recognized: Provided, however, That where the civil action had heretofore been filed
separately but judgment therein has not yet been rendered, and the criminal case is
hereafter filed with the Sandiganbayan or the appropriate court, said civil action shall
be transferred to the Sandiganbayan or the appropriate court, as the case may be, for
consolidation and joint determination with the criminal action, otherwise the separate
civil action shall be deemed abandoned."
Upon the other hand, R.A. No. 3019 is a penal statute approved on August 17, 1960. The
said law represses certain acts of public officers and private persons alike which constitute
graft or corrupt practices or which may lead thereto. 31 Pursuant to Section 10 of R.A. No.
3019, all prosecutions for violation of the said law should be filed with the Sandiganbayan. 32
R.A. No. 3019 does not contain an enumeration of the cases over which the
Sandiganbayan has jurisdiction. In fact, Section 4 of R.A. No. 3019 erroneously cited by
petitioner, deals not with the jurisdiction of the Sandiganbayan but with prohibition on
private individuals. We quote:
Section 4. Prohibition on private individuals. (a) It shall be unlawful for any
person having family or close personal relation with any public official to
capitalize or exploit or take advantage of such family or close personal relation by
directly or indirectly requesting or receiving any present, gift or material or
pecuniary advantage from any other person having some business, transaction,
application, request or contract with the government, in which such public official
has to intervene. Family relation shall include the spouse or relatives by
consanguinity or affinity in the third civil degree. The word "close personal
relation" shall include close personal friendship, social and fraternal connections,
and professional employment all giving rise to intimacy which assures free
access to such public officer.
(b) It shall be unlawful for any person knowingly to induce or cause any public
official to commit any of the offenses defined in Section 3 hereof.

In fine, the two statutes differ in that P.D. No. 1606, as amended, defines the jurisdiction of
the Sandiganbayan while R.A. No. 3019, as amended, defines graft and corrupt practices
and provides for their penalties.
Sandiganbayan
the offense of estafa.

has

jurisdiction

over

Relying on Section 4 of P.D. No. 1606, petitioner contends that estafa is not among those
crimes cognizable by the Sandiganbayan. We note that in hoisting this argument, petitioner
isolated the first paragraph of Section 4 of P.D. No. 1606, without regard to the succeeding
paragraphs of the said provision.
The rule is well-established in this jurisdiction that statutes should receive a sensible
construction so as to avoid an unjust or an absurd conclusion. 33 Interpretatio talis in
ambiguis semper fienda est, ut evitetur inconveniens et absurdum. Where there is
ambiguity, such interpretation as will avoid inconvenience and absurdity is to be
adopted. Kung saan mayroong kalabuan, ang pagpapaliwanag ay hindi dapat maging
mahirap at katawa-tawa.
Every section, provision or clause of the statute must be expounded by reference to each
other in order to arrive at the effect contemplated by the legislature. 34 The intention of the
legislator must be ascertained from the whole text of the law and every part of the act is to
be taken into view.35 In other words, petitioners interpretation lies in direct opposition to the
rule that a statute must be interpreted as a whole under the principle that the best
interpreter of a statute is the statute itself. 36 Optima statuti interpretatrix est ipsum
statutum. Ang isang batas ay marapat na bigyan ng kahulugan sa kanyang kabuuan
sa ilalim ng prinsipyo na ang pinakamainam na interpretasyon ay ang mismong
batas.
Section 4(B) of P.D. No. 1606 reads:
B. Other offenses or felonies whether simple or complexed with other crimes
committed by the public officials and employees mentioned in subsection a of
this section in relation to their office.
Evidently, the Sandiganbayan has jurisdiction over other felonies committed by public
officials in relation to their office. We see no plausible or sensible reason to
exclude estafa as one of the offenses included in Section 4(bB) of P.D. No. 1606.
Plainly, estafa is one of those other felonies. The jurisdiction is simply subject to the twin
requirements that (a) the offense is committed by public officials and employees mentioned
in Section 4(A) of P.D. No. 1606, as amended, and that (b) the offense is committed in
relation to their office.

In Perlas, Jr. v. People,37 the Court had occasion to explain that the Sandiganbayan has
jurisdiction over an indictment for estafa versus a director of the National Parks
Development Committee, a government instrumentality. The Court held then:
The National Parks Development Committee was created originally as an
Executive Committee on January 14, 1963, for the development of the Quezon
Memorial, Luneta and other national parks (Executive Order No. 30). It was later
designated as the National Parks Development Committee (NPDC) on February
7, 1974 (E.O. No. 69). On January 9, 1966, Mrs. Imelda R. Marcos and Teodoro
F. Valencia were designated Chairman and Vice-Chairman respectively (E.O. No.
3). Despite an attempt to transfer it to the Bureau of Forest Development,
Department of Natural Resources, on December 1, 1975 (Letter of
Implementation No. 39, issued pursuant to PD No. 830, dated November 27,
1975), the NPDC has remained under the Office of the President (E.O. No. 709,
dated July 27, 1981).
Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular
government agency under the Office of the President and allotments for its
maintenance and operating expenses were issued direct to NPDC (Exh. 10-A,
Perlas, Item Nos. 2, 3).
The Sandiganbayans jurisdiction over estafa was reiterated with greater firmness
in Bondoc v. Sandiganbayan.38Pertinent parts of the Courts ruling in Bondoc read:
Furthermore, it is not legally possible to transfer Bondocs cases to the Regional
Trial Court, for the simple reason that the latter would not have jurisdiction over
the offenses. As already above intimated, the inability of the Sandiganbayan to
hold a joint trial of Bondocs cases and those of the government employees
separately charged for the same crimes, has not altered the nature of the
offenses charged, as estafa thru falsification punishable by penalties higher than
prision correccional or imprisonment of six years, or a fine of P6,000.00,
committed by government employees in conspiracy with private persons,
including Bondoc. These crimes are within the exclusive, original jurisdiction of
the Sandiganbayan. They simply cannot be taken cognizance of by the regular
courts, apart from the fact that even if the cases could be so transferred, a joint
trial would nonetheless not be possible.
Petitioner
is a public officer.

UP

student

regent

Petitioner also contends that she is not a public officer. She does not receive any salary or
remuneration as a UP student regent. This is not the first or likely the last time that We will
be called upon to define a public officer. InKhan, Jr. v. Office of the Ombudsman, We ruled
that it is difficult to pin down the definition of a public officer.39The 1987 Constitution does

not define who are public officers. Rather, the varied definitions and concepts are found in
different statutes and jurisprudence.

Moreover, it is well established that compensation is not an essential element of public

office.46 At most, it is merely incidental to the public office.47

In Aparri v. Court of Appeals,40 the Court held that:

Delegation of sovereign functions is essential in the public office. An investment in an

individual of some portion of the sovereign functions of the government, to be exercised by
him for the benefit of the public makes one a public officer.48

A public office is the right, authority, and duty created and conferred by law, by
which for a given period, either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some portion of the sovereign
functions of the government, to be exercise by him for the benefit of the public
([Mechem Public Offices and Officers,] Sec. 1). The right to hold a public office
under our political system is therefore not a natural right. It exists, when it exists
at all only because and by virtue of some law expressly or impliedly creating and
conferring it (Mechem Ibid., Sec. 64). There is no such thing as a vested interest
or an estate in an office, or even an absolute right to hold office. Excepting
constitutional offices which provide for special immunity as regards salary and
tenure, no one can be said to have any vested right in an office or its salary (42
Am. Jur. 881).
In Laurel v. Desierto,41 the Court adopted the definition of Mechem of a public office:
"A public office is the right, authority and duty, created and conferred by law, by
which, for a given period, either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some portion of the sovereign
functions of the government, to be exercised by him for the benefit of the public.
The individual so invested is a public officer."42
Petitioner claims that she is not a public officer with Salary Grade 27; she is, in fact, a
regular tuition fee-paying student. This is likewise bereft of merit. It is not only the salary
grade that determines the jurisdiction of the Sandiganbayan. The Sandiganbayan also has
jurisdiction over other officers enumerated in P.D. No. 1606. InGeduspan v. People,43 We
held that while the first part of Section 4(A) covers only officials with Salary Grade 27 and
higher, its second part specifically includes other executive officials whose positions may
not be of Salary Grade 27 and higher but who are by express provision of law placed under
the jurisdiction of the said court. Petitioner falls under the jurisdiction of the Sandiganbayan
as she is placed there by express provision of law.44
Section 4(A)(1)(g) of P.D. No. 1606 explictly vested the Sandiganbayan with jurisdiction
over Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations. Petitioner falls
under this category. As the Sandiganbayan pointed out, the BOR performs functions similar
to those of a board of trustees of a non-stock corporation. 45 By express mandate of law,
petitioner is, indeed, a public officer as contemplated by P.D. No. 1606.

The administration of the UP is a sovereign function in line with Article XIV of the
Constitution. UP performs a legitimate governmental function by providing advanced
instruction in literature, philosophy, the sciences, and arts, and giving professional and
technical training.49 Moreover, UP is maintained by the Government and it declares no
dividends and is not a corporation created for profit.50
The
offense
in
relation
to the Information.

to

charged
public

was
office,

committed
according

Petitioner likewise argues that even assuming that she is a public officer, the
Sandiganbayan would still not have jurisdiction over the offense because it was not
committed in relation to her office.
According to petitioner, she had no power or authority to act without the approval of the
BOR. She adds there was no Board Resolution issued by the BOR authorizing her to
contract with then President Estrada; and that her acts were not ratified by the governing
body of the state university. Resultantly, her act was done in a private capacity and not in
relation to public office.
It is axiomatic that jurisdiction is determined by the averments in the information. 51 More
than that, jurisdiction is not affected by the pleas or the theories set up by defendant or
respondent in an answer, a motion to dismiss, or a motion to quash. 52 Otherwise,
jurisdiction would become dependent almost entirely upon the whims of defendant or
respondent.53
In the case at bench, the information alleged, in no uncertain terms that petitioner, being
then a student regent of U.P., "while in the performance of her official functions, committing
the offense in relation to her office and taking advantage of her position, with intent to gain,
conspiring with her brother, JADE IAN D. SERANA, a private individual, did then and there
wilfully, unlawfully and feloniously defraud the government x x x." (Underscoring supplied)
Clearly, there was no grave abuse of discretion on the part of the Sandiganbayan when it
did not quash the information based on this ground.

Source
of
funds
is
be raised during trial on the merits.

defense

that

should

It is contended anew that the amount came from President Estradas private funds and not
from the government coffers. Petitioner insists the charge has no leg to stand on.
We cannot agree. The information alleges that the funds came from the Office of the
President and not its then occupant, President Joseph Ejercito Estrada. Under the
information, it is averred that "petitioner requested the amount of Fifteen Million Pesos
(P15,000,000.00), Philippine Currency, from the Office of the President, and the latter
relying and believing on said false pretenses and misrepresentation gave and delivered to
said accused Land Bank Check No. 91353 dated October 24, 2000 in the amount of Fifteen
Million Pesos (P15,000,000.00)."
Again, the Court sustains the Sandiganbayan observation that the source of
the P15,000,000 is a matter of defense that should be ventilated during the trial on the
merits of the instant case.54
A
lawyer
and honesty to the Court.

owes

candor,

fairness

As a parting note, petitioners counsel, Renato G. dela Cruz, misrepresented his reference
to Section 4 of P.D. No. 1606 as a quotation from Section 4 of R.A. No. 3019. A review of
his motion to quash, the instant petition forcertiorari and his memorandum, unveils the
misquotation. We urge petitioners counsel to observe Canon 10 of the Code of
Professional Responsibility, specifically Rule 10.02 of the Rules stating that "a lawyer shall
not misquote or misrepresent."
The Court stressed the importance of this rule in Pangan v. Ramos,55 where Atty Dionisio D.
Ramos used the name Pedro D.D. Ramos in connection with a criminal case. The Court
ruled that Atty. Ramos resorted to deception by using a name different from that with which
he was authorized. We severely reprimanded Atty. Ramos and warned that a repetition may
warrant suspension or disbarment.56
We admonish petitioners counsel to be more careful and accurate in his citation. A lawyers
conduct before the court should be characterized by candor and fairness.57 The
administration of justice would gravely suffer if lawyers do not act with complete candor and
honesty before the courts.58
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

SARMIENTO, J.:
This petition for review on certiorari which seeks the reversal and setting aside of the
decision 1 of the Court of Appeals 2 dismissing the petition for certiorari against Judge
Raymundo Seva of the Regional Trial Court of Camarines Norte and the private
respondent, William Guerra, involves a pure question of law i.e., the coverage and
application of Section 119 of Commonwealth Act No. 141, as amended, known otherwise
as the Public Land Act.
The facts are undisputed.
The property subject matter of the case was formerly covered by Original Certificate of Title
No. P-1248, issued by virtue of Free Patent Application No. 192765, in favor of the
spouses, Florencia H. de Enciso and Miguel Enciso. The said original certificate of title was
inscribed in the Registration Book for the Province of Camarines Norte on December 10,
1961. On February 28, 1970, the patentees, the Enciso spouses, by an Absolute Deed of
Sale, sold the property in favor of the petitioners, the spouses Elena Salenillas and
Bernardino Salenillas for a consideration of P900.00. Petitioner Elena Salenillas is a
daughter of the Encisos. As a result of the aforementioned sale, Transfer Certificate of Title
No. T-8104 of the Register of Deeds of Camarines Norte was issued in the name of the
Salenillas, cancelling Original Certificate of Title No. P-1248. On June 30, 1971, the
petitioners mortgaged the property now covered by T.C.T. No. T-8104 with the Rural Bank
of Daet, Inc. The mortgage was subsequently released on November 22, 1973 after the
petitioners paid the amount of P1,000.00. Later, or on December 4, 1975, the petitioners
again mortgaged the property, this time in favor of the Philippine National Bank Branch,
Daet, Camarines Norte as security for a loan of P2,500.00.

C. SPIRIT AND PURPOSE OF THE LAW: RATIO LEGISEST ANIMA LEGIS Reason of
the law is the soul of the law
ELENA
SALENILLAS
AND
BERNARDINO
SALENILLAS, petitioners,
vs.
HONORABLE COURT OF APPEALS and HONORABLE RAYMUNDO SEVA, JUDGE OF
BRANCH 38 OF THE REGIONAL TRIAL COURT OF CAMARINES NORTE and
WILLIAM GUERRA, respondents.
Jose L. Lapak for petitioners.
Jose T. Atienza for private respondent.

For failure of the petitioners to pay their loan, extrajudicial foreclosure proceeding, pursuant
to Act No. 3135, was instituted by the Philippine National Bank against the mortgage and
the property was sold at a public auction held on February 27, 1981. The private
respondent, William Guerra, emerged as the highest bidder in the said public auction and
as a result thereof a "Certificate of Sale" was issued to him by the Ex Officio Provincial
Sheriff of Camarines Norte. Ultimately, on July 12, 1983, a "Sheriff's Final Deed" was
executed in favor of the private respondent.
On August 17,1983, the Philippine National Bank filed with the Regional Trial Court of
Camarines Norte at Daet, a motion for a writ of possession. The public respondent, Judge
Raymundo Seva of the trial court, acting on the motion, issued on September 22, 1983 an
order for the issuance of a writ of possession in favor of the private respondent. When the
deputy sheriff of Camarines Norte however, attempted on November 17, 1983, to place the
property in the possession of the private respondent, the petitioners refused to vacate and
surrender the possession of the same and instead offered to repurchase it under Section

119 of the Public Land Act. On August 15, 1984, another motion, this time for the issuance
of an alias writ of possession was filed by the private respondent with the trial court. The
petitioners, on August 31, 1984, opposed the private respondents' motion and instead
made a formal offer to repurchase the property. Notwithstanding the petitioners' opposition
and formal offer, the trial court judge on October 12, 1984 issued the alias writ of
possession prayed for the private respondent. The petitioners moved for a reconsideration
of the order but their motion was denied.
Undeterred by their initial setback, the petitioners elevated the case to the respondent
Court of Appeals by way of a petition for certiorari claiming that the respondent trial court
judge acted with grave abuse of discretion in issuing the order dated October 12, 1984
granting the writ of possession, and the order dated October 22, 1984, denying their motion
for reconsider consideration.
In a resolution dated January 23, 1985, the respondent appellate court gave due course to
the petition; required the parties to submit simultaneous memoranda in support to their
respective positions; and restrained the trial court and the private respondent from
executing, implementing or otherwise giving effect to the assailed writ of possession until
further orders from the court. 3 However, in a decision promulgated on September 17, 1986,
the respondent Court of Appeals dismissed the case for lack of merit. According to the
appellate court:
It must be noted that when the original owner, Florencia H. Enciso whose title, OCT
No. P-1248, was issued on August 9, 1961, executed a deed of absolute sale on
February 28, 1970 of the property covered by said title to spouses Elena Salenillas
and Bernardino Salenillas, the five year period to repurchase the property provided for
in Section 119 of Commonwealth Act No. 141 as amended could have already started.
Prom this fact alone, the petition should have been dismissed. However, granting that
the transfer from parent to child for a nominal sum may not be the "conveyance"
contemplated by the law. We will rule on the issue raised by the petitioners. 4
xxx xxx xxx
Applying the case of Monge, et al. vs. Angeles, et al., 5 the appellate court went on to hold
that the five-year period of the petitioners to repurchase under Section 119 of the Public
Land Act had already prescribed. The point of reckoning, ruled the respondent court in
consonance with Monge is from the date the petitioners mortgaged the property on
December 4, 1973. Thus, when the petitioners made their formal offer to repurchase on
August 31, 1984, the period had clearly expired.
In an effort to still overturn the decision, the petitioners moved for reconsideration. Their
motion apparently went for naught because on May 7, 1987, the respondent appellate court
resolved to deny the same. Hence, this petition.

