Special Civil Actions Cases Whole Cases

G.R. No.
L-2097 October 16, 1950
ORIENTAL SAWMILL, plaintiff -appellant,

vs.
MANUEL TAMBUNTING and ANGEL DE LEON ONG, defendants-appellees.
P. L. Meer for appellant.

Jose S. Sarte for appellee Tambunting.
MORAN, C.J.:
This is an action for interpleader filed by Oriental Sawmill against Manuel Tambunting and Angel de Leon Ong with respect to the
rental of a vacant lot behind apartment No. 343 Tanduay, Quiapo, Manila, occupied by the plaintiff. The latter alleges that defendants
Manuel Tambunting and Angel de Leon Ong have conflicting claims on said rental, and it brought the action for the purpose of
compelling them to interplead and litigate their conflicting claims for judicial determination. The defendant Manuel Tambunting filed
a motion to dismiss on the ground of res adjudicata which was granted by the court. Hence, this appeal by plaintiff.
The facts are as follows: In the Municipal Court of Manila a suit was filed by Manuel Tambunting against Pio Barretto, general
manager of Oriental Sawmill, for ejectment, the property involved being the same lot located at No. 343 Tanduay, Quiapo, Manila.
The defendant Angel de Leon Ong was allowed to intervene in that suit. After trial a judgment was rendered in favor of the plaintiff,
Manuel Tambunting, and against the defendant, Pio Barretto, ordering the latter to vacate the premises and to pay the former the sum
of P300 as damages for the use and occupation thereof, plus the sum of P500, value of the garage removed by defendant, and to pay
the costs. No mention, however, was made of the intervenor Angel de Leon Ong, whose appeal to the court of first instance was filed
out of time and was dismissed for that reason. Pio Barretto appealed also to the court of first instance where he and plaintiff Manuel
Tambunting reached an amicable settlement whereby the defendant withdrew his appeal and plaintiff waived his right to collect
damages and allowed the defendant to use the property for an indefinite period of time provided said defendant pays P130 monthly
rent from April, 1947.lawphil.net
The rents corresponding to the period from April to September of 1947, amounting to P780, was deposited in court upon the filing of
the complaint for interpleader. In the complaint it is alleged that said rents are being claimed by both Manuel Tambunting and Angel
de Leon Ong and since plaintiff knows not whom to make payment, he brought the action for interpleader. It appears that the property
involved in this case belonged originally to Manuel Tambunting who allegedly sold it to Angel de Leon Ong on April 15, 1944. There
are several "accesorias" (apartments) on the property which at the time of the sale were leased to Manuel Tambunting by the purchaser
Angel de Leon Ong. Tambunting, in turn, subleased these "accesorias" to several persons some of whom are the herein plaintiff
Oriental Sawmill and one Alfonso Pagkalinawan. At present, there are three civil cases pending between Manuel Tambunting and
Angel de Leon Ong regarding the ownership of the property. In one case, Ong seeks to revoke the lease executed in favor of
Tambunting and to eject him from the premises upon the ground that Tambunting subleased the property without the written consent
of Ong. Tambunting in his answer raised the question of ownership, and the case was referred to the Court of First Instance of Manila
where it was docketed as civil case No. 2977.
Upon the other hand, Tambunting filed an action against De Leon for the annulment of the supposed contract of sale upon the ground
of duress. This case was docketed as civil case No. 815 in the Court of First Instance of Manila where, after trial, judgment was
rendered in favor of De Leon with the statement that no duress had attended the sale and Angel de Leon Ong was, therefore, the owner
of the property. The case is now in the Court of Appeals wherein it is docketed as case No. 2491-R. There is another case filed by
Tambunting against De Leon in the court of first instance seeking to annul the sale because of the purchaser's citizenship but the case
was decided against Tambunting upon the ground of res adjudicata. That case is pending appeal in this court.
Considering these different suits between Tambunting and De Leon regarding the ownership of the property, plaintiff Oriental Sawmill
has reasonable grounds to doubt as to whom it should make payments of the rents, and consequently, its complaint for interpleading is
proper. We so held in a similar case under similar facts. In Pagkalinawan vs, Rodas (80 Phil., 281), Manuel and Alfonso surnamed
Pagkalinawan were like Oriental Sawmill, subleases of part of the same property supposedly sold by Tambunting to De Leon. And,
because of the conflicting claims on the rental between Tambunting and De Leon, the two subleasees filed an action for interpleader
against the two conflicting claimants. We held that that action was proper. And in De Jesus vs. Sociedad Arrendataria de Galleras de
1 |Cases on Special Civil Actions (1st Set)
Pasay, et al. (23 Phil., 76), it was held that a lessee who is in doubt as to the person to whom he should pay the rent because the
property leased is claimed by several persons may properly bring an action for interpleader against such persons.
It is true that Angel de Leon Ong was allowed to intervene by the municipal court in the suit by ejectment filed by Tambunting against
Oriental Sawmill and that Ong's appeal to the court of first instance was taken out of time and dismissed for that reason; it must be
noted, however, that neither the municipal court nor the court of first instance on appeal had jurisdiction to settle or determine in that
suit the question of ownership between Tambunting and De Leon.
From the foregoing, the order of dismissal appealed from is reversed and the case remanded to the court below for further
proceedings, the costs to be paid by appellee.
Ozaeta, Paras, Pablo, Bengzon, Tuason, Montemayor and Reyes, JJ., concur.
G.R. No. 72200. March 30, 1993.
SANPIRO FINANCE CORPORATION, petitioner, vs. INTERMEDIATE APPELLATE COURT, LAGUNA

TRANSPORTATION CO. INC., AND LAURO LOPEZ DE LEON, respondents.
Emerito M. Salva & Associates for petitioner.
Santos V. Pampolina, Jr. and Emiliano & Samson and R. Balderrama- Samson for private-respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; LIS PENDENS; REQUISITES. The requisites for lis pendens are: (1) identity of
parties, or at least such as representing the same interests in both actions; (2)identity of rights asserted and reliefs prayed for, the
reliefs being founded on the same facts; and (3) identity in both cases is such that the judgment that may be rendered in the pending
case would, regardless of which party is successful, amount to res judicata in the other.
2. ID.; ID.; CIVIL ACTIONS; IDENTITY OF PARTIES; NOT AFFECTED BY ADDITIONAL PARTIES THEREOF. We find no
difficulty in concluding that there is identity of parties between Civil Case No. B-2146 (Laguna) and in Civil Case No. 8636 (Makati).
In the Laguna case, the plaintiffs are private respondents Laguna Trans and de Leon and one Mauro Vera Cruz and the defendants are
petitioner Sanpiro, Delta, and PNB. In the Makati case, the plaintiff is petitioner Sanpiro and the defendants are private respondents
Laguna Trans, de Leon, Delta, Francisco A. Magante, and John Does. In both cases, therefore, petitioner Sanpiro, private respondents
Laguna Trans and de Leon, and Delta are parties, with the addition of PNB, Mauro Vera Cruz, and Francisco Magante. However, the
addition or elimination of parties do not alter the situation (Del Rosorio, et al., vs. Jacinto, et al., 122 Phil. 421 [1965]).
3. ID.; ID.; ID.; IDENTITY OF RIGHTS ASSERTED AND RELIEFS PRAYED FOR, PRESENT IN CASE AT BAR. In both
cases, the rights asserted spring from the Deed of Assignment executed by Delta in favor of PNB and the Deeds of Assignment
executed by Delta in favor of petitioner. Said deeds of assignment covered the very same debts of respondents Laguna Trans and de
Leon owing to Delta. Both PNB and petitioner, by virtue of said deeds of assignment, were demanding payment from respondents
Laguna Trans and de Leon of the very same debts. It follows that there is an identity of rights asserted and reliefs prayed for in both
cases.
4. ID.; ID.; ID.; RES JUDICATA; EFFECT THEREOF IN CASE AT BAR. The identity in both cases is such that any judgment
that may be rendered in the Laguna case would amount to res judicata in the Makati case. In the event that in the Laguna case, the
judgment is that the assignment to PNB should prevail over the assignment to petitioner of the same obligations of respondent Laguna
Trans, such judgment would be binding on the Makati case and would amount to res judicata of the rights and obligations of the
parties therein; petitioner's cause of action in the Makati case against Delta and private respondents would be devoid of any basis. We
find, therefore, that the Makati court acted with precipitate haste, imprudence, and lack of judicial caution, amounting to grave abuse
of discretion, in ordering the seizure of the diesel buses of private respondents, fully cognizant as the presiding judge was of the
pendency of Civil Case No. 2146.
DECISION

MELO, J p:
Before us is a petition for review on certiorari seeking to set aside the decision dated January 16,1985 and the resolution dated
September 17, 1985 of respondent Intermediate Appellate Court (now the Court of Appeals) in its AC-G.R. SP No. 04565, entitled
"Laguna Transportation Co. Inc., Lauro Lopez de Leon vs. The Honorable Rafael T. Mendoza, Judge of the Regional Trial Court of
Metro Manila, National Capital Judicial Region, Makati, Branch CXXXV; Maximo C. Contreras and Alejandro J. Bernardo, Ex-
Oficio Sheriff and Deputy Sheriff, respectively; Sanpiro Finance Corporation and Delta Motor Corp."
The record reveals the following background facts:
From March to September, 1980, Laguna Transportation Co. Inc. (hereinafter referred to as Laguna Trans) and Lauro Lopez de Leon
(hereinafter referred to as de Leon), private respondents herein, purchased from Delta Motor Corp. (Delta) 5 units of M.A.N. diesel
buses covered with the usual promissory notes and deeds of chattel mortgage.
On February 27,1981, Delta executed a Deed of Assignment(Annex A of Annex E, Petition; pp. 328-334, Rollo) in favor of the
Philippine National Bank (PNB) which stipulated that for and in consideration of :
. . . letters of credit accommodation in the amount of DEUTSCHE MARKS: SIXTEEN MILLION THREE HUNDRED EIGHTY
ONE THOUSAND ONE HUNDRED FIFTEEN (DM16,381,115.00), and other credit accommodations heretofore or hereafter
granted by the ASSIGNEE, the ASSIGNOR has, by way of security for the payment of said loan and other credit accommodations,
assigned, transferred and conveyed and by these presents, does hereby assign, transfer and convey, unto the said ASSIGNEE, its
successors and assigns, the following lien to be constituted in favor of the ASSIGNOR from the sale on installments of units
assembled from CKD's to be imported from the proceeds of the letter of credit accommodation granted by the ASSIGNEE to the
ASSIGNOR as well as those imported from subsequent collection from the proceeds of the sale thereof. (p. 328, Rollo.)
From July 1982 to July 1983, private respondents Laguna Trans and de Leon again purchased from Delta eight units of M.A.N. diesel
buses covered with the usual promissory notes and deeds of chattel mortgage.
On January 6, 1984, Delta executed a Deed of Assignment (Annex C of Annex E, Petition; p. 220, Rollo) in favor of petitioner Sanpiro
in the amount of P26,075,246.60 which deed pertinently provided:
WHEREAS, the ASSIGNOR is a holder in due course of instruments of indebtedness described hereunder in the total aggregate
principal amount of Twenty Six Million Seventy Five Thousand Pesos Two Hundred Forty Six and 60/100 (P26,075,246.60),
Philippine Currency, pursuant to agreements entered into by and between the ASSIGNOR and the debtors;
WHEREAS, the ASSIGNOR has offered to sell the aforesaid instruments of indebtedness to the ASSIGNEE on a with recourse basis
and the latter had accepted the same under the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the foregoing premises, the ASSIGNOR hereby transfers, cedes, assigns, sells, and
conveys [u]nto the ASSIGNEE all the ASSIGNOR's rights, interests and participations in and over the aforesaid instruments of
indebtedness as well as all chattel/real estate mortgages, pledges, and other securities and documents executed in connection with the
instrument of indebtedness, . . .
On January 9, 1984, Delta executed another Deed of Assignment (Annex D of Annex E, Petition; pp. 225-229, Rollo) in favor of
petitioner Sanpiro in the amount of P2,661,056.38 and the whereas clauses of the deed read exactly as those immediately quoted
above except only as to the amount involved.
On April 11,1984, PNB sent the following letter of demand to respondent Laguna Trans:
Laguna Trans Company
Bian, Laguna
Attention: Mr. M.V. Cruz

Gentlemen:
This has reference to your outstanding accounts payable to Delta Motor Corporation (DMC).
Please be informed that your accounts payable have been assigned by DMC to the Philippine National Bank. We, therefore, enjoin you
to hence forth make all your payments directly to PNB at Accounts Management Group, 7th Floor, PNB Building Escolta, Manila for
application to DMC's obligations to PNB.
PNB will not recognize any payments on your accounts here after made to DMC.
Very truly yours,
(SGD.)
T.S. CEDO
Asst. Vice President
(p. 307, Rollo.)
And on May 30, 1984, PNB sent another similarly worded letter to respondent Laguna Trans except that it was mentioned in the
opening paragraph that Laguna Trans outstanding accounts payable to Delta stood at P3,880,237.25 as of February 29,1984 (p. 308,
Rollo).
In the meantime, Delta was demanding payment of the installments due from respondent Laguna Trans and on September 6, 1984,
Delta sent private respondent Laguna Trans and de Leon a letter demanding immediate payment of the arrears due. In reply, private
respondents on September 12, 1984 brought to the attention of Delta the demand letters of PNB. On September 25, 1984, petitioner
Sanpiro sent a letter to private respondents demanding payment of their debts (Annex G of Annex E; p. 301-a, Rollo).
In view of the conflicting claims against them, private respondents filed on October 1, 1984, a complaint in interpleader (p. 303,
Rollo), which was docketed as Civil Case No. 2146 of the Regional Trial Court of Laguna, against petitioner, Sanpiro, PNB, and
Delta, praying that the court determine which among the defendants is entitled to the payment of the monthly amorti-zation due on the
15 diesel buses from private respondent Laguna Trans.
On October 4, 1984, petitioner filed a complaint (Annex I of Annex E; pp. 187-206, Rollo) for replevin with damages, docketed as
Civil Case No. 8636 of the Regional Trial Court of Makati, Metro Manila, against private respondents Laguna Trans and de Leon, and
Francisco A Magante, Delta, and John Does, which, among other reliefs, prayed that Delta be declared liable to pay petitioner's claim
against Laguna Trans, de Leon, and Magante in the event that petitioner be not able to recover its claim against Laguna Trans, de
Leon, and Magante.
On October 5, 1984, Judge Rafael T. Mendoza of the Makati RTC, in Case No. 8636, issued a writ of seizure (Annex 5 of Annex E; p.
123, Rollo), ordering the sheriff to take immediate possession of the motor vehicles or passenger buses of private respondents. Upon
the authority of the writ of seizure, petitioner succeeded in taking possession of six of private respondents' motor vehicles or passenger
buses on October 6, 1984.
On October 8, 1984, private respondents filed a motion (Annex K of Annex E; p. 125, Rollo) to dismiss the complaint and to
discharge the writ of replevin on the ground of lack of cause of action and the pendency of another action, referring to Civil Case No.
2146 of the Regional Trial Court of Laguna between the same parties for the same cause. They also filed an urgent ex-parte motion
(Annex L of Annex E; p. 131, Rollo) to order the sheriff to desist from implementing the writ of seizure. An opposition thereto was
filed by petitioner.
On October 10, 1984, petitioner filed an ex-parte motion (Annex M of Annex E, p. 134, Rollo) to compel private respondents to
surrender the remaining seven motor vehicles or passenger buses. A reply thereto was filed by private respondents. On October

