Angara vs. Electoral Commission, G.R. No. L-45081, July 15, 1936.

SEPTEMBER 18, 2018

I. THE FACTS

Petitioner Jose Angara was proclaimed winner and took his oath of office as member of the National
Assembly of the Commonwealth Government. On December 3, 1935, the National Assembly passed
a resolution confirming the election of those who have not been subject of an election protest prior to
the adoption of the said resolution.

On December 8, 1935, however, private respondent Pedro Ynsua filed an election protest against the
petitioner before the Electoral Commission of the National Assembly. The following day, December 9,
1935, the Electoral Commission adopted its own resolution providing that it will not consider any
election protest that was not submitted on or before December 9, 1935.

Citing among others the earlier resolution of the National Assembly, the petitioner sought the
dismissal of respondent’s protest. The Electoral Commission however denied his motion.

II. THE ISSUE

Did the Electoral Commission act without or in excess of its jurisdiction in taking cognizance of the
protest filed against the election of the petitioner notwithstanding the previous confirmation of such
election by resolution of the National Assembly?

III. THE RULING

[The Court DENIED the petition.]

NO, the Electoral Commission did not act without or in excess of its jurisdiction in taking cognizance
of the protest filed against the election of the petitioner notwithstanding the previous confirmation of
such election by resolution of the National Assembly.

The Electoral Commission acted within the legitimate exercise of its constitutional prerogative in
assuming to take cognizance of the protest filed by the respondent Ynsua against the election of the
petitioner Angara, and that the earlier resolution of the National Assembly cannot in any manner toll
the time for filing election protests against members of the National Assembly, nor prevent the filing of
a protest within such time as the rules of the Electoral Commission might prescribe.

The grant of power to the Electoral Commission to judge all contests relating to the election, returns
and qualifications of members of the National Assembly, is intended to be as complete and
unimpaired as if it had remained originally in the legislature. The express lodging of that power in the
Electoral Commission is an implied denial of the exercise of that power by the National Assembly.
xxx.

[T]he creation of the Electoral Commission carried with it ex necesitate rei the power regulative in
character to limit the time with which protests intrusted to its cognizance should be filed. [W]here a
general power is conferred or duty enjoined, every particular power necessary for the exercise of the
one or the performance of the other is also conferred. In the absence of any further constitutional
provision relating to the procedure to be followed in filing protests before the Electoral Commission,
therefore, the incidental power to promulgate such rules necessary for the proper exercise of its
exclusive power to judge all contests relating to the election, returns and qualifications of members of
the National Assembly, must be deemed by necessary implication to have been lodged also in the

Electoral Commission.Caltex vs. Palomar (G.R. L-19650, 09/29/1966)

FACTS:

In the year 1960, Caltex Philippines conceived and laid the ground work for a promotional
scheme calculated to drum up patronage for its oil products. The contest was entitled “Caltex Hooded
Pump Contest”, which calls for participants to estimate the actual number of liters as hooded gas
pump at each Caltex station will dispense during a specific period.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the
contest but also for the transmission of communications, representations were made by Caltex with
the postal authorities for the contest to be cleared in advance for mailing. This was formalized in a
letter sent by Caltex to the Post master General, dated October 31, 1960, in which Caltex, thru its
counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest
does not violate the “The Anti-Lottery Provisions of the Postal Law”.

Unfortunately, the Palomar, the acting Postmaster General denied Caltex’s request stating
that the contest scheme falls within the purview of the Anti-lottery Provision and ultimately, declined
Clatex’s request for clearance.

Caltex sought reconsideration, stressing that there being no consideration involved in part of
the contestant, the contest was not commendable as a lottery. However, the Postmaster General
maintained his view that the contest involves consideration, or even it does not involve any
consideration it still falls as “Gift Enterprise”, which was equally banned by the Postal Law.

ISSUE:

Whether the petition states a sufficient cause of action for declaratory relief?

Whether or not the scheme proposed by Caltex the appellee is within the coverage of the prohibitive
provisions of the Postal Law?

HELD:

I.

By express mandate of Section 1 of Rule 66 of the old Rules of Court which deals with the
applicability to invoke declaratory relief which states: “Declaratory relief is available to person whose
rights are affected by a statute, to determine any question of construction or validity arising under the
statute and for a declaration of rights thereunder.

In amplification, conformably established jurisprudence on the matter, laid down certain conditions:

There must be a justiciable controversy.

The controversy must be between persons whose interests are adverse.

The party seeking declaratory relief must have a legal interest in the controversy.

The issue involved must be ripe for judicial determination.

With the appellee’s bent to hold the contest and the appellant’s threat to issue a fraud order if carried
out, the contenders are confronted by an ominous shadow of imminent and inevitable litigation unless
their differences are settled and stabilized by a declaration. And, contrary to the insinuation of the
appellant, the time is long past when it can rightly be said that merely the appellee’s “desires are
thwarted by its own doubts, or by the fears of others” — which admittedly does not confer a cause of
action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar,
it was translated into a positive claim of right which is actually contested.

