SECOND DIVISION

ANDO BARCELLANO
-versus-
DOLORES BAÑAS, represented by her son and Attorney-in-fact CRISPINO BERMILLO,

G.R. No. 165287 September 14, 2011

DECISION

PEREZ, J.:

Before the Court is an appeal by certiorari[1] from the Decision[2] of the Fifteenth Division of the Court of
Appeals in CA-G.R. CV No. 67702 dated 26 February 2004, granting the petition of Dolores Bañas,
herein respondent, to reverse and set aside the Decision[3] of the lower court.
The dispositive portion of the assailed decision reads:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The decision of the court
a quo is hereby REVERSED AND SET ASIDE and in its stead another one is rendered GRANTING to petitioner-
appellants the right to redeem the subject property for the amount of Php 60,000.00 within thirty (30) days from
the finality of this decision.

The facts as gathered by the court follow:

Respondent Bañas is an heir of Bartolome Bañas who owns in fee simple Lot 4485, PLS-722-D situated
in Hindi, Bacacay, Albay. Adjoining the said lot is the property of Vicente Medina (Medina), covered by Original
Certificate of Title No. VH-9094, with an area of 1,877 square meters. On 17 March 1997, Medina offered his lot
for sale to the adjoining owners of the property, the heirs of Bartolome Bañas, including herein respondent
Dolores Bañas, Crispino Bermillo (Bermillo) and Isabela Bermillo-Beruela (Beruela)[4] Crispino Bermillo, as the
representative of his family, agreed to the offer of Medina, the sale to take place after the harvest season. [5]

On 3 April 1997, Medina sold the property to herein petitioner Armando Barcellano for P60,000.00. The
following day, the heirs of Bañas learned about the sale and went to the house of Medina to inquire about
it.[6] Medina confirmed that the lot was sold to Barcellano. The heirs conveyed their intention to redeem the
property but Medina replied that there was already a deed of sale executed between the parties.[7] Also, the
Bañas heirs failed to tender the P60,000.00 redemption amount to Medina.[8]

Aggrieved, the heirs went to the Office of the Barangay Council on 5 April 1997.[9] Medina sent only his
tenant to attend the proceeding. On 9 April 1997, the Bañas heirs and Barcellano, with neither Medina nor his
tenant in attendance, went to the Office of the Barangay Council to settle the dispute. According to one of the
Bañas heirs, Barcellano told them that he would be willing to sell the property but for a higher price
of P90,000.00.[10] Because the parties could not agree on the price and for failure to settle the dispute,
the Lupon issued a Certification to File Action.[11]

On 24 October 1997, Dolores Bañas filed an action for Legal Redemption before the Regional Trial
Court. However, on 5 February 1998, the petition was withdrawn on the ground that:

xxx considering the present worse economic situation in the country, petitioner opted that the amount
they are supposed to pay for the redemption be readily available for their immediate and emergency needs.
 On 11 March 1998, Dolores Bañas, as represented by Bermillo, filed another action[12] for Legal
Redemption. It was opposed by Barcellano insisting that he complied with the provisions of Art. 1623 of the New
Civil Code but Bañas failed to exercise her right within the period provided by law.

Trial ensued. On 15 March 2000, the trial court dismissed the complaint of the Bañas heirs for their failure
to comply with the condition precedent of making a formal offer to redeem and for failure to file an action in court
together with the consignation of the redemption price within the reglementary period of 30 days. [13] The
dispositive portion reads:

WHEREFORE, premises considered, the complaint is hereby ordered DISMISSED.

On appeal, the Court of Appeals reversed and set aside the ruling of the lower court and granted the
heirs the right to redeem the subject property. The appellate court ruled that the filing of a complaint before
the Katarungang Pambarangay should be considered as a notice to Barcellano and Medina that the heirs were
exercising their right of redemption over the subject property; and as having set in motion the judicial process of
legal redemption.[14] Further, the appellate court ruled that a formal offer to redeem, coupled with a tender of
payment of the redemption price, and consignation are proper only if the redemptioner wishes to avail himself of
his right of redemption in the future. The tender of payment and consignation become inconsequential when the
redemptioner files a case to redeem the property within the 30-day period.[15]

Hence, this Petition for Review on Certiorari.

In this petition, Barcellano questions the ruling of the appellate court for being contrary to the admitted
facts on record and applicable jurisprudence.

The Court’s Ruling

Barcellano maintains that the written notice required under Art. 1623 to be given to adjoining owner was
no longer necessary because there was already actual notice. Further, he asserts that the appellate court erred
in ruling that the tender of payment of the redemption price and consignation are not required in this case,
effectively affirming that the respondents had validly exercised their right of redemption. Lastly, he questions as
erroneous the application of Presidential Decree No. 1508, otherwise known as“Establishing a System of
Amicably Settling Disputes at the Barangay Level,” thereby ruling that the filing by the heirs of the complaint
before the Barangay was an exercise of right of redemption.

We need only to discuss the requirement of notice under Art. 1623 of the New Civil Code, which provides
that:

The right of legal pre-emption or redemption shall not be exercised except within thirty days from the
notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall not be
recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written
notice thereof to all possible redemptioners.

Nothing in the records and pleadings submitted by the parties shows that there was a written notice sent
to the respondents. Without a written notice, the period of thirty days within which the right of legal pre-emption
may be exercised, does not start.
 The indispensability of a written notice had long been discussed in the early case of Conejero v. Court of
Appeals,[16] penned by Justice J.B.L. Reyes:

With regard to the written notice, we agree with petitioners that such notice is indispensable, and that, in
view of the terms in which Article of the Philippine Civil Code is couched, mere knowledge of the sale, acquired
in some other manner by the redemptioner, does not satisfy the statute. The written notice was obviously exacted
by the Code to remove all uncertainty as to the sale, its terms and its validity, and to quiet any doubts that the
alienation is not definitive. The statute not having provided for any alternative, the method of notification
prescribed remains exclusive.

This is the same ruling in Verdad v. Court of Appeals:[17]

The written notice of sale is mandatory. This Court has long established the rule that notwithstanding actual
knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in order to remove
all uncertainties about the sale, its terms and conditions, as well as its efficacy and status.

Lately, in Gosiengfiao Guillen v. the Court of Appeals,[18] this Court again emphasized the mandatory
character of a written notice in legal redemption:

From these premises, we ruled that “[P]etitioner-heirs have not lost their right to redeem, for in the
absence of a written notification of the sale by the vendors, the 30-day period has not even begun to run.” These
premises and conclusion leave no doubt about the thrust of Mariano: The right of the petitioner-heirs to
exercise their right of legal redemption exists, and the running of the period for its exercise has not even
been triggered because they have not been notified in writing of the fact of sale. (Emphasis supplied)

The petitioner argues that the only purpose behind Art. 1623 of the New Civil Code is to ensure that the
owner of the adjoining land is actually notified of the intention of the owner to sell his property. To advance their
argument, they cited Destrito v. Court of Appeals as cited in Alonzo v. Intermediate Appellate Court,[19] where
this Court pronounced that written notice is no longer necessary in case of actual notice of the sale of property.

The Alonzo case does not apply to this case. There, we pronounced that the disregard of the mandatory
written rule was an exception due to the peculiar circumstance of the case. Thus:

In the face of the established facts, we cannot accept the private respondents' pretense that they were
unaware of the sales made by their brother and sister in 1963 and 1964. By requiring written proof of such notice,
we would be closing our eyes to the obvious truth in favor of their palpably false claim of ignorance, thus exalting
the letter of the law over its purpose. The purpose is clear enough: to make sure that the redemptioners are duly
notified. We are satisfied that in this case the other brothers and sisters were actually informed, although not in
writing, of the sales made in 1963 and 1964, and that such notice was sufficient.

Now, when did the 30-day period of redemption begin?

While we do not here declare that this period started from the dates of such sales in 1963 and 1964, we
do say that sometime between those years and 1976, when the first complaint for redemption was filed, the other
co-heirs were actually informed of the sale and that thereafter the 30-day period started running and ultimately
expired. This could have happened any time during the interval of thirteen years, when none of the co-heirs
made a move to redeem the properties sold. By 1977, in other words, when Tecla Padua filed her complaint, the
right of redemption had already been extinguished because the period for its exercise had already expired.

The following doctrine is also worth noting:

While the general rule is, that to charge a party with laches in the assertion of an alleged right it is essential
that he should have knowledge of the facts upon which he bases his claim, yet if the circumstances were such
as should have induced inquiry, and the means of ascertaining the truth were readily available upon inquiry, but
the party neglects to make it, he will be chargeable with laches, the same as if he had known the facts.
It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not among
them, should enclose a portion of the inherited lot and build thereon a house of strong materials. This definitely
was not the act of a temporary possessor or a mere mortgagee. This certainly looked like an act of ownership.
Yet, given this unseemly situation, none of the co-heirs saw fit to object or at least inquire, to ascertain the facts,
which were readily available. It took all of thirteen years before one of them chose to claim the right of
redemption, but then it was already too late.[20]

xxxx

The co-heirs in this case were undeniably informed of the sales although no notice in writing was given
them. And there is no doubt either that the 30-day period began and ended during the 14 years between the
sales in question and the filing of the complaint for redemption in 1977, without the co-heirs exercising their right
of redemption. These are the justifications for this exception.

The Court clarified that:

We realize that in arriving at our conclusion today, we are deviating from the strict letter of the
law, which the respondent court understandably applied pursuant to existing jurisprudence. The said
court acted properly as it had no competence to reverse the doctrines laid down by this Court in the
above-cited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the De
Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general rule,
in view of the peculiar circumstances of this case.[21] (Emphasis supplied)

Without the “peculiar circumstances” in the present case, Alonzo cannot find application. The impossibility
in Alonzo of the parties’ not knowing about the sale of a portion of the property they were actually occupying is
not presented in this case. The strict letter of the law must apply. That a departure from the strict letter should
only be for extraordinary reasons is clear from the second sentence of Art. 1623 that “The deed of sale shall not
be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given
written notice thereof to all possible redemptioners.”
Justice Edgardo Paras, referring to the origins of the requirement, would explain in his commentaries on
the New Civil Code that despite actual knowledge, the person having the right to redeem is STILL entitled to the
written notice. Both the letter and the spirit of the New Civil Code argue against any attempt to widen the scope
of the “written notice” by including therein any other kind of notice such as an oral one, or by registration. If the
intent of the law has been to include verbal notice or any other means of information as sufficient to give the
effect of this notice, there would have been no necessity or reason to specify in the article that said notice be in
writing, for under the old law, a verbal notice or mere information was already deemed sufficient.[22]

Time and time again, it has been repeatedly declared by this Court that where the law speaks in clear
and categorical language, there is no room for interpretation. There is only room for application.[23] Where the
language of a statute is clear and unambiguous, the law is applied according to its express terms, and
interpretation should be resorted to only where a literal interpretation would be either impossible or absurd or
would lead to an injustice. The law is clear in this case, there must first be a written notice to the family of Bañas.