11,1984, the Makati court issued an order (Annex P of Annex E; pp. 147-148, Rollo), directing private respondents to surrender within
24 hours from receipt of copy of the order the 7 remaining M.A.N. diesel buses to the deputy sheriffs.
On October 12, 1984, private respondents filed a motion (Annex Q of Annex E; pp. 149-151, Rollo) for reconsideration of the order
dated October 11, 1984. On October 16, 1984, the Makati court issued an order (Annex R of Annex E; pp. 152-153, Rollo) denying
said motion for reconsideration and stating that "all other pending incidents are deemed moot and academic by virtue of this order."
On the same date, the deputy sheriff issued the notice (Annex S of Annex E; p. 154, Rollo) of sheriffs sale of private respondents' 6
diesel buses on October 26, 1984.
On October 19, 1984, private respondents filed an omnibus motion (Annex T of Annex E; pp. 155-163, Rollo) (1) to set aside the writ
of seizure dated October 5, 1984, the orders dated October 11 and 16, 1984 and (2) to stop the sheriffs sale scheduled on October 26,
1984. Petitioner filed an opposition thereto (Annex U of Annex E; pp. 164-177, Rollo).
Despite Judge Mendoza's attention having been invited to the urgency of private respondents' omnibus motion and their urgent request
for an early resolution of said omnibus motion in view of the scheduled sheriffs sale on October 26, 1984, Judge Mendoza failed to
resolve the omnibus motion.
Consequently, private respondents filed on October 25, 1984 a petition for certiorari and prohibition (Annex E, pp. 304-327, Rollo),
docketed as AC-G.R. SP No. 04565, before respondent Intermediate Appellate Court (now Court of Appeals) to annul the writ of
seizure and Judge Mendoza's orders dated October 11 and 16, 1984 and to permanently enjoin petitioner and the sheriff from
proceeding with the sheriffs sale scheduled for October 26,1984, and to order the return of the seized buses to private respondents.
On October 25, 1984 and November 29, 1984, the Court of Appeals issued resolutions (Annexes A and B, pp. 78-83, Rollo) ordering
the petitioner and the sheriffs to desist and refrain from proceeding with the public auction sale. On November 26, 1984, petitioner
filed its Answer With Counter-Petition (Annex H, pp. 392-402, Rollo).
On January 16, 1985, the Court of Appeals promulgated a decision (Annex C, pp. 85-101, Rollo), per Justice Nestor B. Alampay (who
later served with distinction in this Court), with the concurrence of Justice Carolina C. Grio-Aquino (now a distinguished Member of
this Court) and Justice Nathanael P. de Pano, Jr., the dispositive portion of which reads as follows:
WHEREFORE, the writ of certiorari prayed for by the petitioners herein is hereby granted and the writ of seizure dated October 5,
1984 issued by respondent Judge in Civil Case No. 8636 of his court is, therefore, declared null and void. As a consequence of this
judgment, and inasmuch as the operation of the passenger buses of petitioner Laguna Transportation Co. is impressed with public
interest, it is hereby ordered, in the greater interests of public welfare, that the passenger buses of petitioner Laguna Transportation Co.
which were seized upon the various orders of respondent Judge of the court below be immediately returned to the petitioner Laguna
Transportation Co., Inc. (Emphasis in the original.)
Respondent Judge is also hereby ordered to dismiss said Civil Case No. 8636 for replevin but without prejudice to the refiling of the
same suit should private respondent Sanpiro Finance Corporation prevail in the interpleader case.
Costs are adjudged against the two private respondents in this case.
Thereafter, petitioner filed an amended motion for reconsideration which was, however, denied in a resolution dated September 17,
1985 (Annex D, pp. 103-106, Rollo).
Hence, the present petition which poses the pivotal issue of whether the pendency of the Laguna case, Civil Case No. 2146, is a
ground for the dismissal of Civil Case No. 8636 of the Makati RTC.
The requisites for lis pendens are: (1) identity of parties, or at least such as representing the same interests in both actions; (2)identity
of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity in both cases is such that the
judgment that may be rendered in the pending case would, regardless of which party is successful, amount to res judicata in the other.
We find no difficulty in concluding that there is identity of parties between Civil Case No. B-2146 (Laguna) and in Civil Case No.
8636 (Makati). In the Laguna case, the plaintiffs are private respondents Laguna Trans and de Leon and one Mauro Vera Cruz and the

defendants are petitioner Sanpiro, Delta, and PNB. In the Makati case, the plaintiff is petitioner Sanpiro and the defendants are private
respondents Laguna Trans, de Leon, Delta, Francisco A. Magante, and John Does. In both cases, therefore, petitioner Sanpiro, private
respondents Laguna Trans and de Leon, and Delta are parties, with the addition of PNB, Mauro Vera Cruz, and Francisco Magante.
However, the addition or elimination of parties do not alter the situation (Del Rosario, et al., vs. Jacinto, et al., 122 Phil. 421 [1965]).
Is there identity of rights asserted and reliefs prayed for in said cases?
In both cases, the rights asserted spring from the Deed of Assignment executed by Delta in favor of PNB and the Deeds of Assignment
executed by Delta in favor of petitioner. Said deeds of assignment covered the very same debts of respondents Laguna Trans and de
Leon owing to Delta. Both PNB and petitioner, by virtue of said deeds of assignment, were demanding payment from respondents
Laguna Trans and de Leon of the very same debts. It follows that there is an identity of rights asserted and reliefs prayed for in both
cases.
Too, the identity in both cases is such that any judgment that may be rendered in the Laguna case would amount to res judicata in the
Makati case. In the event that in the Laguna case, the judgment is that the assignment to PNB should prevail over the assignment to
petitioner of the same obligations of respondent Laguna Trans, such judgment would be binding on the Makati case and would amount
to res judicata of the rights and obligations of the parties therein; petitioner's cause of action in the Makati case against Delta and
private respondents would be devoid of any basis.
We find, therefore, that the Makati court acted with precipitate haste, imprudence, and lack of judicial caution, amounting to grave
abuse of discretion, in ordering the seizure of the diesel buses of private respondents, fully cognizant as the presiding judge was of the
pendency of Civil Case No. 2146. In this regard we quote with approval the following observations of respondent court:
As Sanpiro can make no claim that it is the owner of the vehicles in question, then until the question is resolved as to which of the
assignments made by Delta Motor Corporation, that in favor of PNB or that in favor of Sanpiro Finance Corporation, should prevail, it
cannot be rightly considered by the respondent Judge of the Regional Trial Court of Makati, which is but another court of equal
standing as the Regional 'Trial Court of Laguna that had earlier taken cognizance and assumed jurisdiction over the same matter and
controversy, that private respondent herein, Sanpiro Finance Corporation, has already established a clear right to possession as could
entitle it to effect seizure of the vehicles in question. Much less has the Regional Trial Court of Makati any legal justification to
dispose and decree the sale of said vehicle even before the replevin suit has proceeded to actual trial and allow retention by Sanpiro of
the passenger buses of petitioner.
The fallacy of and imprudence of the action taken by the respondent Judge of the Regional Trial Court is instantly obvious. It is plain
and evident that there is an equal possibility, nay even a stronger probability, that the earlier assignment made by Delta Motors
Corporation of its credit to PNB, dated February 27, 1981 may prevail over an assignment of the same credit made three years later by
Delta Motors to Sanpiro Finance Corporation pursuant to two deeds of assignment, dated January 6, 1984, (Complaint in Replevin
Case No. 8636, Par. 46; Rollo, 94). To instantly favor and bestow absolute recognition to private respondent[s] Sanpiro's alleged right
of possession over the vehicles or passenger buses of the petitioner even if and after attention of respondent Judge of the Regional
Trial Court of Makati had been drawn to the Interpleader case filed ahead and pending, is in our view, to say the very least, a manifest
gross abuse of discretion and a glaring disregard of comity and respect that respondent Judge has the duty to accord to another co-qual
court. (pp 94-95, Rollo.)
WHEREFORE, the petition is hereby DENIED, with costs against petitioner.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.
Gutierrez, Jr., J., is on leave.
G.R. No. 104209 November 16, 1993
PHILNABANK EMPLOYEES ASSOCIATION (PEMA), DBP EMPLOYEES UNION (DBPEU), LBP EMPLOYEES
ASSOCIATION (LBPEA), ALERT AND CONCERNED EMPLOYEES FOR BETTER SSS (ACCESS), and KAPATIRAN

NG MANGGAGAWA SA GSIS (KMG), all under the name and style of KAPATIRAN NG MGA MANGGAGAWA SA
GFI, petitioners,
vs.
HON. JESUS P. ESTANISLAO, in his capacity as Secretary of the Department of Finance and HON. RUBEN D. TORRES, in
his capacity as Secretary of the Department of Labor and Employment, respondents
Alfredo L. Bentulan for petitioners.
Nestor C. Montemor for Philna-Bank Employees' Association.
Salvador C. Bunye, Cristina A. Mortel and Jaime T. de Veyra for movants.
The Solicitor General for respondents.
RESOLUTION
VITUG, J.:
Assailed in this petition for certiorari is a provision of the Supplemental Rules Implementing Republic Act No. 6971 (Productivity
Incentives Act of 1990), jointly promulgated by the Secretary of the Department of Finance and the Secretary of the Department of
Labor and Employment, excluding from the coverage of said Act the employees of the Philippine National Bank ("PNB"),
Development Bank of the Philippines ("DBP"), Land Bank of the Philippines ("LBP"), Social Security System ("SSS") and
Government Service and Insurance System ("GSIS").
Parenthetically, certain rank and file employees of the Public Estates Authority filed a motion for intervention to join the
petitioners 1 which they later withdrew, nonetheless, asserting that "any resolution in the instant petition would likewise apply to
them. 2
Republic Act No. 6971 was signed into law on 22 November 1990 by then President Corazon C. Aquino. It took effect on 9 December
1990 (fifteen days after its publication in two newspapers of general circulation).
Section 3 of the law states:
Sec. 3. Coverage. This Act shall apply to all business enterprises with or without, existing and duly recognized or
certified labor organizations, including government owned and controlled corporations performing proprietary
functions. It shall cover employees and workers including casual, regular, supervisory and managerial employees.
The same Act empowers the Secretary of Labor and Employment and the Secretary of Finance, "after due notice and hearing" to
"jointly promulgate and issue within six (6) months from the effectivity of (the) Act such rules and regulations as are necessary to
carry out (its) provisions" (Sec. 6, R.A. 6971)
On June 03, 1991, the then Labor Secretary Ruben D. Torres and Finance Secretary Jesus P. Estanislao promulgated the Rules
Implementing Republic Act. No. 6971. The Rules took effect on 18 June 1991 following the required publication thereof in a national
newspaper of general circulation.
Section 1, Rule II, of the aforesaid Rules provides:
Sec. 1. Coverage. These Rules shall apply to:
(a) All business enterprises wit or without existing duly recognized or certified labor organizations, including
government-owned and controlled corporations performing proprietary functions.

(b) All employees and workers including casual, regular, rank-and-file, supervisory and managerial employees.
Forthwith, petitioner organizations requested their respective employers to constitute and convene a Labor-Management Committee
(LMC) to discuss and adopt a Productivity Incentives Program (PIP). In the meantime, productivity bonuses were distributed by the
PNB, DBP, LBP, SSS and GSIS. 3
On 24 December 1991, Secretary Estanislao sent the following memorandum to all heads of government financial institutions (GFI's):
To : GFI Heads
From : Jesus P. Estanislao
On : Productivity Incentive Award
1. The President has asked me to remind all the GFI heads about our agreement to desist from
making any further payments/moves regarding productivity incentives until such time as
DOLE/DOF can issue clarificatory guidelines.
2. In view of the move of the SSS, the President has authorized me to indicate that GFI's may have
a choice on granting productivity incentives under the new law or the traditional PIA (productivity
incentive award), provided the terms and conditions of either choice are exactly the same.
3. She has also instructed me to coordinate with DOLE and the immediate issuance of a possible
clarificatory guideline.
(Sgd.) JESUS P. ESTANISLAO 4
In accordance with this memorandum, PNB Executive Vice-President Domingo A. Santiago, Jr., sent a letter to petitioner Philnabank
Employees Association, through its President Jerry P. Tan, advising the latter that in view of the Estanislao memorandum, PNB was
"constrained to wait for the issuance of the said clarificatory guidelines". 5
Allegedly without due notice and hearing, Secretary Estanislao and Secretary Torres subsequently issued the Supplemental Rules
Implementing Republic Act No. 6971, clarifying or amending the previously promulgated rules because "the coverage of the GOCCs
(government owned and controlled corporations) performing proprietary functions would require harmonization with present
definitions, concepts, strategies, policies and thrusts involving the rationalization of the government corporate sector." Paragraph (a),
Section 1, Rule II, of the Rules was thereby modified to read, as follows:
Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly certified labor organizations, including government owned
and controlled corporations performing proprietary functions which are established solely for business or profit or
gain and accordingly excluding those created, maintained or acquired in pursuance of a policy of the state,
enunciated in the Constitution or by law, and those whose officers and employees are covered by the Civil Service.
Government-owned and controlled corporations meeting the criteria provided in the immediately preceding
paragraph shall be certified to by the Government Corporate Monitoring and Coordinating Committee established
by E.O. No. 236 of July 22, 1987. (Emphasis supplied)
On 7 January 1992, under the letterhead, "Kapatiran Ng Manggagawa Sa GFI" (KAMAGFI), PEMA President Jerry P. Tan sent
Secretary Torres and Secretary Estanislao a letter contesting the amendatory rule and giving them forty-eight (48) hours within which
"to recall and revoke" the same. He also informed the heads of the two departments that the supplemental rules were creating "serious
demoralization(s)" among the officers and employees of the GFIs and that failure to revoke the recall the Supplemental Rules "would
mean drastic legal actions and massive concerted activities" on the part of the GFI employees. 6 KAMAGFI also addressed an open
letter, dated 09 January 1992, of similar tenor to the President of the Philippines, Secretary Estanislao, Secretary Torres, Senate
President Neptali Gonzales, Speaker Ramon Mitra, Jr., Senator Teofisto Guingona, and Congressmen Felicito Payumo and Alberto
Veloso. 7 On January 10, 1992, the matter was referred by the Office of the President to Secretary Torres. 8

On 09 March 1992, the instant petition for certiorari was filed.
The petitioners contend that by promulgating the Supplemental Rules, the respondents have "overstepped the bounds of their rule-
making authority by amending the coverage of the Act as provided in Section 3 thereof." Arguing that Republic Act No. 6971 has been
intended by the lawmakers to cover government-owned and controlled corporations which are performing proprietary functions,
without qualifications, the petitioners assert that the respondents have "arrogated upon themselves the power not only to make law, but
also to unmake it by adopting rules inconsistent with and contrary to the clear intention and the end sought to be attained by the
Act." 9The petitioners conclude that the respondents have thus gravely based their discretion, amounting to lack of jurisdiction.
The respondents, through the Solicitor general, contest the herein petition as being both an improper remedy, considering that the
respondents "did not adjudicate the rights and obligations of the GFI employees," and precipitate, since the petitioners' recourse should
have first been administratively pursued with the Civil Service Commission." 10
The instant petition for certiorari cannot be granted.
Firstly, the respondent department secretaries, in promulgating the questioned rule did so in accordance with the mandate of Republic
Act No. 6971. Concededly, in the process, neither did said respondents act in any judicial or quasi-judicial capacity nor did they
arrogate unto themselves any such performance of judicial or quasi-judicial prerogative. A petition for certiorari is a special civil
action that may be invoked only against a a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65, of the revised
Rules of Court is explicit on this matter; viz:
Sec. 1. Petition for certiorari. When any tribunal, board or officer exercising judicial functions, has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of the 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 annulling or modifying the
proceedings, as the law requires, of such tribunal, board or officer.
Secondly, although not inflexible, we have repeatedly declined on grounds of prematurity, as well as in the interest of good order, a
hasty recourse to the courts when administrative avenues are still open. 11
Thirdly, while this case is styled as a petition for certiorari, there is, however, no denying the fact that, in essence, it seeks the
declaration by the court of the unconstitutionality and illegality of the questioned rule, thus partaking the nature, in reality, of one for
declaratory relief over which this Court has only appellate, not original, jurisdiction.
Fourthly, even in cases, where this Court is conferred with primary jurisdiction, starting with the case of Santiago vs. Vasquez et
al., 12 we have stressed, thus
. . . We discern in the proceedings in this case a propensity on the part of the petitioner, and, for that matter, the same
may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our
judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower
courts in the exercise of their original and concurrent jurisdiction, or is even mandated by law to be sought therein.
This practice must be stopped, not only because of the imposition upon the precious time of this Court but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has
to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped
to resolve the issues since this Court is not a trier of facts. We therefore, reiterate the judicial policy that this Court
will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our
primary jurisdiction.
Finally, the principal issue raised by the petitioners, i.e., whether or not the government financial institutions herein involved (but
which have not even been impleaded) are embraced by the phrase "government-owned and controlled
corporations performing proprietary functions" in the context of Republic Act 6971, is itself not necessarily a mere question of law,
that, for certain can totally discard a factual assessment of the respective operations of said institutions and the degree that such
operations interrelate, as the case may be, to their governmental or proprietary functions. This Court has said, more than once, that it is
not an initial evaluator of facts.
WHEREFORE, the instant petition for certiorari is DISMISSED. No Costs.
SO ORDERED.
G.R. No. L-60403 August 3, 1983
ALLIANCE OF GOVERNMENT WORKERS (AGW); PNB-FEMA BANK EMPLOYEES ASSOCIATION (AGW);

