EN BANC

[G.R. No. 127325. March 19, 1997]

MIRIAM DEFENSOR SANTIAGO, ALEXANDER PADILLA and MARIA ISABEL

ONGPIN, petitioners, vs. COMMISSION ON ELECTIONS, JESUS
DELFIN, ALBERTO PEDROSA & CARMEN PEDROSA, in their
capacities as founding members of the Peoples Initiative for Reforms,
Modernization and Action (PIRMA), respondents, SENATOR RAUL S.
ROCO, DEMOKRASYA-IPAGTANGGOL ANG KONSTITUSYON (DIK),
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD INTEGRITY AND
NATIONALISM, INC. (MABINI), INTEGRATED BAR OF THE PHILIPPINES
(IBP)
and
LABAN
NG
DEMOKRATIKONG
PILIPINO
(LABAN), petitioners-intervenors.
DECISION
DAVIDE, JR., J.:
The heart of this controversy brought to us by way of a petition for prohibition
under Rule 65 of the Rules of Court is the right of the people to directly propose
amendments to the Constitution through the system of initiative under Section 2 of
Article XVII of the 1987 Constitution. Undoubtedly, this demands special attention, as
this system of initiative was unknown to the people of this country, except perhaps to
a few scholars, before the drafting of the 1987 Constitution. The 1986 Constitutional
Commission itself, through the original proponent[1] and the main sponsor[2] of the
proposed Article on Amendments or Revision of the Constitution, characterized this
system as innovative.[3] Indeed it is, for both under the 1935 and 1973 Constitutions,
only two methods of proposing amendments to, or revision of, the Constitution were
recognized, viz., (1) by Congress upon a vote of three-fourths of all its members and
(2) by a constitutional convention.[4] For this and the other reasons hereafter
discussed, we resolved to give due course to this petition.
On 6 December 1996, private respondent Atty. Jesus S. Delfin filed with public
respondent Commission on Elections (hereafter, COMELEC) a Petition to Amend the
Constitution, to Lift Term Limits of Elective Officials, by Peoples Initiative (hereafter,
Delfin Petition)[5] wherein Delfin asked the COMELEC for an order
1. Fixing the time and dates for signature gathering all over the country;
2. Causing the necessary publications of said Order and the attached
Petition for Initiative on the 1987 Constitution, in newspapers of general
and local circulation;

3. Instructing Municipal Election Registrars in all Regions of the

Philippines, to assist Petitioners and volunteers, in establishing signing
stations at the time and on the dates designated for the purpose.
Delfin alleged in his petition that he is a founding member of the Movement for
Peoples Initiative,[6] a group of citizens desirous to avail of the system intended to
institutionalize people power; that he and the members of the Movement and other
volunteers intend to exercise the power to directly propose amendments to the
Constitution granted under Section 2, Article XVII of the Constitution; that the exercise
of that power shall be conducted in proceedings under the control and supervision of
the COMELEC; that, as required in COMELEC Resolution No. 2300, signature
stations shall be established all over the country, with the assistance of municipal
election registrars, who shall verify the signatures affixed by individual signatories;
that before the Movement and other volunteers can gather signatures, it is necessary
that the time and dates to be designated for the purpose be first fixed in an order to
be issued by the COMELEC; and that to adequately inform the people of the electoral
process involved, it is likewise necessary that the said order, as well as the Petition
on which the signatures shall be affixed, be published in newspapers of general and
local circulation, under the control and supervision of the COMELEC.
The Delfin Petition further alleged that the provisions sought to be amended are
Sections 4 and 7 of Article VI,[7] Section 4 of Article VII,[8] and Section 8 of Article X[9] of
the Constitution.Attached to the petition is a copy of a Petition for Initiative on the
1987 Constitution[10] embodying the proposed amendments which consist in the
deletion from the aforecited sections of the provisions concerning term limits, and with
the following proposition:
DO YOU APPROVE OF LIFTING THE TERM LIMITS OF ALL ELECTIVE
GOVERNMENT OFFICIALS, AMENDING FOR THE PURPOSE SECTIONS 4 AND 7
OF ARTICLE VI, SECTION 4 OF ARTICLE VII, AND SECTION 8 OF ARTICLE X OF
THE 1987 PHILIPPINE CONSTITUTION?
According to Delfin, the said Petition for Initiative will first be submitted to the
people, and after it is signed by at least twelve per cent of the total number of
registered voters in the country it will be formally filed with the COMELEC.
Upon the filing of the Delfin Petition, which was forthwith given the number UND
96-037 (INITIATIVE), the COMELEC, through its Chairman, issued an Order [11] (a)
directing Delfin to cause the publication of the petition, together with the attached
Petition for Initiative on the 1987 Constitution (including the proposal, proposed
constitutional amendment, and the signature form), and the notice of hearing in three
(3) daily newspapers of general circulation at his own expense not later than 9
December 1996; and (b) setting the case for hearing on 12 December 1996 at 10:00
a.m.
At the hearing of the Delfin Petition on 12 December 1996, the following
appeared: Delfin and Atty. Pete Q. Quadra; representatives of the Peoples Initiative
for Reforms, Modernization and Action (PIRMA); intervenor-oppositor Senator Raul S.
Roco, together with his two other lawyers; and representatives of, or counsel for, the

Integrated Bar of the Philippines (IBP), Demokrasya-Ipagtanggol ang Konstitusyon

(DIK), Public Interest Law Center, and Laban ng Demokratikong Pilipino (LABAN).
[12]
Senator Roco, on that same day, filed a Motion to Dismiss the Delfin Petition on
the ground that it is not the initiatory petition properly cognizable by the COMELEC.

(6) Finally, Congress has not yet appropriated funds for peoples initiative; neither the
COMELEC nor any other government department, agency, or office has realigned
funds for the purpose.

After hearing their arguments, the COMELEC directed Delfin and the oppositors
to file their memoranda and/or oppositions/memoranda within five days.[13]

To justify their recourse to us via the special civil action for prohibition, the
petitioners allege that in the event the COMELEC grants the Delfin Petition, the
peoples initiative spearheaded by PIRMA would entail expenses to the national
treasury for general re-registration of voters amounting to at least P180 million, not to
mention the millions of additional pesos in expenses which would be incurred in the
conduct of the initiative itself. Hence, the transcendental importance to the public and
the nation of the issues raised demands that this petition for prohibition be settled
promptly and definitely, brushing aside technicalities of procedure and calling for the
admission of a taxpayers and legislators suit.[14] Besides, there is no other plain,
speedy, and adequate remedy in the ordinary course of law.

On 18 December 1996, the petitioners herein -- Senator Miriam Defensor

Santiago, Alexander Padilla, and Maria Isabel Ongpin -- filed this special civil action
for prohibition raising the following arguments:
(1) The constitutional provision on peoples initiative to amend the Constitution can
only be implemented by law to be passed by Congress. No such law has been
passed; in fact, Senate Bill No. 1290 entitledAn Act Prescribing and Regulating
Constitutional Amendments by Peoples Initiative, which petitioner Senator Santiago
filed on 24 November 1995, is still pending before the Senate Committee on
Constitutional Amendments.
(2) It is true that R.A. No. 6735 provides for three systems of initiative, namely,
initiative on the Constitution, on statutes, and on local legislation. However, it failed to
provide any subtitle on initiative on the Constitution, unlike in the other modes of
initiative, which are specifically provided for in Subtitle II and Subtitle III. This
deliberate omission indicates that the matter of peoples initiative to amend the
Constitution was left to some future law. Former Senator Arturo Tolentino stressed
this deficiency in the law in his privilege speech delivered before the Senate in 1994:
There is not a single word in that law which can be considered as implementing [the
provision on constitutional initiative]. Such implementing provisions have been
obviously left to a separate law.
(3) Republic Act No. 6735 provides for the effectivity of the law after publication in
print media. This indicates that the Act covers only laws and not constitutional
amendments because the latter take effect only upon ratification and not after
publication.
(4) COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern the
conduct of initiative on the Constitution and initiative and referendum on national and
local laws, is ultra vires insofar asinitiative on amendments to the Constitution is
concerned, since the COMELEC has no power to provide rules and regulations for
the exercise of the right of initiative to amend the Constitution. Only Congress is
authorized by the Constitution to pass the implementing law.
(5)The peoples initiative is limited to amendments to the Constitution, not
to revision thereof. Extending or lifting of term limits constitutes a revision and is,
therefore, outside the power of the peoples initiative.

On 19 December 1996, this Court (a) required the respondents to comment on

the petition within a non-extendible period of ten days from notice; and (b) issued a
temporary restraining order, effective immediately and continuing until further orders,
enjoining public respondent COMELEC from proceeding with the Delfin Petition, and
private respondents Alberto and Carmen Pedrosa from conducting a signature drive
for peoples initiative to amend the Constitution.
On 2 January 1997, private respondents, through Atty Quadra, filed their
Comment[15] on the petition. They argue therein that:
1. IT IS NOT TRUE THAT IT WOULD ENTAIL EXPENSES TO THE NATIONAL
TREASURY FOR GENERAL REGISTRATION OF VOTERS AMOUNTING TO AT
LEAST PESOS: ONE HUNDRED EIGHTY MILLION (P180,000,000.00) IF THE
COMELEC GRANTS THE PETITION FILED BY RESPONDENT DELFIN BEFORE
THE COMELEC.
2. NOT A SINGLE CENTAVO WOULD BE SPENT BY THE NATIONAL
GOVERNMENT IF THE COMELEC GRANTS THE PETITION OF RESPONDENT
DELFIN. ALL EXPENSES IN THE SIGNATURE GATHERING ARE ALL FOR THE
ACCOUNT OF RESPONDENT DELFIN AND HIS VOLUNTEERS PER THEIR
PROGRAM OF ACTIVITIES AND EXPENDITURES SUBMITTED TO THE
COMELEC. THE ESTIMATED COST OF THE DAILY PER DIEM OF THE
SUPERVISING SCHOOL TEACHERS IN THE SIGNATURE GATHERING TO BE
DEPOSITED and TO BE PAID BY DELFIN AND HIS VOLUNTEERS IS P2,571,
200.00;
3. THE PENDING PETITION BEFORE THE COMELEC IS ONLY ON THE
SIGNATURE GATHERING WHICH BY LAW COMELEC IS DUTY BOUND TO
SUPERVISE CLOSELY PURSUANT TO ITS INITIATORY JURISDICTION UPHELD
BY THE HONORABLE COURT IN ITS RECENT SEPTEMBER 26, 1996 DECISION
IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, ET
AL. G.R. NO. 125416;

4. REP. ACT NO. 6735 APPROVED ON AUGUST 4, 1989 IS THE ENABLING LAW
IMPLEMENTING THE POWER OF PEOPLE INITIATIVE TO PROPOSE
AMENDMENTS TO THE CONSTITUTION. SENATOR DEFENSOR-SANTIAGOS
SENATE BILL NO. 1290 IS A DUPLICATION OF WHAT ARE ALREADY PROVIDED
FOR IN REP. ACT NO. 6735;
5. COMELEC RESOLUTION NO. 2300 PROMULGATED ON JANUARY 16, 1991
PURSUANT TO REP. ACT 6735 WAS UPHELD BY THE HONORABLE COURT IN
THE RECENT SEPTEMBER 26, 1996 DECISION IN THE CASE OF SUBIC BAY
METROPOLITAN AUTHORITY VS. COMELEC, ET AL. G.R. NO. 125416 WHERE
THE HONORABLE COURT SAID: THE COMMISSION ON ELECTIONS CAN DO
NO LESS BY SEASONABLY AND JUDICIOUSLY PROMULGATING GUIDELINES
AND RULES FOR BOTH NATIONAL AND LOCAL USE, IN IMPLEMENTING OF
THESE LAWS.
6. EVEN SENATOR DEFENSOR-SANTIAGOS SENATE BILL NO. 1290 CONTAINS
A PROVISION DELEGATING TO THE COMELEC THE POWER TO PROMULGATE
SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO CARRY OUT
THE PURPOSES OF THIS ACT. (SEC. 12, S.B. NO. 1290, ENCLOSED AS ANNEX
E, PETITION);
7. THE LIFTING OF THE LIMITATION ON THE TERM OF OFFICE OF ELECTIVE
OFFICIALS PROVIDED UNDER THE 1987 CONSTITUTION IS NOT A REVISION
OF THE CONSTITUTION. IT IS ONLY AN AMENDMENT. AMENDMENT
ENVISAGES AN ALTERATION OF ONE OR A FEW SPECIFIC PROVISIONS OF
THE CONSTITUTION. REVISION CONTEMPLATES A RE-EXAMINATION OF THE
ENTIRE DOCUMENT TO DETERMINE HOW AND TO WHAT EXTENT IT SHOULD
BE ALTERED. (PP. 412-413, 2ND. ED. 1992, 1097 PHIL. CONSTITUTION, BY
JOAQUIN G. BERNAS, S.J.).
Also on 2 January 1997, private respondent Delfin filed in his own behalf a
Comment[16] which starts off with an assertion that the instant petition is a knee-jerk
reaction to a draft Petition for Initiative on the 1987 Constitution ... which is not
formally filed yet. What he filed on 6 December 1996 was an Initiatory Pleading or
Initiatory Petition, which was legally necessary to start the signature campaign to
amend the Constitution or to put the movement to gather signatures under
COMELEC power and function. On the substantive allegations of the petitioners,
Delfin maintains as follows:
(1) Contrary to the claim of the petitioners, there is a law, R.A. No. 6735, which
governs the conduct of initiative to amend the Constitution. The absence therein of a
subtitle for such initiative is not fatal, since subtitles are not requirements for the
validity or sufficiency of laws.
(2) Section 9(b) of R.A. No. 6735 specifically provides that the proposition in
an initiative to amend the Constitution approved by the majority of the votes cast in
the plebiscite shall become effective as of the day of the plebiscite.

(3) The claim that COMELEC Resolution No. 2300 is ultra vires is contradicted by (a)
Section 2, Article IX-C of the Constitution, which grants the COMELEC the power to
enforce and administer all laws and regulations relative to the conduct of an election,
plebiscite, initiative, referendum, and recall; and (b) Section 20 of R.A. 6735, which
empowers the COMELEC to promulgate such rules and regulations as may be
necessary to carry out the purposes of the Act.
(4) The proposed initiative does not involve a revision of, but mere amendment to, the
Constitution because it seeks to alter only a few specific provisions of the
Constitution, or more specifically, only those which lay term limits. It does not seek to
reexamine or overhaul the entire document.
As to the public expenditures for registration of voters, Delfin considers
petitioners estimate of P180 million as unreliable, for only the COMELEC can give the
exact figure. Besides, if there will be a plebiscite it will be simultaneous with the 1997
Barangay Elections. In any event, fund requirements for initiative will be a priority
government expense because it will be for the exercise of the sovereign power of the
people.
In the Comment[17] for the public respondent COMELEC, filed also on 2 January
1997, the Office of the Solicitor General contends that:
(1) R.A. No. 6735 deals with, inter alia, peoples initiative to amend the
Constitution. Its Section 2 on Statement of Policy explicitly affirms, recognizes, and
guarantees that power; and its Section 3, which enumerates the three systems
of initiative, includes initiative on the Constitution and defines the same as the power
to propose amendments to the Constitution. Likewise, its Section 5 repeatedly
mentionsinitiative on the Constitution.
(2) A separate subtitle on initiative on the Constitution is not necessary in R.A. No.
6735 because, being national in scope, that system of initiative is deemed included in
the subtitle on National Initiative and Referendum; and Senator Tolentino simply
overlooked pertinent provisions of the law when he claimed that nothing therein was
provided for initiative on the Constitution.
(3) Senate Bill No. 1290 is neither a competent nor a material proof that R.A. No.
6735 does not deal with initiative on the Constitution.
(4) Extension of term limits of elected officials constitutes a mere amendment to the
Constitution, not a revision thereof.
(5) COMELEC Resolution No. 2300 was validly issued under Section 20 of R.A. No.
6735 and under the Omnibus Election Code. The rule-making power of the
COMELEC to implement the provisions of R.A. No. 6735 was in fact upheld by this
Court in Subic Bay Metropolitan Authority vs. COMELEC .

On 14 January 1997, this Court (a) confirmed nunc pro tunc the temporary
restraining order; (b) noted the aforementioned Comments and the Motion to Lift
Temporary Restraining Order filed by private respondents through Atty. Quadra, as
well as the latters Manifestation stating that he is the counsel for private respondents
Alberto and Carmen Pedrosa only and the Comment he filed was for the Pedrosas;
and (c) granted the Motion for Intervention filed on 6 January 1997 by Senator Raul
Roco and allowed him to file his Petition in Intervention not later than 20 January
1997; and (d) set the case for hearing on 23 January 1997 at 9:30 a.m.
On 17 January 1997, the Demokrasya-Ipagtanggol ang Konstitusyon (DIK) and
the Movement of Attorneys for Brotherhood Integrity and Nationalism, Inc. (MABINI),
filed a Motion for Intervention. Attached to the motion was their Petition in
Intervention, which was later replaced by an Amended Petition in Intervention wherein
they contend that:
(1) The Delfin proposal does not involve a mere amendment to, but a revision of, the
Constitution because, in the words of Fr. Joaquin Bernas, S.J.,[18] it would involve a
change from a political philosophy that rejects unlimited tenure to one that accepts
unlimited tenure; and although the change might appear to be an isolated one, it can
affect other provisions, such as, on synchronization of elections and on the State
policy of guaranteeing equal access to opportunities for public service and prohibiting
political dynasties.[19] A revision cannot be done by initiative which, by express
provision of Section 2 of Article XVII of the Constitution, is limited to amendments.

(5) The deficiency of R.A. No. 6735 cannot be rectified or remedied by COMELEC
Resolution No. 2300, since the COMELEC is without authority to legislate the
procedure for a peoples initiative under Section 2 of Article XVII of the
Constitution. That function exclusively pertains to Congress. Section 20 of R.A. No.
6735 does not constitute a legal basis for the Resolution, as the former does not set a
sufficient standard for a valid delegation of power.
On 20 January 1997, Senator Raul Roco filed his Petition in Intervention. [21] He
avers that R.A. No. 6735 is the enabling law that implements the peoples right to
initiate constitutional amendments. This law is a consolidation of Senate Bill No. 17
and House Bill No. 21505; he co-authored the House Bill and even delivered a
sponsorship speech thereon. He likewise submits that the COMELEC was
empowered under Section 20 of that law to promulgate COMELEC Resolution No.
2300. Nevertheless, he contends that the respondent Commission is without
jurisdiction to take cognizance of the Delfin Petition and to order its publication
because the said petition is not the initiatory pleading contemplated under the
Constitution, Republic Act No. 6735, and COMELEC Resolution No. 2300. What
vests jurisdiction upon the COMELEC in an initiative on the Constitution is the filing of
a petition for initiative which is signed by the required number of registered voters. He
also submits that the proponents of a constitutional amendment cannot avail of the
authority and resources of the COMELEC to assist them is securing the required
number of signatures, as the COMELECs role in an initiative on the Constitution is
limited to the determination of the sufficiency of the initiative petition and the call and
supervision of a plebiscite, if warranted.

(2) The prohibition against reelection of the President and the limits provided for all
other national and local elective officials are based on the philosophy of governance,
to open up the political arena to as many as there are Filipinos qualified to handle the
demands of leadership, to break the concentration of political and economic powers
in the hands of a few, and to promote effective proper empowerment for participation
in policy and decision-making for the common good; hence, to remove the term limits
is to negate and nullify the noble vision of the 1987 Constitution.

The following day, the IBP filed a Motion for Intervention to which it attached a
Petition in Intervention raising the following arguments:

(3) The Delfin proposal runs counter to the purpose of initiative, particularly in a
conflict-of-interest situation. Initiative is intended as a fallback position that may be
availed of by the people only if they are dissatisfied with the performance of their
elective officials, but not as a premium for good performance.[20]

(2) COMELEC Resolution No. 2300 cannot substitute for the required implementing
law on the initiative to amend the Constitution.

(4) R.A. No. 6735 is deficient and inadequate in itself to be called the enabling law
that implements the peoples initiative on amendments to the Constitution. It fails to
state (a) the proper parties who may file the petition, (b) the appropriate agency
before whom the petition is to be filed, (c) the contents of the petition, (d) the
publication of the same, (e) the ways and means of gathering the signatures of the
voters nationwide and 3% per legislative district, (f) the proper parties who may
oppose or question the veracity of the signatures, (g) the role of the COMELEC in the
verification of the signatures and the sufficiency of the petition, (h) the appeal from
any decision of the COMELEC, (I) the holding of a plebiscite, and (g) the
appropriation of funds for such peoples initiative. Accordingly, there being no enabling
law, the COMELEC has no jurisdiction to hear Delfins petition.

On 20 January 1997, LABAN filed a Motion for Leave to Intervene.

(1) Congress has failed to enact an enabling law mandated under Section 2, Article
XVII of the 1987 Constitution.

(3) The Petition for Initiative suffers from a fatal defect in that it does not have the
required number of signatures.
(4) The petition seeks, in effect a revision of the Constitution, which can be proposed
only by Congress or a constitutional convention.[22]
On 21 January 1997, we promulgated a Resolution (a) granting the Motions for
Intervention filed by the DIK and MABINI and by the IBP, as well as the Motion for
Leave to Intervene filed by LABAN; (b) admitting the Amended Petition in Intervention
of DIK and MABINI, and the Petitions in Intervention of Senator Roco and of the IBP;
(c) requiring the respondents to file within a nonextendible period of five days their
Consolidated Comments on the aforesaid Petitions in Intervention; and (d) requiring

LABAN to file its Petition in Intervention within a nonextendible period of three days
from notice, and the respondents to comment thereon within a nonextendible period
of five days from receipt of the said Petition in Intervention.

Private respondents Alberto and Carmen Pedrosa filed their Consolidated

Comments on the Petitions in Intervention of Senator Roco, DIK and MABINI, and
IBP.[23] The parties thereafter filed, in due time, their separate memoranda.[24]

At the hearing of the case on 23 January 1997, the parties argued on the
following pivotal issues, which the Court formulated in light of the allegations and
arguments raised in the pleadings so far filed:

As we stated in the beginning, we resolved to give due course to this special

civil action.

1. Whether R.A. No. 6735, entitled An Act Providing for a System of Initiative and
Referendum and Appropriating Funds Therefor, was intended to include or
cover initiative on amendments to the Constitution; and if so, whether the Act, as
worded, adequately covers such initiative.
2. Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and
Regulations Governing the Conduct of Initiative on the Constitution, and Initiative and
Referendum on National and Local Laws) regarding the conduct of initiative on
amendments to the Constitution is valid, considering the absence in the law of
specific provisions on the conduct of such initiative.
3. Whether the lifting of term limits of elective national and local officials, as proposed
in the draft Petition for Initiative on the 1987 Constitution, would constitute a revision
of, or an amendment to, the Constitution.
4. Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition
solely intended to obtain an order (a) fixing the time and dates for signature gathering;
(b) instructing municipal election officers to assist Delfin's movement and volunteers
in establishing signature stations; and (c) directing or causing the publication of, inter
alia, the unsigned proposed Petition for Initiative on the 1987 Constitution.
5. Whether it is proper for the Supreme Court to take cognizance of the petition when
there is a pending case before the COMELEC.
After hearing them on the issues, we required the parties to submit
simultaneously their respective memoranda within twenty days and requested
intervenor Senator Roco to submit copies of the deliberations on House Bill No.
21505.
On 27 January 1997, LABAN filed its Petition in Intervention wherein it adopts
the allegations and arguments in the main Petition. It further submits that the
COMELEC should have dismissed the Delfin Petition for failure to state a sufficient
cause of action and that the Commissions failure or refusal to do so constituted grave
abuse of discretion amounting to lack of jurisdiction.
On 28 January 1997, Senator Roco submitted copies of portions of both the
Journal and the Record of the House of Representatives relating to the deliberations
of House Bill No. 21505, as well as the transcripts of stenographic notes on the
proceedings of the Bicameral Conference Committee, Committee on Suffrage and
Electoral Reforms, of 6 June 1989 on House Bill No. 21505 and Senate Bill No. 17.

For a more logical discussion of the formulated issues, we shall first take up the
fifth issue which appears to pose a prejudicial procedural question.
I

THE INSTANT PETITION IS VIABLE DESPITE THE

PENDENCY IN THE COMELEC OF THE DELFIN
PETITION.
Except for the petitioners and intervenor Roco, the parties paid no serious
attention to the fifth issue, i.e., whether it is proper for this Court to take cognizance of
this special civil action when there is a pending case before the COMELEC. The
petitioners provide an affirmative answer. Thus:
28. The Comelec has no jurisdiction to take cognizance of the petition filed by private
respondent Delfin. This being so, it becomes imperative to stop the Comelec from
proceeding any further, and under the Rules of Court, Rule 65, Section 2, a petition
for prohibition is the proper remedy.
29. The writ of prohibition is an extraordinary judicial writ issuing out of a court of
superior jurisdiction and directed to an inferior court, for the purpose of preventing the
inferior tribunal from usurping a jurisdiction with which it is not legally vested. (People
v. Vera, supra., p. 84). In this case the writ is an urgent necessity, in view of the highly
divisive and adverse environmental consequences on the body politic of the
questioned Comelec order. The consequent climate of legal confusion and political
instability begs for judicial statesmanship.
30. In the final analysis, when the system of constitutional law is threatened by the
political ambitions of man, only the Supreme Court can save a nation in peril and
uphold the paramount majesty of the Constitution.[25]
It must be recalled that intervenor Roco filed with the COMELEC a motion to
dismiss the Delfin Petition on the ground that the COMELEC has no jurisdiction or
authority to entertain the petition.[26] The COMELEC made no ruling thereon evidently
because after having heard the arguments of Delfin and the oppositors at the hearing
on 12 December 1996, it required them to submit within five days their memoranda or
oppositions/memoranda.[27] Earlier, or specifically on 6 December 1996, it practically
gave due course to the Delfin Petition by ordering Delfin to cause the publication of
the petition, together with the attached Petition for Initiative, the signature form, and

the notice of hearing; and by setting the case for hearing. The COMELECs failure to
act on Rocos motion to dismiss and its insistence to hold on to the petition rendered
ripe and viable the instant petition under Section 2 of Rule 65 of the Rules of Court,
which provides:

section shall be authorized within five years following the ratification of this
Constitution nor oftener than once every five years thereafter.

SEC. 2. Petition for prohibition. -- Where the proceedings of any tribunal, corporation,
board, or person, whether exercising functions judicial or ministerial, are without or in
excess of its or his jurisdiction, or with grave abuse of discretion, and there is no
appeal or any other plain, speedy and adequate remedy in the ordinary course of law,
a person aggrieved thereby may file a verified petition in the proper court alleging the
facts with certainty and praying that judgment be rendered commanding the
defendant to desist from further proceedings in the action or matter specified therein.

This provision is not self-executory. In his book,[29] Joaquin Bernas, a member of

the 1986 Constitutional Commission, stated:

It must also be noted that intervenor Roco claims that the COMELEC has no
jurisdiction over the Delfin Petition because the said petition is not supported by the
required minimum number of signatures of registered voters. LABAN also asserts that
the COMELEC gravely abused its discretion in refusing to dismiss the Delfin Petition,
which does not contain the required number of signatures. In light of these claims, the
instant case may likewise be treated as a special civil action for certiorari under
Section I of Rule 65 of the Rules of Court.

Bluntly stated, the right of the people to directly propose amendments to the
Constitution through the system of initiative would remain entombed in the cold niche
of the Constitution until Congress provides for its implementation. Stated otherwise,
while the Constitution has recognized or granted that right, the people cannot
exercise it if Congress, for whatever reason, does not provide for its implementation.

In any event, as correctly pointed out by intervenor Roco in his Memorandum,

this Court may brush aside technicalities of procedure in cases of transcendental
importance. As we stated in Kilosbayan, Inc. v. Guingona, Jr.:[28]

The Congress shall provide for the implementation of the exercise of this right.

Without implementing legislation Section 2 cannot operate. Thus, although this mode
of amending the Constitution is a mode of amendment which bypasses congressional
action, in the last analysis it still is dependent on congressional action.

This system of initiative was originally included in Section 1 of the draft Article on
Amendment or Revision proposed by the Committee on Amendments and Transitory
Provisions of the 1986 Constitutional Commission in its Committee Report No. 7
(Proposed Resolution No. 332).[30] That section reads as follows:
SECTION 1. Any amendment to, or revision of, this Constitution may be proposed:

A partys standing before this Court is a procedural technicality which it may, in the
exercise of its discretion, set aside in view of the importance of issues raised. In the
landmark Emergency Powers Cases, this Court brushed aside this technicality
because the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must, technicalities of
procedure.
II

R.A. NO. 6735 INTENDED TO INCLUDE THE SYSTEM

OF INITIATIVE ON AMENDMENTS TO THE
CONSTITUTION, BUT IS, UNFORTUNATELY,
INADEQUATE TO COVER THAT SYSTEM.
Section 2 of Article XVII of the Constitution provides:
SEC. 2. Amendments to this Constitution may likewise be directly proposed by the
people through initiative upon a petition of at least twelve per centum of the total
number of registered voters, of which every legislative district must be represented by
at least three per centum of the registered voters therein. No amendment under this

(a) by the National Assembly upon a vote of three-fourths of all its members; or
(b) by a constitutional convention; or
(c) directly by the people themselves thru initiative as provided for in Article ____
Section ____ of the Constitution.[31]
After several interpellations, but before the period of amendments, the Committee
submitted a new formulation of the concept of initiative which it denominated as
Section 2; thus:
MR. SUAREZ. Thank you, Madam President. May we respectfully call attention of the
Members of the Commission that pursuant to the mandate given to us last night, we
submitted this afternoon a complete Committee Report No. 7 which embodies the
proposed provision governing the matter of initiative. This is now covered by Section
2 of the complete committee report. With the permission of the Members, may I quote
Section 2:
The people may, after five years from the date of the last plebiscite held, directly
propose amendments to this Constitution thru initiative upon petition of at least ten
percent of the registered voters.

This completes the blanks appearing in the original Committee Report No. 7.[32]
The interpellations on Section 2 showed that the details for carrying out Section
2 are left to the legislature. Thus:
FR. BERNAS. Madam President, just two simple, clarificatory questions.
First, on Section 1 on the matter of initiative upon petition of at least 10 percent, there
are no details in the provision on how to carry this out. Do we understand, therefore,
that we are leaving this matter to the legislature?
MR. SUAREZ. That is right, Madam President.
FR. BERNAS. And do we also understand, therefore, that for as long as the
legislature does not pass the necessary implementing law on this, this will not
operate?
MR. SUAREZ. That matter was also taken up during the committee hearing,
especially with respect to the budget appropriations which would have to be legislated
so that the plebiscite could be called. We deemed it best that this matter be left to the
legislature. The Gentleman is right. In any event, as envisioned, no amendment
through the power of initiative can be called until after five years from the date of the
ratification of this Constitution. Therefore, the first amendment that could be proposed
through the exercise of this initiative power would be after five years. It is reasonably
expected that within that five-year period, the National Assembly can come up with
the appropriate rules governing the exercise of this power.
FR. BERNAS. Since the matter is left to the legislature - the details on how this is to
be carried out - is it possible that, in effect, what will be presented to the people for
ratification is the work of the legislature rather than of the people? Does this provision
exclude that possibility?
MR. SUAREZ. No, it does not exclude that possibility because even the legislature
itself as a body could propose that amendment, maybe individually or collectively, if it
fails to muster the three-fourths vote in order to constitute itself as a constituent
assembly and submit that proposal to the people for ratification through the process
of an initiative.

MS. AQUINO. I fully concur with the underlying precept of the proposal in terms of
institutionalizing popular participation in the drafting of the Constitution or in the
amendment thereof, but I would have a lot of difficulties in terms of accepting the draft
of Section 2, as written. Would the sponsor agree with me that in the hierarchy of
legal mandate, constituent power has primacy over all other legal mandates?
MR. SUAREZ. The Commissioner is right, Madam President.
MS. AQUINO. And would the sponsor agree with me that in the hierarchy of legal
values, the Constitution is source of all legal mandates and that therefore we require
a great deal of circumspection in the drafting and in the amendments of the
Constitution?
MR. SUAREZ. That proposition is nondebatable.
MS. AQUINO. Such that in order to underscore the primacy of constituent power we
have a separate article in the constitution that would specifically cover the process
and the modes of amending the Constitution?
MR. SUAREZ. That is right, Madam President.
MS. AQUINO. Therefore, is the sponsor inclined, as the provisions are drafted now, to
again concede to the legislature the process or the requirement of determining the
mechanics of amending the Constitution by people's initiative?
MR. SUAREZ. The matter of implementing this could very well be placed in the hands
of the National Assembly, not unless we can incorporate into this provision the
mechanics that would adequately cover all the conceivable situations.[33]
It was made clear during the interpellations that the aforementioned Section 2 is
limited to proposals to AMEND -- not to REVISE -- the Constitution; thus:
MR. SUAREZ. ... This proposal was suggested on the theory that this matter of
initiative, which came about because of the extraordinary developments this year, has
to be separated from the traditional modes of amending the Constitution as embodied
in Section 1. The committee members felt that this system of initiative should not
extend to the revision of the entire Constitution, so we removed it from the operation
of Section 1 of the proposed Article on Amendment or Revision.[34]

xxx
xxx
MS. AQUINO. Do I understand from the sponsor that the intention in the proposal is
to vest constituent power in the people to amend the Constitution?
MR. SUAREZ. That is absolutely correct, Madam President.

MS. AQUINO. In which case, I am seriously bothered by providing this process of

initiative as a separate section in the Article on Amendment. Would the sponsor be
amenable to accepting an amendment in terms of realigning Section 2 as another

subparagraph (c) of Section 1, instead of setting it up as another separate section as

if it were a self-executing provision?

MR. ROMULO. Under Commissioner Davide's amendment, is it possible for the

legislature to set forth certain procedures to carry out the initiative...?

MR. SUAREZ. We would be amenable except that, as we clarified a while ago, this
process of initiative is limited to the matter of amendment and should not expand into
a revision which contemplates a total overhaul of the Constitution. That was the
sense that was conveyed by the Committee.

MR. DAVIDE. It can.

MS. AQUINO. In other words, the Committee was attempting to distinguish the
coverage of modes (a) and (b) in Section 1 to include the process of revision;
whereas the process of initiation to amend, which is given to the public, would only
apply to amendments?
MR. SUAREZ.That is right. Those were the terms envisioned in the Committee.[35]
Amendments to the proposed Section 2 were thereafter introduced by then
Commissioner Hilario G. Davide, Jr., which the Committee accepted. Thus:
MR. DAVIDE. Thank you Madam President. I propose to substitute the entire Section
2 with the following:
xxx
MR. DAVIDE. Madam President, I have modified the proposed amendment after
taking into account the modifications submitted by the sponsor himself and the
honorable Commissioners Guingona, Monsod, Rama, Ople, de los Reyes and
Romulo. The modified amendment in substitution of the proposed Section 2 will now
read as follows: "SECTION 2. -- AMENDMENTS TO THIS CONSTITUTION MAY
LIKEWISE BE DIRECTLY PROPOSED BY THE PEOPLE THROUGH INITIATIVE
UPON A PETITION OF AT LEAST TWELVE PERCENT OF THE TOTAL NUMBER OF
REGISTERED VOTERS, OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE
REPRESENTED BY AT LEAST THREE PERCENT OF THE REGISTERED VOTERS
THEREOF. NO AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED
WITHIN FIVE YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION
NOR OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER.
THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE
IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT.
MR. SUAREZ. Madam President, considering that the proposed amendment is
reflective of the sense contained in Section 2 of our completed Committee Report No.
7, we accept the proposed amendment.[36]
The interpellations which ensued on the proposed modified amendment to
Section 2 clearly showed that it was a legislative act which must implement the
exercise of the right. Thus:

xxx
MR. ROMULO. But the Commissioners amendment does not prevent the legislature
from asking another body to set the proposition in proper form.
MR. DAVIDE. The Commissioner is correct. In other words, the implementation of this
particular right would be subject to legislation, provided the legislature
cannot determine anymore the percentage of the requirement.
MR. ROMULO. But the procedures, including the determination of the proper form for
submission to the people, may be subject to legislation.
MR. DAVIDE. As long as it will not destroy the substantive right to initiate. In other
words, none of the procedures to be proposed by the legislative body must diminish
or impair the right conceded here.
MR. ROMULO. In that provision of the Constitution can the procedures which I have
discussed be legislated?
MR. DAVIDE. Yes.[37]
Commissioner Davide also reaffirmed that his modified amendment strictly
confines initiative to AMENDMENTS to -- NOT REVISION of -- the Constitution. Thus:
MR. DAVIDE. With pleasure, Madam President.
MR. MAAMBONG. My first question: Commissioner Davide's proposed amendment
on line 1 refers to "amendment." Does it not cover the word "revision" as defined by
Commissioner Padilla when he made the distinction between the words
"amendments" and "revision"?
MR. DAVIDE. No, it does not, because "amendments" and "revision" should be
covered by Section 1. So insofar as initiative is concerned, it can only relate to
"amendments" not "revision."[38]
Commissioner Davide further emphasized that the process of proposing
amendments through initiative must be more rigorous and difficult than the initiative
on legislation. Thus:

MR. DAVIDE. A distinction has to be made that under this proposal, what is involved
is an amendment to the Constitution. To amend a Constitution would ordinarily require
a proposal by the National Assembly by a vote of three-fourths; and to call a
constitutional convention would require a higher number. Moreover, just to submit the
issue of calling a constitutional convention, a majority of the National Assembly is
required, the import being that the process of amendment must be made more
rigorous and difficult than probably initiating an ordinary legislation or putting an end
to a law proposed by the National Assembly by way of a referendum. I cannot agree
to reducing the requirement approved by the Committee on the Legislative because it
would require another voting by the Committee, and the voting as precisely based on
a requirement of 10 percent. Perhaps, I might present such a proposal, by way of an
amendment, when the Commission shall take up the Article on the Legislative or on
the National Assembly on plenary sessions.[39]

Has Congress provided for the implementation of the exercise of this

right? Those who answer the question in the affirmative, like the private respondents
and intervenor Senator Roco, point to us R.A. No. 6735.

The Davide modified amendments to Section 2 were subjected to amendments,

and the final version, which the Commission approved by a vote of 31 in favor and 3
against, reads as follows:

The Congress shall provide for the implementation of the exercise of this right.

MR. DAVIDE. Thank you Madam President. Section 2, as amended, reads as

follows: "AMENDMENT TO THIS CONSTITUTION MAY LIKEWISE BE DIRECTLY
PROPOSED BY THE PEOPLE THROUGH INITIATIVE UPON A PETITION OF AT
LEAST TWELVE PERCENT OF THE TOTAL NUMBER OF REGISTERED VOTERS,
OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE REPRESENTED BY AT
LEAST THREE PERCENT OF THE REGISTERED VOTERS THEREOF. NO
AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED WITHIN FIVE
YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION NOR
OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER.
THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE
IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT.[40]
The entire proposed Article on Amendments or Revisions was approved on second
reading on 9 July 1986.[41] Thereafter, upon his motion for reconsideration,
Commissioner Gascon was allowed to introduce an amendment to Section 2 which,
nevertheless, was withdrawn. In view thereof, the Article was again approved
on Second and Third Readings on 1 August 1986.[42]
However, the Committee on Style recommended that the approved Section 2 be
amended by changing percent to per centum and thereof to therein and deleting the
phrase by law in the second paragraph so that said paragraph reads: The
Congress[43] shall provide for the implementation of the exercise of this right.[44] This
amendment was approved and is the text of the present second paragraph of Section
2.
The conclusion then is inevitable that, indeed, the system of initiative on the
Constitution under Section 2 of Article XVII of the Constitution is not self-executory.

There is, of course, no other better way for Congress to implement the exercise
of the right than through the passage of a statute or legislative act. This is the
essence or rationale of the last minute amendment by the Constitutional Commission
to substitute the last paragraph of Section 2 of Article XVII then reading:
The Congress[45] shall by law provide for the implementation of the exercise of this
right.
with

This substitute amendment was an investiture on Congress of a power to

provide for the rules implementing the exercise of the right. The rules means the
details on how [the right] is to be carried out.[46]
We agree that R.A. No. 6735 was, as its history reveals, intended to
cover initiative to propose amendments to the Constitution. The Act is a consolidation
of House Bill No. 21505 and Senate Bill No. 17. The former was prepared by the
Committee on Suffrage and Electoral Reforms of the House of Representatives on
the basis of two House Bills referred to it, viz., (a) House Bill No. 497,[47] which dealt
with the initiative and referendum mentioned in Sections 1 and 32 of Article VI of the
Constitution; and (b) House Bill No. 988, [48] which dealt with the subject matter of
House Bill No. 497, as well as with initiative and referendum under Section 3 of Article
X (Local Government) and initiative provided for in Section 2 of Article XVII of the
Constitution. Senate Bill No. 17[49] solely dealt with initiative and referendum
concerning ordinances or resolutions of local government units. The Bicameral
Conference Committee consolidated Senate Bill No. 17 and House Bill No. 21505 into
a draft bill, which was subsequently approved on 8 June 1989 by the Senate[50] and by
the House of Representatives.[51] This approved bill is now R.A. No. 6735.
But is R.A. No. 6735 a full compliance with the power and duty of Congress to
provide for the implementation of the exercise of the right?
A careful scrutiny of the Act yields a negative answer.
First. Contrary to the assertion of public respondent COMELEC, Section 2 of the
Act does not suggest an initiative on amendments to the Constitution. The said
section reads:
SECTION 2. Statement and Policy. -- The power of the people under a system of
initiative and referendum to directly propose, enact, approve or reject, in whole or in
part, the Constitution, laws, ordinances, or resolutions passed by any legislative
body upon compliance with the requirements of this Act is hereby affirmed,
recognized and guaranteed. (Underscoring supplied).

The inclusion of the word Constitution therein was a delayed afterthought. That word
is neither germane nor relevant to said section, which exclusively relates to initiative
and referendum on national laws and local laws, ordinances, and resolutions. That
section is silent as to amendments on the Constitution. As pointed out earlier,
initiative on the Constitution is confined only to proposals to AMEND. The people are
not accorded the power to directly propose, enact, approve, or reject, in whole or in
part, the Constitution through the system of initiative. They can only do so with
respect to laws, ordinances, or resolutions.
The foregoing conclusion is further buttressed by the fact that this section was
lifted from Section 1 of Senate Bill No. 17, which solely referred to a statement of
policy on local initiative and referendum and appropriately used the phrases propose
and enact, approve or reject and in whole or in part.[52]
Second. It is true that Section 3 (Definition of Terms) of the Act
defines initiative on amendments to the Constitution and mentions it as one of the
three systems of initiative, and that Section 5 (Requirements) restates the
constitutional requirements as to the percentage of the registered voters who must
submit the proposal. But unlike in the case of the other systems ofinitiative, the Act
does not provide for the contents of a petition for initiative on the Constitution. Section
5, paragraph (c) requires, among other things, statement of the proposed law sought
to be enacted, approved or rejected, amended or repealed, as the case may be. It
does not include, as among the contents of the petition, the provisions of the
Constitution sought to be amended, in the case of initiative on the Constitution. Said
paragraph (c) reads in full as follows:
(c) The petition shall state the following:

Third. While the Act provides subtitles for National Initiative and Referendum
(Subtitle II) and for Local Initiative and Referendum (Subtitle III), no subtitle is
provided for initiative on the Constitution. This conspicuous silence as to the latter
simply means that the main thrust of the Act is initiative and referendum on national
and local laws. If Congress intended R.A. No. 6735 to fully provide for the
implementation of the initiative on amendments to the Constitution, it could have
provided for a subtitle therefor, considering that in the order of things, the primacy of
interest, or hierarchy of values, the right of the people to directly propose
amendments to the Constitution is far more important than the initiative on national
and local laws.
We cannot accept the argument that the initiative on amendments to the
Constitution is subsumed under the subtitle on National Initiative and Referendum
because it is national in scope. Our reading of Subtitle II (National Initiative and
Referendum) and Subtitle III (Local Initiative and Referendum) leaves no room for
doubt that the classification is not based on thescope of the initiative involved, but on
its nature and character. It is national initiative, if what is proposed to be adopted or
enacted is a national law, or a law which only Congress can pass.It is local initiative if
what is proposed to be adopted or enacted is a law, ordinance, or resolution which
only the legislative bodies of the governments of the autonomous regions, provinces,
cities, municipalities, and barangays can pass. This classification of initiative
into national and local is actually based on Section 3 of the Act, which we quote for
emphasis and clearer understanding:
SEC. 3. Definition of terms -xxx

c.1 contents or text of the proposed law sought to be enacted, approved or rejected,
amended or repealed, as the case may be;

There are three (3) systems of initiative, namely:

c.2 the proposition;

a.1 Initiative on the Constitution which refers to a petition proposing amendments to

the Constitution;

c.3 the reason or reasons therefor;

c.4 that it is not one of the exceptions provided therein;
c.5 signatures of the petitioners or registered voters; and
c.6 an abstract or summary proposition is not more than one hundred (100) words
which shall be legibly written or printed at the top of every page of the petition.
(Underscoring supplied).
The use of the clause proposed laws sought to be enacted, approved or rejected,
amended or repealed only strengthens the conclusion that Section 2, quoted earlier,
excludes initiative on amendments to the Constitution.

a.2 Initiative on Statutes which refers to a petition proposing to enact a national

legislation; and
a.3 Initiative on local legislation which refers to a petition proposing to enact a
regional, provincial, city, municipal, or barangay law, resolution or ordinance.
(Underscoring supplied).
Hence, to complete the classification under subtitles there should have been a
subtitle on initiative on amendments to the Constitution.[53]
A further examination of the Act even reveals that the subtitling is
not accurate. Provisions not germane to the subtitle on National Initiative and
Referendum are placed therein, like (1) paragraphs (b) and (c) of Section 9, which
reads:

10

(b) The proposition in an initiative on the Constitution approved by the majority of the
votes cast in the plebiscite shall become effective as to the day of the plebiscite.

(f) The effects of the approval or rejection of the proposition.[55]

As regards local initiative, the Act provides for the following:

(c) A national or local initiative proposition approved by majority of the votes cast in an
election called for the purpose shall become effective fifteen (15) days after
certification and proclamation of the Commission. (Underscoring supplied).
(2) that portion of Section 11 (Indirect Initiative) referring to indirect initiative with the
legislative bodies of local governments; thus:
SEC. 11. Indirect Initiative. -- Any duly accredited peoples organization, as defined by
law, may file a petition for indirect initiative with the House of Representatives,
and other legislative bodies....
and (3) Section 12 on Appeal, since it applies to decisions of the COMELEC on the
findings of sufficiency or insufficiency of the petition for initiative or referendum, which
could be petitions for both national and local initiative and referendum.
Upon the other hand, Section 18 on Authority of Courts under subtitle III on
Local Initiative and Referendum is misplaced,[54] since the provision therein applies to
both national and local initiative and referendum. It reads:
SEC. 18. Authority of Courts. -- Nothing in this Act shall prevent or preclude the
proper courts from declaring null and void any proposition approved pursuant to this
Act for violation of the Constitution or want of capacity of the local legislative body to
enact the said measure.

(a) The preliminary requirement as to the number of signatures of registered voters

for the petition;
(b) The submission of the petition to the local legislative body concerned;
(c) The effect of the legislative bodys failure to favorably act thereon, and the
invocation of the power of initiative as a consequence thereof;
(d) The formulation of the proposition;
(e) The period within which to gather the signatures;
(f) The persons before whom the petition shall be signed;
(g) The issuance of a certification by the COMELEC through its official in the local
government unit concerned as to whether the required number of signatures have
been obtained;
(h) The setting of a date by the COMELEC for the submission of the proposition to the
registered voters for their approval, which must be within the period specified therein;

Curiously, too, while R.A. No. 6735 exerted utmost diligence and care in
providing for the details in the implementation of initiative and referendum on national
and local legislation thereby giving them special attention, it failed, rather intentionally,
to do so on the system of initiative on amendments to the Constitution. Anent the
initiative on national legislation, the Act provides for the following:

(i) The issuance of a certification of the result;

(a) The required percentage of registered voters to sign the petition and the contents
of the petition;

(l) The limitations upon local legislative bodies.[56]

(b) The conduct and date of the initiative;

(c) The submission to the electorate of the proposition and the required number of
votes for its approval;
(d) The certification by the COMELEC of the approval of the proposition;
(e) The publication of the approved proposition in the Official Gazette or in a
newspaper of general circulation in the Philippines; and

(j) The date of effectivity of the approved proposition;

(k) The limitations on local initiative; and

Upon the other hand, as to initiative on amendments to the Constitution, R.A.

No. 6735, in all of its twenty-three sections, merely (a) mentions, the word
Constitution in Section 2; (b) defines initiative on the Constitution and includes it in the
enumeration of the three systems of initiative in Section 3; (c) speaks of plebiscite as
the process by which the proposition in an initiative on the Constitution may be
approved or rejected by the people; (d) reiterates the constitutional requirements as
to the number of voters who should sign the petition; and (e) provides for the date of
effectivity of the approved proposition.
There was, therefore, an obvious downgrading of the more important or the
paramount system of initiative. R.A. No. 6735 thus delivered a humiliating blow to the

11

system of initiative on amendments to the Constitution by merely paying it a reluctant

lip service.[57]
The foregoing brings us to the conclusion that R.A. No. 6735 is incomplete,
inadequate, or wanting in essential terms and conditions insofar as initiative on
amendments to the Constitution is concerned. Its lacunae on this substantive matter
are fatal and cannot be cured by empowering the COMELEC to promulgate such
rules and regulations as may be necessary to carry out the purposes of [the] Act.[58]
The rule is that what has been delegated, cannot be delegated or as expressed
in a Latin maxim: potestas delegata non delegari potest.[59] The recognized exceptions
to the rule are as follows:
(1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the
Constitution;
(2) Delegation of emergency powers to the President under Section 23(2) of Article VI
of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.[60]
Empowering the COMELEC, an administrative body exercising quasi-judicial
functions, to promulgate rules and regulations is a form of delegation of legislative
authority under no. 5 above. However, in every case of permissible delegation, there
must be a showing that the delegation itself is valid. It is valid only if the law (a) is
complete in itself, setting forth therein the policy to be executed, carried out, or
implemented by the delegate; and (b) fixes a standard -- the limits of which are
sufficiently determinate and determinable -- to which the delegate must conform in the
performance of his functions.[61] A sufficient standard is one which defines legislative
policy, marks its limits, maps out its boundaries and specifies the public agency to
apply it. It indicates the circumstances under which the legislative command is to be
effected.[62]
Insofar as initiative to propose amendments to the Constitution is concerned,
R.A. No. 6735 miserably failed to satisfy both requirements in subordinate
legislation. The delegation of the power to the COMELEC is then invalid.
III
COMELEC RESOLUTION NO. 2300, INSOFAR AS IT PRESCRIBES
RULES AND REGULATIONS ON THE CONDUCT OF INITIATIVE ON
AMENDMENTS TO THE CONSTITUTION, IS VOID.

amendments to the Constitution through the system of initiative. It does not have that
power under R.A. No. 6735. Reliance on the COMELECs power under Section 2(1) of
Article IX-C of the Constitution is misplaced, for the laws and regulations referred to
therein are those promulgated by the COMELEC under (a) Section 3 of Article IX-C of
the Constitution, or (b) a law where subordinate legislation is authorized and which
satisfies the completeness and the sufficient standard tests.
IV
COMELEC ACTED WITHOUT JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION IN ENTERTAINING THE DELFIN PETITION.
Even if it be conceded ex gratia that R.A. No. 6735 is a full compliance with the
power of Congress to implement the right to initiate constitutional amendments, or
that it has validly vested upon the COMELEC the power of subordinate legislation and
that COMELEC Resolution No. 2300 is valid, the COMELEC acted without jurisdiction
or with grave abuse of discretion in entertaining the Delfin Petition.
Under Section 2 of Article XVII of the Constitution and Section 5(b) of R.A. No.
6735, a petition for initiative on the Constitution must be signed by at least 12% of the
total number of registered voters of which every legislative district is represented by at
least 3% of the registered voters therein. The Delfin Petition does not contain
signatures of the required number of voters. Delfin himself admits that he has not yet
gathered signatures and that the purpose of his petition is primarily to obtain
assistance in his drive to gather signatures. Without the required signatures, the
petition cannot be deemed validly initiated.
The COMELEC acquires jurisdiction over a petition for initiative only after its
filing. The petition then is the initiatory pleading. Nothing before its filing is cognizable
by the COMELEC, sitting en banc. The only participation of the COMELEC or its
personnel before the filing of such petition are (1) to prescribe the form of the petition;
[63]
(2) to issue through its Election Records and Statistics Office a certificate on the
total number of registered voters in each legislative district; [64] (3) to assist, through its
election registrars, in the establishment of signature stations; [65] and (4) to verify,
through its election registrars, the signatures on the basis of the registry list of voters,
voters affidavits, and voters identification cards used in the immediately preceding
election.[66]
Since the Delfin Petition is not the initiatory petition under R.A. No. 6735 and
COMELEC Resolution No. 2300, it cannot be entertained or given cognizance of by
the COMELEC. The latter knew that the petition does not fall under any of the actions
or proceedings under the COMELEC Rules of Procedure or under Resolution No.
2300, for which reason it did not assign to the petition a docket number. Hence, the
said petition was merely entered as UND, meaning, undocketed. That petition was
nothing more than a mere scrap of paper, which should not have been dignified by
the Order of 6 December 1996, the hearing on 12 December 1996, and the order
directing Delfin and the oppositors to file their memoranda or oppositions. In so
dignifying it, the COMELEC acted without jurisdiction or with grave abuse of
discretion and merely wasted its time, energy, and resources.

It logically follows that the COMELEC cannot validly promulgate rules and
regulations to implement the exercise of the right of the people to directly propose

12

The foregoing considered, further discussion on the issue of whether the

proposal to lift the term limits of the elective national and local officials is
an amendment to, and not a revisionof, the Constitution is rendered unnecessary, if
not academic.

CONCLUSION
This petition must then be granted, and the COMELEC should be permanently
enjoined from entertaining or taking cognizance of any petition for initiative on
amendments on the Constitution until a sufficient law shall have been validly enacted
to provide for the implementation of the system.
We feel, however, that the system of initiative to propose amendments to the
Constitution should no longer be kept in the cold; it should be given flesh and blood,
energy and strength.Congress should not tarry any longer in complying with the
constitutional mandate to provide for the implementation of the right of the people
under that system.
WHEREFORE, judgment is hreby rendered
a) GRANTING the instant petition;
b) DECLARING R.A. No. 6735 inadequate to cover the system of initiative on
amendments to the Constitution, and to have failed to provide sufficient standard for
subordinate legislation;
c) DECLARING void those parts of Resolutions No. 2300 of the Commission on
Elections prescribing rules and regulations on the conduct of initiative or amendments
to the Constitution; and
d) ORDERING the Commission on Elections to forthwith DISMISS the DELFIN
petition (UND-96-037).
The Temporary Restraining Order issued on 18 December 1996 is made
permanent as against the Commission on Elections, but is LIFTED against private
respondents.
Resolution on the matter of contempt is hereby reserved.
SO ORDERED.
Narvasa,
C.J., Regalado,
Romero,
Bellosillo,Kapunan,
Hermosisima,
Jr. and Torres Jr., JJ., concur.
Padilla, J., took no part; related to a co-petitioner and co-counsel of the
petitioners.
Melo and Mendoza, JJ., joins the separate, concurring opinions of Justices
Puno, Francisco and Panganiban.
Puno, Vitug, , Francisco and Panganiban, JJ., has separate opinions.

[1]

Commissioner Blas Ople.

[2]

Commissioner Jose Suarez.

[3]

I Record of the Constitutional Commission, 371, 378.

[4]

Section 1, Article XV of the 1935 Constitution and Section 1(1), Article XVI of the 1973
Constitution.

[5]

Annex A of Petition, Rollo, 15.

[6]

Later identified as the Peoples Initiative for Reforms, Modernization and Action, or PIRMA for
brevity.

[7]

These sections read:

SEC. 4. The term of office of the Senators shall be six years and shall commence, unless
otherwise provided by law, at noon on the thirtieth day of June next following their
election.
No Senator shall serve for more than two consecutive terms. Voluntary renunciation of the office
for any length of time shall not be considered as an interruption in the continuity of his
service for the full term for which he was elected.
xxx
SEC. 7. The Members of the House of Representatives shall be elected for a term of three years
which shall begin, unless otherwise provided by law, at noon on the thirtieth day of
June next following their election.
No Member of the House of Representatives shall serve for more than three consecutive
terms. Voluntary renunciation of the office for any length of time shall not be
considered as an interruption in the continuity of his service for the full term for which
he was elected.
[8]

The section reads:

SEC. 4. The President and the Vice-President shall be elected by direct vote of the people for a
term of six years which shall begin at noon on the thirtieth day of June next following
the day of the election and shall end at noon of the same date six years
thereafter. The President shall not be eligible for any reelection. No person who has
succeeded as President and has served as such for more than four years shall be
qualified for election to the same office at any time.
No Vice-President shall serve for more than two successive terms. Voluntary renunciation of the
office for any length of time shall not be considered as an interruption in the continuity
of the service for the full term for which he was elected.
[9]

The section reads:

SEC. 8. The term of office of elective local officials, except barangay officials, which shall be
determined by law, shall be three years and no such official shall serve for more than
three consecutive terms. Voluntary renunciation of the office for any length of time

13

shall not be considered as an interruption in the continuity of his service for the full
term for which he was elected.
[10]

Rollo, 19.

[11]

Annex B of Petition, Rollo, 25.

[12]
[13]
[14]
[15]
[16]
[17]

Order of 12 December 1996, Annex B-1 of Petition, Rollo, 27.

Id.
Citing Araneta v. Dinglasan, 84 Phil. 368 [1949]; Sanidad v. COMELEC, 73 SCRA 333 [1976].
Rollo, 68.
Rollo, 100.
Rollo, 130.

[34]

Id., 386.

[35]

Id., 392.

[36]

Id., 398-399.

[37]

Id., 399. Underscoring supplied.

[38]

Id., 402-403.

[39]

Id., 401-402.

[40]

Id., 410.

[41]

Id., 412.

[42]

II Record of the Constitutional Commission 559-560.

[43]

The Congress originally appeared as The National Assembly. The change came about as a
logical consequence of the amended Committee Report No. 22 of the Committee on
Legislative which changed The National Assembly to "The Congress of the
Philippines" in view of the approval of the amendment to adopt the bicameral system
(II Record of the Constitutional Commission 102-105). The proposed new Article on
the Legislative Department was, after various amendments approved on Second and
Third Readings on 9 October 1986 (Id., 702-703).

[18]

A Member of the 1986 Constitutional Commission.

[19]

Section 26, Article II, Constitution.

[20]

Citing Commissioner Ople of the Constitutional Commission, I Record of the Constitutional

Commission, 405.

[21]

Rollo, 239.

[44]

V Record of the Constitutional Commission 806.

[22]

Rollo, 304.

[45]

See footnote No. 42.

[23]

Rollo, 568.

[46]

As stated by Commissioner Bernas in his interpellation of Commissioner Suarez, footnote 28.

[24]

These were submitted on the following dates:

[47]

Entitled "Initiative and Referendum Act of 1987, introduced by then Congressmen Raul Roco,
Raul del Mar and Narciso Monfort.

[48]

Entitled An Act Implementing the Constitutional Provisions on Initiative and Referendum and
for Other Purposes, introduced by Congressmen Salvador Escudero.

[49]

Entitled An Act Providing for a System of Initiative and Referendum, and the Exceptions
Therefrom, Whereby People in Local Government Units Can Directly Propose and
Enact Resolutions and Ordinances or Approve or Reject Any Ordinance or Resolution
Passed By the Local Legislative Body, introduced by Senators Gonzales, Romulo,
Pimentel, Jr., and Lina, Jr.

(a) Private respondent Delfin - 31 January 1997 (Rollo, 429);

(b) Private respondents Alberto and Carmen Pedrosa - 10 February 1997 (Id., 446);
(c) Petitioners - 12 February 1997 (Id., 585);
(d) IBP - 12 February 1997 (Id., 476);
(e) Senator Roco - 12 February 1997 (Id., 606);
(f) DIK and MABINI - 12 February 1997 (Id., 465);
(g) COMELEC - 12 February 1997 (Id., 489);
(h) LABAN - 13 February 1997 (Id., 553).
[25]

Rollo, 594.

[50]

IV Record of the Senate, No. 143, pp. 1509-1510.

[26]

Annex D of Rocos Motion for Intervention in this case, Rollo, 184.

[51]

VIII Journal and Record of the House of Representatives, 957-961.

[27]

Rollo, 28.

[52]

That section reads:

[28]

232 SCRA 110, 134 [1994].

[29]

II The Constitution of the Republic of the Philippines, A Commentary 571 [1988].

[30]

I Record of the Constitutional Commission 370-371.

[31]

Id., 371.

[32]

Id., 386.

[33]

Id., 391-392. (Underscoring supplied for emphasis).

Section 1. Statement of Policy. The power of the people under a system of initiative and
referendum to directly propose and enact resolutions and ordinances or approve or
reject, in whole or in part, any ordinance or resolution passed by any local legislative
body upon compliance with the requirements of this Act is hereby affirmed, recognized
and guaranteed.
[53]

It must be pointed out that Senate Bill No. 17 and House Bill No. 21505, as approved on Third
Reading, did not contain any subtitles.

14

[54]

If some confusion attended the preparation of the subtitles resulting in the leaving out of the
more important and paramount system of initiative on amendments to the Constitution, it was
because there was in the Bicameral Conference Committee an initial agreement for the Senate
panel to draft that portion on local initiative and for the House of Representatives panel to draft
that portion covering national initiative and initiative on the Constitution; eventually, however, the
Members thereof agreed to leave the drafting of the consolidated bill to their staff. Thus:
CHAIRMAN GONZALES.
... All right, and we can agree, we can agree. So ang mangyayari dito, ang magiging basic nito,
let us not discuss anymore kung alin ang magiging basic bill, ano, whether it is the
Senate Bill or whether it is the House Bill.Logically it should be ours sapagkat una
iyong sa amin, eh. It is one of the first bills approved by the Senate kaya ang number
niyan, makikita mo, 17, eh. Huwag na nating pag-usapan. Now, if you insist,
really iyong features ng national at saka constitutional, okay. Pero gagawin na nating
consolidation of both bills. (TSN, proceedings of the Bicameral Conference Committee
on 6 June 1989 submitted by Nora, R, pp. I-4 - I-5).
xxx
HON. ROCO. So how do we proceed from this? The staff will consolidate.
HON. GONZALES. Gumawa lang ng isang draft. Submit it to the Chairman, kami na ang
bahalang magconsult sa aming mga members na kung okay,
HON. ROCO. Within today?
HON. GONZALES. Within today and early tomorrow. Hanggang Huwebes lang tayo, eh.
HON. AQUINO. Kinakailangang palusutin natin ito. Kung mabigyan tayo ng kopya bukas and
you are not objecting naman kayo naman ganoon din.
HON. ROCO. Editing na lang because on a physical consolidation nga ito, eh. Yung mga
provisions naman namin wala sa inyo. (TSN, proceedings of Bicameral Conference
Committee of 6 June 1989, submitted by E.S. Bongon, pp. III-4 - III-5).
[55]

Sec. 5(a & c), Sec. 8, Section 9(a).

[56]

Sections 13, 14, 15 and 16.

subject of initiatives and referendum to those exercisable or within the authority of the
local government units. (Id., p. 880).
In the second he stated:
But at any rate, as I have said, because this is new in our political system, the Senate decided
on a more cautious approach and limiting it only to the local general units. (TSN of the
proceedings of the Bicameral Conference Committee on 6 June 1989, submitted by
stenographer Nora R., pp. I-2 to I-3).
In the last he declared:
The initiatives and referendum are new tools of democracy; therefore, we have decided to
be cautious in our approach. Hence, 1) we limited initiative and referendum to the
local government units; 2) that initiative can only be exercised if the local legislative
cannot be exercised more frequently that once every year. (IV Records of the Senate,
No. 143, pp. 15-9-1510).
[58]

Section 20, R.A. No. 6735.

[59]

People v. Rosenthal, 68 Phil. 328 [1939]; ISAGANI A. CRUZ, Philippine Political Law 86
[1996] (hereafter CRUZ).

[60]

People v. Vera, 65 Phil. 56 [1937]; CRUZ, supra, 87.

[61]

Pelaez v. Auditor General, 122 Phil. 965, 974 [1965].

[62]

Edu v. Ericta, 35 SCRA 481, 497 [1970].

[63]

Sec. 7, COMELEC Resolution No. 2300.

[64]

Sec. 28, id.

[65]

Sec. 29, id.

[66]

Sec. 30, id.