Construction

– Is the art or process of discovering and expounding the meaning and intention of the authors of
the law with respect to its application to a given case, where that intention is rendered doubtful,
amongst others, by reason of the fact that the given case is not explicitly provided for in the law.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a
corporation engaged in promotional advertising was advised by the county prosecutor that its
proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion
were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to
determine the legality of its sales promotion plan.

II.

Is the Contest Scheme a Lottery?

Lottery

– Extends to all schemes for the distribution of prizes by chance

e.g. policy playing, gift exhibitions, prize concerts, raffles and fairs as well as various forms of
gambling.

Three Essential Elements:

Consideration

Prize

Chance

No, according to the Supreme Court, the contest scheme is not a lottery but it appears to be
more of a gratuitous distribution since nowhere in the rules is any requirements that any fee be paid,
any merchandise be bought, any services be rendered, or any value whatsoever be given for the
privilege to participate. Since, a prospective contestant has to do is go to a Caltex Station, request for
the entry form which is available on demand and accomplish and submit the same for the drawing of
the winner. Because of this, the contest fails to exhibit any discernible consideration which would
brand it as a lottery.

Moreover, the law does not condemn the gratuitous distribution of property by chance, if no
consideration is derived directly or indirectly from the party receiving the chance, but it does condemn
as criminal scheme in which a valuable consideration of some kind is paid directly or indirectly for the
chance to draw a prize.

Is the scheme, as sales promotion which would benefit the sponsor in the way of increased patronage
be considered as a consideration and thus violates the Postal Law?

No, the required element of consideration does not consist of the benefit derived by the
sponsors of the contest. The true test lies on whether or not the participant pays a valuable
consideration for the chance of winning and not whether or not those conducting the enterprise
receiver something of value for the distribution of the prize.

Is the Contest Scheme a Gift Enterprise?

Even if the term Gift Enterprise is not yet defined explicitly, there appears to be a consensus
among lexicographers and standard authorities that the term is common applied to a sporting artifice
of under which goods are sold for their market value but by way of inducement to purchase the
product, the purchaser is given a chance to win a prize.

And thus, the term of gift enterprise cannot be established in the case at bar since there is not
sale of anything to which the chance offered is attached as an inducement to the purchaser. The
contest is open to all qualified contestant irrespective of whether or not they buy the appellee’s
products.

The lesson that we derive from this state of the pertinent jurisprudence is that every case must be
resolved upon the particular phraseology of the applicable statutory provision. It is only logical that the
term under a construction should be accorded no other meaning than that which is consistent with the
nature of the word associated therewith.

In the end, the Supreme Court ruled out that under the prohibitive provision of the Postal Law, gift
enterprise and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding non in the contest, it was ruled out that the appellee
may not be denied the use of the mails for the purpose thereof.

Roderick Daoang and Rommel Daoang vs The Municipal Judge of San Nicolas (GR No. L-
34568, 28 March 1988) 159 SCRA 369

Facts:

On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a petition with the
Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption of the minors Quirino Bonilla and
Wilson Marcos. On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father
and guardian ad litem, the petitioners herein, filed an opposition to the aforementioned petition for
adoption, claiming that the spouses Antero and Amanda Agonoy had a legitimate daughter named
Estrella Agonoy, oppositors’ mother, who died on 1 March 1971, and therefore, said spouses were
disqualified to adopt under Art. 335 of the Civil Code.

Issue:

Whether or not the respondent spouses Antero Agonoy and Amanda Ramos-Agonoy are disqualified
to adopt under paragraph (1), Art. 335 of the Civil Code.

The pertinent provision of law reads, as follows:

Art. 335. The following cannot adopt:

(1) Those who have legitimate, legitimated, acknowledged natural children, or children by legal fiction;

HELD:

The words in the paragraph (1) of the Article 335 of the Civil Code, in enumerating the persons who
cannot adopt, are clear and unambiguous. When the New Civil Code was adopted, it changed the
word “descendant”, found in the Spanish Civil Code to which the New Civil Code was patterned, to
“children”. The children thus mentioned have a clearly defined meaning in law and do not include
grandchildren. Well known is the rule of statutory construction to the effect that a statute clear and
unambiguous on its face need not be interpreted. The rule is that only statutes with an ambiguous or
doubtful meaning may be subjects of interpretation. In the present case, Roderick and Rommel
Daoang , the grandchildren of Antero and Amanda Agonoy, cannot assail the adoption of Quirino
Bonilla and Wilson Marcos by the Agonoys. The Supreme Court denied the petition and affirmed the
judgement of the Municipal Court of San Nicolas, Ilocos Norte,declaring that henceforth Quirino
Bonilla and Wilson Marcos be, to all legitimate intents and purposes, the children by adoption of the
joint petitioners Antero Agonoy and Amanda R. Agonoy and that the former be freed from legal
obedience and maintenance by their respective parents, Miguel Bonilla and Laureana Agonoy for
Quirino Bonilla and Modesto Marcos and Benjamina Gonzales for Wilson Marcos and their family
names ‘Bonilla’ and ‘Marcos’ be changed with “Agonoy”, which is the family name of the petitioners,
without pronouncements as to costs