KAISAHAN AT KAPATIRAN NG MGA MANGAGAWA AT KAWANI NG MWSS (AGW); BALARA EMPLOYEES
ASSOCIATION (AGW); GSIS WORKERS ASSOCIATION (AGW); SSS EMPLOYEES ASSOCIATION (AGW); PVTA
EMPLOYEES ASSOCIATION (AGW); NATIONAL ALLIANCE OF TEACHERS AND OFFICE WORKERS
(AGW); , petitioners,
vs.
THE HONORABLE MINISTER OF LABOR and EMPLOYMENT, PHILIPPINE NATIONAL BANK (PNB);
METROPOLITAN WATERWORKS and SEWERAGE SYSTEM (MWSS); GOVERNMENT SERVICE INSURANCE
SYSTEM (GSIS); SOCIAL SECURITY SYSTEM (SSS); PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION (PVTA)
PHILIPPINE NORMAL COLLEGE (PNC); POLYTECHNIC UNIVERSITY OF THE PHILIPPINES (PUP), respondents.
The Solicitor General for MOLE, PNB, SSS, PNC and PUP.
Oliver Gesmundo for petitioners.
Jesus C. Gentiles for petitioner SSSEA-AGW.
GUTIERREZ, JR., J.:
Are the branches, agencies, subdivisions, and instrumentalities of the Government, including government owned or controlled
corporations included among the 4 "employers"" under Presidential Decree No. 851 which are required to pay an their employees
receiving a basic salary of not more than P1,000.00 a month, a thirteenth (13th) month pay not later than December 24 of every year?
Petitioner Alliance of Government Workers (AGW) is a registered labor federation while the other petitioners are its affiliate unions
with members from among the employees of the following offices, schools, or government owned or controlled corporations:
1. Philippine National Bank (PNB) Escolta Street, Manila
2. Metropolitan Waterworks and Sewerage System (MWSS) Katipunan Road, Balara, Quezon City
3. Government Service Insurance System (GSIS) Arroceros Street, Manila
4. Social Security System (SSS) East Avenue, Quezon City
5. Philippine Virginia Tobacco Administration (PVTA) Consolacion Building, Cubao, Quezon City
6. Philippine Normal College (PNC) Ayala Boulevard, Manila
7. Polytechnic University of the Philippines (PUP) Hippodromo Street, Sta. Mesa, Manila
On February 28, 1983, the Philippine Government Employees Association (PGEA) filed a motion to come in as an additional
petitioner.
Presidential Decree No. 851 provides in its entirety:

WHEREAS, it is necessary to further protect the level of real f wages from the ravage of world-wide inflation;
WHEREAS, there has been no increase case in the legal minimum wage rates since 1970;
WHEREAS, the Christmas season is an opportune time for society to show its concern for the plight of the working
masses so they may properly celebrate Christmas and New Year.
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the powers vested in me by the Constitution do
hereby decree as follows:
SECTION 1. All employers are hereby required to pay all their employees receiving a basic salary of not more than
Pl,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every
year.
SECTION 2. Employers already paying their employees a 13th-month pay or its equivalent are not covered by this
Decree.
SECTION 3. This Decree shall take effect immediately. Done in the City of Manila, this 16th day of December
1975.
According to the petitioners, P.D. No. 851 requires all employers to pay the 13th-month pay to their employees with one sole
exception found in Section 2 which states that "(E)mployers already paying their employees a 13th month pay or its equivalent are not
covered by this Decree. " The petitioners contend that Section 3 of the Rules and Regulations Implementing Presidential Decree No.
851 included other types of employers not exempted by the decree. They state that nowhere in the decree is the secretary, now
Minister of Labor and Employment, authorized to exempt other types of employers from the requirement.
Section 3 of the Rules and Regulations Implementing Presidential Decree No. 851 provides:
Section 3. Employers covered The Decree shall apply to all employers except to:
a) Distressed employers, such as (1) those which are currently incurring substantial losses or 112) in the case of non-
profit institutions and organizations, where their income, whether from donations, contributions, grants and other
earnings from any source, has consistently declined by more than forty (40%) per cent of their normal income for
the last two (2) )years, subject to the provision of Section 7 of this issuance.
b) The Government and any of its political subdivisions, including government-owned and controlled corporations,
except)t those corporation, operating essentially as private, ,subsidiaries of the government;
c) Employers already paying their employees 13th-month pay or more in a calendar year or its equivalent at the of
this issuance;
d) Employers of household helpers and persons in the personal service of another in relation to such workers: and
e) Employers of those who are paid on purely commission, boundary, or task basis and those who are paid a fixed
for performing a specific work, irrespective of the time consumed in the performance thereof, except where the
workers are paid an piece- rate basis in which case the employer shall be covered by this issuance :insofar ab such
workers are concerned ...
The petitioners assail this rule as ultra vires and void. Citing Philippine Apparel Workers'Union v. NIRC et al., (106 SCRA
444); Teoxon v. Members of the Board of' Administators (33 SCRA 585); Santos u. Hon. Estenzo et al., (109 Phil. 419); Hilado u.
Collector of Internal Revenue (100 Phil. 288), and Olsen & Co. Inc. v. Aldanese and Trinidad (43 Phil. 259), the petitioners argue that
regulations adopted under legislative authority must be in harmony with the provisions of the law and for the sole purpose of carrying
into effect its general provisions. They state that a legislative act cannot be amended by a rule and an administrative officer cannot

change the law. Section 3 is challenged as a substantial modification by rule of a Presidential Decree and an unlawful exercise of
legislative power.
Our initial reaction was to deny due course to the petition in a minute resolution, however, considering the important issues
propounded and the fact, that constitutional principles are involved, we have now decided to give due course to the petition, to
consider the various comments as answers and to resolve the questions raised through a full length decision in the exercise of this
Court's symbolic function as an aspect of the power of judicial review.
At the outset, the petitioners are faced with a procedural barrier. The petition is one for declaratory relief, an action not embraced
within the original jurisdiction of the Supreme Court. (Remotigue v. Osmena,, Jr., 21 SCRA 837; Rural Bank of Olongapo v.
Commission of Land Registration, 102 SCRA 794; De la Llana v. Alba, 112 SCRA 294). There is no statutory or jurisprudential basis
for the petitioners' statement that the Supreme Court has original and exclusive jurisdiction over declaratory relief suits where only
questions of law are involved. Jurisdiction is conferred by law. The petitioners have not pointed to any provision of the Constitution or
statute which sustains their sweeping assertion. On this ground alone, the petition could have been dismissed outright.
Following similar action taken in Nacionalista Party v. Angelo Bautista (85 Phil. 101) and Aquino v. Commission on Elections (62
SCRA 275) we have, however, decided to treat the petition as one for mandamus. The petition has far reaching implications and raises
questions that should be resolved. Have the respondents unlawfully excluded the petitioners from the use and enjoyment of rights to
which they are entitled under the law?
An analysis of the "whereases" of P.D. No. 851 shows that the President had in mind only workers in private employment when he
issued the decree. There was no intention to cover persons working in the government service. The decree states:
xxx xxx xxx
WHEREAS, there has been no increase in the legal minimum wage rates since 1970;
xxx xxx xxx
As pointed out by the Solicitor General in his comment for the Minister of Labor and Employment, the Social Security System the
Philippine Normal College, and Polytechnic University, the contention that govermment owned and controlled corporations and state
colleges and universities are covered by the term "all employers" is belied by the nature of the 13- month pay and the intent behind the
decree.
The Solicitor General states:
"Presidential Decree No. 851 is a labor standard law which requires covered employers to pay their employees receiving not more
than P1,000.00 a month an additional thirteenth-month pay. Its purpose is to increase the real wage of the worker (Marcopper Mining
Corp. v. Ople, 105 SCRA 75; and National Federation of Sugar Workers v. Ovejera, G.R. No. 59743, May 31, 1982) as explained in
the'whereas'clause which read:
WHEREAS, it is necessary to further protect the level of real wages from the ravage of world-
wide inflation;
WHEREAS, there has been no increase in the legal minimum wage rates since 1970; 11
WHEREAS, the Christmas season is an opportune time for society to show its concern for the
plight of the working masses so they may celebrate the Christmas and New Year.
xxx xxx xxx
What the P.D. No. 851 intended to cover, as explained in the prefatory statement of the Decree, are only those in the
private sector whose real wages require protection from world-wide inflation. This is emphasized by the "whereas"
clause which states that 'there has been no increase in the legal minimum wage rates since 1970'. This could only
refer to the private sector, and not to those in the government service because at the time of the enactment of
Presidential Decree No. 851 in 1975, only the employees in the private sector had not been given any increase in
their minimum wage. The employees in the government service had already been granted in 1974 a ten percent
across-the-board increase on their salaries as stated in P.D. No. 525, Section 4.
Moreover, where employees in the government service were to benefit from labor standard laws, their coverage is
explicitly stated in the statute or presidential enactment. This is evident in (a) Presidential Decree No. 390, Sec. 1
which granted emergency cost of living allowance to employees in the national government; (b) Republic Act No.
6111, Sec. 10 on medicare benefits; (c) Presidential Decree No -442, Title II, Article 97 on the applicable minimum
wage rates; (d) Presidential Decree No. 442, Title 11, Article 167 (g) on workmen's compensation; (e) Presidential
Decree No. 1123 which provides for increases in emergency allowance to employees in the private sector and in
salary to government employees in Section 2 thereof; and (f) Executive Order No. 752 granting government
employees a year-end bonus equivalent to one week's pay. Thus, had the intention been to include government
employees under the coverage of Presidential Decree No. 851, said Decree should have expressly so provided and
there should have been accompanying yearly appropriation measures to implement the same. That no such express
provision was provided and no accompanying appropriation measure to was passed clearly show the intent to
exclude government employees from the coverage of P. D. No. 85 1.
We agree.
It is an old rule of statutory construction that restrictive statutes and acts which impose burdens on the public treasury or which
diminish rights and interests, no matter how broad their terms do not embrace the Sovereign, unless the Sovereign is specifically
mentioned. (See Dollar Savings Bank v. United States, 19 Wall (U.S.) 227; United States v. United Mine Workers of America, 330
U.S. 265). The Republic of the Philippines, as sovereign, cannot be covered by a general term like "employer" unless the language
used in the law is clear and specific to that effect.
The issue raised in this petition, however, is more basic and fundamental than a mere ascertainment of intent or a construction of
statutory provisions. It is concerned with a revisiting of the traditional classification of government employment into governmental
functions and proprietary functions and of the many ramifications that this dichotomous treatment presents in the handling of
concerted activities, collective bargaining, and strikes by government employees to wrest concessions in compensation, fringe
benefits, hiring and firing, and other terms and conditions of employment.
The workers in the respondent institutions have not directly petitioned the heads of their respective offices nor their representatives in
the Batasang Pambansa. They have acted through a labor federation and its affiliated unions. In other words, the workers and
employees of these state firms, college, and university are taking collective action through a labor federation which uses the
bargaining power of organized labor to secure increased compensation for its members.
Under the present state of the law and pursuant to the express language of the Constitution, this resort to concerted activity with the
ever present threat of a strike can no longer be allowed.
The general rule in the past and up to the present is that "the terms and conditions of employment in the Government, including any
political subdivision or instrumentality thereof are governed by law" (Section 11, the Industrial Peace Act, R.A. No. 875, as amended
and Article 277, the Labor Code, P.D. No. 442, as amended). Since the terms and conditions of government employment are fixed by
law, government workers cannot use the same weapons employed by workers in the private sector to secure concessions from their
employers. The principle behind labor unionism in private industry is that industrial peace cannot be secured through compulsion by
law. Relations between private employers and their employees rest on an essentially voluntary basis. Subject to the minimum
requirements of wage laws and other labor and welfare legislation, the terms and conditions of employment in the unionized private
sector are settled through the process of collective bargaining. In government employment, however, it is the legislature and, where
properly given delegated power, the administrative heads of government which fix the terms and conditions of employment. And this
is effected through statutes or administrative circulars, rules, and regulations, not through collective bargaining agreements.
At the same time, the old Industrial Peace Act excepted employees and workers in proprietary functions of government from the above
compulsion of law. Thus, in the past, government employees performing proprietary functions could belong to labor organizations
imposing the obligation to join in strikes or engage in other concerted action. (Section 11, R.A. 875, as amended). They could and they
did engage in concerted activities and various strikes against government owned and controlled corporations and other government
institutions discharging proprietary functions. Among the institutions as falling under the exception in Section 11 of the Industrial
Peace Act were respondents Government Service Insurance System (GSISEA v. Alvendia, 108 Phil. 505) and Social Security System
(SSSEA v. Soriano, 7 SCRA 1016). And this Court has supported labor completely in the various strikes and concerted activities in
firms and agencies discharging proprietary functions because the Constitution and the laws allowed these activities.
The exception, however belongs to the past.
The petitioners state in their counter comment filed July 23, 1982 that the 1973 Constitution is categorical about the grant of the rights
to self- organization and collective bargaining to all workers and that no amount of stretched interpretation of lesser laws like the
Labor Code and the Civil Service Act can overturn the clear message of the Constitution with respect to these rights to self-
organization and collective bargaining.
These statements of the petitioners are error insofar as government workers are now concerned.
Under the present Constitution, govemment-owned or controlled corporations are specifically mentioned as embraced by the civil
service. (Section 1, Article XII-B, Constitution). The inclusion of the clause "including every government owned or controlled
corporation" in the 1973 amendments to the Constitution was a deliberate amendment for an express purpose. There may be those who
disagree with the intent of the framers of the amendment but because it is fundamental law, we are all bound by it. The amendment
was intended to correct the situation where more favored employees of the government could enjoy the benefits of two worlds. They
were protected by the laws governing government employment. They could also engage in collective bargaining and join in strikes to
secure higher wages and fringe benefits which equally hardworking employees engaged in government functions could only envy but
not enjoy.
Presidential Decree No. 807, the Civil Service Decree of the Philippines has implemented the 1973 Constitutional amendment. It is
categorical about the inclusion of personnel of government-owned or controlled corporations in the civil service and their being
subject to civil service requirements:
SECTION 56. Government- owned or Controlled Corporations Personnel.All permanent personnel of

government- owned or controlled corporations whose positions are now embraced in the civil service shall continue
in the service until they have been given a chance to qualify in an appropriate examination, but in the meantime,
those who do not possess the appropriate civil service eligibility shall not be promoted until they qualify in an
appropriate civil service examination. Services of temporary personnel ma be y terminated any time.
Personnel of government-owned or controlled corporations are now part of the civil service. It would not be fair to allow them to
engage in concerted activities to wring higher salaries or fringe benefits from Government even as other civil service personnel such
as the hundreds of thousands of public school teachers, soldiers, policemen, health personnel, and other government workers are
denied the right to engage in similar activities.
To say that the words "all employers" in P.D. No. 851 includes the Government and all its agencies, instrumentalities, and
government-owned or controlled corporations would also result in nightmarish budgetary problems.
For instance, the Supreme Court is trying its best to alleviate the financial difficulties of courts, judges, and court personnel in the
entire country but it can do so only within the limits of budgetary appropriations. Public school teachers have been resorting to what
was formerly unthinkable, to mass leaves and demonstrations, to get not a 13th-month pay but promised increases in basic salaries and
small allowances for school uniforms. The budget of the Ministry of Education, Culture and Sports has to be supplemented every now
and then for this purpose. The point is, salaries and fringe benefits of those embraced by the civil service are fixed by law. Any
increases must come from law, from appropriations or savings under the law, and not from concerted activity.
The Government Corporate Counsel, Justice Manuel Lazaro, in his consolidated comment * for respondents GSIS, MWSS, and PVTA
gives the background of the amendment which includes every government-owned or controlled corporation in the embrace of the civil
service:

Records of the 1971 Constitutional Convention show that in the deliberations held relative to what is now Section
1(1) Article XII-B, supra the issue of the inclusion of government-owned or controlled corporations figured
prominently.
The late delegate Roberto S. Oca, a recognized labor leader, vehemently objected to the inclusion of government-
owned or controlled corporations in the Civil Service. He argued that such inclusion would put asunder the right of
workers in government corporations, recognized in jurisprudence under the 1935 Constitution, to form and join
labor unions for purposes of collective bargaining with their employers in the same manner as in the private section
(see: records of 1971 Constitutional Convention).
In contrast, other labor experts and delegates to the 1971 Constitutional Convention enlightened the members of the
Committee on Labor on the divergent situation of government workers under the 1935 Constitution, and called for
its rectification. Thus, in a Position Paper dated November-22, 1971, submitted to the Committee on Labor, 1971
Constitutional Convention, then Acting Commissioner of Civil Service Epi Rev Pangramuyen declared:
It is the stand, therefore, of this Commission that by reason of the nature of the public employer
and the peculiar character of the public service, it must necessarily regard the right to strike given
to unions in private industry as not applying to public employees and civil service employees. It
has been stated that the Government, in contrast to the private employer, protects the interests of
all people in the public service, and that accordingly, such conflicting interests as are present in
private labor relations could not exist in the relations between government and those whom they
employ.
Moreover, determination of employment conditions as well as supervision of the management of

the public service is in the hands of legislative bodies. It is further emphasized that government
agencies in the performance of their duties have a right to demand undivided allegiance from their
workers and must always maintain a pronounced esprit de corps or firm discipline among their
staff members. It would be highly incompatible with these requirements of the public service, if
personnel took orders from union leaders or put solidarity with members of the working class
above solidarity with the Government. This would be inimical to the public interest.
Moreover, it is asserted that public employees by joining labor unions may be compelled to
support objectives which are political in nature and thus jeopardize the fundamental principle that
the governmental machinery must be impartial and non-political in the sense of party politics.'
(see: Records of 1971 Constitutional Convention).
Similarly, Delegate Leandro P. Garcia, expressing support for the inclusion of government-owned or controlled
corporations in the Civil Service, argued:
It is meretricious to contend that because Govermnent owned or controlled corporations yield

profits, their employees are entitled to better wages and fringe benefits than employees of
Government other than Government- owned and controlled cor orations which are not making
profits. There is no gainsaying the fact that the capital they use is the people's (see Records of the
1971 Constitutional Convention).
Summarizing the deliberations of the 1971 Constitutional Convention on the inclusion of Government owned or
controlled corporations, Dean Joaquin G. Bernas, SJ., of the Ateneo de Manila University Professional School of
Law, stated that government-owned corporations came under attack as milking cows of a privileged few enjoying
salaries far higher than their counterparts in the various branches of government, while the capital of these
corporations belongs to the Government and government money is pumped into them whenever on the brink of
disaster, and they should therefore come under the strick surveillance of the Civil Service System. (Bernas, The
1973 Philippine Constitution, Notes and Cases, 1974 ed., p. 524).