Absolute Sentencia Expositore Non Indiget, when the language of the law is clear, no explanation of it is
required.[24]

We find no need to rule on the other issues presented by the petitioner. The respondent Bañas has a
perfect right of redemption and was never in danger of losing such right even if there was no redemption
complaint filed with the barangay, no tender of payment or no consignation.

WHEREFORE, the appeal is DENIED. The 26 February 2004 Decision of the Court of Appeals in CA-
G.R. CV No. 67702, granting to petitioner-appellants the right to redeem the subject property for the amount of
Php60,000.00 within thirty (30) days from the finality of this decision is hereby AFFIRMED. No cost.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-5691 December 27, 1910

S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-appellees,

vs.
WILLIAM VAN BUSKIRK, defendant-appellant.

Lionel D. Hargis for appellant.

Sanz and Oppisso for appellee

MORELAND, J.:

The facts found by the trial court are undisputed by either party in this case. They are —

That on the 11th day of September, 1908, the plaintiff, Carmen Ong de Martinez, was
riding in a carromata on Calle Real, district of Ermita, city of Manila, P.I., along the left-
hand side of the street as she was going, when a delivery wagon belonging to the
defendant used for the purpose of transportation of fodder by the defendant, and to
which was attached a pair of horses, came along the street in the opposite direction to
that the in which said plaintiff was proceeding, and that thereupon the driver of the said
plaintiff's carromata, observing that the delivery wagon of the defendant was coming at
great speed, crowded close to the sidewalk on the left-hand side of the street and
stopped, in order to give defendant's delivery wagon an opportunity to pass by, but that
instead of passing by the defendant's wagon and horses ran into the carromata occupied
by said plaintiff with her child and overturned it, severely wounding said plaintiff by
making a serious cut upon her head, and also injuring the carromata itself and the
harness upon the horse which was drawing it.

xxx xxx xxx

These facts are not dispute, but the defendant presented evidence to the effect that the
cochero, who was driving his delivery wagon at the time the accident occurred, was a
good servant and was considered a safe and reliable cochero; that the delivery wagon
had sent to deliver some forage at Paco Livery Stable on Calle Herran, and that for the
purpose of delivery thereof the cochero driving the team as defendant's employee tied
the driving lines of the horses to the front end of the delivery wagon and then went back
inside of the wagon for the purpose of unloading the forage to be delivered; that while
unloading the forage and in the act of carrying some of it out, another vehicle drove by,
the driver of which cracked a whip and made some other noises, which frightened the
horses attached to the delivery wagon and they ran away, and the driver was thrown
from the inside of the wagon out through the rear upon the ground and was unable to
stop the horses; that the horses then ran up and on which street they came into collision
with the carromata in which the plaintiff, Carmen Ong de Martinez, was riding.
The defendant himself was not with the vehicle on the day in question.

Upon these facts the court below found the defendant guilty of negligence and gave judgment
against him for P442.50, with interest thereon at the rate of 6 per cent per annum from the 17th
day of October, 1908, and for the costs of the action. The case is before us on an appeal from
that judgment.

There is no general law of negligence in the Philippine Islands except that embodied in the Civil
Code. The provisions of that code pertinent to this case are —

Art. 1902. A person who by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done.

Art. 1903. The obligation imposed by preceding article is demandable, not only for
personal acts and omissions, but also for those of the persons for whom they should be
responsible.

The father, and on his death or incapacity the mother, is liable for the damages caused
by the minors who live with them.

Guardians are liable for the damages caused by minors or incapacitated persons who
are under their authority and live with them.

Owners of directors of an establishment or enterprise are equally liable for the damages
caused by the employees in the service of the branches in which the latter may be
employed or on account of their duties.

The State is liable in this sense when it acts through a special agent, but not when the
damages should have been caused by the official to whom properly it pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.

Finally, masters or directors of arts and trades are liable for the damages caused by their
pupils or apprentices while they are under their custody.

The liability referred to in this article shall cease when the persons mentioned therein
prove that they employed all the diligence of a good father of a family to avoid the
damage.

Passing the question whether or not an employer who has furnished a gentle and tractable team
and a trusty and capable driver is, under the last paragraph of the above provisions, liable for
the negligence of such driver in handling the team, we are of the opinion that the judgment must
be reversed upon the ground that the evidence does not disclose that the cochero was
negligent.

While the law relating to negligence in this jurisdiction may possibly be some what different from
that in Anglo-Saxon countries, a question we do not now discuss, the rules under which the fact
of negligence is determined are, nevertheless, generally the same. That is to say, while the law
designating the person responsible for a negligent act may not be the same here as in many
jurisdictions, the law determining what is a negligent act is the same here, generally speaking,
as elsewhere. (Supreme court of Spain, 4 December, 1903; 16 May, 1893; 27 June, 1894; 9
April, 1896; 14 March, 1901; 2 March, 1904; 7 February, 1905; 16 June, 1905; 23 June, 1905;
13 April, 1903; 7 March, 1902; 12 June, 1900; 2 March, 1907; 18 March, 1898; 3 June, 1901.)

It appears from the undisputed evidence that the horses which caused the damage were gentle
and tractable; that the cochero was experienced and capable; that he had driven one of the
horses several years and the other five or six months; that he had been in the habit, during all
that time, of leaving them in the condition in which they were left on the day of the accident; that
they had never run away up to that time and there had been, therefore, no accident due to such
practice; that to leave the horses and assist in unloading the merchandise in the manner
described on the day of the accident was the custom of all cochero who delivered merchandise
of the character of that which was being delivered by the cochero of the defendant on the day in
question, which custom was sanctioned by their employers.

In our judgment, the cochero of the defendant was not negligent in leaving the horses in the
manner described by the evidence in this case, either under Spanish or American
jurisprudence. (Lynch vs. Nurdin, 1 Q. B., 422; Rumsey vs. Nelson, 58 Vt., 590;
Drake vs. Mount, 33 N. J. L., 442; Hoboken Land and Improvement Co. vs. Lally, 48 N. J. L.,
604; Wasmer vs. D. L. & W. R. R. Co., 80 N. Y., 212.) lawphi1.net

In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord Kenyon said:

He was performing his duty while removing the goods into the house, and, if every
person who suffered a cart to remain in the street while he took goods out of it was
obliged to employ another to look after the horses, it would be impossible for the
business of the metropolis to go on.

In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:

The degree of care required of the plaintiff, or those in charged of his horse, at the time
of the injury, is that which would be exercised by a person of ordinary care and prudence
under like circumstances. It can not be said that the fact of leaving the horse unhitched
is in itself negligence. Whether it is negligence to leave a horse unhitched must be
depend upon the disposition of the horse; whether he was under the observation and
control of some person all the time, and many other circumstances; and is a question to
be determined by the jury from the facts of each case.

In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was error on the part of the
trial court to refuse to charge that "it is not negligence for the driver of a quite, gentle horse to
leave him unhitched and otherwise unattended on the side of a public highways while the driver
is upon the sidewalk loading goods on the wagon." The said court closed its opinion with these
words:

There was evidence which could have fully justified the jury in finding that the horse was
quite and gentle, and that the driver was upon the sidewalk loading goods on the wagon,
at time of the alleged injury, and that the horse had been used for years in that way
without accident. The refusal of the trial court to charge as requested left the jury free to
find was verdict against the defendant, although the jury was convinced that these facts
were proven.lawphil.net
In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:

That evidence that a servant, whom traders employed to deliver goods, upon stopping
with his horse and wagon to deliver a parcel at a house from fifty to a hundred rods from
a railroad crossing, left the horse unfastened for four or five minutes while he was in the
house, knowing that it was not afraid of cars, and having used it for three or four months
without ever hitching it or knowing it to start, is not conclusive, as a matter of law, of a
want of due care on his part.

The duty, a violation of which is claimed to be negligence in the respect in question, is to

exercise reasonable care and prudence. Where reasonable care is employed in doing an act
not itself illegal or inherently likely to produce damage to others, there will be no liability,
although damage in fact ensues. (Milwaukee Ry. Co. vs. Arms, 91 U. S., 489; Parrott vs. Wells,
15 Wall., 524; Brown vs. Kendall, 6 Cushing, 292; Jackson Architectural Iron Works vs.Hurlbut,
158 N. Y., 34 Westerfield vs. Levis, 43 La. An., 63; Niosi vs. Empire Steam Laundry, 117 Cal.,
257.)

The act of defendant's driver in leaving the horses in the manner proved was not unreasonable
or imprudent. Acts the performance of which has not proved destructive or injurious and which
have, therefore, been acquiesced in by society for so long a time that they have ripened into
custom, can not be held to be themselves unreasonable or imprudent. Indeed the very reason
why they have been permitted by society is that they beneficial rather than prejudicial.itc-
alf Accidents sometimes happen and injuries result from the most ordinary acts of life. But such
are not their natural or customary results. To hold that, because such an act once resulted in
accident or injury, the actor is necessarily negligent, is to go far. The fact that the doctrine of res
ipsa loquitur is sometimes successfully invoked in such a case, does not in any sense militate
against the reasoning presented. That maxim at most only creates aprima facie case, and that
only in the absence of proof of the circumstances under which the act complained of was
performed. It is something invoked in favor of the plaintiff before defendant's case showing the
conditions and circumstances under which the injury occurred, the creative reason for the
doctrine of res ipsa loquitur disappears. This is demonstrated by the case of Inland and
Seaboard Costing Co. vs. Tolson (139 U.S., 551), where the court said (p. 554):

. . . The whole effect of the instruction in question, as applied to the case before the jury,
was that if the steamboat, on a calm day and in smooth water, was thrown with such
force against a wharf properly built, as to tear up some of the planks of the flooring, this
would be prima facie evidence of negligence on the part of the defendant's agent in
making the landing, unless upon the whole evidence in the case this prima
facie evidence was rebutted. As such damage to a wharf is not ordinarily done by a
steamboat under control of her officers and carefully managed by them, evidence that
such damage was done in this case was prima facie, and, if unexplained, sufficient
evidence of negligence on their part, and the jury might properly be so instructed.