[57]

It would thus appear that the Senates cautious approach in the implementation of the system
of initiative as a mode of proposing amendments to the Constitution, as expressed by Senator
Gonzales in the course of his sponsorship of Senate Bill No. 17 in the Bicameral Conference
Committee meeting and in his sponsorship of the Committees Report, might have insidiously
haunted the preparation of the consolidated version of Senate Bill No. 17 and House Bill No.
21505. In the first he said:
Senate Bill No. 17 recognizes the initiatives and referendum are recent innovations in our
political system. And recognizing that, it has adopted a cautious approach by: first,
allowing them only when the local legislative body had refused to act; second, not
more frequently than once a year; and, third, limiting them to the national level. (I
Record of the Senate, No. 33, p. 871).
xxx
First, as I have said Mr. President, and I am saying for the nth time, that we are introducing a
novel and new system in politics. We have to adopt first a cautious approach. We feel
it is prudent and wise at this point in time, to limit those powers that may be the

THIRD DIVISION

15

[G.R. No. 109404. January 22, 1996]

FLORENCIO EUGENIO, doing business under the name E & S Delta Village,
petitioner, vs. EXECUTIVE SECRETARY FRANKLIN M. DRILON,
HOUSING AND LAND USE. REGULATORY BOARD (HLURB) AND
PROSPERO PALMIANO, respondents.
RESOLUTION
PANGANIBAN, J.:
Did the failure to develop a subdivision constitute legal justification for the nonpayment of amortizations by a buyer on installment under land purchase agreements
entered into prior tothe enactment of P.D. 957, The Subdivision and Condominium
Buyers Protective Decree? This is the major question raised in the instant Petition
seeking to set aside the Decision of the respondent Executive Secretary dated March
10, 1992 in O.P. Case No. 3761, which affirmed the order of the respondent HLURB
dated September 1, 1987.
On May 10, 1972, private respondent purchased on installment basis from
petitioner and his co-owner/ developer Fermin Salazar, two lots in the E &
S Delta Village in Quezon City.
Acting on complaints for non-development docketed as NHA Cases Nos. 2619
and 2620 filed by the Delta Village Homeowners Association, Inc., the National
Housing Authority rendered a resolution on January 17, 1979 inter alia ordering
petitioner to cease and desist from making further sales of lots in said village or in any
project owned by him.
While NHA Cases Nos. 2619 and 2620 were still pending, private respondent
filed with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Human
Settlements Regulatory Commission (HSRC), a complaint (Case No. 80-589) against
petitioner and spouses Rodolfo and Adelina Relevo alleging that, in view of the above
NHA resolution, he suspended payment of his amortizations, but that petitioner resold
one of the two lots to the said spouses Relevo, in whose favor title to the said
property was registered. Private respondent further alleged that he suspended his
payments because of petitioners failure to develop the village. Private respondent
prayed for the annulment of the sale to the Relevo spouses and for reconveyance of
the lot to him.

On October 11, 1983, the OAALA rendered a decision upholding the right of
petitioner to cancel the contract with private respondent and dismissed private
respondents complaint.
On appeal, the Commission Proper of the HSRC reversed the OAALA and,
applying P.D. 957, ordered petitioner to complete the subdivision development and to
reinstate private respondents purchase contract over one lot, and as to the other, it
appearing that Transfer Certificate of Title No. 269546 has been issued to x x x
spouses Rodolfo and Ad(e)lina Relevo x x x, the management of E & S Delta Village
is hereby ordered to immediately refund to the complainant-appellant (herein private
respondent) all payments made thereon, plus interests computed at legal rates from
date of receipt hereof until fully paid.
The respondent Executive Secretary, on appeal, affirmed the decision of the
HSRC and denied the subsequent Motion for Reconsideration for lack of merit and for
having been filed out of time. Petitioner has now filed this Petition for review before
the Supreme Court.
Under Revised Administrative Circular No. 1-95, appeals from judgments or final
orders of the x x x Office of the President x x x may be taken to the Court of Appeals x
x x. However, in order to hasten the resolution of this case, which was deemed
submitted for decision one and a half years ago, the Court resolved to make an
exception to the said Circular in the interest of speedy justice.
In his Petition before this Court, petitioner avers that the Executive Secretary
erred in applying P.D. 957 and in concluding that the non-development of the E &
S Delta Village justified private respondents non-payment of his amortizations.
Petitioner avers that inasmuch as the land purchase agreements were entered into in
1972, prior to the effectivity of P.D. 957 in 1976, said law cannot govern the
transaction.
We hold otherwise, and herewith rule that respondent Executive Secretary did
not abuse his discretion, and that P.D. 957 is to be given retroactive effect so as to
cover even those contracts executed prior to its enactment in 1976.
P.D. 957 did not expressly provide for retroactivity in its entirety, but such can be
plainly inferred from the unmistakable intent of the law.
The intent of the law, as culled from its preamble and from the situation,
circumstances and conditions it sought to remedy, must be enforced. On this point, a
leading authority on statutory construction stressed:

16

The intent of a statute is the law x x x. The intent is the vital part, the essence of the
law, and the primary rule of construction is to ascertain and give effect to the
intent. The intention of the legislature in enacting a law is the law itself and must be
enforced when ascertained, although it may not be consistent with the strict letter of
the statute. Courts will not follow the letter of a statute when it leads away from the
true intent and purpose of the legislature and to conclusions inconsistent with the
general purpose of the act x x x. In construing statutes the proper course is to start
out and follow the true intent of the legislature and to adopt that sense which
harmonizes best with the context and promotes in the fullest manner the apparent
policy and objects of the legislature.1 (italics supplied.)
It goes without saying that, as an instrument of social justice, the law must favor
the weak and the disadvantaged, including, in this instance, small lot buyers and
aspiring homeowners. P.D. 957 was enacted with no other end in view than to provide
a protective mantle over helpless citizens who may fall prey to the manipulations and
machinations of unscrupulous subdivision and condominium sellers, and such intent
is nowhere expressed more clearly than in its preamble, pertinent portions of which
read as follows:
WHEREAS, it is the policy of the State to afford its inhabitants the requirements of
decent human settlement and to provide them with ample opportunities for improving
their quality of life;
WHEREAS, numerous reports reveal that many real estate subdivision owners,
developers, operators, and/or sellers have reneged on their representations and
obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic requirements, thus
endangering the health and safety of home and lot buyers;
WHEREAS, reports of alarming magnitude also show cases of swindling and
fraudulent manipulations perpetrated by unscrupulous subdivision and condominium
sellers and operators, such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the
same subdivision lots to different innocent purchasers for value;2 (italics supplied.)
From a dedicated reading of the preamble, it is manifest and unarguable that the
legislative intent must have been to remedy the alarming situation by having P.D. 957
operate retrospectively even upon contracts already in existence at the time of its
enactment. Indeed, a strictly prospective application of the statute will effectively
emasculate it, for then the State will not be able to exercise its regulatory functions
and curb fraudulent schemes and practices perpetrated under or in connection with
those contracts and transactions which happen to have been entered into prior to P.D.

957, despite obvious prejudice to the very subdivision lot buyers sought to be
protected by said law. It is hardly conceivable that the legislative authority intended to
permit such a loophole to remain and continue to be a source of misery for
subdivision lot buyers well into the future.
Adding force to the arguments for the retroactivity of P.D. 957 as a whole are
certain of its provisions, viz., Sections 20, 21 and 23 thereof, which by their very
terms have retroactive effect and will impact upon even those contracts and
transactions entered into prior to P.D. 957s enactment:
Sec. 20. Time of Completion. - Every owner or developer shall construct and provide
the facilities, improvements, infrastructures and other forms of development, including
water supply and lighting facilities, which are offered and indicated in the approved
subdivision or condominium plans, brochures, prospectus, printed matters, letters or
in any form of advertisement, within one year from the date of the issuance of the
license for the subdivision or condominium project or such other period of time as
may be fixed by the Authority.
Sec. 21. Sales Prior to Decree. - In cases of subdivision lots or condominium units
sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon
the owner or developer of the subdivision or condominium project to complete
compliance with his or its obligations as provided in the preceding section within two
years from the date of this Decree unless otherwise extended by the Authority or
unless an adequate performance bond is filed in accordance with Section 6 hereof.
Failure of the owner or developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under Sections 38 and 39
of this Decree.
Sec. 23. Non-Forfeiture of Payments. - No installment payment made by a buyer in a
subdivision or condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due notice to the
owner or developer, desists from further payment due to the failure of the owner or
developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. Such buyer
may, at his option, be reimbursed the total amount paid including amortization
interests but excluding delinquency interests, with interest thereon at the legal rate.
(italics supplied)
On the other hand, as argued by the respondent Executive Secretary, the
application of P.D. 957 to the contracts in question will be consistent with paragraph 4
of the contracts themselves, which expressly provides:

17

(4) The party of the First Part hereby binds himself to subdivide, develop and improve
the entire area covered by Transfer Certificate of Title No. 168119 of which the
parcels of lands subject of this contract is a part in accordance with the provisions of
Quezon City Ordinance No. 6561, S-66 and the Party of the First Part further binds
himself to comply with and abide by all laws, rules and regulations respecting the
subdivision and development of lots for residential purposes as may be presently in
force or may hereafter be required by laws passed by the Congress of the Philippines
or required by regulations of the Bureau of Lands, the General Registration Office
and other government agencies. (italics supplied)
Moreover, as P.D. 957 is undeniably applicable to the contracts in question, it
follows that Section 23 thereof had been properly invoked by private respondent
when he desisted from making further payment to petitioner due to petitioners failure
to develop the subdivision project according to the approved plans and within the time
limit for complying with the same. (Such incomplete development of the subdivision
and non-performance of specific contractual and statutory obligations on the part of
the subdivision-owner had been established in the findings of the HLURB which in
turn were confirmed by the respondent Executive Secretary in his assailed Decision.)
Furthermore, respondent Executive Secretary also gave due weight to the following
matters: although private respondent started to default on amortization payments
beginning May 1975, so that by the end of July 1975 he had already incurred three
consecutive arrearages in payments, nevertheless, the petitioner, who had the
cancellation option available to him under the contract, did not exercise or utilize the
same in timely fashion but delayed until May 1979 when he finally made up his mind
to cancel the contracts. But by that time the land purchase agreements had already
been overtaken by the provisions of P.D. 957, promulgated on July 12, 1976. (In any
event, as pointed out by respondent HLURB and seconded by the Solicitor General,
the defaults in amortization payments incurred by private respondent had been
effectively condoned by the petitioner, by reason of the latters tolerance of the
defaults for a long period of time.)

orders of the Office of the President shall, except as otherwise provided for by special
laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof x
x x , unless a motion for reconsideration thereof is filed within such period.
WHEREFORE, there being no showing of grave abuse of discretion, the petition
is DENIED due course and is hereby DISMISSED. No costs.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide Jr., Melo, and Francisco, JJ., concur.

Likewise, there is no merit in petitioners contention that respondent Secretary

exceeded his jurisdiction in ordering the refund of private respondents payments on
Lot 12 although (according to petitioner) only Lot 13 was the subject of the complaint.
Respondent Secretary duly noted that the supporting documents submitted
substantiating the claim of non-development justified such order inasmuch as such
claim was also the basis for non-payment of amortizations on said Lot 12.
Finally, since petitioners motion for reconsideration of the (Executive Secretarys)
Decision dated March 10, 1992 was filed only on the 21st day from receipt thereof,
said decision had become final and executory, pursuant to Section 7 of Administrative
Order No. 18 dated February 12, 1987, which provides that (d)ecisions/ resolutions!

18

Bohol Branch II, ANO DACULLO, GERONIMO OROYAN, MARIO APARICI,

RUPERTO CAJES and MODESTO S SUELLO,respondents.

AQUINO, J.:p
The legal issue in this case is whether Presidential Decree No. 772, which penalizes
squatting and similar acts, applies to agricultural lands. The decree (which took effect
on August 20, 1975) provides:
SECTION 1. Any person who, with the use of force, intimidation or
threat, or taking advantage of the absence or tolerance of the
landowner, succeeds in occupying or possessing the property of
the latter against his will for residential, commercial or any other
purposes, shall be punished by an imprisonment ranging from six
months to one year or a fine of not less than one thousand nor
more than five thousand pesos at the discretion of the court, with
subsidiary imprisonment in case of insolvency. (2nd paragraph is
omitted.)
The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with the lower
court separate informations against sixteen persons charging them with squatting as
penalized by Presidential Decree No. 772. The information against Mario Aparici
which is similar to the other fifteen informations, reads:

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-47757-61 January 28, 1980
THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th Assistant of
Provincial Bohol VICENTE DE LA SERNA. JR., as complainant all private
prosecutor, petitioners,
vs.
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First Instance of

That sometime in the year 1974 continuously up to the present at

barangay Magsaysay, municipality of Talibon, province of Bohol,
Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, with stealth and strategy, enter into, occupy
and cultivate a portion of a grazing land physically occupied,
possessed and claimed by Atty. Vicente de la Serna, Jr. as
successor to the pasture applicant Celestino de la Serna of Pasture
Lease Application No. 8919, accused's entrance into the area has
been and is still against the win of the offended party; did then and
there willfully, unlawfully, and feloniously squat and cultivate a
portion of the said grazing land; said cultivating has rendered a
nuisance to and has deprived the pasture applicant from the full
use thereof for which the land applied for has been intended, that is
preventing applicant's cattle from grazing the whole area, thereby
causing damage and prejudice to the said applicant-possessoroccupant, Atty. Vicente de la Serna, Jr. (sic)

19

Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici,
Ruperto Cajes and Modesto Suello were the accused, were raffled to Judge Vicente
B. Echaves, Jr. of Branch II (Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839,
respectively).
Before the accused could be arraigned, Judge Echaves motu proprio issued an
omnibus order dated December 9, 1977 dismissing the five informations on the
grounds (1) that it was alleged that the accused entered the land through "stealth and
strategy", whereas under the decree the entry should be effected "with the use of
force, intimidation or threat, or taking advantage of the absence or tolerance of the
landowner", and (2) that under the rule of ejusdem generis the decree does not apply
to the cultivation of a grazing land.
Because of that order, the fiscal amended the informations by using in lieu of "stealth
and strategy" the expression "with threat, and taking advantage of the absence of the
ranchowner and/or tolerance of the said ranchowner". The fiscal asked that the
dismissal order be reconsidered and that the amended informations be admitted.
The lower court denied the motion. It insisted that the phrase "and for other purposes"
in the decree does not include agricultural purposes because its preamble does not
mention the Secretary of Agriculture and makes reference to the affluent class.
From the order of dismissal, the fiscal appealed to this Court under Republic Act No.
5440. The appeal is devoid of merit.
We hold that the lower court correctly ruled that the decree does not apply to pasture
lands because its preamble shows that it was intended to apply to squatting in urban
communities or more particularly to illegal constructions in squatter areas made by
well-to-do individuals. The squating complained of involves pasture lands in rural
areas.
The preamble of the decree is quoted below:
WHEREAS, it came to my knowledge that despite the issuance of
Letter of Instruction No. 19 dated October 2, 1972, directing the
Secretaries of National Defense, Public Work. 9 and
communications, Social Welfare and the Director of Public Works,
the PHHC General Manager, the Presidential Assistant on Housing
and Rehabilitation Agency, Governors, City and Municipal Mayors,
and City and District Engineers, "to remove an illegal constructions
including buildings on and along esteros and river banks, those
along railroad tracks and those built without permits on public and

private property." squatting is still a major problem in urban

communities all over the country;
WHEREAS, many persons or entities found to have been
unlawfully occupying public and private lands belong to the affluent
class;
WHEREAS, there is a need to further intensify the government's
drive against this illegal and nefarious practice.
It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on
public and private property. It is complemented by Letter of Instruction No. 19-A which
provides for the relocation of squatters in the interest of public health, safety and
peace and order.
On the other hand, it should be noted that squatting on public agricultural lands, like
the grazing lands involved in this case, is punished by Republic Act No. 947 which
makes it unlawful for any person, corporation or association to forcibly enter or
occupy public agricultural lands. That law provides:
SECTION 1. It shall be unlawful for any person corporation or
association to enter or occupy, through force, intimidation, threat,
strategy or stealth, any public agriculture land including such public
lands as are granted to private individuals under the provision of
the Public Land Act or any other laws providing for the of public
agriculture lands in the Philippines and are duly covered by the
corresponding applications for the notwithstanding standing the fact
that title thereto still remains in the Government or for any person,
natural or judicial to investigate induce or force another to commit
such acts.
Violations of the law are punished by a fine of not exceeding one thousand or
imprisonment for not more than one year, or both such fine and imprisonment in the
discretion of the court, with subsidiary imprisonment in case of insolvency. (See
People vs. Lapasaran 100 Phil. 40.)
The rule of ejusdem generis (of the same kind or species) invoked by the trial court
does not apply to this case. Here, the intent of the decree is unmistakable. It is
intended to apply only to urban communities, particularly to illegal constructions. The
rule of ejusdem generis is merely a tool of statutory construction which is resorted to
when the legislative intent is uncertain (Genato Commercial Corp. vs. Court of Tax
Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50).

20

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

Republic of the Philippines

SUPREME COURT
Manila

SO ORDERED.

FIRST DIVISION

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

G.R. No. L-28329 August 17, 1975

COMMISSIONER OF CUSTOMS, petitioner,
vs.
ESSO STANDARD EASTERN, INC., (Formerly: Standard-Vacuum Refining Corp.
(Phil.), respondent.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio
A. Torres and Solicitor Antonio M. Martinez for petitioner.
Carlos J. Valdez & Associates for respondent.

ESGUERRA, J.:
Appeal from the decision of the Court of Tax Appeals reversing the Commissioner of
Customs' decision holding respondent ESSO Standard Eastern, Inc., (formerly the
Standard-Vacuum Refining Corporation (Phil.) and hereinafter referred to as ESSO)
liable in the total sum of P775.62 as special import tax on certain articles imported by
the latter under Republic Act No. 387, otherwise known as the Petroleum Act of 1949.
Respondent ESSO is the holder of Refining Concession No. 2, issued by the
Secretary of Agriculture and Natural Resources on December 9, 1957, and operates
a petroleum refining plant in Limay Bataan. Under Article 103 of Republic Act No. 387
which provides: "During the five years following the granting of any concession, the
concessionaire may import free of customs duty, all equipment, machinery, material,
instruments, supplies and accessories," respondent imported and was assessed the
special import tax (which it paid under protest) on the following separate importations:
1) One carton, scientific instruments with C & F value of assessed a
special import tax in the amount of P31.98 (Airport Protest No. 10);

21

2) One carton of recorder parts with C & F value of $221.56;

assessed special import tax in the amount of P43.82 (Airport
Protest No. 11);
3) One carton of valves with C & F value of $310.58; assessed
special import tax in the amount of P60.72 (Airport Protest No. 12);
4) One box of parts for Conversion boilers and Auxiliary Equipment
with C & F value of $2,389.69; assessed special import tax in the
amount of P467.00 (Airport Protest No. 15);
5) One carton of X-ray films with C & F value of $132.80; assessed
special import tax in the amount of P26.00 (Airport Protest No. 16);
and
6) One carton of recorder parts with C & F value of $750.39;
assessed special import tax in the amount of P147.00 (Airport
Protest No. 17). 1
The Collector of Customs on February 16, 1962, held that respondent ESSO was
subject to the payment of the special import tax provided in Republic Act No. 1394, as
amended by R.A. No. 2352, and dismissed the protest. 2
On March 1, 1962, respondent appealed the ruling of the Collector of Customs to the
Commissioner of Customs who, on March 19, 1965, affirmed the decision of said
Collector of Customs. 3
On July 2, 1965, respondent ESSO filed a petition with the Court of Tax Appeals for
review of the decision of the Commissioner of Customs.
The Court of Tax Appeals, on September 30, 1967, reversed the decision of herein
petitioner Commissioner of Customs and ordered refund of the amount of P775.62 to
respondent ESSO which the latter had paid under protest.4
This decision of the Court of Tax Appeals is now before this Court for review.
Petitioner contends that the special import tax under Republic Act No. 1394 is
separate and distinct from the customs duty prescribed by the Tariff and Customs
Code, and that the exemption enjoyed by respondent ESSO from the payment of
customs duties under the Petroleum net of 1949 does not include exemption from the
payment of the special import tax provided in R.A. No. 1394. 5

For its stand petitioner puts forward this rationale:

A perusal of the provisions of R.A. No. 1394 will show that the
legislature considered the special import tax as a tax distinct from
customs duties as witness the fact that Section 2(a) of the said law
made separate mention of customs duties and special import tax
when it provided that ... if as a result of the application of the
schedule therein, the total revenue derived from the customs duties
and from the special import tax on goods, ... imported from the
United States is less in any calendar year than the proceeds from
the exchange tax imposed under Republic Act Numbered Six
Hundred and One, as amended, on such goods, articles or
products during the calendar year 1955, the President may, by
proclamation, suspend the reduction of the special import tax for
the next succeeding calendar year ....
If it were the intention of Congress to exempt the holders of
petroleum refinery concessions like the protestant (respondent
herein), such exemption should have been clearly stated in the
statute. Exemptions are never presumed. They must be expressed
in the clearest and most unambiguous language and not left to
mere implication. 6
Specifically, petitioner in his brief submitted two assignment of errors allegedly
committed by the Court of Tax Appeals in the controverted decision, to wit:
1st assignment of error:
THE COURT OF TAX APPEALS ERRED IN HOLDING THAT THE
TERM "CUSTOMS DUTY" IN ARTICLE 103 OF REPUBLIC ACT
NO. 387 INCLUDES THE SPECIAL IMPORT TAX IMPOSED BY
REPUBLIC ACT NO. 1394;
2nd assignment of error:
THE COURT OF TAX APPEALS ERRED IN HOLDING THAT
EXEMPTION FROM PAYMENT OF CUSTOMS DUTIES UNDER
REPUBLIC ACT NO. 387 INCLUDES EXEMPTION FROM
PAYMENT OF THE SPECIAL IMPORT TAX.
On the other hand, the Court of Tax Appeals rationalized the ground for its ruling thus:

22

If we are to adhere, as we should, to the plain and obvious meaning

of words in consonance with settled rules of interpretation, it seems
clear that the special import tax is an impost or a charge on the
importation or bringing into the Philippines of all goods, articles or
products subject thereto, for the phrase "import tax on all goods,
articles or products imported or brought into the Philippines" in
explicit and unambiguous terms simply means customs duties. It is
hardly necessary to add that "customs duties" are simply taxes
assessed on merchandise imported from, or exported to a foreign
country.
And being a charge upon importation, the special import tax is
essentially a customs duty, or at least partakes of the character
thereof.
Citing numberous American decisions and definitions of terms "customs duties,"
"duties," "imposts," "levies," "tax," and "tolls," and their distinctions, including some
pronouncements of this Court on the subject, the Court of Tax Appeals in its decision,
went to great lengths to show that the term "special import tax" as used in R.A. No.
1394 includes customs duties. It sees the special import tax as nothing but an impost
or a charge on the importation or bringing into the Philippines of goods, articles or
products. 7
To clinch its theory the Court of Tax Appeals cited the similarity in the basis of
computation of the customs duty as well as the similarity in the phraseology of
Section 3 of Republic Act No. 1394 (which established the special import tax) and
Section 9-01 of the Tariff & Customs code (the basic law providing for and regulating
the imposition of customs duties and imposts on importations). 8

this Court to do is to determine the intention of the legislature through interpretation of

the two statutes involved, i.e., Republic Act No. 1394 and Republic Act No. 387.
It is a well accepted principle that where a statute is ambiguous, as Republic Act No.
1394 appears to be, courts may examine both the printed pages of the published Act
as well as those extrinsic matters that may aid in construing the meaning of the
statute, such as the history of its enactment, the reasons for the passage of the bill
and purposes to be accomplished by the measure. 10
Petitioner in the first assignment of error took exception to the finding of the Court of
Tax Appeals that "The language of Republic Act No. 1394 seems to leave no room for
doubt that the law intends that the phrase 'Special import tax' is taken to include
customs duties" and countered with the argument that "An examination of the
provisions of Republic Act No. 1394 will indubitably reveal that Congress considered
the special import tax as a tax different from customs duties, as may be seen from the
fact that Section 2(a) of said law made separate mention of customs duties and
special import tax ..." Thus:
... if as a result of the application of the schedule therein the total
revenue derived from the customs duties and from the special
import tax on goods, ... imported from the United States is less in
any calendar year than the proceeds from the exchange tax
imposed under Republic Act Numbered Six Hundred and One, as
amended, on such goods, articles or products during the calendar
year 1955, the President may, by proclamation, suspend the
reduction of the special import tax for the next succeeding calendar
year ...
Petitioner further argues:

For its part, private respondent, ESSO, in its answer to the petition, leaned heavily on
the same arguments as those given by the Tax Court, the burden of which is that the
special import tax law is a customs law. 9
It is clear that the only issue involved in this case is whether or not the exemption
enjoyed by herein private respondent ESSO Standard Eastern, Inc. from customs
duties granted by Republic Act No. 387, or the Petroleum Act of 1949, should
embrace or include the special import tax imposed by R.A. No. 1394, or the Special
Import Tax Law.
We have examined the records of this case thoroughly and carefully considered the
arguments presented by both parties and We are convinced that the only thing left to

Customs duties are prescribed by the Tariff and Customs Code,

while the special import tax is provided for by Republic Act No.
1394. If our legislature had intended to classify the special import
tax as customs duty, the said Art would not have expressly
exempted from payment of the special Import tax importations of
machinery, equipment, accessories, and spare parts for use of
industries, without distinguishing whether the industries referred to
are the industries exempt from the payment of Customs duties or
the non-exempt ones (Sec. 6). It is sufficient that the imported
machinery, etc., is for the use of any industry. 11

23

A study of petitioner's two assignments of errors shows that one is anchored on

practically the same ground as the other: both involve the interpretation of R.A. No.
387 (The Petroleum Act of 1949) in relation with R.A. No. 1394 (The Special Import
Tax Law).

ART. 103. Customs duties. During the five years following the
granting of any concessions, the concessionaire may import free of
customs duty, all equipment, machinery, material, instruments,
supplies and accessories.

While the petitioner harps on particular clauses and phrases found in the two cited
laws, which in a way was likewise resorted to by the respondent ESSO, it would do
Us well to restate the fundamental rule in the construction of a statute.

xxx xxx xxx

In order to determine the true intent of the legislature, the particular clauses and
phrases of the statute should not be taken as detached and isolated expressions, but
the whole and every part thereof must be considered in fixing the meaning of any of
its parts. In fact every statute should receive such construction as will make it
harmonize with the pre-existing body of laws. Antagonism between the Act to be
interpreted and existing or previous laws is to be avoided, unless it was clearly the
intention of the legislature that such antagonism should arise and one amends or
repeals the other, either expressly or by implication.
Another rule applied by this Court is that the courts may take judicial notice of the
origin and history of the statutes which they are called upon to construe and
administer, and of facts which affect their derivation, validity and operation. 12
Applying the above stated rules and principles, let us consider the history, the
purpose and objectives of Republic Act No. 387 as it relates to Republic Act No. 1394
and other laws passed by the Congress of the Philippines insofar as they relate to
each other.
Republic Act No. 387, the Petroleum Act of 1949, has this for its title, to wit:
AN ACT TO PROMOTE THE EXPLORATION, DEVELOPMENT,
EXPLOITATION, AND UTILIZATION OF THE PETROLEUM
RESOURCES OF THE PHILIPPINES; TO ENCOURAGE THE
CONSERVATION OF SUCH PETROLEUM RESOURCES; TO
AUTHORIZE THE SECRETARY OF AGRICULTURE AND
NATURAL RESOURCES TO CREATE AN ADMINISTRATION UNIT
AND A TECHNICAL BOARD IN THE BUREAU OF MINES; TO
APPROPRIATE FUNDS THEREFORE; AND FOR OTHER
PURPOSES.
Art. 103 of said Act reads:

Art. 102 of the Same law insofar as pertinent, provides:

ART. 102. Work obligations, taxes, royalties not to be charged.
...; nor shall any other special taxes or levies be applied to such
concessions, nor shall concessionaires under this Act be subjected
to any provincial, municipal, or other local taxes or levies; nor shall
any sales tax be charged on any petroleum produced from the
concession or portion thereof, manufactured by the concessionaire
and used in the working of his concession. ....
Art. 104, still of the same Act, reads:
ART. 104. No export to be imposed. No export tax shall be levied
upon petroleum produced from concessions granted under this Act.
The title of Republic Act No. 387 and the provisions of its three articles just cited give
a clue to the intent of the Philippine legislature, which is to encourage the exploitation
and development of the petroleum resources of the country. Through the
instrumentality of said law, it declared in no uncertain terms that the intensification of
the exploration for petroleum must be carried on unflinchingly even if, for the time
being, no taxes, both national and local, may be collected from the industry. This is
the unequivocal intention of the Philippine Congress when the language of the
Petroleum Act is examined. Until this law or any substantial portion thereof is clearly
amended or repealed by subsequent statutes, the intention of the legislature must be
upheld.
Against this unambiguous language of R.A. No. 387, there is the subsequent
legislation, R.A. No. 1394, the Special Import Tax Law, which, according to the herein
petitioner, shows that the legislature considered the special import tax as a tax distinct
from customs duties.
Republic Act No. 1394, otherwise known as the Special Import Tax Law, is entitled as
follows:

24

AN ACT TO IMPOSE A SPECIAL IMPORT TAX ON ALL GOODS,

ARTICLES OR PRODUCTS IMPORTED OR BROUGHT INTO
THE PHILIPPINES, AND TO REPEAL REPUBLIC ACTS
NUMBERED SIX HUNDRED AND ONE, EIGHT HUNDRED AND
FOURTEEN, EIGHT HUNDRED AND SEVENTY-ONE, ELEVEN
HUNDRED AND SEVENTY-FIVE. ELEVEN HUNDRED AND
NINETY-SEVEN AND THIRTEEN HUNDRED AND SEVENTY
FIVE.

R.A. No. 871 amended Sections one and two of R.A. No. 601, as
amended earlier by R.A. No. 814;

The title indicates unmistakably that it is repealing six prior statutes. As will be seen
later, all these laws dealt with the imposition of a special excise tax on foreign
exchange or other form of levy on importation of goods into the country.

R.A. No. 1375 amended Sections one and two of R.A. No. 601 as
amended by R.A. Nos. 1175 and 1197.

Section I of Republic Act No. 1394 reads as follows:

SECTION 1. Except as herein otherwise provided, there shall be
levied, collected and paid as special import tax on all goods,
articles or products imported or brought into the Philippines,
irrespective of source, during the period and in accordance with the
rates provided for in the following schedule:
xxx xxx xxx
It would appear that by the provision of Section 1 of this Act, the pertinent provision of
the Petroleum Law, for which there appears to be no proviso to the contrary has been
modified or altered.
Section 6 of Republic Act No. 1394 declares that the tax provided for in its Section I
shall not be imposed against importation into the Philippines of machinery and/or raw
materials to be used by new and necessary industries as determined in accordance
with R A. No. 901 and a long list of other goods, articles, machinery, equipment,
accessories and others.
We shall now examine the six statutes repealed by R.A. No. 1394, namely:
R.A. No. 601 is an Act imposing a special excise tax of 17% on
foreign exchange sold by the Central Bank or its agents. This is
known as the Exchange Tax Law;
R.A. No. 814 amended Sections one, two and five and repealed
Sections three and four of R.A. No. 601;

R.A. No. 1175 amended further Sections one and two of R.A. No.
601, as amended;
R.A. No. 1197 amended furthermore R.A. No. 601 as amended
previously by R.A. No. 1175;

As can be seen from the foregoing, in one fell swoop, Republic Act
No. 1394 repealed and revoked six earlier statutes which had
something to do with the imposition of special levies and/or
exemption of certain importations from the burden of the special
import taxes or levies. On the other hand, it is apparent that R.A.
No. 387, the Petroleum Act, had been spared from the pruning knife
of Congress, although this latter law had granted more concessions
and tax exemption privileges than any of the statutes that were
amended, repealed or revoked by R.A. No. 1394. The answer must
be that the Congress of the Philippine saw fit to preserve the
privileges granted under the Petroleum Law of 1949 in order to
keep the door open to the exploitation and development of the
petroleum resources of the country with such incentives as are
given under that law.
This ascertained will and intention of the legislature finds a
parallelism in a case brought earlier before this Court.
A fishpond owner was slapped with taxes as a "merchant" by the Collector of Internal
Revenue. He paid under protest and filed an action to recover the taxes paid,
claiming that he was an agriculturist and not a merchant. When this Court was called
upon to interpret the provisions of the Internal Revenue Law on whether fish is an
agricultural product which falls under the exemption provisions of said law, it inquired
into the purpose of the legislature in establishing the exemption for agricultural
products. We held:
The first inquiry, therefore, must relate to the purpose the
legislature had in mind in establishing the exemption contained in
the clause now under consideration. It seems reasonable to
assume that it was due to the belief on the part of the law-making

25

body that by exempting agricultural products from this tax the

farming industry would be favored and the development of the
resources of the country encouraged. .... 13
Having this in mind, particularly the manner in which extrinsic aids the history of the
enactment of the statute and purpose of the legislature in employing a clause or
provision in the law had been applied in determining the true intent of the lawmaking
body, We are convinced that R.A. No. 387, The Petroleum Act of 1949, was intended
to encourage the exploitation, exploration and development of the petroleum
resources of the country by giving it the necessary incentive in the form of tax
exemptions. This is the raison d etre for the generous grant of tax exemptions to
those who would invest their financial resources towards the achievement of this
national economic goal.

No costs.
SO ORDERED.
Castro (Chairman), Makasiar, Muoz Palma and Martin, JJ., concur.

Footnotes
1 Petition for Review, pp. 1-3, Rollo, pp. 1-3.
2 Ibid., p. 3, Rollo p. 3.

On the contention of herein petitioner that the exemptions enjoyed by respondent

ESSO under R.A. No. 387 have been abrogated by R.A. No. 1394, We hold that
repeal by implication is not favored unless it is manifest that the legislature so
intended. As laws are presumed to be passed with deliberation and with full
knowledge of all existing ones on the subject, it is logical to conclude that in passing a
statute it was not intended to interfere with or abrogate any former law relating to the
same matter, unless the repugnancy between the two is not only irreconcilable but
also clear and convincing as a result of the language used, or unless the latter act
fully embraces the subject matter of the earlier. 14
As observed earlier, Congress lined up for revocation by Republic Act No. 1394 six
statutes dealing with the imposition of special imposts or levies or the granting of
exemptions from special import taxes. Yet, considering the tremendous amount of
revenues it was losing under the Petroleum Law of 1949, it failed to include the latter
statute among those it chose to bury by the Special Import Taw Law. The reason for
this is very clear: The legislature wanted to continue the incentives for the continuing
development of the petroleum industry.
It is not amiss to mention herein passing that contrary to the theory of the herein
petitioner, R.A. No. 387 had not been repealed by R.A. No. 2352 which expressly
abrogated Section 6 of R.A. No. 1394 but did not repeal any part of R.A. No. 387.
Therefore, the exemption granted by Republic Act No. 387 still stands.

3 Ibid., p. 3.
4 Ibid., pp. 3-4; Decision, Annex "A" Petition for Review, Rollo, pp.
9-25.
5 Ibid., p. 5; Rollo, p. 5.
6 Ibid; pp. 6-7; Rollo, pp. 6-7.
7 Decision, pp. 8-11; Rollo, pp. 16-19.
8 Ibid., pp. 11-13.
9 Answer to the Petition for Review, pp. 3-5, Rollo, pp. 29-31.
10 Sutherland, Statutes and Statutory Construction, Vol. II Section
2102, p. 9.
11 Brief for the Petitioner, pp. 9-11 Rollo, p. 57.
12 U.S. v. De Guzman, 30 Phil. 416.

WHEREFORE, taking into consideration the weight given by this Court to the findings
and conclusions of the Court of Tax Appeals on a matter it is well-equipped to handle,
which findings and conclusions We find no reason to overturn, the petition of the
Commissioner of Customs to reverse the decision of the Court of Tax Appeals should
be, as it is hereby, denied.

13 Molina v. Rafferty, 37 Phil. 545.

14 U.S. v. Palacio, 33 Phil. 208.

26

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33693-94 May 31, 1979
MISAEL P. VERA, as Commissioner of Internal Revenue, and THE FAIR TRADE
BOARD, petitioner,
vs.
HON. SERAFIN R. CUEVAS, as Judge of the Court of First Instance of Manila,
Branch IV, INSTITUTE OF EVAPORATED FILLED MILK MANUFACTURERS OF
THE PHILIPPINES, INC., CONSOLIDATED MILK COMPANY (PHIL.) INC., and
MILK INDUSTRIES, INC., respondents.
Solicitor General Felix Q. Antonio and Solicitor Bernardo P. Pardo for petitioners.
Sycip, Salazar, Luna, Manalo & Feliciano for private respondents.

DE CASTRO, J.:
This is a petition for certiorari with preliminary injunction to review the decision
rendered by respondent judge, in Civil Case No. 52276 and in Special Civil Action No.
52383 both of the Court of First Instance of Manila.
Plaintiffs, in Civil Case No. 52276 private respondents herein, are engaged in the
manufacture, sale and distribution of filled milk products throughout the Philippines.
The products of private respondent, Consolidated Philippines Inc. are marketed and
sold under the brand Darigold whereas those of private respondent, General Milk
Company (Phil.), Inc., under the brand "Liberty;" and those of private respondent, Milk
Industries Inc., under the brand "Dutch Baby." Private respondent, Institute of
Evaporated Filled Milk Manufacturers of the Philippines, is a corporation organized for
the principal purpose of upholding and maintaining at its highest the standards of
local filled milk industry, of which all the other private respondents are members.

Civil Case No. 52276 is an action for declaratory relief with ex-parte petition for
preliminary injunction wherein plaintiffs pray for an adjudication of their respective
rights and obligations in relation to the enforcement of Section 169 of the Tax Code
against their filled milk products.
The controversy arose from the order of defendant, Commissioner of Internal
Revenue now petitioner herein, requiring plaintiffs- private respondents to withdraw
from the market all of their filled milk products which do not bear the inscription
required by Section 169 of the Tax Code within fifteen (15) days from receipt of the
order with the explicit warning that failure of plaintiffs' private respondents to comply
with said order will result in the institution of the necessary action against any
violation of the aforesaid order. Section 169 of the Tax Code reads as follows:
Section 169. Inscription to be placed on skimmed milk. All
condensed skimmed milk and all milk in whatever form, from which
the fatty part has been removed totally or in part, sold or put on sale
in the Philippines shall be clearly and legibly marked on its
immediate containers, and in all the language in which such
containers are marked, with the words, "This milk is not suitable for
nourishment for infants less than one year of age," or with other
equivalent words.
The Court issued a writ of preliminary injunction dated February 16, 1963 restraining
the Commissioner of Internal Revenue from requiring plaintiffs' private respondents to
print on the labels of their rifled milk products the words, "This milk is not suitable for
nourishment for infants less than one year of age or words of similar import, " as
directed by the above quoted provision of Law, and from taking any action to enforce
the above legal provision against the plaintiffs' private respondents in connection with
their rifled milk products, pending the final determination of the case, Civil Case No.
52276, on the merits.
On July 25, 1969, however, the Office of the Solicitor General brought an appeal from
the said order by way of certiorari to the Supreme Court. 1 In view thereof, the
respondent court in the meantime suspended disposition of these cases but in view of
the absence of any injunction or restraining order from the Supreme Court, it resumed
action on them until their final disposition therein.
Special Civil Action No. 52383, on the other hand, is an action for prohibition and
injunction with a petition for preliminary injunction. Petitioners therein pray that the
respondent Fair Trade Board desist from further proceeding with FTB I.S. No. I .
entitled "Antonio R. de Joya vs. Institute of Evaporated Milk Manufacturers of the
Philippines, etc." pending final determination of Civil Case No. 52276. The facts of

27

this special civil action show that on December 7, 1962, Antonio R. de Joya and
Sufronio Carrasco, both in their individual capacities and in their capacities as Public
Relations Counsel and President of the Philippine Association of Nutrition,
respectively, filed FTB I.S. No. 1 with Fair Trade Board for misleading advertisement,
mislabeling and/or misbranding. Among other things, the complaint filed include the
charge of omitting to state in their labels any statement sufficient to Identify their filled
milk products as "imitation milk" or as an imitation of genuine cows milk. and omitting
to mark the immediate containers of their filled milk products with the words: "This
milk is not suitable for nourishment for infants less than one year of age or with other
equivalent words as required under Section 169 of the Tax Code. The Board
proceeded to hear the complaint until it received the writ of preliminary injunction
issued by the Court of First Instance on March 19, 1963.
Upon agreement of the parties, Civil Case No. 52276 and Special Civil Action No.
52383 were heard jointly being intimately related with each other, with common facts
and issues being also involved therein. On April 16, 1971, the respondent court
issued its decision, the dispositive part of which reads as follows:
Wherefore, judgment is hereby rendered:
In Civil Case No. 52276:
(a) Perpetually restraining the defendant, Commissioner of Internal
Revenue, his agents, or employees from requiring plaintiffs to print
on the labels of their filled milk products the words: "This milk is not
suitable for nourishment for infants less than one year of age" or
words with equivalent import and declaring as nun and void and
without authority in law, the order of said defendant dated
September 28, 1961, Annex A of the complaint, and the Ruling of
the Secretary of Finance, dated November 12, 1962, Annex G of
the complaint; and
In Special Civil Action No. 52383:
(b) Restraining perpetually the respondent Fair Trade Board, its
agents or employees from continuing in the investigation of the
complaints against petitioners docketed as FTB I.S. No. 2, or any
charges related to the manufacture or sale by the petitioners of
their filled milk products and declaring as null the proceedings so
far undertaken by the respondent Board on said complaints. (pp.
20- 21, Rollo).

From the above decision of the respondent court, the Commissioner of Internal
Revenue and the Fair Trade Board joined together to file the present petition for
certiorari with preliminary injunction, assigning the following errors:
I. THE LOWER COURT ERRED IN RULING THAT SEC. TION 169
OF THE TAX CODE HAS BEEN REPEALED BY IMPLICATION.
II. THE LOWER COURT ERRED IN RULING THAT SECTION 169
OF THE TAX CODE HAS LOST ITS TAX PURPOSE, AND THAT
COMMISSIONER NECESSARILY LOST HIS AUTHORITY TO
ENFORCE THE SAME AND THAT THE PROPER AUTHORITY TO
PROMOTE THE HEALTH OF INFANTS IS THE FOOD AND DRUG
ADMINISTRATION, THE SECRETARY OF HEALTH AND THE
SECRETARY OF JUSTICE, AS PROVIDED FOR IN RA 3720, NOT
THE COMMISSIONER OF INTERNAL REVENUE.
III. THE LOWER COURT ERRED IN RULING THAT THE POWER
TO INVESTIGATE AND TO PROSECUTE VIOLATIONS OF FOOD
LAWS IS ENTRUSTED TO THE FOOD AND DRUG INSPECTION,
THE FOOD AND DRUG ADMINISTRATION, THE SECRETARY OF
HEALTH AND THE SECRETARY OF JUSTICE, AND THAT THE
FAIR TRADE BOARD IS WITHOUT JURISDICTION TO
INVESTIGATE AND PROSECUTE ALLEGED MISBRANDING,
MISLABELLING AND/OR MISLEADING ADVERTISEMENT OF
FILLED MILK PRODUCTS. (pp, 4-5, Rollo).
The lower court did not err in ruling that Section 169 of the Tax Code has been
repealed by implication. Section 169 was enacted in 1939, together with Section 141
(which imposed a Specific tax on skimmed milk) and Section 177 (which penalized
the sale of skimmed milk without payment of the specific tax and without the legend
required by Section 169). However, Section 141 was expressly repealed by Section 1
of Republic Act No. 344, and Section 177, by Section 1 of Republic Act No. 463. By
the express repeal of Sections 141 and 177, Section 169 became a merely
declaratory provision, without a tax purpose, or a penal sanction.
Moreover, it seems apparent that Section 169 of the Tax Code does not apply to filled
milk. The use of the specific and qualifying terms "skimmed milk" in the headnote and
"condensed skimmed milk" in the text of the cited section, would restrict the scope of
the general clause "all milk, in whatever form, from which the fatty pat has been
removed totally or in part." In other words, the general clause is restricted by the
specific term "skimmed milk" under the familiar rule of ejusdem generis that general

28

and unlimited terms are restrained and limited by the particular terms they follow in
the statute.
Skimmed milk is different from filled milk. According to the "Definitions, Standards of
Purity, Rules and Regulations of the Board of Food Inspection," skimmed milk is milk
in whatever form from which the fatty part has been removed. Filled milk, on the other
hand, is any milk, whether or not condensed, evaporated concentrated, powdered,
dried, dessicated, to which has been added or which has been blended or
compounded with any fat or oil other than milk fat so that the resulting product is an
imitation or semblance of milk cream or skim milk." The difference, therefore, between
skimmed milk and filled milk is that in the former, the fatty part has been removed
while in the latter, the fatty part is likewise removed but is substituted with refined
coconut oil or corn oil or both. It cannot then be readily or safely assumed that
Section 169 applies both to skimmed milk and filled milk.
The Board of Food Inspection way back in 1961 rendered an opinion that filled milk
does not come within the purview of Section 169, it being a product distinct from
those specified in the said Section since the removed fat portion of the milk has been
replaced with coconut oil and Vitamins A and D as fortifying substances (p. 58, Rollo).
This opinion bolsters the Court's stand as to its interpretation of the scope of Section
169. Opinions and rulings of officials of the government called upon to execute or
implement administrative laws command much respect and weight. (Asturias Sugar
Central Inc. vs. Commissioner of Customs, G. R. No. L-19337, September 30, 1969,
29 SCRA 617; Tan, et. al. vs. The Municipality of Pagbilao et. al., L-14264, April 30,
1963, 7 SCRA 887; Grapilon vs. Municipal Council of Carigara L-12347, May 30,
1961, 2 SCRA 103).
This Court is, likewise, induced to the belief that filled milk is suitable for nourishment
for infants of all ages. The Petitioners themselves admitted that: "the filled milk
products of the petitioners (now private respondents) are safe, nutritious, wholesome
and suitable for feeding infants of all ages" (p. 44, Rollo) and that "up to the present,
Filipino infants fed since birth with filled milk have not suffered any defects, illness or
disease attributable to their having been fed with filled milk." (p. 45, Rollo).
There would seem, therefore, to be no dispute that filled milk is suitable for feeding
infants of all ages. Being so, the declaration required by Section 169 of the Tax Code
that filled milk is not suitable for nourishment for infants less than one year of age
would, in effect, constitute a deprivation of property without due. process of law.
Section 169 is being enforced only against respondent manufacturers of filled milk
product and not as against manufacturers, distributors or sellers of condensed
skimmed milk such as SIMILAC, SMA, BREMIL, ENFAMIL, OLAC, in which, as

admitted by the petitioner, the fatty part has been removed and substituted with
vegetable or corn oil. The enforcement of Section 169 against the private
respondents only but not against other persons similarly situated as the private
respondents amounts to an unconstitutional denial of the equal pro petition of the
laws, for the law, equally enforced, would similarly offend against the Constitution.
Yick Wo vs. Hopkins, 118 U.S. 356,30 L. ed. 220).
As stated in the early part of this decision, with the repeal of Sections 141 and 177 of
the Tax Code, Section 169 has lost its tax purpose. Since Section 169 is devoid of
any tax purpose, petitioner Commissioner necessarily lost his authority to enforce the
same. This was so held by his predecessor immediately after Sections 141 and 177
were repealed in General Circular No. V-85 as stated in paragraph IX of the Partial
Stipulation of facts entered into by the parties, to wit:
... As the act of sewing skimmed milk without first paying the
specific tax thereon is no longer unlawful and the enforcement of
the requirement in regard to the placing of the proper legend on its
immediate containers is a subject which does not come within the
jurisdiction of the Bureau of Internal Revenue, the penal provisions
of Section 177 of the said Code having been repealed by Republic
Act No. 463. (p. 102, Rollo).
Petitioner's contention that he still has jurisdiction to enforce Section 169 by virtue of
Section 3 of the Tax Code which provides that the Bureau of Internal Revenue shall
also "give effect to and administer the supervisory and police power conferred to it by
this Code or other laws" is untenable. The Bureau of Internal Revenue may claim
police power only when necessary in the enforcement of its principal powers and
duties consisting of the "collection of all national internal revenue taxes, fees and
charges, and the enforcement of all forfeitures, penalties and fines connected
therewith." The enforcement of Section 169 entails the promotion of the health of the
nation and is thus unconnected with any tax purpose. This is the exclusive function of
the Food and Drug Administration of the Department of Health as provided for in
Republic Act No. 3720. In particular, Republic Act No. 3720 provides:
Section 9. ... It shall be the duty of the Board (Food and Drug
Inspection), conformably with the rules and regulations, to hold
hearings and conduct investigations relative to matters touching the
Administration of this Act, to investigate processes of food, drug
and cosmetic manufacture and to subject reports to the Food and
Drug Administrator, recommending food and drug standards for
adoption. Said Board shall also perform such additional functions,
properly within the scope of the administration thereof, as maybe

29

assigned to it by the Food and Drug Administrator. The decisions of

the Board shall be advisory to the Food and Drug Administrator.

functions likely to produce confusion and conflict of official action which is neither
practical nor desirable.

Section 26. ...

WHEREFORE, the decision appealed from is hereby affirmed en toto. No costs.

xxx xxx xxx

SO ORDERED.

(c) Hearing authorized or required by this Act shall be conducted by

the Board of Food and Drug Inspection which shall submit
recommendation to the Food and Drug Administrator.

Teehankee, (Chairman), Fernandez, Melencio-Herrera, JJ., concur.

(d) When it appears to the Food and Drug Administrator from the
reports of the Food and Drug Laboratory that any article of food or
any drug or cosmetic secured pursuant to Section 28 of this Act is
adulterated or branded he shall cause notice thereof to be given to
the person or persons concerned and such person or persons shall
be given an opportunity to subject evidence impeaching the
correctness of the finding or charge in question.

#Footnotes
1 G.R. No. L-30793-94.

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

knowledge of the Food and Drug Administrator of such character
that a criminal prosecution ought to be instituted against the
offender, he shall certify the facts to the Secretary of Justice
through the Secretary of Health, together with the chemists' report,
the findings of the Board of Food and Drug Inspection, or other
documentary evidence on which the charge is based.
(f) Nothing in this Act shall be construed as requiring the Food and
Drug Administrator to certify for prosecution pursuant to
subparagraph (e) hereof, minor violations of this Act whenever he
believes that public interest will be adequately served by a suitable
written notice or warning.
The aforequoted provisions of law clearly show that petitioners, Commissioner of
Internal Revenue and the Fair Trade Board, are without jurisdiction to investigate and
to prosecute alleged misbranding, mislabeling and/or misleading advertisements of
filled milk. The jurisdiction on the matters cited is vested upon the Board of Food and
Drug inspection and the Food and Drug Administrator, with the Secretary of Health
and the Secretary of Justice, also intervening in case criminal prosecution has to be
instituted. To hold that the petitioners have also jurisdiction as would be the result
were their instant petition granted, would only cause overlapping of powers and

30

G.R. No. L-43760 August 21, 1976

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner
vs.
BUREAU OF LABOR RELATIONS, HONORABLE CARMELO C. NORIEL,
NATIONAL FEDERATION OF FREE LABOR UNIONS (NAFLU), and PHILIPPINE
BLOOMING MILLS CO., INC., respondents.
Guevara, Pineda, Guevara & Castillon for petitioner.
Olalia Dimapilis & Associates for respondent Union (NAFLU)
Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz for
respondent Bureau of Labor Relations, etc., et al.

FERNANDO, Acting C.J.:

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

A certification by respondent Director of Labor Relations, Carmelo C. Noriel, that

respondent National Federation of Free Labor Unions (NAFLU) as the exclusive
bargaining agent of all the employees in the Philippine Blooming Mills, Company, Inc.
disregarding the objection raised by petitioner, the Philippine Association of Free
Labor Unions (PAFLU), is assailed in this certiorari proceeding. Admittedly, in the
certification election held on February 27, 1976, respondent Union obtained 429 votes
as against 414 of petitioner Union. Again, admittedly, under the Rules and
Regulations implementing the present Labor Code, a majority of the valid votes cast
suffices for certification of the victorious labor union as the sole and exclusive
bargaining agent. 1 There were four votes cast by employees who did not want any
union. 2 On its face therefore, respondent Union ought to have been certified in
accordance with the above applicable rule. Petitioner, undeterred, would seize upon
the doctrine announced in the case of Allied Workers Association of the Philippines v.
Court of Industrial Relations 3 that spoiled ballots should be counted in determining
the valid votes cast. Considering there were seventeen spoiled ballots, it is the
submission that there was a grave abuse of discretion on the part of respondent
Director. Implicit in the comment of respondent Director of Labor Relations,
4 considered as an answer, is the controlling weight to be accorded the implementing
rule above-cited, no inconsistency being shown between such rule and the present
Labor Code. Under such a view, the ruling in the Allied Workers Association case that
arose during the period when it was the Industrial Peace Act 5, that was in effect and
not the present law, no longer possesses relevance. It cannot and should not be
applied. It is not controlling. There was no abuse of discretion then, much less a
grave one.
This Court is in agreement. The law is on the side of respondent Director, not to
mention the decisive fact appearing in the Petition itself that at most, only ten of the

31

spoiled ballots "were intended for the petitioner Union," 6 thus rendering clear that it
would on its own showing obtain only 424 votes as against 429 for respondent Union.
certiorari does not lie.
1. What is of the essence of the certification process, as noted in Lakas Ng
Manggagawang Pilipino v. Benguet Consolidated, Inc. 7 "is that every labor
organization be given the opportunity in a free and honest election to make good its
claim that it should be the exclusive collective bargaining representative." 8 Petitioner
cannot complain. It was given that opportunity. It lost in a fair election. It came out
second best. The implementing rule favors, as it should, respondent Union, It
obtained a majority of the valid votes cast. So our law Prescribes. It is equally the
case in the United States as this excerpt from the work of Cox and Bok makes clear:
"It is a well-settled rule that a representative will he certified even though less than a
majority of all the employees in the unit cast ballots in favor of the union. It is enough
that the union be designated by a majority of the valid ballots, and this is so even
though only a small proportion of the eligible voters participates. Following the
analogy of political elections, the courts have approved this practice of the Board." 9
2. There is this policy consideration. The country is at present embarked on a widescale industrialization project. As a matter of fact, respondent firm is engaged in such
activity. Industrialization, as noted by Professor Smith, Merrifield and Rothschild, "can
thrive only as there is developed a. stable structure of law and order in the productive
sector."10 That objective is best attained in a collective bargaining regime, which is a
manifestation of industrial democracy at work, if there be no undue obstacles placed
in the way of the choice of a bargaining representative. To insist on the absolute
majority where there are various unions and where the possibility of invalid ballots
may not be ruled out, would be to frustrate that goal. For the probability of a long
drawn-out, protracted process is not easy to dismiss. That is not unlikely given the
intensity of rivalry among unions capable of enlisting the allegiance of a group of
workers. It is to avoid such a contingency that there is this explicit pronouncement in
the implementing rule. It speaks categorically. It must be obeyed. That was what
respondent Director did.
3. Nor can fault of a grave and serious character be imputed to respondent Director
presumably because of failure to abide by the doctrine or pronouncement of this
Court in the aforesaid Allied Workers Association case. The reliance is on this excerpt
from the opinion: "However, spoiled ballots, i.e., those which are defaced, torn or
marked (Rules for Certification Elections, Rule II, sec. 2[j]) should be counted in
determining the majority since they are nevertheless votes cast by those who are
qualified to do so." 11 Nothing can be clearer than that its basis is a paragraph in a
section of the then applicable rules for certification elections. 12 They were
promulgated under the authority of the then prevailing Industrial Peace Act. 13 That
Legislation is no longer in force, having been superseded by the present Labor Code
which took effect on November 1, 1974. This certification election is governed
therefore, as was made clear, by the present Labor Code and the Rules issued
thereunder. Absent a showing that such rules and regulations -are violative of the
Code, this Court cannot ignore their existence. When, as should be the case, a public
official acts in accordance with a norm therein contained, no infraction of the law is

committed. Respondent Director did, as he ought to, comply with its terms. He took
into consideration only the "valid votes" as was required by the Rules. He had no
choice as long as they remain in force. In a proper showing, the judiciary can nullify
any rule it found in conflict with the governing statute. 14 That was not even attempted
here. All that petitioner did was to set forth in two separate paragraphs the applicable
rule followed by respondent Director 15 and the governing article. 16 It did not even
bother to discuss why such rule was in conflict with the present Labor Code. It failed
to point out any repugnancy. Such being the case, respondent Director must be
upheld.
4. The conclusion reached by us derives further support from the deservedly high
repute attached to the construction placed by the executive officials entrusted with the
responsibility of applying a statute. The Rules and Regulations implementing the
present Labor Code were issued by Secretary Blas Ople of the Department of Labor
and took effect on February 3, 1975, the present Labor Code having been made
known to the public as far back as May 1, 1974, although its date of effectivity was
postponed to November 1, 1974, although its date of effectivity was postponed to
November 1, 1974. It would appear then that there was more than enough time for a
really serious and careful study of such suppletory rules and regulations to avoid any
inconsistency with the Code. This Court certainly cannot ignore the interpretation
thereafter embodied in the Rules. As far back as In re Allen," 17 a 1903 decision,
Justice McDonough, as ponente, cited this excerpt from the leading American case
of Pennoyer v. McConnaughy, decided in 1891: "The principle that the
contemporaneous construction of a statute by the executive officers of the
government, whose duty it is to execute it, is entitled to great respect, and should
ordinarily control the construction of the statute by the courts, is so firmly embedded
in our jurisprudence that no authorities need be cited to support it." 18 There was a
paraphrase by Justice Malcolm of such a pronouncement in Molina v. Rafferty," 19 a
1918 decision: "Courts will and should respect the contemporaneous construction
placed upon a statute by the executive officers whose duty it is to enforce it, and
unless such interpretation is clearly erroneous will ordinarily be controlled
thereby." 20 Since then, such a doctrine has been reiterated in numerous
decisions . 21 As was emphasized by Chief Justice Castro, "the construction placed by
the office charged with implementing and enforcing the provisions of a Code should
he given controlling weight. " 22
WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner
Philippine Association of Free Labor Unions (PAFLU).
Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur.

Footnotes
1 Rule 6 of the Rules and Regulations implementing the Labor
Code of the Philippines, Section 8, subsection (f), reads as follows:

32

"The union which obtained majority of the valid votes cast by

eligible voters shall be certified as the sole and exclusive
bargaining agent of all the workers in the appropriate unit. However,
in order to have a valid election, at least fifty-one percent of all
eligible voters in the appropriate bargaining unit shall have cast
their votes."

have. been the intention of counsel for petitioners, but such an

omission possibly may give rise to a misinterpretation as to their
motive. They are well-advised to take a little more care next time in
the filing and preparation of pleadings to assure accuracy.

2 Another labor union, PLAC, obtained a zero vote.

14 Cf. Teoxon v. Member of the Board of Administrators, L-25619,

June 30, 1970, 33 SCRA 585.

13 Republic Act No. 875 (1953).

3 L-22580 and 22950, June 6, 1967, 20 SCRA 364.

15 Rule 6, Section 8, Subsection (f).
4 The comment was submitted by Assistant Solicitor General
Reynato S. Puno, assisted by Solicitor Jesus V. Diaz.

16 Art. 256 of the Labor Code.

5 Republic Act No. 875 (1953).

17 2 Phil 630.

6 As set forth in that portion of the petition labeled Statement of the

Case: "c) Petitioner appealed from the certification ... , calling
attention to the fact that such certification contravenes the provision
of the law (Art. 256, Labor Code); that the seventeen (17) spoiled
ballots should be taken into account in considering the majority,
especially so that out of the 17 spoiled ballots ten (10) were
intended for the petitioner; ... Petition. 3-4.

18 Ibid, 640. Pennoyer v. McConnaughly is cited in 140 US 1. The

excerpt is on p. 23 thereof, Cf. Government v. Municipality of
Binalonan, 32 Phil. 634 (1915).
19 37 Phil. 545.
20 Ibid, 555.

7 L-35075, November 24, 1972, 48 SCRA 169.

8 Ibid, Cf. United Employees Union v. Noriel, L-40810, Oct. 3, 1975,
67 SCRA 267; Philippine Association of Free Unions v. Bureau of
Labor Relations, L-42115, Jan. 27, 1976, 69 SCRA 132; Federacion
Obrera v. Noriel, L-41937, July 6, 1976.
9 Cox and Bok, Labor Law, Seventh Ed., 373 (1969), citing New
York Handkerchief Mfg. Co. v. NLRB, 114 F. 2d 114 (7th Cir., 1940),
certiorari denied 311 U.S. 704, 61 S. Ct. 170, 85 L. Ed. 457 (1941)
and Virginian Ry. Co. v. System Federation No, 40, 300 US 5157
57 S. Ct. 592, 81 L. Ed. 789 (1937).
10 Smith, Merrifield, Rothschild, Collective Bargaining and Labor
Arbitration 13 (1970).

21 Cf. Madrigal v. Rafferty, 38 Phil. 414 (1918); Philippine Sugar

Centrals Agency v. Insular Collector, 51 Phil. 131 (1927); Yra v.
Abao, 52 Phil. 380 (1928); People v. Hernandez, 59 Phil. 272
(1933); Ortua v. Singson Encarnacion, 59 Phil. 440 (1934);
Regalado v. Yulo, 61 Phil. 173 (1935); Bengzon v. Secretary of
Justice, 62 Phil. 912 (1936); Director of Lands v. Abaya, 63 Phil.
559 (1936); Everett v. Bautista, 69 Phil. 137 (1939); Krivenko v.
Register of Deeds, 79 Phil. 461 (1947); Manantan v. Municipality of
Luna, 82 Phil. 844 (1949); Tamayo v. Manila Hotel Co., 101 Phil.
811 (1975); Tan v. Municipality of Pagbilao, L-14264, April 30, 1963,
7 SCRA 887, Asturias Sugar Central v. Commissioner of Customs,
L-19337, Sept. 30, 1969, 29 SCRA 617; University of the
Philippines v. Court of Appeals, L-28153, Jan. 28, 1971, 37 SCRA
64; Orencia v. Enrile, L-28887, Feb. 22, 1974, 55 SCRA Nov. 15,
1974, 61 SCRA 580. The latest case in point is Sarmiento v.
Nolasco, L-38565, Nov. 15, 1974, 61 SCRA 80.

11 L-22580 and 22950, 20 SCRA 364, 369.

12 It is regrettable that quotation marks were used in the petition
and yet no indication is made that this pronouncement is in
accordance with rules for certification election. It certainly could not

22 Asturias Sugar Central, Inc. v. Commissioner of Customs, L19337, Sept. 30, 1969, 29 SCRA 617, 623. The words placed in the
bracket likewise come from that portion of the opinion of then
Justice Castro, but the Code in question is the Tariff and Customs

33

Code. It should be obvious that such a principle applies as well to

the present Labor Code.

Manila
SPECIAL SECOND DIVISION
EASTERN TELECOMMUNICATIONS G.R. NO. 135992
PHILIPPINES, INC. and
TELECOMMUNICATIONS Present:
TECHNOLOGIES, INC.,
Petitioners, PUNO, Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
- versus - TINGA, and
CHICO-NAZARIO, JJ.
INTERNATIONAL COMMUNICATION
CORPORATION, Promulgated:
Respondent. January 31, 2006
X--------------------------------------------------X
AMENDED DECISION
AUSTRIA-MARTINEZ, J.:

On July 23, 2004, the Court promulgated its Decision in the above-captioned case
with the following dispositive portion:
WHEREFORE, the petition for review on certiorari is
PARTIALLY
GRANTED. The
Order
of
the
National
Telecommunications Commissions dated November 10, 1997 in
NTC Case No. 96-195 is AFFIRMED with the following
modifications:
Respondent International Communication Corporation, in
accordance with Section 27 of NTC MC No. 11-9-93, is required to:
(1) Deposit in escrow in a reputable bank 20% of the
investment required for the first two years of the
implementation of the proposed project; and
Republic of the Philippines
Supreme Court

(2) Post a performance bond equivalent to 10% of the

investment required for the first two years of the
approved project but not to exceed P500 Million.

34

within
such
period
to
be
determined
National Telecommunications Commission.

by

the

No pronouncement as to costs.
SO ORDERED.

[1]

Subsequently, in its Manifestation/Comment filed on January 11, 2005, the

Office of the Solicitor General (OSG), in behalf of the NTC, likewise referred to the
same letter of OIC Heceta and declared that it fully agrees with respondent that the
escrow deposit and performance bond are not required in subsequent authorizations
for additional/new areas outside its original roll-out obligation under the Service Area
Scheme of E.O. No. 109.