The Government Corporate Counsel cites the precedent setting decision in Agricultural- Credit and Cooperative Financing
Administration (ACCFA v. Confederation of Unions in Government Corporations and Offtces CUGCO et al., 30 SCRA 649) as giving
the rationale for coverage of government-owned or controlled corporations by the civil service. We stated ACCFA v. CUGCO that:
... The ACA is a government office or agency engaged in governmental, not proprietary functions. These functions
may not be strictly what President Wilson described as "constituent" (as distinguished from 'ministrant'), [Bacani vs.
National Coconut Corporation, G.R. No. L-9657, Nov. 29,1956, 53 O.G. p. 2800] such as those relating to the
maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the
administration of justice and the determination of political duties of citizens, and those relating to national defense
and foreign relations. Under this traditional classification, such constituent functions are exercised by the State as
attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people these latter
functions being ministrant, the exercise of which is optional on the part of the government.
The growing complexities of modern society, however, have rendered this traditional classification of the functions
of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and
initiative and which the government was called upon to enter optionally, and only "because it was better equipped to
administer for the public welfare than is any private individual or group of individuals," (Malcolm, The Government
of the Philippines, pp. 19-20; Bacani vs. National Coconut Corporation, supra) continue to lose their well- defined
boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is
to meet the increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly
towards a greater socialization of economic forces, Here of course this development was envisioned, indeed adopted
as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social
justice.
Chief Justice Fernando, then an Associate Justice of this Court, observed in a concurring opinion that the traditional classification into
constituent and ministrant functions reflects the primacy at that time of the now discredited and repudiated laissez faire concept
carried over into government. He stated:
The influence exerted by American constitutional doctrines unavoidable when the Philippines was still under
American rule notwithstanding, an influence that has not altogether vanished even after independence, the laissez
faire principle never found fun acceptance in this jurisdiction, even during the period of its full flowering in the
United States. Moreover, to erase any doubts, the Constitutional Convention saw to it that our fundamental law
embodies a policy of the responsibility thrust on government to cope with social and economic problems and an
earnest and sincere commitment to the promotion of the general welfare through state action. It would thus follow
that the force of any legal objection to regulatory measures adversely affecting property rights or to statutes
organizing public corporations that may engage in competition with private enterprise has been blunted. Unless
there be a clear showing of any invasion of rights guaranteed by the Constitution, their validity is a foregone
conclusion. No fear need be entertained that thereby spheres hitherto deemed outside government domain have been
encroached upon. With our explicit disavowal of the 'constituent-ministrant' test, the ghost of the laissez-faire
concept no longer stalks the juridical stage."
Our dismissal of this petiti/n should not, by any means, be interpreted to imply that workers in government-owned and controlled
corporations or in state colleges and universities may not enjoy freedom of association. The workers whom the petitioners purport to
represent have the right, which may not be abridged, to form associations or societies for purposes not contrary to law. (Constitution,
Article IV, Section 7). This is a right which share with all public officers and employees and, in fact, by everybody living in this
country. But they may not join associations which impose the obligation to engage in concerted activities in order to get salaries,
fringe benefits, and other emoluments higher than or different frm that provided by law and regulation.
The very Labor Code, P.D. No. 442 as amended,, which governs the registration and provides for the rights of legitimate labor
organizations states:
ART. 277. Government employees. The terms and conditions of employment of all government employees,
including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law,
rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the new

constitution. However, there shall be no reduction of existing wages, benefits, and other terms and conditions of
employment being enjoyed by them at the time of the adoption of this code.
Section 6, Article XII-B of the Constitution gives added reasons why the government employees represented by the petitioners cannot
expect treatment in matters of salaries different from that extended to all others government personnel. The provision states:
SEC. 6. The National Assembly shall provide for the standardization of compensation of government officials and
employees, including those in government-owned or controlled corporations, taking into account the nature of the
responsibilities pertaining to, and the qualifications required for the positions concerned.
It is the legislature or, in proper cases, the administrative heads of government and not the collective bargaining process nor the
concessions wrung by labor unions from management that determine how much the workers in government-owned or controlled
corporations may receive in terms of salaries, 13th month pay, and other conditions or terms of employment. There are government
institutions which can afford to pay two weeks, three weeks, or even 13th-month salaries to their personnel from their budgetary
appropriations. However, these payments must be pursuant to law or regulation. Presidential Decree No. 985 as amended provides:
xxx xxx xxx
SEC. 2. Declaration of Policy. It is hereby declared to be the policy, of the national government to provide equal
pay for substantially, equal work and to base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be
given to, among others, prevailing rates in private industry for comparable work. For this purpose, there is hereby
established a system of compensation standardization and position classification in the national government for all
departments, bureaus, agencies, and officers including government-owned or controlled corporations and financial
institutions: Provided, That notwithstanding a standardized salary system established for all employees, additional
financial incentives may be established by government corporations and financial institutions for their employees to
be supported fully from their corporate funds and for such technical positions as may be approved by the President
in critical government agencies.
The Solicitor-General correctly points out that to interpret P.D. No. 851 as including government employees would upset the
compensation levels of government employees in violation of those fixed according to P.D. No. 985.
Here as in other countries, government salaries and wages have always been lower than salaries, wages, and bonuses in the private
sector. However, civil servants have no cause for despair. Service in the government may at times be a sacrifice but it is also a
welcome privilege. Apart from the emotional and psychic satisfactions, there are various material advantages. The security of tenure
guaranteed to those in the civil service by the Constitution and statutes, the knowledge that one is working for the most stable of
employers and not for private persons, the merit system in appointments and promotions, the scheme of vacation, sick, and maternity
leave privileges, and the prestige and dignity associated with public office are only a few of the joys of government employment.
Section 3 of the Rules and Regulations Implementing Presidential Decree No. 851 is, therefore, a correct interpretation of the decree.
It has been implemented and enforced from December 22, 1975 to the present, The petitioners have shown no valid reason why it
should be nullified because of their petition filed six and a half years after the issuance and implementation of the rule.
WHEREFORE, the petition is hereby DISMISSED for lack of merit.
SO ORDERED.
Concepcion, Jr., Guerrero Relova, JJ., concur.
Aquino, Melencio-Herrera and Plana, JJ., concur in the result.

Separate Opinions
FERNANDO, C.J., concurring pro hac vice:
The pluralityopinion for the Court of Justice Gutierrez, Jr. and the dissent of Justice Makasiar are to be commended for their
scholarship and comprehensiveness.
The approach taken by opinion of the Court is distinguished by its conformity to the prevailing doctrine of statutory construction that
unless so specified, the government does not fall within the terms of any legislation or decree. There is an equally compelling force to
the reliance by Justice Makasiar on the social justice mandate and the protection to labor provision of the Constitution.
If therefore I cannot sibsribe to such a dissent, it is due to the presence of two other constitutional provisions, which in this case exert a
countervailing thrust. The first is found in the first section of Article XIII: This: " Public office is a public trust. Public officers and
employees shall serve with the highest degree of responsibility, integrity, loyalty, and efficiency, and shall remain accountable to the
people. 1
If, as is correctly pointed out in the opinion of Justice Gutierrez, Jr., the scope of government functions has 'expanded with the
emphasis on the state being a welfare or a service agency, petitioner labor unions, insofar as they would assert rights ordinarily
enjoyed by workers in private firms, cannot be sustained. It seems clear to me that under the Constitution there can be no right to
strike by them nor to take a mass leave which is a way of doing indirectly what is not legally allowable,
This approach to my mind is reinforced by this other constitutional provision: "The Civil Service embraces every branch, agency,
subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. " 2 That makes it
evident that the personnel of the government, including those employed in government-owned or controlled corporations, can petition
for redress of grievances or seek the improvement of their working conditions and increase their wages.
To repeat, though, there can be no reliance on concerted labor activities of employees in private firms. The opinion of the Court speaks
with clarity. Thus: "Since the terms and conditions of government employment are fixed by law, government workers cannot use the
same weapons employed by workers in the private sector to secure concessions from their employers. The principle behind labor
unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private
employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other
labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of
collective bargaining. " 3
The distinction in the situation of government employees and those employed in private firms is emphasized in this manner: "In
government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of
government which fix the terms and conditions of employment. and this is effected through statutes or administrative circulars, rules,
and regulations, not through collective bargaining agreements. " 4
The assumption implicit in the Constitution is that the political branches would not be heedless of legitimate demands of government
personnel for measures intended for their welfare. It is manifest that the increase in wages is one of them. At this time, as pointed out
in the dissent, "the savages of inflation " are easily discernible. They have not spared those working for the government. 5
If, as held by the Court then, Presidential Decree No. 851 cannot be so construed to include government personnel, that, for me, is not
the end of the matter. There is Presidential Decree No. 985, cited in the opinion to fall back on. It affords the appropriate remedy, Nor
is there any doubt in my mind that it would be properly implemented.
On matters that where not only by law and practice but also by legitimate expectations, the Administration can act adequately and
fairly, there being due responsiveness to the pleas of labor, there is wisdom as well as conformity to law in the ruling that resort to the
judiciary be made only after full exhaustion of administrative remedies,

The decision of the Court can be so read. In that light, the just claims of labor to social justice and to government protection would be
granted.
I therefore concur pro hac vice.
Teehankee, J., I concur with the dissent of Justice Makasiar.
MAKASIAR, J., dissenting:
The petition should be granted.
Presidential Decree No. 851 promulgated on December 16, 1975 reads thus:
WHEREAS, it is necessary to further protect the level of real wages from the ravage of world-wide inflation;
masses, so they may properly celebrate Christmas and New Year.
11,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every
year.
SEC. 2. Employers already paying their employees a 13th month pay or its equivalent are not covered by this
Decree.
SEC. 3. This Decree shall take effect immediately" (italics supplied).
Section 3 of the rules and regulations promulgated by the Ministry of Labor implementing Presidential Decree No. 851 states:
Section 3, Employers covered The Decree shall apply to all employers except to:
a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of non-
earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the
last two (2) years, subject to the provision of Section 7 of this issuance;
except those corporations operating essentially as private subsidiaries of the Government;
c) Employers already paying their employees 13th month pay or more in a calendar year or its equivalent at the time
of this issuance;
d) Employers of household helpers and persons in the personal service of another in relation to such workers; and
amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where

the workers are i)aid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such
workers are concerned..." (Emphasis supplied).
It will be noted that the aforesaid Presidential Decree No. 851 provides only one exception in its Section 2, to wit: "Employers already
paying their employees a 13th-month pay or its equivalent... " Hence, all other employers, whether of the private sectors or of
government-owned and - controlled corporations and government agencies, are thereunder obligated to pay their employees receiving
a basic salary of not more than P1,000 a month, a 13th-month pay not later than December 24th of every year.
But the implementing rule added four (4) exempted employers.
Petitioners are correct in challenging the aforesaid implementing rule as ultra vires and therefore void, following the principle
established iii Philippine Apparel Workers' Union v. NLRC, et al. (106 SCRA 444), Teoxon v. Members of the Board of
Administrators (33 SCRA 585), Santos v. Hon. Estenzo, et al. (109 Phil. 419), Hilado v. Collector of Internal Revenue (100 Phil. 288),
and Olsen & Co., Inc. v. Aldanese and Trinidad (43 Phil. 259). it is patent that the Minister of Labor and Employment assumed the
authority to legislate by amending the decree and promulgated Section 3 of the implementing rules, which is not a valid subordinate
regulation by any standard.
WE cannot subscribe to the view taken by respondents through their counsel that the intention of the President in promulgating
Presidential Decree No. 851 was to favor only employees of the private sector, relying merely on the second "WHEREAS" stating that
"there has been no increase in the legal minimum wage rates since 1970" and conveniently omitting the other two "WHEREASES "
that " It is necessary to further protect the level of real wages from the ravage of world-wide inflation" and that "the Christmas season
is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and
New Year" (Emphasis suspplied).
All three "WHEREASES" are the premises of the decree requiring all employers to pay all their employees receiving a basic salary of
not more than P1,000 a month, "regardless of the nature of their employment, a 13th-month pay not later than December 24 of every
year." All the working masses, without exception-whether of the private sector or government agencies, instrumentalities, including
government- owned and -controlled corporations-are also suffering from the ravages of world-wide inflation and are likewise entitled
to properly celebrate Christmas and New Year every year.
If the President intended to favor only employees of the private sector, he could have easily inserted the phrase "in the private sector
between the words "wages" and "from" in the first WHEREAS, and between the words masses" and "so" in the third WHEREAS; or
the President could have included the other four classes of employers in the questioned Section 3 (paragraphs a, b, d and e) of the
implementing rule, which the Minister of Labor included with such ease and facility.
Instead of exercising by himself the power to amend Presidential Decree No. 851, the Minister of Labor should and could have drafted
the proposed amendments for the signature of the President or for the approval of the Batasang Pambansa.
Moreover, the position taken by public respondents is repugnant to the social justice guarantee lender the new Constitution expressed
in Section 6 of Article 11 thereof, which provides:
See. 6. The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards
this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and profits (Emphasis supplied).
The afore-quoted guarantee commands the State to "promote social justice to ensure the dignity, welfare and security of all the
people..." and to "equitably diffuse... profits. "The laboring masses of the government- owned and -controlled agencies are entitled to
such dignity, welfare and security as well as an equitable share in the profits of respondents which will inevitably contribute to
enhancing their dignity, welfare and security, as much as those of the workers and employees of the private sector.
The fact that Section 3 of the implementing rules of the Ministry of Labor has been enforced from December 22, 1975 to the present,
does not justify the denial of the right of the members of the petitioners to insist on the compliance by respondents with Presidential
Decree No. 851.

Neither estoppel nor implied waiver can be interposed against the claim of petitioners. Any waiver of the right of laborers and
employees is frowned upon by the law and the requisites of estoppel are not present in the case at bar, even assuming argumenti
gratia, that estoppel is a valid defense against a compensation claim of labor.
The basic rule is that all doubts should be interpreted in favor of labor.
Furthermore, to deny the petitioners the right to 13th month pay secured to them by Presidential Decree No. 851, would render the
State culpable of failing to "afford protection to labor, promote... equality in employment,..." as well as "just and humane conditions of
work." It is not just to deprive them of the right accorded by Presidential Decree No. 851 by limiting the enjoyment thereof only to
employees of the private sector. It would be rank and odious discrimination condemned by the equal protection clause of the
Constitution as there is no substantial basis therefor. Both the employees of the respondents and the employees of the private sector are
similarly situated and have collective bargaining agreements with their respective employers.
To repeat, the employees of the private sector and those of the private respondents are all workers without any essential or material
distinction between them insofar as the right to the 13th-month pay is concerned.
I therefore vote to grant the petition.
Aquino, Melencio-Herrera and Plana, JJ., in the result.
Abad Santos, J., took no part.
Vasquez, De Castro, J., is on leave.
Escolin, J., reserve my vote.
Separate Opinions
FERNANDO, C.J., concurring pro hac vice:
The pluralityopinion for the Court of Justice Gutierrez, Jr. and the dissent of Justice Makasiar are to be commended for their
scholarship and comprehensiveness.
The approach taken by opinion of the Court is distinguished by its conformity to the prevailing doctrine of statutory construction that
unless so specified, the government does not fall within the terms of any legislation or decree. There is an equally compelling force to
the reliance by Justice Makasiar on the social justice mandate and the protection to labor provision of the Constitution.
If therefore I cannot sibsribe to such a dissent, it is due to the presence of two other constitutional provisions, which in this case exert a
countervailing thrust. The first is found in the first section of Article XIII: This: " Public office is a public trust. Public officers and
employees shall serve with the highest degree of responsibility, integrity, loyalty, and efficiency, and shall remain accountable to the
people. 1
If, as is correctly pointed out in the opinion of Justice Gutierrez, Jr., the scope of government functions has 'expanded with the
emphasis on the state being a welfare or a service agency, petitioner labor unions, insofar as they would assert rights ordinarily
enjoyed by workers in private firms, cannot be sustained. It seems clear to me that under the Constitution there can be no right to
strike by them nor to take a mass leave which is a way of doing indirectly what is not legally allowable,
This approach to my mind is reinforced by this other constitutional provision: "The Civil Service embraces every branch, agency,
subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. " 2 That makes it
evident that the personnel of the government, including those employed in government-owned or controlled corporations, can petition
for redress of grievances or seek the improvement of their working conditions and increase their wages.