There was presented in this case, and by the plaintiffs themselves, not only the fact of the
runway and the accident resulting therefrom, but also the conditions under which the runaway
occurred. Those conditions showing of themselves that the defendant's cochero was not
negligent in the management of the horse, the prima facie case in plaintiffs' favor, if any, was
destroyed as soon as made.
It is a matter of common knowledge as well as proof that it is the universal practice of merchants
to deliver merchandise of the kind of that being delivered at the time of the injury, in the manner
in which that was then being delivered; and that it is the universal practice to leave the horses in
the manner in which they were left at the time of the accident. This is the custom in all cities. It
has not been productive of accidents or injuries. The public, finding itself unprejudiced by such
practice, has acquiesced for years without objection. Ought the public now, through the courts,
without prior objection or notice, to be permitted to reverse the practice of decades and thereby
make culpable and guilty one who had every reason and assurance to believe that he was
acting under the sanction of the strongest of all civil forces, the custom of a people? We think
not.

The judgement is reversed, without special finding as to costs. So ordered.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 184823 October 6, 2010

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
AICHI FORGING COMPANY OF ASIA, INC., Respondent.

DECISION

DEL CASTILLO, J.:

A taxpayer is entitled to a refund either by authority of a statute expressly granting such right,
privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of
taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his
entitlement to a refund but also his compliance with the procedural due process as non-
observance of the prescriptive periods within which to file the administrative and the judicial
claims would result in the denial of his claim.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the
July 30, 2008 Decision1 and the October 6, 2008 Resolution2 of the Court of Tax Appeals
(CTA) En Banc.

Factual Antecedents

Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and existing
under the laws of the Republic of the Philippines, is engaged in the manufacturing, producing,
and processing of steel and its by-products.3 It is registered with the Bureau of Internal Revenue
(BIR) as a Value-Added Tax (VAT) entity4 and its products, "close impression die steel forgings"
and "tool and dies," are registered with the Board of Investments (BOI) as a pioneer status.5

On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the period
July 1, 2002 to September 30, 2002 in the total amount of ₱3,891,123.82 with the petitioner
Commissioner of Internal Revenue (CIR), through the Department of Finance (DOF) One-Stop
Shop Inter-Agency Tax Credit and Duty Drawback Center.6

Proceedings before the Second Division of the CTA

On even date, respondent filed a Petition for Review7 with the CTA for the refund/credit of the
same input VAT. The case was docketed as CTA Case No. 7065 and was raffled to the Second
Division of the CTA.

In the Petition for Review, respondent alleged that for the period July 1, 2002 to September 30,
2002, it generated and recorded zero-rated sales in the amount of ₱131,791,399.00,8 which
was paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the National Internal Revenue
Code of 1997 (NIRC);9 that for the said period, it incurred and paid input VAT amounting to
₱3,912,088.14 from purchases and importation attributable to its zero-rated sales;10and that in
its application for refund/credit filed with the DOF One-Stop Shop Inter-Agency Tax Credit and
Duty Drawback Center, it only claimed the amount of ₱3,891,123.82.11

In response, petitioner filed his Answer12 raising the following special and affirmative defenses,
to wit:

4. Petitioner’s alleged claim for refund is subject to administrative investigation by the

Bureau;

5. Petitioner must prove that it paid VAT input taxes for the period in question;

6. Petitioner must prove that its sales are export sales contemplated under Sections
106(A) (2) (a), and 108(B) (1) of the Tax Code of 1997;

7. Petitioner must prove that the claim was filed within the two (2) year period prescribed
in Section 229 of the Tax Code;

8. In an action for refund, the burden of proof is on the taxpayer to establish its right to
refund, and failure to sustain the burden is fatal to the claim for refund; and

9. Claims for refund are construed strictly against the claimant for the same partake of
the nature of exemption from taxation.13

Trial ensued, after which, on January 4, 2008, the Second Division of the CTA rendered a
Decision partially granting respondent’s claim for refund/credit. Pertinent portions of the
Decision read:

For a VAT registered entity whose sales are zero-rated, to validly claim a refund, Section 112
(A) of the NIRC of 1997, as amended, provides:

SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales. – Any VAT-registered person, whose sales are
zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of
creditable input tax due or paid attributable to such sales, except transitional input tax, to the
extent that such input tax has not been applied against output tax: x x x

Pursuant to the above provision, petitioner must comply with the following requisites: (1) the
taxpayer is engaged in sales which are zero-rated or effectively zero-rated; (2) the taxpayer is
VAT-registered; (3) the claim must be filed within two years after the close of the taxable quarter
when such sales were made; and (4) the creditable input tax due or paid must be attributable to
such sales, except the transitional input tax, to the extent that such input tax has not been
applied against the output tax.

The Court finds that the first three requirements have been complied [with] by petitioner.
With regard to the first requisite, the evidence presented by petitioner, such as the Sales
Invoices (Exhibits "II" to "II-262," "JJ" to "JJ-431," "KK" to "KK-394" and "LL") shows that it is
engaged in sales which are zero-rated.

The second requisite has likewise been complied with. The Certificate of Registration with OCN
1RC0000148499 (Exhibit "C") with the BIR proves that petitioner is a registered VAT taxpayer.

In compliance with the third requisite, petitioner filed its administrative claim for refund on
September 30, 2004 (Exhibit "N") and the present Petition for Review on September 30, 2004,
both within the two (2) year prescriptive period from the close of the taxable quarter when the
sales were made, which is from September 30, 2002.

As regards, the fourth requirement, the Court finds that there are some documents and claims
of petitioner that are baseless and have not been satisfactorily substantiated.

xxxx

In sum, petitioner has sufficiently proved that it is entitled to a refund or issuance of a tax credit
certificate representing unutilized excess input VAT payments for the period July 1, 2002 to
September 30, 2002, which are attributable to its zero-rated sales for the same period, but in the
reduced amount of ₱3,239,119.25, computed as follows:

Amount of Claimed Input VAT ₱ 3,891,123.82

Less:
Exceptions as found by the ICPA 41,020.37

Net Creditable Input VAT ₱ 3,850,103.45

Less:
Output VAT Due 610,984.20
Excess Creditable Input VAT ₱ 3,239,119.25

WHEREFORE, premises considered, the present Petition for Review is PARTIALLY

GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND OR ISSUE A TAX
CREDIT CERTIFICATE in favor of petitioner [in] the reduced amount of THREE MILLION TWO
HUNDRED THIRTY NINE THOUSAND ONE HUNDRED NINETEEN AND 25/100 PESOS
(₱3,239,119.25), representing the unutilized input VAT incurred for the months of July to
September 2002.

SO ORDERED.14

Dissatisfied with the above-quoted Decision, petitioner filed a Motion for Partial
Reconsideration,15 insisting that the administrative and the judicial claims were filed beyond the
two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the
NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for tax
refund/credit on September 30, 2004 was beyond the two-year period, which expired on
September 29, 2004.16 He cited as basis Article 13 of the Civil Code,17 which provides that when
the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued that the
simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and
229 of the NIRC.18 According to the petitioner, a prior filing of an administrative claim is a
"condition precedent"19 before a judicial claim can be filed. He explained that the rationale of
such requirement rests not only on the doctrine of exhaustion of administrative remedies but
also on the fact that the CTA is an appellate body which exercises the power of judicial review
over administrative actions of the BIR. 20

The Second Division of the CTA, however, denied petitioner’s Motion for Partial
Reconsideration for lack of merit. Petitioner thus elevated the matter to the CTA En Banc via a
Petition for Review.21

Ruling of the CTA En Banc

On July 30, 2008, the CTA En Banc affirmed the Second Division’s Decision allowing the partial
tax refund/credit in favor of respondent. However, as to the reckoning point for counting the two-
year period, the CTA En Banc ruled:

Petitioner argues that the administrative and judicial claims were filed beyond the period allowed
by law and hence, the honorable Court has no jurisdiction over the same. In addition, petitioner
further contends that respondent's filing of the administrative and judicial [claims] effectively
eliminates the authority of the honorable Court to exercise jurisdiction over the judicial claim.

We are not persuaded.

Section 114 of the 1997 NIRC, and We quote, to wit:

SEC. 114. Return and Payment of Value-added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall
file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days
following the close of each taxable quarter prescribed for each taxpayer: Provided, however,
That VAT-registered persons shall pay the value-added tax on a monthly basis.

[x x x x ]

Based on the above-stated provision, a taxpayer has twenty five (25) days from the close of
each taxable quarter within which to file a quarterly return of the amount of his gross sales or
receipts. In the case at bar, the taxable quarter involved was for the period of July 1, 2002 to
September 30, 2002. Applying Section 114 of the 1997 NIRC, respondent has until October 25,
2002 within which to file its quarterly return for its gross sales or receipts [with] which it complied
when it filed its VAT Quarterly Return on October 20, 2002.

In relation to this, the reckoning of the two-year period provided under Section 229 of the 1997
NIRC should start from the payment of tax subject claim for refund. As stated above,
respondent filed its VAT Return for the taxable third quarter of 2002 on October 20, 2002. Thus,
respondent's administrative and judicial claims for refund filed on September 30, 2004 were filed
on time because AICHI has until October 20, 2004 within which to file its claim for refund.

In addition, We do not agree with the petitioner's contention that the 1997 NIRC requires the
previous filing of an administrative claim for refund prior to the judicial claim. This should not be
the case as the law does not prohibit the simultaneous filing of the administrative and judicial
claims for refund. What is controlling is that both claims for refund must be filed within the two-
year prescriptive period.

In sum, the Court En Banc finds no cogent justification to disturb the findings and conclusion
spelled out in the assailed January 4, 2008 Decision and March 13, 2008 Resolution of the CTA
Second Division. What the instant petition seeks is for the Court En Banc to view and appreciate
the evidence in their own perspective of things, which unfortunately had already been
considered and passed upon.

WHEREFORE, the instant Petition for Review is hereby DENIED DUE COURSE and
DISMISSED for lack of merit. Accordingly, the January 4, 2008 Decision and March 13, 2008
Resolution of the CTA Second Division in CTA Case No. 7065 entitled, "AICHI Forging
Company of Asia, Inc. petitioner vs. Commissioner of Internal Revenue, respondent" are hereby
AFFIRMED in toto.