Before us, the petitioners maintain that contrary to the rulings of the courts below, their right
to repurchase within five years under Section 119 of the Public Land Act has not yet
prescribed. To support their contention, the petitioners cite the cases of Paras vs. Court of
Appeals 6 and Manuel vs. Philippine National Bank, et al. 7
On the other side, the private respondent, in support of the appellate court's decision,
states that the sale of the contested property by the patentees to the petitioners disqualified
the latter from being legal heirs vis-a-vis the said property. As such, they (the petitioners) no
longer enjoy the right granted to heirs under the provisions of Section 119 of the Public
Land Act. 8
In fine, what need be determined and resolved here are: whether or not the petitioners
have the right to repurchase the contested property under Section 119 of the Public Land
Act; and assuming the answer to the question is in the affirmative, whether or not their right
to repurchase had already prescribed.
We rule for the petitioners. They are granted by the law the right to repurchase their
property and their right to do so subsists.
Section 119 of the Public Land Act, as amended, provides in full:
Sec. 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow,
or legal heirs within a period of five years from the date of the conveyance.
From the foregoing legal provision, it is explicit that only three classes of persons are
bestowed the right to repurchase the applicant-patentee, his widow, or other legal heirs.
Consequently, the contention of the private respondent sustained by the respondent
appellate court that the petitioners do not belong to any of those classes of repurchasers
because they acquired the property not through inheritance but by sale, has no legal basis.
The petitioners-spouses are the daughter and son-in-law of the Encisos, patentees of the
contested property. At the very least, petitioner Elena Salenillas, being a child of the
Encisos, is a "legal heir" of the latter. As such, and even on this score alone, she may
therefore validly repurchase. This must be so because Section 119 of the Public Land Act,
in speaking of "legal heirs," makes no distinction. Ubi lex non distinguit nec nos distinguere
debemos.
Moreover, to indorse the distinction made by the private respondent and the appellate court
would be to contravene the very purpose of Section 119 of the Public Land Act which is to
give the homesteader or patentee every chance to preserve for himself and his family the
land that the State had gratuitously given him as a reward for his labor in clearing and
cultivating it. 9 Considering that petitioner Salenillas is a daughter of the spouses Florencia
H. Enciso and Miguel Enciso, there is no gainsaying that allowing her (Elena) and her
husband to repurchase the property would be more in keeping with the spirit of the law. We

have time and again said that between two statutory interpretations, that which better
serves the purpose of the law should prevail.
Guided by the same purpose of the law, and proceeding to the other issue here raised, we
rule that the five-year period for the petitioners to repurchase their property had not yet
prescribed.
The case of Monge et al. vs. Angeles, et al., 10 cited as authority by the respondent Court of
Appeals is inapplicable to the present controversy. The facts obtaining there are
substantially different from those in this case. In Monge the conveyance involved was
a pacto de retro sale and not a foreclosure sale. More importantly, the question raised there
was whether the five-year period provided for in Section 119 "should be counted from the
date of the sale even if the same is with an option to repurchase or from the date the
ownership of the land has become consolidated in favor of the purchaser because of the
homesteader's failure to redeem it. 11 It is therefore understandable why the Court ruled
there as it did. A sale on pacto de retro immediately vests title, ownership, and, generally
possession over the property on the vendee a retro, subject only to the right of the
vendor a retro to repurchase within the stipulated period. It is an absolute sale with a
resolutory condition.
The cases 12 pointed to by the petitioner in support of their position, on the other hand,
present facts that are quite identical to those in the case at bar. Both cases involved
properties the titles over which were obtained either through homestead or free patent.
These properties were mortgaged to a bank as collateral for loans, and, upon failure of the
owners to pay their indebtedness, the mortgages were foreclosed. In both instances, the
Court ruled that the five-year period to. repurchase a homestead sold at public auction or
foreclosure sale under Act 3135 begins on the day after the expiration of the period of
redemption when the deed of absolute sale is executed thereby formally transferring the
property to the purchaser, and not otherwise. Taking into account that the mortgage was
foreclosed and the mortgaged property sold at a public auction to the private respondent on
February 27, 1981, with the "Sheriff's Final Deed" issued on July 12, 1983, the two offers of
the petitioners to repurchase the first on November 17, 1983, and the second, formally, on
August 31, 1984 were both made within the prescribed five-year period.
Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the Revised Rules of
Court, the petitioners should reimburse the private respondent the amount of the purchase
price at the public auction plus interest at the rate of one per centum per month up to
November 17, 1983, together with the amounts of assessments and taxes on the property
that the private respondent might have paid after purchase and interest on the last named
amount at the same rate as that on the purchase price. 13
WHEREFORE, the petition is GRANTED. The Decision dated September 17, 1986, and
the Resolution dated May 7, 1987 of the Court of Appeals, and the Orders dated
September 22, 1983, October 12, 1984, and October 22, 1984 of the Regional Trial Court
of Daet, Camarines Norte, are hereby REVERSED and SET ASIDE, and another one

ENTERED directing the private respondent to reconvey the subject property and to execute
the corresponding deed of reconveyance therefor in favor of the petitioners upon the return
to him by the latter of the purchase price and the amounts, if any, of assessments or taxes
he paid plus interest of one (1%) per centum per month on both amounts up to November
17, 1983

DANILO LIM PA, CAPT. ELMER AMON PAF CAPT. VERGEL NACINO, and LT. JOEY
SARROZA, petitioners,
vs.
B/GEN. DEMETRIO CAMUA COL. HERMINIO A. MENDOZA, COL. ERNESTO B. YU,
COL. ROMEO ODI COL. WILLY FLORENDO, COL. DIONY A. VENTURA, and CAPT.
FRANCISCO T. MALLILLIN PRESIDENT AND MEMBERS OF GENERAL COURTMARTIAL NO. 14, respondents.
No. 97454 August 2, 1991
AFP CHIEF OF STAFF LT. GEN. RODOLFO BIAZON, DEPUTY CHIEF OF STAFF
MAJOR GEN. ALEXANDER AGUIRRE, PNP DIRECTOR GENERAL MAJOR GEN.
CESAR NAZARENO and LT. COL. ALBERTO OLARIO, Commanding Officer of the
PNP/INP
Detention
Center/Jail, petitioners,
vs.
HON. ANTONIO P. SOLANO, Presiding Judge, Regional Trial Court, Quezon City,
Branch 86, CAPTAIN REYNALDO S. RAFAEL, 1 LT SERVANDO A. BAOANAN PN(M), 1
LT. WILFREDO JIMENEZ PAF 1 LT. ATANACIO T. MACALAN JR PMM 2LT ELISEO T.
RASCO PC, 2LT JONAS CALLEJA PC, 2LT JAIRUS JS GELVEZON III PMM 2LT
JOSELITO CABREROS PMM 2LT MEMEL ROJAS PN(M) and 2LT HERMINIO L.
CANTACO PC, respondents.
CRUZ, J.:p
These four cases have been consolidated because they involve practically the same
parties and related issues arising from the same incident.
The petitioners in G.R. Nos. 93177 and 96948 and the private respondents in G.R. Nos.
95020 and 97454 are officers of the Armed Forces of the Philippines facing prosecution for
their alleged participation in the failed coup d' etat that took place on December 1 to 9,
1989.
The charges against them are violation of Articles of War (AW) 67 (Mutiny), AW 96
(Conduct Unbecoming an Officer and a Gentleman) and AW 94 (Various Crimes) in relation
to Article 248 of the Revised Penal Code (Murder).
No. 96948 August 2, 1991
B/GEN. JOSE COMENDADOR, B/GEN. MARCELO BLANDO, CAPT. DANILO PIZARRO
PN, CAPT. MANUEL ISON PN, LTC. ROMELINO GOJO PN (M), LTC. ARSENIO
TECSON PA, LTC. RAFAEL GALVEZ PA, LTC. TIBURCIO FUSILLERO PA, LTC.
ERICSON AURELIO PA, LTC. JACINTO LIGOT PA, LTC. FRANKLIN BRAWNER PA,
MAJ. ALFREDO OLIVEROS PA, MAJ. CESAR DE LA PENA PN (M): MAJ. LEUVINO
VALENCIA PA, CAPT. FLORENCIO FLORES PA, CAPT. JAIME JUNIO PA, CAPT.

In G.R. No. 93177, which is a petition for certiorari, prohibition and mandamus, they are
questioning the conduct of the Pre-Trial Investigation PTI Panel constituted to investigate
the charges against them and the creation of the General Court Martial GCM convened to
try them.
In G.R. No. 96948, the petitioners, besides challenging the legality of GCM No. 14,
seek certiorari against its ruling denying them the right to peremptory challenge as granted
by Article 18 of Com. Act No. 408.

In G.R. No. 95020, the orders of the respondent judge of the Regional Trial Court of
Quezon City are assailed oncertiorari on the ground that he has no jurisdiction over GCM
No. 14 and no authority either to set aside its ruling denying bail to the private respondents.
In G.R. No. 97454, certiorari is also sought against the decision of the Regional Trial Court
of Quezon City in a petition for habeas corpus directing the release of the private
respondents. Jurisdictional objections are likewise raised as in G.R. No. 95020.
I
Before the charges were referred to GCM No. 14, a Pre-Trial Investigation PTI Panel had
been constituted pursuant to Office Order No. 16 dated January 14, 1990, to investigate the
petitioners in G.R. Nos. 93177 and 96948. The PTI Panel issued a uniform subpoena dated
January 30, 1990, individually addressed to the petitioners, to wit:
You are hereby directed to appear in person before the undersigned Pre-Trial
Investigating Officers on 12 Feb 90 9:00 a.m. at Kiangan Hall, Camp Crame Quezon
City, then and there to submit your counter-affidavit and the affidavits of your
witnesses, if any, in the pre-trial investigation of the charge/charges against you for
violence of AWs _______________. DO NOT SUBMIT A MOTION TO DISMISS.
Failure to submit the aforementioned counter-affidavits on the date above specified
shall be deemed a waiver of your right to submit controverting evidence.
On the same date, the petitioners acknowledged receipt of a copy of the charge sheet,
sworn statements of witnesses, and death and medical certificates of victims of the
rebellion.
At the first scheduled hearing, the petitioners challenged the proceedings on various
grounds, prompting the PTI Panel to grant them 10 days within which to file their objections
in writing This was done through a Motion for Summary Dismissal dated February 21,
1990.
In a resolution dated February 27,1990, the PTI Panel denied the motion and gave the
petitioners 5 days from notice to submit their respective counter-affidavits and the affidavits
of their witnesses.
On March 7, 1990, the petitioners verbally moved for reconsideration of the foregoing
denial and the PTI Panel gave them 7 days within which to reduce their motion to writing.
This was done on March 14,1990.
The petitioners now claim that there was no pre-trial investigation of the charges as
mandated by Article of War 71, which provides:

Art. 71. Charges Action upon. Charges and specifications must be

signed by a person subject to military law, and under the oath either
that he has personal knowledge of, or has investigated, the matters set
forth therein and that the same are true in fact, to the best of his
knowledge and belief.
No charge will be referred to a general court-martial for trial until after
a thorough and impartial investigation thereof shall have been made.
This investigation will include inquiries as to the truth of the matter set
forth in said charges, form of charges, and what disposition of the case
should be made in the interest of justice and discipline. At such
investigation full opportunity shall be given to the accused to crossexamine witnesses against him if they are available and to present
anything he may desire in his own behalf, either in defense or
mitigation, and the investigating officer shall examine available
witnesses requested by the accused. If the charges are forwarded
after such investigation, they shall be accompanied by a statement of
the substance of the testimony taken on both sides. (Emphasis
supplied.)
They also allege that the initial hearing of the charges consisted merely of a roll call and
that no prosecution witnesses were presented to reaffirm their affidavits. while the motion
for summary dismissal was denied, the motion for reconsideration remains unresolved to
date and they have not been able to submit their counter-affidavits.
At the hearing of May 15, 1990, the petitioners in G.R. No. 96948 manifested that they
were exercising their right to raise peremptory challenges against the president and
members of GCM No.14. They invoked Article 18 of Com. Act No. 408 for this purpose.
GCM No. 14 ruled, however, that peremptory challenges had been discontinued under P.D.
No. 39.
In G.R. No. 95020, Ltc Jacinto Ligot applied for bail on June 5, 1990, but the application
was denied by GCM No.14. He thereupon filed with the Regional Trial Court of Quezon City
a petition for certiorari and mandamus with prayer for provisional liberty and a writ of
preliminary injunction. After considering the petition and the answer thereto filed by the
president and members of GCM No.14, Judge Maximiano C. Asuncion issued an order
granting provisional liberty to Ligot.
On July 28, 1990, Ligot filed an urgent omnibus motion to enforce the order for his release
and to declare in contempt the commanding officer of the PC/INP Jail for disobey 'ng the
said order. He later also complained that Generals De Villa and Aguirre had refused to
release him "pending final resolution of the appeal to be taken" to this Court.

After hearing, the trial court reiterated its order for the provisional liberty of Ligot, as well as
of intervenors Ltc Franklin Brawner, Lt/Col. Arsenio Tecson and Maj. Alfredo Oliveros, and
later of additional intervenors Ltc Romelino Gojo and Capt. Manuel Ison.
On August 22, 1990, the trial court rendered judgment inter alia:
(a) Declaring, that Section 13, Article III of the Constitution granting the
right to bail to all persons with the defined exception is applicable and
covers all military men facing court-martial proceedings. Accordingly,
the assailed orders of General Court- Martial No. 14 denying bail to
petitioner and intervenors on the mistaken assumption that bail does
not apply to military men facing court-martial proceedings on the
ground that there is no precedent, are hereby set aside and declared
null and void. Respondent General Court-Martial No. 14 is hereby
directed to conduct proceedings on the applications of bail of the
petitioner, intervenors and which may as well include other persons
facing charges before General Court-Martial No. 14.
Pending the proceedings on the applications for bail before General
Court-Martial No. 14, this Court reiterates its orders of release on the
provisional liberty of petitioner Jacinto Ligot as well as intervenors
Franklin Brawner and Arsenio Tecson.
On February 18, 1991, the private respondents in G.R. No. 97454 filed with this Court a
petition for habeas corpus on the ground that they were being detained in Camp Crame
without charges. The petition was referred to the Regional Trial Court of Quezon City,
where it was raffled to respondent Judge Antonio P. Solano. Finding after hearing that no
formal charges had been filed against the petitioners after more than a year after their
arrest, the trial court ordered their release.
II
The Court has examined the records of this case and rules as follows.
It appears that the petitioners in G.R. Nos. 93177 and 96948 were given several
opportunities to present their side at the pre-trial investigation, first at the scheduled hearing
of February 12, 1990, and then again after the denial of their motion of February 21, 1990,
when they were given until March 7, 1990, to submit their counter-affidavits. On that date,
they filed instead a verbal motion for reconsideration which they were again asked to
submit in writing. This they did on March 13, 1990. The motion was in effect denied when
the PTI Panel resolved to recommend that the charges be referred to the General Court
Martial for trial.

The said petitioners cannot now claim they have been denied due process because the
investigation was resolved against them owing to their own failure to submit their counteraffidavits. They had been expressly warned In the subpoena sent them that "failure to
submit the aforementioned counter-affidavits on the date above specified shall be deemed
a waiver of (their) right to submit controverting evidence." They chose not to heed the
warning. As their motions appeared to be dilatory, the PTI Panel was justified in referring
the charges to GCM No. 14 without waiting for the petitioners to submit their defense.
Due process is satisfied as long as the party is accorded an opportunity to be heard. If it is
not availed of, it is deemed waived or forfeited without violation of the Bill of Rights.
There was in our view substantial compliance with Article of War 71 by the PTI Panel.
Moreover, it is now settled that "even a failure to conduct a pre-trial investigation does not
deprive a general court- martial of jurisdiction." We so held in Arula v. Espino, 1 thus:
xxx xxx xxx
But even a failure to conduct a pre-trial investigation does not deprive a general courtmartial of jurisdiction.
The better accepted concept of pre-trial investigation is that it is directory, not mandatory,
and in no way affects the jurisdiction of a court-martial. In Humphrey v. Smith, 336 U.S.
695, 93 L ed 986 (1949), the Court said:
We do not think that the pre-trial investigation procedure by Article 70 (The
Philippine counter-part is article of war 71, Commonwealth Act 408) can properly be
construed as an indispensable pre-requisite to the exercise of the Army General
court martial jurisdiction.. The Article does serve important functions in the
administration of court-martial procedures and does provide safeguards to an
accused. Its language is clearly such that a defendant could object to trial in the
absence of the required investigation. In that event the court-martial could itself
postpone trial pending the investigation. And the military reviewing authorities could
consider the same contention, reversing a court- martial conviction where failure to
comply with Article 70 has substantially injured an accused. But we are not
persuaded that Congress intended to make otherwise valid court-martial judgments
wholly void because pre-trial investigations fall short of the standards prescribed by
Article 70. That Congress has not required analogous pre-trial procedure for Navy
court-martial is an indication that the investigatory plan was not intended to be
exalted to the jurisdictional level.
xxx xxx xxx
Shortly after enactment of Article 70 in 1920 the Judge Advocate General of the
Army did hold that where there had been no pre-trial investigation, court-martial

proceedings were void ab initio. But this holding has been expressly repudiated in
later holdings of the Judge Advocate General. This later interpretation has been that
the pre-trial requirements of Article 70 are directory, not mandatory, and in no way
effect the jurisdiction of a court-martial. The War Department's interpretation was
pointedly called to the attention of Congress in 1947 after which Congress
amended Article 70 but left unchanged the language here under consideration.
compensable pre-requisite to the exercise of Army general court-martial jurisdiction
A trial before a general court-martial convened without any pretrial investigation
under article of war 71 would of course be altogether irregular but the court-martial
might nevertheless have jurisdiction. Significantly, this rule is similar to the one
obtaining in criminal procedure in the civil courts to the effect that absence of
preliminary investigation does not go into the jurisdiction of the court but merely to
the regularity of the proceedings.
As to what law should govern the conduct of the preliminary investigation, that issue was
resolved more than two years ago in Kapunan v. De Villa, 2 where we declared:
The Court finds that, contrary to the contention of petitioners, there was substantial
compliance with the requirements of law as provided in the Articles of War and P.D.
No. 77, as amended by P.D. No. 911. The amended charge sheets, charging
petitioners and their co-respondents with mutiny and conduct unbecoming an officer,
were signed by Maj. Antonio Ruiz, a person subject to military law, after he had
investigated the matter through an evaluation of the pertinent records, including the
reports of respondent AFP Board of Officers, and was convinced of the truth of the
testimonies on record. The charge sheets were sworn to by Maj. Ruiz, the "accuser,"
in accordance with and in the manner provided under Art. 71 of the Articles of War.
Considering that P.D. No. 77, as amended by P.D. No. 911, is only of suppletory
application, the fact that the charge sheets were not certified in the manner provided
under said decrees, i.e., that the officer administering the oath has personally
examined the affiant and that he is satisfied that they voluntarily executed and
understood its affidavit, does not invalidate said charge sheets. Thereafter, a "pretrial
investigation" was conducted by respondent Maj. Baldonado, wherein, pursuant to
P.D. No. 77, as amended by P.D. No. 911, petitioners were subpoenaed and required
to file their counter-affidavit. However, instead of doing so, they filed an untitled
pleading seeking the dismissal of the charges against them. That petitioners were
not able to confront the witnesses against them was their own doing, for they never
even asked Maj. Baldonado to subpoena said witnesses so that they may be made
to answer clarificatory questions in accordance with P. D, No. 77, as amended by
P.D. No. 911.
The petitioners also allege that GCM No. 14 has not been constitute in accordance with
Article 8 of the Articles of War because General Order No. M-6, which supposedly
convened the body, was not signed by Gen. Renato de Villa as Chief of Staff.