To repeat, though, there can be no reliance on concerted labor activities of employees in private firms. The opinion of the Court speaks
with clarity. Thus: "Since the terms and conditions of government employment are fixed by law, government workers cannot use the
same weapons employed by workers in the private sector to secure concessions from their employers. The principle behind labor
unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private
employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other
labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of
collective bargaining. " 3
The distinction in the situation of government employees and those employed in private firms is emphasized in this manner: "In
government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of
government which fix the terms and conditions of employment. and this is effected through statutes or administrative circulars, rules,
and regulations, not through collective bargaining agreements. " 4
The assumption implicit in the Constitution is that the political branches would not be heedless of legitimate demands of government
personnel for measures intended for their welfare. It is manifest that the increase in wages is one of them. At this time, as pointed out
in the dissent, "the savages of inflation " are easily discernible. They have not spared those working for the government. 5
If, as held by the Court then, Presidential Decree No. 851 cannot be so construed to include government personnel, that, for me, is not
the end of the matter. There is Presidential Decree No. 985, cited in the opinion to fall back on. It affords the appropriate remedy, Nor
is there any doubt in my mind that it would be properly implemented.
On matters that where not only by law and practice but also by legitimate expectations, the Administration can act adequately and
fairly, there being due responsiveness to the pleas of labor, there is wisdom as well as conformity to law in the ruling that resort to the
judiciary be made only after full exhaustion of administrative remedies,
The decision of the Court can be so read. In that light, the just claims of labor to social justice and to government protection would be
granted.
I therefore concur pro hac vice.
Teehankee, J., I concur with the dissent of Justice Makasiar.
MAKASIAR, J., dissenting:
The petition should be granted.
Presidential Decree No. 851 promulgated on December 16, 1975 reads thus:
WHEREAS, it is necessary to further protect the level of real wages from the ravage of world-wide inflation;
masses, so they may properly celebrate Christmas and New Year.
11,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every
year.

SEC. 2. Employers already paying their employees a 13th month pay or its equivalent are not covered by this
Decree.
SEC. 3. This Decree shall take effect immediately" (italics supplied).
Section 3 of the rules and regulations promulgated by the Ministry of Labor implementing Presidential Decree No. 851 states:
Section 3, Employers covered The Decree shall apply to all employers except to:
a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in the case of non-
earnings from any source, has consistently declined by more than forty (40%) percent of their normal income for the
last two (2) years, subject to the provision of Section 7 of this issuance;
except those corporations operating essentially as private subsidiaries of the Government;
c) Employers already paying their employees 13th month pay or more in a calendar year or its equivalent at the time
of this issuance;
d) Employers of household helpers and persons in the personal service of another in relation to such workers; and
amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where
the workers are i)aid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such
workers are concerned..." (Emphasis supplied).
It will be noted that the aforesaid Presidential Decree No. 851 provides only one exception in its Section 2, to wit: "Employers already
paying their employees a 13th-month pay or its equivalent... " Hence, all other employers, whether of the private sectors or of
government-owned and - controlled corporations and government agencies, are thereunder obligated to pay their employees receiving
a basic salary of not more than P1,000 a month, a 13th-month pay not later than December 24th of every year.
But the implementing rule added four (4) exempted employers.
Petitioners are correct in challenging the aforesaid implementing rule as ultra vires and therefore void, following the principle
established iii Philippine Apparel Workers' Union v. NLRC, et al. (106 SCRA 444), Teoxon v. Members of the Board of
Administrators (33 SCRA 585), Santos v. Hon. Estenzo, et al. (109 Phil. 419), Hilado v. Collector of Internal Revenue (100 Phil. 288),
and Olsen & Co., Inc. v. Aldanese and Trinidad (43 Phil. 259). it is patent that the Minister of Labor and Employment assumed the
authority to legislate by amending the decree and promulgated Section 3 of the implementing rules, which is not a valid subordinate
regulation by any standard.
WE cannot subscribe to the view taken by respondents through their counsel that the intention of the President in promulgating
Presidential Decree No. 851 was to favor only employees of the private sector, relying merely on the second "WHEREAS" stating that
"there has been no increase in the legal minimum wage rates since 1970" and conveniently omitting the other two "WHEREASES "
that " It is necessary to further protect the level of real wages from the ravage of world-wide inflation" and that "the Christmas season
is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and
New Year" (Emphasis suspplied).
All three "WHEREASES" are the premises of the decree requiring all employers to pay all their employees receiving a basic salary of
not more than P1,000 a month, "regardless of the nature of their employment, a 13th-month pay not later than December 24 of every
year." All the working masses, without exception-whether of the private sector or government agencies, instrumentalities, including
government- owned and -controlled corporations-are also suffering from the ravages of world-wide inflation and are likewise entitled
to properly celebrate Christmas and New Year every year.

If the President intended to favor only employees of the private sector, he could have easily inserted the phrase "in the private sector
between the words "wages" and "from" in the first WHEREAS, and between the words masses" and "so" in the third WHEREAS; or
the President could have included the other four classes of employers in the questioned Section 3 (paragraphs a, b, d and e) of the
implementing rule, which the Minister of Labor included with such ease and facility.
Instead of exercising by himself the power to amend Presidential Decree No. 851, the Minister of Labor should and could have drafted
the proposed amendments for the signature of the President or for the approval of the Batasang Pambansa.
Moreover, the position taken by public respondents is repugnant to the social justice guarantee lender the new Constitution expressed
in Section 6 of Article 11 thereof, which provides:
See. 6. The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards
this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and profits (Emphasis supplied).
The afore-quoted guarantee commands the State to "promote social justice to ensure the dignity, welfare and security of all the
people..." and to "equitably diffuse... profits. "The laboring masses of the government- owned and -controlled agencies are entitled to
such dignity, welfare and security as well as an equitable share in the profits of respondents which will inevitably contribute to
enhancing their dignity, welfare and security, as much as those of the workers and employees of the private sector.
The fact that Section 3 of the implementing rules of the Ministry of Labor has been enforced from December 22, 1975 to the present,
does not justify the denial of the right of the members of the petitioners to insist on the compliance by respondents with Presidential
Decree No. 851.
Neither estoppel nor implied waiver can be interposed against the claim of petitioners. Any waiver of the right of laborers and
employees is frowned upon by the law and the requisites of estoppel are not present in the case at bar, even assuming argumenti
gratia, that estoppel is a valid defense against a compensation claim of labor.
The basic rule is that all doubts should be interpreted in favor of labor.
Furthermore, to deny the petitioners the right to 13th month pay secured to them by Presidential Decree No. 851, would render the
State culpable of failing to "afford protection to labor, promote... equality in employment,..." as well as "just and humane conditions of
work." It is not just to deprive them of the right accorded by Presidential Decree No. 851 by limiting the enjoyment thereof only to
employees of the private sector. It would be rank and odious discrimination condemned by the equal protection clause of the
Constitution as there is no substantial basis therefor. Both the employees of the respondents and the employees of the private sector are
similarly situated and have collective bargaining agreements with their respective employers.
To repeat, the employees of the private sector and those of the private respondents are all workers without any essential or material
distinction between them insofar as the right to the 13th-month pay is concerned.
I therefore vote to grant the petition.
Aquino, Melencio-Herrera and Plana, JJ., in the result.
Abad Santos, J., took no part.
Vasquez, De Castro, J., is on leave.
Escolin, J., reserve my vote.
G.R. No. 109455 November 11, 1993
RAUL A. GALAROSA, in his capacity as incumbent President and Representative of the Association of Barangay Captains of
the Municipality of Sorsogon, Sorsogon, petitioner,
vs.
HON. EUDARLIO B. VALENCIA, in his capacity as the Presiding Judge of the Regional Trial Court of Sorsogon, Branch 52,
SANGGUNIANG BAYAN OF SORSOGON; and RODOLFO SALAY, respondents.
Villanueva, Bernardo & Gabionza for petitioner.
Elizalde D. Diaz for private respondent.
DAVIDE, JR., J.:
At the hub of the present controversy is Section 494 of Republic Act No. 7160, otherwise known as the Local Government Code of
1991, which provides as follows:
Sec. 494. Ex officio Membership in Sanggunians. The duly elected presidents of the Liga [ng mga Barangay] at
the municipal, city and provincial levels, including the component cities and municipalities of Metropolitan Manila,
shall serve as ex-officio members of the sanggunian bayan, sanggunian panglunsod, and sanggunian panlalawigan,
respectively. They shall serve as such only during their term of office as presidents of the liga chapters, which in no
case shall be beyond the term of office of the sanggunian concerned.
Petitioner Raul A. Galarosa (hereinafter GALAROSA) is the incumbent president of the katipunang bayan or Association of Barangay
Councils (ABC) 1 of the municipality of Sorsogon, province of Sorsogon, and was appointed as a member of the Sanggunian
Bayan (SB) of Sorsogon pursuant to Executive Order No. 342 in relation to Section 146 of Batas Pambansa Blg. 337, the quondam
local government code. The salient issue in this case is whether or not GALAROSA can continue to serve as a member of the SB
beyond 30 June 1992, the date when the term of office of the elective members of the SB of Sorsogon expired. The respondent Judge
ruled that GALAROSA could not; GALAROSA thinks otherwise and asks us to set aside the decision of the court a quo.
In August 1992, private respondent Rodolfo Lasay (hereinafter LASAY), the incumbent barangay captain of barangay Gimaloto of the
municipality of Sorsogon and an aspirant for the position of president of the ABC of the said municipality, filed with the court a
quo against the public respondent SB of Sorsogon a petition for declaratory relief and injunction with a prayer for the issuance a
temporary restraining order. LASAY sought the determination by the court of the "appropriate, proper interpretation of the provision
of Sec. 494 of Republic Act No. 7160" and of "whether or not the President of the Association of Barangay Captains can continue
holding office despite the termination of the Terms of Office of the Sangguniang Bayan of Sorsogon on June 30, 1992. 2 He posited
the theory that the term of office of GALAROSA as an ex officio member of the SB of Sorsogon is coterminous with that, of the said
SB which expired on 30 June 1992; hence there was a need for the new election of an ABC representative. He further alleged that
during its session, the SB of Sorsogon accepted and recognized the participation of GALAROSA over his (LASAY's) protest,
allegedly on the basis of the memorandum of the Department of Interior and Local Government (DILG) allowing the ABC presidents
elected before 30 June 1992 to continue in office until the election of new ones. LASAY then prayed for the issuance of a temporary
restraining order enjoining the SB of Sorsogon from recognizing GALAROSA as an ex officio member thereof and from allowing him
to participate in its deliberations, for the holding in abeyance of GALAROSA's salaries, and, after hearing, for a judgment "embodying
the literal interpretation of Sec. 494 of the New Local Government Code to the effect that the term of office of the ex
officio membership to the Sangguniang Bayan of the President; of [the] ABC should in no case be beyond the term of office of
said Sangguniang Bayan." The case was docketed as Civil Case No. 5755.
In its Answer, 3 the SB of Sorsogon, represented by the Provincial Prosecutor, asked for the dismissal of the petition because (a)
LASAY "has no legal right to file the petition or the petition "is based on pure speculative rights," and (b) the petition is premature
since the resolution of the issues raised may still be the subject of rules and regulations to implement Section 494 of the Code.
On 9 September 1992, the trial. court, per respondent Judge Eudarlio B. Valencia issued a temporary restraining order directing the SB
of Sorsogon "to desist from recognizing the participation of the old Ex officio membership of the President of the Association of
Barangay Captains and to hold in abeyance the taking and/or payment of salaries from the Municipal Government of Sorsogon
relative thereto." 4 It set the hearing on the application for a writ of preliminary injunction on 22 September 1992. On the latter date,
the court heard LASAY and the SB of Sorsogon. It then issued an order granting the parties thirty days within which to file their

memoranda in support of their respective positions, after which both the incident on the preliminary injunction and the merits of the
case shall be deemed submitted for decision.5
On 22 October 1992, the respondent Judge issued an order granting the application for the issuance of a writ of preliminary injunction
upon the filing of a bond of P40,000.00. 6
On 26 January, 1993, GALAROSA filed with the court a quo an Appearance with Motion to Annul Injunction order. 7 He prayed
therein that the 22 October 1992 Order be annulled, that the SB of Sorsogon be directed to recognize his participation as an ex
officio member thereof, that he be allowed to enjoy all the benefits and emolument's of the and that his appearance be noted.
On 26 February, 1993, the respondent Judge issued an order noting the above pleading of GALAROSA and directing LASAY to file
his "comment and/or opposition thereto" within five days from receipt of a copy of the said order, after which "the incident shall be
deemed submitted for resolution." 8
The trial court never resolved that "incident."
On 24 March 1993, the respondent Judge handed down a decision 9 in favor of LASAY, the adjudicatory portion of which reads as
follows:
WHEREFORE, in the light of all the foregoing considerations, judgment is hereby rendered:
(1) Declaring the incumbent President of the Association of Barangay Captains

of Sorsogon as without any further right or legal basis to continue in office
as ex-officio member of the present Sangguniang Bayan of Sorsogon pursuant to
and conformably with Section 494 of Republic Act No, 7160; and
(2) Ordering the respondent Sangguniang Bayan of Sorsogon to cease and desist
from recognizing the participation of the old ex-officio membership of the
President of the Association of Barangay Captains of the town of Sorsogon.
In holding for LASAY, the respondent Judge rejected the claim of the SB of Sorsogon that (1) pursuant to DILG Memorandum
Circular No. 92-38 dated 29 June 1992, Section 494 of the Local Government Code was reconciled with Article 210 (d)(3), Rule
XXIX of the Rules and Regulations Implementing the said Code which provides that incumbent ABC presidents shall continue to
serve as ex officio members of their respective sanggunians unless sooner removed for cause or the new officers shall have been
elected and qualified; (2) LASAY is not the proper party in interest and even if he is, he did not exhaust all available administrative
remedies; and (3) what is involved is a political question which is beyond the province of the trial court. As to the first, the respondent
judge ruled that Article 210 of the Rules and Regulations does not expressly provide that the term of office of the ABC presidents
as ex officio members of the SB shall go beyond the term of the SB concerned; since the term of the sanggunian concerned expired on
30 June 1992, it stands to follow that the ex officio membership of the liga president in the said sanggunian, by express mandate of
law, likewise ended on the said date. As to the exhaustion of administrative remedies, the respondent Judge ruled that it is not
applicable since the issue involved is "purely a legal one". He rejected the "political question" issue by stating that the interpretation of
laws, rules, and regulations is a judicial function and prerogative. Furthermore, he invoked Section 1, Article VIII of the 1987
Constitution on the scope of judicial review. The respondent Judge did not squarely tackle the issue regarding the locus standi of
LASAY, although he described LASAY as "the incumbent Barangay Captain of Gimaloto . . . a declared aspirant for President of the
[ABC] . . . as well as being a taxpayer claiming direct interest to complain, protest and seek the proper relief."
Unable to accept the decision, GALAROSA filed this petition which we have decided to treat as one for certiorari under Rule 65. He
submits therein that:
THE RESPONDENT JUDGE ERRED WHEN HE RULED THAT THE PETITIONER, DESPITE HIS
INCUMBENCY AS THE REPRESENTATIVE OF THE ASSOCIATION OF BARANGAY COUNCILS OF THE
MUNICIPALITY OF SORSOGON, HAS NO LONGER ANY LEGAL BASIS OR RIGHT TO HIS EX-
OFFICIO MEMBERSHIP IN THE SANGGUNIANG BAYAN OF THE MUNICIPALITY OF SORSOGON.