Paat vs CA Admin Law Digest

Leonardo Paat vs Court of Appeals, et. Al. GR No. 111107, 10 January 1997 266 SCRA 167

FACTS

The truck of private respondent Victoria de Guzman was seized by the DENR personnel while
on its way to Bulacan because the driver could not produce the required documents for the forest
product found concealed in the truck. Petitioner Jovito Layugan, CENRO ordered the confiscation of
the truck and required the owner to explain. Private respondents failed to submit required
explanation. The DENR Regional Executive Director Rogelio Baggayan sustained Layugan’s action
for confiscation and ordered the forfeiture of the truck. Private respondents brought the case to the
DENR Secretary. Pending appeal, private respondents filed a replevin case before the RTC against
petitioner Layugan and Baggayan. RTC granted the same. Petitioners moved to dismiss the case
contending, inter alia, that private respondents had no cause of action for their failure to exhaust
administrative remedies. The trial court denied their motion. Hence, this petition for review on
certiorari. Petitioners aver that the trial court could not legally entertain the suit for replevin because
the truck was under administrative seizure proceedings.

ISSUE

Whether or not the instant case falls within the exception of the doctrine.

HELD

The Court held in the negative. The Court has consistently held that before a party is allowed
to seek the intervention of the court, it is a pre-condition that he should have availed of all the means
of administrative processed afforded him. Hence, if a remedy within the administrative machinery can
still be resorted to by giving the administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction then such remedy should be exhausted first before court’s
judicial power can be sought. The premature invocation of court’ intervention is fatal to one’s cause of
action.

The doctrine is a relative one and its flexibility is called upon by the peculiarity and uniqueness
of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is violation
of due process, (2) when the issue involved is purely a legal question, (3) when the administrative
action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppels on the
part of the administrative agency concerned, (5) when there is irreparable injury, (6) when the
respondent is a department secretary whose acts as an alter ego of the President bears the implied
and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would
be unreasonable, (8) when it would amount to nullification of a claim, (9) when the subject matter is a
private land in land case proceedings, (10) when the rule does not provide a plain, speedy and
adequate remedy, and (11) when there are circumstances indicating the urgency of judicial
intervention.

A suit for replevin cannot be sustained against the petitioners for the subject truck taken and retained
by them for administrative forfeiture proceedings in pursuant to Sections 68-A of OD 705, as
amended. Dismissal of the replevin suit for lack of cause of action in view of the private respondents’
failure to exhaust administrative remedies should have been the proper course of action by the lower
court instead of assuming jurisdiction over the case and consequently issuing the writ ordering the
return of the truck.

People of the Philippines vs. M. Mapa G.R. No. L-2230 August 30, 1967 En Banc

Facts:

The accused was convicted in violation of Sec. 878 in connection to Sec. 2692 of the Revised
Administrative Code as amended by Commonwealth Act No. 56 and further amended by R.A. 4. On
August 13, 1962, the accused was discovered to have in its possession and control a home-made
revolver cal. 22 with no license permit. In the court proceeding, the accused admitted that he owns
the gun and affirmed that it has no license. The accused further stated that he is a secret agent
appointed by Gov. Leviste of Batangas and showed evidences of appointment. In his defense, the
accused presented the case of People vs. Macarandang, stating that he must be acquitted because
he is a secret agent and which may qualify into peace officers equivalent to municipal police which is
covered by Art. 879.

Issue:

Whether or not holding a position of secret agent of the Governor is a proper defense to illegal
possession of firearms.

Ruling:

The Supreme Court in its decision affirmed the lower court’s decision. It stated that the law is explicit
that except as thereafter specifically allowed, "it shall be unlawful for any person to . . . possess any
firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or
intended to be used in the manufacture of firearms, parts of firearms, or ammunition." The next
section provides that "firearms and ammunition regularly and lawfully issued to officers, soldiers,
sailors, or marines [of the Armed Forces of the Philippines], the Philippine Constabulary, guards in
the employment of the Bureau of Prisons, municipal police, provincial governors, lieutenant
governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial
prisoners and jails," are not covered "when such firearms are in possession of such officials and
public servants for use in the performance of their official duties.

The Court construed that there is no provision for the secret agent; including it in the list therefore the
accused is not exempted.