Article of War No. 8 reads:

Art. 8. General Courts-Martial. The President of the Philippines, the
Chief of Staff of the Armed Forces of the Philippines, the Chief of
Constabulary and, when empowered by the President, the
commanding officer of a major command or task force, the
commanding officer of a division, the commanding officer of a military
area, the superintendent of the Military Academy, the commanding
officer of a separate brigade or body of troops may appoint general
courts-martial; but when any such commander is the accuser or the
prosecutor of the person or persons to be tried, the court shall be
appointed by superior competent authority. ...
While it is true that General Order No. M-6 was not signed by Gen. De Villa, there is no
doubt that he authorized it because the order itself said it was issued "By Command of
General De Villa" and it has not been shown to be spurious. As observed by the Solicitor
General, the Summary Disposition Form showed that Gen. De Villa, as Chief of Staff, AFP,
actually constituted GCM No. 14 and appointed its president and members. It is significant
that General De Villa has not disauthorized or revoked or in any way disowned the said
order, as he would certainly have done if his authority had been improperly invoked. On the
contrary, as the principal respondent in G.R. No. 93177, he sustained General Order No. M
6 in the Comment filed for him and the other respondents by the Solicitor General.
Coming now to the right to peremptory challenge, we note that this was originally provided
for under Article 18 of Com. Act No. 408 (Articles of War), as amended by Rep. Act No.
242, on June 12, 1948, to wit:
Art. 18. Challenges. Members of general or special courts-martial
may be challenged by the accused or the trial judge advocate for
cause stated to the court. The court shall determine the relevancy and
validity thereof, and shall not receive a challenge to more than one
member at a time. Challenges by the trial judge advocate shall
ordinarily be presented and decided before those by the accused are
offered. Each side shall be entitled to the peremptory challenge, but
the law member of the court shall not be challenged except for cause.
The history of peremptory challenge was traced in Martelino v. Alejandro, 3 thus:
In the early formative years of the infant Philippine Army, after the passage in 1935 of
Commonwealth Act No. 1 (otherwise known as the National Defense Act), except for a
handful of Philippine Scout officers and graduates of the United States military and
naval academies who were on duty with the Philippine Army, there was a complete
dearth of officers learned in military law, its aside from the fact that the officer corps of
the developing army was numerically made equate for the demands of the strictly

military aspects of the national defense program. Because of these considerations it

was then felt that peremptory challenges should not in the meanwhile be permitted and
that only challenges for cause, in any number, would be allowed. Thus Article 18 of the
Articles of War (Commonwealth Act No. 408), as worded on September 14, 1938, the
date of the approval of the Act, made no mention or reference to any peremptory
challenge by either the trial judge advocate of a court- martial or by the accused. After
December 17,1958, when the Manual for Courts-Martial of the Philippine Army became
effective, the Judge Advocate General's Service of the Philippine Army conducted a
continuing and intensive program of training and education in military law,
encompassing the length and breadth of the Philippines. This program was pursued
until the outbreak of World War 11 in the Pacific on December 7, 1941. After the formal
surrender of Japan to the allies in 1945, the officer corps of the Armed Forces of the
Philippines had expanded to a very large number, and a great many of the officers had
been indoctrinated in military law. It was in these environmental circumstances that
Article of War 18 was amended on June 12,1948 to entitle "each side" to one
peremptory challenge, with the sole proviso that "the law member of court shall not be
challenged except for cause.
On September 27,1972, President Marcos issued General Order No. 8, empowering the
Chief of Staff of the Armed Forces to create military tribunals "to try and decide cases of
military personnel and such other cases as may be referred to them.
On November 7,1972, he promulgated P.D. No. 39 (Governing the Creation, Composition,
Jurisdiction, Procedure, and other matters relevant to military Tribunals). This decree
disallowed the peremptory challenge, thus:
No peremptory challenge shall be allowed. Challenges for cause may be entertained to
insure impartiality and good faith. Challenges shall immediately be heard and
determined by a majority of the members excluding the challenged member. A tie vote
does not disqualify the challenged member. A successfully challenged member shall be
immediately replaced.
On June 11, 1978, President Marcos promulgated P.D. No. 1498, or the National Security
Code, which was a compilation and codification of decrees, general orders, LOI and
policies intended "to meet the continuing threats to the existence, security and stability of
the State." The modified rule on challenges under P.D. No. 39 was embodied in this decree.
On January 17,1981, President Marcos issued Proc. No. 2045 proclaiming the termination
of the state of martial law throughout the Philippines. The proclamation revoked General
Order No. 8 and declared the dissolution of the military tribunals created pursuant thereto
upon final determination of the cases pending therein.
P.D. No. 39 was issued to implement General Order No. 8 and the other general orders
mentioned therein. With the termination of martial law and the dissolution of the military

tribunals created thereunder, the reason for the existence of P.D. No. 39 ceased
automatically.
It is a basic canon of statutory construction that when the reason of the law ceases, the law
itself ceases.Cessante ratione legis, cessat ipsa lex. This principle is also expressed in the
maxim ratio legis est anima: the reason of law is its soul.
Applying these rules, we hold that the withdrawal of the right to peremptory challenge in L
P.D. No. 39 became ineffective when the apparatus of martial law was dismantled with the
issuance of Proclamation No. 2045, As a result, the old rule embodied in Article 18 of Com.
Act No. 408 was automatically revived and now again allows the right to peremptory
challenge.
We do not agree with the respondents in G.R. No. 96948 that the right to peremptory
challenge remains withdrawn under P.D. No. 39. To repeat for emphasis, this decree was
itself withdrawn when martial law was lifted on January 17, 1981. Indeed, even if not so
withdrawn, it could still be considered no longer operative, having been cast out under the
new dispensation as, in the words of the Freedom Constitution, one of the "iniquitous
vestiges of the previous regime.
The military tribunal was one of the most oppressive instruments of martial law. It is curious
that the present government should invoke the rules of that discredited body to justify its
action against the accused officers.
The Court realizes that the recognition of the right to peremptory challenge may be
exploited by a respondent in a court-martial trial to delay the proceedings and defer his
deserved Punishment. It is hoped that the accused officers in the cases at bar will not be so
motivated. At any rate, the wisdom of Com. Act No. 408, in the light of present
circumstances, is a matter addressed to the law-makers and not to this Court. The judiciary
can only interpret and apply the laws without regard to its own misgivings on their adverse
effects. This is a problem only the political departments can resolve.
The petitioners in G.R. Nos. 95020 and 97454 question the propriety of the petition for
certiorari and mandamus and the petition for habeas corpus filed by the private
respondents with the Regional Trial Courts of Quezon City. It is argued that since the
private respondents are officers of the Armed Forces accused of violations of the Articles of
War, the respondent courts have no authority to order their release and otherwise interfere
with the court-martial proceedings.

The petitioners further contend that under Sec. 9(3) of BP 1 29, the Court of Appeals is
vested with "exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions." Rather irrelevantly, the petitioners also cite the case of Yang v.
Court of Appeals 4 where this Court held that "appeals from the Professional Regulation
Commission are now exclusively cognizable by the Court of Appeals.
It should be noted that the aforecited provision and the case cited refer to ordinary appeals
and not to the remedies employed by the accused officers before the respondent courts.

xxx xxx xxx

National security considerations should also impress upon this Honorable Court that
release on bail of respondents constitutes a damaging precedent. Imagine a
scenario of say 1,000 putschists roaming the streets of the Metropolis on bail, or if
the assailed July 25,1990 Order were sustained, on "provisional" bail. The sheer
number alone is already discomforting. But, the truly disquieting thought is that they
could freely resume their heinous activity which could very well result in the
overthrow of duly constituted authorities, including this Honorable Court, and replace
the same with a system consonant with their own concept of government and justice.

In Martelino, we observed as follows:

It is true that civil courts as a rule exercise no supervision or correcting power over
the proceedings of courts-martial, and that mere errors in their proceedings are not
open to consideration. The single inquiry, the test, is jurisdiction. But it is equally
true that in the exercise of their undoubted discretion, courts-martial may commit
such an abuse of discretion what in the language of Rule 65 is referred to as
"grave abuse of discretion" as to give rise to a defect in their jurisdiction. This is
precisely the point at issue in this action suggested by its nature as one for
certiorari and prohibition ... .
The Regional Trial Court has concurrent jurisdiction with the Court of Appeals and the
Supreme Court over petitions for certiorari, prohibition or mandamus against inferior courts
and other bodies and on petitions forhabeas corpus and quo warranto. 5 In the absence of
a law providing that the decisions, orders and ruling of a court-martial or the Office of the
Chief of Staff can be questioned only before the Court of Appeals and the Supreme Court,
we hold that the Regional Trial Court can exercise similar jurisdiction.
We find that the right to bail invoked by the private respondents in G.R. Nos. 95020 has
traditionally not been recognized and is not available in the military, as an exception to the
general rule embodied in the Bill of Rights. This much was suggested in Arula, where we
observed that "the right to a speedy trial is given more emphasis in the military where the
right to bail does not exist.
The justification for this exception was well explained by the Solicitor General as follows:
The unique structure of the military should be enough reason to exempt military men
from the constitutional coverage on the right to bail.
Aside from structural peculiarity, it is vital to note that mutinous soldiers operate
within the framework of democratic system, are allowed the fiduciary use of firearms
by the government for the discharge of their duties and responsibilities and are paid
out of revenues collected from the people. All other insurgent elements carry out their
activities outside of and against the existing political system.

The argument that denial from the military of the right to bail would violate the equal
protection clause is not acceptable. This guaranty requires equal treatment only of persons
or things similarly situated and does not apply where the subject of the treatment is
substantially different from others. The accused officers can complain if they are denied bail
and other members of the military are not. But they cannot say they have been
discriminated against because they are not allowed the same right that is extended to
civilians.
On the contention of the private respondents in G.R. No. 97454 that they had not been
charged after more than one year from their arrest, our finding is that there was substantial
compliance with the requirements of due process and the right to a speedy trial.
The petition for habeas corpus was directly filed with this Court on February 18, 1991, and
was referred to the Regional Trial Court of Quezon City for raffle, hearing and decision. It
was heard on February 26, 1991, by the respondent court, where the petitioners submitted
the charge memorandum and specifications against the private respondents dated January
30, 1991. On February 12, 1991, pursuant to Office Order No. 31-91, the PTI panel was
created and initial investigation was scheduled on March 12, 1991 at 2:00 p.m. On March
20, 1991, the private respondents received the copies of the charges, charge sheets and
specifications and were required to submit their counter-affidavits on or before April 11,
1991. There was indeed a delay of more than one year in the investigation and preparation
of the charges against the private respondents. However, this was explained by the
Solicitor General thus:
... The AFP Special Investigating Committee was able to complete it pre-charge
investigation only after one (1) year because hundreds of officers and thousands of
enlisted men were involved in the failed coup. All of them, as well as other witnesses,
had to be interviewed or investigated, and these inevitably took months to finish. The
pre-charge investigation was rendered doubly difficult by the fact that those involved
were dispersed and scattered throughout the Philippines. In some cases, command
units, such as the Scout Rangers, have already been disbanded. After the charges
were completed, the same still had to pass review and approval by the AFP Chief of
Staff.

While accepting this explanation, the Court nevertheless must reiterate the following
admonition:
This Court as protector of the rights of the people, must stress the point that if the
participation of petitioner in several coup attempts for which he is confined on orders
of Adjutant General Jorge Agcaoili cannot be established and no charges can be filed
against him or the existence of a prima facie case warranting trial before a military
commission is wanting, it behooves respondent then Major General Rodolfo Biazon
(now General) to release petitioner. Respondents must also be reminded that even if a
military officer is arrested pursuant to Article 70 of then Articles of War, indefinite
confinement is not sanctioned, as Article 71 thereof mandates that immediate steps
must be taken to try the person accused or to dissmiss the charge and release him.
Any officer who is responsible for unnecessary delay in investigating or carrying the
case to a final conclusion may even be punished as a court martial may direct. 6
It should be noted, finally, that after the decision was rendered by Judge Solano on
February 26, 1991, the government filed a notice of appeal ad cautelam and a motion for
reconsideration, the latter was ultimately denied, after hearing, on March 4, 1991. The 48hour period for appeal under Rule 41, Section 18, of the Rules of Court did not run until
after notice of such denial was received by the petitioners on March 12, 1991. Contrary to
the private respondents' contention, therefore, the decision had not yet become final and
executory when the special civil action in G.R. No. 97454 was filed with this Court on March
12, 1991.
III
Regarding the propriety of the petitions at bar, it is well to reiterate the following
observations of the Court in Arula:
The referral of charges to a court-martial involves the exercise of judgment and
discretion (AW 71). A petition for certiorari, in order to prosper, must be based on
jurisdictional grounds because, as long as the respondent acted with jurisdiction, any
error committed by him or it in the exercise thereof will amount to nothing more than
an error of judgment which may be reviewed or corrected only by appeal. Even an
abuse of discretion is not sufficient by itself to justify the issuance of a writ ofcertiorari.
As in that case, we find that the respondents in G.R. No. 93177 have not acted with grave
abuse of discretion or without or in excess of jurisdiction to justify the intervention of the
Court and the reversal of the acts complained of by the petitioners. Such action is
indicated, however, in G.R. No. 96948, where we find that the right to peremptory challenge
should not have been denied, and in G.R. Nos. 95020 and 97454, where the private
respondents should not have been ordered released.

ACCORDINGLY, in G.R. No. 93177, the petition is DISMISSED for lack of merit. In G.R.
No. 96948, the petition is GRANTED, and the respondents are DIRECTED to allow the
petitioners to exercise the right of peremptory challenge under Article 18 of the Articles of
War. In G.R. Nos. 95020 and 97454, the petitions are also GRANTED, and the orders of
the respondent courts for the release of the private respondents are hereby REVERSED
and SET ASIDE. No costs.

D. Doctrine of Necessary Implication: Ex Necessitate Legis From necessity of the

law
LYDIA
O.
CHUA, petitioner,
vs.
THE CIVIL SERVICE COMMISSION, THE NATIONAL IRRIGATION ADMINISTRATION
and THE DEPARTMENT OF BUDGET AND MANAGEMENT, respondents.

two consecutive years of government service in order to be entitled to its benefits. I

more than meet the requirement. Persons who are not entitled are consultants, experts
and contractual(s). As to the budget needed, the law provides that the Department of
Budget and Management will shoulder a certain portion of the benefits to be allotted to
government corporations. Moreover, personnel of these NIA special projects art entitled
to the regular benefits, such (sic) leaves, compulsory retirement and the like. There is
no reason why we should not be entitled to RA 6683.
xxx xxx xxx 2
Denying the plea for reconsideration, the Civil Service Commission (CSC) emphasized:
xxx xxx xxx

PADILLA, J.:
Pursuant to the policy of streamlining and trimming the bureaucracy, Republic Act No. 6683
was approved on 2 December 1988 providing for benefits for early retirement and voluntary
separation from the government service as well as for involuntary separation due to
reorganization. Deemed qualified to avail of its benefits are those enumerated in Sec. 2 of
the Act, as follows:
Sec. 2. Coverage. This Act shall cover all appointive officials and employees of the
National Government, including government-owned or controlled corporations with original
charters, as well as the personnel of all local government units. The benefits authorized
under this Act shall apply to all regular, temporary, casual and emergency employees,
regardless of age, who have rendered at least a total of two (2) consecutive years of
government service as of the date of separation. Uniformed personnel of the Armed
Forces of the Philippines including those of the PC-INP are excluded from the coverage of
this Act.
Petitioner Lydia Chua believing that she is qualified to avail of the benefits of the program,
filed an application on 30 January 1989 with respondent National Irrigation Administration
(NIA) which, however, denied the same; instead, she was offered separation benefits
equivalent to one half (1/2) month basic pay for every year of service commencing from
1980. A recourse by petitioner to the Civil Service Commission yielded negative
results. 1 Her letter for reconsideration dated 25 April 1989 pleaded thus:

We regret to inform you that your request cannot be granted. The provision of Section
3.1 of Joint DBM-CSC Circular Letter No. 89-1 does not only require an applicant to
have two years of satisfactory service on the date of separation/retirement but further
requires said applicant to be on a casual, emergency, temporary or regular employment
status as of December 2, 1988, the date of enactment of R.A. 6683. The law does not
contemplate contractual employees in the coverage.
Inasmuch as your employment as of December 31, 1988, the date of your separation
from the service, is co-terminous with the NIA project which is contractual in nature, this
Commission shall sustain its original decision.
xxx xxx xxx 3
In view of such denial, petitioner is before this Court by way of a special civil action
for certiorari, insisting that she is entitled to the benefits granted under Republic Act No.
6683. Her arguments:
It is submitted that R.A. 6683, as well as Section 3.1 of the Joint DBM-CSC Circular
Letter No. 89-1 requires an applicant to be on a casual, emergency, temporary or
regular employment status. Likewise, the provisions of Section 23 (sic) of the Joint
DBM-CSC Circular Letter No. 88-1, implementing guidelines of R.A. No. 6683,
provides:

xxx xxx xxx

"2.3 Excluded from the benefits under R.A. No. 6683 are the following:

With due respect, I think the interpretation of the Honorable Commissioner of RA 6683
does not conform with the beneficent purpose of the law. The law merely requires that a
government employee whether regular, temporary, emergency, or casual, should have

a) Experts and Consultants hired by agencies for a limited period to perform specific
activities or services with a definite expected output: i.e. membership in Task Force,
Part-Time, Consultant/Employees.

b) Uniformed personnel of the Armed Forces of the Philippines including those of the
Philippine Constabulary and Integrated National Police (PC-INP).