SO ORDERED.22

Petitioner sought reconsideration but the CTA En Banc denied23 his Motion for Reconsideration.

Issue

Hence, the present recourse where petitioner interposes the issue of whether respondent’s
judicial and administrative claims for tax refund/credit were filed within the two-year prescriptive
period provided in Sections 112(A) and 229 of

the NIRC.24

Petitioner’s Arguments

Petitioner maintains that respondent’s administrative and judicial claims for tax refund/credit
were filed in violation of Sections 112(A) and 229 of the NIRC.25 He posits that pursuant to
Article 13 of the Civil Code,26 since the year 2004 was a leap year, the filing of the claim for tax
refund/credit on September 30, 2004 was beyond the two-year period, which expired on
September 29, 2004.27

Petitioner further argues that the CTA En Banc erred in applying Section 114(A) of the NIRC in
determining the start of the two-year period as the said provision pertains to the compliance
requirements in the payment of VAT.28 He asserts that it is Section 112, paragraph (A), of the
same Code that should apply because it specifically provides for the period within which a claim
for tax refund/ credit should be made.29

Petitioner likewise puts in issue the fact that the administrative claim with the BIR and the
judicial claim with the CTA were filed on the same day.30 He opines that the simultaneous filing
of the administrative and the judicial claims contravenes Section 229 of the NIRC, which
requires the prior filing of an administrative claim.31 He insists that such procedural requirement
is based on the doctrine of exhaustion of administrative remedies and the fact that the CTA is
an appellate body exercising judicial review over administrative actions of the CIR.32
Respondent’s Arguments

For its part, respondent claims that it is entitled to a refund/credit of its unutilized input VAT for
the period July 1, 2002 to September 30, 2002 as a matter of right because it has substantially
complied with all the requirements provided by law.33 Respondent likewise defends the CTA En
Banc in applying Section 114(A) of the NIRC in computing the prescriptive period for the claim
for tax refund/credit. Respondent believes that Section 112(A) of the NIRC must be read
together with Section 114(A) of the same Code.34

As to the alleged simultaneous filing of its administrative and judicial claims, respondent
contends that it first filed an administrative claim with the One-Stop Shop Inter-Agency Tax
Credit and Duty Drawback Center of the DOF before it filed a judicial claim with the CTA. 35 To
prove this, respondent points out that its Claimant Information Sheet No. 4970236 and BIR Form
No. 1914 for the third quarter of 2002,37 which were filed with the DOF, were attached as
Annexes "M" and "N," respectively, to the Petition for Review filed with the CTA. 38 Respondent
further contends that the non-observance of the 120-day period given to the CIR to act on the
claim for tax refund/credit in Section 112(D) is not fatal because what is important is that both
claims are filed within the two-year prescriptive period.39 In support thereof, respondent cites
Commissioner of Internal Revenue v. Victorias Milling Co., Inc.40 where it was ruled that "[i]f,
however, the [CIR] takes time in deciding the claim, and the period of two years is about to end,
the suit or proceeding must be started in the [CTA] before the end of the two-year period without
awaiting the decision of the [CIR]."41 Lastly, respondent argues that even if the period had
already lapsed, it may be suspended for reasons of equity considering that it is not a
jurisdictional requirement.42

Our Ruling

The petition has merit.

Unutilized input VAT must be claimed within two years after the close of the taxable quarter
when the sales were made

In computing the two-year prescriptive period for claiming a refund/credit of unutilized input
VAT, the Second Division of the CTA applied Section 112(A) of the NIRC, which states:

SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales – Any VAT-registered person, whose sales are
zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of
creditable input tax due or paid attributable to such sales, except transitional input tax, to the
extent that such input tax has not been applied against output tax: Provided, however, That in
the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1)
and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted
for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP):
Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated
sale and also in taxable or exempt sale of goods or properties or services, and the amount of
creditable input tax due or paid cannot be directly and entirely attributed to any one of the
transactions, it shall be allocated proportionately on the basis of the volume of sales. (Emphasis
supplied.)
The CTA En Banc, on the other hand, took into consideration Sections 114 and 229 of the
NIRC, which read:

SEC. 114. Return and Payment of Value-Added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall
file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days
following the close of each taxable quarter prescribed for each taxpayer: Provided, however,
That VAT-registered persons shall pay the value-added tax on a monthly basis.

Any person, whose registration has been cancelled in accordance with Section 236, shall file a
return and pay the tax due thereon within twenty-five (25) days from the date of cancellation of
registration: Provided, That only one consolidated return shall be filed by the taxpayer for his
principal place of business or head office and all branches.

xxxx

SEC. 229. Recovery of tax erroneously or illegally collected. –

No suit or proceeding shall be maintained in any court for the recovery of any national internal
revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of
any penalty claimed to have been collected without authority, or of any sum alleged to have
been excessively or in any manner wrongfully collected, until a claim for refund or credit has
been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether
or not such tax, penalty or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from
the date of payment of the tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even without written claim
therefor, refund or credit any tax, where on the face of the return upon which payment was
made, such payment appears clearly to have been erroneously paid. (Emphasis supplied.)

Hence, the CTA En Banc ruled that the reckoning of the two-year period for filing a claim for
refund/credit of unutilized input VAT should start from the date of payment of tax and not from
the close of the taxable quarter when the sales were made.43

The pivotal question of when to reckon the running of the two-year prescriptive period, however,
has already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao
Corporation,44 where we ruled that Section 112(A) of the NIRC is the applicable provision in
determining the start of the two-year period for claiming a refund/credit of unutilized input VAT,
and that Sections 204(C) and 229 of the NIRC are inapplicable as "both provisions apply only to
instances of erroneous payment or illegal collection of internal revenue taxes."45 We explained
that:

The above proviso [Section 112 (A) of the NIRC] clearly provides in no uncertain terms
that unutilized input VAT payments not otherwise used for any internal revenue tax due
the taxpayer must be claimed within two years reckoned from the close of the taxable
quarter when the relevant sales were made pertaining to the input VAT regardless of
whether said tax was paid or not. As the CA aptly puts it, albeit it erroneously applied the
aforequoted Sec. 112 (A), "[P]rescriptive period commences from the close of the taxable
quarter when the sales were made and not from the time the input VAT was paid nor from the
time the official receipt was issued." Thus, when a zero-rated VAT taxpayer pays its input VAT a
year after the pertinent transaction, said taxpayer only has a year to file a claim for refund or tax
credit of the unutilized creditable input VAT. The reckoning frame would always be the end of
the quarter when the pertinent sales or transaction was made, regardless when the input VAT
was paid. Be that as it may, and given that the last creditable input VAT due for the period
covering the progress billing of September 6, 1996 is the third quarter of 1996 ending on
September 30, 1996, any claim for unutilized creditable input VAT refund or tax credit for said
quarter prescribed two years after September 30, 1996 or, to be precise, on September 30,
1998. Consequently, MPC’s claim for refund or tax credit filed on December 10, 1999 had
already prescribed.

Reckoning for prescriptive period under

Secs. 204(C) and 229 of the NIRC inapplicable

To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C) or 229 of the NIRC
which, for the purpose of refund, prescribes a different starting point for the two-year
prescriptive limit for the filing of a claim therefor. Secs. 204(C) and 229 respectively provide:

Sec. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. –
The Commissioner may –

xxxx

(c) Credit or refund taxes erroneously or illegally received or penalties imposed without
authority, refund the value of internal revenue stamps when they are returned in good condition
by the purchaser, and, in his discretion, redeem or change unused stamps that have been
rendered unfit for use and refund their value upon proof of destruction. No credit or refund of
taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a
claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided,
however, That a return filed showing an overpayment shall be considered as a written claim for
credit or refund.

xxxx

Sec. 229. Recovery of Tax Erroneously or Illegally Collected. – No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, of any sum alleged to have been excessively or in any manner
wrongfully collected without authority, or of any sum alleged to have been excessively or in any
manner wrongfully collected, until a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained, whether or not such tax,
penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from
the date of payment of the tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even without a written claim
therefor, refund or credit any tax, where on the face of the return upon which payment was
made, such payment appears clearly to have been erroneously paid.
Notably, the above provisions also set a two-year prescriptive period, reckoned from date of
payment of the tax or penalty, for the filing of a claim of refund or tax credit. Notably too, both
provisions apply only to instances of erroneous payment or illegal collection of internal
revenue taxes.

MPC’s creditable input VAT not erroneously paid

For perspective, under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can
be shifted or passed on to the buyer, transferee, or lessee of the goods, properties, or services
of the taxpayer. The fact that the subsequent sale or transaction involves a wholly-tax exempt
client, resulting in a zero-rated or effectively zero-rated transaction, does not, standing alone,
deprive the taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the
erroneous, illegal, or wrongful payment angle does not enter the equation.

xxxx

Considering the foregoing discussion, it is clear that Sec. 112 (A) of the NIRC, providing a
two-year prescriptive period reckoned from the close of the taxable quarter when the
relevant sales or transactions were made pertaining to the creditable input VAT, applies
to the instant case, and not to the other actions which refer to erroneous payment of
taxes.46 (Emphasis supplied.)

In view of the foregoing, we find that the CTA En Banc erroneously applied Sections 114(A) and
229 of the NIRC in computing the two-year prescriptive period for claiming refund/credit of
unutilized input VAT. To be clear, Section 112 of the NIRC is the pertinent provision for the
refund/credit of input VAT. Thus, the two-year period should be reckoned from the close of the
taxable quarter when the sales were made.

The administrative claim was timely filed

Bearing this in mind, we shall now proceed to determine whether the administrative claim was
timely filed.