Respondent now seeks a partial reconsideration of the portion of the Courts

decision requiring it to make a 20% escrow deposit and to post a 10% performance
bond.Respondent claims that Section 27 of NTC MC No. 11-9-93, which required the
foregoing amounts, pertains only to applications filed under Executive Order No. 109
(E.O. No. 109) and not to applications voluntarily filed. In its Manifestation in support
of the motion for partial reconsideration, respondent attached a letter from Deputy
Commissioner and Officer-in-Charge (OIC), Kathleen G. Heceta, of the National

Petitioners did not file any comment and it was only after the Court issued a
show cause and compliance Resolution on October 19, 2005 that petitioners
manifested in their Entry of Special Appearance, Manifestation and Compliance
dated November 25, 2005 that they have no further comments on respondents
motion for partial reconsideration.[4]

Telecommunications Commission (NTC), stating thus:

The Court has observed in its Decision that Section 27 of NTC MC No. 11-9xxx
Please be informed that the escrow deposit and
performance bond were required to public telecommunications
entities to ensure that the mandated installation of local exchange
lines are installed within three (3) years pursuant to EO 109 and RA
7925. Since your company has already complied with its obligation
by the installation of more than 300,000 lines in Quezon
City,Malabon City and Valenzuela City in the National Capital
Region and Region V in early 1997, the escrow deposit and
performance bond were not required in your subsequent
authorizations.[2]

93 is silent as to whether the posting of an escrow deposit and performance bond is a

condition sine qua non for the grant of a provisional authority. The NTC, through the
OSG, explicitly clarified, which was not disputed by petitioners, that the escrow
deposit and performance bond are not required in subsequent authorizations for
additional/new areas outside its original roll-out obligation under E.O. No. 109. The
OSG agreed with respondents stance that since the provisional authority in this case
involves a voluntary application not covered by the original service areas created by
the NTC under E.O. No. 109, then it is not subject to the posting of an escrow deposit

In a Resolution dated October 4, 2004, the Court required petitioners and

the NTC to file their respective comments on the motion.[3]

and performance bond as required by E.O. No. 109, but only to the conditions
provided in the provisional authority.Further, the OSG adapted the ratiocination of the
Court of Appeals on this matter, i.e., respondent was not subjected to the foregoing

35

escrow deposit and performance bond requirement because the landline obligation is
already outside its original roll-out commitment under E.O. No. 109.[5]

The NTC, being the government agency entrusted with the regulation of
activities coming under its special and technical forte, and possessing the necessary
rule-making power to implement its objectives,[6] is in the best position to interpret its
own rules, regulations and guidelines. The Court has consistently yielded and
accorded great respect to the interpretation by administrative agencies of their own
rules unless there is an error of law, abuse of power, lack of jurisdiction or grave
abuse of discretion clearly conflicting with the letter and spirit of the law.[7]

In City Government of Makati vs. Civil Service Commission,[8] the Court cited
cases where the interpretation of a particular administrative agency of a certain rule
was adhered to, viz.:
As properly noted, CSC was only interpreting its own rules
on leave of absence and not a statutory provision in coming up with
this uniform rule. Undoubtedly, the CSC like any other agency
has the power to interpret its own rules and any phrase
contained in them with its interpretation significantly
becoming part of the rules themselves. As observed inWest
Texas Compress & Warehouse Co. v. Panhandle & S.F. Railing Co.
xxx
This principle is not new to us. In Geukeko v. Araneta this
Court upheld the interpretation of the Department of Agriculture and
Commerce of its own rules of procedure in suspending the period
of appeal even if such action was nowhere stated therein. We said xxx

promulgated by the Secretary of Agriculture and Natural

Resources pursuant to the power bestowed on said
administrative agency to promulgate rules and
regulations necessary for the proper discharge and
management of the functions imposed by law upon said
office. x x x x Recognizing the existence of such rulemaking authority, what is the weight of an interpretation
given by an administrative agency to its own rules or
regulations?Authorities sustain the doctrine that the
interpretation given to a rule or regulation by those
charged with its execution is entitled to
the greatest weight by the Court construing such
rule or regulation, and such interpretation will be
followed unless it appears to be clearly
unreasonable or arbitrary (42 Am. Jur. 431). It has also
been said that:
xxx
The same precept was enunciated in Bagatsing v.
Committee on Privatization where we upheld the action of the
Commission on Audit (COA) in validating the sale of Petron
Corporation to Aramco Overseas Corporation on the basis of COA's
interpretation of its own circular that set bidding and audit
guidelines on the disposal of government assets
The COA itself, the agency that adopted the
rules on bidding procedure to be followed by government
offices and corporations, had upheld the validity and
legality of the questioned bidding. The interpretation of
an agency of its own rules should be given more
weight than the interpretation by that agency of the
law it is merely tasked to administer (underscoring
supplied).
Given the greater weight accorded to an agency's
interpretation of its own rules than to its understanding of the
statute it seeks to implement, we simply cannot set aside the
former on the same grounds as we would overturn the latter. More
specifically, in cases where the dispute concerns the interpretation
by an agency of its own rules, we should apply only these
standards:"Whether the delegation of power was valid; whether the
regulation was within that delegation; and if so, whether it was a
reasonable regulation under a due process test." An affirmative
answer in each of these questions should caution us from
discarding the agency's interpretation of its own rules. (Emphasis
supplied)

x x x It must be remembered that Lands Administrative

Order No. 6 is in the nature of procedural rules

36

ROMEO J. CALLEJO, SR. DANTE O. TINGA

Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice

Thus, the Court holds that the interpretation of the NTC that Section 27 of NTC MC
No. 11-9-93 regarding the escrow deposit and performance bond shall pertain only to

ATTESTATION

a local exchange operators original roll-out obligation under E.O. No. 109, and not to
roll-out obligations made under subsequent or voluntary applications outside E.O. No.
109, should be sustained.

I attest that the conclusions in the above Amended Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Associate Justice
Chairperson, Second Division

IN

VIEW

THEREOF,

is GRANTED. The

respondents

Motion

Courts

Decision

for

Partial

Reconsideration

dated July

23,

2004 is AMENDED, the dispositive portion of which should read as follows:

WHEREFORE, the petition for review on certiorari is DENIED. The
Order of the National Telecommunications Commission
dated November 10, 1997 in NTC Case No. 96-195 is AFFIRMED.

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, it is hereby certified that the conclusions in the above Amended Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice

thereby deleting the order requiring respondent to make a 20% escrow deposit and to
post a 10% performance bond.
[1]

Rollo, p. 312.
Id., p. 327.
[3]
Id., p. 329.
[4]
Id., p. 355.
[5]
Id., pp. 339-340.
[6]
Section 11, Commonwealth Act No. 146, as amended; Section 15, Executive Order
No. 546.
[7]
Melendres, Jr. vs. COMELEC, 377 Phil. 275.
[8]
426 Phil. 631, 646-649.
[2]

SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice

37

G.R. No. 87416

April 8, 1991

CECILIO S. DE VILLA, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES,
HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, respondents.
San Jose Enriquez, Lacas Santos & Borje for petitioner.
Eduardo R. Robles for private respondent.

PARAS, J.:
This petition for review on certiorari seeks to reverse and set aside the decision* of
the Court of Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071
entitled "Cecilio S. de Villa vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes,"
dismissing the petition for certiorari filed therein.
The factual backdrop of this case, as found by the Court of Appeals, is as follows:
On October 5, 1987, petitioner Cecilio S. de Villa was charged before the
Regional Trial Court of the National Capital Judicial Region (Makati, Branch
145) with violation of Batas Pambansa Bilang 22, allegedly committed as
follows:

Republic of the Philippines

SUPREME COURT
Manila

That on or about the 3rd day of April 1987, in the municipality of

Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, did, then and there
willfully, unlawfully and feloniously make or draw and issue to
ROBERTO Z. LORAYEZ, to apply on account or for value a
Depositors Trust Company Check No. 3371 antedated March 31,
1987, payable to herein complainant in the total amount of U.S.
$2,500.00 equivalent to P50,000.00, said accused well knowing
that at the time of issue he had no sufficient funds in or credit with
drawee bank for payment of such check in full upon its presentment
which check when presented to the drawee bank within ninety (90)
days from the date thereof was subsequently dishonored for the
reason "INSUFFICIENT FUNDS" and despite receipt of notice of
such dishonor said accused failed to pay said ROBERTO Z.
LORAYEZ the amount of P50,000.00 of said check or to make
arrangement for full payment of the same within five (5) banking
days after receiving said notice.

SECOND DIVISION

38

After arraignment and after private respondent had testified on direct

examination, petitioner moved to dismiss the Information on the following
grounds: (a) Respondent court has no jurisdiction over the offense charged;
and (b) That no offense was committed since the check involved was
payable in dollars, hence, the obligation created is null and void pursuant to
Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and
Currency).
On July 19, 1988, respondent court issued its first questioned orders stating:
Accused's motion to dismiss dated July 5, 1988, is denied for lack
of merit.
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks,
provided they are either drawn and issued in the Philippines though
payable outside thereof, or made payable and dishonored in the
Philippines though drawn and issued outside thereof, are within the
coverage of said law. The law likewise applied to checks drawn
against current accounts in foreign currency.
Petitioner moved for reconsideration but his motion was subsequently
denied by respondent court in its order dated September 6, 1988, and which
reads:
Accused's motion for reconsideration, dated August 9, 1988, which
was opposed by the prosecution, is denied for lack of
merit.1wphi1
The Bouncing Checks Law is applicable to checks drawn against
current accounts in foreign currency (Proceedings of the Batasang
Pambansa, February 7, 1979, p. 1376, cited in Makati RTC Judge
(now Manila City Fiscal) Jesus F. Guerrero's The Ramifications of
the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision,
pp. 20-22).
A petition for certiorari seeking to declare the nullity of the aforequoted
orders dated July 19, 1988 and September 6, 1988 was filed by the
petitioner in the Court of Appeals wherein he contended:
(a) That since the questioned check was drawn against the dollar
account of petitioner with a foreign bank, respondent court has no
jurisdiction over the same or with accounts outside the territorial
jurisdiction of the Philippines and that Batas Pambansa Bilang 22
could have not contemplated extending its coverage over dollar
accounts;

(b) That assuming that the subject check was issued in connection
with a private transaction between petitioner and private
respondent, the payment could not be legally paid in dollars as it
would violate Republic Act No. 529; and
(c) That the obligation arising from the issuance of the questioned
check is null and void and is not enforceable with the Philippines
either in a civil or criminal suit. Upon such premises, petitioner
concludes that the dishonor of the questioned check cannot be said
to have violated the provisions of Batas Pambansa Bilang 22.
(Rollo, Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the decretal
portion of which reads:
WHEREFORE, the petition is hereby dismissed. Costs against
petitioner.
SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
A motion for reconsideration of the said decision was filed by the petitioner
on February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the
Court of Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p.
26).
Hence, this petition.
In its resolution dated November 13, 1989, the Second Division of this Court
gave due course to the petition and required the parties to submit
simultaneously their respective memoranda (Rollo, Resolution, p. 81).
The sole issue in this case is whether or not the Regional Trial Court of
Makati has jurisdiction over the case in question.
The petition is without merit.
Jurisdiction is the power with which courts are invested for administering
justice, that is, for hearing and deciding cases (Velunta vs. Philippine
Constabulary, 157 SCRA 147 [1988]).
Jurisdiction in general, is either over the nature of the action, over the
subject matter, over the person of the defendant, or over the issues framed
in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]).

39

Jurisdiction over the subject matter is determined by the statute in force at

the time of commencement of the action (De la Cruz vs. Moya, 160 SCRA
538 [1988]).
The trial court's jurisdiction over the case, subject of this review, can not be
questioned.
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide
that:
Sec. 10. Place of the commission of the offense. The complaint or
information is sufficient if it can be understood therefrom that the
offense was committed or some of the essential ingredients thereof
occured at some place within the jurisdiction of the court, unless the
particular place wherein it was committed constitutes an essential
element of the offense or is necessary for identifying the offense
charged.
Sec. 15. Place where action is to be instituted. (a) Subject to
existing laws, in all criminal prosecutions the action shall be
instituted and tried in the court of the municipality or territory where
the offense was committed or any of the essential ingredients
thereof took place.
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the
case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled
"that jurisdiction or venue is determined by the allegations in the
information."
The information under consideration specifically alleged that the offense was
committed in Makati, Metro Manila and therefore, the same is controlling and
sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The
Court acquires jurisdiction over the case and over the person of the accused
upon the filing of a complaint or information in court which initiates a criminal
action (Republic vs. Sunga, 162 SCRA 191 [1988]).
Moreover, it has been held in the case of Que v. People of the Philippines
(154 SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA
154 [1988]) that "the determinative factor (in determining venue) is the place
of the issuance of the check."
On the matter of venue for violation of Batas Pambansa Bilang 22, the
Ministry of Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977],
laid down the following guidelines in Memorandum Circular No. 4 dated
December 15, 1981, the pertinent portion of which reads:

(1) Venue of the offense lies at the place where the check was
executed and delivered; (2) the place where the check was written,
signed or dated does not necessarily fix the place where it was
executed, as what is of decisive importance is the delivery thereof
which is the final act essential to its consummation as an obligation;
. . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua,
October 28, 1980)." (See The Law on Bouncing Checks Analyzed
by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos.
11 & 12, October-December, 1983, p. 14).
It is undisputed that the check in question was executed and delivered by
the petitioner to herein private respondent at Makati, Metro Manila.
However, petitioner argues that the check in question was drawn against the
dollar account of petitioner with a foreign bank, and is therefore, not covered
by the Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not distinguish the currency involved in
the case. As the trial court correctly ruled in its order dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks,
provided they are either drawn and issued in the Philippines though
payable outside thereof . . . are within the coverage of said law.
It is a cardinal principle in statutory construction that where the law does not
distinguish courts should not distinguish.1wphi1 Parenthetically, the rule is
that where the law does not make any exception, courts may not except
something unless compelling reasons exist to justify it (Phil. British
Assurance Co., Inc. vs. IAC, 150 SCRA 520 [1987]).
More importantly, it is well established that courts may avail themselves of
the actual proceedings of the legislative body to assist in determining the
construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41
Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a
statute means, the meaning put to the provision during the legislative
deliberation or discussion on the bill may be adopted (Arenas vs. City of San
Carlos, 82 SCRA 318 [1978]).
The records of the Batasan, Vol. III, unmistakably show that the intention of
the lawmakers is to apply the law to whatever currency may be the subject
thereof. The discussion on the floor of the then Batasang Pambansa fully
sustains this view, as follows:
xxx

xxx

xxx

THE SPEAKER. The Gentleman from Basilan is recognized.

40

MR. TUPAY. Parliamentary inquiry, Mr. Speaker.

THE SPEAKER. The Gentleman may proceed.

G.R. No. 106724 February 9, 1994

MR. TUPAY. Mr. Speaker, it has been mentioned by one of the

Gentlemen who interpellated that any check may be involved, like
U.S. dollar checks, etc. We are talking about checks in our country.
There are U.S. dollar checks, checks, in our currency, and many
others.

MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this
check may be a check in whatever currency. This would not even
be limited to U.S. dollar checks. The check may be in French
francs or Japanese yen or deutschunorhs. (sic.) If drawn, then this
bill will apply.

THE NATIONAL POLICE COMMISSION, represented by its Acting Chairman,

Cesar Sarino, Teodolo C. Natividad, Vice-Chairman and Executive Officer, Brig.
Gen. Virgilio H. David, Edgar Dula Torre, Guillermo P. Enriquez, Commissioners,
and Chief Supt. Levy D. Macasiano Director for Personnel, petitioners,
vs.
Honorable Judge Salvador de Guzman, Jr., Chief Supt. Norberto M. Lina, Chief
Supt. Ricardo Trinidad, Jr., Sr. Supt. Manuel Suarez, Supt. Justito B. Tagum, Sr.
Supt. Tranquilino Aspiras, Sr., Supt. Ramon I. Navarro,
Sr. Supt. Ramon I. Navarro, Sr. Supt. Jose P. Suria, Sr. Supt. Agaton Abiera,
Chief Insp. Bienvenido Torres, and the National (ROTC) Alumni Association Inc.
(NARRA), represented by its President Col. Benjamin Gundran, and Director
Hermogenes Peralta, Jr., respondents.

MR TUPAY. So it include U.S. dollar checks.

The Solicitor General for petitioners.

THE SPEAKER. The Sponsor may answer that inquiry.

MR. MENDOZA. Yes, Mr. Speaker.

xxx

xxx

Renecio R. Espiritu for private respondents.

xxx

Diosdado P. Peralta for respondent-intervenor.

(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.
BIDIN, J.:
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes
* Penned by Associate Justice Jose A. R. Melo and concurred in by
Associate Justices Manuel C. Herrera and Jorge S. Imperial.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

The case at bar had its origin in the implementation of the compulsory retirement of
PNP officers as mandated in Sec. 39, RA 6975, otherwise known as "An Act
Establishing the Philippine National Police Under a Reorganized Department of the
Interior and Local Government", which took effect on
January 2, 1991. Among others, RA 6975 provides for a uniform retirement system for
PNP members. Section 39 thereof reads:
Sec. 39. Compulsory Retirement. Compulsory retirement, for
officer and non-officer, shall be upon the attainment of age fifty-six
(56); Provided, That, in case of any officer with the rank of chief
superintendent, director or deputy director general, the Commission
may allow his retention in the service for an unextendible period of
one (1) year.

41

Based on the above provision, petitioners sent notices of retirement to private

respondents who are all members of the defunct Philippine Constabulary and have
reached the age of fifty-six (56).

On December 23, 1991, respondent judge issued a restraining order followed by a

writ of injunction on January 8, 1992 upon posting of a P100,000.00 bond by private
respondents.

In response, private respondents filed a complaint on December 19, 1991 for

declaratory relief with prayer for the issuance of an ex parte restraining order and/or
injunction (docketed as Civil Case No. 91-3498) before the Regional Trial Court of
Makati, Branch 142. In their complaint, respondents aver that the age of retirement
set at fifty-six (56) by Section 39 of RA 6975 cannot be applied to them since they are
also covered by Sec. 89 thereof which provides:

After the parties have submitted their respective pleadings, the case was submitted
for resolution and on August 14, 1992, the respondent judge rendered the assailed
decision, the decretal portion of which reads:

Any provision hereof to the contrary notwithstanding, and within the

transition period of four (4) years following the effectivity of this Act,
the following members of the INP shall be considered compulsorily
retired:
a) Those who shall attain the age of sixty (60) on the first year of
the effectivity of this Act.

WHEREFORE, the court hereby declares that the term "INP" in

Section 89 of the PNP Law includes all members of the present
Philippine National Police, irrespective of the original status of the
present members of the Philippine National Police before its
creation and establishment, and that Section 39 thereof shall
become operative after the lapse of the
four-year transition period.
The preliminary injunction issued is made permanent.
SO ORDERED. (Rollo, pp. 29-30)

b) Those who shall attain the age of fifty-nine (59) on the second
year of the effectivity of this Act.
c) Those who shall attain the age of fifty-eight (58) on the third year
of the effectivity of this Act.
d) Those who shall attain the age of fifty-seven (57) on the fourth
year of the effectivity of this Act.
It is the submission of respondents that the term "INP" includes both the former
members of the Philippine Constabulary and the local police force who were earlier
constituted as the Integrated National Police (INP) by virtue of
PD 765 in 1975.
On the other hand, it is the belief of petitioners that the 4-year transition period
provided in Section 89 applies only to the local police forces who previously retire,
compulsorily, at age sixty (60) for those in the ranks of Police/Fire Lieutenant or
higher (Sec. 33, PD 1184); while the retirement age for the PC had already been set
at fifty-six (56) under the AFP law.

Petitioners filed the instant petition on October 8, 1992 seeking the reversal of the
above judgment. On January 12, 1993, the Court resolved to treat the respondents'
Comment as Answer and gave due course to the petition.
In ruling in favor of private respondents, respondent judge observed, among others,
that:
It may have been the intention of Congress to refer to the local
police forces as the "INP" but the PNP Law failed to define who or
what constituted the INP. The natural recourse of the court is to
trace the source of the "INP" as courts are permitted to look to prior
laws on the same subject and to investigate the antecedents
involved. There is nothing extant in the statute books except that
which was created and established under
PD 765 pursuant to the mandate of Article XV of the 1973
Constitution providing that the "State shall establish and maintain
an integrated national police force whose organization,
administration and operation shall be provided by law." Heretofore,
INP was unknown. And the said law categorically declared the PC
"as the principal component of the Integrated National Police" (Sec.
5, PD 765).

42

The court was supplied by respondents (petitioners herein) with

excerpts taken from the discussion amongst the members of
Congress concerning the particular provision of Section 89. The
court is not persuaded by said discussion; it was a simple matter for
the members of the legislature to state precisely in clear and
unequivocal terms their meaning, such as "integrated police" as
used in PD 765. Instead, they employed "INP", a generic term that
includes the PC as the principal component of the INP, supra. In
failing to categorically restrict the application of Section 89 as the
members of legislature are said to have intended, it gave rise to the
presumption that it has not limited nor intended to limit the meaning
of the word when the bill was finally passed into law. It is not
difficult for the court to also presume that in drafting the wording of
the PNP Law, the legislators were aware of the historical legislative
origin of the "INP".
xxx xxx xxx
The court takes particular note of the fact that Section 89 is found in
the Transitory Provisions of the law which do not provide for any
distinction between the former PC officers and those belonging to
the civilian police forces. These provision are specifically enacted to
regulate the period covering the dissolution of the PC and the
creation of the PNP, a period that necessarily would be attended by
imbalances and or confusion occasioned by the wholesale and
mass integration. In fact, the retirement payment scheme of the INP
is still to be formulated, leaving the impression that nothing is really
settled until after the transition of four years has lapsed. Section 89
therefore prevails over Section 39 up to the year 1995 when the
retirement age for the members of the PNP shall then be age 56;
after the year 1995, Section 39 shall then be the applicable law on
retirement of PNP members. (Rollo, pp. 27-28; emphasis supplied)
Petitioners disagree and claim that the use of the term INP in Sec. 89 does not imply
the same meaning contemplated under PD 765 wherein it is provided:
Sec. 1. Constitution of the Integrated National Police. There is
hereby established and constituted the Integrated National Police
(INP) which shall be composed of the Philippine Constabulary as
the nucleus, and the integrated police forces as established by
Presidential Decrees

Nos. 421, 482, 531, 585 and 641, as components, under the
Department of National Defense.
On the other hand, private respondents assert that being the nucleus of the
Integrated National Police (INP) under PD 765, former members of the Philippine
Constabulary (PC) should not be discriminated against from the coverage of the term
"INP" in Sec. 89, RA 6975. Clearly, it is argued, the term "INP" found in Section 89 of
RA 6975 refers to the INP in PD 765. Thus, where the law does not distinguish, the
courts should not distinguish.
Does the law, RA 6975, distinguish INP from the PC? Petitioners submit that it does
and cite Sections 23 and 85 to stress the point, viz.:
Sec. 23. Composition. Subject to the limitations provided for in
this Act, the Philippine National Police, hereinafter referred to as the
PNP, is hereby established, initially consisting of the members of
the police forces who were integrated into the Integrated National
Police (INP) pursuant to Presidential Decree No. 765, and the
officers and enlisted personnel of the Philippine Constabulary (PC).
..
xxx xxx xxx
The permanent civilian employees of the present PC, INP,
Narcotics Command, CIS and the technical command of the AFP
assigned with the PC, including NAPOLCOM hearing officers
holding regular items as such, shall be absorbed by the Department
as employees thereof, subject to existing laws and regulations.
xxx xxx xxx
Sec. 85. Phase of Implementation. The implementation of this
Act shall be undertaken in three (3) phases, to wit:
Phase I Exercise of option by the uniformed members of the
Philippine Constabulary, the PC elements assigned with the
Narcotics Command, CIS, and the personnel of the technical
services of the AFP assigned with the PC to include the regular CIS
investigating agents and the operatives and agents of the
NAPOLCOM Inspection, Investigation and Intelligence Branch, and
the personnel of the absorbed National Action Committee on Anti-

43

Hijacking (NACAH) of the Department of National Defense, to be

completed within six (6) months from the date of the effectivity of
this Act. At the end of this phase, all personnel from the INP, PC,
technical Services, NACAH, and NAPOLCOM Inspection,
Investigation and Intelligence Branch shall have been covered by
official orders assigning them to the PNP . . .
xxx xxx xxx
. . . Any PC-INP officer or enlisted personnel may, within the twelvemonth period from the effectivity of this Act, retire . . .
Phase III . . . To accomplish the tasks of Phase III, the
Commission shall create a Board of Officers composed of the
following: NAPOLCOM Commissioner as Chairman and one (1)
representative each from the PC, INP, Civil Service Commission
and the Department of Budget and Management.
Section 86 of the same law further provides:
Sec. 86. Assumption by the PNP of Police Functions. The PNP
shall absorb the functions of the PC, the INP and the Narcotics
Command upon the effectivity of this Act.
From a careful perusal of the above provisions, it appears therefore that the use of
the term INP is not synonymous with the PC. Had it been otherwise, the statute could
have just made a uniform reference to the members of the whole Philippine National
Police (PNP) for retirement purposes and not just the INP. The law itself distinguishes
INP from the PC and it cannot be construed that "INP" as used in Sec. 89 includes
the members of the PC.
And contrary to the pronouncement of respondent judge that the law failed to define
who constitutes the INP, Sec. 90 of RA 6975 has in fact defined the same. Thus,
Sec. 90. Status of Present NAPOLCOM, PC-INP. Upon the
effectivity of this Act, the present National Police Commission and
the Philippine Constabulary-Integrated National Police shall cease
to exist. The Philippine Constabulary, which is the nucleus of the
Philippine Constabulary-Integrated National Police shall cease to
be a major service of the Armed Forces of the Philippines. The
Integrated National Police, which is the civilian component of the

Philippine Constabulary-Integrated National Police, shall cease to

be the national police force and lieu thereof, a new police force
shall be established and constituted pursuant to this Act. (emphasis
supplied)
It is not altogether correct to state, therefore, that the legislature failed to define who
the members of the INP are. In this regard, it is of no moment that the legislature
failed to categorically restrict the application of the transition period in Sec. 89
specifically in favor of the local police forces for it would be a mere superfluity as the
PC component of the INP was already retirable at age fifty-six (56).
Having defined the meaning of INP, the trial court need not have belabored on the
supposed dubious meaning of the term. Nonetheless, if confronted with such a
situation, courts are not without recourse in determining the construction of the statute
with doubtful meaning for they may avail themselves of the actual proceedings of the
legislative body. In case of doubt as to what a provision of a statute means, the
meaning put to the provision during the legislative deliberations may be adopted (De
Villa v. Court of Appeals,
195 SCRA 722 [1991] citing Palanca v. City of Manila, 41 Phil. 125 [1920]; Arenas v.
City of San Carlos, 82 SCRA 318 [1978]).
Courts should not give a literal interpretation to the letter of the law if it runs counter to
the legislative intent (Yellow Taxi and Pasay Transportation Workers' Association v.
Manila Yellow Taxi Cab. Co., 80 Phil. 83 [1948]).
Examining the records of the Bicameral Conference Committee, we find that the
legislature did intent to exclude the members of the PC from the coverage of Sec. 89
insofar as the retirement age is concerned, thus:
THE CHAIRMAN. (SEN. MACEDA). Well, it seems what people
really want is one common rule, so if it is fifty-six, fifty-six; of course,
the PC wants sixty for everybody. Of course, it is not acceptable to
us in the sense that we tied this up really to the question of: If you
are lax in allowing their (the PC) entry into the PNP, then tighten up
the retirement. If we will be strict in, like requiring examinations and
other conditions for their original entry, then since we have sifted
out a certain amount of undesirables, then we can allow a longer
retirement age. That was the rationale, that was the tie-up. Since
we are relaxing the entry, we should speed up . . .
THE CHAIRMAN. (REP. GUTANG). Exit.

44

THE CHAIRMAN. (SEN. MACEDA) . . . the retirement, the exit.

THE CHAIRMAN. (SEN. MACEDA). Walang problema dito sa

transition ng pulis, acceptable ito, eh.

THE CHAIRMAN. (REP. GUTANG). So let me get it very clear, Mr.

Chairman. Fifty-six, let's say, that will not make any adjustment in
the PC because there (they) are (retirable at age) fifty-six.

THE CHAIRMAN. (REP. COJUANGCO). Sa PC?

THE CHAIRMAN. (SEN. MACEDA). Kaya nga, wala na silang

masasabi.

THE CHAIRMAN. (SEN. MACEDA). PC, walang mawawala sa

kanila, 56 ang retirement age nilang talaga, eh. Kaya ayaw ko
ngang dagdagan 'yung 56 nila at 'yon din ang sa Armed Forces, 56.
(Ibid., May 22, 1990)

THE CHAIRMAN. (REP. GUTANG). In the case of the Police, since

they are retireable now at sixty, for the officers, it will be
applicable to them on a one-year every year basis for a total period
of four years transition. (Bicameral Conference Committee on
National Defense, March 12, 1990)
REP. GUTANG. On the first year of effectivity, the police will retire at
60 years.
THE CHAIRMAN. (SEN. MACEDA). Sixty.
REP. GUTANG. On the second year, 59.
THE CHAIRMAN. (SEN. MACEDA). Oo.
REP. GUTANG. On the third year, 58.
THE CHAIRMAN. (SEN. MACEDA). Fifty-eight. So 'yung 55, on the
third year, 58, doon siya re-retire.
REP. GUTANG. Oo.

In applying the provisions of Sec. 89 in favor of the local police force as established in
PD 765, the Court does not, in any manner, give any
undue preferential treatment in favor of the other group. On the contrary, the Court is
merely giving life to the real intent of the legislators based on the deliberations of the
Bicameral Conference Committee that preceded the enactment of RA 6975.
The legislative intent to classify the INP in such manner that Section 89 of RA 6975 is
applicable only to the local police force is clear. The question now is whether the
classification is valid. The test for this is reasonableness such that it must conform to
the following requirements: (1) It must be based upon substantial distinctions; (2) It
must be germane to the purpose of the law; (3) It must not be limited to existing
conditions only; (4) It must apply equally to all members of the same class (People vs.
Cayat, 68 Phil. 12 [1939]).
The classification is based upon substantial distinctions. The PC, before the effectivity
of the law (RA 6975), were already retirable at age 56 while the local police force
were retirable at 60, and governed by different laws
(P.D. 1184, Sec. 33 and Sec. 50). The distinction is relevant for the purpose of the
statute, which is to enable the local police force to plan for their retirement which
would be earlier than usual because of the new law. Section 89 is merely transitory,
remedial in nature, and loses its force and effect once the four-year transitory period
has elapsed. Finally, it applies not only to some but to all local police officers.

SEN. SAGUISAG. So kung 55, when the law becomes effective . . .

THE CHAIRMAN. (SEN. MACEDA). He will retire at 58, doon siya
aabot.
REP. UNICO. Pwede.
SEN. SAGUISAG. Dahil 'yon, may time to . . .

It may be appropriate to state at this point that it seems absurd that a law will grant an
extension to PC officers' retirable age from 56 to 60 and then gradually lower it back
to 56 without any cogent reason at all. Why should the retirement age of PC officers
be increased during the transitory period to the exclusion of other PC officers who
would retire at age 56 after such period? Such absurdity was never contemplated by
the law and would defeat its purpose of providing a uniform retirement age for PNP
members.

45

WHEREFORE, the petition is GRANTED. The writ of injunction issued on January 8,

1992 is hereby LIFTED and the assailed decision of respondent judge is REVERSED
and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo,
Melo, Quiason, Puno, Vitug and Kapunan, JJ., concur.
Nocon, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

46

G.R. No. L-17931

February 28, 1963

CASCO PHILIPPINE CHEMICAL CO., INC., petitioner,

vs.
HON. PEDRO GIMENEZ, in his capacity as Auditor General of the Philippines,
and HON. ISMAEL MATHAY, in his capacity as Auditor of the Central
Bank, respondents.
Jalandoni & Jamir for petitioner.
Officer of the Solicitor General for respondents.
CONCEPCION, J.:
This is a petition for review of a decision of the Auditor General denying a claim for
refund of petitioner Casco Philippine Chemical Co., Inc.
The main facts are not disputed. Pursuant to the provisions of Republic Act No. 2609,
otherwise known as the Foreign Exchange Margin Fee Law, the Central Bank of the
Philippines issued on July 1, 1959, its Circular No. 95. fixing a uniform margin fee of
25% on foreign exchange transactions. To supplement the circular, the Bank later
promulgated a memorandum establishing the procedure for applications for
exemption from the payment of said fee, as provided in said Republic Act No. 2609.
Several times in November and December 1959, petitioner Casco Philippine
Chemical Co., Inc. which is engaged in the manufacture of synthetic resin glues,
used in bonding lumber and veneer by plywood and hardwood producers bought
foreign exchange for the importation of urea and formaldehyde which are the main
raw materials in the production of said glues and paid therefor the aforementioned
margin fee aggregating P33,765.42. In May, 1960, petitioner made another purchase
of foreign exchange and paid the sum of P6,345.72 as margin fee therefor.
Prior thereto, petitioner had sought the refund of the first sum of P33,765.42, relying
upon Resolution No. 1529 of the Monetary Board of said Bank, dated November 3,
1959, declaring that the separate importation of urea and formaldehyde is exempt
from said fee. Soon after the last importation of these products, petitioner made a
similar request for refund of the sum of P6,345.72 paid as margin fee therefor.
Although the Central Bank issued the corresponding margin fee vouchers for the
refund of said amounts, the Auditor of the Bank refused to pass in audit and approve
said vouchers, upon the ground that the exemption granted by the Monetary Board
for petitioner's separate importations of urea and formaldehyde is not in accord with
the provisions of section 2, paragraph XVIII of Republic Act No. 2609. On appeal
taken by petitioner, the Auditor General subsequently affirmed said action of the
Auditor of the Bank. Hence, this petition for review.

The only question for determination in this case is whether or not "urea" and
"formaldehyde" are exempt by law from the payment of the aforesaid margin fee. The
pertinent portion of Section 2 of Republic Act No. 2609 reads:
The margin established by the Monetary Board pursuant to the provision of
section one hereof shall not be imposed upon the sale of foreign exchange
for the importation of the following:.
xxx

xxx

xxx

XVIII. Urea formaldehyde for the manufacture of plywood and hardboard

when imported by and for the exclusive use of end-users.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts
be admitted and approved by this Honorable Court, without prejudice to the
parties adducing other evidence to prove their case not covered by this
stipulation of facts. 1wph1.t
Petitioner maintains that the term "urea formaldehyde" appearing in this provision
should be construed as "urea andformaldehyde" (emphasis supplied) and that
respondents herein, the Auditor General and the Auditor of the Central Bank, have
erred in holding otherwise. In this connection, it should be noted that, whereas "urea"
and "formaldehyde" are the principal raw materials in the manufacture of synthetic
resin glues, the National Institute of Science and Technology has expressed, through
its Commissioner, the view that:
Urea formaldehyde is not a chemical solution. It is the synthetic resin formed
as a condensation product from definite proportions of urea and
formaldehyde under certain conditions relating to temperature, acidity, and
time of reaction. This produce when applied in water solution and extended
with inexpensive fillers constitutes a fairly low cost adhesive for use in the
manufacture of plywood.
Hence, "urea formaldehyde" is clearly a finished product, which is patently distinct
and different from urea" and "formaldehyde", as separate articles used in the
manufacture of the synthetic resin known as "urea formaldehyde". Petitioner
contends, however, that the bill approved in Congress contained the copulative
conjunction "and" between the terms "urea" and "formaldehyde", and that the
members of Congress intended to exempt "urea" and "formaldehyde" separately as
essential elements in the manufacture of the synthetic resin glue called "urea"
formaldehyde", not the latter as a finished product, citing in support of this view the
statements made on the floor of the Senate, during the consideration of the bill before

47

said House, by members thereof. But, said individual statements do not necessarily
reflect the view of the Senate. Much less do they indicate the intent of the House of
Representatives (see Song Kiat Chocolate Factory vs. Central Bank, 54 Off. Gaz.,
615; Mayon Motors Inc. vs. Acting Commissioner of Internal Revenue, L-15000
[March 29, 1961]; Manila Jockey Club, Inc. vs. Games & Amusement Board, L-12727
[February 29, 1960]). Furthermore, it is well settled that the enrolled bill which uses
the term "urea formaldehyde" instead of "urea and formaldehyde" is conclusive
upon the courts as regards the tenor of the measure passed by Congress and
approved by the President (Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag vs.
Lopez Vito, 78 Phil. 1; Macias vs. Comm. on Elections, L-18684, September 14,
1961). If there has been any mistake in the printing ofthe bill before it was certified by
the officers of Congress and approved by the Executive on which we cannot
speculate, without jeopardizing the principle of separation of powers and undermining
one of the cornerstones of our democratic system the remedy is by amendment or
curative legislation, not by judicial decree.
WHEREFORE, the decision appealed from is hereby affirmed, with costs against the
petitioner. It is so ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes,
Dizon, Regala and Makalintal, JJ., concur.

48

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 113092 September 1, 1994

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

REGALADO, J.:
It is indeed unfortunate that a group of elderly men, who were moved by their desire
to devote their remaining years to the service of their Creator by forming their own
civic organization for that purpose, should find themselves enmeshed in a criminal
case for making a solicitation from a community member allegedly without the
required permit from the Department of Social Welfare and Development.
The records of this case reveal that sometime in the last quarter of 1985, the officers
of a civic organization known as the Samahang Katandaan ng Nayon ng
Tikay launched a fund drive for the purpose of renovating the chapel of Barrio Tikay,
Malolos, Bulacan. Petitioner Martin Centeno, the chairman of the group, together with
Vicente Yco, approached Judge Adoracion G. Angeles, a resident of Tikay, and
solicited from her a contribution of P1,500.00. It is admitted that the solicitation was
made without a permit from the Department of Social Welfare and Development.
As a consequence, based on the complaint of Judge Angeles, an information 1 was
filed against petitioner Martin Centeno, together with Religio Evaristo and Vicente

Yco, for violation of Presidential Decree No. 1564, or the Solicitation Permit Law,
before the Municipal Trial Court of Malolos, Bulacan, Branch 2, and docketed as
Criminal Case No. 2602. Petitioner filed a motion to quash the information 2 on the
ground that the facts alleged therein do not constitute an offense, claiming that
Presidential Decree No. 1564 only covers solicitations made for charitable or public
welfare purposes, but not those made for a religious purpose such as the construction
of a chapel. This was denied 3 by the trial court, and petitioner's motion for
reconsideration having met the same fate, trial on the merits ensued.
On December 29, 1992, the said trial court rendered judgment 4 finding accused
Vicente Yco and petitioner Centeno guilty beyond reasonable doubt and sentencing
them to each pay a fine of P200.00. Nevertheless, the trial court recommended that
the accused be pardoned on the basis of its finding that they acted in good faith, plus
the fact that it believed that the latter should not have been criminally liable were it not
for the existence of Presidential Decree
No. 1564 which the court opined it had the duty to apply in the instant case.
Both accused Centeno and Yco appealed to the Regional Trial Court of Malolos,
Bulacan, Branch 10. However, accused Yco subsequently withdrew his appeal, hence
the case proceeded only with respect to petitioner Centeno. On May 21, 1993,
respondent Judge Villalon-Pornillos affirmed the decision of the lower court but
modified the penalty, allegedly because of the perversity of the act committed which
caused damage and prejudice to the complainant, by sentencing petitioner Centeno
to suffer an increased penalty of imprisonment of 6 months and a fine of P1,000.00,
without subsidiary imprisonment in case of insolvency. 5 The motion for
reconsideration of the decision was denied by the court. 6
Thus it is that a fine of P200.00 imposed as a penalty by the lowest court in the
judicial hierarchy eventually reached this highest tribunal, challenged on the sole
issue of whether solicitations for religious purposes are within the ambit of
Presidential Decree No. 1564. Quantitatively, the financial sanction is a nominal
imposition but, on a question of principle, it is not a trifling matter. This Court is
gratified that it can now grant this case the benefit of a final adjudication.
Petitioner questions the applicability of Presidential Decree No. 1564 to solicitations
for contributions intended for religious purposes with the submissions that (1) the term
"religious purpose" is not expressly included in the provisions of the statute, hence
what the law does not include, it excludes;
(2) penal laws are to be construed strictly against the State and liberally in favor of the
accused; and (3) to subject to State regulation solicitations made for a religious
purpose would constitute an abridgment of the right to freedom of religion guaranteed
under the Constitution.

49

Presidential Decree No. 1564 (which amended Act No. 4075, otherwise known as the
Solicitation Permit Law), provides as follows:
Sec. 2. Any person, corporation, organization, or association
desiring to solicit or receive contributions for charitable or public
welfare purposes shall first secure a permit from the Regional
Offices of the Department of Social Services and Development as
provided in the Integrated Reorganization Plan. Upon the filing of a
written application for a permit in the form prescribed by the
Regional Offices of the Department of Social Services and
Development, the Regional Director or his duly authorized
representative may, in his discretion, issue a permanent or
temporary permit or disapprove the application. In the interest of
the public, he may in his discretion renew or revoke any permit
issued under Act 4075.
The main issue to be resolved here is whether the phrase "charitable purposes"
should be construed in its broadest sense so as to include a religious purpose. We
hold in the negative.
I. Indeed, it is an elementary rule of statutory construction that the express mention of
one person, thing, act, or consequence excludes all others. This rule is expressed in
the familiar maxim "expressio unius est exclusio alterius." Where a statute, by its
terms, is expressly limited to certain matters, it may not, by interpretation or
construction, be extended to others. The rule proceeds from the premise that the
legislature would not have made specified enumerations in a statute had the intention
been not to restrict its meaning and to confine its terms to those expressly
mentioned. 7
It will be observed that the 1987 Constitution, as well as several other statutes, treat
the words "charitable" and "religious" separately and independently of each other.
Thus, the word "charitable" is only one of three descriptive words used in Section 28
(3), Article VI of the Constitution which provides that "charitable institutions, churches
and personages . . ., and all lands, buildings, and improvements, actually, directly,
and exclusively used for religious, charitable, or educational purposes shall be
exempt from taxation." There are certain provisions in statutes wherein these two
terms are likewise dissociated and individually mentioned, as for instance, Sections
26 (e) (corporations exempt from income tax) and 28 (8) (E) (exclusions from gross
income) of the National Internal Revenue Code; Section 88 (purposes for the
organization of non-stock corporations) of the Corporation Code; and
Section 234 (b) (exemptions from real property tax) of the Local Government Code.

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

50

For, it is a well-entrenched rule that penal laws are to be construed strictly against the
State and liberally in favor of the accused. They are not to be extended or enlarged
by implications, intendments, analogies or equitable considerations. They are not to
be strained by construction to spell out a new offense, enlarge the field of crime or
multiply felonies. Hence, in the interpretation of a penal statute, the tendency is to
subject it to careful scrutiny and to construe it with such strictness as to safeguard the
rights of the accused. If the statute is ambiguous and admits of two reasonable but
contradictory constructions, that which operates in favor of a party accused under its
provisions is to be preferred. The principle is that acts in and of themselves innocent
and lawful cannot be held to be criminal unless there is a clear and unequivocal
expression of the legislative intent to make them such. Whatever is not plainly within
the provisions of a penal statute should be regarded as without its intendment. 13
The purpose of strict construction is not to enable a guilty person to escape
punishment through a technicality but to provide a precise definition of forbidden
acts. 14 The word "charitable" is a matter of description rather than of precise
definition, and each case involving a determination of that which is charitable must be
decided on its own particular facts and circumstances. 15 The law does not operate in
vacuo nor should its applicability be determined by circumstances in the abstract.
Furthermore, in the provisions of the Constitution and the statutes mentioned above,
the enumerations therein given which include the words "charitable" and "religious"
make use of the disjunctive "or." In its elementary sense, "or" as used in a statute is a
disjunctive article indicating an alternative. It often connects a series of words or
propositions indicating a choice of either. When "or" is used, the various members of
the enumeration are to be taken separately.16 Accordingly, "charitable" and "religious,"
which are integral parts of an enumeration using the disjunctive "or" should be given
different, distinct, and disparate meanings. There is no compelling consideration why
the same treatment or usage of these words cannot be made applicable to the
questioned provisions of Presidential Decree No. 1564.
II. Petitioner next avers that solicitations for religious purposes cannot be penalized
under the law for, otherwise, it will constitute an abridgment or restriction on the free
exercise clause guaranteed under the Constitution.
It may be conceded that the construction of a church is a social concern of the people
and, consequently, solicitations appurtenant thereto would necessarily involve public
welfare. Prefatorily, it is not implausible that the regulatory powers of the State may, to
a certain degree, extend to solicitations of this nature. Considering, however, that
such an activity is within the cloak of the free exercise clause under the right to
freedom of religion guaranteed by the Constitution, it becomes imperative to delve
into the efficaciousness of a statutory grant of the power to regulate the exercise of

this constitutional right and the allowable restrictions which may possibly be imposed
thereon.
The constitutional inhibition of legislation on the subject of religion has a double
aspect. On the one hand, it forestalls compulsion by law of the acceptance of any
creed or the practice of any form of worship. Freedom of conscience and freedom to
adhere to such religious organization or form of worship as the individual may choose
cannot be restricted by law. On the other hand, it safeguards the free exercise of the
chosen form of religion. Thus, the constitution embraces two concepts, that is,
freedom to believe and freedom to act. The first is absolute but, in the nature of
things, the second cannot be. Conduct remains subject to regulation for the protection
of society. The freedom to act must have appropriate definitions to preserve the
enforcement of that protection. In every case, the power to regulate must be so
exercised, in attaining a permissible end, as not to unduly infringe on the protected
freedom. 17
Whence, even the exercise of religion may be regulated, at some slight
inconvenience, in order that the State may protect its citizens from injury. Without
doubt, a State may protect its citizens from fraudulent solicitation by requiring a
stranger in the community, before permitting him publicly to solicit funds for any
purpose, to establish his identity and his authority to act for the cause which he
purports to represent. The State is likewise free to regulate the time and manner of
solicitation generally, in the interest of public safety, peace, comfort, or
convenience. 18
It does not follow, therefore, from the constitutional guaranties of the free exercise of
religion that everything which may be so called can be tolerated. 19 It has been said
that a law advancing a legitimate governmental interest is not necessarily invalid as
one interfering with the "free exercise" of religion merely because it also incidentally
has a detrimental effect on the adherents of one or more religion. 20 Thus, the general
regulation, in the public interest, of solicitation, which does not involve any religious
test and does not unreasonably obstruct or delay the collection of funds, is not open
to any constitutional objection, even though the collection be for a religious purpose.
Such regulation would not constitute a prohibited previous restraint on the free
exercise of religion or interpose an inadmissible obstacle to its exercise. 21
Even with numerous regulative laws in existence, it is surprising how many operations
are carried on by persons and associations who, secreting their activities under the
guise of benevolent purposes, succeed in cheating and defrauding a generous public.
It is in fact amazing how profitable the fraudulent schemes and practices are to
people who manipulate them. The State has authority under the exercise of its police
power to determine whether or not there shall be restrictions on soliciting by

51

unscrupulous persons or for unworthy causes or for fraudulent purposes. That

solicitation of contributions under the guise of charitable and benevolent purposes is
grossly abused is a matter of common knowledge. Certainly the solicitation of
contributions in good faith for worthy purposes should not be denied, but somewhere
should be lodged the power to determine within reasonable limits the worthy from the
unworthy. 22 The objectionable practices of unscrupulous persons are prejudicial to
worthy and proper charities which naturally suffer when the confidence of the public in
campaigns for the raising of money for charity is lessened or destroyed.23 Some
regulation of public solicitation is, therefore, in the public interest. 24

Separate Opinions

To conclude, solicitation for religious purposes may be subject to proper regulation by

the State in the exercise of police power. However, in the case at bar, considering that
solicitations intended for a religious purpose are not within the coverage of
Presidential Decree No. 1564, as earlier demonstrated, petitioner cannot be held
criminally liable therefor.

I concur in the result reached in this case that the solicitation of donations for the
repair of a chapel is not covered by P.D. No. 1564 which requires a permit for the
solicitation of contributions for "charitable or public welfare purposes." My reasons are
three-fold.

As a final note, we reject the reason advanced by respondent judge for increasing the
penalty imposed by the trial court, premised on the supposed perversity of petitioner's
act which thereby caused damage to the complainant. It must be here emphasized
that the trial court, in the dispositive portion of its decision, even recommended
executive clemency in favor of petitioner and the other accused after finding that the
latter acted in good faith in making the solicitation from the complainant, an
observation with which we fully agree. After all, mistake upon a doubtful and difficult
question of law can be the basis of good faith, especially for a layman.
There is likewise nothing in the findings of respondent judge which would indicate,
impliedly or otherwise, that petitioner and his co-accused acted abusively or
malevolently. This could be reflective upon her objectivity, considering that the
complainant in this case is herself a judge of the Regional Trial Court at Kalookan
City. It bears stressing at this point that a judge is required to so behave at all times
as to promote public confidence in the integrity and impartiality of the
judiciary, 25 should be vigilant against any attempt to subvert its independence, and
must resist any pressure from whatever source. 26
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE,
and petitioner Martin Centeno is ACQUITTED of the offense charged, with costs de
oficio.
SO ORDERED.
Narvasa, C.J. and Puno, JJ., concur.

MENDOZA, J.:

First. Solicitation of contributions for the construction of a church is not solicitation for
"charitable or public welfare purpose" but for a religious purpose, and a religious
purpose is not necessarily a charitable or public welfare purpose. A fund campaign for
the construction or repair of a church is not like fund drives for needy families or
victims of calamity or for the construction of a civic center and the like. Like
solicitation of subscription to religious magazines, it is part of the propagation of
religious faith or evangelization. Such solicitation calls upon the virtue of faith, not of
charity, save as those solicited for money or aid may not belong to the same religion
as the solicitor. Such solicitation does not engage the philantrophic as much as the
religious fervor of the person who is solicited for contribution.
Second. The purpose of the Decree is to protect the public against fraud in view of
the proliferation of fund campaigns for charity and other civic projects. On the other
hand, since religious fund drives are usually conducted among those belonging to the
same religion, the need for public protection against fraudulent solicitations does not
exist in as great a degree as does the need for protection with respect to solicitations
for charity or civic projects so as to justify state regulation.
Third. To require a government permit before solicitation for religious purpose may be
allowed is to lay a prior restraint on the free exercise of religion. Such restraint, if
followed, may well justify requiring a permit before a church can make Sunday
collections or enforce tithing. But in American Bible Society v. City of Manila, 1 we
precisely held that an ordinance requiring payment of a license fee before one may
engage in business could not be applied to the appellant's sale of bibles because that
would impose a condition on the exercise of a constitutional right. It is for the same
reason that religious rallies are exempted from the requirement of prior permit for

52

public assemblies and other uses of public parks and streets. 2 To read the Decree,
therefore, as including within its reach solicitations for religious purposes would be to
construe it in a manner that it violates the Free Exercise of Religion Clause of the
Constitution, when what we are called upon to do is to ascertain whether a
construction of the statute is not fairly possible by which a constitutional violation may
be avoided.
For these reasons, I vote to reverse the decision appealed from and to acquit
petitioner.
Padilla, J., concurs.

# Separate Opinions

MENDOZA, J.:

I concur in the result reached in this case that the solicitation of donations for the
repair of a chapel is not covered by P.D. No. 1564 which requires a permit for the
solicitation of contributions for "charitable or public welfare purposes." My reasons are
three-fold.
First. Solicitation of contributions for the construction of a church is not solicitation for
"charitable or public welfare purpose" but for a religious purpose, and a religious
purpose is not necessarily a charitable or public welfare purpose. A fund campaign for
the construction or repair of a church is not like fund drives for needy families or
victims of calamity or for the construction of a civic center and the like. Like
solicitation of subscription to religious magazines, it is part of the propagation of
religious faith or evangelization. Such solicitation calls upon the virtue of faith, not of
charity, save as those solicited for money or aid may not belong to the same religion
as the solicitor. Such solicitation does not engage the philantrophic as much as the
religious fervor of the person who is solicited for contribution.
Second. The purpose of the Decree is to protect the public against fraud in view of
the proliferation of fund campaigns for charity and other civic projects. On the other
hand, since religious fund drives are usually conducted among those belonging to the
same religion, the need for public protection against fraudulent solicitations does not
exist in as great a degree as does the need for protection with respect to solicitations
for charity or civic projects so as to justify state regulation.

Third. To require a government permit before solicitation for religious purpose may be
allowed is to lay a prior restraint on the free exercise of religion. Such restraint, if
followed, may well justify requiring a permit before a church can make Sunday
collections or enforce tithing. But in American Bible Society v. City of Manila, 1 we
precisely held that an ordinance requiring payment of a license fee before one may
engage in business could not be applied to the appellant's sale of bibles because that
would impose a condition on the exercise of a constitutional right. It is for the same
reason that religious rallies are exempted from the requirement of prior permit for
public assemblies and other uses of public parks and streets. 2 To read the Decree,
therefore, as including within its reach solicitations for religious purposes would be to
construe it in a manner that it violates the Free Exercise of Religion Clause of the
Constitution, when what we are called upon to do is to ascertain whether a
construction of the statute is not fairly possible by which a constitutional violation may
be avoided.
For these reasons, I vote to reverse the decision appealed from and to acquit
petitioner.
Padilla, J., concurs.
#Footnotes

1 Annex A, Petition; Rollo, 25.

2 Annex B, id.; ibid., 20.
3 Annex D, id.; ibid., 34.
4 Annex G, id.; ibid., 40.
5 Annex H, id.; ibid., 44.
6 Annex J, id.; ibid., 64.
7 Commissioner of Customs vs. Court of Tax Appeals, et al., G.R.
Nos. 48886-88, July 21, 1993, 224 SCRA 665.
8 Scobey vs. Beckman, 41 N.E. 2d 84.
9 See Adye vs. Smith, 26 Am. Rep. 424.

53

10 See Read vs. McLean, 200 So. 109.

THIRD DIVISION

11 In re Seaman's Estate, 139 N.E. 2d 17.

[G.R. Nos. 136149-51. September 19, 2000]

12 In re Clark's Estate, 159 A. 500.

13 Martin, Statutory Construction, 1979 ed., 183.
14 Gaanan vs. Intermediate Appellate Court, et al., G.R. No. 69809,
October 16, 1986, 145 SCRA 112.

PEOPLE OF THE PHILIPPINES, appellee, vs. WALPAN LADJAALAM y MIHAJIL

alias WARPAN, appellant.
DECISION

15 Topeka Presbyterian Manor, Inc. vs. Board, 402 P. ed. 802.

PANGANIBAN, J.:

16 Martin, op. cit., 81.

Republic Act No. 8294 penalizes simple illegal possession of firearms, provided
that the person arrested committed no other crime. Furthermore, if the person is held
liable for murder or homicide, illegal possession of firearms is an aggravating
circumstance, but not a separate offense. Hence, where an accused was convicted of
direct assault with multiple attempted homicide for firing an unlicensed M-14 rifle at
several policemen who were about to serve a search warrant, he cannot be held
guilty of the separate offense of illegal possession of firearms.Neither can such
unlawful act be considered to have aggravated the direct assault.

17 Cantwell vs. Connecticut, 301 U.S. 296 (1940).

18 Id., loc. cit.
19 16 Am. Jur. 2d, Constitutional Law, 283.
20 Ibid., id., 282.

The Case
21 Cantwell vs. Connecticut, supra.
22 Id., loc. cit.
23 City of Seattle vs. Rogers, 106 P. 2d 598.
24 Commonwealth vs. Creighton, et al., 170 A. 720.
25 Rule 2.01, Code of Judicial Conduct.
26 Rule 1.03. id.
MENDOZA, J., concurring:
1 101 Phil. 386 (1957).
2 B.P. Blg. 880, 3(a).

Walpan Ladjaalam y Mihajil, also known as Warpan, appeals before us the

September 17, 1998 Decision[1] of the Regional Trial Court (RTC) of Zamboanga City
(Branch 16), which found him guilty of three out of the four charges lodged against
him.
Filed against appellant were four Informations, [2] all signed by Assistant Regional
State Prosecutor Ricardo G. Cabaron and dated September 25, 1997. The first
Information[3] was for maintaining a den for the use of regulated drugs. It reads as
follows:
That on or about September 24, 1997, in the City of Zamboanga, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, Walpan
Ladjaalam being then the owner of a residential house located at Rio Hondo,[4] this
City, conspiring and confederating together, mutually aiding and assisting x x x his coaccused wife Nur-in Ladjaalam and Ahmad Sailabbi y Hajaraini, did then and there
wilfully, unlawfully and feloniously, maintain said house as a den, where regulated
drug [was] used in any form.[5]

54

The second Information[6] charged appellant with illegal possession of firearms

and ammunition. We quote it below:
That on or about September 24, 1997, in the City of Zamboanga, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, conspiring
and confederating together, mutually aiding and assisting with one another, without
any justifiable reason or purpose other than to use it in the commission of crime, did
then and there, wilfully, unlawfully, and feloniously have in their possession and under
their custody and control, the following weapons, to wit: one (1) M14 rifle with SN
1555225 with magazines and seven (7) rounds of live ammunition; two (2) magazines
with twenty (20) and twenty[-one] (21) rounds of live [ammunition]; one (1) homemade
caliber .38 revolver with five (5) live ammunition; one (1) M-79 (single) rifle with pouch
and with five (5) empty shell[s]; one (1) home made caliber .38 with SN-311092 with
five live ammunition and one empty shell of [a] cal. 38 x x x Smith and Wesson; two
(2) .38 Caliber paltik revolver with Serial Number 311092 and one defaced M79
grenade launcher paltik, without first having obtained the necessary license and or
permit therefor from authorities concerned, in flagrant violation of the aforementioned
law.[7]
The third Information,[8] for multiple attempted murder with direct assault, was
worded thus:
That on or about September 24, 1997, in the City of Zamboanga, Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused being then
armed with M-14 Armalite Rifles, M-16 Armalite Rifles and other assorted firearms
and explosives, conspiring and confederating together, mutually aiding and assisting
x x x one another and with intent to kill, did then and there wilfully, unlawfully and
feloniously try and attempt to kill SPO1 WILLIAM B. JONES, JR., PO3 ENRIQUE C.
RIVERA[,] SPO1 AMADO A. MIRASOL, JR., and SPO1 RICARDO J.
LACASTESANTOS, in the following manner, to wit: by then and there firing their M-14
x x x Armalite Rifles, M-16 Armalite Rifles and other assorted firearms and explosives,
aimed and directed at the fatal parts of the bodies of the above-named police officers,
well known to the accused as members of the Philippine National Police, Zamboanga
City Police Office, and as such, agents of a person in authority, who at the time of the
attack were engaged in the performance of their duties, that is, on the occasion when
said officers were about to serve the Search Warrant legally issued by the Regional
Trial Court, this City, to the person of the accused thus commencing the commission
of crime of multiple murder directly by overt acts, and if the accused did not
accomplish their unlawful purpose, that is, to kill the above-named Police Officers, it
was not by reason of their own voluntary desistance but rather because of the fact
that all the above-named police officers were able to seek cover during the firing and
were not hit by the bullets and explosives fired by the accused and also by the fact
said police officers were able to wrestle with two (2) of the accused namely: Walpan
Ladjaalam y Mihajil a.k.a. Warpan and Ahmad Sailabbi y Hajairani, who were
subdued and subsequently placed under arrest; whereas accused PO2 Nurhakim T.
Hadjula was able to make good his escape and has remained at-large.[9]

In the fourth Information, appellant was charged with illegal possession of drugs.
[10]

On December 21, 1997, the cases against Nur-in Ladjaalam and Ahmad
Sailabbi y Hajaraini were dismissed upon motion of the Office of the City Prosecutor,
which had conducted a reinvestigation of the cases as ordered by the lower
court. The accused were consequently released from jail.
The arraignment of appellant on all four (4) charges took place on January 6,
1998, during which he entered a plea of not guilty.[11] After pretrial, the assailed
Decision was rendered, the dispositive part of which reads:
WHEREFORE, the Court finds accused WALPAN LADJAALAM y
MIHAJIL a.k.a. WARPAN 1. in Criminal Case No. 14636, GUILTY BEYOND REASONABLE DOUBT of
Violation of Section 15-A, Article III, of Republic Act No. 6425, otherwise known as the
Dangerous Drugs Act of 1972, as amended, and SENTENCES said accused to the
penalty of RECLUSION PERPETUA and to pay a fine of FIVE HUNDRED
THOUSAND (P500,000.00) and to pay the costs;
2. In Criminal Case No. 14637, NOT GUILTY of Violation of Section 16, Article III, in
relation to Section 21, Article IV, of Republic Act No. 6425, otherwise known as the
Dangerous Drugs Act of 1972, as amended, and ACQUITS him of said crime with
costs de oficio;
3. in Criminal Case No. 14638, GUILTY BEYOND REASONABLE DOUBT of the
crime of Illegal Possession of Firearm and Ammunition penalized under Presidential
Decree No. 1866, as amended by Republic Act. No. 8294, and SENTENCES said
accused to suffer an indeterminate penalty of SIX (6) YEARS of prision correccional
as minimum to EIGHT (8) YEARS of prision mayor as maximum and to pay a fine
[of] THIRTY THOUSAND (P30,000.00) and pay the costs;
4. in Criminal Case No. 14639, GUILTY BEYOND REASONABLE DOUBT of the
crime of Direct Assault with Multiple Attempted Homicide and SENTENCES said
accused to an indeterminate penalty of TWO (2) YEARS and FOUR (4) MONTHS of
prision correccional as minimum to SIX (6) YEARS of prision correccional as
maximum and to pay a fine of ONE THOUSAND (P1,000.00) and to pay the
costs. (emphasis in the original)
Hence, this appeal.[12]

The Facts
Prosecutions Version

55

In its Brief,[13] the Office of the Solicitor General presents the facts in this wise:
At 1:45 p.m. of September 24, 1997, PO3 Allan Marcos Obut filed an application for
the issuance of a search warrant against appellant, his wife and some John Does
(Exh. C). After the search warrant was issued about 2:30 p.m. of the same day, a
briefing was conducted inside the office of the Anti-Vice/Narcotics Unit of the
Zamboanga City Police Office in connection with the service of the search
warrant.The briefing was conducted by SPO2 Felipe Gaganting, Chief of the AntiVice/Narcotics Unit. During the briefing, PO3 Renato Dela Pea was assigned as
presentor of the warrant. SPO1 Ricardo Lacastesantos and PO3 Enrique Rivera were
designated to conduct the search. Other policemen were assigned as perimeter
guards (TSN, March 3, 1998, pp. 33-36).
After the briefing, more than thirty (30) policemen headed by Police Superintendent
Edwin Soledad proceeded to the house of appellant and his wife at Rio Hondo on
board several police vehicles (TSN, March 4, 1998, p. 32; April 22, 1998, p.
54). Before they could reach appellants house, three (3) persons sitting at a nearby
store ran towards the house shouting, [P]olice, raid, raid (Ibid., March 3, 1998, pp. 41,
43-44; April 23, 1998, p. 4). When the policemen were about ten (10) meters from the
main gate of the house, they were met by a rapid burst of gunfire coming from the
second floor of the house. There was also gunfire at the back of the house (Ibid.,
March 5, 1998, pp. 14-16).
SPO1 Mirasol, SPO2 Lacastesantos, PO3 Rivera, and PO3 Dela Pea who were with
the first group of policemen saw appellant fire an M14 rifle towards them. They all
knew appellant. When they were fired upon, the group, together with SPO2
Gaganting, PO3 Obut and Superintendent Soledad, sought cover at the concrete
fence to observe the movements at the second floor of the house while other
policemen surrounded the house (Ibid., March 4, 1998, pp. 50-51).
In front of the house was an extension building connected to the concrete fence (Ibid.,
pp. 45-46, 57-59, 73-76). Gaganting, Mirasol, Lacastesantos, Gregorio, and Obut
entered the door of the extension building. Gaganting opened the main (steel) gate of
the house. The other members of the team then entered. Lacastesantos and Mirasol
entered the house through the main door and went inside the sala of the ground floor
while other policemen surrounded the house. Two (2) old women were in the sala
together with a young girl and three (3) children. One of the old women took the
children to the second floor while the young girl remained seated at the corner (Ibid.,
pp. 19-21).
Lacastesantos and Mirasol proceeded to the second floor where they earlier saw
appellant firing an M14 rifle at them through the window. While they were going
upstairs, appellant noticed their presence. He went inside the bedroom and, after
breaking and removing the jalousies, jumped from the window to the roof of a
neighboring house. Seeing this, Mirasol rushed downstairs and asked help from the
other members of the raiding team to arrest appellant. Lacastesantos went to the
second floor and shouted to the policemen outside not to fire in the direction of the

second floor because there were children. Mirasol and SPO1 Cesar Rabuya arrested
appellant at the back of his house after a brief chase (Ibid., pp. 21-23).
At the second floor, Lacastesantos saw an M14 rifle (Exh. B-3) with magazine on top
of the sofa at the sala on the second floor (Ibid., P. 27). The rifle bore Serial No.
1555225. He removed the magazine from the rifle and the bullet inside the chamber
of the rifle. He counted seventeen (17) live ammunition inside the magazine. He saw
two (2) more M14 rifle magazines on the sofa, one with twenty (20) live ammunition
(Exh. G-3) and another with twenty-one (21) live ammunition (Exh. G-4). He likewise
saw three (3) M16 rifle magazines (Exh. G-2) in a corner at the second floor (TSN,
March 5, 1998, pp. 23-32, 53-57).
After Lacastesantos and Mirasol entered appellants house, Rivera, Dela Pea,
Gregorio and Obut followed and entered the house. After identifying themselves as
members of the PNP Anti-Vice/Narcotics Unit, Obut presented to the old women a
copy of the search warrant. Dela Pea and Rivera then searched appellants room on
the ground floor in the presence of Punong Barangay Elhano (TSN, March 3, 1998,
pp. 41-43). On top of a table was a pencil case (Exh. J) with fifty (50) folded aluminum
foils inside (Exhs. J-1 to J-50), each containing methamphetamine hydrochloride or
shabu.
Other items were found during the search, namely, assorted coins in different
denominations (Exh. W; TSN, April 28, 1998, pp. 23-25), one (1) homemade .38
caliber revolver (Exh. B-2) with five (5) live [ammunition], one (1) M79 single rifle with
[a] pouch containing five (5) empty shells of an M79 rifle (Exh. B-4), and one (1)
empty shell of an M14 rifle (TSN, April 23, 1998, pp. 30-32).
Rino Bartolome Locson was an informer of the Anti-Vice/Narcotics Unit of the
Zamboanga Police. [O]n the morning of September 24, 1997, he was instructed by
SPO2 Gaganting to go to appellants house to buy shabu. Locson knew appellant as a
seller of shabu (TSN, April 22, 1998, p. 5) and had been to appellants house about
fifteen (15) times before. He went to Rio Hondo and arrived at appellants house at
3:20 p.m. He bought P300.00 worth of shabu from appellant. The latter got three (3)
decks of shabu from his waist bag. Appellant instructed Locson to go behind the
curtain where there was a table. There were six (6) persons already smoking. There
was a lighted kerosene lamp made of a medicine bottle placed on the table. They
asked Locson to smoke shabu and Locson obliged. He placed the three (3) decks of
shabu he bought on the table (Ibid., pp. 8-15).
While they were smoking shabu, Locson heard gunfire coming from appellants
house. They all stood and entered appellants compound but were instructed to pass
[through] the other side. They met appellant at the back of his house. Appellant told
them to escape because the police are already here. They scampered and ran away
because there were already shots. Locson jumped over the fence and ran towards
the seashore. Upon reaching a place near the Fisheries School, he took a tricycle and
went home (Ibid., pp. 17-19).