We required the respondents to comment on the petition, and on 3 June 1993 we issued a temporary restraining order directing the
respondent Judge to cease and desist from implementing and effecting the challenged decision.
In his comment, LASAY states that GALAROSA, not being a party to the case before the trial court, has no right to file the instant
petition. LASAY argues that although GALAROSA had filed a motion for intervention, that pleading was not acted upon by the trial
court. As to the merits of the petition, he asks that we sustain the challenged decision because it is in accord with existing
jurisprudence and the principles of statutory construction; he also avers that Memorandum Circular No. 92-38 of the DILG, which is
relied upon by GALAROSA, violates and contravenes the clear mandate of Section 494 of the Code which provides that in no case
shall the membership of the ex officio members of the SB extend beyond the term of the SB concerned, which ended on 30 June 1992.
GALAROSA filed a Reply to this Comment to which LASAY filed a rejoinder. Not to be out done, the former filed a Sur-rejoinder.
On 14 July 1993, the Office of the Solicitor General filed its comment. While not explicitly saying so, it asks us to grant the petition
and to set aside the challenged decision because there respondent Judge should have dismissed the action on the following grounds:
(a) LASAY failed to present a justiciable controversy since he is not an ABC president but a mere aspirant thereto, or, elsewise stated,
his right to an ex officio membership in the SB is purely anticipatory; (b) not being an ABC president, LASAY is not a proper party to
assail the ex officio membership of GALAROSA; and (c) the latter, who was to be directly affected by the petition of LASAY, was not
named a party-respondent; in view of this "non-joinder of proper part[y]," respondent Judge should have dismissed the petition
outright pursuant to Section 5, Rule 64 of the Revised Rules of Court.
We resolved to give due course to the petition and required the parties to submit their respective memoranda, which the subsequently
complied with.
Before proceeding to the main issue, we will address some issues which the parties have raised, to wit: (a) the legal personality of
LASAY to file the petition for declaratory relief and injunction with the trial court, (b) the absence of a justiciable controversy, (c) the
non-joinder of an indispensable party in the said petition, and (d) the precipitateness of the trial court's decision.
It must be stressed that the petition filed by LASAY with the trial court is one for declaratory relief and injunction and not solely for
the former. The latter can be either prohibitory or mandatory in character. LASAY sought to enjoin the SB of Sorsogon from
recognizing GALAROSA as an ex officio member of the SB and from allowing him to participate in its deliberations, and to direct it
to hold in abeyance the payment of GALAROSA's salaries. LASAY brought the action in his capacity as a barangay captain who is
seeking the presidency of the ABC of Sorsogon and in his capacity as a taxpayer. This Court agrees with GALAROSA and the Office
the Solicitor General that with respect to the first, LASAY does have the legal standing to institute the action for he is a mere aspirant
to the presidency of the ABC and his right thereto is a mere expectancy. We do rule, however, that as a taxpayer he has a sufficient
legal standing, because the injunction he prayed for is founded on what he believed to be an illegal disbursement of public funds of his
municipal government. In this jurisdiction, the strict, rule relative to the determination of real parties in interest has been sufficiently
relaxed to allow a taxpayer to bring an action to restrain the unlawful disbursement of public funds. 10
We also hold that the requisites for an action for declaratory relief were present, namely: (a) that there is justiciable controversy, (b)
that the controversy is between persons whose interests are adverse, (c) that the party seeking relief has a legal interest in the
controversy, and (d) that the issue invoked is ripe for judicial determination. 11 The controversy is whether GALAROSA can continue
to serve as a member of the SB after 30 June 1992. LASAY, as a taxpayer, has the locus standi to have it resolved because a decision
against GALAROSA would mean that he is not entitled to receive his salary and other benefits as a member of the SB and any such
payment to him beyond 30 June 1992 would be illegal.
Nonetheless, the form and nature of the action filed by LASAY required the inclusion of GALAROSA as an adverse party. It is his
right to his office that is challenged and he is the person who would be directly affected by any decision therein.
No final determination of an action can be had unless he is joined therein. He is therefore, an indispensable party. Under Section 7,
Rule 3 of the Revised Rules of Court, the joinder of indispensable parties is compulsory; consequently, no action can proceed unless
they are joined. 12 The absence of an indispensable party in a case render ineffectual all the proceedings subsequent to the filing of the
complaint including the judgment. 13 LASAY should have been required to implead GALAROSA and should he fail to do so, the
petition should be dismissed. 14GALAROSA in fact sought to intervene in the case by filing on 26 January 1993 an "Appearance with
Motion to Annul the Injunction Order." Unfortunately, after it was noted and LASAY was directed to file his "comment and/or
opposition thereto" after which the incident would be submitted for resolution, the respondent Judge, for reasons known only to him,
never did resolve it. Then with undue and precipitate haste, he rendered the challenged decision on 24 March 1993. That decision must
be set aside for having been rendered with grave abuse of discretion amounting to lack of jurisdiction since an indispensable party,
GALAROSA was not effectively impleaded and recognized as a party in the case and given the opportunity to file a responsive
pleading.
A remand of this case to the trial court for further proceedings consistent with the above disquisition would be the natural course of
action to follow. However, considering that the principal issue posed is purely legal and the pleadings of the parties have exhaustively
discussed the main issue and all collateral matters, the controversy could be forthwith resolved on the basis thereof. The remand of the
case to the trial court would only delay the final disposition of the case and would not serve the public interest, especially here where
our decision would affect all ABC presidents throughout the country. We have consistently ruled that the remand of a case to a lower
court for the reception of evidence is not necessary if this Court can already resolve the dispute on the basis of the records before it. 15
We shall then take up the core issue.
Section 494 of the Local Government Code of 1991 provides for the ex officio membership in the respective sanggunians of the duly
elected presidents of the liga at the municipality, city, and provincial levels, including the component cities and municipalities of
Metro Manila. The liga referred to therein is the liga ng mga barangay. Section 491 of the Code provides for its creation and purpose:
Sec. 491. Purpose of organization. There shall be an organization of all barangays to be known as the Liga ng
mga Barangay for the primary purpose of determining the representation of the liga in the sanggunians and for
ventilating, articulating, and crystallizing issues affecting barangay government administration and securing,
through proper and legal means, solutions thereto.
Every barangay is represented in the liga ng mga barangay by the punong barangay, or in his absence or incapacity, by
a sanggunian member duly elected for the purpose among its members. 16 The principal aim of the liga ng mga barangay is to promote
the development of barangays and secure the general welfare of their inhabitants. 17
The forerunner of the liga ng mga barangay is the katipunan ng mga barangay under Section 108 of B.P. Blg. 337, which was known
as the katipunang bayan in municipalities, katipunang panglungsod in cities, katipunang panlalawigan in provinces, and katipunan ng
mga barangay on the national level. Each barangay therein was represented by the punong barangay. The katipunang bayan was also
referred to as the Association of Barangay Councils or ABC for short. Pursuant to the first paragraph of Section 146 of B.P. Blg. 337,
the president of the said organization was among the members of the sangguniang bayan the legislative body of the municipality
subject, however, to appointment by the President of the Philippines. Under Section 110(3) thereof, the term of office of all officers
of the katipunang bayan, including its president, was to be governed by "the by-laws of the organization, without prejudice, however,
to their term of office as member of the sanggunian to which they may be correspondingly appointed." Section 25 of the By-Laws of
the Katipunan ng mga Barangay 18 provides that "the term of office of all officers of the katipunan at all levels shall be from the date
of their elections until the next katipunan elections following general barangay elections, subject to the limitations of Section 4 and the
succeeding sections hereof."19
On 7 March, then President Corazon C. Aquino issued Memorandum Circular No. 51 providing for policy guidelines on the
representation of certain sectors, including the president of the katipunang bayan, in the legislative bodies of local governments. Then
on 28 November 1988 she issued E.O. No. 342 delegating to the Secretary of Local Government the power to appoint certain local
offices under certain sections, including Section 146(1) of B.P. Blg. 337. Thereafter, appointments of the presidents of the katipunang
bayan as members of the sangguniang bayan were made by the Secretary of Local Government.
Immediately prior to the passage of the Local Government Code of 1991, the katipunang bayan or ABC in a municipality was
composed of the barangay captains who were elected in the barangay elections of 28 March 1989 held pursuant to R.A. No. 6679. In
the case at bar, it is presumed that GALAROSA was an elected punong barangay in the municipality of Sorsogon and was later
elected president of the ABC of Sorsogon.
On 7 April 1989, the Department of Local Government issued Circular No. 89-09 providing for the reorganization of the katipunan ng
mga barangays in all levels and prescribing the guidelines for the election of their officers. Guideline 2.2 thereof on terms of office
reads:
The terms of office of all officers of the katipunan at all levels shall be from the date of their election until their
successors shall have been duly elected and qualified, without prejudice, however, to the terms of their appointments
as member of the sanggunian, to which they may be correspondingly appointed.
Accordingly, the president of the katipunang bayan became, after an appointment extended by the President through the Secretary of
the Department of Local Government, a member of the first sangguniang bayan organized under the 1987 Constitution following the
local elections held on 18 January 1988. That GALAROSA was extended such appointment is not disputed.
The Local Government Code of 1991 does not explicitly provide that upon its effectivity the katipunan ng mga barangay under B.P.
Blg. 337 automatically became the liga ng mga barangay under the Local Government Code and that the president of the ABC
automatically became the president of the liga whose term as ex officio member of the first sangguniang bayan under the 1987
Constitution is coterminous with that of the other regular members of the SB or until 30 June 1992 pursuant to Section 494 of the
Local Government Code in relation to Section 2, Article XVIII of the 1987 Constitution 20 and Section 5 of R.A. No. 6636. 21 Absent
such explicitness and considering (1) that the opening clause of Section 491 is expressed in the future tense such that the liga can only
be deemed to exist upon the effectivity of the Local Government Code of 1991 and (2) that Section 494 speaks of "duly elected
presidents of the liga" thereby clearly implying an election after the organization of the liga, the conclusion to be drawn is that the
legislature never intended that Section 494 would apply to the incumbent presidents of the katipunang bayan.
In short, there is no indication at all that Section 491 and Section 494 should be given retroactive effect to adversely affect the
presidents of the ABC. They should thus be applied prospectively. There is a substantive rationale for this. The Local Government
Code significantly altered the previous law and rules relative to the membership of the presidents of the katipunang bayan or the ABC.
In the first place, a prior appointment by the President, as required under Section 110(3) of B.P. Blg. 337 or by him through the
Secretary of Interior and Local Government pursuant to E.O. No. 342, is no longer necessary. It may be pointed out that B.P. Blg. 337
has been expressly repealed under paragraph (a), Section 534 of the Local Government Code of 1991. Accordingly, E.O. No. 342 is
likewise deemed repealed either as a consequence thereof or under paragraph (f) of the said section which repeals, inter alia, executive
orders inconsistent with any provisions of the said Code. In the second place, Section 494 specifically provides that the term of office
of the liga presidents shall in no case go "beyond the term of office of the sanggunian concerned." Consequently, the expiration of
their term of office of the regular members thereof. The section however, does not fix the specific duration of their term
as liga president. This is left to the by-laws of the liga pursuant to Article 211(g) of the Rules and Regulations Implementing the Local
Government Code (IRR for brevity). It may be recalled that under R.A. No. 6679, the term of office of the punong barangay elected in
the 28 March 1989 election for barangay officials was five years commencing on 1 May 1989 and ending 31 May 1994. It also
provides that the next regular election of barangay officials shall be on the second Monday of May 1994 and on the same day every
five years thereafter and that their term of office shall begin on the first day of June following their election and until their successors
shall have been elected an qualified. On the other hand, Section 43(c) of the Local Government Code of 1991 fixes the term of
elective barangay officials at three years which, insofar as those first elected under it are concerned, shall begin "after the regular
election . . . on the second Monday of May 1994.
Nonetheless, notwithstanding the prospective character of Section 494 of the Local Government Code of 1991, the fact remains that
the presidents of the katipunang bayan or ABC who were appointed as members of the sangguniang bayan by the President through
the Secretary of Local Government by virtue of E.O. No. 342 were appointed to the sangguniang bayan whose regular members were
elected in the 18 January 1988 local elections and whose terms expired on 30 June 1992. It is t be presumed that they could not have
been appointed for a term beyond that of the sangguniang bayan. This is evident from both Section 110(3) of B.P. Blg. 337 and
Circular No. 89-09 of the Department of Local Government which respectively provide that the term of office of the ABC presidents
therein determined is "without prejudice to their term of office as member of the sanggunian to which they were accordingly
appointed' and "without prejudice however, to the terms on [sic] their appointments as members of the sanggunian, to which they may
be correspondingly be appointed." Accordingly, while ABC presidents could remain as such after 30 June 1992 because their term of
office as ABC presidents have not yet ended, their term of office as members of the sangguniang bayan has expired.
There is, however, no law which prohibits them from holding over as members of the sangguniang bayan. On the contrary, the
aforementioned IRR, prepared and issued by the Oversight Committee upon specific mandate of Section 533 of the Local Government
Code, expressly recognizes and grants that hold-over authority to ABC presidents. Pertinent portions of paragraphs (d) and (f), Article
210 of the IRR read as follows:
Art. 210 Liga ng mga barangay.
xxx xxx xxx
(d) Ex officio membership in the sanggunian

xxx xxx xxx
(3) The incumbent presidents of the municipal, city, and provincial chapters of
the liga shall continue to serve as ex officio members of
the sanggunian concerned until the expiration of their term of office, unless
sooner revoked for cause.
xxx xxx xxx
(f) Organizational structure
(l) . . . . Pending election of the presidents of the municipal, city, provincial, and metropolitan chapters of the liga,
the incumbent presidents of the association of barangay councils in the municipality, city, province, and
Metropolitan Manila shall continue to act as presidents of the corresponding liga chapters under this Rule.
This was further elaborated in an unnumbered Circular of the DILG dated 15 June 1992 on the subject "Clarifying the Term of Office
of Liga Chapter Presidents (ABC) as Members of the Sanggunian which reads:
In order to clarify issues arising from various interpretations of pertinent provisions of the Local Government Code
of 1991 and the Implementing Rules and Regulations relative to the term of office of the Liga chapter presidents as
members of the sanggunian, the following guidelines are hereby issued.
1. The incumbent presidents of the ABC at the municipal, city, province and
Metropolitan Manila shall continue [sic] to act as presidents of the
corresponding Liga chapters.
2. To ensure continued representation of the barangay in the sanggunian, they

shall continue to serve as ex-officio members of the sanggunian concerned,
unless sooner removed for cause, pending the election of the first set of officials
on the national Liga and local chapters.
3. The election of the first set of officials of the national Liga and local chapters
shall be within six (6) months (not to go beyond March 9, 1993) from
ratification by the National Liga and its constitution and by-laws.
4. The ratification of the Liga Constitution and by-laws shall -be within six (6)
months (not to go beyond September 9, 1992) from the promulgation of the
Implementing Rules and Regulation (IRR) of the Local Government Code on
March 9, 1992.
And on 29 June 1992, the DILG issued Memorandum Circular No. 92-38 which reads as follows:
In view of the numerous issues and concerns reaching this Department requesting for a clarificatory ruling regarding
the term of office of the incumbent ABC Presidents as ex-officio members of the respective sanggunian pending the
reorganization and election of the new liga chapter, the following guidelines are hereby promulgated for the
guidance and reference of all concerned:
Section 494 Local Government Code of 1991 (RA 7160)
The duly elected presidents of the liga at the municipal, city and provincial levels, including the
component cities and municipalities of Metro Manila, shall serve as ex officio members of the
sangguniang bayan, sangguniang panglunsod [and] sangguniang panlalawigan, respectively. They
shall serve as such only during their term of office as presidents of the liga chapters which in no
case shall be beyond the term of office of the sanggunian concerned.
Article 210 (d) (3), Rule XXIX of the IRR
The incumbent presidents of the municipal, city and provincial chapters of the Liga shall continue
to serve as ex officio members of the sanggunian concerned until the expiration of their term of
office, unless sooner removed for cause.
The aforequoted provisions of the Code and its IRR clearly provide that upon the cessation from office of the
elective sanggunian members, these ex-officio members shall likewise cease to hold office upon the election and
qualification of their successors since they cannot serve beyond the end of the term of office of the elective members
(See Laspinas vs. Santos, G.R. No. 83520, June 23, 1988; Cadugon vs. Singuat-Guerra, G.R. No. 85884, March 9,
1989).
Be that as it may, following the generally accepted principle that laws shall have prospective effect unless the
contrary if expressly provided (Section 19, Chapter 5, Introductory Provisions, Administrative Code of 1987), the
applicability of the aforequoted provisions does not contemplate of the incumbent sanggunian members, appointive
or elective.
This principle is buttressed by Article 210 (f), Rule XXIX of the IRR which declares, in part, the "pending election
of the presidents of the municipal, city, provincial, and metropolitan chapters of the liga, the incumbent presidents of
the association of barangay councils in the municipality, city, province, and Metropolitan Manila shall continue to
act as presidents of the corresponding liga chapters under this Rule.
xxx xxx xxx
The application of the hold-over doctrine in both the aforementioned provisions of the IRR and the issuances of the DILG should be
upheld. The rule is settled that unless " "holding over be expressly or impliedly prohibited, the incumbent may continue to hold over
until some one else is elected and qualified to assume the office." 22 This rule is demanded by the most obvious must requirements of
public policy, for without it there must frequently be cases where, from a failure to elect or a refusal or neglect to qualify, the office
would be vacant and the public service entirely suspended." 23 Otherwise stated, the purpose is to prevent the hiatus in the government
pending the time when the successor may be chosen and inducted into office. 24 Section 494 of the Local Government Code could not
have been intended to allow a gap in the representation of the barangays, through the presidents of the ABC, in the sanggunian. Since
the term of office of the punong barangays elected in the 28 March 1989 election and the term of office of the presidents of the ABC
have not yet expired and taking into account the special role conferred upon and the broader powers and functions invested in the
barangays by the Code as a basic political unit, a primary planning and implementing unit of government policies in the community,
and as forum wherein the collective views of the people may be expressed and considered and where disputes may be amicably
settled, 25 it would be in harmony with sound logic to infer that the Code never intended to deprive the barangays of their
representation in the sangguniang bayan during the interregnum when the liga has yet to be formally organized with the election of its
officers.
Besides, the promulgation of the IRR by the Oversight Committee and the pertinent issues of the DILG are in the nature of executive
construction and are thus entitled to great weight and respect by the Court, 26 especially that of the former since the composition of the
Oversight Committee includes six Members of Congress of the Philippines three Senators, one of whom was the Chairman of the
Senate Committee on Local Government, and three Congressmen, one of whom was the Chairman of the House Committee on Local
Government who are presumed to know the intent of the law.
We therefore hold that GALAROSA, as president of the ABC of Sorsogon, can legally and validly hold over as a member of
the sangguniang bayan of Sorsogon, Sorsogon, until the election of the first set of officers of the liga ng mga barangay, unless he is
sooner removed for cause.
WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the decision of the respondent Judge in Civil Case
No. 5575 of Branch 52 of the Regional Trial Court of Sorsogon, Sorsogon.
Costs against private respondent Rodolfo Lasay.

SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado, Romero, Nocon, Bellosillo, Melo, Quiason, Puno and Vitug, JJ., concur.
G.R. No. L-47245 December 9, 1977
GUALBERTO J. DELA LLANA, petitioner,

vs.
THE COMMISSION ON ELECTIONS, THE COMMISSION ON AUDIT, THE SECRETARY OF FINANCE and THE
BUDGET COMMISSIONER, respondents.
RESOLUTION
CASTRO, C.J.:
Considering the allegations, issues presented, and arguments adduced (a) in what the petitioner has denominated as a "Petition for
Prohibition or Declaratory Relief," (b) in the Solicitor General's Comment on the petition, and (c) at the hearing on November 24,
1977, the Court Resolved NOT to give due course to the petition and to DISMISS the same, for the reasons hereunder set forth.
(1) The question to be submitted to the people in the December 17, 1977 referendum which reads, "Do you vote that President
Ferdinand E. Marcos continue in office as incumbent President and be Prime Minister after the organization of the Interim Batasang
Pambansa as provided for in Amendment No. 3 of the 1976 Amendments to the Constitution?," is in neither the nature nor the form of
an amendment. The holding of the referendum will not result in an indirect amendment to Amendment No. 3 to the Constitution which
provides that "The incumbent President of the Philippines shall be the Prime Minister and he shall continue to exercise all his powers
even after the interim Batasang Pambansa is organized and ready to discharge its functions and likewise he shall continue to exercise
his powers and prerogatives under the Nineteen Hundred and Thirty Five Constitution and the powers vested in the President and the
Prime Minister under this Constitution." Presidential Decree No. 1229 which calls for the December 17, 1977 referendum cannot
therefore be said to suffer from any constitutional infirmity. If the people vote "yes," Amendment No. 3 will merely be reaffirmed and
reinforced. If the people vote "no," the incumbent President, heeding "the will" of the people, will - as he has categorically announced
- resign; in such situation, he will be merely exercising the prerogative, inherent in all public officials, to resign. In either case the
Constitution, as it now reads, will remain unaltered.
(2) The matter of whether or not the holding of the December 17, 1977 referendum is unnecessary because the people, on several
occasions, had already expressed their assent to the incumbent President's continuance in office and their approval of his programs of
government, is a political and non-justiciable question, involving as it does the wisdom, no more and no less, of the decision to call for
a referendum. The power to determine when a referendum should be called and what matter is important for referral to the people,
resides in the political branch of the Government, the exercise of which involves consideration of a multitude of factors political,
social, economic, etc. - normally outside the periphery of competence of the courts.
(3) The call for the referendum is explicitly authorized by Amendment No. 7 of the Constitution which in part provides that
"Referenda conducted thru the barangays and under the supervision of the Commission on Elections may be called at any time the
government deems it necessary to ascertain the will of the people regarding any important matter whether of national or local interest."
If, pursuant to this grant of power, the President decides, as he has decided, to consult with the people and submit himself to a vote of
confidence in a referendum because he deems it important to do so, he cannot be constitutionally faulted. His action would also be in
full accord with the spirit of Section 1, Article XIII of the Constitution, which states that public office is a public trust and that public
officers shall remain accountable to the people.
It is clear from the above that the petition does not pose any question of sufficient importance or significance to warrant the further
intention of the Court.
The dismissal of the instant petition is immediately executory.
Makasiar, Antonio, Aquino, Concepcion Jr., Santos, Fernandez and Guerrero, JJ., concur.

Fernando, J., is on leave.
Martin, J., is on sick leave.
Separate Opinions
BARREDO, J., concurring:
I concur in the resolution drafted by the Chief Justice, but I feel it is imperative that I clarify my position as to one particular point,
namely, whether or not the result of the forthcoming referendum will have a substantial bearing on the implementation of the second
paragraph of Amendment No. 3 approved in October, 1976 to the Constitution of the Philippines of 1973, which provides that the
"incumbent President of the Philippines (meaning President Marcos) shall be the Prime Minister."
Of course, should the result of the referendum be affirmative, no possible constitutional problem can arise because President Marcos
will be assuming his position as Prime Minister as the amendment ordains, albeit it should be emphasized that he would be doing so
by direct mandate of the people rather than by choice of the members of the Batasan, which is not explicitly in accordance with the
prescribed procedure in parliamentary governments - an innovation of the 1976 amendments patterned somehow after the one
introduced by the transitory provisions of the Constitution of 1973 in regard to the interim Prime Minister of the
quondam interim National Assembly, which, however, permitted the Assembly to subsequently make its own choice of its prime
minister.
It is if the results should be negative that the question might arise as to whether or not, in effect, the aforementioned amendment would
then be itself amended by denying to the incumbent President the office vested in him by the amendment. In this connection, it must
be borne in mind that, in strict sense, whether or not President Marcos will assume said office could be his prerogative to decide as an
individual, for which decision, either way, he would, naturally, stand responsible to the people. In a democracy, it is only an elective
office that one cannot decline after being voted into it by the electorate. Ordinarily, an office cannot be conferred upon any individual
by means of a constitutional or statutory provision, hence the right to decline must be deemed reserved to the designee if any such
provision should be enacted. Now, if President Marcos may decline on his own personal volition to accept the office in question, if
only because he might feel it is best to follow strictly the parliamentary-system-procedure of allowing the parliament to select its
prime minister, and such declination would not constitute an amendment of the amendment in question, why would a declination
based on a mandate of the people voiced in a referendum be categorized as a constitutional amendment?
In other words, there is a juridical distinction between an outright amendment to the Constitution, on the one hand, and on the other, a
mandate of the people permitting President Marcos to do what he is at liberty to do, that is, decline the office the constitutional
amendment has designed for him, without causing any alteration or modification of the terms of the Constitution.
In any event, in essence, the question in the forthcoming referendum may be deemed a proposal to vary the provision of Amendment
No. 3, by making the implementation thereof dependent on the result of the referendum. Substantially, therefore, the affirmative vote
of the people will amount to a ratification or approval of the proposal. Matters of form aside, there is no violation of the procedure for
constitutional amendment, particularly when it is considered that the motivation is precisely to ascertain with more definiteness the
true will of the people on the specific question, isolated from other issues, if they really want President Marcos to be the prime
minister in the Batasang Pambansa.
TEEHANKEE, J., dissenting:

I concur with the dissenting opinion of Justice Muoz Palma in accordance with my previous dissenting opinions in the 1975
Referendum cases 1 and the 1976 Referendum-Plebiscite cases 2 and wish to stress only the following considerations:
1. In Gonzales vs. Comelec, 3 I had pointed out that such referendums which concededly are "purely consultative" and cannot abrogate
nor amend the Constitution are not provided for nor authorized by the 1973 Constitution and that "the referendum power of the
people" as it is known in law and usage" is a negative power through which appeal may be taken directly to the people from an
affirmative action taken by their representatives." 4 I held therein that "prescinding from the question of whether it is subject to judicial
review and determination, the termination of martial law is not a matter of choice for the people (who much less than the courts can
have 'judicially discoverable and manageable standards' nor 'the complete picture of the emergency' to make the determination) but a
matter of the President's constitutional duty to determine and declare the termination of martial law when the necessity therefor has
ceased. As necessity creates the rule, so it limits its duration." It may be noted that along the same principle, the proposal to include
and submit to the December 17, 1977 referendum the question of reimposition of curfew was eventually discarded on the ground that
it was not a proper subject for submittal in a referendum.
2. In the October, 1976 Amendments to the 1973 Constitution, it was provided in paragraph 7 thereof inter alia that Referenda
conducted thru the barangays and under the supervision of the Commission on Elections may be called at any time the government
deems it necessary to ascertain the will of the people regarding any important matter whether of national or Focal interest," obviously
to remedy the void in the 1973 Constitution. But even under such amendment authorizing referendums, the question to be submitted at
the scheduled referendum of voting that "President Ferdinand E. Marcos continue in office as incumbent President and be Prime
Minister after the organization of the Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1976 Amendments to the
Constitution" is not a proper subject for submittal to a referendum, contrary to the ruling of the majority.
3. Under said amendment, questions that may be submitted to referendums that are now constitutionally authorized (by virtue of the
majority ruling in the Sanidad case) refer to "any important matter whether of national or local interest." The proposed question does
not come within the context or purview of such "important matter" to be submitted to the people for consultation. As brought out at the
hearing, the question of whether President Marcos continue in office as incumbent President and be Prime Minister after the
organization of the Interim Batasang Pambansa is not a proper subject matter for referendum because it goes against the whole
structure and spirit of the Constitution which does not envision nor authorize the affirmation or repudiation of a single personality in
office (not to mention that he and the Batasang Bayan itself unanimously held that no election is possible under the Constitution for
the position [of incumbent President] he presently holds 5 ) but calls for contested elections on fixed dates specified by the
Constitution 6 in free elections under the Commission on Elections (a constitutional commission ).
Whether free contested elections can be held under martial law is yet another question. The opinion expressed by some ranking
justices in the 1973 ratification cases on the question of the people's acceptance of the new Constitution, that "under a regime of
martial law, with the free expression of opinions through the usual media vehicles restricted, we have no means of knowing, to the
point of judicial certainty, whether the people have accepted the Constitution," would seem to be equally applicable thereto.
I am constrained, therefore, to vote to give due course to the petition and to grant the relief prayed for.
MUOZ PALMA, J., dissenting:
I am constrained to dissent from the Resolution of the majority and vote for giving due course to the Petition and granting the relief
prayed for.
1. The proposed referendum for December 17, 1977 which submits to the people the following question:
Do you vote that President Ferdinand E. Marcos continue in office as incumbent President and be Prime Minister
after the organization of the 'Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1,1)76
Amendments to the Constitution?
Is premised or based on or has reference to amendment No. 3 of the 1976 Amendments to the Constitution.
Inasmuch as it was my opinion in Sanidad vs. Commission on Elections, et al., L-44640 and others, October 12, 1976, that Presidential
Decrees 991 and 1033 which called for a national referendum-plebiscite on October 16. 1976, are null and void as they contravene the

express provisions of the 1973 Constitution on the amending process, perforce P.D. 1229, object of this petition, is without
constitutional and legal basis.
2. The necessity for holding the December 17, 1977 Referendum is to my mind a justiciable question and can be inquired into by the
Court as it involves the use of public funds, a power granted under the Constitution to the legislative branch of the Government, it is
true, but one that is subject to certain limitations so that the matter of whether or not that power has been transgressed or abused or
whether or not the appropriation of public funds for the purpose indicated is within the authority granted by the law or the Constitution
is within the competence of the Court to inquire into and resolve.
3. It is claimed by respondents that the President is authorized to call for a Referendum under Amendment No. 7 of the
Constitution ** Although I held the view in Aquino, Jr., Herrera, and others vs. Commission on Elections, L-40004, January 31, 1975,
which sought to stop the holding of a Referendum on February 27, 1975, that the holding of a Referendum is a device for consulting
the people on national issues and may be authorized as an exercise of the executive power under the present composition of the
government, however, I likewise stated that a referendum under martial rule can be of no far-reaching significance as it is
accomplished under an atmosphere or climate of fear. To that I may add that under a martial law regime there is, undeniably,
repression of certain rights and freedoms, and any opinion expressed would not pass the test of a free and untrammeled expression of
the will of the people.
That "(M)artial law connotes power of the gun, meant coercion by the military, and compulsion and intimidation" was so stated by
President Ferdinand E. Marcos upon proclamation of martial law in the country. (Daily Express, November 29, 1972, page 4 quoted in
Chief Justice Roberto Concepcion's Opinion in Javellana vs. Executive Secretary, et al., and other cases, L-36142, March 31, 1973. 50
SCRA 30, 132)
Hence, the futility of such a referendum which entails an expenditure of public funds amounting to ten million pesos which could be
diverted to relieve the economic distress of our low-income people.
Teehankee, J., concurs.
SANTOS, J., concurring:
I would like to add by way of addendum to my vote to deny due course to this petition, on the grounds already explained by the Chief
justice, the following.
The forthcoming referendum on December 17, 1977 is a milestone in the nation's continuing search for a truly free and democratic
mechanism to ascertain the people's will on vital issues that concern them. This particular referendum on the issue of whether or not
the people would want President Ferdinand E. Marcos to 'continue in office as incumbent President and be Prime Minister after the
organization of the Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1976 Amendments to the Constitution"
affords our people, as the sovereign authority, the constitutional prerogative of expressing their views in regard to important matters.
this time, of national concern pursuant to Amendment No. 7 which provides for the calling of a referendum "at any time the
government deems it necessary to ascertain the will of the people regarding any important matter whether of national or of local
interest." This is, after all, the essence and implementation of the constitutional mandate and principle that sovereignity resides in the
people. Our continuing search for the democratic mechanism Is specifically enhanced because, for the first time there is the
categorical commitment by the incumbent President, no less, to resign if he is voted down by the people. This assurance should be
enough for those who are genuinely concerned about national affairs to campaign for "No" votes if they so desire - because they do
not believe in or agree with the manner the President conducts the affairs of the nation during these critical times or even because they
do not like martial law or that they believe it should now be terminated.
I also feel strongly having been once a member of the Citizens' National Committee on Referenda, Plebiscites and Elections
(CINACORPE) along with Ambassador Emilio Abello, Bishops Macario V. Ga and Mariano Gaviola, Commissioner Cesar Miraflor,
Justice Roberto Regala and others, that the Filipino people are free, in the real sense of the term, to vote as they wish in this
forthcoming referendum. I have great faith, indeed I am certain, that if the majority of our people really and truly desire to vote "No",
not all the Armed Forces, as well as the officialdom combined, can prevent them from so expressing their desire so that there is, I
submit, no basis except perhaps in isolated instances and these would be difficult if not impossible to prevent for the apprehension that
the people will vote "Yes" because of the alleged coercive atmosphere generated by martial law. Those who fear that the people are
intimidated into voting against their free will, fail to take the strong Filipino commitment and fidelity to democratic processes and
freedom into account, or do not realize that our people will not tolerate subversion or perversion of their sovereign will even under
martial law.
Separate Opinions
BARREDO, J., concurring:
I concur in the resolution drafted by the Chief Justice, but I feel it is imperative that I clarify my position as to one particular point,
namely, whether or not the result of the forthcoming referendum will have a substantial bearing on the implementation of the second
paragraph of Amendment No. 3 approved in October, 1976 to the Constitution of the Philippines of 1973, which provides that the
"incumbent President of the Philippines (meaning President Marcos) shall be the Prime Minister."
Of course, should the result of the referendum be affirmative, no possible constitutional problem can arise because President Marcos
will be assuming his position as Prime Minister as the amendment ordains, albeit it should be emphasized that he would be doing so
by direct mandate of the people rather than by choice of the members of the Batasan, which is not explicitly in accordance with the
prescribed procedure in parliamentary governments - an innovation of the 1976 amendments patterned somehow after the one
introduced by the transitory provisions of the Constitution of 1973 in regard to the interim Prime Minister of the
quondam interim National Assembly, which, however, permitted the Assembly to subsequently make its own choice of its prime
minister.
It is if the results should be negative that the question might arise as to whether or not, in effect, the aforementioned amendment would
then be itself amended by denying to the incumbent President the office vested in him by the amendment. In this connection, it must
be borne in mind that, in strict sense, whether or not President Marcos will assume said office could be his prerogative to decide as an
individual, for which decision, either way, he would, naturally, stand responsible to the people. In a democracy, it is only an elective
office that one cannot decline after being voted into it by the electorate. Ordinarily, an office cannot be conferred upon any individual
by means of a constitutional or statutory provision, hence the right to decline must be deemed reserved to the designee if any such
provision should be enacted. Now, if President Marcos may decline on his own personal volition to accept the office in question, if
only because he might feel it is best to follow strictly the parliamentary-system-procedure of allowing the parliament to select its
prime minister, and such declination would not constitute an amendment of the amendment in question, why would a declination
based on a mandate of the people voiced in a referendum be categorized as a constitutional amendment?
In other words, there is a juridical distinction between an outright amendment to the Constitution, on the one hand, and on the other, a
mandate of the people permitting President Marcos to do what he is at liberty to do, that is, decline the office the constitutional
amendment has designed for him, without causing any alteration or modification of the terms of the Constitution.
In any event, in essence, the question in the forthcoming referendum may be deemed a proposal to vary the provision of Amendment
No. 3, by making the implementation thereof dependent on the result of the referendum. Substantially, therefore, the affirmative vote
of the people will amount to a ratification or approval of the proposal. Matters of form aside, there is no violation of the procedure for
constitutional amendment, particularly when it is considered that the motivation is precisely to ascertain with more definiteness the
true will of the people on the specific question, isolated from other issues, if they really want President Marcos to be the prime
minister in the Batasang Pambansa.
TEEHANKEE, J., dissenting:
I concur with the dissenting opinion of Justice Muoz Palma in accordance with my previous dissenting opinions in the 1975
Referendum cases 1 and the 1976 Referendum-Plebiscite cases 2 and wish to stress only the following considerations:
1. In Gonzales vs. Comelec, 3 I had pointed out that such referendums which concededly are "purely consultative" and cannot abrogate
nor amend the Constitution are not provided for nor authorized by the 1973 Constitution and that "the referendum power of the
people" as it is known in law and usage" is a negative power through which appeal may be taken directly to the people from an