Relying on Article 13 of the Civil Code,47 which provides that a year is equivalent to 365 days,
and taking into account the fact that the year 2004 was a leap year, petitioner submits that the
two-year period to file a claim for tax refund/ credit for the period July 1, 2002 to September 30,
2002 expired on September 29, 2004.48

We do not agree.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc.,49 we said that as

between the Civil Code, which provides that a year is equivalent to 365 days, and the
Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is
the latter that must prevail following the legal maxim, Lex posteriori derogat priori.50 Thus:

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code
of 1987 deal with the same subject matter – the computation of legal periods. Under the Civil
Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the
Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless to
state, under the Administrative Code of 1987, the number of days is irrelevant.
There obviously exists a manifest incompatibility in the manner of

computing legal periods under the Civil Code and the Administrative Code of 1987. For this
reason, we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being
the more recent law, governs the computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the
two-year prescriptive period (reckoned from the time respondent filed its final adjusted return on
April 14, 1998) consisted of 24 calendar months, computed as follows:

Year 1 1st calendar month April 15, 1998 to May 14, 1998
2nd calendar month May 15, 1998 to June 14, 1998
3rd calendar month June 15, 1998 to July 14, 1998
4th calendar month July 15, 1998 to August 14, 1998
5th calendar month August 15, 1998 to September 14, 1998
6th calendar month September 15, 1998 to October 14, 1998
7th calendar month October 15, 1998 to November 14, 1998
8th calendar month November 15, 1998 to December 14, 1998
9th calendar month December 15, 1998 to January 14, 1999
10th calendar month January 15, 1999 to February 14, 1999
11th calendar month February 15, 1999 to March 14, 1999
12th calendar month March 15, 1999 to April 14, 1999
Year 2 13th calendar month April 15, 1999 to May 14, 1999
14th calendar month May 15, 1999 to June 14, 1999
15th calendar month June 15, 1999 to July 14, 1999
16th calendar month July 15, 1999 to August 14, 1999
17th calendar month August 15, 1999 to September 14, 1999
18th calendar month September 15, 1999 to October 14, 1999
19th calendar month October 15, 1999 to November 14, 1999
20th calendar month November 15, 1999 to December 14, 1999
21st calendar month December 15, 1999 to January 14, 2000
22nd calendar month January 15, 2000 to February 14, 2000
23rd calendar month February 15, 2000 to March 14, 2000
24th calendar month March 15, 2000 to April 14, 2000
We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of
the 24th calendar month from the day respondent filed its final adjusted return. Hence, it was
filed within the reglementary period.51

Applying this to the present case, the two-year period to file a claim for tax refund/credit for the
period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence,
respondent’s administrative claim was timely filed.

The filing of the judicial claim was premature

However, notwithstanding the timely filing of the administrative claim, we

are constrained to deny respondent’s claim for tax refund/credit for having been filed in violation
of Section 112(D) of the NIRC, which provides that:

SEC. 112. Refunds or Tax Credits of Input Tax. –

xxxx

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases,
the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes
within one hundred twenty (120) days from the date of submission of complete documents in
support of the application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of
the Commissioner to act on the application within the period prescribed above, the taxpayer
affected may, within thirty (30) days from the receipt of the decision denying the claim or after
the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim
with the Court of Tax Appeals. (Emphasis supplied.)

Section 112(D) of the NIRC clearly provides that the CIR has "120 days, from the date of the
submission of the complete documents in support of the application [for tax refund/credit],"
within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s
recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on the application for tax
refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30
days.

In this case, the administrative and the judicial claims were simultaneously filed on September
30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-
day period. For this reason, we find the filing of the judicial claim with the CTA premature.

Respondent’s assertion that the non-observance of the 120-day period is not fatal to the filing of
a judicial claim as long as both the administrative and the judicial claims are filed within the two-
year prescriptive period52 has no legal basis.

There is nothing in Section 112 of the NIRC to support respondent’s view. Subsection (A) of the
said provision states that "any VAT-registered person, whose sales are zero-rated or effectively
zero-rated may, within two years after the close of the taxable quarter when the sales were
made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or
paid attributable to such sales." The phrase "within two (2) years x x x apply for the issuance of
a tax credit certificate or refund" refers to applications for refund/credit filed with the CIR and not
to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the
same provision, which states that the CIR has "120 days from the submission of complete
documents in support of the application filed in accordance with Subsections (A) and (B)" within
which to decide on the claim.

In fact, applying the two-year period to judicial claims would render nugatory Section 112(D) of
the NIRC, which already provides for a specific period within which a taxpayer should appeal
the decision or inaction of the CIR. The second paragraph of Section 112(D) of the NIRC
envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-
day period; and (2) when no decision is made after the 120-day period. In both instances, the
taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-day
period is crucial in filing an appeal with the CTA.

With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc.53 relied upon by
respondent, we find the same inapplicable as the tax provision involved in that case is Section
306, now Section 229 of the NIRC. And as already discussed, Section 229 does not apply to
refunds/credits of input VAT, such as the instant case.

In fine, the premature filing of respondent’s claim for refund/credit of input VAT before the CTA
warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.

WHEREFORE, the Petition is hereby GRANTED. The assailed July 30, 2008 Decision and the
October 6, 2008 Resolution of the Court of Tax Appeals are hereby REVERSED and SET
ASIDE. The Court of Tax Appeals Second Division is DIRECTED to dismiss CTA Case No.
7065 for having been prematurely filed.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 162155 August 28, 2007

COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official

capacity as Revenue District Officer of Revenue District No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.

DECISION

CORONA, J.:4

This petition for review on certiorari1 seeks to set aside the August 1, 2003 decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying
reconsideration.3

On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc.,
applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter to
petitioner revenue district officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the
Bureau of Internal Revenue (BIR),4 he explained that the increase in the cost of labor and
materials and difficulty in obtaining financing for projects and collecting receivables caused the
real estate industry to slowdown.5 As a consequence, while business was good during the first
quarter of 1997, respondent suffered losses amounting to ₱71,879,228 that year. 6

According to Yap, because respondent suffered losses, it was not liable for income
taxes.7 Nevertheless, respondent paid its quarterly corporate income tax and remitted creditable
withholding tax from real estate sales to the BIR in the total amount of
₱26,318,398.32.8 Therefore, respondent was entitled to tax refund or tax credit.9

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional
documents to support its claim.10 Respondent complied but its claim was not acted upon. Thus,
on April 14, 2000, it filed a petition for review11 in the Court of Tax Appeals (CTA).

On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year
prescriptive period for filing a judicial claim for tax refund or tax credit.12 It invoked Section 229
of the National Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been excessively or in any manner
wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner;
but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has
been paid under protest or duress.
In any case, no such suit or proceeding shall be filed after the expiration of two (2) years
from the date of payment of the tax or penalty regardless of any supervening cause that
may arise after payment: Provided, however, That the Commissioner may, even without a
claim therefor, refund or credit any tax, where on the face of the return upon which payment was
made, such payment appears clearly to have been erroneously paid. (emphasis supplied)

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to
claim a refund or credit commenced on that date.13

The tax court applied Article 13 of the Civil Code which states:

Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years
are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours,
and nights from sunset to sunrise.

If the months are designated by their name, they shall be computed by the number of days
which they respectively have.

In computing a period, the first day shall be excluded, and the last included. (emphasis
supplied)

Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for
the filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year,
respondent's petition, which was filed 731 days14 after respondent filed its final adjusted return,
was filed beyond the reglementary period.15

Respondent moved for reconsideration but it was denied.16 Hence, it filed an appeal in the CA.17

On August 1, 2003, the CA reversed and set aside the decision of the CTA.18 It ruled that Article
13 of the Civil Code did not distinguish between a regular year and a leap year. According to the
CA:

The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a
leap year.19

In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to
April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a
total of 730 days. A statute which is clear and explicit shall be neither interpreted nor
construed.20

Petitioners moved for reconsideration but it was denied.21 Thus, this appeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly
construed against claimants.22 Section 229 of the NIRC should be strictly applied against
respondent inasmuch as it has been consistently held that the prescriptive period (for the filing
of tax refunds and tax credits) begins to run on the day claimants file their final adjusted
returns.23 Hence, the claim should have been filed on or before April 13, 2000 or within 730
days, reckoned from the time respondent filed its final adjusted return.
The conclusion of the CA that respondent filed its petition for review in the CTA within the two-
year prescriptive period provided in Section 229 of the NIRC is correct. Its basis, however, is
not.

The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted
return.24 But how should the two-year prescriptive period be computed?

As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is
understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson,25 we
ruled that a year is equivalent to 365 days regardless of whether it is a regular year or a leap
year.26

However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31,
Chapter VIII, Book I thereof provides:

Sec. 31. Legal Periods. — "Year" shall be understood to be twelve calendar

months; "month" of thirty days, unless it refers to a specific calendar month in which case it
shall be computed according to the number of days the specific month contains; "day", to a day
of twenty-four hours and; "night" from sunrise to sunset. (emphasis supplied)

A calendar month is "a month designated in the calendar without regard to the number of days it
may contain."28 It is the "period of time running from the beginning of a certain numbered day up
to, but not including, the corresponding numbered day of the next month, and if there is not a
sufficient number of days in the next month, then up to and including the last day of that
month."29 To illustrate, one calendar month from December 31, 2007 will be from January 1,
2008 to January 31, 2008; one calendar month from January 31, 2008 will be from February 1,
2008 until February 29, 2008.30

A law may be repealed expressly (by a categorical declaration that the law is revoked and
abrogated by another) or impliedly (when the provisions of a more recent law cannot be
reasonably reconciled with the previous one).31Section 27, Book VII (Final Provisions) of the
Administrative Code of 1987 states:

Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, or portions
thereof, inconsistent with this Code are hereby repealed or modified accordingly.

A repealing clause like Sec. 27 above is not an express repealing clause because it fails to
identify or designate the laws to be abolished.32 Thus, the provision above
only impliedly repealed all laws inconsistent with the Administrative Code of 1987.1avvphi1

Implied repeals, however, are not favored. An implied repeal must have been clearly and
unmistakably intended by the legislature. The test is whether the subsequent law encompasses
entirely the subject matter of the former law and they cannot be logically or reasonably
reconciled.33

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code
of 1987 deal with the same subject matter — the computation of legal periods. Under the Civil
Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the
Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless to
state, under the Administrative Code of 1987, the number of days is irrelevant.
There obviously exists a manifest incompatibility in the manner of computing legal periods under
the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31,
Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the
computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the
two-year prescriptive period (reckoned from the time respondent filed its final adjusted
return34 on April 14, 1998) consisted of 24 calendar months, computed as follows:

Year 1st calendar April 15, 1998 to May 14, 1998

1 month
2nd calendar May 15, 1998 to June 14, 1998
month
3rd calendar June 15, 1998 to July 14, 1998
month
4th calendar July 15, 1998 to August 14, 1998
month
5th calendar August 15, 1998 to September 14,
month 1998
6th calendar September 15, to October 14, 1998
month 1998
7th calendar October 15, 1998 to November 14,
month 1998
8th calendar November 15, to December 14,
month 1998 1998
9th calendar December 15, to January 14, 1999
month 1998
10th calendar January 15, 1999 to February 14, 1999
month
11th calendar February 15, 1999 to March 14, 1999
month
12th calendar March 15, 1999 to April 14, 1999
month
Year 13th calendar April 15, 1999 to May 14, 1999
2 month
14th calendar May 15, 1999 to June 14, 1999
month
15th calendar June 15, 1999 to July 14, 1999
month
 16th calendar July 15, 1999 to August 14, 1999
month
17th calendar August 15, 1999 to September 14,
month 1999
18th calendar September 15, to October 14, 1999
month 1999
19th calendar October 15, 1999 to November 14,
month 1999
20th calendar November 15, to December 14,
month 1999 1999
21st calendar December 15, to January 14, 2000
month 1999
22nd calendar January 15, 2000 to February 14, 2000
month
23rd calendar February 15, 2000 to March 14, 2000
month
24th calendar March 15, 2000 to April 14, 2000
month

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of
the 24th calendar month from the day respondent filed its final adjusted return. Hence, it was
filed within the reglementary period.

Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax
Appeals which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113
entitled Primetown Property Group, Inc. v. Commissioner of Internal Revenue and Arturo V.
Parcero.

No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19671 November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant,

vs.
VICENTA F. ESCAÑO, ET AL., defendants-appellees.

I. V. Binamira & F. B. Barria for plaintiff-appellant.

Jalandoni & Jarnir for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal, on factual and legal questions, from the judgment of the Court of First Instance of
Cebu, in its Civil Case No. R-4177, denying the claim of the plaintiff-appellant, Pastor B.
Tenchavez, for legal separation and one million pesos in damages against his wife and parents-
in-law, the defendants-appellees, Vicente, Mamerto and Mena,1 all surnamed "Escaño,"
respectively.2

The facts, supported by the evidence of record, are the following:

Missing her late afternoon classes on 24 February 1948 in the University of San Carlos, Cebu
City, where she was then enrolled as a second year student of commerce, Vicenta Escaño, 27
years of age (scion of a well-to-do and socially prominent Filipino family of Spanish ancestry
and a "sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez, 32 years of age,
an engineer, ex-army officer and of undistinguished stock, without the knowledge of her parents,
before a Catholic chaplain, Lt. Moises Lavares, in the house of one Juan Alburo in the said city.
The marriage was the culmination of a previous love affair and was duly registered with the local
civil register.

Vicenta's letters to Pastor, and his to her, before the marriage, indicate that the couple were
deeply in love. Together with a friend, Pacita Noel, their matchmaker and go-between, they had
planned out their marital future whereby Pacita would be the governess of their first-born; they
started saving money in a piggy bank. A few weeks before their secret marriage, their
engagement was broken; Vicenta returned the engagement ring and accepted another suitor,
Joseling Lao. Her love for Pastor beckoned; she pleaded for his return, and they reconciled.
This time they planned to get married and then elope. To facilitate the elopement, Vicenta had
brought some of her clothes to the room of Pacita Noel in St. Mary's Hall, which was their usual
trysting place.

Although planned for the midnight following their marriage, the elopement did not, however,
materialize because when Vicente went back to her classes after the marriage, her mother, who
got wind of the intended nuptials, was already waiting for her at the college. Vicenta was taken
home where she admitted that she had already married Pastor. Mamerto and Mena Escaño
were surprised, because Pastor never asked for the hand of Vicente, and were disgusted
because of the great scandal that the clandestine marriage would provoke (t.s.n., vol. III, pp.
1105-06). The following morning, the Escaño spouses sought priestly advice. Father Reynes
suggested a recelebration to validate what he believed to be an invalid marriage, from the
standpoint of the Church, due to the lack of authority from the Archbishop or the parish priest for
the officiating chaplain to celebrate the marriage. The recelebration did not take place, because
on 26 February 1948 Mamerto Escaño was handed by a maid, whose name he claims he does
not remember, a letter purportedly coming from San Carlos college students and disclosing an
amorous relationship between Pastor Tenchavez and Pacita Noel; Vicenta translated the letter
to her father, and thereafter would not agree to a new marriage. Vicenta and Pastor met that
day in the house of Mrs. Pilar Mendezona. Thereafter, Vicenta continued living with her parents
while Pastor returned to his job in Manila. Her letter of 22 March 1948 (Exh. "M"), while still
solicitous of her husband's welfare, was not as endearing as her previous letters when their love
was aflame.

Vicenta was bred in Catholic ways but is of a changeable disposition, and Pastor knew it. She
fondly accepted her being called a "jellyfish." She was not prevented by her parents from
communicating with Pastor (Exh. "1-Escaño"), but her letters became less frequent as the days
passed. As of June, 1948 the newlyweds were already estranged (Exh. "2-Escaño"). Vicenta
had gone to Jimenez, Misamis Occidental, to escape from the scandal that her marriage stirred
in Cebu society. There, a lawyer filed for her a petition, drafted by then Senator Emmanuel
Pelaez, to annul her marriage. She did not sign the petition (Exh. "B-5"). The case was
dismissed without prejudice because of her non-appearance at the hearing (Exh. "B-4").

On 24 June 1950, without informing her husband, she applied for a passport, indicating in her
application that she was single, that her purpose was to study, and she was domiciled in Cebu
City, and that she intended to return after two years. The application was approved, and she left
for the United States. On 22 August 1950, she filed a verified complaint for divorce against the
herein plaintiff in the Second Judicial District Court of the State of Nevada in and for the County
of Washoe, on the ground of "extreme cruelty, entirely mental in character." On 21 October
1950, a decree of divorce, "final and absolute", was issued in open court by the said tribunal.

In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of Cebu to annul their
daughter's marriage to Pastor (Exh. "D"). On 10 September 1954, Vicenta sought papal
dispensation of her marriage (Exh. "D"-2).

On 13 September 1954, Vicenta married an American, Russell Leo Moran, in Nevada. She now
lives with him in California, and, by him, has begotten children. She acquired American
citizenship on 8 August 1958.

But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a complaint in the Court
of First Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Escaño, her
parents, Mamerto and Mena Escaño, whom he charged with having dissuaded and discouraged
Vicenta from joining her husband, and alienating her affections, and against the Roman Catholic
Church, for having, through its Diocesan Tribunal, decreed the annulment of the marriage, and
asked for legal separation and one million pesos in damages. Vicenta claimed a valid divorce
from plaintiff and an equally valid marriage to her present husband, Russell Leo Moran; while
her parents denied that they had in any way influenced their daughter's acts, and
counterclaimed for moral damages.

The appealed judgment did not decree a legal separation, but freed the plaintiff from supporting
his wife and to acquire property to the exclusion of his wife. It allowed the counterclaim of
Mamerto Escaño and Mena Escaño for moral and exemplary damages and attorney's fees
against the plaintiff-appellant, to the extent of P45,000.00, and plaintiff resorted directly to this
Court.

The appellant ascribes, as errors of the trial court, the following:

1. In not declaring legal separation; in not holding defendant Vicenta F. Escaño liable for
damages and in dismissing the complaint;.

2. In not holding the defendant parents Mamerto Escano and the heirs of Doña Mena
Escaño liable for damages;.

3 In holding the plaintiff liable for and requiring him to pay the damages to the defendant
parents on their counterclaims; and.

4. In dismissing the complaint and in denying the relief sought by the plaintiff.

That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez, and the defendant-
appellee, Vicenta Escaño, were validly married to each other, from the standpoint of our civil
law, is clearly established by the record before us. Both parties were then above the age of
majority, and otherwise qualified; and both consented to the marriage, which was performed by
a Catholic priest (army chaplain Lavares) in the presence of competent witnesses. It is nowhere
shown that said priest was not duly authorized under civil law to solemnize marriages.

The chaplain's alleged lack of ecclesiastical authorization from the parish priest and the
Ordinary, as required by Canon law, is irrelevant in our civil law, not only because of the
separation of Church and State but also because Act 3613 of the Philippine Legislature (which
was the marriage law in force at the time) expressly provided that —

SEC. 1. Essential requisites. Essential requisites for marriage are the legal capacity of
the contracting parties and consent. (Emphasis supplied)

The actual authority of the solemnizing officer was thus only a formal requirement, and,
therefore, not essential to give the marriage civil effects,3 and this is emphasized by section 27
of said marriage act, which provided the following:

SEC. 27. Failure to comply with formal requirements. No marriage shall be declared
invalid because of the absence of one or several of the formal requirements of this Act if,
when it was performed, the spouses or one of them believed in good faith that the
person who solemnized the marriage was actually empowered to do so, and that the
marriage was perfectly legal.

The good faith of all the parties to the marriage (and hence the validity of their marriage) will be
presumed until the contrary is positively proved (Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco
vs. Jason, 60 Phil. 442, 448). It is well to note here that in the case at bar, doubts as to the
authority of the solemnizing priest arose only after the marriage, when Vicenta's parents
consulted Father Reynes and the archbishop of Cebu. Moreover, the very act of Vicenta in
abandoning her original action for annulment and subsequently suing for divorce implies an
admission that her marriage to plaintiff was valid and binding.
Defendant Vicenta Escaño argues that when she contracted the marriage she was under the
undue influence of Pacita Noel, whom she charges to have been in conspiracy with appellant
Tenchavez. Even granting, for argument's sake, the truth of that contention, and assuming that
Vicenta's consent was vitiated by fraud and undue influence, such vices did not render her
marriage ab initio void, but merely voidable, and the marriage remained valid until annulled by a
competent civil court. This was never done, and admittedly, Vicenta's suit for annulment in the
Court of First Instance of Misamis was dismissed for non-prosecution.

It is equally clear from the record that the valid marriage between Pastor Tenchavez and
Vicenta Escaño remained subsisting and undissolved under Philippine law, notwithstanding the
decree of absolute divorce that the wife sought and obtained on 21 October 1950 from the
Second Judicial District Court of Washoe County, State of Nevada, on grounds of "extreme
cruelty, entirely mental in character." At the time the divorce decree was issued, Vicenta
Escaño, like her husband, was still a Filipino citizen.4 She was then subject to Philippine law,
and Article 15 of the Civil Code of the Philippines (Rep. Act No. 386), already in force at the
time, expressly provided:

Laws relating to family rights and duties or to the status, condition and legal capacity of
persons are binding upon the citizens of the Philippines, even though living abroad.