56

The following day, September 25, 1997, he went to the police station and executed an
affidavit (Exh. M) narrating what transpired at appellants house [o]n the afternoon of
September 24, 1997.
After the search and before returning to the police station, P03 Dela Pea prepared a
Receipt for Property Seized (Exh. P & 3) listing the properties seized during the
search. The receipt was signed by Dela Pea as the seizure officer, and by Punong
Barangay Hadji Hussin Elhano and radio reporter Jun Cayona as witnesses. A copy
of the receipt was given to appellant but he refused to acknowledge the properties
seized (TSN, April 23, 1998, pp. 11-12).
An examination conducted by Police Inspector Mercedes D. Diestro, Forensic
Chemist of the PNP Crime Laboratory Service Office 9, on the paraffin casts taken
from both hands of appellant yielded positive for gunpowder nitrates (Exh. A-3), giving
rise to the possibility that appellant had fired a gun before the examination (TSN,
March 3, 1998, p. 11). Gunpowder residue examinations conducted on September
26, 1997 showed that the following firearms were fired (Exh. B-5): a .38 caliber
revolver (homemade) with Serial No. 311092 (Exh. B-1), another .38 caliber revolver
(homemade) without a serial number (Exh. B-2), a Cal. 7.62 mm M14 U.S. rifle with
Serial No. 1555225 (Exh. B-3), and an M79 rifle without a serial number (Exh. B4). They were fired within five (5) days prior to the examination (TSN, March 3, 1998,
pp. 16-21).
With respect to the crystalline substances, an examination conducted by Police
Inspector Susan M. Cayabyab, likewise a Forensic Chemist of the PNP Crime
Laboratory Service Office 9, on the fifty (50) pieces of folded aluminum foils each
containing white crystalline granules with a total weight of 1.7426 grams (Exh. J-1 to
J-50) yielded positive results for the presence of methamphetamine hydrochloride
(shabu) (Exh. L). However, the examination of one (1) crystalline stone weighing
83.2674 grams (Exh. K) yielded negative results for the presence of
methamphetamine hydrochloride (Exh. L).
The records of the Regional Operation and Plans Division of the PNP Firearm and
Explosive Section show that appellant had not applied/filed any application for license
to possess firearm and ammunition or x x x been given authority to carry [a] firearm
outside of his residence (Exh. X)[14]

Defenses Version

[15]

Appellant Ladjaalam agrees with the narration of facts given by the lower court.
Hence, we quote the pertinent parts of the assailed Decision:

Accused Walpan Ladjaalam y Mihajil a.k.a. Warpan, 30 years old, married, gave his
occupation as smuggling (tsn, p. 2, May 4, 1998). He used to go to Labuan in
Malaysia and bring cigarettes to the Philippines without paying taxes (tsn, pp. 40-41,

id). He said that his true name [was] Abdul Nasser Abdurakman and that Warpan or
Walpan Ladjaalam [was] only his alias. However, he admitted that more people
kn[e]w him as Walpan Ladjaalam rather than Abdul Nasser Abdurakman (tsn. pp. 3940; 46-47, id). He testified that [o]n the afternoon of September 24, 1997, when he
was arrested by the police, he was sleeping in the house of Dandao, a relative of his
wife. He was alone. He slept in Dandaos house and not in his house because they
ha[d] a sort of a conference as Dandaos daughter was leaving for Saudi Arabia. He
noticed the presence of policemen in his neighborhood at Aplaya, Rio Hondo when he
heard shots. He woke up and went out of the house and that was the time that he
was arrested. He said he was arrested xxx [at] the other side of my house; at the
other side of the fence where I was sleeping. xxx. At the back of my house (tsn, p. 7,
id.). He does not know who arrested him considering that the one who arrested me
does not have nameplate. He was arrested by four (4) persons. Not one of those who
arrested him testified in Court. He was handcuffed and placed inside a jeep parked at
Rio Hondo Elementary School. According to him, he did not fire a gun at the
policemen from [t]he second floor of his house. He said the policemen [were] the
one[s] who fire[d] at us (tsn, p. 5, id.). If he fired a gun at the policemen for sure they
[would] die [b]ecause the door is very near x x x the vicinity of my house. He does not
own the M14 rifle (Exh. B-3) which according to policemen, he used in firing at
them. The gun does not belong to him. He does not have a gun like that (tsn, p. 15,
id.). A policeman also owns an M14 rifle but he does not know the policeman (tsn, pp.
16-17, id). He said that the M79 rifle (Exh. B-4), the three (3) empty M16 rifle
magazines (Exh. G; G-1 to G-2), the two (2) M14 magazines with live ammunition
(Exh. G-3; G-4); the two (2) caliber .38 revolvers (Exhs. B-1; B-2), the fifty (50)
aluminum foils each containing shabu (Exhs. J-1 to J-50) placed inside a pencil case
(Exh. J, the assorted coins placed inside a blue bag (Exh. W) and the white crystalline
stone (Exh. K) all do not belong to him. He said that the policemen just produced
those things as their evidence. The firearms do not belong to him. They were brought
by the policemen (tsn, p. 43, May 4, 1998). Regarding the blue bag containing
assorted coins, he said: that is not ours, I think this (is) theirs, xxx they just brought
that as their evidence (tsn, pp. 15-24, id.)
Walpan Ladjaalam declared there were occupants who were renting his extension
house. He affirmed that he owns that house. Four (4) persons were staying in the
extension house. He could only recognize the husband whose name is Momoy. They
are from Jolo. They left the place already because they were afraid when the police
raided the place. (tsn, pp. 8-10, May 4, 1998). He does not know prosecution witness
Rino Locson y Bartolome. Although Locson recognized him, in his case he does not
know Locson and he does not recognize him (tsn, p.11, id). He did not sell anything to
Locson and did not entertain him. He is not selling shabu but he knows for a fact that
there are plenty of person who are engaged in selling shabu in that place, in that area
known as Aplaya, Rio Hondo. One of them is Hadji Agbi (tsn, pp.11-14, id).
After his arrest Walpan Ladjaalam was brought to the police station where he stayed
for one day and one night before he was transferred to the City jail. While at the
police station, he was not able to take a bath. He smokes two packs of cigarette a
day. While he was at the police station, he smoked [a] cigarette given to him by his
younger sister. He lighted the cigarettes with [a] match. From the police station, he

57

was brought to the PNP Regional Office at R.T. Lim Boulevard where he was subject
to paraffin examination (tsn, pp. 24-26, May 4, 1998).
During the raid conducted on his house, his cousin Boy Ladjaalam, Ating Sapadi, and
Jecar (Sikkal) Usman, the younger brother of his wife were killed. Walpan Ladjaalam
said that he saw that it was the policeman who shot them[,] only I do not know his
name. They were killed at the back of his house. He said that no charges were filed
against the one responsible for their death (tsn, pp. 30-33- May 4, 1998).

Murkisa Usman, 30 years old, married, declared that [o]n the afternoon of September
24, 1997, she was sitting at the door of her house watching her children playing when
a motorcyle, driven by a person, stopped near her house. The driver was Gaganting
whom she called a soldier. He went down from his motorcycle, pulled a gun and
poked it at Murkisa. Murkisa stood up and raised her hands. She got her children and
when she was about to enter the room of her house, Gaganting again poked a gun at
her and there was a shot. As a result of firing, three persons died, namely, Sikkal
Usman, Boy Ladjaalam and Atip Sapali Sali (tsn, pp. 8-10, May 5, 1998).

Anilhawa Ahamad, more or less 80 years old, a widow was in the house of Walpan
Ladjaalam whom he calls Hadji Id at the time the police raided the house. She is the
mother of Ahma Sailabbi. She was together with Babo Dandan, two small children
and a helper when soldiers entered the house. (W)hen they arrived, they kept on
firing (their guns) even inside the house (tsn, p.5, May 5, 1998). They were armed
with short and long firearms. They searched the house and scattered things and got
what they wanted. They entered the room of Walpan Ladjaalam. They tried to open a
bag containing jewelry. When Anilhawa tried to bring the bag outside the room, they
grabbed the bag from her and poked a gun at her. At that time Walpan Ladjaalam
was not in the house. Ahamad Sailabbi was also not in the house. A Search Warrant
was shown to Anilhawa after the search was conducted and just before the policemen
left the place. Anilhawa Ahamad said that it was already late in the afternoon[;] before
they left that was the time the Search Warrant (was) given to us by xxx Barangay
Captain Hussin Elhano (tsn, pp.6-8, May 5, 1998). Barangay Chairman Elhano
arrived already late in the afternoon, almost sundown (tsn, p. 9, id). Anilhaw declared
that aside from a bag containing jewelry and a bag full of money, she had not seen
anything else that was taken from Walpan Ladjaalams house (tsn, pp. 9-12, id).

Barangay Captain Hadji Hussin Elhano, 51 years old, testified that about 4:00 o clock
[o]n the afternoon of September 24, 1997, he was fetched by two policemen at
Catabangan where he was attending a seminar. Because of traffic along the way, they
arrived at the Rio Hondo already late in the afternoon. He saw policemen were
already inside the house. Upon entering the gate, he saw Walpan at the gate already
handcuffed. Walpan called him but the police advised him not to approach
Walpan. The search was already over and things were already taken inside the
house. When he went inside the house, he saw the things that they (policemen)
searched, the firearms and the shabu (tsn, p. 17. May 8, 1998). He did not see the
Search Warrant. What was shown to him were the things recovered during the search
which were being listed. They were being counted and placed on a table. Upon
seeing the things that were recovered during the search, I just signed the receipt
(Exh. P; P-1) of the things x x x taken during the search (tsn, pp. 17-18. May 8,
1998). He saw three dead bodies at the side of the fence when he went to the other
side of the house. The three persons were killed outside the fence of Walpan
Ladjaalam (tsn, p. 18, id).[16]

Akmad (Ahmad) Sailabbi, 37 years old, married testified that about 4:00 oclock [o]n
the afternoon of September 24, 1997, ha was standing in front of his house when
policemen arrived and immediately arrested him. He was about to go to the City
Proper to buy articles he was intending to bring to Sabah. He had around
P50,000.00 placed inside a waist bag tied around his waist. The policemen told him to
lie down in prone position and a policeman searched his back. They pulled his waist
bag and took his DiaStar wrist watch. He was shot three times and was hit on the
forehead leaving a scar. His injury was not treated. He was taken to the police station
where he was detained for one day and one night. He was detained at the City Jail for
three months and five days after which he was released (tsn, pp. 25-29, May 5,
1998).

The Trial Courts Ruling

Melba Usma, 20 years old, a widow, testified that [o]n the afternoon of September 24,
1997, she was in the house of her parents lying together with her husband Sikkal
Usma. There is only one house between her parents house and the house of Walpan
Ladjaalam. Her husband Sikkal Usman is the brother of Nur-in Ladjaalam, Walpans
wife. When Melba heard shots, she went downstairs. A policeman was looking for her
husband. The policeman called her husband. When her husband went down, he was
instructed by the policeman to lie down in prone position. Then the policeman shot
her husband. The policeman had two other companions who also shot her husband
while he was lying down in prone position (tsn, pp.2-7, May 5, 1998).

The trial court observed that the house of appellant was raided on September
24, 1997 by virtue of Search Warrant No. 20 issued on the same day. However, the
lower court nullified the said Warrant because it had been issued for more than one
specific offense,[17] in violation of Section 3, Rule 126 of the Rules of Court.[18] The
court a quo ruled:
It should be stated at the outset that Search Warrant No. 20 is totally null and
void because it was issued for more than one specific offense x x x contrary to
Section 3, Rule 1[2]6 of the Rules of Court which provides that A search warrant shall
not issue but upon probable cause in connection with one specific offense xxx. In
Tambasan vs. People, 246 SCRA 184 (1995), the Supreme Court ruled that a search
warrant for more than one offense - a scatter shot warrant - violates Section 3, Rule
126 of the [R]evised Rules of Court and is totally null and void.[19] (emphasis in the
original)
Nevertheless, the trial court deemed appellants arrest as valid. It emphasized
that he had shot at the officers who were trying to serve the void search warrant. This

58

fact was established by the testimonies of several police officers, [20] who were
participants in the raid, and confirmed by the laboratory report on the paraffin tests
conducted on the firearms and appellant.[21]Additionally, the judge noted that Appellant
Ladjaalam, based on his statements in his Counter Affidavit, impliedly contradicted his
assertions in open court that there had been no exchange of gunfire during the raid.
[22]
The trial court concluded that the testimonies of these officers must prevail over
appellants narration that he was not in his house when the raid was conducted.
Prescinding from this point, the court a quo validated the arrest of appellant,
reasoning thus:
Under the circumstances, the policemen had authority to pursue and arrest Walpan
Ladjaalam and confiscate the firearm he used in shooting at the policemen and to
enter his house to effect said arrest and confiscation of the firearm. Under Rule 113,
Section 5 (a), of the Rules of Court, A peace officer or a private person may, without a
warrant, arrest a person xxx (w)hen in his presence, the person to be arrested has
committed, is actually committing, or is attempting to commit an offense. An offense is
committed in the presence or within the view of an officer, within the meaning of the
rule authorizing an arrest without a warrant, when the officer sees the offense,
although at a distance, or hears the disturbances created thereby and proceeds at
once to the scene thereof. At the time the policemen entered the house of accused
Walpan Ladjaalam after he had fired shots at the policemen who intended to serve
the Search Warrant to him, the accused was engaged in the commission of a crime,
and was pursued and arrested after he committed the crime of shooting at the
policemen who were about to serve the Search Warrant.[23]
As a consequence of the legal arrest, the seizure of the following was also
deemed valid: the M14 rifle (with a magazine containing seventeen live ammunition)
[24]
used by appellant against the police elements, two M14 magazines, and three
other M16 rifle magazines.[25] The trial court observed that these items were in plain
view of the pursuing police officers.Moreover, it added that these same items were
evidence [of] the commission of a crime and/or contraband and therefore, subject to
seizure[26] since appellant had not applied for a license to possess firearm and had not
been given authority to carry firearm outside his residence.[27]
For being incredible and unsupported by evidence, appellants claim that the
items that were seized by the police officers had been planted was disbelieved by the
trial court. It ruled that if the police officers wanted to plant evidence to incriminate
him, they could have done so during the previous raids or those conducted after his
arrest. To its mind, it was unbelievable that they would choose to plant evidence,
when they were accompanied by the barangay chairman and a radio reporter who
might testify against them. It then dismissed these allegations, saying that frame-up,
like alibi, was an inherently weak defense.[28]
The trial court also convicted the accused of the crime of maintaining a drug
den. It reasoned as follows:
The testimony of Rino Bartolome Locson, corroborated by SPO1 Ricardo
Lacastesantos and SPO1 Amado Mirasol, Jr. clearly established that Walpan

Ladjaalam operated and maintained a drug den in his extension house where shabu
or methamphetamine hydrochloride, a regulated drug, was sold, and where persons
or customers bought and used shabu or methamphetamine hydrochloride by burning
the said regulated drug and sniffing its smoke with the use of an aluminum foil
tooter. A drug den is a lair or hideaway where prohibited or regulated drugs are used
in any form or are found. Its existence [may be] proved not only by direct evidence but
may also be established by proof of facts and circumstances, including evidence of
the general reputation of the house, or its general reputation among police
officers.The uncorroborated testimony of accused Walpan Ladjaalam
a.k.a. Warpan that he did not maintain an extension house or a room where drug
users who allegedly buy shabu from him inhales or smokes shabu cannot prevail over
the testimonies of Locson, SPO1 Lacastesantos, and SPO1 Mirasol. He admitted that
he is the owner of the extension house but he alleged that there were four (4)
occupants who rented that extension house. He knew the name of only one of the
four occupants who are allegedly from Jolo, a certain Momoy, the husband. Aside
from being uncorroborated, Walpans testimony was not elaborated by evidence as to
when or for how long was the extension house rented, the amount of rental paid, or
by any other document showing that the extension house was in fact rented. The
defense of denial put up by accused Walpan Ladjaalam a.k.a. 'Warpan is a weak
defense. Denial is the weakest defense and cannot prevail over the positive and
categorical testimonies of the prosecution witnesses.Denials, if unsubstantiated by
clear and convincing evidence, are negative and self-serving evidence which deserve
no weight in law and cannot be given evidentiary weight over the testimony of
credible witnesses who testify on affirmative matters. As between the positive
declaration of the prosecution witnesses and the negative statements of the accused,
the former deserve more credence.[29]
In conclusion, the trial court explained appellants liability in this manner:
x x x. The act of the accused in firing an M14 rifle to the policemen who were about to
enter his house to serve a search warrant constitutes the crime of direct assault with
multiple attempted homicide[,] not multiple attempted murder with direct assault[,]
considering that no policeman was hit and injured by the accused and no
circumstance was proved to qualify the attempted killing to attempted murder.
The accused Walpan Ladjaalam a.k.a. Warpan cannot be held liable [for] the crime of
Violation of Section 16, Article III, in relation to Section 21, Article IV, of Republic Act
6425 otherwise known as the Dangerous Drugs Act of 1992, as amended, because
the fifty (50) pieces of folded aluminum foils having a total weight of 1.7426 grams all
containing methamphetamine hydrochloride or shabu allegedly found in his house are
inadmissible as evidence against him considering that they were seized after [a]
search conducted by virtue of Search Warrant No. 20 which is totally null and void as
it was issued for more than one offense, and were not found in plain view of the police
officers who seized them. Neither could the accused be held liable for illegal
possession of firearms and ammunition except for the (1) M14 rifle with Serial
Number 1555225 and with magazine containing fifteen (15) live ammunition and two
more M14 rifle magazines with twenty (20) and twenty-one (21) live ammunition
respectively considering that the policemen who recovered or seized the other

59

firearms and ammunition did not testify in court. The blue bag containing assorted
coins cannot be returned to the accused Walpan Ladjaalam a.k.a. Warpan because
according to the accused the blue bag and assorted coins do not belong to him[;]
instead the said assorted coins should be turned over to the National Treasury.[30]
The Issues
In his Brief, appellant submits the following Assignment of Errors:

We fail to see the need for an ocular inspection in this case, especially in the
light of the clear testimonies of the prosecution witnesses.[33] We note in particular that
the defense had even requested SPO1 Amado Mirasol Jr. to sketch the subject
premises to give the lower court a fairly good idea of appellants house.[34] Viewing the
site of the raid would have only delayed the proceedings. [35] Moreover, the question
whether to view the setting of a relevant event has long been recognized to be within
the discretion of the trial judge. [36] Here, there is no reason to disturb the exercise of
that discretion.[37]

I
The trial court erred when it concluded that appellant Walpan Ladjaalam y Mihajil
[had] fired first at the police officers who went to his house to serve a search warrant
upon him which led to an exchange of fire between Ladjaalam and the police officer.

Second Issue: Credibility of Prosecution Witnesses

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

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

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

The trial court erred when it ruled that the presumption of regularity in the
performance of their duties [excluded] the claim of the appellant that the firearms and
methamphetamine hydrochloride (i.e. shabu) were planted by the police.[31]
In the interest of simplicity, we shall take up these issues seriatim: (a) denial of
the request for ocular inspection, (b) credibility of the prosecution witnesses, and
(c) the defense of frame-up. In addition, we shall also discuss the proper crimes and
penalties to be imposed on appellant.

A: Yes.
Q: And its there where you were met by a volley of fire?
A: Yes, Your Honor.
COURT:
Q: How far were you from the concrete fen[c]e when you were met by a volley of
fire? ... You said you were fired upon?
A: More or less, five (5) meters.

The Courts Ruling

The appeal has no merit.

First Issue: Denial of Request for Ocular Inspection

xxxxxxxxx
PROSECUTOR NUVAL:
Q: Now, you said you were able to enter the house after the gate was opened by
your colleague Felipe Gaganting ... I will reform that question.
Q: Who opened the gate Mr. Witness?
A: SPO2 Felipe Gaganting, Efren Gregorio and Allan Marcos Obut.

Appellant insists that the trial court erred in denying his request for an ocular
inspection of the Ladjaalam residence. He argues that an ocular inspection would
have afforded the lower court a better perspective and an idea with respect to the
scene of the crime.[32] We do not agree.

Q: And, at that time you were hiding at the concrete fence?

A: Yes.

60

Q: Now, when this gate was opened, you said you went inside the house, right?
A: Yes.
Q: What did you see inside the house?
A: I, together with SPO1 Ricardo Lacastesantos, entered the main door of the
house of Walfran [sic] Ladjaalam at the ground floor. We went inside the sala
on the ground floor of his house[;] I saw two old woman.

A: We immediately went out and I asked the assistance of the members of the
raiding team and the investigator of the unit especially SPO1 Cesar
Rabuya. I was able to manage to arrest Walfan Ladjaalam.[42]
What happened thereafter was narrated by Senior Police Officer Ricardo
Lacastesantos,[43] as follows:
Q: What did you notice [o]n the second floor?

PROSECUTOR NUVAL:

A: I went where the firing came from, so, I saw [an] M14 rifle and I shouted from
the outside, do not fire at the second floor because there [are] a lot of
children here.

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

Q: Now, that rifle you said [was an] M14, where did you find this?

A: I did not mind those two old women because those two women were sitting on
the ground floor. I was concentrating on the second floor because Ladjaalam
was firing towards our group so, I, together with Ricardo Lacastesantos,
went upstairs to the second floor of the house.

A: At the sala set.

Q: Were you able to go to the second floor of the house?

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

A: Yes.

A: Yes.

Q: What happened when you were already on the second floor?

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

xxxxxxxxx

A: While we were proceeding to the second floor, Walfan [sic] Ladjaalam, noticed
our presence and immediately went inside the bedroom [o]n the second floor
and he went immediately and jumped from the window of his house x x x
leading to the roof of the neighbors house.
xxxxxxxxx

Q: This sala set where is this located?

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

A: Yes.
Q: Why can you identify that?
A: The Serial No. of M14 is 1555225 and I marked it with my initial.
Q: Now, I have here M14 rifle[;] will you please tell us where is the Serial No. of
this?

COURT:
Reform. That is leading

A: 1555225 and I put my initial, RJL.

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

FISCAL NUVAL:

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

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

This is already marked as our Exhibit B-3 with magazine, one magazine and
seven round [ammunition].

xxxxxxxxx
PROSECUTOR NUVAL:
Q: Were you able to go down?
A: Yes.
Q: What happened when you were there?

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

A: When I recovered it I removed the bullets inside the chamber[.] I removed the
magazine and I turned it over to the investigator.
Q: Where did you turn it over?
A: At the crime scene.
Q: Now, that magazine, can you still identify this?
A: Yes.

61

Q: Why?

Q: Can we conclude that he fired a gun?

A: I put x x x markings.

A: I cannot conclude that he fired a gun because there are so many

circumstances [why] a person [would be] positive on his hands for gun
powder nitrates.

xxxxxxxxx
COURT:

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

So, a[si]de from the magazine attached to the M14 rifle you found six more
magazines?

A: Yes.

A: Yes, so, all in all six magazines, three empty M16 rifle magazines and three
M14.
Q: The M16 magazines [were] empty?
A: Empty.

xxxxxxxxx
PROSECUTOR NUVAL:
Q: What about, Madam Witness this Exhibit B-3, which is the M14 rifle. What did
you do with this?
A: SPO3 Abu did the swabbing both in the chamber and the barrel wherein I
observed there [were] black and traces of brown residue on the bolt,
chamber and in the barrel.

Q: How about the M14?

A: Found with [ammunition].
xxxxxxxxx

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

Q: So, where are the three M16 magazines?

A: It indicates that the gun was fired.

A: In the corner.

Q: Recently?

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

A: Because of the traces of brown residue, it could be possible that the gun was
fired before the incident x x x.

A: I turned [them] over to the investigator.

Q: Can you identify them?
A: Yes, because of my initials[.]
Q: Where are your initials?
A: On the magazines.
Q: RJL?
A: RJL.[44]
These were confirmed by the results of the paraffin tests conducted on appellant
and on the weapons seized during the raid. Both of his hands as well as the
weapons, particularly the M-14 which he had used, were positive for gunpowder
nitrate. Police Inspector Mercedes Delfin-Diestro explained in open court:
Q: Okay. Now, what was the result of your examination, Madam Witness?
A: The result of the examination [was] that both hands of the subject person, ha[d]
presence of gun powder nitrates.

COURT:
Q: There is also black residue?
A: Yes.
Q: What does it indicate?
A: It indicates that the firearm was recently fired.
Q: And, where is this swab used at the time of the swabbing of this Exhibit?
A: This one.
PROSECUTOR NUVAL:
May we ask that this be marked as Exhibit B-3-A.
COURT:
Q: The firing there indicates that the gun was recently fired, during the incident?
A: Yes.

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

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

A: It indicates there is presence of powder nitrates.

A: Yes, Your Honor.[45] (emphasis supplied)

62

Duly proven from the foregoing were the two elements [46] of the crime of illegal
possession of firearms. Undoubtedly, the established fact that appellant had fired an
M-14 rifle upon the approaching police officers clearly showed the existence of the
firearm or weapon and his possession thereof. Sufficing to satisfy the second element
was the prosecutions Certification[47]stating that he had not filed any application for
license to possess a firearm, and that he had not been given authority to carry any
outside his residence.[48] Further, it should be pointed out that his possession and use
of an M-14 rifle were obviously unauthorized because this weapon could not be
licensed in favor of, or carried by, a private individual.[49]

referring to [as] your house or the house of your neighbors [from] which you
said you heard gunshots?
A Our house.
Q Now, in paragraph 6 of your Counter-Affidavit you stated and I quote: that [o]n
that afternoon of September 24, 1997, I was at home in my house Aplaya,
Riohondo, Bo. Campo Muslim, my companions in my house [were] the two
old women and my children, is this correct?
A They were not there.

Third Issue: Defense of Frame-up

From the convoluted arguments strewn before us by appellant, we gather that
the main defense he raises is frame-up. He claims that the items seized from his
house were planted, and that the entire Zamboanga police force was out to get him at
all cost.
This Court has invariably held that the defense of frame-up is inherently weak,
since it is easy to fabricate, but terribly difficult to disprove. [50] Absent any showing of
an improper motive on the part of the police officers,[51] coupled with the presumption
of regularity in the performance of their duty, such defense cannot be given much
credence.[52] Indeed, after examining the records of this case, we conclude that
appellant has failed to substantiate his claim. On the contrary, his statements in his
Counter Affidavit are inconsistent with his testimony during the trial. [53] He testified
thus:
Q Now, Mr. Witness, do you remember having executed an Affidavit/ a CounterAffidavit?

Q Now, in that statement Mr. Witness, you said that you were at home in [your]
house at Aplaya, Riohondo, Bo. Campo Muslim[;] which is which now, you
were in your house or you were in your neighbors[] house at that time when
you heard gunshots?
A I was in the house near my house.
Q So, your statement particularly paragraph 6 of your Counter-Affidavit that you
were at home in [your] house at Aplaya Riohondo Bo. Campo Muslim, is x x
x not correct?
A Yes, Sir. This is not correct.[54]

Crime and Punishment

The trial court convicted appellant of three crimes: (1) maintenance of a drug
den, (2) direct assault with attempted homicide, and (3) illegal possession of
firearms. We will discuss each of these.

A I could not remember.

Q I have here a Counter-Affidavit and it was signed before this representation on
the 8th day of December 1997[;] tell us whose signature is this appearing
above the typewritten name
FISCAL NUVAL:
Q . . . . Walpan Ladjaalam, whose signature is this?
(Showing)
A Yes, Sir. This is mine.
Q Now, in paragraph[s] 1,2,3,4,5,6,7 and 8; you stated in this Counter-Affidavit
which I quote: that I was resting and sleeping when I heard the gunshots and
I noticed that the shots were directed towards our house.. and I inspected
and x x x we were attacked by armed persons.. and I was apprehended by
the persons who attacked x x x our house; [the] house you are referring to
[in] this paragraph, whose house [are you] referring to, is this [what] you are

Maintenance of a Drug Den

We agree with the trial court that appellant was guilty of maintenance of a drug
den, an offense for which he was correctly sentenced to reclusion perpetua. His guilt
was clearly established by the testimony of Prosecution Witness Rino Bartolome
Locson, who himself had used the extension house of appellant as a drug den on
several occasions, including the time of the raid. The formers testimony was
corroborated by all the raiding police officers who testified before the court. That
appellant did not deny ownership of the house and its extension lent credence to the
prosecutions story.

Direct Assault with Multiple Attempted Homicide

63

The trial court was also correct in convicting appellant of direct assault [55] with
multiple counts of attempted homicide. It found that [t]he act of the accused [of] firing
an M14 rifle [at] the policemen[,] who were about to enter his house to serve a search
warrant x x x constituted such complex crime.[56]
We note that direct assault with the use of a weapon carries the penalty
of prision correccional in its medium and maximum periods, while attempted homicide
carries the penalty ofprision correccional.[57] Hence, for the present complex crime, the
penalty for direct assault, which constitutes the most serious crime, should be
imposed and applied in its maximum period.[58]

Illegal Possession of Firearms

Aside from finding appellant guilty of direct assault with multiple attempted
homicide, the trial court convicted him also of the separate offense of illegal
possession of firearms under PD 1866, as amended by RA 8294, and sentenced him
to 6 years of prision correccional to 8 years of prision mayor.
The Office of the Solicitor General (OSG) disagrees, on the ground that the trial
court should not have applied the new law. It contends that under the facts of the
case, the applicable law should have been PD 1866, as worded prior to its
amendment by RA 8294.
The trial courts ruling and the OSGs submission exemplify the legal communitys
difficulty in grappling with the changes brought about by RA 8294. Hence, before us
now are opposing views on how to interpret Section 1 of the new law, which provides
as follows:
SECTION 1. Section 1 of Presidential Decree No. 1866, as amended, is hereby
further amended to read as follows:

with firing capability of full automatic and by burst of two or three: Provided,
however, That no other crime was committed by the person arrested.
If homicide or murder is committed with the use of an unlicensed firearm, such use of
an unlicensed firearm shall be considered as an aggravating circumstance.
If the violation of this Section is in furtherance of or incident to, or in connection with
the crime of rebellion or insurrection, sedition, or attempted coup detat, such violation
shall be absorbed as an element of the crime of rebellion or insurrection, sedition, or
attempted coup detat.
The same penalty shall be imposed upon the owner, president, manager, director or
other responsible officer of any public or private firm, company, corporation or entity,
who shall willfully or knowingly allow any of the firearms owned by such firm,
company, corporation or entity to be used by any person or persons found guilty of
violating the provisions of the preceding paragraphs or willfully or knowingly allow any
of them to use unlicensed firearms or firearms without any legal authority to be
carried outside of their residence in the course of their employment.
The penalty of arresto mayor shall be imposed upon any person who shall carry any
licensed firearm outside his residence without legal authority therefor.
Citing People v. Jayson,[59] the OSG argues that the foregoing provision does not
cover the specific facts of this case. Since another crime -- direct assault with multiple
unlawful homicide -- was committed, appellant cannot be convicted of simple illegal
possession of firearms under the second paragraph of the aforecited
provision. Furthermore, since there was no killing in this case, illegal possession
cannot be deemed as an aggravating circumstance under the third paragraph of the
provision. Based on these premises, the OSG concludes that the applicable law is not
RA 8294, but PD 1866 which, as worded prior the new law, penalizes simple illegal
possession of firearms even if another crime is committed at the same time.[60]

Section 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of

Firearms or Ammunition Instruments Used or Intended to be Used in the Manufacture
of Firearms or Ammunition. -- The penalty of prision correccional in its maximum
period and a fine of not less than Fifteen thousand pesos (P15,000) shall be imposed
upon any person who shall unlawfully manufacture, deal in, acquire, dispose, or
possess any low powered firearm, such as rimfire handgun, .380 or .32 and other
firearm of similar firepower, part of firearm, ammunition, or machinery, tool or
instrument used or intended to be used in the manufacture of any firearm or
ammunition: Provided, That no other crime was committed.

Applying a different interpretation, the trial court posits that appellant should be
convicted of illegal possession of firearms, in addition to direct assault with multiple
attempted homicide.It did not explain its ruling, however. Considering that it could not
have been ignorant of the proviso[61] in the second paragraph, it seemed to have
construed no other crime as referring only to homicide and murder, in both of which
illegal possession of firearms is an aggravating circumstance. In other words, if a
crime other than murder or homicide is committed, a person may still be convicted of
illegal possession of firearms. In this case, the other crime committed was direct
assault with multiple attempted homicide; hence, the trial court found appellant guilty
of illegal possession of firearms.

The penalty of prision mayor in its minimum period and a fine of Thirty thousand
pesos (P30,000) shall be imposed if the firearm is classified as high powered firearm
which includes those with bores bigger in diameter than .30 caliber and 9 millimeter
such as caliber .40, .41, .44, .45 and also lesser calibered firearms but considered
powerful such as caliber .357 and caliber .22 centerfire magnum and other firearms

We cannot accept either of these interpretations because they ignore the plain
language of the statute. A simple reading thereof shows that if an unlicensed firearm
is used in the commission of any crime, there can be no separate offense of simple
illegal possession of firearms. Hence, if the other crime is murder or homicide, illegal
possession of firearms becomes merely an aggravating circumstance, not a separate

64

offense. Since direct assault with multiple attempted homicide was committed in this
case, appellant can no longer be held liable for illegal possession of firearms.
Moreover, penal laws are construed liberally in favor of the accused. [62] In this
case, the plain meaning of RA 8294s simple language is most favorable to herein
appellant. Verily, no other interpretation is justified, for the language of the new law
demonstrates the legislative intent to favor the accused.[63] Accordingly, appellant
cannot be convicted of two separate offenses of illegal possession of firearms and
direct assault with attempted homicide. Moreover, since the crime committed was
direct assault and not homicide or murder, illegal possession of firearms cannot be
deemed an aggravating circumstance.
We reject the OSGs contention that PD 1866, as worded prior to its amendment
by RA 8294, should be applied in this case. When the crime was committed on
September 24, 1997, the original language of PD 1866 had already been expressly
superseded by RA 8294 which took effect on July 6, 1997.[64] In other words, no
longer in existence was the earlier provision of PD 1866, which justified a conviction
for illegal possession of firearms separate from any other crime. It was replaced by
RA 8294 which, among other amendments to PD 1866, contained the
specific proviso that no other crime was committed.
Furthermore, the OSGs reliance on People v. Jayson[65] is misplaced. True, this
Court sustained the conviction of appellant for illegal possession of firearms, although
he had also committed homicide. We explained, however, that the criminal case for
homicide [was] not before us for consideration.
Just as unacceptable is the interpretation of the trial court. We find no
justification for limiting the proviso in the second paragraph to murder and
homicide. The law is clear: the accused can be convicted of simple illegal possession
of firearms, provided that no other crime was committed by the person arrested. If the
intention of the law in the second paragraph were to refer only to homicide and
murder, it should have expressly said so, as it did in the third paragraph. Verily, where
the law does not distinguish, neither should we.

sentenced to 2 years and 4 months to 6 years of prision correccional; and (2)

maintaining a drug den, for which he was correctly sentenced by the trial court
to reclusion perpetua. Costs against appellant.
Let a copy of this Decision be furnished the Congress of the Philippines for a
possible review, at its sound discretion, of RA 8294.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

[1]

Written by Judge Jesus C. Carbon Jr.

[2]

Rollo, pp. 10-15.

[3]
The appellant was charged together with his wife Nur-In Ladjaalam and one Ahmad
Sailabbi. Charges against the latter were later dropped.
[4]

Also spelled Riohondo.

[5]

Rollo, p. 10.

[6]
Appellant was charged here together with Nur-In Ladjaalam and Ahmad
Sailabbi y Hajaraini. The charge against the latter two was subsequently dismissed.
[7]

Rollo, p. 12.

[8]
In this Information, charged were appellant together with one PO2 Nurhakim T.
Hadjula and Ahmad Sailabbi y Hajaraini. Charges against Sailabbi were later
dropped; Hadjula still remains at large.
[9]

Rollo, pp. 14-15.

The Court is aware that this ruling effectively exonerates appellant of illegal
possession of an M-14 rifle, an offense which normally carries a penalty heavier than
that for direct assault.While the penalty for the first is prision mayor, for the second it
is only prision correccional. Indeed, the accused may evade conviction for illegal
possession of firearms by using such weapons in committing an even lighter offense,
[66]
like alarm and scandal[67] or slight physical injuries,[68] both of which are punishable
by arresto menor.[69] This consequence, however, necessarily arises from the
language of RA 8294, whose wisdom is not subject to the Courts review. Any
perception that the result reached here appears unwise should be addressed to
Congress. Indeed, the Court has no discretion to give statutes a new meaning
detached from the manifest intendment and language of the legislature. Our task is
constitutionally confined only to applying the law and jurisprudence[70] to the proven
facts, and we have done so in this case.

[10]
No copy of the fourth Information was attached to the records. In any event, the
trial court acquitted him of this charge.

WHEREFORE,
the
appealed
Decision
is
hereby AFFIRMED with
the MODIFICATION that appellant is found guilty only of two offenses: (1) direct
assault and multiple attempted homicide with the use of a weapon, for which he is

[15]
Appellants Brief, p. 5; rollo, p. 149. This Brief was signed by Atty. Jose E.
Fernandez.

[11]

Assisted by counsel de parte, Atty. Jose E. Fernandez.

[12]

Notice of Appeal was filed on September 25, 1998. This case was deemed
submitted for resolution after the Courts receipt of the Brief for the Appellee on May
19, 2000. The filing of a reply brief was deemed waived, as none was submitted
within the reglementary period.
[13]

Signed by Solicitor General Ricardo P. Galvez, Assistant Solicitor General Carlos

N. Ortega and Associate Solicitor Rico Sebastian D. Liwanag.
[14]

[16]

Appellees Brief, pp. 9-16; rollo, pp. 247-254.

Decision, pp. 23-32; rollo, pp. 51-60.

65

[17]
These are: 1) violation of 16, Article III of RA 6495, otherwise known as the
Dangerous Drugs Act of 1972; 2) violation of PD 1866 penalizing illegal possession of
firearm and ammunition.
[18]

It provides:

SEC. 3. Requisite for issuing search warrant. -- A search warrant shall not issue but
upon probable cause in connection with one specific offense to be determined
personally by the judge after examination under oath or affirmation of the complainant
and the witnesses he may produce, and particularly describing the place to be
searched and the things to be seized.
[19]

Decision, pp. 32-33; rollo, pp. 60-61.

[20]
These are, inter alia, SPO1 Amado Mirasol Jr., SPO1 Ricardo Lacastesantos, PO3
Enrique Rivera and PO3 Renato Dela Pea.
[21]
Decision, pp. 42-43; rollo, pp. 70-71. Both appellant and the firearms seized tested
positive for gunpowder nitrates.
[22]

The trial court quoted the same thus:

[O]n the afternoon of September 24, 1998, I was at home in my house at Aplaya, Rio
Hondo, Barangay Campo Muslim xxx (and) I was resting and sleeping when I heard
the sound of gun reports, which awakened me. Then I noticed that the shots were
directed towards our house, hence I suspected that we were under attack by armed
persons. I tried to escape and jumped outside, but I was apprehended by the persons
who attacked our house, before I learned they were police officers. (Decision p.
35; rollo, p. 63.)
[23]

Decision, pp. 37-38; rollo, pp. 63-64.

[24]

Seen by SPO1 Lacastesantos lying on top of a sofa on the second story of

appellants house when he pursued appellant.

[35]

See People v. Baniel, supra.

[36]

Paras, Rules of Court Annotated, 2nd ed., p. 78, citing Graham on

Evidence. See also Appellees Brief, pp. 21-22.
[37]

See People v. Moreno, 83 Phil. 286, April 7, 1949.

[38]

Appellants first assignment of error is herein taken up as the second issue.

[39]
See People v. Elamparo, GR No. 121572, March 31, 2000; People v. Cupino, et
al., GR No. 125688, March 31, 2000; People v. Estorco, GR No. 111941, April 27,
2000; People v. Sultan, GR No. 132470, April 27, 2000; People v. Mendoza, GR No.
128890, May 31, 2000; People v. Geral, GR No. 122283, June 15, 2000;
People v. Rios, GR No. 132632, June 19, 2000; People v. Molina, infra.
[40]

People v. Narvasa, 298 SCRA 637, November 16, 1998.

[41]

The witness is a member of the team that went to Ladjaalams house on

September 24, 1997. He was tasked to bring the barangay captain to appellants
house to serve as a witness to the search.
[42]

TSN, March 4, 1998, pp. 18-23.

[43]
Also a member or the raiding team. Lacastesantos, together with SPO1 Mirasol,
went inside the house. When appellant tried to escape, Mirasol pursued him;
Lacastesantos proceeded to the second floor.
[44]

TSN, March 5, 1998, pp. 23-24, 28-29.

[45]

TSN, March 3, 1998, pp. 10-11, 19-20.

[46]

In the en banc case of People v. Molina (292 SCRA 742, 777, July 22, 1998), we
said:
In crimes involving illegal possession of firearms, the prosecution has the burden of
proving the elements thereof: (1) the existence of the subject firearm; and (2) the fact
that the accused, who owned or possessed the firearm, did not have the
corresponding license or permit to possess or carry the same outside his
residence. (footnote omitted)

[25]

Seen at a corner on the same floor.

[26]

Decision, p. 38; rollo, p. 66.

[27]

Ibid.

[28]

Ibid. p. 51; rollo, p. 79.

[29]

Ibid., pp. 48-50; pp. 76-78.

[30]

Ibid., pp. 53-54; pp. 81-82.

[31]

Appellants Brief, p. 1; rollo, p. 145.

[48]
People v. Lazaro, supra., citing several cases. See also People v. Narvasa, supra.;
People v. Molina, supra.; People v. Villanueva, 275 SCRA 489, July 15, 1997.

[32]

Appellants Brief, p. 19; rollo, 163.

[49]

See also People v. Castillo, GR No. 131592-93, February 15, 2000; People v. Lazaro,
GR No. 112090, October 26, 1999; People v. Narvasa, 298 SCRA 637, November 16,
1998.
[47]

[33]

As shown by the pertinent portions quoted below. See People v. Baniel, 275 SCRA
472, July 15, 1997.
[34]

Signed by Police Senior Inspector Ruperto Rugay Regis Jr.

People v. Molina, supra.

[50]

See People v. Barita et al., GR No. 123541, February 8, 2000; Dizon v. CA, 311
SCRA 1, July 22, 1999.

TSN, March 4, 1998, pp. 37-38.

66

[51]
In fact, appellant admits that he did not have any misunderstanding with the
arresting officers. Neither could he think of any reason why they would file false
charges against him. (TSN, May 4, 1998, p. 42)

[62]
See People v. Atop, 286 SCRA 157, February 10, 1998; People v. Deleverio, 289
SCA 547, April 24, 1998.
[63]
See Tanada v. Yulo, 61 Phil. 515, May 31, 1935; Regalado v. Yulo, 61 Phil. 173,
February 15, 1935.

[52]

See People v. Dizon, supra.

[53]

TSN, May 4, 1998, pp. 37-39.

[64]

People v. Jayson, supra.

Ibid.

[65]

Supra at p. 177, per Mendoza, J.

Article 148 of the RPC reads:

[66]

[54]
[55]

ART. 148. Direct assaults. -- Any person or persons who, without public uprising,
shall employ force or intimidation for the attainment of any of the purposes
enumerated in defining the crimes of rebellion and sedition, or shall attack, employ
force, or seriously intimidate or resist any person in authority or any of his agents,
while engaged in the performance of official duties, or on occasion of such
performance, shall suffer the penalty of prision correccional in its medium and
maximum periods and a fine not exceeding 1,000 pesos, when the assault is
committed with a weapon or when the offender is a public officer or employee, or
when the offender lays hands upon a person in authority. xxx.
[56]

Article 48 of the Revised Penal Code (RPC) reads:

ART. 48. Penalty for complex crimes. -- When a single act constitutes two or more
grave or less grave felonies, or when an offense is a necessary means for committing
the other, the penalty for the most serious crime shall be imposed, the same to be
applied in its maximum period. (emphasis ours)
[57]

Article 249; cf. 51, RPC.

Offenses under the Revised Penal Code which carry a penalty lighter than that for
illegal possession of a high-powered firearm include (1) indirect assault (Article 149),
(2) tumults and other disturbances (Article 153), (3) discharge of firearms (Article
254), (4) light threats (Article 285), and (5) light coercion (Article 287).
[67]
Article 155 (1) of the Revised Penal code provides the penalty of arresto menor or
fine not exceeding 200 pesos upon "[a]ny person who within any town or public place,
shall discharge any firearm, rocket, firecracker or other explosive calculated to cause
alarm or danger."
[68]
Article 266 (1) imposes the penalty of arresto menor "when an offender has
inflicted physical injuries which shall incapacitate the offended party for labor from
one to nine days, or shall require medical attention during the same period." For
example, when a person hits the head of another with the butt of an unlicensed M-14
rifle, thereby incapacitating the latter for one to nine days, the accused may be
charged only with slight physical injuries, not illegal possession of firearms.
[69]

Under Article 27 of the Revised Penal Code, the duration of arresto menor is one
to thirty days.
[70]

[58]

Section 1 of the Indeterminate Sentence Law provides that the court shall
sentence the accused to an indeterminate sentence the maximum term of which shall
be that which, in view of the attending circumstances, could be properly imposed
under the rules of the said Code, and the minimum of which shall be within the range
of the penalty next lower to that prescribed by the Code for the offense. An authority
on criminal law writes that when the accused is guilty of a complex crime, the penalty
immediately lower is the next below the penalty provided for the gravest crime.
(Reyes, The Revised Penal Code, Book One, 1981 ed., p. 769.) Since direct assault
is punishable with prision correccional in its medium and maximum period, the
penalty next lower in degree is arresto mayor (maximum) to prision
correccional (minimum). Accordingly, the indeterminate penalty for direct assault with
multiple attempted homicide is 2 years and 4 months to 6 years of prision
correccional.
[59]

That penal laws should be liberally interpreted in favor of the accused.

282 SCRA 166, 176-177, November 18, 1997.

[60]
People v. Quijada, 259 SCRA 191, July 24, 1996; People v. Tac-an, 182 SCRA
601, February 26, 1990.
[61]

That no other crime was committed by the person arrested.

67

G.R. No. L-69344

April 26, 1991

REPUBLIC OF THE PHILIPPINES, petitioner,

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

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

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

The parties agreed that there were no issues of fact to be litigated, hence, the case
was submitted for decision upon the pleadings and memoranda on the lone legal
question of: whether or not the payment of deficiency income tax under the tax
amnesty, P.D. 23, and its acceptance by the Government operated to divest the
Government of the right to further recover from the taxpayer, even if there was an
existing assessment against the latter at the time he paid the amnesty tax.
It is not disputed that as a result of an investigation made by the Bureau of Internal
Revenue in 1963, it was found that the private respondents owed the Government
P1,283,621.63 as income taxes for the years 1955 to 1959, inclusive of the 50%
surcharge and 1% monthly interest. The defendants protested against the

68

assessment. A reinvestigation was conducted resulting in the drastic reduction of the

assessment to only P17,117.08.
It appears that on April 27, 1978, the private respondents offered to pay the Bureau of
Internal Revenue the sum of P5,000 by way of compromise settlement of their income
tax deficiency for the questioned years, but Assistant Commissioner Bernardo Carpio,
in a letter addressed to the Pastor spouses, rejected the offer stating that there was
no legal or factual justification for accepting it. The Government filed the action
against the spouses in 1980, ten (10) years after the assessment of the income tax
deficiency was made.
On a motion for judgment on the pleadings filed by the Government, which the
spouses did not oppose, the trial court rendered a decision on February 28, 1980,
holding that the defendants spouses had settled their income tax deficiency for the
years 1955 to 1959, not under P.D. 23 or P.D. 370, but under P.D. 213, as shown in
the Amnesty Income Tax Returns' Summary Statement and the tax Payment
Acceptance Order for P2,951.20 with its corresponding official receipt, which returns
also contain the very assessment for the questioned years. By accepting the payment
of the amnesty income taxes, the Government, therefore, waived its right to further
recover deficiency incomes taxes "from the defendants under the existing
assessment against them because:
1. the defendants' amnesty income tax returns' Summary Statement
included therein the deficiency assessment for the years 1955 to 1959;
2. tax amnesty payment was made by the defendants under Presidential
Decree No. 213, hence, it had the effect of remission of the income tax
deficiency for the years 1955 to 1959;
3. P.D. No. 23 as well as P.D. No. 213 do not make any exceptions nor
impose any conditions for their application, hence, Revenue Regulation No.
7-73 which excludes certain taxpayers from the coverage of P.D. No. 213 is
null and void, and
4. the acceptance of tax amnesty payment by the plaintiff-appellant bars the
recovery of deficiency taxes. (pp. 3-4, IAC Decision, pp. 031-032, Rollo.)
The Government appealed to the Intermediate Appellant Court (AC G.R. CV No.
68371 entitled, "Republic of the Philippines vs. Antonio Pastor, et al."), alleging that
the private respondents were not qualified to avail of the tax amnesty under P.D. 213
for the benefits of that decree are available only to persons who had no pending
assessment for unpaid taxes, as provided in Revenue Regulations Nos. 8-72 and 773. Since the Pastors did in fact have a pending assessment against them, they were
precluded from availing of the amnesty granted in P.D.'s Nos. 23 and 213. The
Government further argued that "tax exemptions should be interpreted strictissimi
juris against the taxpayer."

The respondent spouses, on the other hand, alleged that P.D. 213 contains no
exemptions from its coverage and that, under Letter of Instruction LOI 129 dated
September 18, 1973, the immunities granted by P.D. 213 include:
II-Immunities Granted.
Upon payment of the amounts specified in the Decree, the following shall be
observed:
1. . . . .
2. The taxpayer shall not be subject to any investigation, whether civil,
criminal or administrative, insofar as his declarations in the income tax
returns are concerned nor shall the same be used as evidence against, or to
the prejudice of the declarant in any proceeding before any court of law or
body, whether judicial, quasi-judicial or administrative, in which he is a
defendant or respondent, and he shall be exempt from any liability arising
from or incident to his failure to file his income tax return and to pay the tax
due thereon, as well as to any liability for any other tax that may be due as a
result of business transactions from which such income, now voluntarily
declared may have been derived. (Emphasis supplied; p. 040, Rollo.)
There is nothing in the LOI which can be construed as authority for the Bureau of
Internal Revenue to introduce exceptions and/or conditions to the coverage of the
law.
On November 23, 1984, the Intermediate Appellate Court (now Court of Appeals)
rendered a decision dismissing the Government's appeal and holding that the
payment of deficiency income taxes by the Pastors under PD. No. 213, and the
acceptance thereof by the Government, operated to divest the latter of its right to
further recover deficiency income taxes from the private respondents pursuant to the
existing deficiency tax assessment against them. The appellate court held that if
Revenue Regulation No. 7-73 did provide an exception to the coverage of P.D. 213,
such provision was null and void for being contrary to, or restrictive of, the clear
mandate of P.D. No. 213 which the regulation should implement. Said revenue
regulation may not prevail over the provisions of the decree, for it would then be an
act of administrative legislation, not mere implementation, by the Bureau of Internal
Revenue.
On February 4, 1986, the Republic of the Philippines, through the Solicitor General,
filed this petition for review of the decision dated November 23, 1984 of the
Intermediate Appellate Court affirming the dismissal, by the Court of First Instance of
Manila, of the Government's complaint against the respondent spouses.
The petition is devoid of merit.

69

Even assuming that the deficiency tax assessment of P17,117.08 against the Pastor
spouses were correct, since the latter have already paid almost the equivalent
amount to the Government by way of amnesty taxes under P.D. No. 213, and were
granted not merely an exemption, but an amnesty, for their past tax failings, the
Government is estopped from collecting the difference between the deficiency tax
assessment and the amount already paid by them as amnesty tax.
A tax amnesty, being a general pardon or intentional overlooking by the
State of its authority to impose penalties on persons otherwise guilty of
evasion or violation of a revenue or tax law, partakes of an absolute
forgiveness or waiver by the Government of its right to collect what
otherwise would be due it, and in this sense, prejudicial thereto, particularly
to give tax evaders, who wish to relent and are willing to reform a chance to
do so and thereby become a part of the new society with a clean slate
(Commission of Internal Revenue vs. Botelho Corp. and Shipping Co., Inc.,
20 SCRA 487).
The finding of the appellate court that the deficiency income taxes were paid by the
Pastors, and accepted by the Government, under P.D. 213, granting amnesty to
persons who are required by law to file income tax returns but who failed to do so, is
entitled to the highest respect and may not be disturbed except under exceptional
circumstances which have already become familiar (Rule 45, Sec. 4, Rules of Court;
e.g., where: (1) the conclusion is a finding grounded entirely on speculation, surmise
and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave
abuse of discretion; (4) the judgment is based on misapprehension of facts; (5) the
Court of Appeals went beyond the issues of the case and its findings are contrary to
the admissions of both the appellant and the appellee; (6) the findings of fact of the
Court of Appeals are contrary to those of the trial court; (7) said findings of fact are
conclusions without citation of specific evidence in which they are based; (8) the facts
set forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondents; and (9) when the finding of fact of the Court of Appeals
is premised on the absense of evidence and is contradicted by the evidence on
record (Thelma Fernan vs. CA, et al., 181 SCRA 546, citing Tolentino vs. de Jesus,
56 SCRA 67; People vs. Traya, 147 SCRA 381), none of which is present in this case.
The rule is that in case of doubt, tax statutes are to be construed strictly against the
Government and liberally in favor of the taxpayer, for taxes, being burdens, are not to
be presumed beyond what the applicable statute (in this case P.D. 213) expressly and
clearly declares (Commission of Internal Revenue vs. La Tondena, Inc. and CTA, 5
SCRA 665, citing Manila Railroad Company vs. Collector of Customs, 52 Phil, 950).
WHEREFORE, the petition for review is denied. No costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

70

MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS, INC., petitioner,

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

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

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

Sec. 103. Exempt Transactions. The following shall be exempt

from the value-added tax:
(a) Sale of nonfood agricultural, marine and forest products in their
original state by the primary producer or the owner of the land
where the same are produced;
(b) Sale or importation in their original state of agricultural and
marine food products, livestock and poultry of a kind generally used

G.R. No. 108524 November 10, 1994

71

as, or yielding or producing foods for human consumption, and

breeding stock and genetic material therefor;
Under 103(a), as above quoted, the sale of agricultural non-food products in their
original state is exempt from VAT only if the sale is made by the primary producer or
owner of the land from which the same are produced. The sale made by any other
person or entity, like a trader or dealer, is not exempt from the tax. On the other hand,
under 103(b) the sale of agricultural food products in their original state is exempt
from VAT at all stages of production or distribution regardless of who the seller is.
The question is whether copra is an agricultural food or non-food product for
purposes of this provision of the NIRC. On June 11, 1991, respondent Commissioner
of Internal Revenue issued the circular in question, classifying copra as an
agricultural non-food product and declaring it "exempt from VAT only if the sale is
made by the primary producer pursuant to Section 103(a) of the Tax Code, as
amended." 2
The reclassification had the effect of denying to the petitioner the exemption it
previously enjoyed when copra was classified as an agricultural food product under
103(b) of the NIRC. Petitioner challenges RMC No. 47-91 on various grounds, which
will be presently discussed although not in the order raised in the petition for
prohibition.
First. Petitioner contends that the Bureau of Food and Drug of the Department of
Health and not the BIR is the competent government agency to determine the proper
classification of food products. Petitioner cites the opinion of Dr. Quintin Kintanar of
the Bureau of Food and Drug to the effect that copra should be considered "food"
because it is produced from coconut which is food and 80% of coconut products are
edible.
On the other hand, the respondents argue that the opinion of the BIR, as the
government agency charged with the implementation and interpretation of the tax
laws, is entitled to great respect.
We agree with respondents. In interpreting 103(a) and (b) of the NIRC, the
Commissioner of Internal Revenue gave it a strict construction consistent with the rule
that tax exemptions must be strictly construed against the taxpayer and liberally in
favor of the state. Indeed, even Dr. Kintanar said that his classification of copra as
food was based on "the broader definition of food which includes agricultural
commodities and other components used in the manufacture/processing of food." The
full text of his letter reads:

10 April 1991
Mr. VICTOR A. DEOFERIO, JR.
Chairman VAT Review Committee
Bureau of Internal Revenue
Diliman, Quezon City
Dear Mr. Deoferio:
This is to clarify a previous communication made by this Office
about copra in a letter dated 05 December 1990 stating that copra
is not classified as food. The statement was made in the context of
BFAD's regulatory responsibilities which focus mainly on foods that
are processed and packaged, and thereby copra is not covered.
However, in the broader definition of food which include agricultural
commodities and other components used in the manufacture/
processing of food, it is our opinion that copra should be classified
as an agricultural food product since copra is produced from
coconut meat which is food and based on available information,
more than 80% of products derived from copra are edible products.
Very truly yours,
QUINTIN L. KINTANAR, M.D., Ph.D.
Director
Assistant Secretary of Health for
Standards and Regulations
Moreover, as the government agency charged with the enforcement of the law, the
opinion of the Commissioner of Internal Revenue, in the absence of any showing that
it is plainly wrong, is entitled to great weight. Indeed, the ruling was made by the
Commissioner of Internal Revenue in the exercise of his power under 245 of the
NIRC to "make rulings or opinions in connection with the implementation of the
provisions of internal revenue laws, including rulings on the classification of articles
for sales tax and similar purposes."
Second. Petitioner complains that it was denied due process because it was not
heard before the ruling was made. There is a distinction in administrative law between
legislative rules and interpretative rules. 3 There would be force in petitioner's

72

argument if the circular in question were in the nature of a legislative rule. But it is not.
It is a mere interpretative rule.
The reason for this distinction is that a legislative rule is in the nature of subordinate
legislation, designed to implement a primary legislation by providing the details
thereof. In the same way that laws must have the benefit of public hearing, it is
generally required that before a legislative rule is adopted there must be hearing. In
this connection, the Administrative Code of 1987 provides:
Public Participation. If not otherwise required by law, an agency
shall, as far as practicable, publish or circulate notices of proposed
rules and afford interested parties the opportunity to submit their
views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless
the proposed rates shall have been published in a newspaper of
general circulation at least two (2) weeks before the first hearing
thereon.
(3) In case of opposition, the rules on contested cases shall be
observed. 4
In addition such rule must be published. 5 On the other hand, interpretative rules are
designed to provide guidelines to the law which the administrative agency is in charge
of enforcing.
Accordingly, in considering a legislative rule a court is free to make three inquiries: (i)
whether the rule is within the delegated authority of the administrative agency; (ii)
whether it is reasonable; and (iii) whether it was issued pursuant to proper procedure.
But the court is not free to substitute its judgment as to the desirability or wisdom of
the rule for the legislative body, by its delegation of administrative judgment, has
committed those questions to administrative judgments and not to judicial judgments.
In the case of an interpretative rule, the inquiry is not into the validity but into the
correctness or propriety of the rule. As a matter of power a court, when confronted
with an interpretative rule, is free to (i) give the force of law to the rule; (ii) go to the
opposite extreme and substitute its judgment; or (iii) give some intermediate degree
of authoritative weight to the interpretative rule. 6
In the case at bar, we find no reason for holding that respondent Commissioner erred
in not considering copra as an "agricultural food product" within the meaning of
103(b) of the NIRC. As the Solicitor General contends, "copra per se is not food, that
is, it is not intended for human consumption. Simply stated, nobody eats copra for

food." That previous Commissioners considered it so, is not reason for holding that
the present interpretation is wrong. The Commissioner of Internal Revenue is not
bound by the ruling of his predecessors. 7 To the contrary, the overruling of decisions
is inherent in the interpretation of laws.
Third. Petitioner likewise claims that RMC No. 47-91 is discriminatory and violative of
the equal protection clause of the Constitution because while coconut farmers and
copra producers are exempt, traders and dealers are not, although both sell copra in
its original state. Petitioners add that oil millers do not enjoy tax credit out of the VAT
payment of traders and dealers.
The argument has no merit. There is a material or substantial difference between
coconut farmers and copra producers, on the one hand, and copra traders and
dealers, on the other. The former produce and sell copra, the latter merely sell copra.
The Constitution does not forbid the differential treatment of persons so long as there
is a reasonable basis for classifying them differently. 8
It is not true that oil millers are exempt from VAT. Pursuant to 102 of the NIRC, they
are subject to 10% VAT on the sale of services. Under 104 of the Tax Code, they
are allowed to credit the input tax on the sale of copra by traders and dealers, but
there is no tax credit if the sale is made directly by the copra producer as the sale is
VAT exempt. In the same manner, copra traders and dealers are allowed to credit the
input tax on the sale of copra by other traders and dealers, but there is no tax credit if
the sale is made by the producer.
Fourth. It is finally argued that RMC No. 47-91 is counterproductive because traders
and dealers would be forced to buy copra from coconut farmers who are exempt from
the VAT and that to the extent that prices are reduced the government would lose
revenues as the 10% tax base is correspondingly diminished.
This is not so. The sale of agricultural non-food products is exempt from VAT only
when made by the primary producer or owner of the land from which the same is
produced, but in the case of agricultural food products their sale in their original state
is exempt at all stages of production or distribution. At any rate, the argument that the
classification of copra as agricultural non-food product is counterproductive is a
question of wisdom or policy which should be addressed to respondent officials and
to Congress.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

73

Narvasa, C.J., Regalado and Puno, JJ., concur.

#Footnotes

3 See Victorias Milling Co. v. Social Security Commission, 114 Phil.

555 (1962); Philippine Blooming Mills v. Social Security System,
124 Phil. 499 (1966).

1 The value-added tax is a percentage tax on the sale, barter,

exchange or importation of goods or services. (NIRC, 99) Insofar
as the sale, barter or exchange of goods is concerned, the tax is
equivalent to 10% of the gross selling price or gross value in money
of the goods sold, bartered or exchanged, such tax to be paid by
the seller or transferor. ( 100(a)) The tax is determined as follows:

4 Bk. VII, Ch. 2, 9.

(d) Determination of the tax. (1) Tax billed as separate item in

the invoice. If the tax is billed as a separate item in the invoice, the
tax shall be based on the gross selling price, excluding the tax.
"Gross selling price" means the total amount of money or its
equivalent which the purchaser pays or is obligated to pay to the
seller in the consideration of the sale, barter or exchange of the
goods, excluding the value-added tax. The excise tax, if any, on
such goods shall form part of the gross selling price.