Del Mar v. PAGCOR

G.R. No. 138298 / November 29, 2000

SUMMARY. PAGCOR requested legal advice from the Secretary of Justice if it’s authorized under
its charter to operate jai-alai games (a form of sport). The Secretary of Justice said that PAGCOR
has the authority; hence PAGCOR has the power under its charter to operate. Petitioner del Mar filed
a petition for prohibition preventing PAGCOR from managing jai-alai since its illegal and devoid of
any basis either from the Constitution or PAGCOR’s own Charter. However, PAGCOR still entered in
an agreement with BELLE and FILGAME, hence, del Mar filed a Petition for Certiorari questioning
the validity of the agreement. Members of the House of Representative also filed a petition stating
that operation of PAGCOR of jai-alai is illegal because it is not included in its scope. Respondents
then questioned the locus standi or legal standing of petitioners filing as taxpayers and members of
the House of representatives. As stated by the Court, they have legal standing to the case since it
affects public interest (involves taxes) and affects the powers of the legislative.

DOCTRINE. Locus Standi or Legal Standing to file a petition as taxpayers and member of the House
of Representatives
FACTS.

 PAGCOR requested for legal advice from the Secretary of Justice as to whether or not it is
authorized by its Charter to operate and manage jai-alai frontons in the country in relation to
Section 1 and 10 of P.D. No. 1869.

 The Secretary of Justice opined that the authority of PAGCOR to operate and maintain games
of chance or gambling extends to jai-alai which is a form of sport or game played for bets and
that the Charter of PAGCOR amounts to a legislative franchise for the purpose.

 On May 6, 1999, petitioner del Mar filed a Petition for Prohibition to prevent PAGCOR from
managing and/or operating the jai-alai or Basque pelota games on the ground that the act is
patently illegal and devoid of any basis either from the Constitution or PAGCOR’s own Charter.

 On June 17, 1999 however, PAGCOR entered into an agreement with BELLE and FILGAME
wherein the latter parties would provide all the required facilities and requirements for the
establishment and operation of jai-alai.

 On August 10, 1999, del Mar then filed a Supplemental Petition for Certiorari questioning the
validity of the agreement stating that PAGCOR is without jurisdiction, authority, legislative
franchise, or authority to enter into such agreement for the operation and establishment of jai-
alai games.

 A little earlier (July 1, 1999), Federico S. Sandoval II and Michael T. Defensor filed a Petition
for Injunction. A Petition in Intervention was filed by Juan Miguel Zubiri alleging that the
operation by PAGCOR of jai-alai is illegal because it is not included in PAGCOR’s scope.

 Petitoners del Mar, Sandoval, Defensor, and intervenor Zubiri are suing as taxpayers and in
their capacity as the members of the House of Representatives.

 Respondent questions the locus standi or the standing of the petitioners to file the petition at
bar as taxpayers and as legislators because the operation of jai-alai does not involve the
disbursement of public funds.

ISSUES & RATIO.

1. WON petitioners have a locus standi or legal standing to file the petition – YES.

As stated by the Court, Respondent’s stance is without an “oven ready” legal support. A party suing
as taxpayer must specifically prove that he has sufficient interest in preventing the illegal expenditure
of money raised by taxation. In essence, taxpayers are allowed to sue where there is a claim of illegal
disbursement of public funds, or that public money is being deflected to any improper purpose, or
where petitioners seek to restrain respondent from wasting public funds through the enforcement of
an invalid or unconstitutional law. The record shown under their agreement is barren of evidence that
the operation and management of jai-alai by the PAGCOR involves expenditure of public money. The
Court also holds that as members of the House of Representatives, petitioners have legal standing to
file the petition at bar. The operation of jai-alai constitutes an infringement by PAGCOR of the
legislature’s exclusive power to grant franchise. Hence, powers of Congress are being impared, so as
the powers of each of its members.
DECISION.

Petitioners have legal standing to file the petition

NOTES.

The states issue is only a “procedural issue” questioning when can taxpayers file a suit.

The substantive issue concerns whether PAGCOR’s legislative franchise includes the right to
manage and operate jai-alai. It was ruled that PAGCOR DOES NOT HAVE THE RIGHT to operate
jai-alai because:

 It was not stated under its scope.

 In accordance with its historical creation, there is a separate Executive Order which controls
the operating of Jai-Alai (controlled by the Romualdezes) in Manila. PACGOR’s franchise was
never given a franchise to operate jai-alai.

 Tax treatment between jai-alai operations and gambling casinos are distinct from each other.

 PAGCOR is engaged in the business affected with public interest.

CORPUZ vs. PEOPLE

G.R. No. 180016 / APRIL 29, 2014 / PERALTA J. / ESTAFA / AABPAYAD

NATURE Petition for review on certiorari

PETITIONER Lito Corpuz

RESPONDENT People of the Philippines

FACTS.

• Danilo Tangcoy, private complainant, and Lito Corpuz, petitioner, met at the Admiral Royale
Casino in Olongapo City sometime in 1990.

• Tangcoy was then engaged in the business of lending money to casino players and, upon
hearing that Tangcoy had some pieces of jewelry for sale, Corpuz approached him on May 2, 1991 at
the same casino and offered to sell the said pieces of jewelry on commission basis.