The Civil Code of the Philippines, now in force, does not admit absolute divorce, quo ad vinculo
matrimonii; and in fact does not even use that term, to further emphasize its restrictive policy on
the matter, in contrast to the preceding legislation that admitted absolute divorce on grounds of
adultery of the wife or concubinage of the husband (Act 2710). Instead of divorce, the present
Civil Code only provides for legal separation (Title IV, Book 1, Arts. 97 to 108), and, even in that
case, it expressly prescribes that "the marriage bonds shall not be severed" (Art. 106, subpar.
1).

For the Philippine courts to recognize and give recognition or effect to a foreign decree of
absolute divorce betiveen Filipino citizens could be a patent violation of the declared public
policy of the state, specially in view of the third paragraph of Article 17 of the Civil Code that
prescribes the following:

Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, policy and good customs, shall not be rendered ineffective by
laws or judgments promulgated, or by determinations or conventions agreed upon in a
foreign country.

Even more, the grant of effectivity in this jurisdiction to such foreign divorce decrees would, in
effect, give rise to an irritating and scandalous discrimination in favor of wealthy citizens, to the
detriment of those members of our polity whose means do not permit them to sojourn abroad
and obtain absolute divorces outside the Philippines.

From this point of view, it is irrelevant that appellant Pastor Tenchavez should have appeared in
the Nevada divorce court. Primarily because the policy of our law cannot be nullified by acts of
private parties (Civil Code,Art. 17, jam quot.); and additionally, because the mere appearance of
a non-resident consort cannot confer jurisdiction where the court originally had none (Area vs.
Javier, 95 Phil. 579).
From the preceding facts and considerations, there flows as a necessary consequence that in
this jurisdiction Vicenta Escaño's divorce and second marriage are not entitled to recognition as
valid; for her previous union to plaintiff Tenchavez must be declared to be existent and
undissolved. It follows, likewise, that her refusal to perform her wifely duties, and her denial
of consortium and her desertion of her husband constitute in law a wrong caused through her
fault, for which the husband is entitled to the corresponding indemnity (Civil Code, Art. 2176).
Neither an unsubstantiated charge of deceit nor an anonymous letter charging immorality
against the husband constitute, contrary to her claim, adequate excuse. Wherefore, her
marriage and cohabitation with Russell Leo Moran is technically "intercourse with a person not
her husband" from the standpoint of Philippine Law, and entitles plaintiff-appellant Tenchavez to
a decree of "legal separation under our law, on the basis of adultery" (Revised Penal Code, Art.
333).

The foregoing conclusions as to the untoward effect of a marriage after an invalid divorce are in
accord with the previous doctrines and rulings of this court on the subject, particularly those that
were rendered under our laws prior to the approval of the absolute divorce act (Act 2710 of the
Philippine Legislature). As a matter of legal history, our statutes did not recognize divorces a
vinculo before 1917, when Act 2710 became effective; and the present Civil Code of the
Philippines, in disregarding absolute divorces, in effect merely reverted to the policies on the
subject prevailing before Act 2710. The rulings, therefore, under the Civil Code of 1889, prior to
the Act above-mentioned, are now, fully applicable. Of these, the decision in Ramirez vs. Gmur,
42 Phil. 855, is of particular interest. Said this Court in that case:

As the divorce granted by the French Court must be ignored, it results that the marriage
of Dr. Mory and Leona Castro, celebrated in London in 1905, could not legalize their
relations; and the circumstance that they afterwards passed for husband and wife in
Switzerland until her death is wholly without legal significance. The claims of the very
children to participate in the estate of Samuel Bishop must therefore be rejected. The
right to inherit is limited to legitimate, legitimated and acknowledged natural children.
The children of adulterous relations are wholly excluded. The word "descendants" as
used in Article 941 of the Civil Code cannot be interpreted to include illegitimates born
of adulterous relations. (Emphasis supplied)

Except for the fact that the successional rights of the children, begotten from Vicenta's marriage
to Leo Moran after the invalid divorce, are not involved in the case at bar, the Gmur case is
authority for the proposition that such union is adulterous in this jurisdiction, and, therefore,
justifies an action for legal separation on the part of the innocent consort of the first marriage,
that stands undissolved in Philippine law. In not so declaring, the trial court committed error.

True it is that our ruling gives rise to anomalous situations where the status of a person
(whether divorced or not) would depend on the territory where the question arises. Anomalies of
this kind are not new in the Philippines, and the answer to them was given in Barretto vs.
Gonzales, 58 Phil. 667:

The hardship of the existing divorce laws in the Philippine Islands are well known to the
members of the Legislature. It is the duty of the Courts to enforce the laws of divorce as
written by Legislature if they are constitutional. Courts have no right to say that such
laws are too strict or too liberal. (p. 72)

The appellant's first assignment of error is, therefore, sustained.

However, the plaintiff-appellant's charge that his wife's parents, Dr. Mamerto Escaño and his
wife, the late Doña Mena Escaño, alienated the affections of their daughter and influenced her
conduct toward her husband are not supported by credible evidence. The testimony of Pastor
Tenchavez about the Escaño's animosity toward him strikes us to be merely conjecture and
exaggeration, and are belied by Pastor's own letters written before this suit was begun (Exh. "2-
Escaño" and "Vicenta," Rec. on App., pp. 270-274). In these letters he expressly apologized to
the defendants for "misjudging them" and for the "great unhappiness" caused by his "impulsive
blunders" and "sinful pride," "effrontery and audacity" [sic]. Plaintiff was admitted to the Escaño
house to visit and court Vicenta, and the record shows nothing to prove that he would not have
been accepted to marry Vicente had he openly asked for her hand, as good manners and
breeding demanded. Even after learning of the clandestine marriage, and despite their shock at
such unexpected event, the parents of Vicenta proposed and arranged that the marriage be
recelebrated in strict conformity with the canons of their religion upon advice that the previous
one was canonically defective. If no recelebration of the marriage ceremony was had it was not
due to defendants Mamerto Escaño and his wife, but to the refusal of Vicenta to proceed with it.
That the spouses Escaño did not seek to compel or induce their daughter to assent to the
recelebration but respected her decision, or that they abided by her resolve, does not constitute
in law an alienation of affections. Neither does the fact that Vicenta's parents sent her money
while she was in the United States; for it was natural that they should not wish their daughter to
live in penury even if they did not concur in her decision to divorce Tenchavez (27 Am. Jur. 130-
132).

There is no evidence that the parents of Vicenta, out of improper motives, aided and abetted her
original suit for annulment, or her subsequent divorce; she appears to have acted
independently, and being of age, she was entitled to judge what was best for her and ask that
her decisions be respected. Her parents, in so doing, certainly cannot be charged with
alienation of affections in the absence of malice or unworthy motives, which have not been
shown, good faith being always presumed until the contrary is proved.

SEC. 529. Liability of Parents, Guardians or Kin. — The law distinguishes between the
right of a parent to interest himself in the marital affairs of his child and the absence of
rights in a stranger to intermeddle in such affairs. However, such distinction between the
liability of parents and that of strangers is only in regard to what will justify interference.
A parent isliable for alienation of affections resulting from his own malicious conduct, as
where he wrongfully entices his son or daughter to leave his or her spouse, but he is not
liable unless he acts maliciously, without justification and from unworthy motives. He is
not liable where he acts and advises his child in good faith with respect to his child's
marital relations in the interest of his child as he sees it, the marriage of his child not
terminating his right and liberty to interest himself in, and be extremely solicitous for, his
child's welfare and happiness, even where his conduct and advice suggest or result in
the separation of the spouses or the obtaining of a divorce or annulment, or where he
acts under mistake or misinformation, or where his advice or interference are indiscreet
or unfortunate, although it has been held that the parent is liable for consequences
resulting from recklessness. He may in good faith take his child into his home and afford
him or her protection and support, so long as he has not maliciously enticed his child
away, or does not maliciously entice or cause him or her to stay away, from his or her
spouse. This rule has more frequently been applied in the case of advice given to a
married daughter, but it is equally applicable in the case of advice given to a son.
Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or social discrimination
and with having exerted efforts and pressured her to seek annulment and divorce,
unquestionably caused them unrest and anxiety, entitling them to recover damages. While this
suit may not have been impelled by actual malice, the charges were certainly reckless in the
face of the proven facts and circumstances. Court actions are not established for parties to give
vent to their prejudices or spleen.

In the assessment of the moral damages recoverable by appellant Pastor Tenchavez from
defendant Vicente Escaño, it is proper to take into account, against his patently unreasonable
claim for a million pesos in damages, that (a) the marriage was celebrated in secret, and its
failure was not characterized by publicity or undue humiliation on appellant's part; (b) that the
parties never lived together; and (c) that there is evidence that appellant had originally agreed to
the annulment of the marriage, although such a promise was legally invalid, being against public
policy (cf. Art. 88, Civ. Code). While appellant is unable to remarry under our law, this fact is a
consequence of the indissoluble character of the union that appellant entered into voluntarily
and with open eyes rather than of her divorce and her second marriage. All told, we are of the
opinion that appellant should recover P25,000 only by way of moral damages and attorney's
fees.

With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto Escaño and
Mena Escaño, by the court below, we opine that the same are excessive. While the filing of this
unfounded suit must have wounded said defendants' feelings and caused them anxiety, the
same could in no way have seriously injured their reputation, or otherwise prejudiced them,
lawsuits having become a common occurrence in present society. What is important, and has
been correctly established in the decision of the court below, is that said defendants were not
guilty of any improper conduct in the whole deplorable affair. This Court, therefore, reduces the
damages awarded to P5,000 only.

Summing up, the Court rules:

(1) That a foreign divorce between Filipino citizens, sought and decreed after the effectivity of
the present Civil Code (Rep. Act 386), is not entitled to recognition as valid in this jurisdiction;
and neither is the marriage contracted with another party by the divorced consort, subsequently
to the foreign decree of divorce, entitled to validity in the country;

(2) That the remarriage of divorced wife and her co-habitation with a person other than the
lawful husband entitle the latter to a decree of legal separation conformably to Philippine law;

(3) That the desertion and securing of an invalid divorce decree by one consort entitles the other
to recover damages;

(4) That an action for alienation of affections against the parents of one consort does not lie in
the absence of proof of malice or unworthy motives on their part.

WHEREFORE, the decision under appeal is hereby modified as follows;

(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal separation from
defendant Vicenta F. Escaño;
(2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant Tenchavez the
amount of P25,000 for damages and attorneys' fees;

(3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño and the
estate of his wife, the deceased Mena Escaño, P5,000 by way of damages and attorneys' fees.