7 Petitioner's claim that RMC No. 47-91 erroneously revoked

irrelevant VAT rulings of the BIR is not correct. RMC No. 47-91
revoked VAT Rulings No. 009-88 and No. 279-88, which dealt with
the question whether copra is an agricultural food or non-food
product. VAT ruling No. 009-88 held that "copra as an agricultural
product is exempt from VAT in all stages of distribution." On the
other hand, VAT Ruling No. 279-88 treated "copra . . . as an
agricultural food product in its original state" and, therefore,
"exempt from VAT under Section 103(b) of the TAX Code, as
amended by EO 273 regardless of whether the sale is made by
producer or subsequent sale."

(2) Tax not billed separately or is billed erroneously in the

invoice. In case the tax is not billed separately or is billed
erroneously in the invoice, the tax shall be determined by
multiplying the gross selling price, including the amount intended by
the seller to cover the tax or the tax billed erroneously, by the factor
1/11 or such factor as may be prescribed by regulations in case of
persons partially exempt under special laws.

5 Taada v. Tuvera, 146 SCRA 446 (1986). See Victorias Milling

Co. v. SSC, supra note 3.
6 K. DAVIS, Administrative Law 116 (1965).

8 Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc.

v. Tan, 163 SCRA 371 (1988) (sustaining the validity of E.O. 273
adopting the VAT); Sison, Jr. v. Ancheta, 130 SCRA 653 (1984)
(sustaining the validity of B.P. Blg. 135 providing for taxable income
taxation).

(3) Sales returns, allowances and sales discounts. The value of

goods sold and subsequently returned or for which allowances
were granted by a VAT-registered person may be deducted from
the gross sales or receipts for the quarter in which a refund is made
or a credit memorandum or refund is issued. Sales discounts
granted and indicated in the invoice at the time of sale may be
excluded from the gross sales within the same quarter. (100(d))
2 This circular is based on VAT Ruling No. 190-90 dated August 17,
1990 which revoked VAT Ruling No. 009-88 and VAT Ruling No.
279-88, June 30, 1988, classifying copra as an agricultural food
product.

74

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 86020 August 5, 1994

RAMON CORPORAL, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and GOVERNMENT SERVICE
INSURANCE SYSTEM,respondents.
Public Attorney's Office for petitioner.

75

QUIASON, J.:
This is a petition for certiorari questioning the decision of the Employees'
Compensation Commission which denied petitioner's claim for death benefits under
Presidential Decree No. 626, as amended.
I
Norma Peralta Corporal was employed as a public school teacher with assignment in
Juban, Sorsogon. On November 28 to November 30, 1977, she was confined at the
Esteves Memorial Hospital for acute coronary insufficiency and premature ventricular
contractions.
On June 30, 1983, she was assigned to the Banadero Elementary School in Daraga,
Albay. Norma had to walk three kilometers to and from said school as no
transportation was available to ferry her and other teachers from the national highway
to the school. During her fourth pregnancy, Norma suffered a complete abortion and
was hospitalized for two days at the Albay Provincial Hospital. After her maternity
leave, Norma reported back to work.
In March of 1984, she again conceived. However, in September of the same year, she
was transferred to the Kilicao Elementary School, where she had to walk more than
one kilometer of rough road. On December 2, 1984, she gave birth to a baby boy with
the help of a "hilot." An hour later, she was rushed to the Immaculate Conception
Hospital due to profuse vaginal bleeding. She underwent a hysterectomy but
unfortunately, she died on the same day due to "shock, severe hemorrhage" resulting
from a "prolapse(d) uterus post partum." Norma was 40 years old when she died.
Her husband, Ramon Corporal, petitioner herein, filed a claim for compensation
benefit with the Government Service Insurance System (GSIS). The GSIS denied
petitioner's claim thus:
Please be advised that on the basis of the proofs and evidences
(sic) submitted to the System, the cause of death of your wife,
Shock secondary to Severe Hemorrhage, Uterine PROLAPSE is
not considered an occupational disease as contemplated under the
above-mentioned law (P.D. No. 626). Neither was there any
showing that her position as Teacher, MECS, Albay had increased
the risk of contracting her ailment (Rollo, p. 23).

Petitioner filed several motions for the reconsideration of the denial of his claim to no
avail, because a re-evaluation of the claim by the Medical Evaluation and
Underwriting Group of the GSIS showed that there was "no basis to alter its previous
action of denial for the same reason . . . that her cause of death is non-workconnected as contemplated under the law" and neither did her job as a teacher
increase the risk of contracting her ailment (Rollo, p. 25).
Petitioner appealed to the Employees' Compensation Commission (ECC). The ECC
requested the GSIS to re-evaluate petitioner's claim and to finally determine
compensability, with instruction that in case the claim is denied once more by the
System, the entire record of the case be elevated to the ECC. The GSIS reiterated its
denial of petitioner's claim.
On September 7, 1988, the ECC rendered a decision also denying petitioner's claim.
It said:
Medical studies show that Prolapsed Uterus may occur in infants
and nulliparous women as well as multiparas. Defects in
innervation and in the basic integrity of the supporting structures
account(s) for prolapse(d) in the first two and childbirth trauma for
the latter. The cervix usually elongates because the weight of the
nagging vaginal tissues pulls it downward, whereas the attached
but weak cardinal ligaments tend(s) to support it. In third degree or
complete prolapse(d) both the cervix and the body of the uterus
have passed through the introitus and the entire vaginal canal is
inverted. (Obstetrics and Gynecology, Wilson, Beecham,
Carrington, 3rd Edition, p. 585).
On the other hand Acute Coronary Insufficiency are terms often
used to describe a syndrome characterized by prolonged
substernal pain, usually not relieved by vasodilators of a short
period of rest due to a more severe inadequacy of coronary
circulation. The symptoms in this condition are more intense and
prolonged than in angina pectoris, but abnormal ECG and other
laboratory findings associated with myocardial infarction are
absent. The syndrome is covered by a temporary inability of one's
coronary arteries to supply sufficient oxygenated blood to the heart
muscle. (Merck, Manual of Diagnosis & Therapy, pp. 100-101).
Based on the above medical discussion of the subject ailments, we
believe that the development of the fatal illness has no relation
whatsoever with the duties and working conditions of the late

76

teacher. There is no showing that the nature of her duties caused

the development of prolapse of the uterus. The ailment was a
complication of childbirth causing profuse vaginal bleeding during
the late stage. We also consider Acute Coronary Insufficiency as
non-work-connected illness for the reason that it is caused by
temporary inability of one coronary arteries (sic) to supply
oxygenated blood to the heart muscle. There is no damage to heart
muscle. In view thereof, we have no recourse but to sustain
respondent's denial of the instant claim (Rollo, pp. 29-31).
Hence, petitioner filed the instant petition, asserting compensability of the death of his
wife.
II
Petitioner contends that although prolapsed uterus is not one of occupational
diseases listed by the ECC, his claim should proper under the increased risk theory.
He anchors such claim on the fact that as early as January 1984 or before Norma's
fifth pregnancy, he had noticed a spherical tissue which appeared like a tomato
protruding out of Norma's vagina and rectum. He avers that such condition was
attributable to Norma's long walks to and from her place of teaching Banadero
Elementary School, which is situated on the side of the Mayon Volcano. Moreover,
the roads leading to the school are full of ruts and rocks, and, during the rainy
season, are flooded and slippery. Petitioner asserts that inspite of these, Norma
continued to discharge her duties as a public servant, notwithstanding her pregnancy
and her prolapsed uterus.
Petitioner also contends that the findings of the respondents contravene the
constitutional provision on social justice. He alleges that since the workmen's
compensation law is a social legislation, its provisions should be interpreted liberally
in favor of the employees whose rights it intends to protect.
Under P.D. No. 626, as amended, for sickness and the resulting death of an
employee to be compensable, the claimant must show either: (a) that it is a result of
an occupational disease listed under Annex A of the Amended Rules on Employees'
Compensation with the conditions set therein satisfied; or (b) that the risk of
contracting the disease is increased by the working conditions (Santos v. Employees'
Compensation Commission, 221 SCRA 182 [1993]; Quizon v. Employees'
Compensation Commission, 203 SCRA 426 [1991]). Clearly, then, the principle of
aggravation and presumption of compensability under the old Workmen's
Compensation Act no longer applies (Latagan v. Employees' Compensation
Commission, 213 SCRA 715 [1992]).

Since petitioner admits that his wife died of an ailment which is not listed as
compensable by the ECC and he merely anchors his claim on the second rule, he
must positively show that the risk of contracting Norma's illness was increased by her
working conditions. Petitioner failed to satisfactorily discharge the onus imposed by
law.
The fact that Norma had to walk six kilometers everyday and thereafter, a shorter
distance of more than one kilometer just to reach her place of work, was not sufficient
to establish that such condition caused her to develop prolapse of the uterus.
Petitioner did not even present medical findings on the veracity of his claim that
Norma had a tomato-like spherical tissue protruding from her vagina and rectum.
Norma developed prolapse of the uterus because she was multiparas, or one who
had more than one child, and quite beyond the safe child-bearing age when she gave
birth to her fifth child she was already forty years old.Novak's Textbook on
Gynecology describes prolapse of the uterus (descensus uteri) as follows:
An extremely common condition, being far more frequent in elderly
than in young patients. This is explained by the increasing laxity
and atony of the muscular and fascial structures in later life. The
effects of childbirth injuries may thus make themselves evident, in
the form of uterine prolapse, many years after the last pregnancy.
Pregnancies in a prolapsed uterus may lead to numerous
complications, as noted by Piver and Spezia.
The important factor in the mechanism of the prolapse is
undoubtedly injury or overstretching of the pelvic floor, and
especially of the cardinal ligaments (Mackenrodt) in the bases of
the broad ligaments.Combined with this there is usually extensive
injury to the perineal structures, producing marked vaginal
relaxation and also frequent injury to the fascia or the anterior or
posterior vaginal walls, with the production of cystocele or
rectocele. Usually, various combinations of these conditions are
seen, although at times little or no cystocele or rectocele is
associated with the prolapse. Occasional cases are seen for that
matter, in women who have never borne children, and in these the
prolapse apparently represents a hernia of the uterus through a
defect in the pelvic fascial floor (Emphasis supplied).
The 1986 Current Medical Diagnosis & Treatment also describes the condition as
follows:

77

Uterine prolapse most commonly occurs as a delayed result of

childbirth injury to the pelvic floor (particularly the transverse
cervical and uterosacral ligaments). Unrepaired obstetric
lacerations of the levator musculature and perineal body augment
the weakness. Attenuation of the pelvic structures with aging and
congenital weakness can accelerate the development of prolapse.
The determination of whether the prolapse of Norma's uterus developed before or
after her fifth pregnancy is therefore immaterial since this illness is the result of the
physiological structure and changes in the body on pregnancy and childbirth.
With the evidence presented in support of the claim, petitioner's prayer cannot be
granted. While as a rule labor and social welfare legislation should be liberally
construed in favor of the applicant, (Tria v. Employees' Compensation Commission,
208 SCRA 834 [1992]), there is also the rule that such liberal construction and
interpretation of labor laws may not be applied where the pertinent provisions of the
Labor Code and P.D. No. 626, as amended, are clear and leave no room for
interpretation.
The Court commiserates with the petitioner and his children for the loss of a loved
one. We also recognize the importance of the services rendered by public elementary
school teachers inspite of their meager salaries which are not proportionate to their
immense responsibility in molding the values and character of the youth in this
country (De Vera v. Employees' Compensation Commission, 133 SCRA 685 [1984]).
But under the legal milieu of the case, we can only suggest, not mandate, that
respondents grant ex gratia some form of relief to their members similarly situated as
petitioner's wife.
WHEREFORE, the petition is DENIED.
SO ORDERED.
Cruz, Davide, Jr. and Kapunan, JJ., concur.
Bellosillo, J., is on leave.

78

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

The petitioner appealed to the Employees' Compensation Commission which affirmed

the decision of the Government Service Insurance System on a finding that the
ailment of the deceased, enteric fever, was not induced by or aggravated by the
nature of the duties of Nazario Manahan, Jr. as a teacher. 2
To support her theory that the disease of Nazario Manahan, Jr., enteric fever, resulted
from his employment as classroom teacher of the Las Pias Municipal High School,
the petitioner cites the following authority:

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

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

FERNANDEZ, J.:
This is a petition to review the decision of the Employees' Compensation Commission
in ECC Case No. 0070 (Nazario Manahan, Jr., deceased), entitled "Maria Manahan,
Appellant, versus Government Service Insurance System, (Las Pias Municipal High
School), Respondent" affirming the decision of the Government Service Insurance
System which denied the claim for death benefit. 1
The claimant, petitioner herein, Maria E. Manahan, is the widow of Nazario Manahan,
Jr., who died of "Enteric Fever" while employed as classroom teacher in Las Pias
Municipal High School, Las Pias Rizal, on May 8, 1975.
The petitioner filed a claim with the Government Service Insurance for death benefit
under Presidential Decree 626. In a letter dated June 19, 1975, the Government
Service Insurance denied the claim on a finding that the ailment of Nazario Manahan,
Jr., typhoid fever, is not an occupational disease.
The petitioner filed a motion for reconsideration on the ground that the deceased,
Nazario Manahan, Jr., was in perfect health when admitted to the service and that the
ailment of said deceased was attributable to his employment.
The Government Service Insurance System affirmed the denial of the claim on the
ground that enteric fever or paratyphoid is similar in effect to typhoid fever, in the
sense that both are produced by Salmonella organisms.

OF ENTERIC FEVER
THE SOURCE OF INFECTION is feces or urine from patients and
carriers. Family contacts may be transient carriers and 2 to 5% of
patients become chronic carriers. In poorly sanitized communities,
water is the most frequent vehicle of transmission; food, especially
milk, is the next most important. In modern urban areas, food,
contaminated by healthy carriers who are food handlers, is the
principal vehicle. Flies may spread the organism from feces to food.
Direct contact infection is infrequent.
The organism enters the body through the gastrointestinal tract,
invading the blood stream by way of the lymphatic channels. There
is hyperplasia and often ulceration of Pyeris patches, especially in
the ileum and cecum. When the ulcers heals, no scar results. The
kidneys and liver usually show cloudly swelling and the latter may
reveal a patchy necrosis The spleen is enlarged and soft. Rarely,
the lungs show pneumonic changes. (Merck Manual 10th Edit., P.
842) 3
The factual findings of the respondent Commission indicate that the deceased was in
perfect health when he entered government service on July 20, 1969, and that in the
course of his employment in 1974, he was treated for epigastric pain. He succumbed
to enteric fever on May 8, 1975.
Enteric fever is referred to in medical books as typhoid fever (Dorlands Illustrated
Medical Dictionary, 24th Ed., p. 548) or paratyphoid fever (Harrison's Principles of
Internal Medicine, 6th Ed., p. 817). Its symptoms include abdominal pain (id., p. 810).
In discussing the clinical manifestations of the disease, Mr. Harrison states that
recovery (from enteric or paratyphoid fever) may be followed by continued excretion
of the causative organism in the stools for several months (id., p. 817). This lingering

79

nature of the species producing enteric fever points out the possibility that the illness
which afflicted the deceased in 1974 was the same as, or at least, related to, his 1975
illness.

Moreover, the constitutional guarantee of social justice and protection to labor make
Us take a second look at the evidence presented by the claimant.

Because of these circumstances, the illness that claimed the life of the deceased
could have had its onset months before December 10, 1974. Such being the case, his
cause of action accrued before December 10, 1974.

As a teacher of the Las Pias Municipal High School at Las Pias Rizal, the
deceased used to eat his meals at the school canteen. He also used the toilet and
other facilities of the school. Said the respondent Commission," ... it is not improbable
that the deceased might have contracted the illness during those rare moments that
he was away from his family, since it is medically accepted that enteric fever is
caused by salmonella organisms which are acquired by ingestion of contaminated
food or drinks. Contamination of food or water may come from the excretion of
animals such as rodents flies, or human beings who are sick or who are carriers, or
infection in meat of animals as food. Meat, milk and eggs are the foods most
frequently involved in the transmission of this type of species, since the organism may
multiply even before ingestion. ..." These findings of the respondent Commission lead
to the conclusion that the risk of contracting the fatal illness was increased by the
decedent's working condition.

In the case of Corales vs. ECI (L-44063, Feb. 27, 1979), We ruled that:

In view of the foregoing, the petition for review is meritorious.

The medical record of the deceased shows that he had a history of ulcer-like
symptoms (p. 3, ECC rec.). This butresses the claimant's claim that her husband had
been suffer from ulcer several months before his death on May 8, 1975. This is
likewise sustained by the medical certificate (p. 12, ECC rec.) issued by Dr. Aquilles
Bernabe to the effect that "Nazario Manahan was treated for epigastric pain probably
due to hyper-acidity on December 10, 1974." Epigastric pain is a symptom of ulcer,
and ulcer is a common complication of typhoid fever. There is even such a thing as
"typhoidal ulcer" (p. 812, supra).

... Article 294, Title III (Transitory and Final Provisions) of the New
Labor Code provides that all actions and claims accruing prior to
the effectivity of this Code shall be determined in accordance with
the laws in force at the time of their accrual and under the third
paragraph of Article 292, Title 11 Prescription of Offenses and
Claims, workmen's compensation claims accruing prior to the
effectivity of this Code and during the period from November 1,
1974 up to December 31, 1974 shall be processed and adjudicated
in accordance with the laws and rules at the time their causes of
action accrued. Hence, this Court applied the provisions of the
Workmen's Compensation Act, as amended, on passing upon
petitioner's claim.
Pursuant to such doctrine and applying now the provisions of the Workmen's
Compensation Act in this case, the presumption of compensability subsists in favor of
the claimant.
In any case, We have always maintained that in case of doubt, the same should be
resolved in favor of the worker, and that social legislations like the Workmen's
Compensation Act and the Labor Code should be liberally construed to attain their
laudable objective, i.e., to give relief to the workman and/or his dependents in the
event that the former should die or sustain an injury.

WHEREFORE, the decision of the Employees' Compensation Commission sought to

be reviewed is hereby set aside the Government Service Insurance System is
ordered:
1. To pay the petitioner the amount of SIX THOUSAND PESOS (P6,000.00) as death
compensation benefit;
2. To pay the petitioner the amount of SIX HUNDRED PESOS (P600.00) as attorney's
fees;
3. To reimburse the petitioner expenses incurred for medical services, hospitalization
and medicines of the deceased Nazario Manahan, Jr., duly supported by proper
receipts; and
4. To pay administrative fees.
SO ORDERED.
Teehankee (Chairman), Makasiar, Guerrero and De Castro, JJ., concur.
Separate Opinions

80

MELENCIO-HERRERA, J., concurring:

I concur. Although enteric fever is not an occupational disease, considering the cause
of said illness, the risk of contracting it could have been increased by the working
conditions of the deceased, a teacher, who used to eat his meals at the school
canteen and used the comfort room and other facilities of the school.

This original action for certiorari impugns the Order 1 of respondent Commission on
Elections, dated January 19, 1993, dismissing the appeal filed by petitioner Roleto A.
Pahilan for the latter's failure to file a notice of appeal with the Regional Trial Court of
Mumbajao, Camiguin, and, necessarily on the same rationale, the
Resolution 2 promulgated by said respondent on May 6, 1993 denying petitioner's
motion for reconsideration.
Petitioner Pahilan and private respondent Tabalba were candidates for Mayor of
Guinsiliban, Camiguin during the local elections held on May 11, 1992. On May 13,
1992, the Municipal Board of Canvassers proclaimed Tabalba as the duly elected
Mayor of Guinsilban, the latter having garnered 1,087 votes as against 806 votes for
Pahilan.

Footnotes
1 Rollo, pp. 25-27.
2 Idem.
3 Rollo, p. 20.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 110170 February 21, 1994

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

Thereafter, Pahilan filed an election protest 3 which he sent by registered mail on May
23, 1992, addressed to the Clerk of Court of the Regional Trial Court of Mambajao,
Camiguin, attaching thereto P200.00 in cash as payment for docket fees. In a
letter 4 dated May 28, 1992, the OIC-Clerk of Court of the Regional Trial Court of
Mambajao, Camiguin, Branch 28, informed Pahilan that the correct fees that where
supposed to be paid amounted to P620.00, and that, accordingly, the petition would
not be entered in the court docket and summons would not be issued pending
payment of the balance of P420.00.
On June 16, 1992, upon receipt of the latter, Pahilan paid the required balance in the
total amount P470.00. 5
Subsequently, on June 22, 1992, Tabalba filed his answer with
Counterclaim, 6 alleging as one of his affirmative defenses lack of jurisdiction on the
part of the trial court to entertain the election protest for having been filed beyond the
ten-day period provided by law.
On August 17, 1992, Pahilan filed a Motion for Inhibition, dated August 14, 1992,
because of alleged serious and grave doubts that the presiding judge could
impartially hear and decide his election protest with the cold neutrality of an impartial
judge, as the latter allegedly belongs to and had supported a political group adverse
to the candidacy of petitioner.

Marciano Ll. Aparte, Jr. for Rudy A. Tabalba.

On August 18, 1992, the trial court proceeded with the pre-trial conference, heard the
defense on the allegation of lack of jurisdiction for non-payment of docket fees, and
thereafter ordered the parties to submit their respective memoranda.

REGALADO, J.:

Tabalba filed his Memorandum in Support of Affirmative Defense of Lack of

Jurisdiction, 7 dated September 4, 1992. Under date of September 22, 1992, Pahilan

81

filed a Memorandum 8 as well as a Motion to Resolve Motion for Inhibition Prior to

Resolution of Affirmative Defenses. 9
On October 2, 1992, the trial court issued an Order 10 denying the motion for inhibition
and dismissing the election protest for "non-payment on time of the required fees for
filing an initiatory pleading." Pahilan's counsel received a copy of said order on
October 12, 1992 in Cagayan de Oro City.
On October 17, 1992 and within the 5-day period to appeal, Pahilan filed a verified
appeal brief 11 in respondent Commission on Elections, with copies duly served on the
Regional Trial Court of Mambajao, Camiguin and the counsel for herein private
respondent.
On December 12, 1992, the Comelec Contests Adjudication Department directed the
Clerk of Court, Regional Trial Court, Camiguin, Branch 28, to immediately transmit the
complete records of EP case No. 3(92) which was being appealed by herein
petitioner. 12 Thereafter, in a letter 13 dated January 7, 1993, the said Clerk of Court
informed respondent Commission that "to this very late date, this office has not
received any notice of appeal from the aggrieved party." As a consequence,
respondent Commission, in an Order dated January 19, 1993, dismissed Pahilan's
verified appeal for failure to appeal within the prescribed period.
Pahilan filed a motion for reconsideration 14 of the order dismissing his appeal. Both
parties were required by respondent Commission to file their respective memoranda.
Finally, on May 6, 1993, respondent Commission issued its aforestated resolution
denying Pahilan's motion for reconsideration.
Hence, this petition on the bases of the following assigned errors:
1. Whether or not respondent Commission validly dismissed the
verified "Appeal" of petitioner which contains all the elements of a
"notice of appeal" and more expressive of the intent to elevate the
case for review by said appellate body, and furnishing copies
thereof to the respondent trial judge and counsel for the adverse
party, aside from the incomplete payment of the appeal fee; and
2. Whether or not the respondent trial judge validly dismissed the
petition of protest of petitioner for non-payment on time of the
required fee.
We find cogency and merit in the petition.

The bone of contention in this petition is the alleged erroneous dismissal of

petitioner's appeal by respondent Commission because of the failure of petitioner to
file a notice of appeal before the Regional Trial Court of Mambajao, Camiguin which,
in turn, dismissed the election protest of petitioner for non-payment of docket fees.
The COMELEC RULES OF PROCEDURE provide for the manner in which appeals
from decisions of courts in election contests shall be made, to wit:
RULE 22 Appeals from Decisions of Courts
in Election Protest Cases
Sec. 1. Caption and title of appealed cases. In all election
contests involving the elections, returns, and qualifications of
municipal or barangay officials, the party interposing the appeal
shall be called the "Appellant" and the adverse party the "Appellee",
but the title of the case shall remain as it was in the court of origin.
xxx xxx xxx
Sec. 3. Notice of Appeal. Within five (5) days after promulgation
of the decision of the court, the aggrieved party may file with said
court a notice of appeal, and serve a copy thereof upon the
attorney of record of the adverse party.
Sec. 4. Immediate transmittal of records of the case. The Clerk
of the court concerned shall, within fifteen (15) days from the filing
of the notice of appeal, transmit to the Electoral Contests
Adjudication Department the complete records of the case, together
with all the evidence, including the original and three(3) copies of
the transcript of stenographic notes of the proceedings.
Sec. 5. Filing of briefs. The Clerk of Court concerned, upon
receipt of the complete records of the case, shall notify the
appellant or his counsel to file with the Electoral Contests
Adjudication Department within thirty (30) days from receipt of such
notice, ten (10) legible copies of his brief with proof of service
thereof upon the appellee.
Within thirty (30) days from receipt of the brief of the appellant, the
appellee shall file ten (10) legible copies of his brief with proof of
service thereof upon the appellant.

82

xxx xxx xxx

Sec. 9. Grounds for dismissal of appeal. The appeal may be
dismissed upon motion of either party or at the instance of the
Commission on any of the following grounds:
(a) Failure of the appellant to pay the appeal fee;
(b) Failure of the appellant to file copies of his brief within the time
provided by these rules;
(c) Want of specific assignment of errors in the appellant's brief;
and
(d) Failure to file notice of appeal within the prescribed period.
In the case at bar, petitioner received a copy of the trial court's order dismissing his
election protest on October 12, 1992. As earlier stated, herein petitioner, instead of
filing a notice of appeal as required by the rules, filed with respondent Commission a
verified appeal brief within the five-day reglementary period by registered mail under
Registry Receipt No. 43093, dated October 17, 1992. It will be noted, however, that
on even date, petitioner likewise sent by registered mail copies of his appeal brief to
the Regional Trial Court of Mambajao, Camiguin, under Registry Receipt No. 43091,
and to the counsel of herein private respondent, under Registry Receipt No. 43092. 15
The question now posed by the foregoing factual situation is whether the notice of
appeal can be validly substituted by an appeal brief. We firmly believe and so hold,
under the considerations hereinunder discussed, that the same may be allowed.
First, in cases where a record on appeal is required under the Rules of Court, it has
been consistently held that the filing or presentation and approval of the record on
appeal on time necessarily implies or involves the filing of the notice of
appeal, 16 because the act of taking or perfecting an appeal is more expressive of the
intention to appeal than the filing of a mere notice to do so. 17
If the courts can deign to be indulgent and lenient in the interpretation of the rules
respecting ordinary civil actions involving private parties representing private
interests, with more reason should the rules involving election cases, which are
undoubtedly impressed with public interest, be construed with the same or even
greater forbearance and liberality.

It has been frequently decided, it may be stated as a general rule recognized by all
courts, that statutes providing for election contests are to be liberally construed to the
end that the will of the people in the choice of public officers may not be defeated by
mere technical objections. An election contest, unlike an ordinary action, is imbued
with public interest since it involves not only the adjudication of the private interests of
rival candidates but also the paramount need of dispelling the uncertainty which
beclouds the real choice of the electorate with respect to who shall discharge the
prerogatives of the office within their gift. Moreover, it is neither fair nor just to keep in
office for an uncertain period one whose right to it is under suspicion. It is imperative
that his claim be immediately cleared not only for the benefit of the winner but for the
sake of public interest, which can only be achieved by brushing aside technicalities of
procedure with protract and delay the trial of an ordinary
action. 18
For this reason, broad perspectives of public policy impose upon courts the
imperative duty to ascertain by all means within their command who is the real
candidate elected in as expeditious a manner as possible, without being fettered by
technicalities and procedural barriers to the end that the will of the people may not be
frustrated. 19
It is true that perfection of an appeal in the manner and within the period laid down by
law is not only mandatory but also jurisdictional, and that the failure to perfect an
appeal as required by the rules has the effect of defeating the right of appeal of a
party and precluding the appellate court from acquiring jurisdiction over the
case. 20Nevertheless, in some instances, this Court has disregarded such unintended
lapses so as to give due course to appeals on the basis of strong and compelling
reasons, such as serving the ends of justice and preventing a grave miscarriage
thereof in the exercise of our equity
jurisdiction. 21
It is our considered opinion that public interest is of far greater importance than the
justifications of substantial justice and equity in seeking an exception to the general
rule. Hence, election cases, by their very nature, should and ought to merit a similar
exemption from a strict application of technical rules of procedure.
Second, it has been shown and it is not even denied that the Regional Trial Court of
Camiguin, as well as the counsel for private respondent, was furnished copies of the
appeal brief which were sent by registered mail on October 17, 1992, within the
reglementary period to appeal. This fact was never refuted by the Solicitor General in
his Comment. Concomitantly, although the Clerk of Court claimed that he had not
received any notice of appeal from herein petitioner, it would be safe to assume,
under the circumstances, that the appeal brief duly directed mailed was received in

83

the regular course of the

mail 22 and was, therefore, deemed filed with the trial court as of the date of mailing.

rules governing ordinary civil actions are not necessarily binding on special actions
like an election contest wherein public interest will be adversely affected.

Third, applying suppletorily the provisions of the Rules of Court, 23 particularly Section
4, Rule 41 thereof, the requirement is that a notice of appeal shall specify the parties
to the appeal; shall designate the judgment or order, or part thereof, appealed from;
and shall specify the court to which the appeal is taken. A perusal of herein
petitioner's appeal brief will disclose the following information: that the parties to the
case are Roleto A. Pahilan as protestant-appellant and Rudy A Tabalba as protesteeappellee; that appellant therein is appealing from the order of the Regional Trial Court
of Mambajao, Camiguin, dismissing the petition for election contest in Election Case
No. 3(92); and that the appeal is being made pursuant to Section 22 of Republic Act
No. 7166, that is, before the Commission on Elections.

The case of Malimit vs. Degamo, on its part, is not on all fours with the present case.
In that case, the petition forquo warranto was mailed to the clerk of Court on
December 14, 1959 and was received by the latter on December 17, 1959. The
docket fee was deemed paid only on January 5, 1960, because the petitioner therein
failed to prove his allegation that a postal money order for the docket fee was
attached to his petition. Hence, the petition for quo warranto was correctly dismissed.

Accordingly, there is no gainsaying the fact that the particulars which ought to be
reflected in the notice of appeal have been specifically and categorically spelled out in
the appeal brief of petitioner. Perforce, and in light of the foregoing disquisitions, we
find and so hold that petitioner is entitled to the relief prayed for.
We now proceed to resolve the issue anent the dismissal of petitioner's election
protest by the Regional Trial Court for non-payment, or more accurately
the incomplete payment, of docket fees. Ordinarily, with the reversal of the
respondent Commission's questioned order, this case should be remanded to said
court for adjudication on the merits. Considering, however, the exigencies of time
appurtenant to the disposition of election cases, and considering further that the issue
has at any rate been squarely raised in this petition, it is now incumbent upon this
Court to act on the propriety of the trial court's order dismissing the election protest
for failure of petitioner to pay thecorrect amount of docket fees.
In dismissing petitioner's action, the trial court relied on the rulings enunciated in the
cases of Malimit vs. Degamo 24(an action for quo warranto), Magaspi, et
al. vs. Ramolete, et al. 25 (a suit for recovery of possession and ownership of
land),Lee vs. Republic 26 (a petition for declaration of intention to become a Filipino
citizen), Manchester Development Corporation vs. Court of Appeals, et al. 27 (an
action for a sum of money and damages), Sun Insurance Office, Ltd., (SIOL) et
al. vs.Asuncion. 28 (a suit for a sum of money and damages), and Tacay, et
al. vs. Regional Trial Court of Tagum, Davao del Norte, etc., et al. 29 (an action for
damages). It bears emphasis that the foregoing cases, except for Malimit
vs. Degamo, are ordinary civil actions. This fact alone would have sufficed for a
declaration that there was no basis for the dismissal of petitioner's protest for the
simple reason that an election contest is not an ordinary civil action. Consequently the

In the case at bar, it cannot be gainsaid that the sum of P200.00 was attached to the
petition mailed to the Regional Trial Court of Camiguin and this fact was even
acknowledged by the Clerk of Court thereof when he requested herein petitioner to
pay the balance of the correct docket fee. In Malimit, there was no docket fee paid at
all at the time of mailing; in the present case, the docket fee was paid except that the
amount given was not correct. Considering the fact that there was an honest effort on
the part of herein petitioner to pay the full amount of docket fees, we are not inclined
to insist on a stringent application of the rules.
Furthermore, there are strong and compelling reasons to rule that the doctrine we
have established in Manchesterand cases subsequent thereto cannot be made to
apply to election cases.
As we have earlier stated, the cases cited are ordinary civil actions whereas election
cases are not. The rules which apply to ordinary civil actions may not necessarily
serve the purpose of election cases, especially if we consider the fact that election
laws are to be accorded utmost liberality in their interpretation and application,
bearing in mind always that the will of the people must be upheld. Ordinary civil
actions would generally involve private interests while all elections cases are, at all
times, invested with public interest which cannot be defeated by mere procedural or
technical infirmities.
Again, the Court in Manchester made its ruling in view of its finding that there existed
the unethical practice of lawyers and parties of filing an original complaint without
specifying in the prayer the amount of damages which, however, is stated in the body
of the complaint. This stratagem is clearly intended for no other purpose than to
evade the payment of the correct filing fees by misleading the docket clerk in the
assessment thereof. Thus, the court therein held that jurisdiction shall be acquired
only upon payment of the prescribed docket fee.
That ruling was later relaxed in the case of Sun Insurance which allowed the
subsequent payment of the correct docket fees provided it is made within the

84

reglementary period or before prescription has set in. The reason given was that
there was no intent on the part of the petitioners therein to defraud the government,
unlike the plaintiff in the case of Manchester.
In Tacay, et al. vs. Tagum, et al., it was stated that this Court, inspired by the doctrine
laid down in Manchester,issued Circular No. 7 on March 24, 1988, which was aimed
at the practice of certain parties who omit from the prayer of their complaints any
specification of the amount of damages, the omission being clearly intended for no
other purpose than to evade the payment of the correct filing fees by deluding the
docket clerk in his assessment of the same. In all these cases, the rule was applied
for failure of the plaintiff to include in the prayer of the complaint the total amount of
damages sought against the defendant. The reason for this, according to
the Tacay case, is because the amount of damages will help determine two things:
first, the jurisdiction of the court; and, second, the amount of docket fees to be paid.
In the case now before us, and in election cases in general, it is not the amount of
damages, if any, that is sought to be recovered which vests in the courts the
jurisdiction to try the same. Rather, it is the nature of the action which is determinative
of jurisdiction. Thus, regardless of the amount of damages claimed, the action will still
have to be filed with the Regional Trial Court. In such a case, the evil sought to be
avoided in Manchester and like cases will never arise. Peremptorily, there will be no
occasion to apply the rulings in the cases mentioned. In addition, the filing fee to be
paid in an election case is a fixed amount of P300.00. There will consequently be no
opportunity for a situation to arise wherein an election contest will have to be
dismissed for failure to state the exact amount of damages and thus evince an intent
to deprive the Government of the docket fees due.

WHEREFORE, the Order of the Commission on Elections dated January 19, 1993, as
well as its Resolution promulgated on May 6, 1993, both in EAC No. 24-92; and the
Order of the Regional Trial court of Mambajao, Camiguin, dated October 2, 1992, in
Election Case No. 3(92) are hereby REVERSED and SET ASIDE, and the records of
this case are hereby ordered REMANDED to the court a quo for the expeditious
continuation of the proceedings in and the adjudication of the election protest pending
therein as early as practicable.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Davide, Jr., Romero, Nocon, Bellosillo,
Melo, Quiason, Puno, Vitug and Kapunan, JJ., concur.

#Footnotes
1 Annex O, Petition; Rollo, 125.
2 Annex S, id.; ibid., 189
3 Annex A, id.: ibid., 31.
4 Annex C, id.; ibid., 36.
5 Annexes D to D-4, id.; ibid., 37-39.

Finally, in Manchester, there was a deliberate attempt on the part of the plaintiffs
therein to evade payment of the correct docket fees. In the case of petitioner, he
already explained, and this we find acceptable and justified, that "since the schedule
of the new rates of court fees was not then available and the filing of the petition for
election contests was done thru the mails, the old rates readily came to mind, and this
was the reason why only two hundred pesos was remitted at the same time with the
petition." 30
To summarize, the evil sought to be avoided in Manchester and similar cases can
never obtain in election cases since (1) the filing fee in an election cases is fixed and
not dependent on the amount of damages sought to be recovered, if any; and (2) a
claim for damages in an election case is merely ancillary to the main cause of action
and is not even determinative of the court's jurisdiction which is governed by the
nature of the election filed.

6 Annex E, id.; ibid., 40.

7 Annex H, id.; ibid., 53.
8 Annex I, id.; ibid., 57.
9 Annex G. id.; ibid., 61.
10 Annex K, id.; ibid., 63.
11 Annex L, id.; ibid., 77.
12 Annex M, id.; ibid., 123.

85

13 Annex N, id.; ibid., 124.

30 Rollo, 58.

14 Annex P, id.; ibid., 127.

15 Rollo, 88.
16 Lopez vs. Lopez, et al., 77 Phil. 133 (1946).
17 Peralta vs. Solon, 77 Phil. 610 (1946).
18 Unda vs. Commission on Elections, et al., G.R. No. 94090,
October 18, 1990, 190 SCRA 827.
19 Vda. de De Mesa, et al. vs. Mencias, et al., G.R. No. L-24583,
October 29, 1966, 18 SCRA 533.
20 Villanueva vs. Court of Appeals, et al., G.R. No. 99357, January
27, 1992, 205 SCRA 537.

Republic of the Philippines

SUPREME COURT
Manila

21 Imperial Textile Mills, Inc. vs. National Labor Relations

Commission, et al., G.R. No. 101527, January 19, 1993, 217 SCRA
237.

THIRD DIVISION

22 Section 3(v), Rule 131, Rules of Court.

23 This is expressly authorized by Section 1, Rule 43 of the
comelec Rules of Procedure.
24 G.R. No. L-17850, Nov. 28, 1964, 12 SCRA 450.
25 G.R. No. L-34840, July 20, 1982, 115 SCRA 193.
26 G.R. No. L-15027, January 31, 1964, 10 SCRA 65.
27 G.R. No. 75919, May 7, 1987, 149 SCRA 562.

G.R. No. L-36378 January 27, 1992

PIO BALATBAT, petitioner,
vs.
COURT OF APPEALS and DOMINGO PASION, respondents.
Bureau of Agrarian Legal Assistance for petitioner.
Roberto Y. Miranda for private respondent.

28 G.R Nos. 79937-38, February 13, 1989, 170 SCRA 274.

29 G.R. Nos. 88075-77, December 20, 1989, 180 SCRA 433.

DAVIDE, JR., J.:

86

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by
an agricultural lessee who was ordered ejected in an action for ejectment filed by the
new owner of the landholding on the basis of the latter's claim that he will personally
cultivate the land pursuant to Section 36 (1) of R.A. No. 3844.
The antecedent facts, as gathered from the pleadings, are not controverted.
Petitioner is the agricultural lessee of a parcel of land located at Santiago, Sta. Ana,
Pampanga containing an area of 18,490 square meters, more or less, which is owned
by Daniel Garcia. The latter sold the land to private respondent Domingo Pasion and
had declared for taxation purposes under Tax Declaration No. 126. Sometime after
the sale, Domingo Pasion, on a claim that he will personally cultivate the land, filed on
15 June 1970 with the Court of Agrarian Relations, Fifth Regional District, Branch II at
San Fernando, Pampanga, a complaint to eject petitioner alleging therein that he had
notified petitioner of his intention to personally cultivate the landholding, but despite
the lapse of one (1) agricultural year from receipt of the notice thereof, petitioner
refused to vacate the land.
In his amended answer with counterclaim, petitioner denied having received any
notice from the private respondent and by way of special and affirmative defenses, he
alleged that: (a) the jurisdictional requirements of the law have not been complied
with by private respondent; (b) the latter has another palay landholding situated at
Santiago, Sta. Ana, Pampanga with an area of
2 1/2 hectares which is being worked by a hired helper; (c) private respondent is
physically unfit to perform the different phases of farm work; and (d) that private
respondent filed the case merely to harass petitioner because of the latter's adoption
of the agricultural leasehold system and refusal to shift back to the 50-50 sharing
arrangement with the former. In his counterclaim, petitioner sought to exercise his
right of redemption over the subject landholding pursuant to the provisions of R.A. No.
3844 in view of the failure of the former owner, Daniel Garcia, to notify him
beforehand of the intended sale of the landholding. Private respondent filed his
Answer to the Counterclaim.
At the pre-trial conference of the case, the parties could only stipulate on their being
of legal age, their residences and on the fact that private respondent is the owner of
the landholding in question, which is cultivated by petitioner under the leasehold
system.
After trial on the merits, the agrarian court rendered a decision against petitioner, the
dispositive portion of which reads:

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered

granting authority to plaintiff Domingo Pasion to eject defendant Pio
Balatbat from the landholding in question described in the
complaint and to personally cultivate his landholding, and ordering
said defendant to vacate the said premises and to deliver the
possession thereof to the said plaintiff, subject, however, to the
second proviso contained in Section 36(1) and to the provisions of
Section 25 of Republic Act No. 3844.
The claim for damages of plaintiff is DENIED for lack of basis.
The counterclaim of the defendants is hereby DISMISSED for lack
of merit.
No pronouncement as to costs.
SO ORDERED. 1
Petitioner appealed the decision to the Court of Appeals which docketed it as C.A.G.R. No. 00479-R; he urged said court to reverse it because the agrarian court
gravely erred in: (a) ordering his ejectment, completely denying the fact that private
respondent, due to his sickness, is physically incapable of personally cultivating the
subject landholding and that private respondent filed the complaint out of
vindictiveness, and (b) in dismissing the counterclaim for redemption, contrary to the
facts and law. 2
On 16 December 1972, the Court of Appeals promulgated its decision 3 in C.A.-G.R.
No. 00479-R affirming the decision of the agrarian court. In disposing of the assigned
errors, said Court ruled that private respondent complied with the requirement of
notice of at least one (1) agricultural year. And although private respondent was
already 69 years old at the time he testified, there is nothing on record to indicate that
he is suffering from any physical ailment; besides, in this age of advanced technology,
most of the back-breaking processes of farming have been lightened by machinery.
As regards the asserted right of redemption pursuant to Section 11 of R.A. No. 3844,
the Court held that the petitioner "failed to comply with the requirements" and took
note of petitioner's petition before the lower court to litigate as pauper as "a
circumstance that is highly indicative of lack of funds on his part." 4 His motion to
reconsider 5 the decision having been denied in the resolution of 25 January
1973, 6 petitioner took the instant recourse to present the following legal issues for
this Court's resolution:

87

1. What is the effect of Section 7 of R.A. No. 6389, abolishing

personal cultivation by landowners as a ground for dispossession of
tenants from their landholdings, on pending appealed cases?
2. Should pending appealed cases on personal cultivation be
decided in the light of Section 7 of R.A. No. 6389?
Expectedly, petitioner maintains that this case should have been decided in the light
of Section 7 of R.A. No. 6389 since, in view of the appeal, the private respondent did
not yet acquire a vested right to personally cultivate the landholding. In short, the
application of the repealing law warrants the dismissal of the action for ejectment.
Republic Act No. 6389 took effect on 10 September 1971, during the pendency of this
case before the Court of Appeals.
After private respondent filed his comment 7 in compliance with the resolution of 13
March 1973, this Court resolved to give due course to the petition 8 and thereafter
required the petitioner to file his Brief, 9 which he complied with on 22 June
1973; 10 he makes the following assignment of errors:
I
The Court a quo gravely erred in ordering the ejectment of herein
petitioner on the ground of personal cultivation.
II
The Honorable Court of Appeals erred in not dismissing private
respondent's complaint for cultivation in view of the repeal of
Section 36(1) Rep. Act 3844 by Section 7 of Rep. Act 6389.
Private respondent filed his Brief on 25 September 1973.
In support of the first assigned error, petitioner asserts that during the pendency of the
appeal in the Court of Appeals, Congress passed Republic Act No. 6389, Section 7 of
which amended Section 36(1) of R.A. No. 3844. As amended, personal cultivation is
no longer a ground to dispossess an agricultural lessee of his landholding. Section
36(1) of R.A. No. 3844 originally read as follows:
Sec. 36. Possession of Landholding; Exceptions.
Notwithstanding any agreement as to the period or future surrender

of the land, an agricultural lessee shall continue in the enjoyment

and possession of his landholding except when his dispossession
has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
(1) The agricultural lessorowner or a member
of his immediate family will personally cultivate
the landholding or will convert the landholding, if
suitably located, into residential, factory, hospital
or school site or other useful non-agricultural
purposes: Provided, That the agricultural lessee
shall be entitled to disturbance compensation
equivalent to five years rental on his landholding
in addition to his rights under Sections twenty-five
and thirty-four, except when the land owned and
leased by the agricultural lessor, is not more than
five hectares, in which case instead of
disturbance compensation the lessee may be
entitled to an advance notice of at least one
agricultural year before ejectment proceedings
are filed against him: Provided, further, That
should the landholder not cultivate the land
himself for three years or fail to substantially
carry out such conversion within one year after
the dispossession of the tenant, it shall be
presumed that he acted in bad faith and the
tenant shall have the right to demand possession
of the land and recover damages for any loss
incurred by him because of said dispossession.
xxx xxx xxx
Section 7 of R.A. No. 6389 reads as follows:
Sec. 7. Section 36(1) of the same Code is hereby amended to read
as follows:
(1) The landholding is declared by the
department head upon recommendation of the
National Planning Commission to be suited for
residential, commercial, industrial or some other
urban purposes: Provided, That the agricultural

88

lessee shall be entitled to disturbance

compensation equivalent to five times the
average of the gross harvest on his landholding
during the last five preceding calendar years;
Since under the original provision of Section 36(1) of R.A. No. 3844, the
dispossession of the agricultural lessee on the ground of personal cultivation by the
agricultural lessor-owner can only take place when "authorized by the Court in a
judgment that is final and executory," it follows then that since the repeal of the
provision took effect before the judgment in this case became final and executory,
private respondent may no longer dispossess petitioner on that ground because it
had been removed from the statute books. Counsel for petitioner, Atty. Greta-Diosa
Quitorio, Trial Attorney of the Bureau of Agrarian Legal Assistance, made a thorough
study of the history of R.A. No. 6389 and came up with the conclusion that, as
gathered from the questions and answers of Senators Diokno and Laurel, the
legislative intent to give retroactive effect to said law or to make it applicable to
pending cases of ejectment on ground of personal cultivation, appeared clear. She
further summoned to the aid of petitioner an arsenal of impressive doctrines in
statutory construction to protect the cause and strengthen the case of the petitioner.
All of her efforts, which are undoubtedly commendable, are futile. As early as 1984,
in Nilo vs. Court of Appeals, et al., and Castro vs. Castro, 11 this Court, per Justice
Hugo E. Gutierrez, Jr., ruled that Section 7 of R.A. No. 6389 cannot be given
retroactive effect because, while during the debates on the bill which was eventually
enacted into Republic Act No. 6389, there were statements made on the floor that
"the owner will lose the right to eject after the enactment of this measure" even in
cases where the owner has not really succeeded in ejecting the
tenants, 12 Congress failed to express an intention to make Republic Act No. 6389
retroactive and to cover ejectment cases on the ground of personal cultivation then
pending adjudication by the courts. This Court thus stated:
xxx xxx xxx
Article 3 of the old Civil Code (now Article 4 of the New Civil Code)
provides that: "Laws shall not have a retroactive effect unless
therein otherwise provided." According to this provision of law, in
order that a law may have retroactive effect it is necessary that an
express provision to this effect be made in the law, otherwise
nothing should be understood which is not embodied in the law.
Furthermore, it must be borne in mind that a law is a rule
established to guide our actions with no binding effect until it is
enacted, wherefore, it has no application to past times but only to
future time, and that is why it is said that the law looks to the future

only and has no retroactive effect unless the legislator may have
formally given that effect to some legal provisions (Lopez and
Lopez v. Crow, 40 Phil. 997).
As early as 1913, this Court with Justice Moreland
as ponente announced:
The Act contains, as is seen, no express words
giving it a retrospective or retroactive effect, nor
is there anything found therein which indicates an
intention to give it such an effect. Its effect is,
rather, by clear intendment, prospective.
It is a rule of statutory construction that all
statutes are to construed as having only a
prospective operation unless the purpose and
intention of the Legislature to give them a
retrospective effect is expressly declared or is
necessarily implied from the language used. In
every case of doubt, the doubt must be solved
against the retrospective effect. The cases
supporting this rule are almost without number. . .
.
xxx xxx xxx
The doctrine of non-retroactivity was reiterated in the case
of Segovia v. Noel (47 Phil. 543.). Thus
A sound canon of statutory construction is that a
statute operates prospectively only and never
retroactively, unless the legislative intent to the
contrary is made manifest either by the express
terms of the statute or by necessary implication.
Following the lead of the United States Supreme
Court and putting the rule more strongly, a statute
ought not to receive a construction making it act
retroactively, unless the words used are so clear,
strong, and imperative that no other meaning can
annexed to them, or unless the intention of the
legislature cannot be otherwise satisfied. No
court will hold a statute to be retroactive when the

89

legislature has not said so. . . . (Farrel v. Pingree

(1888), 5 Utah, 443; 16 Pac., 843; Greer v. City of
Asheville [1894], 114 N.C., 495; United States
Fidelity & Guaranty Co. v. Struthers Wells Co.
[1907], 209 U.S., 306)

therefor, has (sic) recognized personal cultivation as a ground for

retention and, therefore, exemption from the land transfer decree.
Personal cultivation cannot be effected unless the tenant gives up
the land to the owner.
Presidential Decree No. 27 provides:

xxx xxx xxx

Our decision to deny retroactive effect to the amendatory provision
gains added strength from later developments.
Under the 1973 Constitution, it is even more emphasized that
property ownership is impressed with a social function. This means
that the owner has the obligation to use his property not only to
benefit himself but society as well. Hence, the Constitution provides
under Section 6 of Article II that in the promotion of social justice,
the State "shall regulate the acquisition, ownership, use, enjoyment,
and disposition of private property, and equitably diffuse property
ownership and profits." The Constitution also ensures that the
worker shall have a just and living wage which should assure for
himself and his family an existence worthy of human dignity and
give him opportunities for a better life (Sections 7 and 9, Article II)
(Alfanta vs. Noe, 53 SCRA 76; Almeda vs. Court of Appeals, 78
SCRA 194).
In line with the above mandates, this Court upheld the
constitutionality of Presidential Decree No. 27, which decrees the
emancipation of tenants from the bondage of the soil and
transferred to them the ownership of the land they till, in Gonzales
v. Estrella (91 SCRA 294). We noted the imperative need for such a
decree in Chavez v. Zobel (55 SCRA 26). We held in the latter case
that "on this vital policy question, one of the utmost concern, the
need for what for some is a radical solution in its pristine sense,
one that goes at the root, was apparent. Presidential Decree No. 27
was thus conceived. . . . There is no doubt then, as set forth
expressly therein, that the goal is emancipation. What is more, the
decree is now part and parcel of the law of the land according to
the present Constitution.
Significantly, P.D. No. 27, which decrees the emancipation of the
tenant from the bondage of the soil, transfers to him the ownership
of the land he tills, and provides instruments and mechanisms

In all cases, the landowner may retain an area of

not more than seven (7) hectares if such
landowner is cultivating such area or will now
cultivate it.
The redistribution of land, restructuring of property ownership,
democratization of political power, and implementation of social
justice do not require that a landowner should be deprived of
everything he owns and that even small parcels as in these two
cases now before us may not be worked by the owner himself. The
evil sought to be remedied by agrarian reform is the ancient
anachronism where one person owns the land while another works
on it. The evil is not present in cases of personal cultivation by the
owner.
Taking over by the landowner is subject to strict requirements. In
addition to proof of ownership and the required notices to the
tenant, the bona-fide intention to cultivate must be proved to the
satisfaction of the court. And as earlier stated, the tenant is
protected in case the owner fails to cultivate the land within one
year or to work the land himself for three years.
The seven hectares retention under P.D. No. 27 is applicable only
to landowners who do not own other agricultural lands containing
an aggregate of more than seven hectares or lands used for
residential, commercial, industrial, or other urban purposes where
they derive adequate income to support themselves and their
families. (Letter of Instruction No. 472 dated October 21, 1976).
The subsequent cases of Diga vs. Adriano, et al. 13 and Gallardo
vs. Borromeo 14 reiterated the rule We laid in the Niloand Castro cases.
WHEREFORE, for want of merit, the instant petition is hereby DISMISSED.

90

No pronouncement as to costs.
IT IS SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Romero, JJ., concur.

Footnotes
1 Rollo, 9-10.
2 Id., 10.
3 Per Associate Justice Hermogenes Concepcion, Jr., concurred in
by Associate Justices Andres Reyes and Luis B. Reyes.
4 Id., 29.
5 Id., 30.
6 Id., 41.
7 Rollo, 44.
8 Id., 50.
9 Id., 57.
10 Id., 63.
11 128 SCRA 519.
12 Senate Journal, Nos. 43 and 44, 30 and 31 March 1971,
2nd Regular Session 7th Congress.
13 133 SCRA 421 (1984).
14 161 SCRA 500 (1988).

91

The facts are undisputed:

In September 1979, petitioner recruited private respondent to work as service
contract driver in Saudi Arabia for a period of twelve (12) months with a salary of
US$165.00 and an allowance of US$165.00 per month. They further agreed that
private respondent shall be entitled to a bonus of US$1,000.00 if after the 12-month
period, he renews or extends his employment contract without availing of his vacation
or home leave. Their contract dated September 20, 1979, was duly approved by the
Ministry of Labor and Employment.
The aforesaid contract was not implemented. In December, 1979, petitioner notified
private respondent that the position of service driver was no longer available. On
December 14, 1979, they executed another contract which changed the position of
private respondent into that of helper/laborer with a salary of US$105.00 and an
allowance of US$105.00 per month. The second contract was not submitted to the
Ministry of Labor and Employment for approval.

Republic of the Philippines

SUPREME COURT
Baguio City

On December 18, 1979, private respondent left the country and worked at petitioner's
Buraidah Sports Complex project in Saudi Arabia, performing the job of a
helper/laborer. He received a monthly salary and allowance of US$210.00, in
accordance with the second contract. Private respondent renewed his contract of
employment after one year. His salary and allowance were increased to US$231.00.

SECOND DIVISION

G.R. No. 104215 May 8, 1996

ERECTORS, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JULIO ANDRES, JR. and
FLORENCIO BURGOS,respondents.

PUNO, J.:p
Petitioner Erectors, Inc. challenges the jurisdiction of respondent Labor Arbiter Julio F.
Andres, Jr. to hear and decide the complaint 1 for underpayment of wages and nonpayment of overtime pay filed by private respondent Florencio Burgos, an overseas
contract worker.

Private respondent returned to the Philippines on August 24, 1981. He then invoked
his first employment contract. He demanded from the petitioner the difference
between his salary and allowance as indicated in the said contract, and the amount
actually paid to him, plus the contractual bonus which should have been awarded to
him for not availing of his vacation or home leave credits. Petitioner denied private
respondent's claim.
On March 31, 1982, private respondent filed with the Labor Arbiter a complaint
against the petitioner for underpayment of wages and non-payment of overtime pay
and contractual bonus.
On May 1, 1982, while the case was still in the conciliation stage, Executive Order
(E.O. No. 797 creating the Philippine Overseas Employment Administration (POEA)
took effect. Section 4(a) of E.O. No. 797 vested the POEA with "original and exclusive
jurisdiction over all cases, including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers for
overseas employment." 2

92

Despite E.O. No. 797, respondent Labor Arbiter proceeded to try the case on the
merits. On September 23, 1983, he rendered a Decision 3 in favor of private
respondent, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the
respondent to pay the complainant as follows:

It asserts that E.O. No. 797 divested the Labor Arbiter of his authority to try and
resolve cases arising from overseas employment contract. Invoking this Court's ruling
in Briad Agro Development Corp. vs. Dela Cerna, 8 petitioner argues that E.O. No.
797 applies retroactively to affect pending cases, including the complaint filed by
private respondent.
The petition is devoid of merit.

1. The sum of US$2,496.00 in its peso equivalent on August 25,

1981 as difference between his allowance as Service Driver as
against his position as Helper/Laborer;
2. The sum of US$1,000.00 in its peso equivalent as of the same
date, as his contractual bonus.
The complaints for non-payment/underpayment of overtime pay
and unpaid wages or commission are DISMISSED for lack of
merit. 4
Petitioner appealed to respondent National Labor Relations Commission (NLRC). It
questioned the jurisdiction of the Labor Arbiter over the case in view of the enactment
of E.O. No. 797.
In a Resolution dated July 17, 1991, 5 respondent NLRC dismissed the petitioner's
appeal and upheld the Labor Arbiter's jurisdiction. It ruled:
To begin with, the Labor Arbiter has the authority to decide this
case. On May 29, 1978, the Labor Arbiters were integrated into the
Regional Offices under P.D. 1391. On May 1, 1980, P.D. 1691 was
promulgated giving the Regional Offices of the Ministry of Labor
and Employment the original and exclusive jurisdiction over all
cases arising out of or by virtue of any law or contract involving
Filipino workers for overseas employment. There is no dispute that
the Labor Arbiter had the legal authority over the case on hand,
which accrued and was filed when the two above mentioned
Presidential Decrees were in force. 6
Petitioner filed this special civil action for certiorari reiterating the argument that:
The NLRC committed grave abuse of discretion tantamount to lack
of jurisdiction in affirming the Labor Arbiter's void judgment in the
case a quo. 7

The rule is that jurisdiction over the subject matter is determined by the law in force at
the time of the commencement of the action. 9 On March 31, 1982, at the time private
respondent filed his complaint against the petitioner, the prevailing laws were
Presidential Decree No. 1691 10 and Presidential Decree No. 1391 11 which vested the
Regional Offices of the Ministry of Labor and the Labor Arbiters with "original and
exclusive jurisdiction over all cases involving employer-employee relations including
money claims arising out of any law or contracts involving Filipino workers for
overseas employment." 12 At the time of the filing of the complaint, the Labor Arbiter
had clear jurisdiction over the same.
E.O. No. 797 did not divest the Labor Arbiter's authority to hear and decide the case
filed by private respondent prior to its effectivity. Laws should only be applied
prospectively unless the legislative intent to give them retroactive effect is expressly
declared or is necessarily implied from the language used. 13 We fail to perceive in the
language of E.O. No. 797 an intention to give it retroactive effect.
The case of Briad Agro Development Corp. vs. Dela Cerna 14 cited by the petitioner is
not applicable to the case at bar. In Briad, the Court applied the exception rather than
the general rule. In this case, Briad Agro Development Corp. and L.M. Camus
Engineering Corp. challenged the jurisdiction of the Regional Director of the
Department of Labor and Employment over cases involving workers' money claims,
since Article 217 of the Labor Code, the law in force at the time of the filing of the
complaint, vested in the Labor Arbiters exclusive jurisdiction over such cases. The
Court dismissed the petition in its Decision dated June 29, 1989. 15 It ruled that the
enactment of E.O. No. 111, amending Article 217 of the Labor Code, cured the
Regional Director's lack of jurisdiction by giving the Labor Arbiter and the Regional
Director concurrent jurisdiction over all cases involving money claims. However, on
November 9, 1989, the Court, in a Resolution, 16 reconsidered and set aside its June
29 Decision and referred the case to the Labor Arbiter for proper proceedings, in view
of the promulgation of Republic Act (R.A.) 6715 which divested the Regional Directors
of the power to hear money claims. It bears emphasis that the Court accorded E.O.
No. 111 and R.A. 6715 a retroactive application because as curative statutes, they fall
under the exceptions to the rule on prospectivity of laws.

93

E.O. No. 111, amended Article 217 of the Labor Code to widen the workers' access to
the government for redress of grievances by giving the Regional Directors and Labor
Arbiters concurrent jurisdiction over cases involving money claims. This amendment,
however, created a situation where the jurisdiction of the Regional Directors and the
Labor Arbiters overlapped. As a remedy, R.A. 6715 further amended Article 217 by
delineating their respective jurisdictions. Under R.A. 6715, the Regional Director has
exclusive original jurisdiction over cases involving money claims provided: (1) the
claim is presented by an employer or person employed in domestic or household
service, or househelper under the Code; (2) the claimant, no longer being employed,
does not seek reinstatement; and (3) the aggregate money claim of the employee or
househelper does not exceed P5,000.00. All other cases are within the exclusive and
original jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore
curative statutes. A curative statute is enacted to cure defects in a prior law or to
validate legal proceedings, instruments or acts of public authorities which would
otherwise be void for want of conformity with certain existing legal requirements.
The law at bar, E.O. No. 797, is not a curative statute. It was not intended to remedy
any defect in the law. It created the POEA to assume the functions of the Overseas
Employment Development Board, the National Seamen Board and the overseas
employment functions of the Bureau of Employment Services. Accordingly, it gave the
POEA "original and exclusive jurisdiction over all cases, including money claims,
involving employer-employee relations arising out of or by virtue of any law or
contract involving Filipino workers for overseas employment, including
seamen." 17 The rule on prospectivity of laws should therefore apply to E.O. No. 797.
It should not affect jurisdiction over cases filed prior to its effectivity.
Our ruling in Philippine-Singapore Ports Corp. vs. NLRC 18 is more apt to the case at
bar. In this case, PSPC hired Jardin to work in Saudi Arabia. Jardin filed a complaint
against PSPC for illegal dismissal and recovery of backwages on January 31, 1979
with the Labor Arbiter. PSPC questioned the jurisdiction of the Labor Arbiter because
at that time, the power to hear and decide cases involving overseas workers was
vested in the Bureau of Employment Services. We held:
When Jardin filed the complaint for illegal dismissal on January 31,
1979, Art. 217 (5) of the Labor Code provided that Labor Arbiters
and the NLRC shall have "exclusive jurisdiction to hear and decide"
all cases arising from employer-employee relations "unless
expressly excluded by this Code." At that time Art. 15 of the same
Code had been amended by P.D. No. 1412 which took effect on
June 9, 1978. The pertinent provision of the said presidential
decree states:

Art. 15. Bureau of Employment Services.

(a) . . .
(b) The Bureau shall have the original and exclusive jurisdiction
over all matters or cases involving employer-employee relations
including money claims, arising out of or by virtue of any law or
contracts involving Filipino workers for overseas employment,
except seamen. The decisions of the Bureau shall be final and
executory subject to appeal to the Secretary of Labor whose
decision shall be final and inappealable.
Considering that private respondent Jardin's claims undeniably
arose out of an employer-employee relationship with petitioner
PSPC and that private respondent worked overseas or in Saudi
Arabia, the Bureau of Employment Services and not the Labor
Arbiter had jurisdiction over the case. . . .
Art. 15 was further amended by P.D. No. 1691 which took effect on
May 1, 1990. Such amendment qualifies the jurisdiction of the
Bureau of Employment Services as follows:
(b) The regional offices of the Ministry of Labor shall have the
original and exclusive jurisdiction over all matters or cases involving
employer-employee relations including money claims, arising out of
or by virtue of any law or contracts involving Filipino workers for
overseas employment except seamen:Provided that the Bureau of
Employment Services may, in the case of the National Capital
Region, exercise such power, whenever the Minister of Labor
deems it appropriate. The decisions of the regional offices or the
Bureau of Employment Services if so authorized by the Minister of
Labor as provided in this Article, shall be appealable to the National
Labor Relations Commission upon the same grounds provided in
Article 223 hereof. The decisions of the National Labor Relations
Commission shall be final and inappealable.
Hence, as further amended, Art. 15 provided for concurrent
jurisdiction between the regional offices of the then Ministry of
Labor and Bureau of Employment Services "in the National Capital
Region." It is noteworthy that P.D. No. 1691, while likewise
amending Art. 217 of the Labor Code, did not alter the provision
that Labor Arbiters shall have jurisdiction over all claims arising

94

from employer-employee relations "unless expressly excluded by

this Code."

2 Official Gazette, Vol. 78, No. 21, May 24, 1982, pp. 2368-7 - 2638-13.
3 Rollo, pp. 13-23.

The functions of the Bureau of Employment Services were

subsequently assumed by the Philippine Overseas Employment
Administration (POEA) on May 1, 1982 by virtue of Executive Order
No. 797 by granting the POEA "original and exclusive jurisdiction
over all cases, including money claims, involving employeremployee relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment, including
seamen." (Sec. 4 (a); Eastern Shipping Lines v. Philippine
Overseas Employment Administration [POEA], 200 SCRA 663
[1991]). This development showed the legislative authority's
continuing intent to exclude from the Labor Arbiter's jurisdiction
claims arising from overseas employment.

4 Rollo, p. 23.
5 Rollo, pp. 26-30.
6 Rollo, p. 28.
7 Rollo, p. 7.
8 179 SCRA 269, November 9, 1989.
9 Tiongson vs. Court of Appeals, 214 SCRA 197 (1992).