• Tangcoy agreed, and as a consequence, he turned over to petitioner the following items: an
18k diamond ring for men; a woman's bracelet; one (1) men's necklace and another men's bracelet,
with an aggregate value of P98,000.00, as evidenced by a receipt of even date.

• They both agreed that petitioner shall remit the proceeds of the sale, and/or, if unsold, to return
the same items, within a period of 60 days. The period expired without petitioner remitting the
proceeds of the sale or returning the pieces of jewelry. When Tangcoy was able to meet petitioner,
the latter promised the former that he will pay the value of the said items entrusted to him, but to no
avail.
• A criminal complaint for estafa was filed against Corpuz.

• On the prosecution, it was established that Tongcoy and Corpuz were collecting agents of
Antonio Balajadia, who is engaged in the financing business of extending loans to Base employees.
For every collection made, they earn a commission. Petitioner denied having transacted any business
with Tongcoy.

• However, he admitted obtaining a loan from Balajadia sometime in 1989 for which he was
made to sign a blank receipt. He claimed that the same receipt was then dated May 2, 1991 and used
as evidence against him for the supposed agreement to sell the subject pieces of jewelry, which he
did not even see.

• RTC and CA – accused is guilty of estafa.

ISSUE & RATIO.

1. WON the demand to return the subject the subject jewelry, if unsold, or remit the proceeds, if
sold, is a valid demand under one of the elements of Estafa under Art. 315 (1) (b) of the RPC? –
YES.

Demand need not even be formal; it may be verbal. The specific word "demand" need not even be
used to show that it has indeed been made upon the person charged, since even a mere query as to
the whereabouts of the money [in this case, property], would be tantamount to a demand. As
expounded in Asejo v. People:

With regard to the necessity of demand, we agree with the CA that demand under this kind of estafa
need not be formal or written. The appellate court observed that the law is silent with regard to the
form of demand in estafa under Art. 315 1(b), thus:

When the law does not qualify, We should not qualify. Should a written demand be necessary, the
law would have stated so. Otherwise, the word "demand" should be interpreted in its general meaning
as to include both written and oral demand. Thus, the failure of the prosecution to present a written
demand as evidence is not fatal.

In Tubb v. People, where the complainant merely verbally inquired about the money entrusted to the
accused, we held that the query was tantamount to a demand, thus:

x x x [T]he law does not require a demand as a condition precedent to the existence of the crime of
embezzlement. It so happens only that failure to account, upon demand for funds or property held in
trust, is circumstantial evidence of misappropriation. The same way, however, be established by other
proof, such as that introduced in the case at bar.

In view of the foregoing and based on the records, the prosecution was able to prove the existence of
all the elements of the crime. Private complainant gave petitioner the pieces of jewelry in trust, or on
commission basis, as shown in the receipt dated May 2, 1991 with an obligation to sell or return the
same within sixty (60) days, if unsold. There was misappropriation when petitioner failed to remit the
proceeds of those pieces of jewelry sold, or if no sale took place, failed to return the same pieces of
jewelry within or after the agreed period despite demand from the private complainant, to the
prejudice of the latter.
Caveat: There’s a discussion about the penalty for estafa, like need na daw sya i-amend. But the SC
didn’t impose the same kasi duty daw yun ng Congress. Basta, it’s long kasi kaya I didn’t include it
here. Check nyo nalang powz.

DECISION.

Petition denied.

G.R. No. L-19190 November 29, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. VENANCIO CONCEPCION,

defendant-appellant.

FACTS:

Venancio Concepcion, President of the Philippine National Bank, sent telegrams and a confirmation
letter to the manager of the Aparri branch of PNB, authorizing an extension of credit in favour of Puno
y Concepcion, S. en C. in the amount of P300,000.00. This special authorization limited the
discretional power of the local manager of the Aparri branch to grant loans and discount negotiable
documents to P5,000, which in certain cases, could be increased to P10,000. Pursuant to this
authorization, credit aggregating P300,000 was granted to Puno y Concepcion, S. en C., the only
security required consisting of six demand notes. This Puno y Concepcion, S. en C., in reality is a
copartnership capitalized at P100,000 wherein, Venancio Concepcion’s wife owns half of the
copartnership. Venancio Concepcion was found guilty by the CFI for violation of Section 354 of Act
2747 which provides that: : "The National Bank shall not, directly or indirectly, grant loans to any of
the members of the board of directors of the bank nor to agents of the branch banks."

ISSUES:

1. Whether or not the granting of a credit of P300,000 to the copartnership was a “loan” within the
meaning of Section 35 of Act No. 2747.