3. Assuming arguendo that petitioner's appointment is permanent, security of tenure is

available only for the term of office (i.e., duration of project).

c) Appointive officials and employees who retire or elect to be separated from the
service for optional retirement with gratuity under R.A. No. 1616, 4968 or with pension
under R.A. No. 186, as amended by R.A. No. 6680 or P.D. No. 1146, an amended, or
vice- versa.

4. The objective of Republic Act No. 6683 is not really to grant separation or retirement
benefits but reorganization 5 to streamline government functions. The application of the law
must be made consistent with the purpose for which it was enacted. Thus, as the
expressed purpose of the law is to reorganize the government, it will not have any
application to special projects such as the WMECP which exists only for a short and
definite period. This being the nature of special projects, there is no necessity for offering its
personnel early retirement benefits just to induce voluntary separation as a step to
reorganization. In fact, there is even no need of reorganizing the WMECP considering its
short and limited life-span. 6

d) Officials and employees who retired voluntarily prior to the enactment of this law and
have received the corresponding benefits of that retirement/separation.
e) Officials and employees with pending cases punishable by mandatory separation
from the service under existing civil service laws, rules and regulations; provided that if
such officials and employees apply in writing within the prescriptive period for the
availment of the benefits herein authorized, shall be allowed only if acquitted or cleared
of all charges and their application accepted and approved by the head of office
concerned."
Based on the above exclusions, herein petitioner does not belong to any one of them.
Ms. Chua is a full time employee of NIA entitled to all the regular benefits provided for
by the Civil Service Commission. She held a permanent status as Personnel Assistant
A, a position which belongs to the Administrative Service. . . . If casuals and emergency
employees were given the benefit of R.A. 6683 with more reason that this petitioner
who was holding a permanent status as Personnel Assistant A and has rendered almost
15 years of faithful, continuous service in the government should be similarly rewarded
by the beneficient (sic) purpose of the law. 4
The NIA and the Civil Service Commission reiterate in their comment petitioner's exclusion
from the benefits of Republic Act No. 6683, because:
1. Petitioner's employment is co-terminous with the project per appointment papers kept by
the Administrative Service in the head office of NIA (the service record was issued by the
Watershed Management and Erosion Control Project (WMECP), Pantabangan, Nueva
Ecija). The project, funded by the World Bank, was completed as of 31 December 1988,
after which petitioner's position became functus officio.
2. Petitioner is not a regular and career employee of NIA her position is not included in
its regular plantilla. She belongs to the non-career service (Sec. 6, P.D. No. 807) which is
inherently short-lived, temporary and transient; on the other hand, retirement presupposes
employment for a long period. The most that a non-career personnel can expect upon the
expiration of his employment is financial assistance. Petitioner is not even qualified to retire
under the GSIS law.

5. The law applies only to employees of the national government, government-owned or

controlled corporations with original charters and local government units.
Due to the impossibility of reconciling the conflicting interpretations of the parties, the Court
is called upon to define the different classes of employees in the public sector (i.e.
government civil servants).
Who are regular employees? The Labor Code in Art. 280 (P.D. No. 492, as amended)
deems an employment regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer. No
equivalent definition can be found in P.D.No. 807 (promulgated on 6 October 1975, which
superseded the Civil Service Act of 1965 R.A. No. 2260) or in the Administrative Code of
1987 (Executive Order No. 292 promulgated on 25 July 1987). The Early Retirement Law
itself (Rep. Act No. 6683) merely includes such class of employees (regular employees) in
its coverage, unmindful that no such specie is employed in the public sector.
The appointment status of government employees in the career service is classified as
follows:
1. permanent one issued to a person who has met the requirements of the position to
which appointment is made, in accordance with the provisions of the Civil Service Act and
the Rules and Standards promulgated in pursuance thereof; 7
2. temporary In the absence of appropriate eligibles and it becomes necessary in the
public interest to fill a vacancy, a temporary appointment should be issued to a person who
meets all the requirements for the position to which he is being appointed except the
appropriate civil service eligibility: Provided, That such temporary appointment shall not
exceed twelve months, but the appointee may be replaced sooner if a qualified civil service
eligible becomes available. 8
The Administrative Code of 1987 characterizes the Career Service as:

(1) Open Career positions for appointment to which prior qualification in an appropriate
examination is required;

3. Chairman and Members of Commissions and boards with fixed terms of office and
their personal or confidential staff;

(2) Closed Career positions which are scientific, or highly technical in nature; these
include the faculty and academic staff of state colleges and universities, and scientific
and technical positions in scientific or research institutions which shall establish and
maintain their own merit systems;

4. contractual personnel or those whose employment in the government is in

accordance with a special contract to undertake a specific work or job requiring special
or technical skills not available in the employing agency, to be accomplished within a
specific period, which in no case shall exceed one year and performs or accomplishes
the specific work or job, under his own responsibility with a minimum of direction and
supervision from the hiring agency.

(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant

Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant
Regional Director, Chief of Department Service and other officers of equivalent rank as
may be identified by the Career Executive Service Board, all of whom are appointed by
the President.
(4) Career officers, other than those in the Career Executive Service, who are
appointed by the President, such as the Foreign Service Officers in the Department of
Foreign Affairs;
(5) Commission officers and enlisted men of the Armed Forces which shall maintain a
separate merit system;
(6) Personnel of government-owned or controlled corporations, whether performing
governmental or proprietary functions, who do not fall under the non-career service;
and
(7) Permanent laborers, whether skilled, semi-skilled, or unskilled.

The Non-Career Service, on the other hand, is characterized by:

. . . (1) entrance on bases other than those of the usual tests of merit
and fitness utilized for the career service; and (2) tenure which is
limited to a period specified by law, or which is coterminous with that of
the appointing authority or subject to his pleasure, or which is limited to
the duration of a particular project for which purpose employment was
made.
Included in the non-career service are:
1. elective officials and their personal or confidential staff;
2. secretaries and other officials of Cabinet rank who hold their positions at the pleasure
of the President and their personal confidential staff(s);

5. emergency and seasonal personnel. 10

There is another type of non-career employee:
Casual where and when employment is not permanent but occasional,
unpredictable, sporadic and brief in nature (Caro v. Rilloroza, 102 Phil. 70; Manuel v.
P.P. Gocheco Lumber Co., 96 Phil. 945)
Consider petitioner's record of service:
Service with the government commenced on 2 December 1974 designated as a laborer
holdingemergency status with the NIA Upper Pampanga River Project, R & R
Division. 11 From 24 March 1975 to 31 August 1975, she was a research aide
with temporary status on the same project. On 1 September 1975 to 31 December
1976, she was with the NIA-FES III; R & R Division, then on 1 January 1977 to 31 May
1980, she was with NIA UPR IIS (Upper Pampanga River Integrated Irrigation
Systems) DRD. On 1 June 1980, she went to NIA W.M.E.C.P. (Watershed
Management & Erosion Control Project) retaining the status of temporary employee.
While with this project, her designation was changed to personnel assistant on 5
November 1981; starting 9 July 1982, the status became permanent until the
completion of the project on 31 December 1988. The appointment paper 12 attached to
the OSG's comment lists her status as co-terminus with the Project.
The employment status of personnel hired under foreign assisted projects is
considered co-terminous, that is, they are considered employees for the duration of the
project or until the completion or cessation of said project (CSC Memorandum Circular No.
39, S. 1990, 27 June 1990).
Republic Act No. 6683 seeks to cover and benefits regular, temporary,
casual and emergency employees who have rendered at least a total of two (2)
consecutive years government service.
Resolution No. 87-104 of the CSC, 21 April 1987, provides:

WHEREAS, pursuant to Executive Order No. 966 dated June 22, 1984, the Civil Service
Commission is charged with the function of determining creditable services for retiring
officers and employees of the national government;

a) co-terminous with the project When the appointment is co-existent with the
duration of a particular project for which purpose employment was made or subject to
the availability of funds for the same;

WHEREAS, Section 4 (b) of the same Executive Order No. 966 provides that all previous
services by an officer/employee pursuant to a duly approved appointment to a position in
the Civil Service are considered creditable services, while Section 6 (a) thereof states
that services rendered oncontractual, emergency or casual status are non-creditable
services;

b) co-terminous with the appointing authority when appointment is co-existent with

the tenure of the appointing authority.

WHEREAS, there is a need to clarify the aforesaid provisions inasmuch as some

contractual, emergency or casual employment are covered by contracts or appointments
duly approved by the Commission.
NOW, therefore, the Commission resolved that services rendered on contractual,
emergency or casual status, irrespective of the mode or manner of payment therefor
shall be considered as creditable for retirement purposes subject to the following
conditions: (emphasis provided)
1. These services are supported by approved appointments, official records and/or other
competent evidence. Parties/agencies concerned shall submit the necessary proof of
said services;
2. Said services are on full time basis and rendered prior to June 22, 1984, the effectivity
date of Executive Order No. 966; and
3. The services for the three (3) years period prior to retirement are continuous and fulfill
the service requirement for retirement.
What substantial differences exist, if any, between casual, emergency, seasonal, project,
co-terminous or contractual personnel? All are tenurial employees with no fixed term, noncareer, and temporary. The 12 May 1989 CSC letter of denial 13 characterized herein
petitioner's
employment
as co-terminous with
the NIA
project which
in
turn
was contractual in nature. The OSG says petitioner's status is co-terminous with the
Project. CSC Memorandum Circular No. 11, series of 1991 (5 April 1991) characterizes the
status of a co-terminous employee
(3) Co-terminous status shall be issued to a person whose entrance in the service is
characterized by confidentiality by the appointing authority or that which is subject to his
pleasure or co-existent with his tenure.
The foregoing status (co-terminous) may be further classified into the following:

c) co-terminous with the incumbent when appointment is co-existent with the

appointee, in that after the resignation, separation or termination of the services of the
incumbent the position shall be deemed automatically abolished; and
d) co-terminous with a specific period, e.g. "co-terminous for a period of 3 years" the
appointment is for a specific period and upon expiration thereof, the position is deemed
abolished.
It is stressed, however, that in the last two classifications (c) and (d), what is termed coterminous is the position, and not the appointee-employee. Further, in (c) the security of
tenure of the appointee is guaranteed during his incumbency; in (d) the security of
tenure is limited to a specific period.
A co-terminous
employee is
a
non-career
civil
servant,
like casual and emergency employees. We see no solid reason why the latter are extended
benefits under the Early Retirement Law but the former are not. It will be noted that Rep.
Act No. 6683 expressly extends its benefits for early retirement to regular, temporary,
casual andemergency employees. But specifically excluded from the benefits are
uniformed personnel of the AFP including those of the PC-INP. It can be argued
that, expressio unius est exclusio alterius. The legislature would not have made a specific
enumeration in a statute had not the intention been to restrict its meaning and confine its
terms and benefits to those expressly mentioned 14 or casus omissus pro omisso habendus
est A person, object or thing omitted from an enumeration must be held to have been
omitted intentionally. 15 Yet adherence to these legal maxims can result in incongruities and
in a violation of the equal protection clause of the Constitution.
The case of Fegurin, et al. v. NLRC, et al., 16 comes to mind where, workers belonging to a
work pool, hired and re-hired continuously from one project to another were considered
non-project-regular and permanent employees.
Petitioner Lydia Chua was hired and re-hired in four (4) successive projects during a span
of fifteen (15) years. Although no proof of the existence of a work pool can be assumed, her
service record cannot be disregarded.
Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person shall be deprived of life,
liberty, or property without due process of law, nor shall any person be denied the equal
protection of the laws."

. . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled that the equal protection
clause applies only to persons or things identically situated and does not bar a
reasonable classification of the subject of legislation, and a classification is reasonable
where (1) it is based on substantial distinctions which make real differences; (2) these
are germane to the purpose of the law; (3) the classification applies not only to
present conditions but also to future conditions which are substantially identical to
those of the present; (4) the classification applies only to those who belong to the
same class. 17
Applying the criteria set forth above, the Early Retirement Law would violate the equal
protection clause were we to sustain respondents' submission that the benefits of said
law are to be denied a class of government employees who are similarly situated as
those covered by said law. The maxim of Expressio unius est exclusio alterius should
not be the applicable maxim in this case but the doctrine of necessary
implication which holds that:
No statute can be enacted that can provide all the details involved in its application.
There is always an omission that may not meet a particular situation. What is thought,
at the time of enactment, to be an all-embracing legislation may be inadequate to
provide for the unfolding events of the future. So-called gaps in the law develop as the
law is enforced. One of the rules of statutory construction used to fill in the gap is the
doctrine of necessary implication. The doctrine states that what is implied in a statute
is as much a part thereof as that which is expressed. Every statute is understood, by
implication, to contain all such provisions as may be necessary to effectuate its object
and purpose, or to make effective rights, powers, privileges or jurisdiction which it
grants, including all such collateral and subsidiary consequences as may be fairly and
logically inferred from its terms. Ex necessitate legis. And every statutory grant of
power, right or privilege is deemed to include all incidental power, right or privilege.
This is so because the greater includes the lesser, expressed in the Maxim, in eo plus
sit, simper inest et minus. 18
During the sponsorship speech of Congressman Dragon (re: Early Retirement Law), in
response to Congressman Dimaporo's interpellation on coverage of state university
employees who are extended appointments for one (1) year, renewable for two (2) or three
(3) years, 19 he explained:
This Bill covers only those who would like to go on early retirement and
voluntary separation. It is irrespective of the actual status or nature of
the appointment one received, but if he opts to retire under this, then
he is covered.
It will be noted that, presently Pending in Congress, is House Bill No. 33399 (a proposal to
extend the scope of the Early Retirement Law). Its wording supports the submission that
Rep. Act No. 6683 indeed overlooked a qualified group of civil servants. Sec. 3 of said
House bill, on coverage of early retirement, would provide:

Sec. 3. Coverage. It will cover all employees of the national

government, including government-owned or controlled corporations,
as well as the personnel of all local government units. The benefits
authorized under this Act shall apply to all regular, temporary,
casual, emergency and contractual employees, regardless of age, who
have rendered at least a total of two (2) consecutive years government
service as of the date of separation. The term "contractual employees"
as used in this Act does not include experts and consultants hired by
agencies for a limited period to perform specific activities or services
with definite expected output.
Uniformed personnel of the Armed Forces of the Philippines, including
those of the PC-INP are excluded from the coverage of this Act.
(emphasis supplied)
The objective of the Early Retirement or Voluntary Separation Law is to trim the
bureaucracy, hence, vacated positions are deemed abolished upon early/voluntary
retirement of their occupants. Will the inclusion of co-terminous personnel (like the
petitioner) defeat such objective? In their case, upon termination of the project and
separation of the project personnel from the service, the term of employment is considered
expired, the officefunctus officio. Casual, temporary and contractual personnel serve for
shorter periods, and yet, they only have to establish two (2) years of continuous service to
qualify. This, incidentally, negates the OSG's argument that co-terminous or project
employment is inherently short-lived, temporary and transient, whereas, retirement
presupposes employment for a long period. Here, violation of the equal protection clause of
the Constitution becomes glaring because casuals are not even in the plantilla, and yet,
they are entitled to the benefits of early retirement. How can the objective of the Early
Retirement Law of trimming the bureaucracy be achieved by granting early retirement
benefits to a group of employees (casual) without plantilla positions? There would, in such
a case, be no abolition of permanent positions or streamlining of functions; it would merely
be a removal of excess personnel; but the positions remain, and future appointments can
be made thereto.
Co-terminous or project personnel, on the other hand, who have rendered years of
continuous service should be included in the coverage of the Early Retirement Law, as long
as they file their application prior to the expiration of their term, and as long as they comply
with CSC regulations promulgated for such purpose. In this connection, Memorandum
Circular No. 14, Series of 1990 (5 March 1990) implementing Rep. Act No.
6850, 20 requires, as a condition to qualify for the grant of eligibility, an aggregate or total of
seven (7) years of government service which need not be continuous, in the career or noncareer
service,
whether appointive,
elective,
casual,
emergency, seasonal,
contractualor co-terminous including military and police service, as evaluated and
confirmed by the Civil Service Commission. 21 A similar regulation should be promulgated
for the inclusion in Rep. Act No. 6683 of co-terminous personnel who survive the test of
time. This would be in keeping with the coverage of "all social legislations enacted to
promote the physical and mental well-being of public servants" 22 After all, co-terminous

personnel, are also obligated to the government for GSIS contributions, medicare and
income tax payments, with the general disadvantage of transience.
In fine, the Court believes, and so holds, that the denial by the respondents NIA and CSC
of petitioner's application for early retirement benefits under Rep. Act No. 6683 is
unreasonable, unjustified, and oppressive, as petitioner had filed an application for
voluntary retirement within a reasonable period and she is entitled to the benefits of said
law. While the application was filed after expiration of her term, we can give allowance for
the fact that she originally filed the application on her own without the assistance of
counsel. In the interest of substantial justice, her application must be granted; after all she
served the government not only for two (2) years the minimum requirement under the
law but for almost fifteen (15) years in four (4) successive governmental projects.
WHEREFORE, the petition is GRANTED.
Let this case be remanded to the CSC-NIA for a favorable disposition of petitioner's
application for early retirement benefits under Rep. Act No. 6683, in accordance with the
pronouncements in this decision.