These amendments notwithstanding, when the complaint for illegal

dismissal was filed on January 31, 1979, under Art. 15, as
amended by P.D. No. 1412, it was the Bureau of Employment
Services which had jurisdiction over the case and not the Labor
Arbiters. It is a settled rule that jurisdiction is determined by the
statute in force at the time of the commencement of the
action (Municipality of Sogod v. Rosal, 201 SCRA 632, 637 [1991]).
P.D. 1691 which gave the regional offices of the Ministry of Labor
concurrent jurisdiction with the Bureau of Employment Services,
was promulgated more than a year after the complaint was filed.
(emphasis supplied)
In sum, we hold that respondent NLRC did not commit grave abuse of discretion in
upholding the jurisdiction of respondent Labor Arbiter over the complaint filed by
private respondent against the petitioner.

10 Took effect on May 1, 1980.

11 Took effect on May 29, 1978.
12 Article 15 (b) of the Labor Code, as amended by P.D. 1691 and P.D.
1391.
13 Article 4, New Civil Code; Gallardo vs. Borromeo, 161 SCRA 500 (1988);
Nilo vs. Court of Appeals, 128 SCRA 519 (1984).
14 179 SCRA 269 (November 9, 1989).
15 174 SCRA 525.

IN VIEW WHEREOF, the Petition is DISMISSED. Costs against petitioner.

16 179 SCRA 269.

SO ORDERED.

17 Section 4 of Executive Order No. 797.

Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.

18 218 SCRA 77 (1993).

Footnotes
1 Docketed as NLRC-NCR-3-3142-82.

95

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 100776 October 28, 1993

ALBINO S. CO, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.
NARVASA, C.J.:
In connection with an agreement to salvage and refloat asunken vessel and in
payment of his share of the expenses of the salvage operations therein stipulated
petitioner Albino Co delivered to the salvaging firm on September 1, 1983 a check
drawn against the Associated Citizens' Bank, postdated November 30, 1983 in the
sum of P361,528.00. 1 The check was deposited on January 3, 1984. It was
dishonored two days later, the tersely-stated reason given by the bank being:
"CLOSED ACCOUNT."
A criminal complaint for violation of Batas Pambansa Bilang 22 2 was filed by the
salvage company against Albino Co with the Regional Trial Court of Pasay City. The
case eventuated in Co's conviction of the crime charged, and his being sentenced to
suffer a term of imprisonment of sixty (60) days and to indemnify the salvage
company in the sum of P361,528.00.
Co appealed to the Court of Appeals. There he sought exoneration upon the theory
that it was reversible error for the Regional Trial Court to have relied, as basis for its

96

verdict of conviction, on the ruling rendered on September 21, 1987 by this Court
in Que v. People, 154 SCRA 160 (1987) 3 i.e., that a check issued merely to
guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22.
This was because at the time of the issuance of the check on September 1, 1983,
some four (4) years prior to the promulgation of the judgment in Que v. People on
September 21, 1987, the delivery of a "rubber" or "bouncing" check as guarantee for
an obligation was not considered a punishable offense, an official pronouncement
made in a Circular of the Ministry of Justice. That Circular (No. 4), dated December
15, 1981, pertinently provided as follows:
2.3.4. Where issuance of bouncing check is neither estafa nor
violation of B.P. Blg. 22.
Where the check is issued as part of an arrangement to guarantee
or secure the payment of an obligation, whether pre-existing or not,
the drawer is not criminally liable for either estafa or violation of B.P.
Blg. 22 (Res. No. 438, s. 1981, Virginia Montano vs. Josefino
Galvez, June 19, 1981; Res. No. 707, s. 1989; Alice Quizon vs.
Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981, Alfredo
Guido vs. Miguel A. Mateo, et. al., November 17, 1981; Res. No.
589, s. 1981, Zenaida Lazaro vs. Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by another issued on August
8, 1984 (Ministry Circular No. 12) almost one (1) year after Albino Co had delivered
the "bouncing" check to the complainant on September 1, 1983. Said Circular No. 12,
after observing inter alia that Circular No. 4 of December 15, 1981 appeared to have
been based on "a misapplication of the deliberation in the Batasang Pambansa, . . .
(or) the explanatory note on the original bill, i.e. that the intention was not to penalize
the issuance of a check to secure or guarantee the payment of an obligation," as
follows: 4
Henceforth, conforming with the rule that an administrative agency
having interpreting authority may reverse its administration
interpretation of a statute, but that its review interpretation applies
only prospectively (Waterbury Savings Bank vs. Danaher, 128
Conn., 476; 20 a2d 455 (1941), in all cases involving violation of
Batas Pambansa Blg. 22 where the check in question is issued
after this date, the claim that the check is issued as a guarantee or
part of an arrangement to secure an obligation collection will no
longer be considered a valid defense.

Co's theory was rejected by the Court of Appeals which affirmed his conviction.
Citing Senarillos v. Hermosisima, 101 Phil. 561, the Appellate Court opined that
the Que doctrine did not amount to the passage of new law but was merely a
construction or interpretation of a pre-existing one, i.e., BP 22, enacted on April 3,
1979.
From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court
on certiorari under Rule 45 of the Rules of Court. By Resolution dated September 9,
1991, the Court dismissed his appeal. Co moved for reconsideration under date of
October 2, 1991. The Court required comment thereon by the Office of the Solicitor
General. The latter complied and, in its comment dated December 13, 1991,
extensively argued against the merits of Albino Co's theory on appeal, which was
substantially that proffered by him in the Court of Appeals. To this comment, Albino Co
filed a reply dated February 14, 1992. After deliberating on the parties' arguments and
contentions, the Court resolved, in the interests of justice, to reinstate Albino Co's
appeal and adjudicate the same on its merits.
Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines,"
according to Article 8 of the Civil Code. "Laws shall have no
retroactive effect, unless the contrary is provided," declares Article
4 of the same Code, a declaration that is echoed by Article 22 of
the Revised Penal Code: "Penal laws shall have, a retroactive
effect insofar as they favor the person guilty of a felony, who is not
a habitual criminal . . . 5
The principle of prospectivity of statutes, original or amendatory, has been applied in
many cases. These include: Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding
that Republic Act No. 1576 which divested the Philippine National Bank of authority to
accept back pay certificates in payment of loans, does not apply to an offer of
payment made before effectivity of the act; Largado v. Masaganda, et al., 5 SCRA
522 (June 30, 1962), ruling that RA 2613, s amended by RA 3090 on June, 1961,
granting to inferior courts jurisdiction over guardianship cases, could not be given
retroactive effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA
18, to the effect that Sections 9 and 10 of Executive Order No. 90, amending Section
4 of PD 1752, could have no retroactive application; People v. Que Po Lay, 94 Phil.
640, holding that a person cannot be convicted of violating Circular No. 20 of the
Central, when the alleged violation occurred before publication of the Circular in the
Official Gazette;Baltazar v. C.A., 104 SCRA 619, denying retroactive application to
P.D. No. 27 decreeing the emancipation of tenants from the bondage of the soil, and
P.D. No. 316 prohibiting ejectment of tenants from rice and corn farmholdings,
pending the promulgation of rules and regulations implementing P.D. No. 27; Nilo

97

v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 whichremoved "personal
cultivation" as a ground for the ejectment of a tenant cannot be given retroactive
effect in the absence of a statutory statement for retroactivity; Tac-An v. CA, 129
SCRA 319, ruling that the repeal of the old Administrative Code by RA 4252 could not
be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA
6389 should have only prospective application; (see also Bonifacio v. Dizon, 177
SCRA 294 and Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to administrative rulings and
circulars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108
SCRA 142, holding that a circular or ruling of the Commissioner of Internal Revenue
may not be given retroactive effect adversely to a taxpayer: Sanchez v.COMELEC,
193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on Elections,
which directed the holding of recall proceedings, had no retroactive
application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC
Memorandum Circular No. 29, s. 1989 cannot be given retrospective effect so as to
entitle to permanent appointment an employee whose temporary appointment had
expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions which,
"although in themselves not laws, are nevertheless evidence of what the laws mean, .
. . (this being) the reason whyunder Article 8 of the New Civil Code, 'Judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal
system . . .'"
So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
It will be noted that when appellant was appointed Secret Agent by
the Provincial Government in 1962, and Confidential Agent by the
Provincial commander in 1964, the prevailing doctrine on the matter
was that laid down by Us in People v. Macarandang (1959)
and People v. Lucero (1958). 6 Our decision inPeople
v. Mapa, 7 reversing the aforesaid doctrine, came only in 1967. The
sole question in this appeal is: should appellant be acquitted on the
basis of Our rulings in Macarandang and Lucero, or should his
conviction stand in view of the complete reverse of the
Macarandang and Lucero doctrine in Mapa? . . .
Decisions of this Court, although in themselves not laws, are
nevertheless evidence of what the laws mean, and this is the
reason why under Article 8 of the New Civil Code, "Judicial
decisions applying or interpreting the laws or the Constitution shall

form a part of the legal system . . ."The interpretation upon a law by

this Court constitutes, in a way, a part of the law as of the date that
law was originally passed, since this Court's construction merely
establishes the contemporaneous legislative intent that the law thus
construed intends to effectuate. The settled rule supported by
numerous authorities is a restatement of the legal maxim "legis
interpretation legis vim obtinet" the interpretation placed upon
the written law by a competent court has the force of law. The
doctrine laid down in Lucero andMacarandang was part of the
jurisprudence, hence, of the law, of the land, at the time appellant
was found in possession of the firearm in question and where he
was arraigned by the trial court. It is true that the doctrine was
overruled in the Mapa case in 1967, but when a doctrine of this
Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively, and should not apply to parties
who had relied on, the old doctrine and acted on the faith thereof.
This is especially true in the construction and application of criminal
laws, where it is necessary that the punishment of an act be
reasonably foreseen for the guidance of society.
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of
Appeals, et al. (G.R. No. 97973) and Development Bank of the Philippines v. Court of
Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205 SCRA 515, 527-528: 8
We sustain the petitioners' position, It is undisputed that the subject
lot was mortgaged to DBP on February 24, 1970. It was acquired
by DBP as the highest bidder at a foreclosure sale on June 18,
1977, and then sold to the petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting section 119 of
R.A. 141 as amended was that enunciated
in Monge and Tupas cited above. The petitioners Benzonan and
respondent Pe and the DBP are bound by these decisions for
pursuant to Article 8 of the Civil Code "judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines." But while our decisions form part of the
law of the land, they are also subject to Article 4 of the Civil Code
which provides that "laws shall have no retroactive effect unless the
contrary is provided." This is expressed in the familiar legal
maxim lex prospicit, non respicit, the law looks forward not
backward. The rationale against retroactivity is easy to perceive.
The retroactive application of a law usually divests rights that have

98

already become vested or impairs the obligations of contract and

hence, is unconstitutional (Francisco vs. Certeza, 3 SCRA 565
[1061]).
The same consideration underlies our rulings giving only
prospective effect to decisions enunciating new doctrines. Thus, we
emphasized in People v. Jabinal, 55 SCRA 607 [1974]" . . . when a
doctrine of this Court is overruled and a different view is adopted,
the new doctrine should be applied prospectively and should not
apply to parties who had relied on the old doctrine and acted on the
faith thereof.
A compelling rationalization of the prospectivity principle of judicial decisions is well
set forth in the oft-cited case ofChicot County Drainage Dist. v. Baxter States Bank,
308 US 371, 374 [1940]. The Chicot doctrine advocates the imperative necessity to
take account of the actual existence of a statute prior to its nullification, as an
operative fact negating acceptance of "a principle of absolute retroactive invalidity.
Thus, in this Court's decision in Taada v. Tuvera, 9 promulgated on April 24, 1985
which declared "that presidential issuances of general application, which have not
been published,shall have no force and effect," and as regards which declaration
some members of the Court appeared "quite apprehensive about the possible
unsettling effect . . . (the) decision might have on acts done in reliance on the validity
of these presidential decrees . . ." the Court said:
. . . . The answer is all too familiar. In similar situation is in the past
this Court, had taken the pragmatic and realistic course set forth
in Chicot County Drainage District vs. Baxter Bank (308 U.S. 371,
374) to wit:
The courts below have proceeded on the theory that the Act of
Congress, having found to be unconstitutional, was not a law; that it
was inoperative, conferring no rights and imposing no duties, and
hence affording no basis for the challenged decree. Norton vs.
Shelby County, 118 US 425, 442; Chicago, I. & L. Ry. Co. v.
Hackett, 228 U. S. 559, 566. It is quite clear, however, that such
broad statements as to the effect of a determination of
unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, is an operative
fact and may have consequences which cannot justly be ignored.
The past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be

considered in various aspects with respect to particular conduct,

private and official. Questions of rights claimed to have become
vested, of status, of prior determinations deemed to have finality
and acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application, demand
examination. These questions are among the most difficult of those
who have engaged the attention of courts, state and federal, and it
is manifest from numerous decisions that an all-inclusive statement
of a principle of absolute retroactive invalidity cannot be justified.
Much earlier, in De Agbayani v. PNB, 38 SCRA 429 concerning the effects of the
invalidation of "Republic Act No. 342, the moratorium legislation, which continued
Executive Order No. 32, issued by the then President Osmea, suspending the
enforcement of payment of all debts and other monetary obligations payable by war
sufferers," and which had been "explicitly held in Rutter v. Esteban (93 Phil. 68
[1953] 10 . . . (to be) in 1953 'unreasonable and oppressive, and should not be
prolonged a minute longer . . ." the Court made substantially the same
observations, to wit:11
. . . . The decision now on appeal reflects the orthodox view that an
unconstitutional act, for that matter an executive order or a
municipal ordinance likewise suffering from that infirmity, cannot be
the source of any legal rights or duties. Nor can it justify any official
act taken under it. Its repugnancy to the fundamental law once
judicially declared results in its being to all intents and purposes
amere scrap of paper. . . . It is understandable why it should be so,
the Constitution being supreme and paramount. Any legislative or
executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of
simplicity. lt may not however be sufficiently realistic. It does not
admit of doubt that prior to the declaration of nullity such challenged
legislative or executive act must have been in force and had to be
compiled with. This is so as until after the judiciary, in an
appropriate case, declares its invalidity,, it is entitled to obedience
and respect. Parties may have acted under it and may have
changed theirpositions, what could be more fitting than that in a
subsequent litigation regard be had to what has been done while
such legislative or executive act was in operation and presumed to
be valid in all respects. It is now accepted as a doctrine that prior to
its being nullified, its existence is a fact must be reckoned with. This
is merely to reflect awareness that precisely because the judiciary

99

is the governmental organ which has the final say on whether or not
a legislative or executive measure is valid, a, period of time may
have elapsed before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to deprive the law of
its quality of fairness and justice then, if there be no recognition of
what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: 'The
actual existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be considered in
various aspects, with respect to particular relations, individual
and corporate, and particular conduct, private and official (Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]). This language has been quoted with approval in a
resolution in Araneta v. Hill (93 Phil. 1002 [1953]) and the decision
in Manila Motor Co. Inc. v. Flores (99 Phil. 738 [1956]). An even
more recent instance is the opinion of Justice Zaldivar speaking for
the Court in Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967,
21 SCRA 1095).
Again, treating of the effect that should be given to its decision in Olaguer v. Military
Commission No 34, 12 declaring invalid criminal proceedings conducted during the
martial law regime against civilians, which had resulted in the conviction and
incarceration of numerous persons this Court, in Tan vs. Barrios, 190 SCRA 686,
at p. 700, ruled as follows:
In the interest of justice and consistently, we hold that Olaguer
should, in principle, be applied prospectively only to future cases
and cases still ongoing or not yet final when that decision was
promulgated. Hence, there should be no retroactive nullification of
final judgments, whether of conviction or acquittal, rendered by
military courts against civilians before the promulgation of the
Olaguer decision. Such final sentences should not be disturbed by
the State. Only in particular cases where the convicted person or
the State shows that there was serious denial of constitutional
rights of the accused, should the nullity of the sentence be declared
and a retrial be ordered based on the violation of the constitutional
rights of the accused and not on the Olaguer doctrine. If a retrial is
no longer possible, the accused should be released since judgment

against him is null on account of the violation of his constitutional

rights and denial of due process.
xxx xxx xxx
The trial of thousands of civilians for common crimes before the
military tribunals and commissions during the ten-year period of
martial rule (1971-1981) which were created under general orders
issued by President Marcos in the exercise of his legislative powers
is an operative fact that may not just be ignored. The belated
declaration in 1987 of the unconstitutionality and invalidity of those
proceedings did not erase the reality of their consequences which
occurred long before our decision in Olaguer was promulgated and
which now prevent us from carrying Olaguer to the limit of its logic.
Thus did this Court rule in Municipality of Malabang v. Benito, 27
SCRA 533, where the question arose as to whether the nullity of
creation of a municipality by executive order wiped out all the acts
of the local government abolished. 13
It would seem then, that the weight of authority is decidedly in favor of the proposition
that the Court's decision of September 21, 1987 in Que v. People, 154 SCRA 160
(1987) 14 that a check issued merely to guarantee the performance of an obligation is
nevertheless covered by B.P. Blg. 22 should not be given retrospective effect to the
prejudice of the petitioner and other persons situated, who relied on the official
opinion of the Minister of Justice that such a check did not fall within the scope of B.P.
Blg. 22.
Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14
Phil. 128, applying the familiar doctrine that in crimes mala prohibita, the intent or
motive of the offender is inconsequential, the only relevant inquiry being, "has the law
been violated?" The facts in Go Chico are substantially different from those in the
case at bar. In the former, there was no official issuance by the Secretary of Justice or
other government officer construing the special law violated; 15 and it was there
observed, among others, that "the defense . . . (of) an honest misconstruction of the
law under legal advice" 16 could not be appreciated as a valid defense. In the present
case on the other hand, the defense is that reliance was placed, not on the opinion of
a private lawyer but upon an official pronouncement of no less than the attorney of
the Government, the Secretary of Justice, whose opinions, though not law, are
entitled to great weight and on which reliance may be placed by private individuals is
reflective of the correct interpretation of a constitutional or statutory provision; this,
particularly in the case of penal statutes, by the very nature and scope of the authority
that resides in as regards prosecutions for their violation. 17 Senarillos

100

vs. Hermosisima, supra, relied upon by the respondent Court of Appeals, is crucially
different in that in said case, as in U.S. v. Go Chico, supra, no administrative
interpretation antedated the contrary construction placed by the Court on the law
invoked.
This is after all a criminal action all doubts in which, pursuant to familiar, fundamental
doctrine, must be resolved in favor of the accused. Everything considered, the Court
sees no compelling reason why the doctrine of mala prohibita should override the
principle of prospectivity, and its clear implications as herein above set out and
discussed, negating criminal liability.
WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional
Trial Court are reversed and set aside, and the criminal prosecution against the
accused-petitioner is DISMISSED, with costs de oficio.

5 Exceptions to the rule of prospectivity are collated, e.g., in the textbook of

retired Justice Edgardo A. Paras (Civil Code of the Philippines Annotated,
1984 ed., Vol. 1, pp. 22-23) viz : 1) laws remedial in nature; 2) penal law
favorable to accused, if ; after not habitual delinquent; 3) laws of emergency
nature under police power : e.g., tenancy relations (Vda. de Ongsiako v.
Gamboa, 47 O.G. 4259, Valencia et al. v. Surtida et al., May 31, 1961); 4)
curative laws; 5) substantive right declared for first time unless vested rights
impaired (Unson v. del Rosario, Jan. 29, 1953; Belen v. Belen, 49 O.G. 997;
Peo v. Alejaga, 49 OG 2833).
6 106 Phil. 713 and 103 Phil. 500, respectively, both involving prosecutions
for illegal possession of firearms, and both holding that appointment by the
Provincial Governor or Provincial Commander of a person as a "secret
agent" or "confidential agent" "sufficiently placed him under the category of
a 'peace officer' . . . who under section 879 of the Revised Administrative
Code is exempted from the requirements relating to the issuance of license
to possess firearm.

SO ORDERED.
7 SEE Ilagan v. People, Jan. 29, 1974, 55 SCRA 361.

Padilla, Regalado, Nocon and Puno, JJ., concur.

8 The title of the cited Monge case is Monge, et al. v. Angeles, et al., and is
reported in 101 Phil., 563 [1957], while that of the cited Tupas case is Tupas
v. Damasco, et al., reported in 132 SCRA 593 [1984].

# Footnotes

9 136 SCRA 27, 40-41.

1 As found by the Court of Appeals, the agreement was between Co,
representing Mayflower Shipping Corporation, and Geronimo B. Bella,
representing Tans-Pacific Towage, Inc. The expenses for refloating were
apportioned chiefly between FGU Insurance and Development Bank of the
Philippines, which respectively contributed P2,329,022.00 and
P1,579,000.00. SEE Rollo, pp. 9, 20-21.
2 Otherwise known as the "Bouncing Checks Law".
3 The ruling is contained in an extended resolution on a motion for
reconsideration, promulgated by the Special Former Second Division of the
Court on September 21, 1987, written for the division by Paras,J., with
whom concurred Fernan, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ. In that
resolution, the Court gave its "stamp of approval" on the decision of the
Court of Appeals holding inter alia that "It is now settled that Batas
Pambansa Bilang 22 applies even in cases where dishonored checks are
issued merely in the form of a deposit or a guarantee."

10 And several other rulings set forth in a corresponding footnote in the text
of the decision.
11 SEE also Olaguer v. Military Commission No. 34, 150 SCRA 144 (1987)
(Citing Municipality of Malabang v. Benito, 27 SCRA 533 where the question
arose as to whether the judicial nullification of an executive order creating a
municipality wiped out all the acts of the local government abolished); Tan v.
Barrios, 190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA 378
(1991); Union of Filipino Employees v. Vivar, Jr., 205 SCRA 200 (1992);
Peralta v. Civil Service Commission, 212 SCRA 425.
12 150 SCRA 144 (1987).
13 SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of February 26,
1991; and Drilon v. Court of Appeals, 202 SCRA 378 [1991].
14 SEE footnote 3, supra.

4 Emphasis supplied.

101

15 Act No. 1696 of the Philippine Commission punishing any person who
shall expose, or cause or permit to be exposed, to public view . . . any flag,
banner, emblem, or device used during the late insurrection in the Philippine
Islands to designate or identify those in armed rebellion against the United
States, . . .
16 14 Phil. 128, 133-134.
17 Estrella vs. Orendain, 37 SCRA 640; Noblejas vs. Salas, 67 SCRA 47.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 79060 December 8, 1989
ANICETO C. OCAMPO, petitioner,
vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES (University
of the Philippines),respondents.
Pedro F. Martinez for petitioner.

PARAS, J.:
This is a petition for review on certiorari to reverse or set aside the judgment of public
respondent Court of Appeals dated May 8, 1987 which affirmed the trial court's
decision finding petitioner guilty of violation of Presidential Decree No. 772 (AntiSquatting Law) and sentencing him to suffer imprisonment for one (1) year, with the
accessories provided by law and to remove the house constructed on the land in
question within thirty (30) days from the finality of judgment, otherwise, private
respondent University of the Philippines was authorized to demolish or dismantle the
house at the expense of the petitioner.

The facts are not disputed.

At about 10:00 o'clock in the morning of August 15, 1984, the desk
officer of the U.P. Police Force received a telephone call; the caller
reported that somebody was constructing a house at the U.P.
Arboretum.
Villanueva, Ladip and Ernesto were directed to investigate (pp. 4-5,
TSN, June 21, 1985; p. 4, TSN, July 22, 1985).
Villanueva and Ladip are members of the U.P. Police Force
connected or assigned with the U.P. Squatter's Relocation Team.
The U.P. Arboretum is located at the back of the U.P. Petron, beside
the U.P. Hydraulic Research Center (p. 5, TSN, June 21, 1985).
They proceeded to said place and there they saw some people
constructing a house. They asked the carpenters who owned the
house and were told that the accused, Aniceto Ocampo, is the
owner. Aniceto Ocampo who was present at the time, was asked
whether he had a building permit. The accused admitted that he
had no building permit, although he claimed that he bought the
parcel of land on which his house was being constructed from a
certain Roberto Pael (p. 5, TSN, July 22, 1985; p. 6, TSN, June 21,
1985).
The accused was informed that the land belongs to the University
of the Philippines and that he should stop the construction of his
aforesaid house. The accused complied (pp. 6-7, TSN, June 21,
1985; p. 6, TSN, July 22, 1985).
However, on August 24, 1984, the accused resumed the
construction of his aforesaid house. The aforenamed prosecution
witnesses reminded the accused that he was violating Presidential
Decree No. 772 (pp. 7-8, TSN, June 21, 1985; pp. 6-7, TSN, July
22, 1985).
The accused was again told to stop the construction of his house.
The accused ignored the U.P. Police Squatter's Team, and insisted
that he bought the land from Mr. Pael (p. 9, TSN, July 22, 1985; p.
10, TSN, June 21, 1985).
The team reported the matter to their Chief, Captain Madrigal, and
executed an affidavit (Exh. "A") which they submitted to the U.P.

102

Legal Department (p. 9, TSN, July 22, 1985; p. 10, tsn, June 21,
1985).
A picture of the house constructed by the accused was also taken"
(Exhibit "B"). (pp. 2-3, Comment; pp. 22-23, Rollo).
After the preliminary investigation had been conducted, an information dated March
25, 1985, was filed against Aniceto Ocampo charging him with violation of
Presidential Decree No. 772, docketed as Criminal Case No. Q-38997.

(p. 5, Comment; p. 25, Rollo)

On October 7, 1985, the trial court found Aniceto Ocampo guilty beyond reasonable
doubt of the offense charged.
Accused then appealed to the Court of Appeals alleging that the trial court erred in:
(a) applying Section 15, Rule 119 of the 1985 Rule of Criminal Procedure; (b)
convicting appellant on the basis of evidence which does not measure to the degree
of proof as required by law; and (c) not applying the principle of presumption of
innocence in favor of appellant.

Upon arraignment, accused-appellant (now petitioner) pleaded "not guilty".

After the prosecution rested its case, petitioner waived the presentation of his
evidence and instead filed a motion to dismiss (demurrer to evidence) on the ground
that the prosecution did not present Transfer Certificate of Title No. 192689 to prove
ownership of the land in question and that it failed to prove that the land on which the
petitioner constructed his house belongs to the University of the Philippines.
The trial court denied the motion to dismiss for lack of merit, arriving at the following
conclusion:
The prosecution did not present in evidence Transfer Certificate of
Title No. 192689 to prove that the land in question, indeed, belongs
to the University of the Philippines. The absence of this piece of
evidence, in the considered view of this Court, did not cripple the
fact that the accused, Aniceto Ocampo, is not the owner of said
property. And since there is no showing that the accused occupied
the lot in question and constructed his residential house thereat
with the knowledge and/or consent of the owner thereof, the
accused is a squatter within the contemplation of Presidential
Decree No. 772. "Section 1 of Presidential Decree No. 772 reads:
Any person, who with the use of force, intimidation or threat, or
taking advantage of the absence or tolerance of the landowner,
succeeds in occupying or possessing the property of the latter
against his will for residential, commercial or any other purposes,
shall be punished by an imprisonment ranging from six months to
one year or a fine of not less than one thousand nor more than five
thousand pesos at the discretion of the court, with subsidiary
imprisonment in case of insolvency.

Respondent Court of Appeals affirmed the decision of the lower court, finding said
appealed decision to be in accordance with law and supported by evidence as well.
Hence, accused-appellant filed the instant petition for review on certiorari.
In this petition, two issues are presented involving purely questions of law:
1. Whether or not the failure of the prosecution to present evidence
of ownership is not a fatal defect in finding the accused-petitioner
guilty beyond reasonable doubt of the crime of squatting; and
2. Is the Motion to Dismiss filed by accused-petitioner a bar for him
to present evidence?
For failure of the petitioner to file his reply within the period which expired on
December 20, 1987, this Court, in a resolution dated February 3, 1988, resolved to
dispense with the aforesaid reply and considered the case submitted for deliberation.
Petitioner alleges that the very essence of the case is the proof of ownership of the
land involved herein. We do not agree.
The law involved in this case is Section 1 of Presidential Decree No. 772, otherwise
known as the Anti-Squatting Law, which embraces three (3) elements, namely: (a)
accused is not the owner of the land; (b) that he succeeded in occupying or
possessing the property through force, intimidation, or threat or by taking advantage
of the absence or tolerance of the owner; and (c) such occupation of the property is
without the consent or against the will of the owner. In the case at bar, all three (3)
elements have been established beyond reasonable doubt.

103

The evidence presented by the prosecution manifested that Aniceto Ocampo was not
the owner of the land on which he constructed his house and that he did so against
the owner's will or without its consent. Prosecuution witnesses testified that as early
as May, 1983, petitioner was told that the area is U.P. property; that he began
constructing his house without a permit from the owner; that petitioner had no building
permit and that he had been informed that he was violating the Anti-Squatting Law.
Besides, it was also confirmed that petitioner had never shown title to the land he
claims to have purchased from one Roberto Pael. Yet, he failed to present any deed
of sale or any title in his name. This alleged sale is a defense which the petitioner
could have successfully utilized to his advantage but failed to substantiate it with
evidence at the trial. When petitioner moved for dismissal of the case, he forfeited his
chance to prove his claim. It must be noted also that this Roberto Pael was shown by
testimonial evidence to be not the owner of the land and that said land is the subject
of a criminal case against Pael for squatting.
Neither did the petitioner exhibit any building or sanitary permit to the U.P. Security
Force or in court, such being attached only to his motion for reconsideration. Worthy
of note is the fact that such permits are both dated June 26, 1985, which is more than
ten (10) months after the illegal construction took place and three (3) months after the
case had been filed against petitioner. (p. 29, Rello)
We concur with the Court of Appeals in affirming the trial court's decision which
maintained that the failure of the prosecution to present title to prove ownership by
the University of the Philippines of the land in question is not material in proving the
guilt of the petitioner beyond reasonable doubt. The ownership of U.P. is not in issue
in this case. Withal, the property has been widely and publicly known to be part of the
U.P. grounds. The crucial issue is the act of squatting of the petitioner and his nonownership of the property, both of which have been proven beyond reasonable doubt.
As regard the second issue presented, the answer is in the affirmative. Section 15,
Rule 119 of the Rules on Criminal Procedure, as amended, provides:
Section 15. Demurrer to Evidence. after the prosecution has
rested its case, the court may dismiss the case on the ground of
insufficiency of evidence (1) on its own initiative after giving the
prosecution an opportunity to be heard; or (2) on motion of the
accused filed with prior leave of court.

right to present evidence and submits the case for judgment on the
basis of the evidence for the prosecution. (Emphasis supplied).
The amendment to Section 15, Rule 119 of the 1985 Rules on Criminal Procedure
took effect only on October 1, 1988, but the same was given retroactive effect in the
case of Bonalos vs. People, in its resolution dated, September 19, 1988. Well-settled
is the rule that "statutes regulating the procedure of the court will be construed as
applicable to actions pending and undetermined at the time of their passage.
Procedural laws are retrospective in that sense and to that extent" (People vs.
Sumilang, 77 Phil. 784; Alday vs. Canilon, 120 SCRA 522). The amendment would
therefore apply in this case.
In the case at bar, nowhere does the record show that accused-petitioner's demurrer
to evidence was filed with prior leave of court, the retroactive effect of the amendment
aforestated would therefore work against herein petitioner.
By moving to dismiss on the ground of insufficiency of evidence, accused-petitioner
waives his right to present evidence to substantiate his defense and in effect submits
the case for judgment on the basis of the evidence for the prosecution. This is exactly
what petitioner did, and he cannot now claim denial of his right to adduce his own
evidence. As the Solicitor General aptly opined, "petitioner gambled on securing an
acquittal, a gamble which he lost." (pp. 31-32, Rollo)
More than that, petitioner raises as issue whether his motion to dismiss bars him from
presenting his evidence, but nowhere in his petition does he endeavor to argue in his
favor. Such a question should have been raised by the petitioner in the court a quo
and on appeal yet he failed to do the same.
WHEREFORE, the petition is DENIED. The decision of the public respondent is
hereby AFFIRMED in toto.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera (Chairperson), J., is on leave.

If the court denies the motion for dismissal, the accused may
adduce evidence in his defense. When the accused files such
motion to dismiss without express leave of court, he waives the

104

EN BANC
G.R. Nos. 82805 & 83225. June 29, 1989.]
BRIAD AGRO DEVELOPMENT CORPORATION, Petitioner, v. HONORABLE
DIONISIO DELA SERNA, IN HIS CAPACITY AS UNDERSECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, TRADE UNIONS OF THE
PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU LOCAL CHAPTER NO.
RO1-005, ALFRED DELA CRUZ, ET AL., * respondents.
[G.R. No. 83225. June 29, 1989.]
L.M. CAMUS ENGINEERING CORPORATION, Petitioner, v. THE HON.
SECRETARY OF LABOR, The HON. UNDERSECRETARY DIONISIO C. DELA
SERNA, VICTORIANO ATIENZA, JR., JOSNERI DIOCARES, REYNALDO
PAREO, WINNIE ORTOSIT, NELEN SEVERINO, MARLON RESONABLE,
ROLANDO ALDANESE, ALICIO SEBIAO, CARLINTO PAQUERO, JULIAN
GOSONA, ROLANDO CASIMERO, ALFREDO DE LEON, VICTORIANO
MACHANG, ARMANDO SALAZAR, ANITO DE JESUS, FRANCISCO DELGADO,
PAQUITO PITULAN, DANILO CENTINO, ROMEO DELOS SANTOS, RUBEN
LARA, ROGELIO MAGHUYOR, BEN ABDANI, RUDY PALASUGLO, WILLIAM
BALDADO, ROMEO LABIGAN, TANNY JANOLO and EDGAR A.
OREZ, Respondents.
Corazon R. Paulino for petitioner in G.R. No. 82805.
Raoul B. Agrava & Associates for petitioner in G.R. No. 83225.
Lar, Comia, Manala & Associates for respondents in G.R. No. 82805.
Jesus Balicanta for respondents in G.R. No. 83225.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; JURISDICTION OVER

MONEY CLAIMS; SECRETARY OF LABOR AND REGIONAL DIRECTORS
BESTOWED JURISDICTION PURSUANT TO EXECUTIVE ORDER NO. 111. The
Court rules that, in view of the promulgation of Executive Order No. 111, Zambales
Base Metals v. Minister of Labor is no longer good law. Executive Order No. 111 is in
the character of a curative law, that is to say, it was intended to remedy a defect that,

105

in the opinion of the legislature (the incumbent Chief Executive in this case, in the
exercise of her lawmaking powers under the Freedom Constitution) had attached to
the provision subject of the amendment. This is clear from the proviso: "The
provisions of Article 217 of this Code to the contrary notwithstanding . . ." Plainly, the
amendment was meant to make both the Secretary of Labor (or the various Regional
Directors) and the Labor Arbiters share jurisdiction.

Submitted for decision are these two consolidated cases, both in the nature of
challenges to the jurisdiction of the various Regional Directors of the Department of
Labor and Employment to act on money claims. 1
ANTECEDENT FACTS AND PROCEEDINGS.
I. G.R. No. 82805

2. STATUTORY CONSTRUCTION AND INTERPRETATION; CURATIVE STATUTES,

PURPOSES AND CONDITIONS FOR VALIDITY. Curative statutes have long been
considered valid in this jurisdiction. Their purpose is to give validity to acts done that
would have been invalid under existing laws, as if existing laws have been complied
with. They are, however, subject to exceptions. For one, they must not be against the
Constitution and for another, they cannot impair vested rights or the obligation of
contracts.
3. ID.; RULE THAT A STATUTE IS TO BE READ IN A MANNER THAT WOULD
BREATHE LIFE INTO IT, RATHER THAN DEFEAT IT, APPLIED TO EXECUTIVE
ORDER NO. 111; CASE AT BAR. Executive Order vests in Regional Directors
jurisdiction," [t]he provisions of Article 217 of this Code to the contrary
notwithstanding", it would have rendered such a proviso and the amendment itself
useless to say that they (Regional Directors) retained the self-same restricted
powers, despite such an amendment. It is fundamental that a statute is to be read in a
manner that would breathe life into it, rather than defeat it. At any rate, and as we
have observed, the language of Executive Order No. 111 is comprehensive enough to
extend to the resolution of employer-employee controversies covered by Article 217.
4. LABOR AND SOCIAL LEGISLATION; EXECUTIVE ORDER NO. 111, WITH
RETROACTIVE APPLICATION. The Executive Order in question being a curative
statute has retrospective effect.
5. REMEDIAL LAW; ESTOPPEL; A PARTY MAY NOT ATTACK A TRIBUNALS
JURISDICTION AND AT THE SAME TIME ASK FOR AFFIRMATIVE RELIEF; CASE
AT BAR. With respect moreover to Camus Engineerings petition (G.R. No. 83225),
it is the Courts considered opinion that the petitioner is estopped from assailing
Director Kongs jurisdiction. The rule is that a party may not attack a tribunals
jurisdiction and at the same time ask for affirmative relief. The records disclose that
the petitioner had entered into an amicable settlement with a total of forty-seven
employees and had it approved by Director Kong. The petitioner must, therefore, be
said to have accepted Director Kongs jurisdiction. It cannot now assail it.

DECISION

SARMIENTO, J.:

This case originated from a complaint filed on February 21, 1987 to recover unpaid
wages and wage supplements filed with Regional Director Filomeno Balbin of the
Labor Departments Regional Office No. I sitting in San Fernando, La Union. The
facts appear in his order:cralawnad
This case arose out of a complaint filed by TRADE UNION OF THE PHILIPPINES
AND ALLIED SERVICES (TUPAS) WFTU Local Chapter No. ROI-005, against
respondent agricultural firm, for alleged underpayment/non-payment of minimum
wage, ECOLA, overtime pay, legal holiday pay, night shift differential pay, 13th month
pay and service incentive leave pay.
Acting on this complaint and pursuant to a corresponding authority issued, a routine
inspection was conducted on subject establishment by Labor Standards and Welfare
Officer Danilo T. Basa on May 20, 1987, but the same did not materialize since no
records were presented for examination, as the same are allegedly all being kept at
the firms Manila Office. Nevertheless, LSWO Basa advised the firms Officer-inCharge, Mr. Virgilio Villa-Real to present the said records for verification at our
Dagupan Labor Office. However, to date and despite the fact that respondent has
been duly notified to present the same, no records were presented for verification.
x

Respondents repeated failure to appear during the scheduled conferences despite

due notices, is construed as a waiver of its right to adduce evidence to controvert the
above-noted claims. Likewise, its failure to present the required employment records
is presumed to mean that the presentation of the same will be against the interest of
the respondent and said records will prove the claims of herein complainants.
Based on the records on hand, the workers/members of the complaining Union have
been found to be underpaid of their wages and unpaid of their ECOLA, holiday pay,
service incentive leave pay and 13th month pay from January 1984 to April 1987. The
claims for non-payment of overtime pay and night shift differential pay have not been
clearly shown and proven, hence, are not included in the computed deficiencies. 2
Director Balbin then held against Briad Agro Development Corporation, and disposed
as follows:chanrob1es virtual 1aw library
WHEREFORE, PREMISES CONSIDERED, and considering further that said
deficiencies form part of the legal remuneration of herein employees, respondent is
hereby ordered to satisfy the same and pay the total amount of FIVE MILLION

106

THREE HUNDRED SIXTY NINE THOUSAND NINE HUNDRED NINE PESOS and
30/ 100 (P5,369,909.30) in the manner above-stated, within fifteen (15) days from
receipt hereof, and to submit proof of payment within the same period. Otherwise, a
Writ of Execution will be issued to the proper sheriffs to enforce this Order. The claims
for non-payment of overtime pay and night shift differential pay, are hereby
DISMISSED for lack of merit.

On November 18, 1982, counsel for respondent, Atty. Nicolito L. Bustos, filed a
motion for extension of time to file his motion to set aside and/or reconsider Order
dated 25 October 1982.
On November 24, 1982, respondent filed a Motion to Set Aside and/or Reconsider the
Order dated 25 October 1982 on the following grounds namely:chanrob1es virtual
1aw library

Let the parties be notified accordingly.

1. That the Order dated 25 October 1982 was issued without notice and hearing.
SO ORDERED. 3
2. That the questioned Order is not supported by the facts and the law of the case.
In its appeal to the National Labor Relations Commission, Briad Agro Development
contended that the Regional Director has no authority to entertain pecuniary claims of
workers, following this Courts ruling in Zambales Base Metals, Inc. v. Minister of
Labor, 4 in which we held that money claims are the exclusive domain of the labor
arbiters. The National Labor Relations Commission dismissed the appeal on the
strength of Executive Order No. 111, 5 amending Article 128(b) of the Labor Code, in
which jurisdiction to so act on monetary claims was supposedly granted to regional
directors. In its petition to this Court, Briad Agro Development reiterates its
jurisdictional challenge.chanrobles virtual lawlibrary
II. G.R. No. 83225.
The money award in this case, as and for unpaid emergency cost of living
allowances, and thirteenth-month and holiday pays, was granted originally in favor of
seventy-four employees of L.M. Camus Engineering following an inspection by
Regional Director David Kong of the Department of Labors Regional Office No. IX,
Zamboanga City. In his order, issued on May 16, 1983, Director Kong condemned the
corporation to pay a total of P146,181.20. Forty-seven employees were, however,
later dropped from the case following an amicable settlement with the petitioner. The
facts are as follows:chanrob1es virtual 1aw library
Records disclosed that on the basis of the complaint filed by the herein complainants,
an inspection was conducted in respondents premises but both the project manager
and the project engineer were out of town, except the internal auditor who informed
the Labor Regulations Officer (now known as Labor Standards and Welfare Officer)
that he had no authority to produce the employment records needed; that the internal
auditor promised to inform the project manager and the project engineer about the
required employment records but no information was received since then.
Consequently, a subpoena duces tecum was issued by the Regional Director on
August 20, 1982, addressed to the Manager of respondent company ordering the
latter to submit the pertinent employment records before the Field Service Division,
Regional Office No. IX, Zamboanga City on August 25, 1982 at 9:30 a.m.
Notwithstanding receipt of such subpoena duces tecum and the follow-up letter to the
said Manager of respondent, plus another subpoena addressed to respondents
project manager, respondent failed to submit the required pertinent records.
Consequently, on October 25, 1982 the Regional Director issued the Order in dispute,
copy of which was received by respondent on November 1982.

Respondent argues that the awards are void because the composition of each award
was not indicated; that complainants were either its employees or that of its
subcontractor Carlos Balinagay; that of the 74 complainants only three, namely:
Julian Gajana, Jose Casimora and Jose Roxas failed to execute quitclaims; and that
for these reasons the disputed Order may be validly set aside and/or reconsidered.
Complainants, thru counsel, filed their opposition to the aforesaid Motion to Set Aside
Order dated 25 October 1982. They maintain that the Order in question was issued in
the valid exercise of the visitorial and enforcement power of the Minister (now
Secretary) of Labor and Employment, thru the Regional Director as his duly
authorized representative; that before the said Order was issued, respondent or its
representative was directed time and again by the Regional Director to submit the
pertinent employment records of complainants but respondent chose to ignore the
said directives; that during the hearing of respondents motion on November 25, 1982
each complainant testified that no quitclaim was ever executed by them, although
they remembered having signed a certain document which respondent thru its
representative made them believe to be simply an evidence of payment of salary and
not a quitclaim.
On May 16, 1983, the Regional Director issued an Order denying respondents
motion.
On May 27, 1983, a Motion to Dismiss was filed alleging that "the parties have agreed
to settle amicably the individual claims of the various complainants who are listed in
the order of 25 October 1982."cralaw virtua1aw library
Respondent likewise moved for the reconsideration of the May 16, 1983-Order on the
ground that the Regional Office never had any jurisdiction over the nature of the
dispute. 6
The petitioner then appealed to the Office of the Secretary of Labor, an appeal that
did not prosper. On behalf of the Secretary, Undersecretary Dionisio de la Serna
affirmed Director Kongs award, as modified.
The petitioner moved for reconsideration, impugning the authority of the Regional
Director. Undersecretary Dionisio dela Serna denied reconsideration and sustained
the Regional Directors jurisdiction.

107

The petitioner, in this petition, primarily questions Regional Directors jurisdiction to

pass upon money claims.

He further submits that, as a consequence, Zambales Base Metals, Inc. v. Minister of

Labor is no longer controlling (although in his comment in G.R. No. 83225, he
maintains that it is still in force and effect.) 9

III. The cases before the Court; the question of jurisdiction.

IV. The Courts decision.

The petitioners in these two consolidated cases submit that the jurisdiction over
money claims is exclusive on the Labor Arbiters of the National Labor Relations
Commission, by force of Article 217 of the Labor Code:chanrob1es virtual 1aw library

The Court rules that, in view of the promulgation of Executive Order No. 111,
Zambales Base Metals v. Minister of Labor is no longer good law. Executive Order
No. 111 is in the character of a curative law, that is to say, it was intended to remedy a
defect that, in the opinion of the legislature (the incumbent Chief Executive in this
case, in the exercise of her lawmaking powers under the Freedom Constitution) had
attached to the provision subject of the amendment. This is clear from the proviso:
"The provisions of Article 217 of this Code to the contrary notwithstanding . . ." Plainly,
the amendment was meant to make both the Secretary of Labor (or the various
Regional Directors) and the Labor Arbiters share jurisdiction.

ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters
shall have the original and exclusive jurisdiction to hear and decide within thirty (30)
working days after submission of the case by the parties for decision, the following
cases involving all workers, whether agricultural or non-agricultural:chanrobles virtual
lawlibrary
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms an
conditions of employment;
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees
compensation, social security, medicare and maternity benefits.
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions
involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters. 7
The Solicitor General, on the other hand, relies on the provisions of Executive Order
No. 111, amending, among other things, Article 128, paragraph (b), of the Labor
Code:chanrob1es virtual 1aw library
(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in
cases where the relationship of employer-employee still exists, the Minister of Labor
and Employment or his duly authorized representatives shall have the power to order
and administer, after due notice and hearing, compliance with the labor standards
provisions of this Code and other labor legislation based on the findings of labor
regulation officers or industrial safety engineers made in the course of inspection, and
to issue writs of execution to the appropriate authority for the enforcement of their
orders except in case where the employer contests the findings of the labor regulation
officer and raises issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection. 8

Curative statutes have long been considered valid in this jurisdiction. Their purpose is
to give validity to acts done that would have been invalid under existing laws, as if
existing laws have been complied with. They are, however, subject to exceptions. For
one, they must not be against the Constitution and for another, they cannot impair
vested rights or the obligation of contracts. 10 It has not been shown in this case that
these exceptions apply.
That Executive Order No. 111 intended to make the jurisdiction to pass upon money
claims, among the other cases mentioned by Article 217 of the Labor Code,
concurrent between the Secretary of Labor (or Regional Directors) and the Labor
Arbiters is clear from its perambulatory clauses, to wit:chanrob1es virtual 1aw library
WHEREAS, the welfare of the workers is a primary concern of the government.
WHEREAS, it is necessary to amend or repeal provisions of laws that repress the
rights of workers and of their trade unions. 11
Executive Order No. 111, it is obvious, was enacted to widen workers access to the
Government for redress of grievances.
The language of the provision is indeed broad enough to encompass cases over
which Labor Arbiters had hitherto exercised exclusive jurisdiction. We quote, in
part:chanrob1es virtual 1aw library
. . . the Minister of Labor and Employment or his duly authorized representatives shall
have the power to order and administer, after due notice and hearing, compliance
with the labor standards provisions of this Code and other labor legislation . . . 12
We can no longer accept the contention that the Regional Directors singular concern,
under the said provision, is to ensure compliance with labor standards, such as
industrial safety and similar concerns. In Zambales Base Metals, it was our reading of
Section 128(b) of the Code that the aforesaid labor officials authority stopped there,
13 but we have, in view of the amendment under Executive Order No. 111, since

108

taken a second look. As we said, the Executive Order vests in Regional Directors
jurisdiction," [t]he provisions of Article 217 of this Code to the contrary
notwithstanding", it would have rendered such a proviso and the amendment itself
useless to say that they (Regional Directors) retained the self-same restricted
powers, despite such an amendment. It is fundamental that a statute is to be read in a
manner that would breathe life into it, rather than defeat it. At any rate, and as we
have observed, the language of Executive Order No. 111 is comprehensive enough to
extend to the resolution of employer-employee controversies covered by Article 217.
It is interesting to note that the Government itself (through the Solicitor General)
considers Zambales Base Metals v. Minister of Labor as Executive Order No. 111s
very raison detre. 14 If this is so, the intent of the legislator to grant Regional
Directors the jurisdiction now impugned cannot any more be clearer.
Being a curative statute, the Executive Order in question has retrospective effect. In
Garcia v. Martinez, 15 we held that legislation "which is in the nature of a curative
statute" 16 has "retrospective application to a pending proceeding." 17 Hence, these
cases should be decided in the light of the presidential issuance in question, although
they might have come pending further proceedings. Be that as it may, the records
show that G.R. No. 82805 had come about during the effectivity of Executive Order
No. 111. (In G.R. No. 82805, the complaint was filed on February 21, 1987; in G.R.
No. 83225, the material dates do not appear in the records but the order decreeing
the money award was issued on October 25, 1982 and a subponena duces tecum
appears to have been issued, in connection with the inspections that prefaced the
complaint, on August 20, 1982. 18) With respect to G.R. No. 82805, therefore, the
Executive Order squarely applies, while insofar as G.R. No. 83225 is concerned, we
give it a retroactive operation.
With respect moreover to Camus Engineerings petition (G.R. No. 83225), it is the
Courts considered opinion that the petitioner is estopped from assailing Director
Kongs jurisdiction. The rule is that a party may not attack a tribunals jurisdiction and
at the same time ask for affirmative relief. 19 The records disclose that the petitioner
had entered into an amicable settlement with a total of forty-seven employees and
had it approved by Director Kong. The petitioner must, therefore, be said to have
accepted Director Kongs jurisdiction. It cannot now assail it.chanrobles law library :
red

NARVASA, J., concurring:chanrob1es virtual 1aw library

While, for the reasons hereinafter stated, I concur in the result reached in the main
opinion, I cannot quite bring myself to agree with its express or clearly implied
postulate that Executive Order No. 111 worked any substantive change in the law
previous thereto as far as concerns the extent and character of the authority vested in
the Secretary of Labor and Employment or his representatives in labor standards
disputes. A survey of the state of the law prior to and after the issuance of said
Executive Order will, I hope, make the point clearer.
1. The Law Prior to EO 111. 1
a. Exclusive Original Jurisdiction of Labor Arbiters. Prior to the effectivity of EO
111, the Labor Arbiters had "original and exclusive jurisdiction (inter alia) to hear and
decide" (1) "cases . . . that workers may file involving wages, hours of work and other
terms and conditions of employment . . .," and (2) "all money claims of workers
involving non-payment or underpayment of wages, overtime or premium
compensation, maternity or service incentive leave, separation pay and other money
claims arising from employer-employee relations, except claims for employees
compensation, social security and medicare benefits and as otherwise provided in
Article 127 of (the Labor) Code . . ." 2
b. Power Granted to Secretary of Labor or Representative. Notwithstanding that
the jurisdiction of the Labor Arbiters above mentioned was pronounced to be original
and exclusive, some power over the same subject matter (over wages [e.g., nonpayment or under-payment], hours of work [e.g., overtime or premium compensation],
and other terms and conditions of employment [e.g., separation pay, maternity and
other leave benefits]) was in measure also vested in the Secretary of Labor or his
duly authorized representative, i.e., the Regional Director.
(1) Article 128 of the Labor Code. Article 128 of the Labor Code, 3 as amended by
P.D. No. 850, 4 conferred on the "Secretary of Labor or his duly authorized
representatives . . . the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of . . . (the) Code based on the
findings of labor regulation officers or industrial safety engineers made in the course
of inspection, and to issue writs of execution to the appropriate authority for the
enforcement of their order."cralaw virtua1aw library

Accordingly, we sustain the jurisdiction of the respondents Regional Directors.

WHEREFORE, these petitions are DISMISSED. No costs.

(2) Labor Standards Provisions. The "labor standards provisions" referred to are,
of course, those concerning wages, hours of work, separation pay, maternity and
other leaves, industrial or occupational safety, medical and dental treatment, etc. 5

SO ORDERED.
Melencio-Herrera, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino,
Medialdea and Regalado, JJ., concur.
Separate Opinions

(3) Rules and Regulations Implementing the Labor Code. The Rules and
Regulations implementing the Labor Code promulgated on February 16, 1976
provided, among other things, 6 that the Regional Director had power to cause
investigation of complaints filed by aggrieved parties if employer-employee
relationship still existed between the parties, and take such other action as may be
necessary in accordance with Article 128 of the Code; but if the employment relation
no longer existed, the case would be assigned to a Conciliator for determination of

109

the issues and effecting of an amicable settlement, and if no settlement was reached,
the case would be certified to the Appropriate Labor Arbiter. However, the Regional
Director could deny certification of the case to the Labor Arbiter if: (a) the complaint
patently lacked cause of action; (b) the causes of action had already prescribed; (c)
the complaint patently partook (of) the nature of harassment; and (d) the complaint
was barred by prior judgment. The denial of the certification could however be subject
of appeal by the Bureau of Labor Standards.
(4) Policy Instructions No. 14. Policy Instructions No. 14, on the subject,
"Termination Cases," effective April 23, 1976, recognized the jurisdiction of the
Regional Director to conduct a summary investigation of applications for clearance to
dismiss employees and decide whether or not to deny the application; but "if he does
not deny the application, he shall immediately certify the case to the Executive Arbiter
for hearing and decision on the merits." 7
c. Allocation of Jurisdiction. Considering that apart from the Regional Director (in
representation of the Secretary of Labor) and the Labor Arbiter, there were other
officers, i.e., the Conciliators in the Bureau of Labor Relations, who also had some
power relative to "labor standards cases," it was thought necessary to define more
precisely the competence of the different officials on the matter. This was done in
Policy Instructions No. 6 issued by the Ministry of Labor and Employment on April 23,
1976, dealing explicitly with the subject, "Distribution of Jurisdiction over Labor
Cases."cralaw virtua1aw library
(1) The Regional Director. Placed within the exclusive original jurisdiction of the
REGIONAL DIRECTOR were labor standards cases "arising from violations of labor
standard laws discovered in the course of inspection or complaints where employeremployee relations still exist." 8

(3) where evidentiary matters not disclosed or verified in the normal course of
inspection are required; or
(4) where there is no more employer-employee relationship. 12
e. Later Rules.
(1) PD 1367. Presidential Decree No. 1367 confirmed the jurisdiction of Labor
Arbiters over "cases arising from employer-employee relations duly indorsed (or
"certified") by the Regional Directors." 13
(2) Policy Instructions No. 37. Policy Instructions No. 37, issued on October 7,
1978 in connection with PD 1391, provided that "cases, involving violation of labor
standards laws where employer-employee relationship still exists shall be assigned to
the Labor Arbiters where: (a) intricate questions of law are involved; or (b) evidentiary
matters not disclosed or verified in the normal course of inspection by labor
regulations officers are required for their proper disposition." 14 It declared, too, that
the so-called "conciliable cases" theretofore under the jurisdiction of the defunct
Conciliation Section for purposes of conciliation or amicable settlement, became
immediately assignable to the Arbitration Branch for joint conciliation and compulsory
arbitration. 15
(3) PD 1691. PD 1691 further amended Article 127 (re-numbered 128) by the
addition of a proviso relative to the situation referred to in Policy Instructions
Numbered 7 and 37, supra, i.e., where the employer contests the findings of labor
regulations officers, viz.: 16
"x

(2) The Conciliation Section. Placed within the exclusive original jurisdiction of the
CONCILIATION SECTION were labor standards cases "where employer-employee
relations no longer exist." 9
(3) The Labor Arbiters. Declared as "CERTIFIABLE" to the Labor Arbiters were
cases which were "not settled by the Conciliation Section of the Regional Office"
"where employer-employee relations no longer exist" or those concerning (a)
"questions of law," or (b) "claims involving an amount exceeding P100,000 or 40% of
the paid-up capital of the employer, whichever is lower, or (c) evidentiary matters not
disclosed or verified in the normal course of inspection." 10
d. Additional Prescriptions. Further refinement of the power of the Regional
Directors over Labor Standards Cases was effected by Policy Instructions No. 7.
Policy Instructions No. 7 declared that a Regional Director could exercise jurisdiction
over labor standards controversies except in those cases
(1) where questions of law are involved as determined by the Regional Director; 11
(2) where the amount involved exceeds P100,000 or over 40% of the equity of the
employer, whichever is lower;

"(b) The Minister of Labor or his duly authorized representative shall have the power
to order and administer, after due notice and hearing, compliance with the labor
standards provisions of this code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their order, except in
cases where the employer contests the findings of the labor regulation officer and
raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection."cralaw virtua1aw library
f. Restatement of Power of Secretary of Labor or Representative Prior to EO 111.
In light of the laws and rules just cited, and the pronouncement in Policy Instructions
No. 7 that labor standards cases had been taken from the arbitration system and
placed under the enforcement system to the end that "the worker need not litigate to
get what legally belongs to him," the fact of the matter is that the power of Regional
Directors over labor standards cases prior to EO 111 consisted merely of the
enforcement of UNCONTESTED MONEY CLAIMS OF PERSONS STILL
EMPLOYED, i.e., money claims of persons arising from violations of labor standards
provisions of the Labor Code (or other statute) discovered by labor regulations
officers in the course of normal inspection, where the employment relationship still

110

existed, or the employer did not contest or otherwise raise any issue respecting the
findings of said labor regulations officers.
(1) No adjudicatory power. Indeed, no adjudicative power as that possessed by
Labor Arbiters was ever reposed in the Regional Director, in the sense of trying and
deciding (or hearing and determining) legal controversies or justiciable causes
involving labor standards laws. The Regional Director actually did not have the power
or faculty known as "jurisdiction," vested in a judge, for instance, or a labor arbiter,
i.e., to receive evidence adduced by parties involved in a labor standards controversy,
determine on the basis thereof the factual issues, and apply the law to the facts thus
deemed established, in order that the controversy or litigation might be authoritatively
resolved. He did not have the power to resolve controversies (understood in the
popular sense, as clashes of opposing views). He merely had functions that can only
be described as ministerial. He had visitorial power, as representative of the Minister
or Secretary of Labor, to cause inspection of establishments to ascertain observance
of labor standards provisions, and in the event of discovered violations thereof, to
require compliance therewith if the employer admitted the infractions; but if it should
appear, at the hearing required to be held after discovery of the infractions, that a
controversy existed, i.e., the employer was not accepting but was on the contrary
contesting said officers findings, or that no employment relationship existed any
longer, the Regional Director himself could not try and decide the case but had to
refer or certify it to the appropriate Labor Arbiter for hearing and judgment. There was,
in fine, no sharing by the Regional Director of the original and exclusive jurisdiction
reposed by law in Labor Arbiters even with respect to money claims arising from
alleged breach of labor standards provisions of the Labor Code.chanrobles law library
3. Relevant Jurisprudence. It was in this sense of the Regional Directors lack of
adjudicatory authority, or the power of compulsory arbitration that the law was
applied in Zambales Base Metals v. Minister of Labor, 146 SCRA 50 (Nov. 26, 1986),
concerning money claims 17 arising from alleged violations of labor standards
provisions not discovered in the course of normal inspection, Oreshoot Mining Co. v.
Arellano, 156 SCRA 500 (Dec. 14, 1987), involving, among others, employees whose
employment had been terminated, 18 and Ong v. Parel, 156 SCRA 768 (Dec. 21,
1987), in which the employer inter alia disputed the adequacy of the evidentiary
foundation (employees affidavits) of the findings of the labor standards inspectors.
Noteworthy is that, as observed in Ong v. Parel, the Solicitor General had taken the
position (as late as January, 1987) that the respondent Regional Director was "not
empowered to adjudicate money claims because such authority is reposed in the
Labor Arbiter and the National Labor Relations Commission as provided under Art.
127 of the same Code, as amended . . . (and) that the visitorial and enforcement
powers of the public respondent under Art. 128 of the Labor Code are limited to
awards not exceeding P100,000.00 pursuant to MOLE Policy Instruction No. 7." 19
4. Amendments Under EO 111. Another amendment of paragraph (b) of Article 128
of the Labor Code was made by Executive Order No. 111 which took effect, as
aforestated, on March 3, 1987. The amendment consisted merely in the intercalation
of two (2) clauses, to wit: (a) "The provisions of Article 217 of this code to the contrary
notwithstanding and in cases where the relationship of employer-employee still
exists," and (b) "and other labor legislation." As thus amended, 20 paragraph (b)

Article 128 now reads:jgc:chanrobles.com.ph

"(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in
cases where the relationship of employer-employee still exists, the Minister of Labor
and Employment or his duly authorized representatives shall have the power to order
and administer, after due notice and hearing, compliance with the labor standards
provisions of this Code and other labor legislation based on the findings of labor
regulations officers or industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the labor
regulations officer and raises issues which cannot be resolved without considering
evidentiary matters that are not verifiable in the normal course of inspection."cralaw
virtua1aw library
5. Actual Effect of EO 111. According to the Solicitor General, Executive Order No.
111 was promulgated precisely to revise the law as pronounced and applied in the
Zambales Base Metals decision. 21 If this be so, the formulation of the executive
order falls short of the purpose, and is, in light of the prior state of the law,
inefficacious to bring about the intended revision.
The insertion of the clause, "where the relationship of employer-employee still exists,"
to qualify the power of the Minister (now Secretary) of Labor and Employment or his
duly authorized representatives the necessary implication being that where the
employment relation no longer existed, said Minister (Secretary) or his
representatives had no such power was quite unnecessary for in Policy
Instructions Numbered 6, 7 and 37, supra, it was explicitly acknowledged that these
officials really had no jurisdiction over cases where the relationship of employer and
employee no longer existed.
The inclusion of the phrase, "and other labor legislation," was also unnecessary for it
is obvious that labor standards provisions may be found in the Labor Code as well as
in other statutes. In any event, the phrase did not affect the subject of jurisdiction of
Regional Directors.chanroblesvirtualawlibrary
Neither does the intercalation of the phrase, "the provisions of Article 217 of this Code
to the contrary notwithstanding," work a change in the existing law. For even before
the effectivity of EO 111 and notwithstanding that under said Article 217 Labor
Arbiters had exclusive original jurisdiction over cases . . . (and all) money claims of
workers involving non-payment or underpayment of wages, overtime or premium
compensation, maternity or service incentive leave, separation pay and other money
claims arising from employer-employee relations, except claims for employees
compensation, social security and medicare benefits" the Minister (Secretary) of
Labor or his duly authorized representatives already had the power (albeit not truly
adjudicative) where the employer-employee relationship still existed
". . . to order and administer, after due notice and hearing, compliance with the labor
standards provisions of this code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their order, except in

111

cases where the employer contests the findings of the labor regulation officer and
raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection."cralaw virtua1aw library
In other words, even without the qualifying phrase, "the provisions of Article 217 of
this Code to the contrary notwithstanding," the Secretary of Labor or his duly
authorized representatives already "shared" in some measure the jurisdiction of Labor
Arbiters to order observance of labor laws denominated exclusive and original in
said Article 217 in that in UNCONTESTED MONEY CLAIMS OF PERSONS STILL
EMPLOYED, Regional Directors had power to "order and administer . . . compliance
with the labor standards provisions . . . and to issue writs of execution to the
appropriate authority for the enforcement of their order." The principle has not been
changed. Even under EO 111 no other aspect of the Labor Arbiters jurisdiction may
be deemed to be shared by the Secretary or his representatives, in view of the
retention of the provisos requiring (1) the existence of the employment relationship
and (2) the absence of a contest or issue raised by the employer anent the findings of
the labor regulations officers. Whether under EO 111 or the prior law, therefore, the
Secretary of Labor or his representatives could, notwithstanding the exclusive original
jurisdiction conferred on Labor Arbiters, order compliance with the legal provisions
governing wages, hours of employment and other terms of employment, found to
have been violated in the normal course of inspection, provided that (1) the
employment relationship still existed and (2) the case was uncontested, i.e., the
employer did not contest or raise any issue relative to the findings of the labor
standards officers.
To recapitulate, under EO 111, the Regional Directors, in representation of the
Secretary of Labor and notwithstanding the grant of exclusive original jurisdiction
to Labor Arbiters by Article 217 of the Labor Code, as amended have power to
hear cases involving violations of labor standards provisions of the Labor Code or
other legislation discovered in the course of normal inspection, and order compliance
therewith, provided that:chanrob1es virtual 1aw library
1) the alleged violations of the employer involve persons who are still his employees,
i.e., not dismissed: and

Labor Relations Commission.

b) The employer shall raise such objections during the hearing of the case or at any
time after receipt of the notice of inspection results. The issue of whether or not the
case shall be endorsed to the NLRC shall be resolved by the Regional Director in the
final disposition of the case.
Section 2. Labor Standards and Welfare Officers (LSWOs) as witnesses In cases
that have been endorsed to the NLRC, the LSWOs who participated in the
investigation shall make themselves available as witnesses in the proceedings before
the Labor Arbiter concerned."cralaw virtua1aw library
It may finally be observed that the hearing to be conducted by the Regional Director is
limited to a determination of whether or not (1) the employment relationship still
exists, and/or (2) the employer accepts the findings of the LSWOs and raises no
issues which cannot be resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection. In the affirmative case, the Regional
Director may properly order compliance with the legal provisions violated and issue
writs of execution to the appropriate authority for the enforcement of this order;
otherwise, the Regional Director ceases to have competence to take cognizance of
and decide the case but must refer or certify it to the Labor Arbiter for hearing and
judgment.chanrobles virtual lawlibrary
6. Application of the Law to Cases at Bar. In G.R. No. 82805 (Briad Agro
Development Corporation v. de la Serna), the employer refused to present its records
for inspection by the Regional Office. This may be deemed a waiver of the right to
contest the conclusions of the Labor Inspectors drawn from the evidence and records
at hand. Under Executive Order 111, which is applicable since the violations of labor
standards took place after its effectivity, it was within the authority of the Regional
Director to order compliance with the labor standards statutes, and to issue a writ of
execution to the appropriate authority to enforce his order.