YES. The "credit" of an individual means his ability to borrow money by virtue of the confidence or
trust reposed by a lender that he will pay what he may promise. A "loan" means the delivery by one
party and the receipt by the other party of a given sum of money, upon an agreement, express or
implied, to repay the sum loaned, with or without interest. The concession of a "credit" necessarily
involves the granting of "loans" up to the limit of the amount fixed in the "credit,"

2. Whether or not the granting of a credit of P300,000 to the copartnership was a “loan” or a
“discount”.

LOAN. Discounts are favored by bankers because of their liquid nature, growing, as they do, out of an
actual, live, transaction. But in its last analysis, to discount a paper is only a mode of loaning money,
with, however, these distinctions: (1) In a discount, interest is deducted in advance, while in a loan,
interest is taken at the expiration of a credit; (2) a discount is always on double-name paper; a loan is
generally on single-name paper.

Conceding, without deciding, the law covers loans and not discounts, yet the conclusion is inevitable
that the demand notes signed by the firm "Puno y Concepcion, S. en C." were not discount paper but
were mere evidences of indebtedness, because (1) interest was not deducted from the face of the
notes, but was paid when the notes fell due; and (2) they were single-name and not double-name
paper.

3. Whether or not the granting of a credit of P300,000 to the copartnershop was an “indirect loan”
within the meaning of Section 35 of Act 2747.

YES. In the interpretation and construction of statutes, the primary rule is to ascertain and give effect
to the intention of the Legislature. In this instance, the purpose of the Legislature is plainly to erect a
wall of safety against temptation for a director of the bank. The prohibition against indirect loans is a
recognition of the familiar maxim that no man may serve two masters — that where personal interest
clashes with fidelity to duty the latter almost always suffers. If, therefore, it is shown that the husband
is financially interested in the success or failure of his wife's business venture, a loan to partnership of
which the wife of a director is a member, falls within the prohibition.

Various provisions of the Civil serve to establish the familiar relationship called a conjugal
partnership. (Articles 1315, 1393, 1401, 1407, 1408, and 1412 can be specially noted.) A loan,
therefore, to a partnership of which the wife of a director of a bank is a member, is an indirect
loan to such director.

That it was the intention of the Legislature to prohibit exactly such an occurrence is shown by the
acknowledged fact that in this instance the defendant was tempted to mingle his personal and family
affairs with his official duties, and to permit the loan P300,000 to a partnership of no established
reputation and without asking for collateral security.

Tanada v. Yulo

Case No. 288 No. 43575 (May 31, 1935) Chapter IV, Page 127, Footnote No.11

FACTS:

Petitioner is a Justice of Peace appointed by the Gov. Gen. with the consent by the Philippine
Commission, assigned to Alabat, Tayabas. Later in his service, he was transferred to Perez,
Tayabas. He reached his 65 birthday on October 5, 1934, subsequent to the approval of Act No. 3899
which makes mandatory the retirement of all justices who have reached 65 years of age at the time
said Act takes effect on January 1, 1933. The judge of First instance, acting upon the directive of the
Secretary of Respondent Justice, directed Petitioner to cease holding office pursuant to Act No. 3899.

ISSUE:

1. W/N Petitioner should cease to hold office.

2. W/N his transfer is considered a “new transfer” and requires confirmation by the Philippine
Commission.

HELD:

No, Petitioner should not cease to hold office as Act No. 3899 clearly states that those who will cease
to hold office are those 65 yrs of age at the time the Act takes effect, not thereafter. Therefore,
Petitioner shall be a Justice of Peace for life as long as he stays in good behavior or does not
become incapacitated.

No, his transfer is not a new appointment. Hence, no confirmation is required as it is just an
enlargement of the jurisdiction grounded on original appointment.

HELD:

3. The natural and reasonable meaning of the language used in Act No. 3899, leaves room for no
other deducting than that a justice of the peace appointed prior to the approval of the Act and who
completed sixty-five years of age on September 13, 1934, subsequent to the approval of the Act,
which was on November 16, 1931, and to the date fixed for cessation from office which was on
January 1, 1933, is not affected by the said Act.

A justice of the peace like the petitioner who became sixty-five years of age on October 5, 1934, was
not included in a law which required justice of the peace sixty-five years of age to cease to hold office
on January 1, 1933.

2. It is to be deduced that according to the United States Supreme Court, the transfer simply
amounted to an enlargement or change of jurisdiction grounded on the original appointment and thus
did not require a new appointment. Whatever our view is might have been to the contrary, it now
becomes our duty to follow the decision of the higher court. It also seems evident that a transfer as
applied to officers amounts merely to a change of position or to another grade of service.

PASTOR M. ENDENCIA and FERNANDO JUGO vs. SATURNINO DAVID

G.R. No. L-6355-56 August 31, 1953

Facts

Saturnino David, then Collector of Internal Revenue, ordered the taxing of Justice Pastor Endencia’s
and Justice Fernando Jugo’s salary pursuant to Sec 13 of RA 590 which provides that “SEC. 13. No
salary wherever received by any public officer of the Republic of the Philippines shall be considered
as exempt from the income tax, payment of which is hereby declared not to be a diminution of his
compensation fixed by the Constitution or by law.” According to the brief of the Solicitor General on
behalf of appellant Collector of Internal Revenue, the decision in the case of Perfecto vs. Meer, supra,
was not received favorably by Congress, because immediately after its promulgation, Congress
enacted Republic Act No. 590. To bring home his point, the Solicitor General reproduces what he
considers the pertinent discussion in the Lower House of House Bill No. 1127 which became
Republic Act No. 590.