On November 9, 1972, Esso filed a complaint in the Court of First Instance of Manila for the
recovery of the said amount. It contended that the additional one-half percent tax is void
because it is not authorized by the city charter nor by any law (Civil Case No. 88827).
CITY
OF
MANILA
and
CITY
TREASURER, petitioners-appellants,
vs.
JUDGE AMADOR E. GOMEZ of the Court of First Instance of Manila and ESSO
PHILIPPINES, INC.,respondents-appellees.

After hearing, the trial court declared the tax ordinance void and ordered the city treasurer
of Manila to refund to Esso the said tax. The City of Manila and its treasurer appealed to
this Court under Republic Act No. 5440 (which superseded Rule 42 of the Rules of Court).
The only issue is the validity of the tax ordinance or the legality of the additional one-half
percent realty tax.

AQUINO, J.:
This case is about the legality of the additional one-half percent (%) realty tax imposed by
the City of Manila.
Section 64 of the Revised Charter of Manila, Republic Act No. 409, which took effect on
June 18, 1949, fixes the annual realty tax at one and one-half percent (1- %).
On the other hand, section 4 of the Special Education Fund Law, Republic Act No. 5447,
which took effect on January 1, 1969, imposed "an annual additional tax of one per
centum on the assessed value of real property in addition to the real property tax regularly
levied thereon under existing laws" but "the total real property tax shall not exceed a
maximum of three per centrum.
That maximum limit gave the municipal board of Manila the Idea of fixing the realty tax
at three percent. So, by means of Ordinance No. 7125, approved by the city mayor on
December 26, 1971 and effective beginning the third quarter of 1972, the board imposed
an additional one-half percent realty tax. The ordinance reads:
SECTION 1. An additional annual realty tax of one-half percent (1/2%),
or in short a total of three percent (3%) realty tax (1-% pursuant to
the Revised Charter of Manila; 1% per Republic Act No. 5447; and %
per this Ordinance) on the assessed value ... is hereby levied and
imposed.
Esso Philippines, Inc. paid under protest the sum of P16,092.69 as additional one-half
percent realty tax for the third quarter of 1972 on its land and machineries located in
Manila.

The petitioners in their manifestation of March 17, 1981 averred that the said tax ordinance
is still in force; that Ordinance No. 7566, which was enacted on September 10, 1974,
imposed a two percent tax on commercial real properties (like the real properties of Esso
and that that two percent tax plus the one percent tax under the Special Education Fund
Law gives a total of three percent realty tax on commercial properties.
Esso Philippines, Inc., now Petrophil Corporation, in its manifestation of March 2, 1981,
revealed that up to this time it has been paying the additional one-half percent tax and that
from 1975 to 1980 it paid the total sum of P4,206,240.71 as three percent tax on its real
properties.
In this connection, it is relevant to note that section 39(2) of the Real Property Tax Code,
Presidential Decree No. 464, which took effect on June 1, 1974, provides that a city council
may, by ordinance, impose a realty tax "of not less than one half of one percent but not
more than two percent of the assessed value of real property".
Section 41 of the said Code reaffirms the one percent tax on real property for the Special
Education Fund in addition to the basic two percent realty tax.
So, there is no question now that the additional one-half percent realty tax is valid under the
Real Property Tax Code. What is in controversy is the legality of the additional one-half
percent realty tax for the two-year period from the third quarter of 1972 up to the second
quarter of 1974.
We hold that the doctrine of implications in statutory construction sustains the City of
Manila's contention that the additional one-half percent realty tax is sanctioned by the
provision in section 4 of the Special Education Fund Law that "the total real property tax
shall not exceed a maximum of three per centum.
The doctrine of implications means that "that which is plainly implied in the language of a
statute is as much a part of it as that which is expressed" (In re McCulloch Dick, 38 Phil. 41,
45, 90; 82 C.J.S. 632, 73 Am Jur 2nd 404).

While the 1949 Revised Charter of Manila fixed the realty tax at one and a half percent, on
the other hand, the 1968 Special Education Fund Law definitively fixed three percent as
the maximum real property tax of which one percent would accrue to the Special Education
Fund.
The obvious implication is that an additional one-half percent tax could be imposed by
municipal corporations. Inferentially, that law fixed at two percent the realty tax that would
accrue to a city or municipality.
And the fact that the 1974 Real Property Tax Code specifically fixes the real property tax
at two percent confirms the prior intention of the lawmaker to impose two percent as the
realty tax proper. That was also the avowed intention of the questioned ordinance.
In invalidating the ordinance, the trial court upheld the view of Esso Philippines, Inc, that
the Special Education Fund Law refers to a contingency where the application of the
additional one percent realty tax would have the effect of raising the total realty tax to more
than three percent and that it cannot be construed as an authority to impose an additional
realty tax beyond the one percent fixed by the said law.
At first glance, that appears to be a specious or reasonable contention. But the fact remains
that the city charter fixed the realty tax at 1-% and the later law, the Special Education
Fund Law, provides for three percent as the maximum realty tax of which one percent
would be earmarked for the education fund.
The unavoidable inference is that the later law authorized the imposition of an additional
one-half percent realty tax since the contingency referred to by the complaining taxpayer
would not arise in the City of Manila.
It is true, as contended by the taxpayer, that the power of a municipal corporation to levy a
tax should be expressly granted and should not be merely inferred. But in this case, the
power to impose a realty tax is not controverted. What is disputed is the amount thereof,
whether one and one-half percent only or two percent. (See sec. 2 of Rep. Act No. 2264.)
As repeatedly observed, section 4 of the Special Education Fund Law, as confirmed by the
Real Property Tax Code, in prescribing a total realty tax of three percent impliedly
authorizes the augmentation by one-half percent of the pre-existing one and one- half
percent realty tax.
WHEREFORE, the decision of the trial court is reversed and set aside. The complaint of
Esso Philippines, Inc. for recovery of the realty tax paid under protest is dismissed. No
costs.

E. Casus omissus pro omissohabendusest a person or thing omitted from an

enumeration must be held to have been omitted intentionally
PEOPLE
OF
THE
vs.
GUILLERMO MANANTAN, defendant-appellee.
Office
of
the
Solicitor
Padilla Law Office for defendant-appellee.

General

PHILIPPINES, plaintiff-appellant,

for

plaintiff-appellant.

REGALA, J.:
This is an appeal of the Solicitor General from the order of the Court of First Instance of
Pangasinan dismissing the information against the defendant.
The records show that the statement of the case and the facts, as recited in the brief of
plaintiff-appellant, is complete and accurate. The same is, consequently, here adopted, to
wit:
In an information filed by the Provincial Fiscal of Pangasinan in the Court of First
Instance of that Province, defendant Guillermo Manantan was charged with a
violation Section 54 of the Revised Election Code. A preliminary investigation
conducted by said court resulted in the finding a probable cause that the crime
charged as committed by defendant. Thereafter, the trial started upon
defendant's plea of not guilty, the defense moved to dismiss the information on
the ground that as justice of the peace the defendant is one of the officers
enumerated in Section 54 of the Revised Election Code. The lower court denied
the motion to dismiss holding that a justice of the peace is within the purview
Section 54. A second motion was filed by defense counsel who cited in support
thereof the decision of the Court of Appeals in People vs. Macaraeg, (CA-G.R.
No. 15613-R, 54 Off. Gaz., pp. 1873-76) where it was held that a justice of the
peace is excluded from the prohibition of Section 54 of the Revised Election
Code. Acting on this second motion to dismiss, the answer of the prosecution,
the reply of the defense, and the opposition of the prosecution, the lower court
dismissed the information against the accused upon the authority of the ruling in
the case cited by the defense.
Both parties are submitting this case upon the determination of this single question of law:
Is a justice the peace included in the prohibition of Section 54 of the Revised Election
Code?

Section 54 of the said Code reads:

No justice, judge, fiscal, treasurer, or assessor of any province, no officer or
employee of the Army, no member of the national, provincial, city, municipal or
rural police force and no classified civil service officer or employee shall aid any
candidate, or exert any influence in any manner in a election or take part therein,
except to vote, if entitled thereto, or to preserve public peace, if he is a peace
officer.
Defendant-appellee argues that a justice of the peace is not comprehended among the
officers enumerated in Section 54 of the Revised Election Code. He submits the aforecited
section was taken from Section 449 of the Revised Administrative Code, which provided
the following:
SEC. 449. Persons prohibited from influencing elections. No judge of the First
Instance, justice of the peace, or treasurer, fiscal or assessor of any province and
no officer or employee of the Philippine Constabulary, or any Bureau or employee
of the classified civil service, shall aid any candidate or exert influence in any
manner in any election or take part therein otherwise than exercising the right to
vote.
When, therefore, section 54 of the Revised Election Code omitted the words "justice of the
peace," the omission revealed the intention of the Legislature to exclude justices of the
peace from its operation.
The above argument overlooks one fundamental fact. It is to be noted that under Section
449 of the Revised Administrative Code, the word "judge" was modified or qualified by the
phrase "of First instance", while under Section 54 of the Revised Election Code, no such
modification exists. In other words, justices of the peace were expressly included in Section
449 of the Revised Administrative Code because the kinds of judges therein were specified,
i.e., judge of the First Instance and justice of the peace. In Section 54, however, there was
no necessity therefore to include justices of the peace in the enumeration because the
legislature had availed itself of the more generic and broader term, "judge." It was a term
not modified by any word or phrase and was intended to comprehend all kinds of judges,
like judges of the courts of First Instance, Judges of the courts of Agrarian Relations,
judges of the courts of Industrial Relations, and justices of the peace.
It is a well known fact that a justice of the peace is sometimes addressed as "judge" in this
jurisdiction. It is because a justice of the peace is indeed a judge. A "judge" is a public
officer, who, by virtue of his office, is clothed with judicial authority (U.S. v. Clark, 25 Fed.
Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a public officer lawfully
appointed to decide litigated questions according to law. In its most extensive sense the
term includes all officers appointed to decide litigated questions while acting in that

capacity, including justices of the peace, and even jurors, it is said, who are judges of
facts."
A review of the history of the Revised Election Code will help to justify and clarify the above
conclusion.
The first election law in the Philippines was Act 1582 enacted by the Philippine Commission
in 1907, and which was later amended by Act. Nos. 1669, 1709, 1726 and 1768. (Of these
4 amendments, however, only Act No. 1709 has a relation to the discussion of the instant
case as shall be shown later.) Act No. 1582, with its subsequent 4 amendments were later
on incorporated Chapter 18 of the Administrative Code. Under the Philippine Legislature,
several amendments were made through the passage of Acts Nos. 2310, 3336 and 3387.
(Again, of these last 3 amendments, only Act No. 3587 has pertinent to the case at bar as
shall be seen later.) During the time of the Commonwealth, the National Assembly passed
Commonwealth Act No. 23 and later on enacted Commonwealth Act No. 357, which was
the law enforced until June 1947, when the Revised Election Code was approved. Included
as its basic provisions are the provisions of Commonwealth Acts Nos. 233, 357, 605, 666,
657. The present Code was further amended by Republic Acts Nos. 599, 867, 2242 and
again, during the session of Congress in 1960, amended by Rep. Acts Nos. 3036 and
3038. In the history of our election law, the following should be noted:
Under Act 1582, Section 29, it was provided:
No public officer shall offer himself as a candidate for elections, nor shall he be
eligible during the time that he holds said public office to election at any
municipal, provincial or Assembly election, except for reelection to the position
which he may be holding, and no judge of the First Instance, justice of the peace,
provincial fiscal, or officer or employee of the Philippine Constabulary or of the
Bureau of Education shall aid any candidate or influence in any manner or take
part in any municipal, provincial, or Assembly election under the penalty of being
deprived of his office and being disqualified to hold any public office whatsoever
for a term of 5 year: Provide, however, That the foregoing provisions shall not be
construe to deprive any person otherwise qualified of the right to vote it any
election." (Enacted January 9, 1907; Took effect on January 15, 1907.)
Then, in Act 1709, Sec. 6, it was likewise provided:

. . . No judge of the First Instance, Justice of the peace provincial fiscal or officer
or employee of the Bureau of Constabulary or of the Bureau of Education shall
aid any candidate or influence in any manner to take part in any municipal
provincial or Assembly election. Any person violating the provisions of this
section shall be deprived of his office or employment and shall be disqualified to
hold any public office or employment whatever for a term of 5 years, Provided,
however, that the foregoing provisions shall not be construed to deprive any
person otherwise qualified of the right to vote at any election. (Enacted on August
31, 1907; Took effect on September 15, 1907.)
Again, when the existing election laws were incorporated in the Administrative Code on
March 10, 1917, the provisions in question read:
SEC. 449. Persons prohibited from influencing elections. No judge of the First
Instance, justice of the peace, or treasurer, fiscal or assessor of any province and
no officer or employee of the Philippine Constabulary or any Bureau or employee
of the classified civil service, shall aid any candidate or exert influence in any
manner in any election or take part therein otherwise than exercising the right to
vote. (Emphasis supplied)
After the Administrative Code, the next pertinent legislation was Act No. 3387. This Act
reads:
SEC. 2636. Officers and employees meddling with the election. Any judge of
the First Instance, justice of the peace, treasurer, fiscal or assessor of any
province, any officer or employee of the Philippine Constabulary or of the police
of any municipality, or any officer or employee of any Bureau of the classified civil
service, who aids any candidate or violated in any manner the provisions of this
section or takes part in any election otherwise by exercising the right to vote,
shall be punished by a fine of not less than P100.00 nor more than P2,000.00, or
by imprisonment for not less than 2 months nor more than 2 years, and in all
cases by disqualification from public office and deprivation of the right of suffrage
for a period of 5 years. (Approved December 3, 1927.) (Emphasis supplied.)
Subsequently, however, Commonwealth Act No. 357 was enacted on August 22, 1938. This
law provided in Section 48:
SEC. 48. Active Interventation of Public Officers and Employees. No justice,
judge, fiscal, treasurer or assessor of any province, no officer or employee of the
Army, the Constabulary of the national, provincial, municipal or rural police, and
no classified civil service officer or employee shall aid any candidate, nor exert
influence in any manner in any election nor take part therein, except to vote, if
entitled thereto, or to preserve public peace, if he is a peace officer.

This last law was the legislation from which Section 54 of the Revised Election Code was
taken.
It will thus be observed from the foregoing narration of the legislative development or
history of Section 54 of the Revised Election Code that the first omission of the word
"justice of the peace" was effected in Section 48 of Commonwealth Act No. 357 and not in
the present code as averred by defendant-appellee. Note carefully, however, that in the two
instances when the words "justice of the peace" were omitted (in Com. Act No. 357 and
Rep. Act No. 180), the word "judge" which preceded in the enumeration did not carry the
qualification "of the First Instance." In other words, whenever the word "judge" was qualified
by the phrase "of the First Instance", the words "justice of the peace" would follow;
however, if the law simply said "judge," the words "justice of the peace" were omitted.
The above-mentioned pattern of congressional phraseology would seem to justify the
conclusion that when the legislature omitted the words "justice of the peace" in Rep. Act
No. 180, it did not intend to exempt the said officer from its operation. Rather, it had
considered the said officer as already comprehended in the broader term "judge".
It is unfortunate and regrettable that the last World War had destroyed congressional
records which might have offered some explanation of the discussion of Com. Act No. 357
which legislation, as indicated above, has eliminated for the first time the words "justice of
the peace." Having been completely destroyed, all efforts to seek deeper and additional
clarifications from these records proved futile. Nevertheless, the conclusions drawn from
the historical background of Rep. Act No. 180 is sufficiently borne out by reason hid equity.
Defendant further argues that he cannot possibly be among the officers enumerated in
Section 54 inasmuch as under that said section, the word "judge" is modified or qualified by
the phrase "of any province." The last mentioned phrase, defendant submits, cannot then
refer to a justice of the peace since the latter is not an officer of a province but of a
municipality.
Defendant's argument in that respect is too strained. If it is true that the phrase "of any
province" necessarily removes justices of the peace from the enumeration for the reason
that they are municipal and not provincial officials, then the same thing may be said of the
Justices of the Supreme Court and of the Court of Appeals. They are national officials. Yet,
can there be any doubt that Justices of the Supreme Court and of the Court of Appeals are
not included in the prohibition? The more sensible and logical interpretation of the said
phrase is that it qualifies fiscals, treasurers and assessors who are generally known as
provincial officers.