"Section 1. Contested Cases.

In G.R. No. 83255 (L.M. Camus Engineering Corporation v. Secretary of Labor), the
employer similarly refused to produce its relevant records, despite several requests
therefor by the Regional Office. Its refusal may be regarded as a waiver of the right to
contest the Directors findings made on the basis of the records and evidence
available, including the fact that the employer had impliedly acknowledged the
imputed infractions of labor standards when it made payments on account thereof to
several of its employees by way of amicable settlement. Under the law prior to
Executive Order 111, the Regional Director had the power, in cases where the
employment relationship still existed, to order compliance with labor standards and
issue a writ of execution to the appropriate authorities for the enforcement of his
awards. In any event, said Executive Order, as a "curative statute . . . has
retrospective application to a pending proceeding." 22

a) In cases where the employer contests the findings of the Labor Standards and
Welfare Officers and the issues cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection, the Regional
Director shall endorse such case to the appropriate Arbitration Branch of the National

I suggest that in both cases, even without the sanction of Executive Order 111, which
neither enlarged nor otherwise altered the authority of the Secretary of Labor and the
Regional Directors as regards labor standards cases, the assailed actions of said
officials may be sustained as properly within the powers vested in them by the law in

2) the employer does not contest the findings of the labor regulations officer or raise
issues which cannot be resolved without considering evidentiary matters that are not
verifiable in the normal course of inspection.
These propositions relative to uncontested cases are reflected in Rule III of the Rules
Implementing Executive Order 111 governing the "Endorsement of Cases to the
National Labor Relations Commission," viz.:jgc:chanrobles.com.ph

112

force before the effectivity of said enactment. Upon this proposition, the dismissal of
both petitions is entirely in order.
7. Republic Act No. 6715. What in fact conferred upon Regional Directors
adjudicative power in the true sense of the term, i.e., the power take cognizance of,
receive evidence on and determine legal controversies brought before them, is
Republic Act No. 6715, signed into law on March 2, 1988 and effective "fifteen (15)
days after its publication in the Official Gazette or in at least two (2) national
newspapers of general circulation, whichever comes earlier."cralaw virtua1aw library
a. Amendment of Article 129. RA 6715 amended Article 129 of the Labor Code to
read as follows:chanrob1es virtual 1aw library
ART. 129. Recovery of wages, simple money claims and other benefits. Upon
complaint of any interested party, the Regional Director of the Department of Labor
and Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide
any matter involving the recovery of wages and other monetary claims and benefits,
including legal interest, owing to an employee or person employed in domestic or
household service or househelper under this code, arising from employer-employee
relations; Provided, That such complaint does not include a claim for reinstatement:
Provided, further, That the aggregate money claims of each employee or househelper
do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing
officer shall decide or resolve the complaint within thirty (30) calendar days from the
date of the filing of the same . . .
Any decision or resolution of the Regional Director or hearing officer pursuant to this
provision may be appealed on the same grounds provided in Article 223 of this Code,
within five (5) calendar days from receipt of a copy of said decision or resolution, to
the National Labor Relations Commission which shall resolve the appeal within ten
(10) calendar days from the submission of the last pleading required or allowed under
its rules.
x

b. Amendment of Article 217. Amended by RA 6715, too, was Article 217 of the
same Code, to read as follows:chanrob1es virtual 1aw library
ART. 217. Jurisdiction of Labor Arbiters and the Commission. Except as otherwise
provided under this code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:chanrob1es virtual 1aw library
(1) Unfair labor practice cases;
(2) Termination disputes;

(3) If accompanied with a claim of reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relation;
(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim
for reinstatement.
x

c. Requisites for Exercise of Jurisdiction by Regional Director, etc. Quite clearly,

under the provisions of said Act, Regional Directors and other hearing officers of the
Department of Labor (aside from the Labor Arbiters) have real jurisdiction i.e., they
may try and decide, or hear and determine any claim brought before them for
recovery of wages and other monetary claims and benefits, including legal interest, if
the following requisites concur, to wit:chanrobles virtual lawlibrary
1) the claim is presented by an employee or person employed in domestic or
household service, or househelper under the Code;
2) the claimant, no longer being employed, does not seek reinstatement; and
3) the aggregate money claim of the employee or househelper does not exceed five
thousand pesos (P5,000.00).
d. When Labor Arbiter has exclusive jurisdiction. Where these three (3) requisites
do not co-exist, the Labor Arbiters have exclusive original jurisdiction over all claims
arising from employer-employee relations, other than those for employees
compensation, social security, medicare and maternity benefits.
Fernan, C.J., Cruz and Gutierrez, Jr., JJ., concur.
Endnotes:

* Actual title of the petition. Per the Courts resolution dated November 15, 1988, the
Court required the petitioner (in G.R. No. 82805) to submit the names of the

113

respondents. As of the time of promulgation hereof, the petitioners have not complied.
But since the petition raises pure principles of law, the Court is promulgating judgment
herein without the names of respondents required. The Court reserves the right,
however, to impose proper disciplinary measures against the petitioner for failing
without justifiable reason to comply with its directives.

16, 1987 (83 O.G. No. 7, p. 577) and therefore became effective on March 3, 1987.
2. ART. 217, Labor Code, as amended by PD 850. The reference to ART. 127 was
later removed by P.D. No. 1691, May 1, 1980.
3. PD 442, effective May 1, 1974.

1. Per the Courts resolution dated August 26, 1988, these cases were consolidated.
4. Effective Dec. 16, 1975.
2. G.R. No. 82805, Rollo, 12-13.
3. Id., 19.

5. See Book Ill (Conditions of Employment) and Book IV (Health, Safety and Social
Welfare Benefits) of the Labor Code, and Secs. 2-3, Rule X, Book III, Rules
Implementing the Labor Code.

4. Nos. L-73184-88, November 26, 1986, 146 SCRA 50.

6. SECS. 1, 3 and 7, Rule XII, Book V.
5. Promulgated on December 24, 1986.
6. Rollo, id., 34-36.
7. Pres. Decree No. 442, art. 217.

7. SEE Columbia Development Corporation v. Minister of Labor and Employment,

146 SCRA 425 and Cebu Institute of Technology v. Minister of Labor, 113 SCRA 257,
upholding the jurisdiction of the Regional Director to summarily hear applications for
clearance and decide whether to deny or certify the same; EDI Staff Builders
International, Inc. v. Leogardo, G.R. No. 71907, July 30, 1987.

8. Exec. Order No. 111, supra, sec. 2; Emphasis supplied.

8. Policy Instructions No. 6, par. 1.
9. For purposes of these petitions, we overlook this apparent lapse and consider the
Solicitors comments in G.R. No. 82805 as the Governments official position since
they agree with the Department of Labors stand.

9. Id., par 2. The Conciliation Section however could only conciliate, it had no power
to decide the case. If conciliation was not possible, the case had to be referred to the
Labor Arbiter for trial and judgment.

10. Government of P.I. v. Municipality of Binalonan, 32 Phil. 634 (1915).

11. Exec. Ord. No. 111, supra.
12. Supra; Emphasis supplied.

10. Id., par. 6. N.B. There appears to be no statutory basis for these dispositions in
Policy Instructions No. 6 governing the matter of jurisdiction.
11. SEE footnote 1 at page 4, infra, re Policy Instructions No. 37 which, among
others, qualifies "questions of law" by the adjective, "intricate."

13. Zambales Base Metals, Inc. v. Minister of Labor, supra, 52.

14. G.R. No. 82805, rollo, id., 51.
15. No. L-47629, May 28, 1979, 90 SCRA 331; see also Calderon v. Court of Appeals,
No. L-52235, October 28, 1980, 100 SCRA 459.
16. Supra, 333.

12. N.B. As already stated, there are no statutory foundations for these jurisdictional
rules. According to the MOLE, the "clear purpose" of PD 850 which avowedly took
labor standards cases from the arbitration system and placed them; under the
enforcement system subject to certain exceptions was "to assure the worker the
rights and benefits due to him under labor standards laws without having to go
through arbitration. The worker need not litigate to get what legally belongs to him.
The whole enforcement machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge." (Policy Instructions No. 7).

17. Supra.
13. PD 1367 became effective on May 29, 1978.
18. Rollo, id., 35.
14. Emphasis supplied; SEE footnote 9, supra.
19. Balais v. Balais, G.R. No. 33924, March 18, 1988.
15. PD 1391, eff. May 29, 1978.
1. EO 111 expressly declared that its provisions would become effective 15 days after
publication in the Official Gazette. The executive order was so published on February

16. The proviso added is indicated by italics.

114

FIRST DIVISION
17. For unpaid wages, 13th month pay and service incentive leave.
18. The employees were seeking reinstatement, back wages and other monetary
benefits.
19. 156 SCRA 768; Italics supplied.
20. The amendment being indicated by italics.
21. SEE rollos of G.R. No. 82805 (p. 51) and G.R. No. 74621.

G.R. No. 80593 December 18, 1989

PHILIPPINE NATIONAL BANK, petitioner,
vs.
TERESITA CRUZ, JOSE AGRIPINO, BERNARDO BAUZON, LUCRECIA BILBAO,
MA. LUISA CABRERA, FRANCIS BAACLO GUADALUPE CAMACHO, LUZ DE
LEON, MIKE VILLAVERDE, NEPOMUCENO MEDINA, EDGARDO MENDOZA,
JENNIFER VELEZ, AMELIA MEDINA, EDUARDO ESPEJO and RICARDO
BATTOrespondents.

22. Garcia v. Martinez, 90 SCRA 331.

The Chief Legal Officer for petitioner.
Romualdo C. Delos Santos for respondents.

GANCAYCO, J.:
The focus of the instant petition for certiorari is the application of Article 110 of the
Labor Code. The said article provides that workers shall enjoy first preference with
regard to wages due them in cases of bankruptcy or liquidation of an employer's
business.
The antecedent facts of the case are as follows:
Sometime in 1980 Aggregate Mining Exponents (AMEX) laid-off about seventy
percent (70%) of its employees because it was experiencing business reverses. The
retained employees constituting thirty percent (30%) of the work force however, were
not paid their wages. This non-payment of salaries went on until July 1982 when
AMEX completely ceased operations and instead entered into an operating
agreement with T.M. San Andres Development Corporation whereby the latter would
be leasing the equipment and machineries of AMEX.
The unpaid employees sought redress from the Labor Arbiter 1 who, on August
27,1986 rendered a decision finding their claim valid and meritorious. The dispositive
part of the said decision, reads:

Republic of the Philippines

SUPREME COURT
Manila

WHEREFORE, finding the claims of complainants for payment of

unpaid wages and separation pay to be valid and meritorious,
respondents Aggregate Mining Exponent and its president Luis
Tirso Revilla should, as they are hereby ordered to pay the same to
said complainants in the following amounts:

115

Yrs. of
Service

Rate

Separation Pay

Backwages

P1,300.00

P5,200.00

P6,174.96

1,900.00

8,550.00

11,712.85

2,300.00

8,050.00

19,247.00

12

2,700.00

16,200.00

23,485.70

1,800.00

2,700.00

5,004.35

3,500.00

12,550.00

32,986.90

1,300.00

3,900.00

3,227.15

1,300.00

3,250.00

3,110.85

1,500.00

4,500.00

4,793.80

1,200.00

3,000.00

4,287.10

920.00

1,840.00

832.10

740.00

740.00

4,287.66

116

740.00

740.00

6,822.81

970.00

1,940.00

234.10

117

3,000.00

10,500.00

9,874.70

OR UPON ANY PARTICULAR PROPERTY OWNED BY THEIR

EMPLOYER. 4
The petition is devoid of merit.

83,360.00

136,092.03

in the total amount of P219,452.03. To properly effectuate the

payment of the same, the necessary arrangement should be made
between respondents Amex and T.M. San Andres Development
Corp. and Philippine National Bank (PNB) on their respective role
and participation herein. For should the principal respondent be
unable to satisfy these Awards, the same can be satisfied from the
proceeds or fruits of its machineries and equipment being operated
by respondent T.M. San Andres Dev. Corp. either by operating
agreement with respondent Amex or thru lease of the same from
PNB.
To obviate any further differences between complainants and their
counsel to the latter's attorney's fees which seems to be the cause
of their earlier misunderstanding, as can be gleaned from the
Charging Lien filed by said counsel, respondents are, moreover,
ordered to segregate and pay the same directly to said counsel, the
amount of which is to be computed pursuant to their agreement on
July 14, 1983 (Annex A of Position to Enter Attorney's Charging
Lien in the Record of the Case). 2
AMEX and its President, Tirso Revilla did not appeal from this decision. But PNB, in
its capacity as mortgagee-creditor of AMEX interposed an appeal with the respondent
Commission, not being satisfied with the outcome of the case. The appeal was
primarily based on the allegation that the workers' lien covers unpaid wages only and
not the termination or severance pay which the workers likewise claimed they were
entitled to. In a resolution 3 dated October 27, 1987, the National Labor Relations
Commission affirmed the decision appealed from. Hence the instant petition filed by
the petitioner bank based on the following grounds:
I. ARTICLE 110 OF THE LABOR CODE MUST BE READ IN
RELATION TO ARTICLES 2241, 2242, 2243, 2244 AND 2245 OF
THE CIVIL CODE CONCERNING THE CLASSIFICATION,
CONCURRENCE AND PREFERENCE OF CREDITS.
II. ARTICLE 110 OF THE LABOR CODE DOES NOT PURPORT
TO CREATE A LIEN IN FAVOR OF WORKERS OR EMPLOYEES
FOR UNPAID WAGES EITHER UPON ALL OF THE PROPERTIES

At the outset, petitioner PNB did not question the validity of the workers' claim for
unpaid wages with respect to the mortgaged properties of AMEX, provided that the
same be limited to the unpaid wages, and to the exclusion of termination pay. In the
instant petition however, PNB starts off with the question of whether or not the
workers' lien take precedence over any other claim considering that this Court has
ruled otherwise in Republic vs. Peralta. 5
This Court cannot allow the petitioner to alter its stance at this stage inasmuch as it is
deemed to have acquiesced in the decision of the labor arbiter concerning payment of
unpaid wages. The records reveal that the petitioner failed to question the same on
appeal. Hence, it is now barred from claiming that the workers' lien applies only to the
products of their labor and not to other properties of the employer which are
encumbered by mortgage contracts or otherwise.
Notwithstanding the foregoing, an attempt on the part of the petitioner to seek relief
from that portion of the decision would still be in vain.
Article 110 of the Labor Code provides that:
Art. 110. Worker preference in case of bankruptcy. In the event of
bankcruptcy or liquidation of an employer's business - his workers
shall enjoy first preference as regards their unpaid wages and other
monetary claims, any provision of law to the contrary
notwithstanding. Such unpaid wages and monetary claims, shall be
paid in full before claims of the government and other creditors may
be paid.6
This Court must uphold the preference accorded to the private respondents in view of
the provisions of Article 110 of the Labor Code which are clear and which admit of no
other interpretation. The phrase "any provision of law to the contrary notwithstanding"
indicates that such preference shall prevail despite the order set forth in Articles 2241
to 2245 of the Civil Code. 6-a No exceptions were provided under the said article,
henceforth, none shall be considered. Furthermore, the Labor Code was signed into
Law decades after the Civil Code took effect.
In Herman vs. Radio Corporation of the Philippines, 7 this Court declared that
whenever two statutes of different dates and of contrary tenor are of equal theoretical
application to a particular case, the statute of later date must prevail being a later
expression of legislative will. Applying the aforecited case in the instant petition, the
Civil Code provisions cited by the petitioner must yield to Article 110 of the Labor
Code.

118

Moreover, Our pronouncement in A. C. Ransom Labor Union-CCLU vs.

NLRC, 8 reinforces the above-mentioned interpretation where this Court, speaking
through Associate Justice Melencio-Herrera, explicitly stated that "(t)he worker
preference applies even if the employer's properties are encumbered by means of a
mortgage contract ... So that, when (the) machinery and equipment of RANSOM were
sold to Revelations Manufacturing Corporation for P2M in 1975, the right of the 22
laborers to be paid from the proceeds should have been recognized ... " 9
Reliance by the petitioners on Republic vs. Peralta is without basis. The said case
involved a question of workers' preference as against the tax claims of the State. In
the said case the Court held that the State must prevail in that instance since "it has
been frequently said that taxes are the very lifeblood of government. The effective
collection of taxes is a task of highest importance for the sovereign. It is critical indeed
for its own survival ." 10
Nevertheless, under Article 110 of the Labor Code as amended, the unpaid wages
and other monetary claims of workers should be paid in full before the claims of the
Government and other creditors. Thus not even tax claims could have preference
over the workers' claim.
Consistent with the ruling of this Court in Volkschel Labor Union vs. Bureau of Labor
Relations, 11 this court adopts the doctrine that "(i)n the implementation and
interpretation of the provisions of the Labor Code and its implementing regulations,
the workingman's welfare should be the primordial and paramount
consideration." 12 Bearing this in mind, this Court must reiterate the dictum laid down
in A.C. Ransom that the conflict between Article 110 of the Labor Code and Article
2241 to 2245 of the Civil Code must be resolved in favor of the former. A contrary
ruling would defeat the purpose for which Article 110 was intended; that is, for the
protection of the working class, pursuant to the never-ending quest for social justice.
Petitioner next advances the theory that "even if the worker's lien applies in the
instant case, the same should cover only unpaid wages excluding termination or
severance pay. 13 To support this contention, petitioner cites Section 7, Rule 1, Book
VI of the Rules and Regulations implementing the Labor Code which provides that:
The just causes for terminating the services of an employee shall
be those provided under article 283 of the Code. The separation
from work of an employee for a just cause does not entitle him to
termination pay provided in the Code, emphasis supplied)
Based on that premise, petitioner contends that the claim for termination pay should
not be enforced against AMEX properties mortgaged to petitioner PNB because
Article 110 of the Labor Code refers only to "wages due them for services rendered
during the period prior to bankcruptcy or liquidation." 14 Citing serious financial losses
as the basis for the termination of the private respondents, petitioner alleges that the
employees are not entitled to the termination pay which they claim.

This contention is, again, bereft of merit.

The respondent Commission noted that "AMEX failed to adduce convincing evidence
to prove that the financial reverses were indeed serious." 15 After a careful study of
the records of the case, this Court finds no reason to alter the findings of the
respondent Commission.
In Garcia vs. National Labor Relations Commission , 16 it was held that "it is
essentially required that the alleged losses in business operations must be proved.
" 17 This policy was adopted to obviate the possibility of an employer fabricating
business reverses in order to ease out employees for no apparent reason. Hence, no
departure shall be made by this Court from the ruling in Philippine Commercial and
Industrial Bank vs. National Mines and Allied Workers Union (NAMAWU-MIF) 18where
it was categorically stated that the term "wages" includes not only remunerations or
earnings payable by an employer for services rendered or to be rendered, but also
covers all benefits of the employees under a Collective Bargaining Agreement like
severance pay, educational allowance, accrued vacation leave earned but not
enjoyed, as well as workmen's compensation awards and unpaid salaries for services
rendered. All of these benefits fall under the term "wages" which enjoy first preference
over all other claims against the employer. 19
Furthermore, in Peralta, this Court held that for purposes of the application of Article
110, "termination pay is reasonably regarded as forming part of the remuneration or
other money benefits accruing to employees or workers by reason of their having
previously rendered services..." 20 Hence, separation pay must be considered as part
of remuneration for services rendered or to be rendered.
Indeed Article 110 of the Labor Code, as amended, aforecited, now provides that the
workers' preference covers not only unpaid wages but also other monetary claims.
The respondent Commission was, therefore, not in error when it awarded the
termination pay claimed by the private respondents. As far as the latter are
concerned, the termination pay which they so rightfully claim is an additional
remuneration for having rendered services to their employer for a certain period of
time. Noteworthy also is the relationship between termination pay and services
rendered by an employee, that in computing the amount to be given to an employee
as termination pay, the length of service of such employee is taken into consideration
such that the former must be considered as part and parcel of wages. Under these
circumstances then, this Court holds that the termination or severance pay awarded
by the respondent Commission to the private respondents is proper and should be
sustained.
Lastly, it must be noted that the amount claimed by petitioner PNB for the satisfaction
of the obligations of AMEX is relatively insubstantial and is not significant enough as
to drain its coffers. By contrast, that same amount could mean subsistence or
starvation for the workingman. Quoting further from Philippine Commercial and
Industrial Bank, this Court supports the equitable principle that "it is but humane and

119

partakes of the divine that labor, as human beings, must be treated over and above
chattels, machineries and other kinds of properties and the interests of the employer
who can afford and survive the hardships of life better than their workers. Universal
sense of human justice, not to speak of our specific social justice and protection to
labor constitutional injunctions dictate the preferential lien that the above provision
accord to labor. 21 In line with this policy, measures must be undertaken to ensure that
such constitutional mandate on protection to labor is not rendered meaningless by an
erroneous interpretation of the applicable laws.

5 150 SCRA 37 (1987).

WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of

merit. No costs.

8 150 SCRA 498 (1987).

6 Republic Act 6715; See Official Gazette, Manila 6, 1989, page 15.
6-a Articles 2241 to 2245, Civil Code of the Philippines.
7 50 Phil. 490 (1927).

9 Ibid, page 507.

SO ORDERED.
Narvasa, Grio-Aquino and Medialdea, JJ, concur.
Separate Opinions
CRUZ, J.,concurring:
I can perhaps be allowed a little immodesty in taking this occasion to point out that in
Republic of the Philippines v. Peralta, cited in the ponencia, I was the only one who
held the view that the claims of the laborers should take precedence over those of
even the Government under Article 110 of the Labor Code.
Interpreting the said provision, I submitted that it should be read according to its literal
import and obvious philosophy, to favor and protect the laborer pursuant to the social
justice policy. None of my thirteen colleagues then agreed with me.
With the amendment of the article, evidently to correct the meaning given to it in
Peralta, all doubt has been removed as to its original intention (which I feel was quite
clear even before). There is no question now that under Article 110 of the Labor Code
as reworded the claims of the laborer prevail over those of all others, including the
Government itself, in the interest of social justice. It is for me a cause for deep elation.
Footnotes

10 Op cit ., page 51.

11 137 SCRA 42 (1985).
12 Ibid, page 48.
13 Page 26, Rollo.
14 Page 27, Rollo.
15 Pages 4 to 5, Resolution; page 36 to 37, Rollo.
16 153 SCRA 639 (1987), citing National Federation of Labor Union
vs. Ople, 143 SCRA 124 (1986).
17 Ibid, page 651.
18 115 SCRA 873 (1982).
19 Ibid, page 880.
20 Supra, note 5, page 44.

1 Labor Arbiter Raymundo R. Valenzuela.

21 Op. cit., Note 18, pages 880 to 881.

2 Pages 34 to 35, Rollo.

3 Penned by Commissioner Oscar N. Abella, concurred in by
Commissioners Daniel M. Lucas, Jr. and Domingo Zapanta.
4 Page 6, Petition; Page 28, Rollo.

120

On September 13, 1988, the Vice-Mayor of Manila and Presiding Officer of the City
Council of Manila, the Hon. Danilo R. Lacuna, submitted to the Civil Service
Commission, through the Regional Director of the National Capital Region, the
appointments of nineteen officers and employees in the Executive Staff of the Office
of the Presiding Officer, City Council of Manila, pursuant to the provisions of Section
15, of said Republic Act No. 409, as amended, which reads:
Sec. 15. . . . .
xxx

xxx

xxx

. . . The Board shall appoint and the Vice Mayor shall sign all appointments
of the other employees of the Board.1

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 87119

April 16, 1991

HON. GEMILIANO C. LOPEZ, JR., in his capacity as City Mayor of

Manila, petitioner,
vs.
THE CIVIL SERVICE COMMISSION, HON. DANILO R. LACUNA, in his capacity
as Vice-Mayor and Presiding Officer of the City Council of Manila, and THE CITY
COUNCIL OF MANILA, respondents.
The City Legal Officer for petitioner.
Lacuna, Bello & Associates Law Offices for Danilo B. Lacuna.

SARMIENTO, J.:
The only question in this petition, denominated as a "direct appeal under Article VIII,
Section 5 (2) (e), of the Constitution and Section 9(3), of Batas Blg. 129," is whether
the City Council of Manila still has the power to appoint Council officers and
employees under Republic Act No. 409, otherwise known as the Charter of the City of
Manila, or whether the power is now vested with the City Mayor pursuant to Republic
Act No. 5185, the Decentralization Law, and Batas Blg. 337, the Local Government
Code. The facts are as follows:

The City Budget Officer of Manila later sought from the Personnel Bureau of the
Mayor's office "comment and/or recommendation" on whether the payroll of the newly
appointed employees of the City Council may be paid on the basis of appointments
signed by the Vice-Mayor.2 The Personnel Bureau then forwarded the query to the
City Legal Officer who, in a 3rd endorsement dated September 19, 1988,3 rendered
an opinion that the proper appointing officer is the City Mayor and not the City
Council. This opinion was transmitted by the Secretary to the City Mayor to the
Commission.
On February 1, 1989, the Commission promulgated Resolution No. 89-075, and held
that contrary to the opinion of the City Legal Officer, it is the City Council to which the
appointing power is vested. The dispositive portion thereof is as follows:
WHEREFORE, foregoing premises considered, the Commission resolved to
rule, as it hereby rules that the proper appointing authority of the officers and
employees of the City Council of Manila is the City Council and the signatory
of individual appointments thus issued is the City Vice-Mayor of Manila.4
As we stated at the outset, the issue is whether or not Section 15, supra, of the
Charter of the City of Manila has been repealed, and as a result, the City Council can
no longer tender appointments to Council positions.
As we also mentioned at the outset, this petition has been brought by way of a "direct
appeal" from the resolution of the Civil Service Commission pursuant supposedly to
the Constitution and Batas Blg. 129. In this connection, we have held that no appeal
lies from the decisions of the Civil Service Commission, and that parties aggrieved
thereby may proceed to this Court alone on certiorari under Rule 65 of the Rules of
Court, within thirty days from receipt of a copy thereof, pursuant to Section 7, Article
IX, of the Constitution. We quote:
Sec. 7. Unless otherwise provided by this Constitution or by law, any
decision, order, or ruling of each Commission may be brought to the

121

Supreme Court on certiorari by the aggrieved party within thirty days from
receipt of a copy thereof.5
As we held, the Civil Service Commission, under the Constitution, is the single arbiter
of all contests relating to the civil service and as such, its judgments are unappealable
and subject only to this Court's certiorari jurisdiction.6
The petitioner's omission notwithstanding, we are nevertheless accepting the petition
and because of the important public interest it involves, we are considering it as a
petition for certiorari under Rule 65, considering further that it was filed within the
thirty-day period.7
As the petitioner contends, Section 15 of Republic Act No. 409 as amended has
supposedly been repealed by Republic Act No. 5185, specifically, Section 4 thereof,
which we quote, in part:
xxx

xxx

xxx

The City Assessor, City Agriculturist, City Chief of Police and City Chief of
Fire Department and other heads of offices entirely paid out of city funds and
their respective assistants or deputies shall, subject to civil service law, rules
and regulations, be appointed by the City Mayor: Provided, however, That
this section shall not apply to Judges, Auditors, Fiscals, City Superintendents
of Schools, Supervisors, Principals, City Treasurers, City Health Officers and
City Engineers.
xxx

xxx

xxx

All other employees, except teachers, paid out of provincial, city or municipal
general funds, road and bridge funds, school funds, and other local funds,
shall, subject to civil service law, rules and regulations, be appointed by the
Provincial Governor, City or Municipal Mayor upon recommendation of the
office head concerned. . . .8

(h) Appoint, in accordance with civil service law, rules and regulations, all
officers and employees of the city, whose appointments are not otherwise
provided in this Code;9
There is no doubt that Republic Act No. 409, which provides specifically for the
organization of the Government of the City of Manila, is a special law, and whereas
Republic Act No. 5185 and Batas Blg. 337, which apply to municipal governments in
general, are general laws. As the Solicitor General points out, and we agree with him,
it is a canon of statutory construction that a special law prevails over a general law
regardless of their dates of passage and the special is to be considered as
remaining an exception to the general.10
So also, every effort must be exerted to avoid a conflict between statutes. If
reasonable construction is possible, the laws must be reconciled in that manner.
Repeals of laws by implication moreover are not favored, and the mere repugnancy
between two statutes should be very clear to warrant the court in holding that the later
in time repeals the other.11
Why a special law prevails over a general law has been put by the Court as follows:
xxx

xxx

xxx

. . . The Legislature consider and make provision for all the circumstances of
the particular case.1wphi1 The Legislature having specially considered all
of the facts and circumstances in the particular case in granting a special
charter, it will not be considered that the Legislature, by adopting a general
law containing provisions repugnant to the provisions of the charter, and
without making any mention of its intention to amend or modify the charter,
intended to amend, repeal, or modify the special act. (Lewis vs. Cook
County, 74 I11. App., 151; Philippine Railway Co. vs. Nolting 34 Phil., 401.)12
In one case, we held that Republic Act No. 5185 did not divest the Mayor of Manila of
his power under the Charter of the City of Manila to approve the city budget.13

and by Batas Blg. 337, we likewise quote:

Sec. 171. Chief Executive; Compensation, Powers, and Duties.
xxx

xxx

xxx

xxx

xxx

xxx

(2) The city mayor shall:

We also agree with the Civil Service Commission that the provisions of Republic Act
No. 5185, giving mayors the power to appoint all officials "entirely paid out by city
funds14 and those of Batas Blg. 337, empowering local executives with the authority to
appoint "all officers and employees of the city,"15 were meant not to vest the city
mayors per se with comprehensive powers but rather, to underscore the transfer of
the power of appointment over local officials and employees from the President to the
local governments and to highlight the autonomy of local governments. They were not
meant, however, to deprive the City Council of Manila for instance, its appointing
power granted by existing statute, and after all, that arrangement is sufficient to
accomplish the objectives of both the Decentralization Act and the Local Government
Code, that is, to provide teeth to local autonomy.

122

In the light of an the foregoing, we do not find any grave abuse of discretion
committed by the respondent Commission.

14

Rep. Act No. 5785, sec. 4, supra.

15

Batas Blg. 337, sec. 171(h), supra.

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ.,
concur.
Footnotes
1

Rep. Act No. 409, as amended by Rep. Act No. 1571, sec. 15.

Rollo, 17.

Id., 19.

Id., 27.

CONST., art. IX, sec. 7; Dario v. Mison, G.R. Nos. 81954, 81967, 82023,
83737, 85310, 85335, 86241, August 8, 1989, 176 SCRA 84.
6

Dario v. Mison, supra.

The petitioners received a copy of Resolution No. 89-075 of the Civil

Service Commission on February 15, 1989 (rollo, id., 5); the petition was
filed on March 2, 1989.
8

Rep. Act No. 5185, sec. 4.

Batas Blg. 337, sec. 171(h).

10

Butuan Sawmill, Inc. v. City of Butuan, No. L-21516, April 29, 1966, 16
SCRA 755.
11

Manila Railroad Co. v. Rafferty, 40 Phil. 224, 228 (1919).

12

Supra, 230.

13

Cabigao v. Villegas, No. L-31463, August 31, 1970, 34 SCRA 632.

123

Constabulary conducted a "test buy" at San Sebastian Drug Store and was sold 200
tablets of Valium 10 mg. worth P410.00 without a doctor's prescription.. 5

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-55230 November 8, 1988
HON. RICHARD J. GORDON, in his capacity as City Mayor of
Olongapo, petitioner,
vs.
JUDGE REGINO T. VERIDIANO II and Spouses EDUARDO and ROSALINDA
YAMBAO, respondents.

CRUZ, J.:
The issue before the Court is the conflict between the Food and Drug Administration
and the mayor of Olongapo City over the power to grant and revoke licenses for the
operation of drug stores in the said city. While conceding that the FDA possesses
such power, the mayor claims he may nevertheless, in the exercise of his own power,
prevent the operation of drug stores previously permitted by the former.
There are two drug stores involved in this dispute, to wit, the San Sebastian Drug
Store and the Olongapo City Drug Store, both owned by private respondent
Rosalinda Yambao. 1 They are located a few meters from each other in the same
building on Hospital Road, Olongapo City. 2 They were covered by Mayor's Permits
Nos. 1954 and 1955, respectively, issued for the year 1980, 3 and licenses to operate
issued by the FDA for the same year. 4
This case arose when on March 21, 1980, at about 5:00 o'clock in the afternoon, a
joint team composed of agents from the FDA and narcotics agents from the Philippine

A report on the operation was submitted to the petitioner, as mayor of Olongapo City,
on April 9, 1980. 6 On April 17, 1980, he issued a letter summarily revoking Mayor's
Permit No. 1954, effective April 18, 1980, "for rampant violation of R.A. 5921,
otherwise known as the Pharmacy Law and R.A. 6425 or the Dangerous Drugs Act of
1972." 7 Later, when the petitioner went to Singapore, Vice-Mayor Alfredo T. de Perio,
Jr. caused the posting of a signboard at the San Sebastian Drug Store announcing its
permanent closure. 8
Acting on the same investigation report of the "test-buy," and after hearing, FDA
Administrator Arsenio Regala, on April 25, 1980, directed the closure of the drug store
for three days and its payment of a P100.00 fine for violation of R.A. No. 3720. He
also issued a stern warning to Yambao against a repetition of the infraction. 9 On April
29, 1980, the FDA lifted its closure order after noting that the penalties imposed had
already been discharged and allowed the drug store to resume operations. 10
On April 30, 1980, Yambao, through her counsel, wrote a letter to the petitioner
seeking reconsideration of the revoca tion of Mayor's Permit No. 1954. 11 On May 7,
1980, having received no reply, she and her husband filed with the Regional Trial
Court of Olongapo City a complaint for mandamus and damages, with a prayer for a
writ of preliminary injunction, against the petitioner and Vice-Mayor de Perio. 12
On the same date, Yambao requested permission from the FDA to exchange the
locations of the San Sebastian Drug Store and the Olongapo City Drug Store for
reasons of "business preference." 13
The request was granted. 14 But when informed of this action, the petitioner, in a
letter to the private respondent dated May 13, 1980, disapproved the transfers and
suspended Mayor's Permit No. 1955 for the Olongapo City Drug Store. 15
The Yambaos then filed on May 15, 1980, a supplemental complaint questioning the
said suspension and praying for the issuance of a preliminary writ of prohibitory
injunction. 16 On the same day, the respondent judge issued an order directing the
maintenance of the status quo with respect to the Olongapo City Drug Store pending
resolution of the issues. 17
On May 21, 1980, the petitioner wrote the FDA requesting reconsideration of its order
of April 29, 1980, allowing resumption of the operation of the San Sebastian Drug
Store. 18 The request was denied by the FDA in its reply dated May 27, 1980. 19

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A motion for reconsideration of the status quo order had earlier been filed on May 1,
1980 by the petitioner. After a joint hearing and an exchange of memoranda thereon,
the respondent judge issued an order on July 16, 1980, 20 the dispositive portion of
which read as follows:
WHEREFORE, the defendants' motion for reconsideration of the
status quo order dated May 15, 1980, is hereby DENIED and the
letter of the defendant city mayor dated April 17, 1980, for the
revocation of Mayor's Permit No. 1954 for the San Sebastian Drug
Store is declared null and void.
Accordingly, a writ of preliminary prohibitory injunction is heretofore
issued enjoining defendants from doing acts directed towards the
closure of the San Sebastian Drug Store and the suspension of the
Olongapo City Drug Store both situated at Hospital Road,
Olongapo City. Further, the signboard posted at San Sebastian
Drug Store by the defendants is ordered removed in order that the
said drug store will resume its normal business operation.
The hearing of the main petition for damages is set on August 14,
1980, at 1:30 o'clock in the afternoon.
The petitioner's motion for reconsideration of the above stated order was denied in an
order dated September 4, 1980. 21 The petitioner thereupon came to this Court in
this petition for certiorari and prohibition with preliminary, injunction, to challenge the
aforesaid orders.
We issued a temporary restraining order against the respondent judge on October 2
7, 1980, 22 but lifted it on December 10, 1980, for failure of the petitioner to file his
comment on the private respondents' motion to lift the said order and/or for issuance
of a counter restraining order. 23
First, let us compare the bases of the powers and functions respectively claimed by
the FDA and the petitioner as mayor of Olongapo City.

The task of drug inspection was originally lodged with the Board of Pharmaceutical
Examiners pursuant to Act 2762, as amended by Act 4162. By virtue of Executive
Order No. 392 dated January 1, 1951 (mandating reorganization of various
departments and agencies), this was assumed by the Department of Health and
exercised through an office in the Bureau of Health known as the Drug Inspection
Section. This section was empowered "to authorize the opening of pharmacies, drug
stores and dispensaries, and similar establishments after inspection by persons
authorized by law."
The Food and Drug Administration was created under R.A. No. 3720 (otherwise
known as the Food, Drug and Cosmetic Act), approved on June 22, 1963, and vested
with all drug inspection functions in line with "the policy of the State to insure safe and
good quality supply of food, drug and cosmetics, and to regulate the production, sale
and traffic of the same to protect the health of the people." Section 5 of this Act
specifically empowers it:
(e) to issue certificates of compliance with technical requirements to
serve as basis for the issuance of license and spotcheck for
compliance with regulations regarding operation of food, drug and
cosmetic manufacturers and establishments.
For a more effective exercise of this function, the Department of Health issued on
March 5, 1968, Administrative Order No. 60, series of 1968, laying down the
requirements for the application to be filed with the FDA for authorization to operate or
establish a drug establishment. The order provides that upon approval of the
application, the FDA shall issue to the owner or administrator of the drug store or
similar establishment a "License to Operate" which "shall be renewed within the first 3
months of each year upon payment of the required fees." This license contains the
following reservation:
However, should during the period of issue, a violation of any
provisions of the Food, Drug and Cosmetic Act and/or the
regulations issued thereunder be committed, this License shall be
subject to suspension or revocation.
When the drug addiction problem continued to aggravate, P.D. No. 280 was
promulgated on August 27, 1973, to give more teeth to the powers of the FDA, thus:
Section 1. Any provision of law to the contrary notwithstanding, the
Food and Drug Administrator is hereby authorized to order the
closure, or suspend or revoke the license of any drug establishment
which after administrative investigation is found guilty of selling or

125

dispensing drugs medicines and other similar substances in

violation of the Food, Drug and Cosmetic Act, and Dangerous
Drugs Act of 1972, or other laws regulating the sale or dispensation
of drugs, or rules and regulations issued pursuant thereto.
Sec. 2. The administrative investigation shall be summary in
character. The owner of the drug store shall be given an opportunity
to be heard. (P.D. 280, emphasis supplied.)
For his part, the petitioner, traces his authority to the charter of Olongapo City, R.A.
No. 4645, which inter aliaempowers the city mayor under Section 10 thereof:
k. to grant or refuse municipal licenses to operate or permits of all
classes and to revoke the same for violation of the conditions upon
which they were granted, or if acts prohibited by law or city
ordinances are being committed under protection of such licenses
or in the premises in which the business for which the same have
been granted is carried on, or for any other good reason of general
interest.
The charter also provides, in connection with the powers of the city health officer, that:
Sec. 6 (k). He and his representatives shall have the power to
arrest violators of health laws, ordinances, rules and regulations
and to recommend the revocation or suspension of the permits of
the different establishments to the City Mayor for violation of health
laws, ordinances, rules and regulations. (Emphasis supplied.)
An application to establish a drug store in Olongapo City must be filed with the Office
of the Mayor and must show that the applicant has complied with the existing
ordinances on health and sanitation, location or zoning, fire or building, and other
local requirements. If the application is approved, the applicant is granted what is
denominated a "Mayor's Permit" providing inter alia that it "is valid only at the place
stated above and until (date), unless sooner revoked for cause." 24
Courts of justice, when confronted with apparently conflicting statutes, should
endeavor to reconcile the same instead of declaring outright the invalidity of one as
against the other. Such alacrity should be avoided. The wise policy is for the judge to
harmonize them if this is possible, bearing in mind that they are equally the handiwork
of the same legislature, and so give effect to both while at the same time also
according due respect to a coordinate department of the government. It is this policy

the Court will apply in arriving at the interpretation of the laws above-cited and the
conclusions that should follow therefrom.
A study of the said laws will show that the authorization to operate issued by the FDA
is a condition precedent to the grant of a mayor's permit to the drug store seeking to
operate within the limits of the city. This requirement is imperative. The power to
determine if the opening of the drug store is conformable to the national policy and
the laws on the regulation of drug sales belongs to the FDA. Hence, a permit issued
by the mayor to a drug store not previously cleared with and licensed by the said
agency will be a nullity.
This is not to say, however, that the issuance of the mayor's permit is mandatory once
it is shown that the FDA has licensed the operation of the applicant drug store. This is
not a necessary consequence. For while it may appear that the applicant has
complied with the pertinent national laws and policies, this fact alone will not signify
compliance with the particular conditions laid down by the local authorities like zoning,
building, health, sanitation, and safety regulations, and other municipal ordinances
enacted under the general welfare clause. This compliance still has to be ascertained
by the mayor if the permit is to be issued by his office. Should he find that the local
requirements have not been observed, the mayor must then, in the exercise of his
own authority under the charter, refuse to grant the permit sought.
The power to approve a license includes by implication,. even if not expressly
granted, the power to revoke it. By extension, the power to revoke is limited by the
authority to grant the license, from which it is derived in the first place. Thus, if the
FDA grants a license upon its finding that the applicant drug store has complied with
the requirements of the general laws and the implementing administrative rules and
regulations, it is only for their violation that the FDA may revoke the said license. By
the same token, having granted the permit upon his ascertainment that the conditions
thereof as applied particularly to Olongapo City have been complied with, it is only for
the violation of such conditions that the mayor may revoke the said permit.
Conversely, the mayor may not revoke his own permit on the ground that the
compliance with the conditions laid down and found satisfactory by the FDA when it
issued its license is in his own view not acceptable. This very same principle also
operates on the FDA. The FDA may not revoke its license on the ground that the
conditions laid down in the mayor's permit have been violated notwithstanding that no
such finding has been made by the mayor.
In the present case, the closure of the San Sebastian Drug Store was ordered by the
FDA for violation of its own conditions, which it certainly had the primary power to
enforce. By revoking the mayor's permit on the same ground for which the San

126

Sebastian Drug Store had already been penalized by the FDA, the mayor was in
effect reversing the derision of the latter on a matter that came under its jurisdiction.
As the infraction involved the pharmacy and drug laws which the FDA had the direct
responsibility to execute, the mayor had no authority to interpose his own findings on
the matter and substitute them for the decision already made by the FDA.
It would have been different if the offense condoned by the FDA was a violation of,
say, a city ordinance requiring buildings to be provided with safety devices or
equipment, like fire extinguishers. The city executive may ignore such condonation
and revoke the mayor's permit just the same. In this situation, he would be acting
properly because the enforcement of the city ordinance is his own prerogative. In the
present case, however, the condition allegedly violated related to a national law, not
to a matter of merely local concern, and so came under the 'jurisdiction of the FDA.
Settled is the rule that the factual findings of administrative authorities are accorded
great respect because of their acknowledged expertise in the fields of specialization
to which they are assigned. 25 Even the courts of justice, including this Court, are
concluded by such findings in the absence of a clear showing of a grave abuse of
discretion, which is not present in the case at bar. For all his experience in the
enforcement of city ordinances, the petitioner cannot claim the superior aptitudes of
the FDA in the enforcement of the pharmacy and drug addiction laws. He should
therefore also be prepared, like the courts of justice themselves, to accept its
decisions on this matter.
The petitioner magnifies the infraction committed by the San Sebastian Drug Store
but the FDA minimizes it. According to the FDA Administrator, Valium is not even a
prohibited drug, which is why the penalty imposed was only a 3-day closure of the
drug store and a fine of P100.00. 26 Notably, the criminal charges filed against the
private respondent for the questioned transaction were dismissed by the fiscal's
office. 27
It is also worth noting that the San Sebastian Drug Store was penalized by the FDA
only after a hearing held on April 25, 1980, at which private respondent Yambao,
assisted by her lawyer-husband, appeared and testified. 28 By contrast, the
revocation of the mayor's permit was communicated to her in a letter 29 reading
simply as follows:
April 17, 1980
Rosalinda Yambao
c/o San Sebastian Drug Store
Hospital Road, Olongapo City

Madame:
Based on a report submitted by PC Major Virtus V. Gil, Chief 3
RFO, Dis. B, Task Force "Bagong Buhay," "you are rampantly
violating the provisions of Republic Act 5921 otherwise known as
the 'Pharmacy Law."
Aside from this, there is evidence that you are dispensing regulated
drugs contrary to the provisions of R.A. 6425 otherwise known as
the Dangerous Drugs Act of 1972.
In view of the above, Mayors Permit No. 1954 heretofore issued in
your name for the operation of a drug store (San Sebastian) at the
Annex Building of the Fil-Am (IYC), along Hospital Road, this City,
is REVOKED effective April 18, 1980.
PLEASE BE GUIDED ACCORDINGLY.
Very truly yours,
(SGD.) RICHARD J. GORDON
City Mayor
If only for the violation of due process which is manifest from this letter, the mayor's
arbitrary action can be annulled.
The indefinite suspension of the mayor's permit for Olongapo City Drug Store was
based on the transfer thereof to the site of the San Sebastian Drug Store as approved
by the FDA but without permission from the petitioner. On this matter, the Court
believes that the final decision rested with the mayor. The condition violated related
more to the location in Olongapo City of business establishments in general than to
the regulation of drug stores in particular. It therefore came under the petitioner's
jurisdiction.
The FDA would have the right to disapprove the site of the drug store only if it would
impair the health or other interests of the customers in contravention of the national
laws or policies, as where the drug store is located in an unsanitary site. But the local
executive would have reason to object to the location, even if approved by the FDA,
where it does not conform to, say, a zoning ordinance intended to promote the
comfort and convenience of the city residents.

127

The reason given by the petitioner in disapproving the transfer was violation of
Mayor's Permit No. 1955, which by its terms was valid only at the place stated
therein. In the letter of May 13, 1980 30 the private respondent was clearly informed
that for violation of the condition of Mayor's Permit No. 1955 granting her the of
operating the Olongapo City Drug Store at No. 1-B Fil-Am Bldg., Hospital Road, the
said permit was "hereby suspended." We find that that reason was valid enough. The
permit clearly allowed the drug store to operate in the address given and not
elsewhere. No hearing was necessary because the transfer without the mayor's
permission is not disputed and was in fact impliedly admitted by the private
respondent.
If the private respondent wanted to transfer her drug store, what she should have
done was to secure the approval not only of the FDA but also, and especially, of the
mayor. Merely notifying the petitioner of the change in the location of her drug stores
as allowed by the FDA was not enough. The FDA had no authority to revoke that
particular condition of the mayor's permits indicating the sites of the two drug stores
as approved by the mayor in the light of the needs of the city. Only the mayor could.
We assume that Mayor's Permit No. 1954 could also have been validly suspended for
the same reason (as the sites of the two drug stores were exchanged without
amendment of their respective permits) were it not for the fact that such permit was
revoked by the petitioner on the more serious ground of violation of the Pharmacy
Law and the Dangerous Drugs Act of 1972.
It is understood, however, that the suspension should be deemed valid only as the
two drug stores have not returned to their original sites as specified in their respective
permits. Indefinite suspension will amount to a permanent revocation, which will not
be a commensurate penalty with the degree of the violation being penalized.
The Court adds that denial of the request for transfer, if properly made by the private
respondents, may not be validly denied by the judge in the absence of a clear
showing that the transfer sought will prejudice the residents of the city. As the two
drug stores are only a few meters from each other, and in the same building, there
would seem to be no reason why the mere exchange of their locations should not be
permitted. Notably, the location of the two drug stores had previously been approved
in Mayor's Permit Nos. 1954 and 1955.
Our holding is that the petitioner acted invalidly in revoking Mayor's Permit No. 1954
after the FDA had authorized the resumption of operations of the San Sebastian Drug
Store following the enforcement of the penalties imposed upon it. However, it was
competent for the petitioner to suspend Mayor's Permit No. 1955 for the transfer of
the Olongapo City Drug Store in violation of the said permit. Such suspension should

nevertheless be effective only pending the return of the drug store to its authorized
original site or the eventual approval by the mayor of the requested transfer if found to
be warranted.
The petitioner is to be commended for his zeal in the promotion of the campaign
against drug addiction, which has sapped the vigor and blighted the future of many of
our people, especially the youth. The legal presumption is that he acted in good faith
and was motivated only by his concern for the residents of Olongapo City when he
directed the closure of the first drug store and the suspension of the permit of the
other drug store. It appears, though, that he may have overreacted and was for this
reason properly restrained by the respondent judge.
WHEREFORE, the challenged Orders of July 6, 1980 and September 4, 1980, are
MODIFIED in the sense that the suspension of Mayor's Permit No. 1955 shall be
considered valid but only until the San Sebastian Drug Store and the Olongapo City
Drug Store return to their original sites as specified in the FDA licenses and the
mayor's permits or until the request for transfer, if made by the private respondents, is
approved by the petitioner. The rest of the said Orders are AFFIRMED, with costs
against the petitioner.
SO ORDERED.
Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea, JJ., concur
Footnotes
1 Rollo, p. 47.
2 Ibid.
3 Id.
4 Id., P. 96.
5 Id., pp. 48,15.
6 Id.
7 Id., p. 23.
8 Id., p. 48.

128

9 Id., pp, 24-26.

27 Ibid., pp. 234-242.

10 Id., p. 26.

28 Id., p. 14.

11 Id., pp. 27-28.

29 Id., p. 23.

12 Id., pp. 14-21.

30 Id., P. 36.

13 Id., p. 34.

Republic of the Philippines

SUPREME COURT
Manila

14 Id

EN BANC

15 pp. 36-37.
16 Id., pp. 29-33.

G.R. No. L-23052

17 Id., p. 38.

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.

18 Id., pp. 98-100.

19 Id., p. 104.
20 Id., pp. 47-54.
21 Id., P. 64.
22 Id., pp. 65-67.
23 Id., pp. 160-162.
24 Id., p. 211.
25 Tagum Doctors Enterprises v. Gregorio Apsay, et al., G.R. No.
81188, August 30,1988; Antonio de Leon v. Heirs of Gregorio
Reyes, et al., 152 SCRA 584; Liangga Bay Logging Co., Inc. v.
Hon. Enage, et al., 152 SCRA 80; Packaging Products Corp. v.
NLRC, 152 SCRA 21 0, and the cases cited therein; Ateneo de
Manila University v. CA, 145 SCRA 100.
26 Rollo, p. 25.

January 29, 1968

City Fiscal Manuel T. Reyes for petitioner.

Sevilla, Daza and Associates for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the
Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone,
waiting for a jeepney to take him down town. After waiting for about five minutes, he
managed to hail a jeepney that came along to a stop. As he stepped down from the
curb to board the jeepney, and took a few steps, he fell inside an uncovered and
unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit
the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to
pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons
came to his assistance and pulled him out of the manhole. One of them brought
Teotico to the Philippine General Hospital, where his injuries were treated, after which
he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico
suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip
apart from an abrasion on the right infra-patella region. These injuries and the allergic
eruption caused by anti-tetanus injections administered to him in the hospital,

129

required further medical treatment by a private practitioner who charged therefor

P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First
Instance of Manila, a complaint which was, subsequently, amended for
damages against the City of Manila, its mayor, city engineer, city health officer, city
treasurer and chief of police. As stated in the decision of the trial court, and quoted
with approval by the Court of Appeals,
At the time of the incident, plaintiff was a practicing public accountant, a
businessman and a professor at the University of the East. He held
responsible positions in various business firms like the Philippine
Merchandising Co., the A.U. Valencia and Co., the Silver Swan
Manufacturing Company and the Sincere Packing Corporation. He was also
associated with several civic organizations such as the Wack Wack Golf
Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila
and the Knights of Rizal. As a result of the incident, plaintiff was prevented
from engaging in his customary occupation for twenty days. Plaintiff has lost
a daily income of about P50.00 during his incapacity to work. Because of the
incident, he was subjected to humiliation and ridicule by his business
associates and friends. During the period of his treatment, plaintiff was under
constant fear and anxiety for the welfare of his minor children since he was
their only support. Due to the filing of this case, plaintiff has obligated himself
to pay his counsel the sum of P2,000.00.
On the other hand, the defense presented evidence, oral and documentary,
to prove that the Storm Drain Section, Office of the City Engineer of Manila,
received a report of the uncovered condition of a catchbasin at the corner of
P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the
same was covered on the same day (Exhibit 4); that again the iron cover of
the same catch basin was reported missing on January 30, 1958, but the
said cover was replaced the next day (Exhibit 5); that the Office of the City
Engineer never received any report to the effect that the catchbasin in
question was not covered between January 25 and 29, 1968; that it has
always been a policy of the said office, which is charged with the duty of
installation, repair and care of storm drains in the City of Manila, that
whenever a report is received from whatever source of the loss of a
catchbasin cover, the matter is immediately attended to, either by
immediately replacing the missing cover or covering the catchbasin with
steel matting that because of the lucrative scrap iron business then
prevailing, stealing of iron catchbasin covers was rampant; that the Office of
the City Engineer has filed complaints in court resulting from theft of said

iron covers; that in order to prevent such thefts, the city government has
changed the position and layout of catchbasins in the City by constructing
them under the sidewalks with concrete cement covers and openings on the
side of the gutter; and that these changes had been undertaken by the city
from time to time whenever funds were available.
After appropriate proceedings the Court of First Instance of Manila rendered the
aforementioned decision sustaining the theory of the defendants and dismissing the
amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals,
except insofar as the City of Manila is concerned, which was sentenced to pay
damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the City of
Manila.
The first issue raised by the latter is whether the present case is governed by Section
4 of Republic Act No. 409 (Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or
property arising from the failure of the Mayor, the Municipal Board, or any
other city officer, to enforce the provisions of this chapter, or any other law or
ordinance, or from negligence of said Mayor, Municipal Board, or other
officers while enforcing or attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which provides:
Provinces, cities and municipalities shall be liable for damages for the death
of, or injuries suffered by, any person by reason of defective conditions of
road, streets, bridges, public buildings, and other public works under their
control or supervision.
Manila maintains that the former provision should prevail over the latter, because
Republic Act 409, is a special law, intended exclusively for the City of Manila,
whereas the Civil Code is a general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is
true that, insofar as its territorial application is concerned, Republic Act No. 409 is a
special law and the Civil Code a general legislation; but, as regards the subjectmatter of the provisions above quoted, Section 4 of Republic Act 409 establishes a
general rule regulating the liability of the City of Manila for: "damages or injury to
persons or property arising from the failure of" city officers "to enforce the provisions

130

of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor,
Municipal Board, or other officers while enforcing or attempting to enforce said
provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a
particular prescription making "provinces, cities and municipalities . . . liable for
damages for the death of, or injury suffered by any person by reason" specifically
"of thedefective condition of roads, streets, bridges, public buildings, and otherpublic works under their control or supervision." In other words, said section 4 refers
to liability arising from negligence, in general, regardless of the object thereof,
whereas Article 2189 governs liability due to "defective streets," in particular. Since
the present action is based upon the alleged defective condition of a road, said Article
2189 is decisive thereon.
It is urged that the City of Manila cannot be held liable to Teotico for damages: 1)
because the accident involving him took place in a national highway; and 2) because
the City of Manila has not been negligent in connection therewith.
As regards the first issue, we note that it is based upon an allegation of fact not made
in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his
amended complaint, that his injuries were due to the defective condition of a street
which is "under the supervision and control" of the City. In its answer to the amended
complaint, the City, in turn, alleged that "the streets aforementioned were and have
been constantly kept in good condition and regularly inspected and the storm drains
and manholes thereof covered by the defendant City and the officers concerned" who
"have been ever vigilant and zealous in the performance of their respective functions
and duties as imposed upon them by law." Thus, the City had, in effect, admitted that
P. Burgos Avenue was and isunder its control and supervision.
Moreover, the assertion to the effect that said Avenue is a national highway was
made, for the first time, in its motion for reconsideration of the decision of the Court of
Appeals. Such assertion raised, therefore, a question of fact, which had not been put
in issue in the trial court, and cannot be set up, for the first time, on appeal, much less
after the rendition of the decision of the appellate court, in a motion for the
reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability
therein established to attach that the defective roads or streets belong to the
province, city or municipality from which responsibility is exacted. What said article
requires is that the province, city or municipality have either "control or supervision"
over said street or road. Even if P. Burgos Avenue were, therefore, a national
highway, this circumstance would not necessarily detract from its "control or
supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x)
thereof provides:

Sec. 18. Legislative powers. The Municipal Board shall have the following
legislative powers:
xxx

xxx

xxx

(x) Subject to the provisions of existing law to provide for the laying out,
construction and improvement, and toregulate the use of streets, avenues,
alleys, sidewalks, wharves, piers, parks, cemeteries, and other public
places; to provide for lighting, cleaning, and sprinkling of streets and public
places; . . . to provide for the inspection of, fix the license fees for and
regulate the openings in the same for the laying of gas, water, sewer and
other pipes, the building and repair of tunnels, sewers, and drains, and all
structures in and under the same and the erecting of poles and the stringing
of wires therein; to provide for and regulate cross-works, curbs, and gutters
therein, . . . to regulate traffic and sales upon the streets and other public
places; to provide for the abatement of nuisances in the same and punish
the authors or owners thereof; to provide for the construction and
maintenance, and regulate the use, of bridges, viaducts and culverts; to
prohibit and regulate ball playing, kite-flying, hoop rolling, and other
amusements which may annoy persons using the streets and public places,
or frighten horses or other animals; to regulate the speed of horses and
other animals, motor and other vehicles, cars, and locomotives within the
limits of the city; to regulate the lightsused on all vehicles, cars, and
locomotives; . . . to provide for and change the location, grade, and crossing
of railroads, and compel any such railroad to raise or lower its tracks to
conform to such provisions or changes; and to require railroad companies to
fence their property, or any part thereof, to provide suitable protection
against injury to persons or property, and to construct and repair ditches,
drains, sewers, and culverts along and under their tracks, so that the natural
drainage of the streets and adjacent property shall not be obstructed.
This authority has been neither withdrawn nor restricted by Republic Act No. 917 and
Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act
governs the disposition or appropriation of the highway funds and the giving of aid to
provinces, chartered cities and municipalities in the construction of roads and streets
within their respective boundaries, and Executive Order No. 113 merely implements
the provisions of said Republic Act No. 917, concerning the disposition and
appropriation of the highway funds. Moreover, it provides that "the
construction, maintenance and improvement of national primary, national secondary
and national aid provincial and city roads shall be accomplished by the Highway
District Engineers and Highway City Engineers under the supervision of the
Commissioner of Public Highways and shall be financed from such appropriations as

131

may be authorized by the Republic of the Philippines in annual or special

appropriation Acts."
Then, again, the determination of whether or not P. Burgos Avenue is under the
control or supervision of the City of Manila and whether the latter is guilty of
negligence, in connection with the maintenance of said road, which were decided by
the Court of Appeals in the affirmative, is one of fact, and the findings of said Court
thereon are not subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with
costs against the City of Manila. It is so ordered.1wph1.t
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles
and Fernando, JJ., concur.
Footnotes
1

Medical fees P1,400.00; Lost income P350.00; Moral damages

P3,000.00; and Attorney's fees P2,000.00.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

132

G.R. No. L-34024 April 5, 1978

ISIDRO G. ARENAS, petitioner,
vs.
CITY OF SAN CARLOS (PANGASINAN), CITY COUNCIL OF SAN CARLOS CITY,
JUAN C. LOMIBAO, BENJAMIN POSADAS, DOUGLAS D. SORIANO, BASILIO
BULATAO, CATALINA B. CAGAMPAN, EUGENIO RAMOS, FRANCISCO
CANCINO, ALFREDO VINLUAN, MARCELO LAPEA, LEOPOLDO C. TULAGAN
and TORIBIO PAULINO, in their official capacities as City Mayor, City Vice
Mayor, City Councilors and City Treasurer, respectively, and Honorable
Presiding Judge, COURT OF FIRST INSTANCE OF SAN CARLOS CITY
(PANGASINAN), BRANCH X, respondents.
Daniel C. Macaraeg and Alfredo P. Arenas for petitioner.
Abelardo P. Fermin & Antonio Ruiz for respondents.

FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of First Instance of
Pangasinan at San Carlos City, Branch X, dismissing the petition for mandamus in
Civil Case No. SCC-182. 1
In January 1971, Isidro G. Arenas, a City Judge of San Carlos City (Pangasinan),
instituted against the City of San Carlos (Pangasinan), City Council of San Carlos City
and the Mayor, Vice-Mayor, City Councilors and City Treasurer of San Carlos City, a
petition for mandamus in the Court of First Instance of Pangasinan.
The petition alleged that the petitioner, Isidro G. Arenas, is the incumbent City Judge
of San Carlos City (Pangasinan, that the respondent City of San Carlos, from the time
of its creation in 1966 up to the present, has been classified as a third class city; that
Republic Act No. 5967 which became effective on June 21, 1969 provides that the
basic salaries of city judges of second and third class cities shall be P18,000.00 per
annum; that the petitioner was then actually receiving a monthly salary of P1,000.00
of which P350.00 was the share of the national government and P650.00 is the share
of the city government, which salary was P500.00 below the basic monthly salary of a
City Judge of a third class city; that under Republic Act No. 5967, the difference
between the salary actually being received by a City Judge and the basic salary
established in said act shall be paid by the city government; that from June 21, 1969

up to the filing of the petition on January 21, 1971, the petitioner was entitled to a
salary differential of P9,500.00 with the respondent City of San Carlos (Pangasinan);
that the petitioner had repeatedly requested the respondents to enact the necessary
budget and to pay him the said differential but the respondents, without any
justification, whatsoever, refused and still refuse to do the same; that it is the clear
duty of the respondent to enact the necessary budget providing for the payment of the
salary of the petitioner as provided for in Republic Act No. 5967; that petitioner has no
other plain, adequate and speedy remedy except the present action for mandamus;
and that because of the refusal of the respondent to comply with their obligation as
provided in Republic Act No. 5967, the petitioner was forced to engage the services of
a lawyer to file this action for which he was to pay the sum of P2,000.00 as attorney's
fees. 2
In their answer dated February 10, 1971, the respondents admitted and denied the
allegations in the petition and alleged that Republic Act No. 5967 further provides,
among other things, that the salary of the city judge shall at least be one hundred
pesos per month less than that of a city mayor; that the city judge receives an annual
salary of P12,000.00 which is P100.00 per month less than the salary being received
by the city mayor which is P13,200.00 yearly; that assuming the existence of a salary
difference, in view of the provision of Republic Act No. 5967, that the payment of the
salary difference shall be subject to the implementation of the respective city
government, which is discretionary on the part of the city government as to whether it
would or would not implement the payment of the salary difference, and in view of the
financial difficulties of the city which has a big overdraft, the payment of the salary
difference of the city judge cannot be made; and that the petitioner should pay his
lawyer and should not charge the attorney's fees to the respondents who have not
violated any rights of the petitioner. 3
The Court of First Instance of San Carlos City (Pangasinan), Branch X, rendered its
decision dated May 31, 1971 dismissing the petition, without pronouncement as to
costs.
The pertinent portion of Section 7, Republic Act No. 5967 reads:
Sec. 7. Unless the City Charter or any special law provides higher
salary, the city judge in chartered cities shall receive a basic salary
which shall not be lower than the sums as provided thereinbelow:
xxx xxx xxx
(c) For second and third class cities, eighteen thousand pesos per
annum;

133

xxx xxx xxx

For the cities of Baguio, Quezon, Pasay and other first class cities,
the city judge shall receive one thousand pesos less than that fixed
for the district judge, and for second and third class cities, the city
judge shall receive one thousand five hundred pesos less than that
fixed for the district judge, and for other cities, the city judge shall
receive two thousand pesos less than that fixed for the district
judge: Provided, however, That the salary of a city judge shall be at
least one hundred pesos per month less than that of the city mayor.
The petitioner contends that "... if the last proviso of said Section 7 of Republic Act
No. 5967 would be interpreted as the controlling measure for fixing the salary of the
city judges, then the principal provision of Section 7 fixing the salaries of City Judges
at rate very much higher than that of a City Mayor (particularly in the case of second
and third class cities) would be rendered totally useless." The petitioner submitted
"that since the principal intention of the legislature in enacting Section 7 of Republic
Act 5967 is to increase the salary of the city judges, then the last proviso of said
Section 7 should give way to the provisions of said section preceding said proviso."
The record shows that when Republic Act No. 5967 took effect on June 21, 1969, San
Carlos City (Pangasinan) was a third class city; that the petitioner as city judge
received an annual salary of P12,000.00; and that the city mayor of San Carlos City
received an annual salary of P13,200.00 which was exactly P100.00 a month more
than the salary of the city judge.
During the deliberation in the Senate on House Bill No. 17046, which became
Republic Act No. 5967, the following discussion took place:

SENATOR LAUREL. No. Mr. President, I understand the concern of

the distinguished gentleman from Davao. But in this particular
amendment prepared by the distinguished lady from La Union,
this will not require the council to pay it at P100.00 exactly less than
the salary of the mayor. It is just the limit the maximum but
they may fix it at much less than that. That is why the words "at
least" were suggested by the Committee. It need not be exactly just
P100.00 less. It may be P500.00 less.
SENATOR ALMENDRAS. Your Honor, take for example the cities of
Iloilo, Cebu, Bacolod or Manila for that matter. The Mayors are
receiving at least P1,500 a month. Now, under the amendment of
the lady from La Union, Nueva Ecija and
Davao which has already been accepted by the sponsor does
it mean that if the salary of the city mayor is P1,500, the city judges
will receive P1,400?
xxx xxx xxx
SENATOR ANTONINO I would like to call his attention to lines
13 to 20. We presented this amendment because it says here: "For
the cities of Baguio, Quezon, Pasay and other first class cities, the
city judge shall receive one thousand pesos less than that fixed for
the district judge". So it will happen, and my attention was called by
the gentlemen from Iloilo that the city judge win be receiving
more salary than the city mayor. Hence the amendment, Mr.
President.
xxx xxx xxx

SENATOR GANZON Because with the bill as drafted, I recall

that there will be some cities where the city judges will receive
salaries higher than those of the mayors. And in all charters, Your
Honor, the city judge is considered a department head
theoretically, at least, under the mayor. It would not be fair for the
purposes of public administration that a city department head
should receive a salary higher than that of the chief executive of the
city.
SENATOR LAUREL. That point is very well taken, and I would like
to congratulate Your Honor.