Issue(s)

Does the imposition of an income tax upon the salaries of Justice Endencia and Justice Jugo and
other members of the Supreme Court and all judges of inferior courts amount to a diminution? Is
Section 13 of Republic Act No. 590 constitutional?

Ratio Decidendi
On the issue of imposition of income tax upon the salaries of the judges, in a rather exhaustive and
well considered decision found and held under the doctrine laid down by the court in the case of
Perfecto vs. Meer, 85 Phil 552, Judge Higinio B. Macadaeg held that the collection of income taxes
from the salaries of Justice Jugo and Justice Endencia was in violation of the Constitution of the
Philippines, and so ordered the refund of said taxes. On the issue of whether Section 13 of Republic
Act No. 590 is constitutional, the court believes that this is a clear example of interpretation or
ascertainment of the meaning of the phrase “which shall not be diminished during their continuance in
office,” found in section 9, Article VIII of the Constitution, referring to the salaries of judicial officers.
By legislative fiat as enunciated in section 13, Republic Act No. 590, Congress says that taxing the
salary of a judicial officer is not a decrease of compensation. This act of interpreting the Constitution
or any part thereof by the Legislature is an invasion of the well-defined and established province and
jurisdiction of the Judiciary. “The rule is recognized elsewhere that the legislature cannot pass any
declaratory act, or act declaratory of what the law was before its passage, so as to give it any binding
weight with the courts. A legislative definition of a word as used in a statute is not conclusive of its
meaning as used elsewhere; otherwise, the legislature would be usurping a judicial function in
defining a term. The court reiterates the doctrine laid down in the case of Perfecto vs. Meer, supra, to
the effect that the collection of income tax on the salary of a judicial officer is a diminution thereof and
so violates the Constitution. Further, the court holds that the interpretation and application of the
Constitution and of statutes is within the exclusive province and jurisdiction of the judicial department,
and that in enacting a law, the Legislature may not legally provide therein that it be interpreted in such
a way that it may not violate a Constitutional prohibition, thereby tying the hands of the courts in their
task of later interpreting said statute, especially when the interpretation sought and provided in said
statute runs counter to a previous interpretation already given in a case by the highest court of the
land. Thus the court holds that judgment is affirmed, that Section 13, Republic Act 590 in so far as it
provides that taxing of the salary of a judicial officer shall be considered “not to be a diminution of his
compensation fixed by the Constitution or by law”, constitutes and invasion of the province and
jurisdiction of the judiciary. In this sense, the court is of the opinion that said section is null and void, it
being a transgression of the fundamental principles underlying the separation of powers. In the light
of the issue on imposing income tax on judges salaries, dissenting opinion of court cited that judges
are also citizens and thus their salaries are subjected to the Income Tax Law prevailing. The debates,
interpellations and opinions expressed regarding the constitutional provision in question until it was
finally approved by the Commission disclosed that the true intent of the framers of the 1987
Constitution, in adopting it, was to make the salaries of members of the Judiciary taxable. The
ascertainment of that intent is but in keeping with the fundamental principle of constitutional
construction that the intent of the framers of the organic law and of the people adopting it should be
given effect. Hence, court affirms judgment as in Perfecto vs. Meer on the issue of imposing income
tax on judges’ salaries.

NPC v. Province of Lanao del Sur

Case No. 187
G.R. No. 96700 (November 19, 1996)
Chapter III, Page 122, Footnote No.232

FACTS:
Petitioner Corporation was assessed real property taxes by Respondent since
its tax exempt status was revoked by P.D. 1931. Because of the Petitioner’s failure to
pay, the properties were auctioned with the Respondent as the sole bidder.
Petitioner contends that its status was never revoked but merely suspended. With the
Resolutions issued by the Fiscal Incentives Review Board (FIRB), the tax exemption
privileges of the Petitioners were restored. However, Respondent contends that the
Resolutions issued by the said Board was void relying on an earlier case between the
Petitioner and the Province of Albay stating that FIRB does not have power to restore
tax exemptions and that the said Board can only recommend to the President or the
Minister of Finance which subsidiary of the Government can be given exemptions.
Note however, that the Albay case was already superceded by the Maceda vs.
Macaraig case stating that the FIRB Resolution is in accordance with the
requirements of the law if it was properly approved by the Minister of Finance. In the
present case, the FIRB Resolutions reinstating the status were properly approved by
the Minister of Finance.

ISSUE:
1. W/N Respondent Province and provincial officials can validly and lawfully
assess RPT against, and thereafter sell at public auction the subject properties of the
Petitioner to effect collection of alleged deficiencies in the payment of such taxes.
2. W/N Petitioner has ceased to enjoy its tax and duty exemption privileges,
including its exemption from payment of RPT.