The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendantappellee. Under the said rule, a person, object or thing omitted from an enumeration must
be held to have been omitted intentionally. If that rule is applicable to the present, then
indeed, justices of the peace must be held to have been intentionally and deliberately
exempted from the operation of Section 54 of the Revised Election Code.
The rule has no applicability to the case at bar. The maxim "casus omisus" can operate and
apply only if and when the omission has been clearly established. In the case under
consideration, it has already been shown that the legislature did not exclude or omit
justices of the peace from the enumeration of officers precluded from engaging in partisan
political activities. Rather, they were merely called by another term. In the new law, or
Section 54 of the Revised Election Code, justices of the peace were just called "judges."
In insisting on the application of the rule of "casus omisus" to this case, defendant-appellee
cites authorities to the effect that the said rule, being restrictive in nature, has more
particular application to statutes that should be strictly construed. It is pointed out that
Section 54 must be strictly construed against the government since proceedings under it
are criminal in nature and the jurisprudence is settled that penal statutes should be strictly
interpreted against the state.
Amplifying on the above argument regarding strict interpretation of penal statutes,
defendant asserts that the spirit of fair play and due process demand such strict
construction in order to give "fair warning of what the law intends to do, if a certain line is
passed, in language that the common world will understand." (Justice Holmes, in McBoyle
v. U.S., 283 U.S. 25, L. Ed. 816).
The application of the rule of "casus omisus" does not proceed from the mere fact that a
case is criminal in nature, but rather from a reasonable certainty that a particular person,
object or thing has been omitted from a legislative enumeration. In the present case, and
for reasons already mentioned, there has been no such omission. There has only been a
substitution of terms.
The rule that penal statutes are given a strict construction is not the only factor controlling
the interpretation of such laws; instead, the rule merely serves as an additional, single
factor to be considered as an aid in determining the meaning of penal laws. This has been
recognized time and again by decisions of various courts. (3 Sutherland, Statutory
Construction, p. 56.) Thus, cases will frequently be found enunciating the principle that the
intent of the legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is to be noted that a
strict construction should not be permitted to defeat the policy and purposes of the statute
(Ash Sheep Co. v. U.S., 252 U.S. 159). The court may consider the spirit and reason of a
statute, as in this particular instance, where a literal meaning would lead to absurdity,
contradiction, injustice, or would defeat the clear purpose of the law makers (Crawford,
Interpretation of Laws, Sec. 78, p. 294). A Federal District court in the U.S. has well said:

The strict construction of a criminal statute does not mean such construction of it
as to deprive it of the meaning intended. Penal statutes must be construed in the
sense which best harmonizes with their intent and purpose. (U.S. v. Betteridge
43 F. Supp. 53, 56, cited in 3 Sutherland Statutory Construction 56.)
As well stated by the Supreme Court of the United States, the language of criminal
statutes, frequently, has been narrowed where the letter includes situations inconsistent
with the legislative plan (U.S. v. Katz, 271 U.S. 354; See also Ernest Brunchen,
Interpretation of the Written Law (1915) 25 Yale L.J. 129.)
Another reason in support of the conclusion reached herein is the fact that the purpose of
the statute is to enlarge the officers within its purview. Justices of the Supreme Court, the
Court of Appeals, and various judges, such as the judges of the Court of Industrial
Relations, judges of the Court of Agrarian Relations, etc., who were not included in the
prohibition under the old statute, are now within its encompass. If such were the evident
purpose, can the legislature intend to eliminate the justice of the peace within its orbit?
Certainly not. This point is fully explained in the brief of the Solicitor General, to wit:
On the other hand, when the legislature eliminated the phrases "Judge of First
Instance" and justice of the peace", found in Section 449 of the Revised
Administrative Code, and used "judge" in lieu thereof, the obvious intention was
to include in the scope of the term not just one class of judges but all judges,
whether of first Instance justices of the peace or special courts, such as judges of
the Court of Industrial Relations. . . . .
The weakest link in our judicial system is the justice of the peace court, and to so
construe the law as to allow a judge thereof to engage in partisan political
activities would weaken rather than strengthen the judiciary. On the other hand,
there are cogent reasons found in the Revised Election Code itself why justices
of the peace should be prohibited from electioneering. Along with Justices of the
appellate courts and judges of the Court of First Instance, they are given
authority and jurisdiction over certain election cases (See Secs. 103, 104, 117123). Justices of the peace are authorized to hear and decided inclusion and
exclusion cases, and if they are permitted to campaign for candidates for an
elective office the impartiality of their decisions in election cases would be open
to serious doubt. We do not believe that the legislature had, in Section 54 of the
Revised Election Code, intended to create such an unfortunate situation. (pp.
708, Appellant's Brief.)
Another factor which fortifies the conclusion reached herein is the fact that the
administrative or executive department has regarded justices of the peace within the
purview of Section 54 of the Revised Election Code.

In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary of Justice, etc. (G.R.
No. L-12601), this Court did not give due course to the petition for certiorari and prohibition
with preliminary injunction against the respondents, for not setting aside, among others,
Administrative Order No. 237, dated March 31, 1957, of the President of the Philippines,
dismissing the petitioner as justice of the peace of Carmen, Agusan. It is worthy of note that
one of the causes of the separation of the petitioner was the fact that he was found guilty in
engaging in electioneering, contrary to the provisions of the Election Code.
Defendant-appellee calls the attention of this Court to House Bill No. 2676, which was filed
on January 25, 1955. In that proposed legislation, under Section 56, justices of the peace
are already expressly included among the officers enjoined from active political
participation. The argument is that with the filing of the said House Bill, Congress impliedly
acknowledged that existing laws do not prohibit justices of the peace from partisan political
activities.
The argument is unacceptable. To begin with, House Bill No. 2676 was a proposed
amendment to Rep. Act No. 180 as a whole and not merely to section 54 of said Rep. Act
No. 180. In other words, House Bill No. 2676 was a proposed re-codification of the existing
election laws at the time that it was filed. Besides, the proposed amendment, until it has
become a law, cannot be considered to contain or manifest any legislative intent. If the
motives, opinions, and the reasons expressed by the individual members of the legislature
even in debates, cannot be properly taken into consideration in ascertaining the meaning of
a statute (Crawford, Statutory Construction, Sec. 213, pp. 375-376), a fortiori what weight
can We give to a mere draft of a bill.
On law reason and public policy, defendant-appellee's contention that justices of the peace
are not covered by the injunction of Section 54 must be rejected. To accept it is to render
ineffective a policy so clearly and emphatically laid down by the legislature.
Our law-making body has consistently prohibited justices of the peace from participating in
partisan politics. They were prohibited under the old Election Law since 1907 (Act No. 1582
and Act No. 1709). Likewise, they were so enjoined by the Revised Administrative Code.
Another which expressed the prohibition to them was Act No. 3387, and later, Com. Act No.
357.
Lastly, it is observed that both the Court of Appeals and the trial court applied the rule of
"expressio unius, est exclusion alterius" in arriving at the conclusion that justices of the
peace are not covered by Section 54. Said the Court of Appeals: "Anyway, guided by the
rule of exclusion, otherwise known as expressio unius est exclusion alterius, it would not be
beyond reason to infer that there was an intention of omitting the term "justice of the peace
from Section 54 of the Revised Election Code. . . ."
The rule has no application. If the legislature had intended to exclude a justice of the peace
from the purview of Section 54, neither the trial court nor the Court of Appeals has given the

reason for the exclusion. Indeed, there appears no reason for the alleged change. Hence,
the rule of expressio unius est exclusion alterius has been erroneously applied. (Appellant's
Brief, p. 6.)
Where a statute appears on its face to limit the operation of its provisions to
particular persons or things by enumerating them, but no reason exists why other
persons or things not so enumerated should not have been included, and
manifest injustice will follow by not so including them, the maxim expressio unius
est exclusion alterius, should not be invoked. (Blevins v. Mullally 135 p. 307, 22
Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered by the trial court should be
set aside and this case is remanded for trial on the merits.

SPS.
NEREO
&
NIEVA
DELFINO, Petitioners,
vs.
ST. JAMES HOSPITAL, INC., and THE HONORABLE RONALDO ZAMORA,
EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT. Respondents.
RESOLUTION
CHICO-NAZARIO, J.:
Before Us for Resolution is the Motion for Reconsideration of private respondent St. James
Hospital, Inc., seeking the reversal of Our Decision dated 5 September 2006. Respondent
assails the Decision on the ground that the Court had erroneously interpreted the 1991
Comprehensive Land Use Plan (CLUP) or the Comprehensive Zoning Ordinance of the
Municipality of Santa Rosa, Laguna, in ruling that the St. James Hospital is a nonconforming structure under the 1991 Zoning Ordinance and that the expansion of the St.
James Hospital into a four-storey, forty-bed capacity medical institution within the Mariquita
Pueblo Subdivision is prohibited under the provisions of the 1991 Zoning Ordinance.
Moreover, respondent now contends that the case must now be decided in accordance with
the latest Zoning Ordinance passed in 1999 or the Santa Rosa Zoning Ordinance which
was only submitted as evidence in the instant Motion for Reconsideration.
Respondent now claims that the legislative history of the 1991 Zoning Ordinance shows
that commercial and institutional uses were expressly allowed in Sec. 2, par. 1 of said
Ordinance as it retained uses that are commercial and institutional as well as recreational
in character and those for the maintenance of ecological balance. Thus, respondent

postulates that even if parks, playgrounds and recreation centers which were expressly
provided for in the 1981 Zoning Ordinance under letters (h) and (k) were excluded in the
enumeration in the 1991 Zoning Ordinance, the same cannot, by any stretch of logic, be
interpreted to mean that they are no longer allowed. On the contrary, respondent explains
that what appears is the fact that parks, playgrounds, and recreation centers are deemed to
have been covered by Sec. 2, par. 1 of the 1991 Zoning Ordinance which speaks of "x x x
other spaces designed for recreational pursuit and maintenance of ecological balance x x
x." Hence, respondent concludes that the same reading applies in the non-inclusion of the
words hospitals, clinics, school, churches and other places of worship, and drugstores
which cannot be interpreted to mean that the aforesaid uses are to be deemed nonconforming under the 1991 Zoning Ordinance as these uses are allegedly covered by the
clause allowing for institutional and commercial uses.
Arising from this interpretation, respondent maintains that the Court erred in applying Sec.
1 of Article X of the 1991 Zoning Ordinance which pertains only to existing non-conforming
uses and buildings, since, according to respondent, the St. James Hospital and its
expansion are consistent with the uses allowed under the zoning ordinance.

mentioned3 . Thus, in interpreting the whole of Section 2, Article VI, it must be understood
that in expressly enumerating the allowable uses within a residential zone, those not
included in the enumeration are deemed excluded. Hence, since hospitals, among other
things, are not among those enumerated as allowable uses within the residential zone, the
only inference to be deduced from said exclusion is that said hospitals have been
deliberately eliminated from those structures permitted to be constructed within a
residential area in Santa Rosa, Laguna.
Furthermore, according to the rule of casus omissus in statutory construction, a thing
omitted must be considered to have been omitted intentionally. Therefore, with the omission
of the phrase "hospital with not more than ten capacity" in the new Zoning Ordinance, and
the corresponding transfer of said allowable usage to another zone classification, the only
logical conclusion is that the legislative body had intended that said use be removed from
those allowed within a residential zone. Thus, the construction of medical institutions, such
as St. James Hospital, within a residential zone is now prohibited under the 1991 Zoning
Ordinance.
xxxx

To address this matter, we deem it necessary to reiterate our discussion in our Decision
dated 5 September 2006, wherein we have thoroughly examined the pertinent provisions of
the 1981 and 1991 Zoning Ordinances, to wit:
Likewise, it must be stressed at this juncture that a comprehensive scrutiny of both
Ordinances will disclose that the uses formerly allowed within a residential zone under the
1981 Zoning Ordinance such as schools, religious facilities and places of worship, and
clinics and hospitals have now been transferred to the institutional zone under the 1991
Zoning Ordinance1 . This clearly demonstrates the intention of the Sangguniang Bayan to
delimit the allowable uses in the residential zone only to those expressly enumerated under
Section 2, Article VI of the 1991 Zoning Ordinance, which no longer includes hospitals.
It is lamentable that both the Office of the President and the Court of Appeals gave undue
emphasis to the word "institutional" as mentioned in Section 2, Article VI of the 1991 Zoning
Ordinance and even went through great lengths to define said term in order to include
hospitals under the ambit of said provision. However, they neglected the fact that under
Section 4, Article VI of said Ordinance 2 , there is now another zone, separate and distinct
from a residential zone, which is classified as "institutional", wherein health facilities, such
as hospitals, are expressly enumerated among those structures allowed within said zone.
Moreover, both the Office of the President and the appellate court failed to consider that
any meaning or interpretation to be given to the term "institutional" as used in Section 2,
Article VI must be correspondingly limited by the explicit enumeration of allowable uses
contained in the same section. Whatever meaning the legislative body had intended in
employing the word "institutional" must be discerned in light of the restrictive enumeration
in the said article. Under the legal maxim expression unius est exclusion alterius, the
express mention of one thing in a law, means the exclusion of others not expressly

Having concluded that the St. James Hospital is now considered a non-conforming
structure under the 1991 Zoning Ordinance, we now come to the issue of the legality of the
proposed expansion of said hospital into a four-storey, forty-bed medical institution. We
shall decide this said issue in accordance with the provisions of the 1991 Zoning Ordinance
relating to non-conforming buildings, the applicable law at the time of the proposal. As
stated in Section 1 of Article X of the 1991 Zoning Ordinance:
Section 1. EXISTING NON-CONFORMING USES AND BUILDINGS. The lawful uses of
any building, structure or land at the point of adoption or amendment of this Ordinance may
be continued, although such does not conform with the provisions of this Ordinance.
1. That no non-conforming use shall be enlarged or increased or extended to occupy
a greater area or land that has already been occupied by such use at the time of the
adoption of this Ordinance, or moved in whole or in part to any other portion of the lot
parcel of land where such non-conforming use exist at the time of the adoption of this
Ordinance.4 (Emphasis ours.)
It is clear from the abovequoted provision of the 1991 Zoning Ordinance that the expansion
of a non-conforming building is prohibited. Hence, we accordingly resolve that the
expansion of the St. James Hospital into a four-storey, forty-bed capacity medical institution
within the Mariquita Pueblo Subdivision as prohibited under the provisions of the 1991
Zoning Ordinance.
From our discussion above, it is clear that the position of respondent is erroneous. 1awp+
+i1 As stated in our Decision, a comprehensive scrutiny of both zoning ordinances will

disclose that the uses formerly allowed within a residential zone under the 1981 Zoning
Ordinance such as schools, religious facilities and places of worship, and clinics and
hospitals have been transferred to the institutional zone under the 1991 Zoning Ordinance.
This clearly indicates that the allowable uses in the residential zone have been delimited
only to those expressly enumerated under Section 2, Article VI of the 1991 Zoning
Ordinance, which no longer includes hospitals.
With respect to respondents claim that the controversy must now be decided in light of
latest Zoning Ordinance passed in 1999 or the Santa Rosa Zoning Ordinance, it must be
stressed at this point that the present case arose in 1994 when respondent St. James
Hospital, Inc., applied for a permit with the Housing and Land Use Regulatory Board
(HLURB) to expand its hospital into a four-storey, forty-bed capacity medical institution, at
which time, the zoning ordinance in effect was the 1991 Zoning Ordinance. It is a wellsettled rule that the law in force at the time of the occurrence of the cause of action is the
applicable law notwithstanding its subsequent amendment or repeal. 5 Hence, in resolving
the instant case, the zoning ordinance to be used in interpreting the legality or illegality of
said expansion is that which was in full force and effect at the time of the application for
expansion which is the 1991 Zoning Ordinance, regardless of its subsequent amendment
or repeal by the passage of the 1999 Zoning Ordinance.
Moreover, pleadings, arguments and evidence were submitted by both parties as regards
the provisions of the 1991 Zoning Ordinance only. Apparently, the 1999 Zoning Ordinance
was already enacted and in effect by the time the petitioners appealed their case to this
Court on 7 February 2005. Petitioners, however, in their appeal, consistently maintained
their argument that the expansion undertaken by the respondent in 1994 violated the 1991
Zoning Ordinance, and respondent likewise limited itself to the defense that it had complied
therewith. It bears to emphasize that respondent called the attention of this Court to the
enactment of the 1999 Zoning Ordinance and asserted its compliance with this latest
zoning ordinance only in its Motion for Reconsideration before this Court. Points of law,
theories, issues and arguments not adequately brought to the attention of the trial court
need not be, and ordinarily will not be, considered by a reviewing court as they cannot be
raised for the first time on appeal because this would be offensive to the basic rules of fair
play, justice and due process.6 This rule holds even more true when the points of law,
theories, issues and arguments are belatedly raised for the first time in the motion for
reconsideration of this Courts decision.
Accordingly, the Motion for Reconsideration of respondent St. James Hospital, Inc., is
hereby DENIED. However, this is without prejudice to respondent St. James Hospital, Inc.s
reapplication for expansion in accordance with the requirements under zoning ordinances
now in effect.

They alleged that sometime in 1960, or after J. M. Tuason & Co., Inc. had illegally entered
upon that land, they discovered that it had been fraudulently or erroneously included in
OCT No. 735 of the Registry of Deeds of Rizal and that it was registered in the names of
defendants Mariano, Teresa, Juan, Demetrio and Augusta all surnamed Tuason pursuant to
a decree issued on July 6. 1914 in Case No. 7681 of the Court of Land Registration.

F. STARE DECISIS ( Follow past precedents and do not disturb what has been
settled)
J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO A. TUASON, TERESA
TUASON,
CELSO S. TUASON
and
SEVERO A.
TUASON, petitioners,
vs.
HON. HERMINIO C. MARIANO, Presiding Judge of the Court of First Instance of Rizal
MANUELA AQUIAL, MARIA AQUIAL, Spouses JOSE M. CORDOVA and SATURNINA
C. CORDOVA, respondents.
Sison Law Office and Senensio O. Ortile for petitioners.
Hill & Associates Law Office for respondents Aquials.

They further alleged that transfer certificates of title, derived from OCT No. 735, were
issued to defendants J. M. Tuason & Co., Inc., University of the Philippines and National
Waterworks and Sewerage Authority (Nawasa) which leased a portion of its land to
defendant Capitol Golf Club.
Plaintiffs Aquial prayed that OCT No. 735 and the titles derived therefrom be declared void
due to certain irregularities in the land registration proceeding. They asked for damages.
Defendant J.M. Tuason & Co., Inc. filed a motion to dismiss on the grounds of lack of
jurisdiction, improper venue, prescription, laches and prior judgment. The plaintiffs opposed
that motion. The lower court denied it. The grounds of the motion to dismiss were pleaded
as affirmative defenses in the answer of defendants Tuason and J. M. Tuason & Co., Inc.
They insisted that a preliminary hearing be held on those defenses.
On January 25, 1967, the spouses Jose M. Cordova and Saturnina C. Cordova, who had
bought eleven hectares of the disputed land from the plaintiffs, were allowed to intervene in
the case.