I conferred with the gentlemen from Iloilo and Batangas, and this
was their objection. We have proposed this amendment to at least
solve this problem, so that no city judge will be receiving more than
the city mayor. So they will be receiving less than what is proposed
in this Bill. (Vol. IV, No. 61, Senate Congressional Records, pages
2773-2787. (Emphasis supplied .) 4
It is clear from the deliberation of the Senate that the intention of Congress in
enacting Republic Act No. 5967 was that the salary of a city judge should not be
higher than the salary of the city mayor. The saving clause "Provided, however, That
the salary of a city judge shall be at least P100.00 per month less than that of the city

134

mayor" qualifies the earlier provision which fixes the salary of city judges for second
and third class cities at P18,000.00 per annum.
The primary purpose of a proviso is to limit the general language of a statute. When
there is irreconcilable repugnancy between the proviso and the body of the statute the
former is given precedence over the latter on the ground that it is the latest
expression of the intent of the legislature.
Inasmuch as the city mayor of San Carlos City (Pangasinan) was receiving an annual
salary of P13,200.00, the respondents cannot be compelled to provide for an annual
salary of P18,000.00 for the petitioner as city judge of the said city.
WHEREFORE, the petition for review is hereby dismissed and the decision appealed
from is affirmed, without pronouncement as to cost.
SO ORDERED.
Teehankee, (Chairman) Makasiar, Muoz Palma and Guerrero, JJ., concur.

Footnotes
1 Annex "A" of the Petition, Rollo, pp. 21-24.
2 Annex "B" to the Petition, Rollo, pp. 25-30.
3 Annex "C" to the Petition, Rollo, pp. 31-32.
4 Answer, Rollo, pp. 41-42.

135

TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR

RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING
JUDGE, BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL;
GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT CORPORATION and R.
J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA
and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING
JUDGE, BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA;
IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION,
MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE,
BRANCH 70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET
DEVELOPMENT, INC. and CARLITO ARROYO; THE MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE,
BRANCH 163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE
BUSINESS RESOURCES, INC. represented by, MR. TOBIAS REYNALD M.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE,
BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON
FISHING CORP. and ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF
JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE,
BRANCH 78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH
VENTURES, INC., represented by its PRESIDENT ALFONSO PUYAT;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING
JUDGE, BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA;
SEA MAR TRADING CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR
FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS,respondents.

136

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and
profligate consumption and extravagance of the rich or fishing in the murky waters of
the Pasig River and the Laguna Lake or making a clearing in the forest so that he can
produce food for his family, to understand why protecting birds, fish, and trees is more
important than protecting him and keeping his family alive.
How do we strike a balance between environmental protection, on the one hand, and
the individual personal interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and sustainable
development, Republic Act No. 4850 created the "Laguna Lake Development
Authority." This Government Agency is supposed to carry out and effectuate the
aforesaid declared policy, so as to accelerate the development and balanced growth
of the Laguna Lake area and the surrounding provinces, cities and towns, in the act
clearly named, within the context of the national and regional plans and policies for
social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended
certain sections of Republic Act No. 4850 because of the concern for the rapid
expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de
Bay, combined with current and prospective uses of the lake for municipal-industrial
water supply, irrigation, fisheries, and the like. Concern on the part of the Government
and the general public over: the environment impact of development on the water
quality and ecology of the lake and its related river systems; the inflow of polluted
water from the Pasig River, industrial, domestic and agricultural wastes from
developed areas around the lake; the increasing urbanization which induced the
deterioration of the lake, since water quality studies have shown that the lake will
deteriorate further if steps are not taken to check the same; and the floods in
Metropolitan Manila area and the lakeshore towns which will influence the hydraulic
system of Laguna de Bay, since any scheme of controlling the floods will necessarily
involve the lake and its river systems, likewise gave impetus to the creation of the
Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the
national policy to promote, and accelerate the development and
balanced growth of the Laguna Lake area and the surrounding

provinces, cities and towns hereinafter referred to as the region,

within the context of the national and regional plans and policies for
social and economic development and to carry out the development
of the Laguna Lake region with due regard and adequate provisions
for environmental management and control, preservation of the
quality of human life and ecological systems, and the prevention of
undue ecological disturbances, deterioration and pollution. 1
Special powers of the Authority, pertinent to the issues in this case, include:
Sec. 3. Section 4 of the same Act is hereby further amended by
adding thereto seven new paragraphs to be known as paragraphs
(j), (k), (l), (m), (n), (o), and (p) which shall read as follows:
xxx xxx xxx
(j) The provisions of existing laws to the contrary
notwithstanding, to engage in fish production and
other aqua-culture projects in Laguna de Bay and
other bodies of water within its jurisdiction and in
pursuance thereof to conduct studies and make
experiments, whenever necessary, with the
collaboration and assistance of the Bureau of
Fisheries and Aquatic Resources, with the end in
view of improving present techniques and
practices.Provided, that until modified, altered or
amended by the procedure provided in the
following sub-paragraph, the present laws, rules
and permits or authorizations remain in force;
(k) For the purpose of effectively regulating and
monitoring activities in Laguna de Bay,the
Authority shall have exclusive jurisdiction to issue
new permit for the use of the lake waters for any
projects or activities in or affecting the said lake
including navigation, construction, and operation
of fishpens, fish enclosures, fish corrals and the
like, and to impose necessary safeguards for lake
quality control and management and to collect
necessary fees for said activities and
projects: Provided, That the fees collected for
fisheries may be shared between the Authority

137

and other government agencies and political subdivisions in such proportion as may be
determined by the President of the Philippines
upon recommendation of the Authority's
Board: Provided, further, That the Authority's
Board may determine new areas of fishery
development or activities which it may place
under the supervision of the Bureau of Fisheries
and Aquatic Resources taking into account the
overall development plans and programs for
Laguna de Bay and related bodies of
water: Provided, finally, That the Authority shall
subject to the approval of the President of the
Philippines promulgate such rules and
regulations which shall govern fisheries
development activities in Laguna de Bay which
shall take into consideration among others the
following: socio-economic amelioration of
bonafide resident fishermen whether individually
or collectively in the form of cooperatives,
lakeshore town development, a master plan for
fishpen construction and operation, communal
fishing ground for lake shore town residents, and
preference to lake shore town residents in hiring
laborer for fishery projects;
(l) To require the cities and municipalities
embraced within the region to pass appropriate
zoning ordinances and other regulatory
measures necessary to carry out the objectives
of the Authority and enforce the same with the
assistance of the Authority;
(m) The provisions of existing laws to the contrary
notwithstanding, to exercise water rights over
public waters within the Laguna de Bay region
whenever necessary to carry out the Authority's
projects;
(n) To act in coordination with existing
governmental agencies in establishing water
quality standards for industrial, agricultural and

municipal waste discharges into the lake and to

cooperate with said existing agencies of the
government of the Philippines in enforcing such
standards, or to separately pursue enforcement
and penalty actions as provided for in Section 4
(d) and Section 39-A of this Act: Provided, That in
case of conflict on the appropriate water quality
standard to be enforced such conflict shall be
resolved thru the NEDA Board. 2
To more effectively perform the role of the Authority under Republic Act No. 4850, as
though Presidential Decree No. 813 were not thought to be completely effective, the
Chief Executive, feeling that the land and waters of the Laguna Lake Region are
limited natural resources requiring judicious management to their optimal utilization to
insure renewability and to preserve the ecological balance, the competing options for
the use of such resources and conflicting jurisdictions over such uses having created
undue constraints on the institutional capabilities of the Authority in the light of the
limited powers vested in it by its charter, Executive Order No. 927 further defined and
enlarged the functions and powers of the Authority and named and enumerated the
towns, cities and provinces encompassed by the term "Laguna de Bay Region".
Also, pertinent to the issues in this case are the following provisions of Executive
Order No. 927 which include in particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of
Water within the Lake Region: To effectively regulate and monitor
activities in the Laguna de Bay region, the Authority shall have
exclusive jurisdiction to issue permit for the use of all surface water
for any projects or activities in or affecting the said region including
navigation, construction, and operation of fishpens, fish enclosures,
fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay
Region" shall refer to the Provinces of Rizal and Laguna; the Cities
of San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the
towns of Tanauan, Sto. Tomas and Malvar in Batangas Province;
the towns of Silang and Carmona in Cavite Province; the town of
Lucban in Quezon Province; and the towns of Marikina, Pasig,
Taguig, Muntinlupa, and Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to
collect fees for the use of the lake water and its tributaries for all

138

beneficial purposes including but not limited to fisheries, recreation,

municipal, industrial, agricultural, navigation, irrigation, and waste
disposal purpose; Provided, that the rates of the fees to be
collected, and the sharing with other government agencies and
political subdivisions, if necessary, shall be subject to the approval
of the President of the Philippines upon recommendation of the
Authority's Board, except fishpen fee, which will be shared in the
following manner; 20 percent of the fee shall go to the lakeshore
local governments, 5 percent shall go to the Project Development
Fund which shall be administered by a Council and the remaining
75 percent shall constitute the share of LLDA. However, after the
implementation within the three-year period of the Laguna Lake
Fishery Zoning and Management Plan, the sharing will be modified
as follows: 35 percent of the fishpen fee goes to the lakeshore local
governments, 5 percent goes to the Project Development Fund and
the remaining 60 percent shall be retained by LLDA; Provided,
however, that the share of LLDA shall form part of its corporate
funds and shall not be remitted to the National Treasury as an
exception to the provisions of Presidential Decree No. 1234.
(Emphasis supplied)
It is important to note that Section 29 of Presidential Decree No. 813 defined the term
"Laguna Lake" in this manner:

(a) Municipalities shall have the exclusive authority to grant fishery

privileges in the municipal waters and impose rental fees or
charges therefor in accordance with the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals,
oyster, mussel or other aquatic beds or bangus
fry areas, within a definite zone of the municipal
waters, as determined by it; . . . .
(2) Grant privilege to gather, take or catch
bangus fry, prawn fry or kawag-kawag or fry of
other species and fish from the municipal waters
by nets, traps or other fishing gears to marginal
fishermen free from any rental fee, charges or
any other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. . . . .
xxx xxx xxx

Sec 41. Definition of Terms.

(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used
in this Act, the same shall refer to Laguna de Bay which is that area
covered by the lake water when it is at the average annual
maximum lake level of elevation 12.50 meters, as referred to a
datum 10.00 meters below mean lower low water (M.L.L.W). Lands
located at and below such elevation are public lands which form
part of the bed of said lake.
Then came Republic Act No. 7160, the Local Government Code of 1991. The
municipalities in the Laguna Lake Region interpreted the provisions of this law to
mean that the newly passed law gave municipal governments the exclusive
jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160
provides:
Sec. 149. Fishery Rentals, Fees and Charges.

(XI) Subject to the provisions of Book II of this

Code, grant exclusive privileges of constructing
fish corrals or fishpens, or the taking or catching
of bangus fry, prawn fry orkawag-kawag or fry of
any species or fish within the municipal waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue fishing privileges
and fishpen permits. Big fishpen operators took advantage of the occasion to
establish fishpens and fishcages to the consternation of the Authority. Unregulated
fishpens and fishcages, as of July, 1995, occupied almost one-third of the entire lake
water surface area, increasing the occupation drastically from 7,000 hectares in 1990
to almost 21,000 hectares in 1995. The Mayor's permit to construct fishpens and
fishcages were all undertaken in violation of the policies adopted by the Authority on
fishpen zoning and the Laguna Lake carrying capacity.

139

To be sure, the implementation by the lakeshore municipalities of separate

independent policies in the operation of fishpens and fishcages within their claimed
territorial municipal waters in the lake and their indiscriminate grant of fishpen permits
have already saturated the lake area with fishpens, thereby aggravating the current
environmental problems and ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general
public that:
In compliance with the instructions of His Excellency PRESIDENT
FIDEL V. RAMOS given on June 23, 1993 at Pila, Laguna pursuant
to Republic Act 4850 as amended by Presidential Decree 813 and
Executive Order 927 series of 1983 and in line with the policies and
programs of the Presidential Task Force on Illegal Fishpens and
Illegal Fishing, the general public is hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the
Laguna de Bay Region, which were not registered or to which no
application for registration and/or permit has been filed with Laguna
Lake Development Authority as of March 31, 1993 are hereby
declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so
declared as illegal shall be subject to demolition which shall be
undertaken by the Presidential Task Force for Illegal Fishpen and
Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures
declared as illegal shall, without prejudice to demolition of their
structures be criminally charged in accordance with Section 39-A of
Republic Act 4850 as amended by P.D. 813 for violation of the
same laws. Violations of these laws carries a penalty of
imprisonment of not exceeding 3 years or a fine not exceeding Five
Thousand Pesos or both at the discretion of the court.
All operators of fishpens, fishcages and other aqua-culture
structures declared as illegal in accordance with the foregoing
Notice shall have one (1) month on or before 27 October 1993 to
show cause before the LLDA why their said fishpens, fishcages and
other aqua-culture structures should not be demolished/dismantled.

One month, thereafter, the Authority sent notices to the concerned owners of the
illegally constructed fishpens, fishcages and other aqua-culture structures advising
them to dismantle their respective structures within 10 days from receipt thereof,
otherwise, demolition shall be effected.
Reacting thereto, the affected fishpen owners filed injunction cases against the
Authority before various regional trial courts, to wit: (a) Civil Case No. 759-B, for
Prohibition, Injunction and Damages, Regional Trial Court, Branch 70, Binangonan,
Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049,
for Injunction, Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and
Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c) Civil
Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court, Branch 163,
Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M.
Tianco; (d) Civil Case No. 556-M, for Prohibition, Injunction and Damages, Regional
Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil
Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court,
Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f)
Civil Case No. 554-, forCertiorari and Prohibition, Regional Trial Court, Branch 79,
Morong, Rizal, filed by Greenfields Ventures Industrial Corp. and R.J. Orion
Development Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial Court,
Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon Fishing
Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional grounds.
The motions to dismiss were invariably denied. Meanwhile, temporary restraining
order/writs of preliminary mandatory injunction were issued in Civil Cases Nos.
64124, 759 and 566 enjoining the Authority from demolishing the fishpens and similar
structures in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 12086571, were filed by the Authority with this court. Impleaded as parties-respondents are
concerned regional trial courts and respective private parties, and the municipalities
and/or respective Mayors of Binangonan, Taguig and Jala-jala, who issued permits for
the construction and operation of fishpens in Laguna de Bay. The Authority sought the
following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of
preliminary injunction issued in Civil Cases Nos. 64125, 759 and
566;

140

(B) Permanent prohibition against the regional trial courts from

exercising jurisdiction over cases involving the Authority which is a
co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government
Code of 1991) did not repeal, alter or modify the provisions of R.A.
4850, as amended, empowering the Authority to issue permits for
fishpens, fishcages and other aqua-culture structures in Laguna de
Bay and that, the Authority the government agency vested with
exclusive authority to issue said permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were
referred to the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's
consolidated petitions, the Court of Appeals holding that: (A) LLDA is not among
those quasi-judicial agencies of government whose decision or order are appealable
only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial
functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter
insofar as fishing privileges in Laguna de Bay are concerned had been repealed by
the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to
grant permits devolved to and is now vested with their respective local government
units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this
Court charging the following errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY
COMMITTED AN ERROR WHEN IT RULED THAT THE LAGUNA
LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL
AGENCY.
2. THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR WHEN IT RULED THAT R.A. 4850 AS
AMENDED BY P.D. 813 AND E.O. 927 SERIES OF 1983 HAS
BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID RULING
IS CONTRARY TO ESTABLISHED PRINCIPLES AND
JURISPRUDENCE OF STATUTORY CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR WHEN IT RULED THAT THE POWER TO
ISSUE FISHPEN PERMITS IN LAGUNA DE BAY HAS BEEN

DEVOLVED TO CONCERNED (LAKESHORE) LOCAL

GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only issue posed
is: Which agency of the Government the Laguna Lake Development Authority or
the towns and municipalities comprising the region should exercise jurisdiction
over the Laguna Lake and its environs insofar as the issuance of permits for fishery
privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act
No. 4850, the provisions of Presidential Decree No. 813, and Section 2 of Executive
Order No. 927, cited above, specifically provide that the Laguna Lake Development
Authority shall have exclusive jurisdiction to issue permits for the use of all surface
water for any projects or activities in or affecting the said region, including navigation,
construction, and operation of fishpens, fish enclosures, fish corrals and the like. On
the other hand, Republic Act No. 7160, the Local Government Code of 1991, has
granted to the municipalities the exclusive authority to grant fishery privileges in
municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish
corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite
zone of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the
aforementioned laws creating the Laguna Lake Development Authority and granting
the latter water rights authority over Laguna de Bay and the lake region.
The Local Government Code of 1991 does not contain any express provision which
categorically expressly repeal the charter of the Authority. It has to be conceded that
there was no intent on the part of the legislature to repeal Republic Act No. 4850 and
its amendments. The repeal of laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority
constitutes a special law. Republic Act No. 7160, the Local Government Code of
1991, is a general law. It is basic in statutory construction that the enactment of a later
legislation which is a general law cannot be construed to have repealed a special law.
It is a well-settled rule in this jurisdiction that "a special statute, provided for a
particular case or class of cases, is not repealed by a subsequent statute, general in
its terms, provisions and application, unless the intent to repeal or alter is manifest,
although the terms of the general law are broad enough to include the cases
embraced in the special law." 3
Where there is a conflict between a general law and a special statute, the special
statute should prevail since it evinces the legislative intent more clearly than the

141

general statute. The special law is to be taken as an exception to the general law in
the absence of special circumstances forcing a contrary conclusion. This is because
implied repeals are not favored and as much as possible, effect must be given to all
enactments of the legislature. A special law cannot be repealed, amended or altered
by a subsequent general law by mere implication. 4
Thus, it has to be concluded that the charter of the Authority should prevail over the
Local Government Code of 1991.
Considering the reasons behind the establishment of the Authority, which are
environmental protection, navigational safety, and sustainable development, there is
every indication that the legislative intent is for the Authority to proceed with its
mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development
Authority that "Laguna de Bay, like any other single body of water has its own unique
natural ecosystem. The 900 km lake surface water, the eight (8) major river
tributaries and several other smaller rivers that drain into the lake, the 2,920 km
basin or watershed transcending the boundaries of Laguna and Rizal provinces,
greater portion of Metro Manila, parts of Cavite, Batangas, and Quezon provinces,
constitute one integrated delicate natural ecosystem that needs to be protected with
uniform set of policies; if we are to be serious in our aims of attaining sustainable
development. This is an exhaustible natural resource a very limited one which
requires judicious management and optimal utilization to ensure renewability and
preserve its ecological integrity and balance."
"Managing the lake resources would mean the implementation of a national policy
geared towards the protection, conservation, balanced growth and sustainable
development of the region with due regard to the inter-generational use of its
resources by the inhabitants in this part of the earth. The authors of Republic Act
4850 have foreseen this need when they passed this LLDA law the special law
designed to govern the management of our Laguna de Bay lake resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of
management policies where lakeshore local government units exercise exclusive
dominion over specific portions of the lake water. The garbage thrown or sewage
discharged into the lake, abstraction of water therefrom or construction of fishpens by
enclosing its certain area, affect not only that specific portion but the entire 900 km of
lake water. The implementation of a cohesive and integrated lake water resource
management policy, therefore, is necessary to conserve, protect and sustainably
develop Laguna de Bay." 5

The power of the local government units to issue fishing privileges was clearly
granted for revenue purposes. This is evident from the fact that Section 149 of the
New Local Government Code empowering local governments to issue fishing permits
is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading,
"Specific Provisions On The Taxing And Other Revenue Raising Power Of Local
Government Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages
and other aqua-culture structures is for the purpose of effectively regulating and
monitoring activities in the Laguna de Bay region (Section 2, Executive Order No.
927) and for lake quality control and management. 6 It does partake of the nature of
police power which is the most pervasive, the least limitable and the most demanding
of all State powers including the power of taxation. Accordingly, the charter of the
Authority which embodies a valid exercise of police power should prevail over the
Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other aquaculture structures in the Laguna de Bay area. Section 3 of Executive Order No. 927
provides for the proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or not,
it is our holding that, considering the provisions of Section 4 of Republic Act No. 4850
and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court
in Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304, 306,
which we quote:
xxx xxx xxx
As a general rule, the adjudication of pollution cases generally
pertains to the Pollution Adjudication Board (PAB), except in cases
where the special law provides for another forum. It must be
recognized in this regard that the LLDA, as a specialized
administrative agency, is specifically mandated under Republic Act
No. 4850 and its amendatory laws to carry out and make effective
the declared national policy of promoting and accelerating the
development and balanced growth of the Laguna Lake area and
the surrounding provinces of Rizal and Laguna and the cities of
San Pablo, Manila, Pasay, Quezon and Caloocan with due regard
and adequate provisions for environmental management and
control, preservation of the quality of human life and ecological
systems, and the prevention of undue ecological disturbances,
deterioration and pollution. Under such a broad grant of power and

142

authority, the LLDA, by virtue of its special charter, obviously has

the responsibility to protect the inhabitants of the Laguna Lake
region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among
others, to pass upon and approve or disapprove all plans,
programs, and projects proposed by local government
offices/agencies within the region, public corporations, and private
persons or enterprises where such plans, programs and/or projects
are related to those of the LLDA for the development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency
has only such powers as are expressly granted to it by law, it is
likewise a settled rule that an administrative agency has also such
powers as are necessarily implied in the exercise of its express
powers. In the exercise, therefore, of its express powers under its
charter, as a regulatory and quasi-judicial body with respect to
pollution cases in the Laguna Lake region, the authority of the
LLDA to issue a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless" paper agency.
there is no question that the Authority has express powers as a regulatory
and quasi-judicial body in respect to pollution cases with authority to issue a
"cease and desist order" and on matters affecting the construction of illegal
fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The
Authority's pretense, however, that it is co-equal to the Regional Trial Courts
such that all actions against it may only be instituted before the Court of
Appeals cannot be sustained. On actions necessitating the resolution of
legal questions affecting the powers of the Authority as provided for in its
charter, the Regional Trial Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, has not repealed the
provisions of the charter of the Laguna Lake Development Authority, Republic Act No.
4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits
for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of
municipalities situated therein and the authority to exercise such powers as are by its
charter vested on it.

Removal from the Authority of the aforesaid licensing authority will render nugatory its
avowed purpose of protecting and developing the Laguna Lake Region. Otherwise
stated, the abrogation of this power would render useless its reason for being and will
in effect denigrate, if not abolish, the Laguna Lake Development Authority. This, the
Local Government Code of 1991 had never intended to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby
granted, insofar as they relate to the authority of the Laguna Lake Development
Authority to grant fishing privileges within the Laguna Lake Region.
The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC,
Branch 78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan,
Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby
declared null and void and ordered set aside for having been issued with grave abuse
of discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing
permits to construct and operate fishpens, fishcages and other aqua-culture
structures within the Laguna Lake Region, their previous issuances being declared
null and void. Thus, the fishing permits issued by Mayors Isidro B. Pacis, Municipality
of Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega,
Municipality of Jala-jala, specifically, are likewise declared null and void and ordered
cancelled.
The fishpens, fishcages and other aqua-culture structures put up by operators by
virtue of permits issued by Municipal Mayors within the Laguna Lake Region,
specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila
Marine Life Business Resources, Inc., represented by, Mr. Tobias Reynald M.
Tiangco; Greenfield Ventures Industrial Development Corporation and R.J. Orion
Development Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing
Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon
Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc.,
represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern
Lagoon Fishing Corporation, and MINAMAR Fishing Corporation, are hereby
declared illegal structures subject to demolition by the Laguna Lake Development
Authority.
SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.
Separate Opinions

143

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only
like to stress what the decision already states, i.e., that the local government units in
the Laguna Lake area are not precluded from imposing permits on fishery operations
for revenue raising purposes of such local government units. In other words, while the
exclusive jurisdiction to determine whether or not projects or activities in the lake area
should be allowed, as well as their regulation, is with the Laguna Lake Development
Authority, once the Authority grants a permit, the permittee may still be subjected to
an additional local permit or license for revenue purposes of the local government
units concerned. This approach would clearly harmonize the special law, Rep. Act No.
4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also
enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some
level of economic viability.
Footnotes
1 Section 1, PD No. 813.
2 At pages 64-65.
3 Manila Railroad Company vs. Rafferty, 40 Phils. 225;
National Power Corporation vs. Arca, 25 SCRA 935;
Province of Misamis Oriental vs. Cagayan Electric Power
and Light Company, Inc., 181 SCRA 43.
4 Fajardo vs. Villafuerte, G.R. No. 89135, December 21,
1989.
5 Petition, under caption, "Nature of Petition".
6 Section 3 (k), Presidential Decree No. 813.

144

In addition, petitioner received a monthly allowance of P944 from the local funds[2] of
the Municipality of Naujan starting 1984.[3]

EN BANC

[G.R. No. 143596. December 11, 2003]

JUDGE TOMAS C. LEYNES, petitioner, vs. THE COMMISSION ON AUDIT (COA),

HON. GREGORIA S. ONG, DIRECTOR, COMMISSION ON AUDIT and
HON. SALVACION DALISAY, PROVINCIAL AUDITOR, respondents.

On March 15, 1993, the Sangguniang Bayan of Naujan, through Resolution No.
057, sought the opinion of the Provincial Auditor and the Provincial Budget Officer
regarding any budgetary limitation on the grant of a monthly allowance by the
municipality
to
petitioner
judge.
On May
7,
1993,
the Sangguniang Bayan unanimously approved Resolution No. 101 increasing
petitioner judges monthly allowance from P944 to P1,600 (an increase of P656)
starting May 1993.[4] By virtue of said resolution, the municipal government (the
Municipal Mayor and the Sangguniang Bayan) approved a supplemental budget
which was likewise approved by the Sangguniang Panlalawigan and the Office of
Provincial Budget and Management of Oriental Mindoro. In 1994, the Municipal
Government of Naujan again provided for petitioner judges P1,600 monthly allowance
in its annual budget which was again approved by theSangguniang Panlalawigan and
the Office of Provincial Budget and Management of Oriental Mindoro.[5]
On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to
the Municipal Mayor and the Sangguniang Bayan of Naujan directing them to stop the
payment of theP1,600 monthly allowance or RATA to petitioner judge and to require
the immediate refund of the amounts previously paid to the latter. She opined that
the Municipality of Naujan could not grant RATA to petitioner judge in addition to the
RATA the latter was already receiving from the Supreme Court. Her directive was
based on the following:
Section 36, RA No. 7645, General Appropriations Act of 1993

DECISION
CORONA, J.:
Before us is a petition for certiorari under Rule 65 in relation to Section 2, Rule
64 of the Rules of Court, seeking to reverse and set aside the decision [1] dated
September 14, 1999 of the Commission on Audit (COA), affirming the resolution of
COA Regional Director Gregoria S. Ong dated March 29, 1994 which in turn affirmed
the opinion dated October 19, 1993 of the Provincial Auditor of
Oriental Mindoro, Salvacion M. Dalisay. All three denied the grant of P1,600 monthly
allowance to petitioner Judge Tomas C. Leynes by the Municipality of Naujan,
Oriental Mindoro.

FACTUAL ANTECEDENTS
Petitioner Judge Tomas C. Leynes who, at present, is the presiding judge of
the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 40 was formerly
assigned to theMunicipality of Naujan, Oriental Mindoro as the sole presiding judge of
the Municipal Trial Court thereof. As such, his salary and representation and
transportation allowance (RATA) were drawn from the budget of the Supreme Court.

Representation and Transportation Allowances. The following officials and those of

equivalent rank as may be determined by the Department of Budget and
Management (DBM) while in the actual performance of their respective functions are
hereby granted monthly commutable representation and transportation allowances
payable from the programmed appropriations provided for their respective offices, not
exceeding the rates indicated below . . .
National Compensation Circular No. 67 dated January 1, 1992, of the Department of
Budget and Management
Subject: Representation and Transportation Allowances of National Government
Officials and Employees
xxxxxxxxx
4. Funding Source: In all cases, commutable and reimbursable RATA shall be paid
from the amount appropriated for the purpose and other personal services savings of
the agency or project from where the officials and employees covered under this
Circular draw their salaries. No one shall be allowed to collect RATA from more than
one source.[6] (emphasis supplied)

145

Petitioner judge appealed to COA Regional Director Gregoria S. Ong who,

however, upheld the opinion of Provincial Auditor Dalisay and who added that
Resolution No. 101, Series of 1993 of the Sangguniang Bayan of Naujan failed to
comply with Section 3 of Local Budget Circular No. 53 dated September 1, 1993
outlining the conditions for the grant of allowances to judges and other national
officials or employees by the local government units (LGUs). Section 3 of the said
budget circular provides that:
Sec. 3 Allowances. LGUs may grant allowances/additional compensation to the
national government officials/employees assigned to their locality at rates authorized
by law, rules and regulations and subject to the following preconditions:
a. That the annual income or finances of the municipality, city or province
as certified by the Accountant concerned will allow the grant of the
allowances/additional compensation without exceeding the general
limitations for personal services under Section 325 of RA 7160;
b. That the budgetary requirements under Section 324 of RA 7160
including the full requirement of RA 6758 have been satisfied and
provided fully in the budget as certified by the Budget Officer and
COA representative in the LGU concerned;
c. That the LGU has fully implemented the devolution of
personnel/functions in accordance with the provisions of RA 7160;
d. That the LGU has already created mandatory positions prescribed in RA
7160; and
e. That similar allowances/additional compensation are not granted by the
national government to the officials/employees assigned to the
LGU.[7]
Petitioner judge appealed the unfavorable resolution of the Regional Director to
the Commission on Audit. In the meantime, a disallowance of the payment of
the P1,600 monthly allowance to petitioner was issued. Thus he received his P1,600
monthly allowance from the Municipality of Naujan only for the period May 1993 to
January 1994.
On September 14, 1999, the COA issued its decision affirming the resolution of
Regional Director Gregoria S. Ong:
The main issue . . . is whether or not the Municipality of Naujan, Oriental Mindoro can
validly provide RATA to its Municipal Judge, in addition to that provided by the
Supreme Court.

Generally, the grant of (RATA) [sic] to qualified national government officials and
employees pursuant to Section 36 of R.A. 7645 [General Appropriations Act of 1993]
and NCC No. 67 dated 01 January 1992 is subject to the following conditions to wit:
1. Payable from the programmed /appropriated amount and others from
personal services savings of the respective offices where the
officials or employees draw their salaries;
2. Not exceeding the rates prescribed by the Annual General
Appropriations Act;
3. Officials /employees on detail with other offices or assigned to serve
other offices or agencies shall be paid from their parent agencies;
4. No one shall be allowed to collect RATA from more than one source.
On the other hand, the municipal government may provide additional allowances and
other benefits to judges and other national government officials or employees
assigned or stationed in the municipality, provided, that the finances of the
municipality allow the grant thereof pursuant to Section 447, Par. 1 (xi), R.A. 7160,
and provided further, that similar allowance/additional compensation are not granted
by the national government to the official/employee assigned to the local government
unit as provided under Section 3(e) of Local Budget Circular No. 53, dated 01
September 1993.
The conflicting provisions of Section 447, Par. (1) (xi) of the Local Government Code
of 1991 and Section 36 of the General Appropriations Act of 1993 [RA 7645] have
been harmonized by the Local Budget Circular No. 53 dated 01 September 1993,
issued by the Department of Budget and Management pursuant to its powers under
Section 25 and Section 327 of the Local Government Code. The said circular must be
adhered to by the local government units particularly Section 3 thereof which provides
the implementing guidelines of Section 447, Par. (1) (xi) of the Local Government
Code of 1991 in the grant of allowances to national government officials/employees
assigned or stationed in their respective local government units.
Consequently, the subject SB Resolution No. 101 dated 11 May 1993 of
the Sangguniang Bayan of Naujan, Oriental Mindoro, having failed to comply with the
inherent precondition as defined in Section 3 (e). . . is null and void. Furthermore, the
Honorable Judge Tomas C. Leynes, being a national government official is prohibited
to receive additional RATA from the local government fund pursuant to Section 36 of
the General Appropriations Act (R.A. 7645 for 1993) and National Compensation
Circular No. 67 dated 1 January 1992.[8] (emphasis ours)

ASSIGNMENTS OF ERROR

146

Petitioner judge filed a motion for reconsideration of the above decision but it
was denied by the Commission in a resolution dated May 30, 2000. Aggrieved,
petitioner filed the instant petition, raising the following assignments of error for our
consideration:
I
WHETHER OR NOT RESOLUTION NO. 1O1, SERIES OF 1993 OF NAUJAN,
ORIENTAL MINDORO, WHICH GRANTED ADDITIONAL ALLOWANCE TO THE
MUNICIPAL TRIAL JUDGE OF NAUJAN, ORIENTAL MINDORO AND INCREASING
HIS CURRENT REPRESENTATION AND TRAVELLING ALLOWANCE (RATA) TO
AN AMOUNT EQUIVALENT TO THAT RECEIVED MONTHLY BY SANGGUNIANG
MEMBERS IN PESOS: ONE THOUSAND SIX HUNDRED (P1,600.00) EFFECTIVE
1993, IS VALID.
II
WHETHER OR NOT THE POWER OF MUNICIPAL GOVERNMENTS TO GRANT
ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL
GOVERNMENT EMPLOYEES STATIONED IN THEIR MUNICIPALITY IS VERY
EXPLICIT AND UNEQUIVOCAL UNDER THE LOCAL GOVERNMENT CODE OF
1991 PARTICULARLY SECTION 447 IN RELATION TO SECTIONS 17 AND 22
THEREOF.
III
WHETHER OR NOT THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)
CAN, BY THE ISSUANCE OF BUDGET CIRCULARS, RESTRICT A MUNICIPAL
GOVERNMENT FROM EXERCISING ITS GIVEN LEGISLATIVE POWERS OF
PROVIDING ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO NATIONAL
EMPLOYEES STATIONED OR ASSIGNED TO THEIR MUNICIPALITY FOR AS
LONG AS THEIR FINANCES SO ALLOW.
IV
WHETHER OR NOT THE LOCAL GOVERNMENT CODE OF 1991 PARTICULARLY
SECTION 447 (a) (1) (xi) WAS EXPRESSLY OR IMPLIEDLY REPEALED OR
MODIFIED BY REPUBLIC ACT 7645 AND THE GENERAL APPROPRIATIONS ACT
OF 1993.

POSITION OF COA
Respondent
Commission
on
Audit
opposes
the
grant
by
the Municipality of Naujan of
the P1,600
monthly
allowance
to
petitioner
Judge Leynes for the reason that the municipality could not grant RATA to judges in
addition to the RATA already received from the Supreme Court.[9] Respondent bases
its contention on the following:
1. National Compensation Circular No. 67 (hereafter NCC No. 67) dated
January 1, 1992 of the Department of Budget and Management (DBM)
which provides that (a) the RATA of national officials and employees shall
be payable from the programmed appropriations or personal services
savings of the agency where such officials or employees draw their salary
and (b) no one shall be allowed to collect RATA from more than one
source;
2. the General Appropriations Act of 1993 (RA 7645) which provided that the
RATA of national officials shall be payable from the programmed
appropriations of their respective offices and
3. Local Budget Circular No. 53 (hereafter LBC No. 53) dated September 1,
1993 of the DBM which prohibits local government units from granting
allowances to national government officials or employees stationed in their
localities when such allowances are also granted by the national
government or are similar to the allowances granted by the national
government to such officials or employees.[10]

POSITION OF PETITIONER
Petitioner judge, on the other hand, asserts that the municipality is expressly
and unequivocally empowered by RA 7160 (the Local Government Code of 1991) to
enact appropriation ordinances granting allowances and other benefits to judges
stationed in its territory. Section 447(a)(1)(xi) of the Local Government Code of 1991
imposes only one condition, that is, when the finances of the municipal government
allow. The Code does not impose any other restrictions in the exercise of such power
by the municipality. Petitioner also asserts that the DBM cannot amend or modify a
substantive law like the Local Government Code of 1991 through mere budget
circulars. Petitioner emphasizes that budget circulars must conform to, not modify or
amend, the provisions of the law it seeks to implement.[11]

V
WHETHER OR NOT PETITIONER WAS ENTITLED TO RECEIVE THE ADDITIONAL
ALLOWANCES GRANTED TO HIM BY THE MUNICIPALITY OF NAUJAN,
ORIENTAL MINDORO BY VIRTUE OF ITS RESOLUTION NO. 101, SERIES OF
1993.

HISTORY OF GRANT OF
ALLOWANCES TO JUDGES

147

The power of local government units (LGUs) to grant allowances to judges

stationed in their respective territories was originally provided by Letter of Instruction
No. 1418 dated July 18, 1984 (hereafter LOI No. 1418):
WHEREAS, the State is cognizant of the need to maintain the independence of the
Judiciary;
WHEREAS, the budgetary allotment of the Judiciary constitutes only a small
percentage of the national budget;
WHEREAS, present economic conditions adversely affected the livelihood of the
members of the Judiciary;
WHEREAS, some local government units are ready, willing and able to pay additional
allowances to Judges of various courts within their respective territorial jurisdiction;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, do hereby direct:
1. Section 3 of Letter of Implementation No. 96 is hereby amended to
read as follows:
3. The allowances provided in this letter shall be borne
exclusively by the National Government. However,
provincial, city and municipal governments may pay
additional allowances to the members and personnel of
the Judiciary assigned in their respective areas out of
available local funds but not to exceed P1,500.00;
Provided, that in Metropolitan Manila, the city and
municipal governments therein may pay additional
allowances not exceeding P3,000.00. (emphasis ours)[12]
On June 25, 1991, the DBM issued Circular No. 91-7 outlining the guidelines for
the continued receipt of allowances by judges from LGUs:
Consistent with the constitutional provision on the fiscal autonomy of the judiciary and
the policy of the National Government of allowing greater autonomy to local
government units, judges of the Judiciary are hereby allowed to continue to receive
allowances at the same rates which they have been receiving from the Local
Government Units as of June 30, 1989, subject to the following guidelines:
1. That the continuance of payment of subject allowance to the recipient
judge shall be entirely voluntary and non-compulsory on the part of
the Local Government Units;

2. That payment of the above shall always be subject to the availability of

local funds;
3. That it shall be made only in compliance with the policy of nondiminution of compensation received by the recipient judge before
the implementation of the salary standardization;
4. That the subject allowance shall be given only to judges who were
receiving the same as of June 30, 1989 and shall be coterminous with the incumbent judges; and
5. That the subject allowance shall automatically terminate upon transfer of
a judge from one local government unit to another local government
unit. (emphasis ours)
On October 10, 1991, Congress enacted RA 7160, otherwise known as the
Local Government Code of 1991.[13] The power of the LGUs to grant allowances and
other benefits to judges and other national officials stationed in their respective
territories was expressly provided in Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)
(1)(xi) of the Code.
On March 15, 1994, the DBM issued Local Budget Circular No. 55 (hereafter
LBC No. 55) setting out the maximum amount of allowances that LGUs may grant to
judges. For provinces and cities, the amount should not exceed P1,000 and for
municipalities, P700.
On December 3, 2002, we struck down the above circular in Dadole, et al. vs.
COA.[14] We ruled there that the Local Government Code of 1991 clearly provided
that LGUs could grant allowances to judges, subject only to the condition that the
finances of the LGUs allowed it. We held that setting a uniform amount for the grant
of allowances (was) an inappropriate way of enforcing said criterion. Accordingly, we
declared that the DBM exceeded its power of supervision over LGUs by imposing a
prohibition that did not jibe with the Local Government Code of 1991.[15]

ESTABLISHED PRINCIPLES INVOLVED

From the foregoing history of the power of LGUs to grant allowances to judges,
the following principles should be noted:
1. the power of LGUs to grant allowances to judges has long been recognized
(since 1984 by virtue of LOI No. 1418) and, at present, it is expressly and
unequivocally provided in Sections 447, 458 and 468 of the Local
Government Code of 1991;

148

2. the issuance of DBM Circular No. 91-7 dated June 25, 1991 and LBC No. 55
dated March 15, 1994 indicates that the national government recognizes
the power of LGUs to grant such allowances to judges;
3. in

Circular
No.
91-7,
the
national
government
merely provides the guidelines for the continued receipt of allowances by
judges from LGUs while in LBC No. 55, the national government merely
tries to limit the amount of allowances LGUs may grant to judges and

4. in the recent case of Dadole, et al. vs. COA, the Court upheld the
constitutionally enshrined autonomy of LGUs to grant allowances to
judges in any amount deemed appropriate, depending on availability of
funds, in accordance with the Local Government Code of 1991.

OUR RULING
We rule in favor of petitioner judge. Respondent COA erred in opposing the
grant of the P1,600 monthly allowance by the Municipality of Naujan to petitioner
Judge Leynes.

DISCUSSION OF OUR RULING

Section 447(a)(1)(xi) of RA 7160, the Local Government Code of 1991,
provides:
(a) The sangguniang bayan, as the legislative body of the municipality, shall enact
ordinances, approve resolutions and appropriate funds for the general welfare of the
municipality and its inhabitants . . ., and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
municipal government, and in this connection shall:
xxxxxxxxx
(xi) When the finances of the municipal government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and high
school teachers, and other national government officials stationed in or assigned to
the municipality; (emphasis ours)
Respondent COA, however, contends that the above section has been
repealed, modified or amended by NCC No. 67 dated January 1, 1992, RA 7645 (the
General Appropriations Act of 1993) and LBC No. 53 dated September 1, 1993.[16]

It is elementary in statutory construction that an administrative circular cannot

supersede, abrogate, modify or nullify a statute. A statute is superior to an
administrative circular, thus the latter cannot repeal or amend it.[17] In the present
case, NCC No. 67, being a mere administrative circular, cannot repeal a substantive
law like RA 7160.
It is also an elementary principle in statutory construction that repeal of statutes
by implication is not favored, unless it is manifest that the legislature so intended. The
legislature is assumed to know the existing laws on the subject and cannot be
presumed to have enacted inconsistent or conflicting statutes.[18] Respondent COA
alleges that Section 36 of RA 7645 (the GAA of 1993) repealed Section 447(a)(l)(xi) of
RA 7160 (the LGC of 1991). A review of the two laws, however, shows that this was
not so. Section 36 of RA 7645 merely provided for the different rates of RATA payable
to national government officials or employees, depending on their position, and stated
that these amounts were payable from the programmed appropriations of the parent
agencies to which the concerned national officials or employees belonged.
Furthermore, there was no other provision in RA 7645 from which a repeal of Section
447(a) (l)(xi) of RA 7160 could be implied. In the absence, therefore, of any clear
repeal of Section 447(a)(l)(xi) of RA 7160, we cannot presume such intention on the
part of the legislature.
Moreover, the presumption against implied repeal becomes stronger when, as in
this case, one law is special and the other is general. [19] The principle is expressed in
the maximgeneralia specialibus non derogant, a general law does not nullify a
specific or special law. The reason for this is that the legislature, in passing a law of
special character, considers and makes special provisions for the particular
circumstances dealt with by the special law. This being so, the legislature, by
adopting a general law containing provisions repugnant to those of the special law
and without making any mention of its intention to amend or modify such special law,
cannot be deemed to have intended an amendment, repeal or modification of the
latter.[20]
In this case, RA 7160 (the LGC of 1991) is a special law[21] which exclusively
deals with local government units (LGUs), outlining their powers and functions in
consonance with the constitutionally mandated policy of local autonomy. RA 7645 (the
GAA of 1993), on the other hand, was a general law[22] which outlined the share in the
national fund of all branches of the national government. RA 7645 therefore, being a
general law, could not have, by mere implication, repealed RA 7160. Rather, RA 7160
should be taken as the exception to RA 7645 in the absence of circumstances
warranting a contrary conclusion.[23]
The controversy actually centers on the seemingly sweeping provision in NCC
No. 67 which states that no one shall be allowed to collect RATA from more than one
source. Does this mean that judges cannot receive allowances from LGUs in addition
to the RATA from the Supreme Court? For reasons that will hereinafter be discussed,
we answer in the negative.
The pertinent provisions of NCC No. 67 read:
3. Rules and Regulations:

149

3.1.1 Payment of RATA, whether commutable or reimbursable, shall

be in accordance with the rates prescribed for each of the
following officials and employees and those of equivalent
ranks, and the conditions enumerated under the pertinent
sections of the General Provisions of the annual General
Appropriations Act (GAA):
xxxxxxxxx
4. Funding Source:
In all cases, commutable and reimbursable RATA shall be paid from the amount
appropriated for the purpose and other personal services savings of the agency or
project from where the officials and employees covered under this Circular draw their
salaries. No one shall be allowed to collect RATA from more than one
source. (emphasis ours)
In construing NCC No. 67, we apply the principle in statutory construction that
force and effect should not be narrowly given to isolated and disjoined clauses of the
law but to its spirit, broadly taking all its provisions together in one rational view.
[24]
Because a statute is enacted as a whole and not in parts or sections, that is, one
part is as important as the others, the statute should be construed and given effect as
a whole. A provision or section which is unclear by itself may be clarified by reading
and construing it in relation to the whole statute.[25]
Taking NCC No. 67 as a whole then, what it seeks to prevent is the dual
collection of RATA by a national official from the budgets of more than one national
agency. We emphasize that the other source referred to in the prohibition is another
national agency. This can be gleaned from the fact that the sentence no one shall be
allowed to collect RATA from more than one source (the controversial prohibition)
immediately follows the sentence that RATA shall be paid from the budget of the
national agency where the concerned national officials and employees draw their
salaries. The fact that the other source is another national agency is supported by RA
7645 (the GAA of 1993) invoked by respondent COA itself and, in fact, by all
subsequent GAAs for that matter, because the GAAs all essentially provide that (1)
the RATA of national officials shall be payable from the budgets of their respective
national agencies and (2) those officials on detail with other national agencies shall
be paid their RATA only from the budget of their parent national agency:
Section 36, RA 7645, General Appropriations Act of 1993:
Representation and Transportation Allowances. The following officials and those of
equivalent rank as may be determined by the Department of Budget and
Management (DBM) while in the actual performance of their respective functions are
hereby granted monthly commutable representation and transportation allowances
payable from the programmed appropriations provided for their respective offices, not
exceeding the rates indicated below, which shall apply to each type of allowance:

xxxxxxxxx
Officials on detail with other offices, including officials of the Commission of Audit
assigned to serve other offices or agencies, shall be paid the allowance herein
authorized from the appropriations of their parent agencies. (emphasis ours)
Clearly therefore, the prohibition in NCC No. 67 is only against the dual or
multiple collection of RATA by a national official from the budgets of two or more
national agencies. Stated otherwise, when a national official is on detail with another
national agency, he should get his RATA only from his parent national agency and not
from the other national agency he is detailed to.
Since the other source referred in the controversial prohibition is another
national agency, said prohibition clearly does not apply to LGUs like
the Municipality of Naujan. National agency of course refers to the different offices,
bureaus and departments comprising the national government. The budgets of these
departments or offices are fixed annually by Congressin the General Appropriations
Act.[26] An LGU is obviously not a national agency. Its annual budget is fixed by its
own legislative council (Sangguniang Bayan, Panlungsod or Panlalawigan), not by
Congress. Without doubt, NCC No. 67 does not apply to LGUs.
The prohibition in NCC No. 67 is in fact an administrative tool of the DBM to
prevent the much-abused practice of multiple allowances, thus standardizing the
grant of RATA by national agencies. Thus, the purpose clause of NCC No. 67 reads:
This Circular is being issued to ensure uniformity and consistency of actions on
claims for representation and transportation allowance (RATA) which is primarily
granted by law to national government officials and employees to cover expenses
incurred in the discharge or performance of their duties and responsibilities.
By no stretch of the imagination can NCC No. 67 be construed as nullifying the
power of LGUs to grant allowances to judges under the Local Government Code of
1991. It was issued primarily to make the grant of RATA to national officials under the
national budget uniform. In other words, it applies only to the national funds
administered by the DBM, not the local funds of LGUs.
To rule against the power of LGUs to grant allowances to judges as what
respondent COA would like us to do will subvert the principle of local autonomy
zealously guaranteed by the Constitution.[27] The Local Government Code of 1991
was specially promulgated by Congress to ensure the autonomy of local governments
as mandated by the Constitution. By upholding, in the present case, the power
of LGUs to grant allowances to judges and leaving to their discretion the amount of
allowances they may want to grant, depending on the availability of local funds, we
ensure the genuine and meaningful local autonomy of LGUs.
We now discuss the next contention of respondent COA: that the resolution of
the Sangguniang Bayan of Naujan granting the P1,600 monthly allowance to
petitioner judge was null and void because it failed to comply with LBC No. 53
dated September 1, 1993:

150

Sec. 3 Allowances. LGUs may grant allowances/additional compensation to the

national government officials/employees assigned to their locality at rates authorized
by law, rules and regulations and subject to the following preconditions:
a. That the annual income or finances of the municipality, city or
province as certified by the Accountant concerned will
allow the grant of the allowances/additional compensation
without exceeding the general limitations for personal
services under Section 325 of RA 7160;

these respectively provide for the budgetary requirements and general limitations on
the use of provincial, city and municipal funds. Paragraphs (a) to (d) are proper
guidelines for the condition provided in Sections 447, 458 and 468 of the Local
Government Code of 1991 that LGUs may grant allowances to judges if their funds
allow.[33]
Respondent
COA
also
argues
that
Resolution
No.
101
of
the Sangguniang Bayan of Naujan failed to comply with paragraphs (a) to (d) of LBC
No. 53, thus it was null and void.
The argument is misplaced.

b. That the budgetary requirements under Section 324 of RA 7160

including the full requirement of RA 6758 have been
satisfied and provided fully in the budget as certified by the
Budget Officer and COA representative in the LGU
concerned;
c. That the LGU has fully implemented the devolution of
personnel/functions in accordance with the provisions of
RA 7160;
d. That the LGU has already created mandatory positions prescribed
in RA 7160.
e. That similar allowances/additional compensation are not granted
by the national government to the officials/employees
assigned to the LGU.
Though LBC No. 53 of the DBM may be considered within the ambit of the
President's power of general supervision over LGUs,[28] we rule that Section 3,
paragraph (e) thereof is invalid. RA 7160, the Local Government Code of 1991,
clearly provides that provincial, city and municipal governments may grant allowances
to judges as long as their finances allow.Section 3, paragraph (e) of LBC No. 53,
by outrightly prohibiting LGUs from granting allowances to judges whenever such
allowances are (1) also granted by the national government or (2) similar to the
allowances granted by the national government, violates Section 447(a)(l)(xi) of the
Local Government Code of 1991.[29] As already stated, a circular must conform to the
law it seeks to implement and should not modify or amend it.[30]
Moreover, by prohibiting LGUs from granting allowances similar to the
allowances granted by the national government, Section 3 (e) of LBC No. 53
practically prohibits LGUs from granting allowances to judges and, in effect, totally
nullifies their statutory power to do so. Being unduly restrictive therefore of the
statutory power of LGUs to grant allowances to judges and being violative of their
autonomy guaranteed by the Constitution, Section 3, paragraph (e) of LBC No. 53 is
hereby declared null and void.
Paragraphs (a) to (d) of said circular, however, are valid as they are in
accordance with Sections 324[31] and 325[32] of the Local Government Code of 1991;

Guidelines (a) to (d) were met when the Sangguniang Panlalawigan of

Oriental Mindoro approved
Resolution
No.
101
of
the Sangguniang Bayan of Naujan granting the P1,600 monthly allowance to
petitioner judge as well as the corresponding budgets of the municipality providing for
the said monthly allowance to petitioner judge. Under Section 327 of the Local
Government Code of 1991, the Sangguniang Panlalawigan was specifically tasked to
review the appropriation ordinances of its component municipalities to ensure
compliance with Sections 324 and 325 of the Code. Considering said duty of
the Sangguniang Panlalawigan, we will assume, in the absence of proof to the
contrary, that the Sangguniang Panlalawigan of Oriental Mindoro performed what the
law required it to do, that is, review the resolution and the corresponding budgets of
the Municipality of Naujan to make sure that they complied with Sections 324 and 325
of the Code.[34] We presume the regularity of the Sangguniang Panlalawigans official
act.
Moreover, it is well-settled that an ordinance must be presumed valid in the
absence of evidence showing that it is not in accordance with the law.[35] Respondent
COA had
the
burden
of
proving
that
Resolution
No.
101
of
the Sangguniang Bayan of Naujan did not comply with the condition provided in
Section 447 of the Code, the budgetary requirements and general limitations on the
use of municipal funds provided in Sections 324 and 325 of the Code and the
implementing guidelines issued by the DBM, i.e., paragraphs (a) to (d), Section 3 of
LBC No. 53. Respondent COA also had the burden of showing that
the Sangguniang Panlalawigan of Oriental Mindoro erroneously approved said
resolution despite its non-compliance with the requirements of the law. It failed to
discharge such burden. On the contrary, we find that the resolution of
the Municipality of Naujan granting the P1,600 monthly allowance to petitioner judge
fully complied with the law. Thus, we uphold its validity.
In sum, we hereby affirm the power of the Municipality of Naujan to grant the
questioned allowance to petitioner Judge Leynes in accordance with the
constitutionally mandated policy of local autonomy and the provisions of the Local
Government Code of 1991. We also sustain the validity of Resolution No. 101, Series
of 1993, of the Sangguniang Bayan of Naujan for being in accordance with the law.
WHEREFORE, the petition is hereby GRANTED. The assailed decision
dated September 14, 1999 of the Commission of Audit is hereby SET ASIDE and
Section 3, paragraph (e) of LBC No. 53 is hereby declared NULL and VOID.

151

No costs.

[13]

The law took effect on January 1, 1992.

SO ORDERED.

[14]

G.R. No. 125350, December 3, 2002.

[15]

Instead of filing a comment on behalf of respondent COA in this case, the

Solicitor General filed a manifestation supporting the position of
petitioner judges. The Solicitor General argued that (1) DBM only enjoyed
the power to review and determine whether disbursement of funds were
made in accordance with the ordinance passed by a LGU while (2) the COA
had no more than auditorial visitation powers over the LGUs pursuant to
Section 348 of RA 7160 which provides for the power to inspect at any time
the financial accounts of LGUs. Moreover, the Solicitor General opined that
the DBM and the respondent are only authorized under RA 7160 to
promulgate a Budget Operations Manual for LGUs, to improve and
systematize methods, techniques and procedures employed in budget
preparation, authorization, execution and accountability pursuant to Section
354 of RA 7160. The Solicitor General pointed out that LBC 55 was not
exercised under any of the aforementioned provisions.

[16]

Rollo, pp. 22-25.

Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago,

Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
Azcuna, and Tinga, JJ., concur.

[1]

Penned by Chairman Celso D. Gagan and Commissioners Raul C. Flores and

Emmanuel M. Dalman.

[2]

Respondent COA erroneously considered the P944 monthly allowance as RATA

from the Supreme Court in its Comment dated October 23, 2000 and
Memorandum dated June 26, 2001. Rollo, pp. 53, 103.

[3]

Annex "D," Certification of the Office of the Municipal Accountant; Petition for
Certiorari, p. 5.

[4]

Annex "E," Resolution No. 101, Series of 1991, Rollo, p. 35.

[17]

China Banking Corporation vs. Court of Appeals, 265 SCRA 327 [1996].

[5]

Petition for Certiorari, p. 4.

[18]

U.S. vs. Palacio, 33 Phil 208 [1916]; Maceda vs. Macaraeg, 197 SCRA 771 [1991].

[6]

Rollo, p. 38.

[19]

[7]

Rollo, pp. 40-42.

Manila Railroad Co. vs. Rafferty, 40 Phil 224 [1919]; Commissioner of Internal
Revenue vs. Court of Appeals, 207 SCRA 487 [1992].

[8]

[20]

Rollo, pp. 22-25.

De Villa vs. Court of Appeals, 195 SCRA 722 [1991].

[21]

A special law is one which relates to particular persons or things of a class, or to a

particular portion or section of the state only. U.S. vs. Serapio, 23 Phil 584
[1912].

[22]

A general law is one which affects all people of the state or all of a particular class
of persons in the state or embraces a class of subjects or places and does
not omit any subject or place naturally belonging to such
class.U.S. vs. Serapio, 23 Phil 584 [1912]; Valera vs. Tuason, 80 Phil 823
[1948]; Villegas vs. Subido, 41 SCRA 190 [1971].

[9]

Respondent COA erroneously considered the P944 monthly allowance being

received by petitioner judge from the local funds of the municipality since
1984 as RATA from the Supreme Court. Thus, in 1993 when the municipality
increased said allowance to P1,600 (an increase of P656), COA opposed
the grant of the whole P1,600 monthly allowance because the municipality
supposedly could not grant RATA to petitioner judge in addition to the RATA
already granted by the Supreme Court. See Comment dated October 23,
2000 and Memorandum dated June 26, 2001, Rollo, pp. 53, 103.

[10]

Rollo, pp. 22-25, 31-33, 36-38, 57-64.

[23]

Villegas vs. Subido, 41 SCRA 190 [1971].

[11]

Rollo, pp. 10-17.

[24]

Araneta vs. Concepcion, 99 Phil 709 [1956]; Sotto vs. Sotto, 43 Phil 688 [1922].

[12]

In Allarde vs. Commission on Audit, 218 SCRA 227 [1993], we ruled that the use of
the word may in LOI No. 1418 signifies that the allowance may not be
demanded as a matter of right, but

[25]

Maddumba vs. Ozaeta, 82 Phil 345 [1948]; Lopez vs. El Hogar Filipino, 47 Phil 249
[1925].

[26]

National agencies included in the national budget are Congress, Office

of the President, Office of the Vice-President, DA, DAR, DBM, DECS,
DENR, DOF, DFA, DOH, DILG, DOJ, DOLE, DND, DPWH, DOST, DSWD,
DOT, DTI, DOTC, NEDA, Office of the Press Secretary, the Judiciary,
Constitutional Offices, Commission on Human Rights, State Universities and
Colleges and Autonomous Regions. See the GAA of 1993 as example.

is entirely dependent on the will of the municipality concerned. It should be treated as

an honorarium, an amount that is given not as a matter of obligation but in
appreciation of services rendered, a voluntary donation in consideration for
services
which
admit
of
no
compensation
in
money
(Santiago vs. Commission on Audit, 199 SCRA 128, 130).

152

[27]

Section 25, Article II; Section 2, Article X, 1987 Constitution.

[28]

The LBC No. 53 was issued by the DBM by virtue of Administrative Order No. 42
which clarified

the role of the DBM in the administration of the compensation and position
classification systems in the LGUs and mandated it, among other things, to
provide guidelines for the grant of allowances and additional forms of
compensation by the LGUs. AO No. 42 was issued by the President by
virtue of his power of general supervision over the LGUs under Section 25 of
the Local Government Code of 1991.
[29]

Also Section 458(a)(1)(xi) and Section 468(a)(1)(xi), Local Government Code of

1991.

[30]

Supra note 17.

[31]

Section 324. Budgetary Requirements. - The budgets of local government units for
any fiscal year shall comply with the following requirements:

(a) The aggregate amount appropriated shall not exceed the estimates of income;
(b) Full provision shall be made for all statutory and contractual obligations of the
local government unit concerned: Provided, however, that the amount of
appropriations for debt servicing shall not exceed twenty percent (20%) of
the regular income of the local government unit concerned;
(c) In

the
case
of
provinces,
cities,
and
municipalities,
aid
to
component barangays shall be provided in amounts of not less than One
thousand pesos (P1,000.00) per barangay; and

(d) Five percent (5%) of the estimated revenue from regular sources shall be set
aside as an annual lump sum appropriation for unforeseen expenditures
arising from the occurrence of calamities: Provided, however, that such
appropriation shall be used only in the area, or a portion thereof, of the local
government unit or other areas declared in a state of calamity by the
President.
[32]

Section 325. General Limitations. - The use of the provincial, city and municipal
funds shall be subject to the following limitations:

(a) The total appropriations, whether annual or supplemental, for personal services of
a local government unit for one (1) fiscal year shall not exceed forty-five
(45%) in the case of first to third class provinces, cities, and municipalities,
and fifty-five percent (55%) in the case of fourth class or lower, of the total
annual income from regular sources realized in the next preceding fiscal
year. The appropriations for salaries, wages, representation and
transportation allowances of officials and employees of the public utilities
and economic enterprises owned, operated, and maintained by the local
government unit concerned shall not be included in the annual budget or in
the computation of the maximum amount for personal services. The

appropriations for the personal services of such economic enterprises shall

be charged to their respective budgets;
(b) No official or employee shall be entitled to a salary rate higher than the maximum
fixed for his position or other positions of equivalent rank by applicable laws
or rules and regulations issued thereunder;
(c) No local fund shall be appropriated to increase or adjust salaries or wages of
officials and employees of the national government, except as may be
expressly authorized by law;
(d) In cases of abolition of positions and the creation of new ones resulting from the
abolition of existing positions in the career service, such abolition or creation
shall be made in accordance with pertinent provisions of this code and the
civil service law, rules and regulations;
(e) Positions in the official plantilla for career positions which are occupied by
incumbents holding permanent appointments shall be covered by adequate
appropriations;
(f) No changes in designation or nomenclature of positions resulting in a promotion or
demotion in rank or increase or decrease in compensation shall be allowed,
except when the position is actually vacant, and the filling of such positions
shall be strictly made in accordance with the civil service law, rules and
regulations;
(g) The creation of new positions and salary increases or adjustments shall in no case
be made retroactive; and
(h) The annual appropriations for discretionary purposes of the local chief executive
shall not exceed two percent (2%) of the actual receipts derived from basic
real property tax in the next preceding calendar year. Discretionary funds
shall be disbursed only for public purposes to be supported by appropriate
vouchers and subject to such guidelines as may be prescribed by law. No
amount shall be appropriated for the same purpose except as authorized
under this Section.
[33]

Paragraph (a) should be read in conjunction with the recent circular of the DBM,
Local Budget

Circular No. 75 dated July 12, 2002 entitled Guidelines on Personal Services
Limitation. Section 5.5 thereof entitled Honoraria of National Government
Personnel provides: The appropriation intended to be granted as honoraria
and similar benefits to national government personnel shall be classified as
Maintenance and Other Operating Expenses (MOOE) since these are not
personal services costs of the local government unit.
[34]

Figuerres vs. Court of Appeals, 305 SCRA 206 [1999].

[35]

Ibid.

153