HELD:
The Petitioner never lost its tax exempt status, but its privileges were only
suspended. Thus, the Respondent cannot assess deficiency RPT against the Petitioner.
Furthermore, since the Petitioner was never delinquent in paying RPT, the subsequent
auction and sale of the Petitioner’s assets is also considered void.

LATIN MAXIM:
1, 5a, 5b, 9a, 20a, 37, 38a, 49

Secretary of DPWH vs Heracleo

Case Digest GR 179334 Apr 21 2015

Facts:

Spouses “Heracleo” are the co-owners of a land which is among the private properties traversed by
MacArthur Highway in Bulacan, a government project undertaken sometime in 1940. The taking was
taken without the requisite expropriation proceedings and without their consent. In 1994, Heracleo
demanded the payment of the fair market value of the property. The DPWH offered to pay 0.70
centavos per sqm., as recommended by the appraiser committee of Bulacan. Unsatisfied, Heracleo
filed a complaint for recovery of possession with damages. Favorable decisions were rendered by the
RTC and the CA, with valuation of P 1,500 per sqm and 6% interest per annum from the time of filing
of the until full payment. The SC Division reversed the CA ruling and held that computation should be
based at the time the property was taken in 1940, which is 0.70 per sqm. But because of the
contrasting opinions of the members of the Division and transcendental importance of the issue, the
case was referred to the En Banc for resolution.

Issue 1: W/N the taking of private property without due process should be nullified
No. The government’s failure to initiate the necessary expropriation proceedings prior to actual taking
cannot simply invalidate the State’s exercise of its eminent domain power, given that the property
subject of expropriation is indubitably devoted for public use, and public policy imposes upon the
public utility the obligation to continue its services to the public. To hastily nullify said expropriation in
the guise of lack of due process would certainly diminish or weaken one of the State’s inherent
powers, the ultimate objective of which is to serve the greater good.

Thus, the non-filing of the case for expropriation will not necessarily lead to the return of the property
to the landowner. What is left to the landowner is the right of compensation.

Issue 2: W/N compensation is based on the market value of the property at the time of taking

Yes. While it may appear inequitable to the private owners to receive an outdated valuation, the long-
established rule is that the fair equivalent of a property should be computed not at the time of
payment, but at the time of taking. This is because the purpose of ‘just compensation’ is not to reward
the owner for the property taken but to compensate him for the loss thereof. The owner should be
compensated only for what he actually loses, and what he loses is the actual value of the property at
the time it is taken.

Issue 3: W/N the principle of equity should be applied in this case

No. The Court must adhere to the doctrine that its first and fundamental duty is the application of the
law according to its express terms, interpretation being called for only when such literal application is
impossible. To entertain other formula for computing just compensation, contrary to those
established by law and jurisprudence, would open varying interpretation of economic policies – a
matter which this Court has no competence to take cognizance of. Equity and equitable principles
only come into full play when a gap exists in the law and jurisprudence

Velasco Dissent:

The State’s power of eminent domain is not absolute; the Constitution is clear that no person shall be
deprived of life, liberty and property without due process of law. As such, failure of the government to
institute the necessary proceedings should lead to failure of taking an individual’s property. In this
case, since the property was already taken, the complainants must be equitably compensated for the
loss thereof.

For purposes of “just” compensation, the value of the land should be determined from the time the
property owners filed the initiatory complaint, earning interest therefrom. To hold otherwise would
validate the State’s act as one of expropriation in spite of procedural infirmities which, in turn, would
amount to unjust enrichment on its part. To continue condoning such acts would be licensing the
government to continue dispensing with constitutional requirements in taking private property.

Paras v. COMELEC
Case No. 196 G.R. No. 123169 (November 4, 1996) Chapter VI, Page 259, Footnote No. 50

FACTS:
A petition for recall was filed against Paras, who is the incumbent Punong
Barangay. The recall election was deferred due to Petitioner’s opposition that under
Sec. 74 of RA No. 7160, no recall shall take place within one year from the date of the
official’s assumption to office or one year immediately preceding a regular local
election. Since the Sangguniang Kabataan (SK) election was set on the first Monday
of May 2006, no recall may be instituted.

ISSUE:
W/N the SK election is a local election.

HELD:
No. Every part of the statute must be interpreted with reference to its context,
and it must be considered together and kept subservient to its general intent. The
evident intent of Sec. 74 is to subject an elective local official to recall once during his
term, as provided in par. (a) and par. (b). The spirit, rather than the letter of a law,
determines its construction. Thus, interpreting the phrase “regular local election” to
include SK election will unduly circumscribe the Code for there will never be a recall
election rendering inutile the provision. In interpreting a statute, the Court assumed
that the legislature intended to enact an effective law. An interpretation should be
avoided under which a statute or provision being construed is defeated,
meaningless, inoperative or nugatory.

LATIN MAXIM:
9a, 11d, 25b, 27, 36b, 37, 38