Antonio E. Pesigan for respondents Cordovas.

AQUINO, J.:
This is another litigation regarding the validity of the much controverted Original Certificate
of Title No. 735 covering the Santa Mesa and D Estates of the Tuason mayorazgo or Entail
with areas of 877 (879) and 1,625 hectares, respectively (Barrette vs. Tuason, 50 Phil. 888;
Benin case, infra).
On October 1, 1965, Manuela Aquial and Maria Aquial filed a complaint in forma pauperis in
the Court of First Instance of Rizal Pasig Branch X, wherein they prayed that they be
declared the owners of a parcel of land located at Balara, Marikina, Rizal (now Quezon
City) and bounded on the north by Sapang Mapalad, on the south by the land of Eladio,
Tiburcio on the east by Sapang Kolotkolotan, and on the west by Sapang Kuliat The land,
which has an area of three hundred eighty-three quiones was allegedly acquired by their
father by means of a Spanish title issued to him on May 10, 1877 (Civil Case No. 8943).

On September 5, 1970, the lower court issued an order requiring the parties the Register of
Deeds of Rizal to produce in court on October 16, 1970 OCT No. 735 and certain transfer
certificates of title derived from that first or basic title. Later, the court required the
production in court of the plan of the land covered by OCT No. 735 allegedly for the
purpose of determining whether the lands claimed by the plaintiffs and the intervenors are
included therein.
On February 11, 1971, the Tuason and J. M. Tuason & Co., Inc. filed the instant civil
actions of certiorari and prohibition praying, inter alia, that the trial court be ordered to
dismiss the complaint and enjoined from proceeding in the said case. After the petitioners
had filed the proper bond, a writ of preliminary injunction was issued. Respondents Aquial
and Cordova answered the petition. The parties, except the Aquials, filed memoranda in
lieu of oral argument.

The issue is whether OCT No. 735 and the titles derived therefrom can be questioned at
this late hour by respondents Aquial and Cordova. The supposed irregularities in the land
registration proceeding, which led to the issuance of the decree upon which OCT. No. 735
was based, are the same issues raised in Civil Cases Nos. 3621, 3622 and 3623 of the
lower court. The 1965 decision of Judge Eulogio Mencias in those cases, in validating OCT
No. 735, is annexed to the complaint of the Aquials. It is cited by them to support their
support their action and it might have encouraged them to ventilate their action in court.
On appeal to this Court, that decision was reversed and the validity of OCT No. 735 and
the titles derived therefrom was once more upheld. (Benin vs. Tuason, L-26127, Alcantara
vs. Tuason, L-26128 and Pili vs. Tuason, L-26129, all decided on June 28, 1974, 57 SCRA
531).
The ruling in the Benin, Alcantara and Pili cases was applied in Mara, Inc. vs. Estrella, L40511, July 25, 1975, 65 SCRA 471. That ruling is simply a reiteration or confirmation of the
holding in the following cases directly or incidentally sustaining OCT No. 735: Bank of the
P. I. vs. Acua, 59 Phil. 183; Tiburcio vs. PHHC, 106 Phil. 447;Galvez and Tiburcio vs.
Tuason y de la Paz, 119 Phil. 612; Alcantara vs. Tuason, 92 Phil. 796; Santiago vs. J. M.
Tuason & Co., Inc. 110 Phil. 16; J. M. Tuason & Co., Inc. vs. Bolaos, 95 Phil. 106; J. M.
Tuason & Co., Inc. vs. Santiago, 99 Phil. 615; J. M. Tuason & Co., Inc. vs. De Guzman, 99
Phil. 281; J. M. Tuason & Co., Inc. vs. Aguirre, 117 Phil. 110; J. M. Tuason & Co., Inc. vs.
Macalindong, 116 Phil. 1227; J. M. Tuason & Co., Inc. vs. Magdangal, 114 Phil. 42; Varsity
Hills, Inc. vs. Navarro, L-30889, February 29, 1972, 43 SCRA 503, and People's Homesite
and Housing Corporation vs. Mencias, L-24114, August 16, 1967, 20 SCRA 1031.
Considering the governing principle of stare decisis et non quieta movere (follow past
precedents and do not disturb what has been settled) it becomes evident that respondents
Aquial and Cordova cannot maintain their action in Civil Case No. 8943 without eroding the
long settled holding of the courts that OCT No. 735 is valid and no longer open to attack.

TALA
REALTY
SERVICES
CORP.,
vs.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent.

petitioner,

SANDOVAL-GUTIERREZ, J.:
Stare decisis et non quieta movere. This principle of adherence to precedents has not lost
its luster and continues to guide the bench in keeping with the need to maintain stability in
the law.
The principle finds application to the case now before us.

It is against public policy that matters already decided on the merits be relitigated again and
again, consuming the court's time and energies at the expense of other litigants: Interest rei
publicae ut finis sit litium." (Varsity Hills, Inc. vs. Navarro, supra).
Finding the petition for certiorari and prohibition to be meritorious, the trial court is directed
to dismiss Civil Case No. 8943 with prejudice and without costs. No costs.

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Resolution dated December 23, 1997 of the Court of
Appeals in C.A.-G.R. SP No. 44257.
Under Republic Act No. 337 (General Banking Act), commercial banks are allowed to invest
in real property subject to the limitation that:
"Sec. 25. Any commercial bank may purchase, hold and convey real estate for
the following purposes:
"(a) such as shall be necessary for its immediate accommodation in the
transaction of its business: Provided, however, that the total investment in such

real estate and improvements thereof, including bank equipment, shall not
exceed fifty percent (50%) of net worth x x x x x x ." (Emphasis Ours)
Investments in real estate made by savings and mortgage banks are likewise subject to the
same limitation imposed by the aforequoted provision.1
Bound by such limitation, the management of Banco Filipino Savings and Mortgage Bank
(Banco Filipino for brevity) devised means to pursue its endeavor to expand its banking
operations. To this end, Tala Realty Services Corporation (Tala for brevity) was organized
by Banco Filipino's four (4) major stockholders namely, Antonio Tiu, Tomas B. Aguirre,
Nancy Lim Ty and Pedro B. Aguirre. Tala and Banco Filipino agreed on this scheme Tala
would acquire the existing branch sites and new branch sites which it would lease out to
Banco Filipino.
On August 25, 1981, pursuant to their agreement, Banco Filipino sold its eleven (11) branch
sites all over the country to Tala. In turn Tala leased those sites to Banco Filipino under
contracts of lease executed by both parties on the same day.
Years after, dissension between Tala and Banco Filipino arose in connection with their
lease contracts resulting in a chain of lawsuits for illegal detainer. Some of these cases are
still pending in courts. At present, three of the illegal detainer cases have been passed
upon by the Supreme Court.

with rental escalation of 10% per year; and advance deposit equivalent to rents for four
months, plus a goodwill of P500,000.00.
Banco Filipino did not comply and in April 1994, it stopped paying rents.
In its letter dated April 14, 1994, Tala notified Banco Filipino that the lease contract would
no longer be renewed; that it should pay its back rentals, including goodwill, deposit and
adjusted rentals in the amount of P2,059, 540.00 and vacate the premises on or before
April 30, 1994.3 In its second letter dated May 2, 1994, Tala demanded upon Banco Filipino
to pay the rents and vacate the premises.4
In answer to Tala's complaint, Banco Filipino denied having executed the lease contract
providing for a term of eleven (11) years; claiming that its contract with Tala is for twenty
(20) years, citing the Contract of Lease executed on August 25, 1981 providing:
"That the term of this LEASE shall be for a period of twenty (20) years,
renewable for another period of twenty (20) years at the option of the LESSEE
under terms and conditions mutually agreeable to both parties."5

The case at bar, involving Banco Filipino's Iloilo City branch site, is one of those cases for
illegal detainer filed by Tala against Banco Filipino based on these grounds: (a) expiration
of the period of lease and (b) non-payment of rentals.

On July 1, 1996, the MTC rendered judgment holding that the eleven (11)-year lease
contract superseded the twenty (20)-year lease contract. Thus, the court ordered the
ejectment of Banco Filipino from the premises on these grounds: expiration of the eleven
(11)-year lease contract and non-payment of the adjusted rental. Banco Filipino was
likewise ordered to pay back rentals in the amount of P79,050.00 corresponding to the
period from May 1994 up to the time that it shall have surrendered to Tala possession of
the premises.6

The facts of the present controversy may be summed up as follows:

On appeal, the Regional Trial Court, Branch 26, Iloilo City affirmed the MTC decision.7

In its complaint in Civil Case No. 51(95) filed with the Municipal Trial Court (MTC) of Iloilo
City on March 29, 1995, Tala alleged that on the basis of a contract of lease executed on
August 25, 1981 which provides in part:

Banco Filipino elevated the RTC decision to the Court of Appeals which affirmed the
challenged decision.8

"1. That the term of this LEASE shall be for a period of eleven (11) years,
renewable for another period of nine (9) years at the option of the LESSEE under
terms and conditions mutually agreeable to both parties."2,
its contract with Banco Filipino expired on August 31, 1992. However, Banco Filipino has
continued to occupy the premises even after the expiration of the lease.
On June 2, 1993, Tala imposed upon Banco Filipino the following terms and conditions: that
the bank should pay P70,050.00 as monthly rental retroactive as of September 1, 1992,

Banco Filipino sought for a reconsideration of the Court of Appeals Decision, invoking in its
Supplemental Motion for Reconsideration the Decisions of the same court in two of the
other illegal detainer cases initiated by Tala against Banco Filipino, docketed as CA-G.R.
SP Nos. 39104 and 40524. In these cases, the Court of Appeals upheld the validity of the
lease contract providing for a period of twenty (20) years. Finding Banco Filipino's motions
for reconsideration meritorious, the Court of Appeals issued the herein assailed Resolution,
thus:
"This Court agrees with petitioner that its Decision of August 30, 1996 in CA-G.R.
SP No. 39104, having been declared final and executory by no less than the
Supreme Court in G.R. No. 127586, now constitutes the law of the case between

the parties in the present case. Accordingly, this Court is not at liberty to
disregard or abandon the same at will without wreaking havoc on said legal
principle.
"WHEREFORE, petitioner's motion for reconsideration and supplemental motion
for reconsideration are hereby GRANTED. Accordingly, the Court's Decision of
August 25, 1997 is hereby SET ASIDE and, in lieu thereof, a new one is
rendered REVERSING and SETTING ASIDE the appealed decision and
DISMISSING the complaint for ejectment filed against herein petitioner in the
Municipal Trial Court of Iloilo City."9
Tala now comes to this Court on the lone ground that:
"The Honorable Court of Appeals erred in considering that principle of 'the law of
the case' finds application in the instant case."10
Petitioner Tala contends that its complaint for illegal detainer should not have been
dismissed by the Court of Appeals on the basis of its decision in CA-G.R. SP No. 39104.
Petitioner claims that this decision is not a precedent.

"Second. Petitioner Tala Realty insists that its eleven (11)-year lease contract
controls. We agree with the MTC and the RTC, however, that the eleven (11)year contract is a forgery because (1) Teodoro O. Arcenas, then Executive VicePresident of private respondent Banco Filipino, denied having signed the
contract; (2) the records of the notary public who notarized the said contract, Atty.
Generoso S. Fulgencio, Jr., do not include the said document; and (3) the said
contract was never submitted to the Central Bank as required by the latter's rules
and regulations (Rollo, pp. 383-384.).
"Clearly, the foregoing circumstances are badges of fraud and simulation that
rightly make any court suspicious and wary of imputing any legitimacy and
validity to the said lease contract.
"Executive Vice-President Arcenas of private respondent Banco Filipino testified
that he was responsible for the daily operations of said bank. He denied having
signed the eleven (11)-year contract and reasoned that it was not in the interest
of Banco Filipino to do so (Rollo, p. 384). The fact was corroborated by Josefina
C. Salvador, typist of Banco Filipino's Legal Department, who allegedly witnessed
the said contract and whose initials allegedly appear in all the pages thereof. She
disowned the said marginal initials (id., p. 385).

The first in the series of illegal detainer cases filed by Tala against the bank which reached
the Supreme Court is CA-G.R. SP No. 39104. This involves the site in Malabon. The Court
of Appeals held that Banco Filipino cannot be ejected from the subject premises
considering that the twenty (20)-year lease contract has not expired. Tala elevated this
Court of Appeals decision to the Supreme Court in G.R. No. 127586. In a Resolution dated
March 12, 1997, the Supreme Court dismissed Tala's petition as the "appeal" was not
timely perfected, thus:

"The Executive Judge of the RTC supervises a notary public by requiring

submission to the Office of the Clerk of Court of his monthly notarial report with
copies of acknowledged documents thereto attached. Under this procedure and
requirement of the Notarial Law, failure to submit such notarial report and copies
of acknowledged documents has dire consequences including the possible
revocation of the notary's notarial commission.

"Considering the manifestation dated January 31, 1997 filed by petitioner that it is
no longer pursuing or holding in abeyance recourse to the Supreme Court for
reasons stated therein, the Court Resolved toDECLARE THIS CASE
TERMINATED and DIRECT the Clerk of Court to INFORM the parties that the
judgment sought to be reviewed has become final and executory, no appeal
therefrom having been timely perfected."11

"The fact that the notary public who notarized petitioner Tala Realty's alleged
eleven (11)-year lease contract did not retain a copy thereof for submission to the
Office of the Clerk of Court of the proper RTC militates against the use of said
document as a basis to uphold petitioner's claim. The said alleged eleven (11)year lease contract was not submitted to the Central Bank whose strict
documentation rules must be complied with by banks to ensure their continued
good standing. On the contrary, what was submitted to the Central Bank was the
twenty (20)-year lease contract.

We agree with petitioner Tala that the decision of the Court of Appeals in CA-G.R. SP No.
39104 holding that the twenty (20)-year contract of lease governs the contractual
relationship between the parties is not a precedent considering that the Supreme Court in
G.R. No. 127586 did not decide the case on the merits. The petition was dismissed on
mere technicality. It is significant to note, however, that the Supreme Court in G.R. No.
129887,12through Mr. Justice Sabino R. de Leon, resolved the identical issue raised in the
present petition, i.e., whether the period of the lease between the parties is twenty (20) or
eleven (11) years, thus:

"Granting arguendo that private respondent Banco Filipino deliberately omitted to

submit the eleven (11)-year contract to the Central Bank, we do not consider that
fact as violative of the res inter alios acta aliis non nocet (Section 28, Rule 130,
Revised Rules of Court provides, viz.: 'Sec. 28. Admission by third party - The
rights of a party cannot be prejudiced by an act, declaration or omission of
another, except as hereinafter provided.'; Compania General de Tabacos v.
Ganson, 13 Phil. 472, 477 [1909]) rule in evidence. Rather, it is an indication of
said contract's inexistence.

"It is not the eleven (11)-year lease contract but the twenty (20)-year lease
contract which is the real and genuine contract between petitioner Tala Realty
and private respondent Banco Filipino. Considering that the twenty (20)-year
lease contract is still subsisting and will expire in 2001 yet, Banco Filipino
is entitled to the possession of the subject premises for as long as it pays
the agreed rental and does not violate the other terms and conditions
thereof (Art. 1673, New Civil Code)." (Emphasis supplied)
The validity of the twenty (20) year lease contract was further reinforced on June 20, 2000
when the First Division of this Court, this time, speaking through Madame Justice Consuelo
Ynares-Santiago, rendered a Decision in G.R. No. 137980, likewise upholding the twenty
(20)-year lease contract, thus:
"In light of the foregoing recent Decision of this Court (G.R. No. 129887), we
have no option but to uphold the twenty-year lease contract over the eleven-year
contract presented by petitioner. It is the better practice that when a court has
laid down a principle of law as applicable to a certain state of facts, it will adhere
to that principle and apply it to all future cases where the facts are substantially
the same. 'Stare decisis et non quieta movere.'
"That the principle of stare decisis applies in the instant case, even though the
subject property is different, may be gleaned from the pronouncement in Negros
Navigation Co., Inc. vs. Court of Appeals [G.R. No. 110398, 281 SCRA 534,
542-543 (1997)], to wit
'Petitioner criticizes the lower court's reliance on the Mecenas case,
arguing that although this case arose out of the same incident as that
involved in Mecenas, the parties are different and trial was conducted
separately. Petitioner contends that the decision in this case should be
based on the allegations and defenses pleaded and evidence adduced
in it, or, in short, on the record of this case.
'The contention is without merit. What petitioner contends may be true
with respect to the merits of the individual claims against petitioner but
not as to the cause of the sinking of its ship on April 22, 1980 and its
liability for such accident, of which there is only one truth. Otherwise,
one would be subscribing to the sophistry: truth on one side of the
Pyrenees, falsehood on the other!
'Adherence to the Mecenas case is dictated by this Court's policy of
maintaining stability in jurisprudence in accordance with the legal
maxim 'stare decisis et non quieta movere' (Follow past precedents
and do not disturb what has been settled.) Where, as in this case, the
same questions relating to the same event have been put forward by

parties similarly situated as in a previous case litigated and decided by

a competent court, the rule of stare decisis is a bar to any attempt to
relitigate the same issue (J.M. Tuason & Corp. v. Mariano, 85 SCRA
644 [1978]). In Woulfe v. Associated Realties Corporation (130 N.J. Eq.
519, 23 A. 2d 399, 401 [1942]), the Supreme Court of New Jersey held
that where substantially similar cases to the pending case were
presented and applicable principles declared in prior decisions, the
court was bound by the principle of stare decisis.Similarly, in State ex
rel. Tollinger v. Gill (75 Ohio App., 62 N.E. 2d 760 [1944]), it was held
that under the doctrine of stare decisis a ruling is final even as to
parties who are strangers to the original proceeding and not bound by
the judgment under the res judicata doctrine. The Philadelphia court
expressed itself in this wise: 'Stare decisis simply declares that, for the
sake of certainty, a conclusion reached in one case should be applied
to those which follow, if the facts are substantially the same, even
though the parties may be different' (Heisler v. Thomas Colliery Co.,
274 Pa. 448, 452, 118A, 394, 395 [1922]. Manogahela Street Ry, Co. v.
Philadelphia Co., 350 Pa 603, 39 A. 2d 909, 916 [1944]; In re Burtt's
Estate, 353 Pa. 217, 4 A. 2d 670, 677 [1945]). Thus, in J.M. Tuason v.
Mariano, supra, this Court relied on its rulings in other cases involving
different parties in sustaining the validity of a land title on the principle
of 'stare decisis et non quieta movere.'(underscoring, Ours)
"Here, therefore, even if the property subject of the Decision of G.R. No. 129887
is located in Urdaneta, Pangasinan while that in the instant case is located in
Davao, we can very well apply the conclusion in G.R. No. 129887 that it is the
twenty-year lease contract which is controlling inasmuch as not only are the
parties the same, but more importantly, the issue regarding its validity is one and
the same and, hence, should no longer be relitigated."
Considering the above rulings, we hold that the term of the lease in the present case is also
twenty (20) years.
Resolving now the issue of whether or not respondent Banco Filipino should be ejected for
non-payment of rentals, the First Division of this Court in the same G.R. No. 137980 held:
"Coming now to the issue of whether or not respondent should be ejected for
non-payment of rentals, we do not agree with the ruling in G.R. No 129887 that
since the unpaid rentals demanded by petitioner were based on a new rate which
it unilaterally imposed and to which respondent did not agree, there lies no
ground for ejectment. In such a case, there could still be ground for ejectment
based on non-payment of rentals. The recent case of T & C Development
Corporation vs. Court of Appeals13 is instructional on this point. It was there
cautioned that