affirmative action taken by their representatives." 4 I held therein that "prescinding from the question of whether it is subject to judicial
review and determination, the termination of martial law is not a matter of choice for the people (who much less than the courts can
have 'judicially discoverable and manageable standards' nor 'the complete picture of the emergency' to make the determination) but a
matter of the President's constitutional duty to determine and declare the termination of martial law when the necessity therefor has
ceased. As necessity creates the rule, so it limits its duration." It may be noted that along the same principle, the proposal to include
and submit to the December 17, 1977 referendum the question of reimposition of curfew was eventually discarded on the ground that
it was not a proper subject for submittal in a referendum.
2. In the October, 1976 Amendments to the 1973 Constitution, it was provided in paragraph 7 thereof inter alia that Referenda
conducted thru the barangays and under the supervision of the Commission on Elections may be called at any time the government
deems it necessary to ascertain the will of the people regarding any important matter whether of national or Focal interest," obviously
to remedy the void in the 1973 Constitution. But even under such amendment authorizing referendums, the question to be submitted at
the scheduled referendum of voting that "President Ferdinand E. Marcos continue in office as incumbent President and be Prime
Minister after the organization of the Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1976 Amendments to the
Constitution" is not a proper subject for submittal to a referendum, contrary to the ruling of the majority.
3. Under said amendment, questions that may be submitted to referendums that are now constitutionally authorized (by virtue of the
majority ruling in the Sanidad case) refer to "any important matter whether of national or local interest." The proposed question does
not come within the context or purview of such "important matter" to be submitted to the people for consultation. As brought out at the
hearing, the question of whether President Marcos continue in office as incumbent President and be Prime Minister after the
organization of the Interim Batasang Pambansa is not a proper subject matter for referendum because it goes against the whole
structure and spirit of the Constitution which does not envision nor authorize the affirmation or repudiation of a single personality in
office (not to mention that he and the Batasang Bayan itself unanimously held that no election is possible under the Constitution for
the position [of incumbent President] he presently holds 5 ) but calls for contested elections on fixed dates specified by the
Constitution 6 in free elections under the Commission on Elections (a constitutional commission ).
Whether free contested elections can be held under martial law is yet another question. The opinion expressed by some ranking
justices in the 1973 ratification cases on the question of the people's acceptance of the new Constitution, that "under a regime of
martial law, with the free expression of opinions through the usual media vehicles restricted, we have no means of knowing, to the
point of judicial certainty, whether the people have accepted the Constitution," would seem to be equally applicable thereto.
I am constrained, therefore, to vote to give due course to the petition and to grant the relief prayed for.
MUOZ PALMA, J., dissenting:
I am constrained to dissent from the Resolution of the majority and vote for giving due course to the Petition and granting the relief
prayed for.
1. The proposed referendum for December 17, 1977 which submits to the people the following question:
Do you vote that President Ferdinand E. Marcos continue in office as incumbent President and be Prime Minister
after the organization of the 'Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1,1)76
Amendments to the Constitution?
Is premised or based on or has reference to amendment No. 3 of the 1976 Amendments to the Constitution. * Inasmuch as it was my
opinion in Sanidad vs. Commission on Elections, et al., L-44640 and others, October 12, 1976, that Presidential Decrees 991 and 1033
which called for a national referendum-plebiscite on October 16. 1976, are null and void as they contravene the express provisions of
the 1973 Constitution on the amending process, perforce P.D. 1229, object of this petition, is without constitutional and legal basis.
2. The necessity for holding the December 17, 1977 Referendum is to my mind a justiciable question and can be inquired into by the
Court as it involves the use of public funds, a power granted under the Constitution to the legislative branch of the Government, it is
true, but one that is subject to certain limitations so that the matter of whether or not that power has been transgressed or abused or
whether or not the appropriation of public funds for the purpose indicated is within the authority granted by the law or the Constitution
is within the competence of the Court to inquire into and resolve.

3. It is claimed by respondents that the President is authorized to call for a Referendum under Amendment No. 7 of the
Constitution ** Although I held the view in Aquino, Jr., Herrera, and others vs. Commission on Elections, L-40004, January 31, 1975,
which sought to stop the holding of a Referendum on February 27, 1975, that the holding of a Referendum is a device for consulting
the people on national issues and may be authorized as an exercise of the executive power under the present composition of the
government, however, I likewise stated that a referendum under martial rule can be of no far-reaching significance as it is
accomplished under an atmosphere or climate of fear. To that I may add that under a martial law regime there is, undeniably,
repression of certain rights and freedoms, and any opinion expressed would not pass the test of a free and untrammeled expression of
the will of the people.
That "(M)artial law connotes power of the gun, meant coercion by the military, and compulsion and intimidation" was so stated by
President Ferdinand E. Marcos upon proclamation of martial law in the country. (Daily Express, November 29, 1972, page 4 quoted in
Chief Justice Roberto Concepcion's Opinion in Javellana vs. Executive Secretary, et al., and other cases, L-36142, March 31, 1973. 50
SCRA 30, 132)
Hence, the futility of such a referendum which entails an expenditure of public funds amounting to ten million pesos which could be
diverted to relieve the economic distress of our low-income people.
Teehankee, J., concurs.
SANTOS, J., concurring:
I would like to add by way of addendum to my vote to deny due course to this petition, on the grounds already explained by the Chief
justice, the following.
The forthcoming referendum on December 17, 1977 is a milestone in the nation's continuing search for a truly free and democratic
mechanism to ascertain the people's will on vital issues that concern them. This particular referendum on the issue of whether or not
the people would want President Ferdinand E. Marcos to 'continue in office as incumbent President and be Prime Minister after the
organization of the Interim Batasang Pambansa as provided for in Amendment No. 3 of the 1976 Amendments to the Constitution"
affords our people, as the sovereign authority, the constitutional prerogative of expressing their views in regard to important matters.
this time, of national concern pursuant to Amendment No. 7 which provides for the calling of a referendum "at any time the
government deems it necessary to ascertain the will of the people regarding any important matter whether of national or of local
interest." This is, after all, the essence and implementation of the constitutional mandate and principle that sovereignity resides in the
people. Our continuing search for the democratic mechanism Is specifically enhanced because, for the first time there is the
categorical commitment by the incumbent President, no less, to resign if he is voted down by the people. This assurance should be
enough for those who are genuinely concerned about national affairs to campaign for "No" votes if they so desire - because they do
not believe in or agree with the manner the President conducts the affairs of the nation during these critical times or even because they
do not like martial law or that they believe it should now be terminated.
I also feel strongly having been once a member of the Citizens' National Committee on Referenda, Plebiscites and Elections
(CINACORPE) along with Ambassador Emilio Abello, Bishops Macario V. Ga and Mariano Gaviola, Commissioner Cesar Miraflor,
Justice Roberto Regala and others, that the Filipino people are free, in the real sense of the term, to vote as they wish in this
forthcoming referendum. I have great faith, indeed I am certain, that if the majority of our people really and truly desire to vote "No",
not all the Armed Forces, as well as the officialdom combined, can prevent them from so expressing their desire so that there is, I
submit, no basis except perhaps in isolated instances and these would be difficult if not impossible to prevent for the apprehension that
the people will vote "Yes" because of the alleged coercive atmosphere generated by martial law. Those who fear that the people are
intimidated into voting against their free will, fail to take the strong Filipino commitment and fidelity to democratic processes and
freedom into account, or do not realize that our people will not tolerate subversion or perversion of their sovereign will even under
martial law.
GR NO. L-7453, May 11, 1956
ONG LIAN, ET AL., PETITIONERS-APPELLEES, V.S. THE MUNICIPAL BOARD OF MANILA, ET AL.,
RESPONDENTS-APPELLANTS, JUANITA MIRANDA, ET AL., INTERVENORS-APPELLANTS.

DECISION
BAUTISTA ANGELO, J.:
This is an action for declaratory judgment instituted in the Court of First Instance of Manila seeking to compel respondents to renew
the licenses and permits heretofore issued to petitioners to enable them to reopen their stores or resume their business of selling fresh
meat within a distance of 200 meters from the boundary of the Aranque market upon the theory that Ordinance No. 3555 which was
repealed by Ordinance To. 3563, both of the City of Manila, should stand repealed despite the judgment of nullity of the latter
ordinance, praying at the same time that a writ of preliminary mandatory injunction be issued pending the complete termination of the
proceeding. The writ prayed for was issued ex-parte and, after trial, it was made permanent, the court declaring Ordinance No. 3555
definitely repealed and without force and effect. From the decision, respondents and intervenors interposed the present appeal.
Petitioners were holders of license and permits to engage in the business of selling pork and meat in the City of Manila but outside of s
public market whereas the inter-venors are stall-holders in the Aranque market who were allowed to intervene because of the interest
they have in the merits of the controversy. On February 3, 1953, Ordinance No. 3555 was enacted prohibiting the sale of fresh meat
within a radius of 200 meters from the boundary of any public market in answer to the demand of public market stall-holders who
complained against other sellers of fresh meat, who were not stall-holders, who used to flock around the premises of the public
markets to the prejudice of their business.
After the enactment of said ordinance, petitioners filed in action in the same court assailing its validity which however was declared
legal and valid and the decision became final because they did not deem it necessary to appeal therefrom (Civil Case No. 18689).
Thereafter, Ordinance No. 3563 was approved, this time prohibiting the sale of fresh meat anywhere in the city except in public
markets for reasons of health and safety of the people. Again, the validity of this ordinance was assailed In an action instituted by
some interested parties (Civil Case No. 19227), and the same having been declared unconstitutional, the case was elevated to the
Supreme Court (GR NO. L-6762). This appeal was taken pending consideration when the present case was submitted for resolution.
Subsequent to the declaration of nullity of Ordinance No. 3563 by the Court of First Instance of Manila in Civil Case No. 19227,
petitioners herein, whose stores were located within the redius of 200 meters from the boundary of Aranque market, commenced the
present action in an attempt to secure the renewal of their permits and licenses to enable them to reopen their stores and continue their
business of selling fresh meat making as basis of their plea the declaration of Ordinance No, 3555 as without force and effect in view
of its express repeal by Ordinance No. 3563.
The main issue submitted by respondents for determination in this appeal is: Did the Municipal Board absolutely intend by the
enactment of Ordinance No. 3563 to repeal Ordinance No. 3563 to repeal Ordinance No. 3555 irrespective of the validity or nullity of
Ordinance No. 3563 which was ultimately declared null and void in Case No. 19227? Stated differently, did Ordinance No. 3563
repeal Ordinance No. 3555 irrespective of the invalidity of the former?
The lower court answered the question in the affirmative predicating its ruling on the following comment:
The argument has been advanced that the failure of the repealing ordinance to meet the test of legality shall perforce revive
the repealed one. The Court does not Question this premise. However upon a detailed scrutiny of the facts attendant to
the passage of the later ordinance, the general rule, as manifested and argued by the intervenors and respondents, will not
apply to the instant case for it cannot be denied that the subsequent ordinance was promulgated not in substitution of the
prior one but to do away completely with the latter without regard to its validity or invalidity. Tersely, Ordinance No. 3563
was passed by the Municipal Board independently of the status in law of Ordinance No. 3555. So, where an act expressly
repealing another act and providing a substitute therefor is found to be invalid, the repealing clause must also be held to be
invalid, unless it shell appear that the legislature would have passed the repealing clause even if it had not provided a
substitute for the act repealed (Equitable Guarantee v. Donahue, 49 Atlantic Reporter 373. 19 Del. 191; People v. De Blaay,
100 N.W. 598, 137 Mich. 402; State v. Groom, 109 N.E. 477, 91 Ohio St, 1).
We believe however that the consideration of this issue has now become moot it appearing that this Court has declared the repealing
Ordinance No. 3563 valid and constitutional (See Co Kian, et el. v. The City of Manila, et al. , G. R. No. L-6762). It should be noted
that the present case was instituted because the Court of First Instance of Manila declared said ordinance invalid but without waiting
for the final put cone of the appeal which war then pending in the Supreme Court. Indeed, the institution of this case was premature,
as the court would not finally determine therein the effect of the repealing ordinance upon the one repealed. Whatever decision may be
rendered therein would be indefinite in character for It would depend upon the final decision of the Supreme Court. This Is in effect
what has happened when this Court held that the repealing ordinance is valid and constitutional; for its natural result Is the entire
repeal of Ordinance No.3555. It follows therefore that petitioners? who are not stall-holders, are not entitled to the renewal of there
licenses and permits because they are completely barred by Ordinance No. 3563 which was declared by this Court constitutional in
GR NO. L-6762.
Wherefore, the decision appealed from is reversed, with costs against appellees.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., and Endencia,
JJ., concur.

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G.R. No.

L-2097 October 16, 1950

ORIENTAL SAWMILL, plaintiff -appellant,

P. L. Meer for appellant.

G.R. No. 72200. March 30, 1993.

SANPIRO FINANCE CORPORATION, petitioner, vs. INTERMEDIATE APPELLATE COURT, LAGUNA

Emerito M. Salva & Associates for petitioner.

2 |Cases on Special Civil Actions (1st Set)

The record reveals the following background facts:

Laguna Trans Company

Attention: Mr. M.V. Cruz

Very truly yours,

Asst. Vice President

(p. 307, Rollo.)

4 |Cases on Special Civil Actions (1st Set)

5 |Cases on Special Civil Actions (1st Set)

WHEREFORE, the petition is hereby DENIED, with costs against petitioner.

Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

Gutierrez, Jr., J., is on leave.

G.R. No. 104209 November 16, 1993

6 |Cases on Special Civil Actions (1st Set)

Alfredo L. Bentulan for petitioners.

Nestor C. Montemor for Philna-Bank Employees' Association.

Salvador C. Bunye, Cristina A. Mortel and Jaime T. de Veyra for movants.

The Solicitor General for respondents.

Section 3 of the law states:

Section 1, Rule II, of the aforesaid Rules provides:

Sec. 1. Coverage. These Rules shall apply to:

7 |Cases on Special Civil Actions (1st Set)

(Sgd.) JESUS P. ESTANISLAO 4

Coverage. These Rules shall apply to:

8 |Cases on Special Civil Actions (1st Set)

The instant petition for certiorari cannot be granted.

G.R. No. L-60403 August 3, 1983

ALLIANCE OF GOVERNMENT WORKERS (AGW); PNB-FEMA BANK EMPLOYEES ASSOCIATION (AGW);

Oliver Gesmundo for petitioners.

Jesus C. Gentiles for petitioner SSSEA-AGW.

GUTIERREZ, JR., J.:

1. Philippine National Bank (PNB) Escolta Street, Manila

3. Government Service Insurance System (GSIS) Arroceros Street, Manila

4. Social Security System (SSS) East Avenue, Quezon City

6. Philippine Normal College (PNC) Ayala Boulevard, Manila

Presidential Decree No. 851 provides in its entirety:

10 |Cases on Special Civil Actions (1st Set)

11 |Cases on Special Civil Actions (1st Set)

xxx xxx xxx

xxx xxx xxx

The Solicitor General states:

xxx xxx xxx

The exception, however belongs to the past.

SECTION 56. Government- owned or Controlled Corporations Personnel.All permanent personnel of

14 |Cases on Special Civil Actions (1st Set)

Moreover, determination of employment conditions as well as supervision of the management of

It is meretricious to contend that because Govermnent owned or controlled corporations yield

15 |Cases on Special Civil Actions (1st Set)

16 |Cases on Special Civil Actions (1st Set)

xxx xxx xxx

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

Concepcion, Jr., Guerrero Relova, JJ., concur.

Aquino, Melencio-Herrera and Plana, JJ., concur in the result.

17 |Cases on Special Civil Actions (1st Set)

FERNANDO, C.J., concurring pro hac vice:

18 |Cases on Special Civil Actions (1st Set)