'The trial court found that private respondent had failed to pay the
monthly rental of P1,800.00 from November 1992 to February 16,
1993, despite demands to pay and to vacate the premises made by
petitioner. Even if private respondent deposited the rents in arrears in
the bank, this fact cannot alter the legal situation of private respondent
since the account was opened in private respondent's name. Clearly,
there was cause for the ejectment of private respondent. Although the
increase in monthly rentals from P700.00 to P1,800.00 was in excess
of 20% allowed by B.P. Blg. 877, as amended by R.A. No. 6828, what
private respondent could have done was to deposit the original rent of
P700.00 either with the judicial authorities or in a bank in the name of,
and with notice to, petitioner. As this Court held in Uy v. Court of
Appeals (178 SCRA 671, 676 [1989]):
'The records reveal that the new rentals demanded since 1979
(P150.00 per month) exceed that allowed by law so refusal on the part
of the lessor to accept was justified. However, what the lessee should
have done was to deposit in 1979 the previous rent. This deposit in the
Bank was made only in 1984 indicating a delay of more than four
years.
'From the foregoing facts, it is clear that the lessor was correct in
asking for the ejectment of the delinquent lessee. Moreover, he should
be granted not only the current rentals but also all the rentals in
arrears. This is so even if the lessor himself did not appeal because as
ruled by this Court, there have been instances when substantial justice
demands the giving of the proper reliefs.' x x x
"While advance rentals appear to have been made to be applied for the payment
of rentals due from the eleventh year to the twentieth year of the lease, to wit'3. That upon the signing and execution of this Contract, the LESSEE
shall pay the LESSOR ONE MILLION TWENTY THOUSAND PESOS
ONLY (P1,020,000.00) Philippine Currency representing advance
rental to be applied on the monthly rental for period from the eleventh
to the twentieth year',

completely stopped paying rent but should have deposited the original rent
amount with the judicial authorities or in a bank in the name of, and with notice
to, petitioner. This circumstance, i.e., respondent's failure to pay rent at the old
rate, does not appear in G.R. No. 129887. Thus, while we are bound by the
findings of this Court's Second Division in that case under the principle of stare
decisis, the fact that respondent's failure to pay any rentals beginning April 1994,
which provided ground for its ejectment from the premises, justifies our departure
from the outcome of G.R. No. 129887. In this case, we uphold petitioner's right to
eject respondent from the leased premises."
It bears stressing that the facts of the instant case and those of G.R. Nos. 129887 and
137980 are substantially the same. The only difference is the site of respondent bank. The
opposing parties are likewise the same.
Clearly, in light of the Decisions of this Court in G.R. Nos. 129887 and 137980, which we
follow as precedents, respondent Banco Filipino may not be ejected on the ground of
expiration of the lease. However, since it stopped paying the rents beginning April 1994, its
eviction from the premises is justified.
WHEREFORE, the petition is GRANTED. The assailed Resolution of the Court of Appeals
in CA- G.R. SP No. 44257 is MODIFIED insofar as it denies petitioner Tala's prayer for
ejectment of respondent Banco Filipino.
Judgment is rendered ordering respondent Banco Filipino to vacate the subject premises
and to restore possession thereof to petitioner Tala. Respondent is also ordered to pay Tala
the monthly rental of P21,100.00 computed from April 1994 up to the time it vacates the
premises.1wphi1.nt Costs against respondent.
J.R.A.
PHILIPPINES,
vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.

INC., Petitioner,

DECISION
DEL CASTILLO, J.:

"the records show that such advance rental had already been applied for rent on
the property for the period of August, 1985 to November, 1989.

Stare decisis et non quieta movere.

"Thus, when respondent stopped paying any rent at all beginning April, 1994, it
gave petitioner good ground for instituting ejectment proceedings. We reiterate
the ruling in T & C Development Corporation, supra, that if ever petitioner took
exception to the unilateral or illegal increase in rental rate, it should not have

Courts are bound by prior decisions. Thus, once a case has been decided one way, courts
have no choice but to resolve subsequent cases involving the same issue in the same
manner.1 We ruled then, as we rule now, that failure to print the word "zero-rated" in the
invoices/receipts is fatal to a claim for credit/refund of input value-added tax (VAT) on zerorated sales.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set
aside the January 15, 2007 Decision2 and the March 16, 2007
Resolution3 of the Court of Tax Appeals (CTA) En Banc.
Factual Antecedents
Petitioner J.R.A. Philippines, Inc., a domestic corporation, is engaged in the manufacture
and wholesale export of jackets, pants, trousers, overalls, shirts, polo shirts, ladies wear,
dresses and other wearing apparel.4 It is registered with the Bureau of Internal Revenue
(BIR) as a VAT taxpayer5 and as an Ecozone Export Enterprise with the Philippine
Economic Zone Authority (PEZA).6
On separate dates, petitioner filed with the Revenue District Office (RDO) No. 54 of the
BIR, Trece Martires City, applications for tax credit/refund of unutilized input VAT on its
zero-rated sales for the taxable quarters of 2000 in the total amount of P8,228,276.34,
broken down as follows:
1st quarter P 2,369,060.97
2nd quarter 2,528,126.02
3rd quarter 1,918,015.38
4th quarter 1,413,073.977
The claim for credit/refund, however, remained unacted by the respondent. Hence,
petitioner was constrained to file a petition before the CTA.
Proceedings before the Second Division of the Court of Tax Appeals

5. Being allegedly registered with the Philippine Economic Zone Authority as an

export enterprise, petitioners business is not subject to VAT pursuant to Section
24 of R.A. No. 7916 in relation to Section 109 (q) of the Tax Code. Hence, it is
not entitled to tax credit of input taxes pursuant to Section 4.103-1 of Revenue
Regulations No. 7-95;
6. The amount of P8,228,276.34 being claimed by petitioner as alleged unutilized
VAT input taxes for the year 2000 was not properly documented;
7. In an action for refund, the burden of proof is on the taxpayer to establish its
right to refund, and failure to [do so] is fatal to the claim for refund/ credit;
8. Petitioner must show that it has complied with the provisions of Section 204 (c)
and 229 of the Tax Code on the prescriptive period for claiming tax refund/credit;
9. Claims for refund are construed strictly against the claimant for the same
partake the nature of exemption from taxation.10
After trial, the Second Division of the CTA rendered a Decision 11 denying petitioners claim
for refund/credit of input VAT attributable to its zero-rated sales due to the failure of
petitioner to indicate its Taxpayers Identification Number-VAT (TIN-V) and the word "zerorated" on its invoices.12 Thus, the fallo reads:
WHEREFORE, premises considered, the instant petition is hereby DENIED DUE
COURSE, and, accordingly,DISMISSED for lack of merit.
SO ORDERED.13
Aggrieved by the Decision, petitioner filed a Motion for Reconsideration 14 to which
respondent filed an Opposition.15 Petitioner, in turn, tendered a Reply.16

On April 16, 2002, petitioner filed a Petition for Review8 with the CTA for the refund/credit of
the same input VAT which was docketed as CTA Case No.

The Second Division of the CTA, however, stood firm on its Decision and denied
petitioners Motion for lack of merit in a Resolution 17 dated October 5, 2005. This prompted
petitioner to elevate the matter to the CTA En Banc.18

6454 and raffled to the Second Division of the CTA.

Ruling of the CTA En Banc

In his Answer,9 respondent interposed the following special and affirmative defenses, to wit:

On January 15, 2007, the CTA En Banc denied the petition, reiterating that failure to
comply with invoicing requirements results in the denial of a claim for refund. 19 Hence, it
disposed of the petition as follows:

4. Petitioners alleged claim for refund is subject to administrative routinary

investigation/examination by the Bureau;

WHEREFORE, the petition for review is DENIED for lack of merit. ACCORDINGLY, the
Decision dated June 30, 2005 and Resolution dated October 5, 2005 of Second Division of
the Court of Tax Appeals in C.T.A Case No. 6454 are hereby AFFIRMED.

C. RESPONDENTS REGULATIONS ARE INVALID BECAUSE THEY DO NOT

IMPLEMENT THE 1997 TAX CODE BUT INSTEAD, [EXCEED] THE
LIMITATIONS OF THE LAW.

SO ORDERED.20

D.
PETITIONER
PRESENTED
SUBSTANTIAL
EVIDENCE
THAT
UNEQUIVOCALLY PROVED PETITIONERS ZERO-RATED TRANSACTIONS
FOR THE YEAR 2000.

Presiding Justice Ernesto D. Acosta (Presiding Justice Acosta) concurred with the findings
of the majority that there was failure on the part of petitioner to comply with the invoicing
requirements;21 he dissented, however, to the outright denial of petitioners claim since
there are other pieces of evidence proving petitioners transactions and VAT status.22
Petitioner sought reconsideration23 of the Decision but the CTA En Banc
denied the same in a Resolution 24 dated March 16, 2007. Presiding Justice Acosta
maintained his dissent.
Issue
Hence, the instant Petition with the solitary issue of whether the failure to print the word
"zero-rated" on the invoices/receipts is fatal to a claim for credit/ refund of input VAT on
zero-rated sales.
Petitioners Arguments
Petitioner submits that:
THE COURT OF TAX APPEALS ERRED BY DECIDING QUESTIONS OF SUBSTANCE IN
A MANNER THAT IS NOT IN ACCORD WITH LAW AND JURISPRUDENCE, IN THAT:
A. THE INVOICING REQUIREMENTS UNDER THE 1997 TAX CODE DO NOT
REQUIRE THAT INVOICES AND/OR RECEIPTS ISSUED BY A VATREGISTERED TAXPAYER, SUCH AS THE PETITIONER, SHOULD BE
IMPRINTED WITH THE WORD "ZERO-RATED."
B. THE INVOICING REQUIREMENTS PRESCRIBED BY THE 1997 TAX CODE
AND THE REQUIREMENT THAT THE WORDS "ZERO-RATED" BE IMPRINTED
ON THE SALES INVOICES/OFFICIAL RECEIPTS UNDER REVENUE
REGULATIONS NO. 7-95 ARE NOT EVIDENTIARY RULES AND THE
ABSENCE THEREOF IS NOT FATAL TO A TAXPAYERS CLAIM FOR REFUND.

E. NO PREJUDICE CAN RESULT TO THE GOVERNMENT BY REASON OF

THE FAILURE OF PETITIONER TO IMPRINT THE WORD "ZERO-RATED" ON
ITS INVOICES. PETITIONERS CLIENTS FOR ITS ZERO-RATED
TRANSACTIONS CANNOT UNDULY BENEFIT FROM ITS "OMISSION"
CONSIDERING
THAT
THEY
ARE
NON-RESIDENT
FOREIGN
CORPORATIONS [that] ARE NOT COVERED BY THE PHILIPPINE VAT
SYSTEM.
F. IN CIVIL CASE[S], SUCH AS CLAIMS FOR REFUND, STRICT COMPLIANCE
WITH TECHNICAL RULES OF EVIDENCE IS NOT REQUIRED. MOREOVER, A
MERE PREPONDERANCE OF EVIDENCE WILL SUFFICE TO JUSTIFY THE
GRANT OF A CLAIM.25
Respondents Arguments
Emphasizing that tax refunds are in the nature of tax exemptions which are strictly
construed against the claimant, respondent seeks the affirmance of the assailed Decision
and Resolution of the CTA En Banc. 26 He insists that the denial of petitioners claim for tax
credit/refund is justified because it failed to comply with the invoicing requirements under
Section 4.108-127 of Revenue Regulations No. 7-95.
Our Ruling
The petition is bereft of merit.
The absence of the word "zero-rated" on the invoices/receipts is fatal to a claim for
credit/refund of input VAT

The question of whether the absence of the word "zero-rated" on the invoices/receipts is
fatal to a claim for credit/refund of input VAT is not novel. This has been squarely resolved
in Panasonic Communications Imaging Corporation of the Philippines (formerly Matsushita
Business Machine Corporation of the Philippines) v. Commissioner of Internal
Revenue.28 In that case, we sustained the denial of petitioners claim for tax credit/refund
for non-compliance with Section 4.108-1 of Revenue Regulations No. 7-95, which requires
the word "zero rated" to be printed on the invoices/receipts covering zero-rated sales. We
explained that:
Zero-rated transactions generally refer to the export sale of goods and services. The tax
rate in this case is set at zero. When applied to the tax base or the selling price of the
goods or services sold, such zero rate results in no tax chargeable against the foreign
buyer or customer. But, although the seller in such transactions charges no output tax, he
can claim a refund of the VAT that his suppliers charged him. The seller thus enjoys
automatic zero rating, which allows him to recover the input taxes he paid relating to the
export sales, making him internationally competitive.
For the effective zero rating of such transactions, however, the taxpayer has to be VATregistered and must comply with invoicing requirements. x x x
xxxx
Petitioner Panasonic points out, however, that in requiring the printing on its sales invoices
of the word "zero-rated," the Secretary of Finance unduly expanded, amended, and
modified by a mere regulation (Section 4.108-1 of RR 7-95) the letter and spirit of Sections
113 and 237 of the 1997 NIRC, prior to their amendment by R.A. 9337. Panasonic argues
that the 1997 NIRC, which applied to its payments specifically Sections 113 and 237
required the VAT-registered taxpayers receipts or invoices to indicate only the following
information:
(1) A statement that the seller is a VAT-registered person, followed by his
taxpayers identification number (TIN);

Petitioner Panasonic points out that Sections 113 and 237 did not require the inclusion of
the word "zero-rated" for zero-rated sales covered by its receipts or invoices. The BIR
incorporated this requirement only after the enactment of R.A. 9337 on November 1, 2005,
a law that did not yet exist at the time it issued its invoices.
But when petitioner Panasonic made the export sales subject of this case, i.e., from April
1998 to March 1999, the rule that applied was Section 4.108-1 of RR 7-95, otherwise
known as the Consolidated Value-Added Tax Regulations, which the Secretary of Finance
issued on December 9, 1995 and [which] took effect on January 1, 1996. 1avvphil It already
required the printing of the word "zero-rated" on the invoices covering zero-rated sales.
When R.A. 9337 amended the 1997 NIRC on November 1, 2005, it made this particular
revenue regulation a part of the tax code. This conversion from regulation to law did not
diminish the binding force of such regulation with respect to acts committed prior to the
enactment of that law.
Section 4.108-1 of RR 7-95 proceeds from the rule-making authority granted to the
Secretary of Finance under Section 245 of the 1977 NIRC (Presidential Decree 1158) for
the efficient enforcement of the tax code and of course its amendments. The requirement is
reasonable and is in accord with the efficient collection of VAT from the covered sales of
goods and services. As aptly explained by the CTAs First Division, the appearance of the
word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from
falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent
such word, a successful claim for input VAT is made, the government would be refunding
money it did not collect.
Further, the printing of the word "zero-rated" on the invoice helps segregate sales that are
subject to 10% (now 12%) VAT from those sales that are zero-rated. Unable to submit the
proper invoices, petitioner Panasonic has been unable to substantiate its claim for refund.29
Consistent with the foregoing jurisprudence, petitioners claim for credit/ refund of input VAT
for the taxable quarters of 2000 must be denied. Failure to print the word "zero-rated" on
the invoices/receipts is fatal to a claim for credit/ refund of input VAT on zero-rated sales.

(2) The total amount which the purchaser [paid] or is obligated to pay to the seller
with the indication that such amount includes the value-added tax;

WHEREFORE, the petition is hereby DENIED. The assailed Decision dated January 15,
2007 and the Resolution dated March 16, 2007 of the Court of Tax Appeals En Banc are
hereby AFFIRMED.

(3) The date of transaction, quantity, unit cost and description of the goods or
properties or nature of the service; and

SO ORDERED.

(4) The name, business style, if any, address and taxpayer's identification
number (TIN) of the purchaser, customer or client.