Neither party to recover costs.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. Nos. 95122-23 May 31, 1991

BOARD OF COMMISSIONERS (COMMISSION ON IMMIGRATION AND DEPORTATION),

BOARD OF SPECIAL INQUIRY, COMMISSIONER ANDREA D. DOMINGO, ASSOCIATE
COMMISSIONER JORGE V. SARMIENTO, ACTING ASSOCIATE COMMISSIONER REGINO
R. SANTIAGO, MEMBERS OF THE BOARD OF SPECIAL INQUIRY, ESTANISLAO CANTA,
LEO MAGAHOM and BENJAMIN KALAW, petitioners,
vs.
HON. JOSELITO DELA ROSA, Presiding Judge, RTC Manila, Branch 29, WILLIAM T.
GATCHALIAN,respondents.

BOARD OF COMMISSIONERS (COMMISSION ON IMMIGRATION AND DEPORTATION),

BOARD OF SPECIAL INQUIRY, COMMISSIONER ANDREA D. DOMINGO, ASSOCIATE
COMMISSIONER JORGE V. SARMIENTO, ACTING ASSOCIATE COMMISSIONER REGINO
R. SANTIAGO, MEMBERS OF THE BOARD OF SPECIAL INQUIRY, ESTANISLAO CANTA,
LEO MAGAHOM and BENJAMIN KALAW, petitioners,
vs.
HON. TERESITA DIZON CAPULONG, Presiding Judge, RTC Branch 172, Valenzuela,
Metro Manila, DEE HUA T. GATCHALIAN, SHERWING T. GATCHALIAN, KENNETH T.
GATCHALIAN, REXLON T. GATCHALIAN, and WESLIE T. GATCHALIAN, respondents.

G.R. Nos. 95612-13 May 31, 1991

WILLIAM T. GATCHALIAN, petitioner,

vs.
BOARD OF COMMISSIONERS (COMMISSION ON IMMIGRATION AND DEPORTATION), et
al., respondents.

The Solicitor General for petitioners.

edesma, Saludo & Associates for respondent William Gatchalian.
Cervo and Tanay Law Office for respondent T.D. Capulong, D.H.T. Gatchalian, et al.

BIDIN, J.:

This is a petition for certiorari and prohibition filed by the Solicitor General seeking 1) to set
aside the Resolution/Temporary Restraining Order dated September 7, 1990, issued by
respondent Judge de la Rosa in Civil Case No. 90-54214 which denied petitioners' motion to
dismiss and restrained petitioners from commencing or continuing with any of the proceedings
which would lead to the deportation of respondent William Gatchalian, docketed as D.C. No. 90-
523, as well as the Order of respondent Judge Capulong dated September 6, 1990 in Civil Case
No. 3431-V-90 which likewise enjoined petitioners from proceeding with the deportation charges
against respondent Gatchalian, and 2) to prohibit respondent judges from further acting in the
aforesaid civil cases.

On October 23, 1990, respondent Gatchalian filed his Comment with Counter-Petition, docketed
as G.R. Nos. 96512-13, alleging lack of jurisdiction on the part of respondent Board of
Commissioners, et al., over his person with prayer that he be declared a Filipino citizen, or in
the alternative, to remand the case to the trial court for further proceedings.

On December 13, 1990, petitioners filed their comment to respondent Gatchalian's counter-
petition. The Court considers the comment filed by respondent Gatchalian as answer to the
petition and petitioners' comment as answer to the counter-petition and gives due course to the
petitions.

There is no dispute as to the following facts:

On July 12, 1960, Santiago Gatchalian, grandfather of William Gatchalian, was recognized by
the Bureau of Immigration as a native born Filipino citizen following the citizenship of his natural
mother, Marciana Gatchalian (Annex "1", counter-petition). Before the Citizenship Evaluation
Board, Santiago Gatchalian testified that he has five (5) children with his wife Chu Gim Tee,
namely: Jose Gatchalian, Gloria Gatchalian, Francisco Gatchalian, Elena Gatchalian and
Benjamin Gatchalian (Annex "2", counter-petition).

On June 27, 1961, William Gatchalian, then a twelve-year old minor, arrived in Manila from
Hongkong together with Gloria, Francisco, and Johnson, all surnamed Gatchalian. They had
with them Certificates of Registration and Identity issued by the Philippine Consulate in
Hongkong based on a cablegram bearing the signature of the then Secretary of Foreign Affairs,
Felixberto Serrano, and sought admission as Filipino citizens. Gloria and Francisco are the
daughter and son, respectively, of Santiago Gatchalian; while William and Johnson are the sons
of Francisco.

After investigation, the Board of Special Inquiry No. 1 rendered a decision dated July 6, 1961,
admitting William Gatchalian and his companions as Filipino citizens (Annex "C", petition). As a
consequence thereof, William Gatchalian was issued Identification Certificate No. 16135 by the
immigration authorities on August 16, 1961 (Annex "D", petition).

On January 24, 1962, the then Secretary of Justice issued Memorandum No. 9 setting aside all
decisions purporting to have been rendered by the Board of Commissioners on appeal or on
review motu proprio of decisions of the Board of Special Inquiry. The same memorandum
directed the Board of Commissioners to review all cases where entry was allowed on the
ground that the entrant was a Philippine citizen. Among those cases was that of William and
others.

On July 6, 1962, the new Board of Commissioners, after a review motu proprio of the
proceedings had in the Board of Special Inquiry, reversed the decision of the latter and ordered
the exclusion of, among others, respondent Gatchalian (Annex "E", petition). A warrant of
exclusion also dated July 6, 1962 was issued alleging that "the decision of the Board of
Commissioners dated July 6, 1962 . . . has now become final and executory (Annex "F",
petition).
The actual date of rendition of said decision by the Board of Commissioners (whether on July 6,
1962 or July 20, 1962) became the subject of controversy in the 1967 case of Arocha vs.
Vivo (21 SCRA 532) wherein this Court sustained the validity of the decision of the new Board
of Commissioners having been promulgated on July 6, 1962, or within the reglementary period
for review.

Sometime in 1973, respondent Gatchalian, as well as the others covered by the July 6, 1962
warrant of exclusion, filed a motion for re-hearing with the Board of Special Inquiry where the
deportion case against them was assigned.

On March 14, 1973, the Board of Special Inquiry recommended to the then Acting
Commissioner Victor Nituda the reversal of the July 6, 1962 decision of the then Board of
Commissioners and the recall of the warrants of arrest issued therein (Annex "5", counter-
petition).

On March 15, 1973, Acting Commissioner Nituda issued an order reaffirming the July 6, 1961
decision of the Board of Special Inquiry thereby admitting respondent Gatchalian as a Filipino
citizen and recalled the warrant of arrest issued against him (Annex "6", counter-petition).

On June 7, 1990, the acting director of the National Bureau of Investigation wrote the Secretary
of Justice recommending that respondent Gatchalian along with the other applicants covered by
the warrant of exclusion dated July 6, 1962 be charged with violation of Sec. 37 (a), pars. 1 and
2, in relation to Secs. 45 (c), and (d) and (e) of Commonwealth Act No. 613, as amended, also
known as the Immigration Act of 1940 (Annex "G", petition).

On August 1, 1990, the Secretary of Justice indorsed the recommendation of the NBI to the
Commissioner of Immigration for investigation and immediate action (Annex "20", counter-
petition).

On August 15, 1990, petitioner Commissioner Domingo of the Commission of Immigration and
Deportation * issued a mission order commanding the arrest of respondent William
Gatchalian (Annex "18", counter-petition). The latter appeared before Commissioner Domingo
on August 20, 1990 and was released on the same day upon posting P200,000.00 cash bond.

On August 29, 1990, William Gatchalian filed a petition for certiorari and prohibition with
injunction before the Regional Trial Court of Manila, Br. 29, presided by respondent Judge dela
Rosa, docketed as Civil Case No. 90-54214.

On September 4, 1990, petitioners filed a motion to dismiss Civil Case No. 90-54214 alleging
that respondent judge has no jurisdiction over the Board of Commissioners and/or the Board of
Special Inquiry. Nonetheless, respondent judge dela Rosa issued the assailed order dated
September 7, 1990, denying the motion to dismiss.

Meanwhile, on September 6, 1990, respondent Gatchalian's wife and minor children filed before
the Regional Trial Court of Valenzuela, Metro Manila, Br. 172, presided by respondent judge
Capulong Civil Case No. 3431-V-90 for injunction with writ of preliminary injunction. The
complaint alleged, among others, that petitioners acted without or in excess of jurisdiction in the
institution of deportation proceedings against William. On the same day, respondent Capulong
issued the questioned temporary restraining order restraining petitioners from continuing with
the deportation proceedings against William Gatchalian.

The petition is anchored on the following propositions: 1) respondent judges have no jurisdiction
over petitioners (Board of Commissioners, et al.,) and the subject matter of the case, appellate
jurisdiction being vested by BP 129 with the Court of Appeals; 2) assuming respondent judges
have jurisdiction, they acted with grave abuse of discretion in preempting petitioners in the
exercise of the authority and jurisdiction to hear and determine the deportation case against
respondent Gatchalian, and in the process determine also his citizenship; 3) respondent judge
dela Rosa gravely abused his discretion in ruling that the issues raised in the deportation
proceedings are beyond the competence and jurisdiction of petitioners, thereby disregarding the
cases of Arocha vs. Vivo and Vivo vs. Arca (supra), which put finality to the July 6, 1962
decision of the Board of Commissioners that respondent Gatchalian is a Chinese citizen; and 4)
respondent judge Capulong should have dismissed Civil Case No. 3431-V-90 for forum-
shopping.

In his counter-petition, William Gatchalian alleges among others that: 1) assuming that the
evidence on record is not sufficient to declare him a Filipino citizen, petitioners have no
jurisdiction to proceed with the deportation case until the courts shall have finally resolved the
question of his citizenship; 2) petitioners can no longer judiciously and fairly resolve the question
of respondent's citizenship in the deportation case because of their bias, pre-judgment and
prejudice against him; and 3) the ground for which he is sought to be deported has already
prescribed.

For purposes of uniformity, the parties herein will be referred to in the order the petitions were
filed.

Petitioners argue that under Sec. 9 (3) of BP 129, it is the Court of Appeals which has exclusive
appellate jurisdiction over all final judgments or orders of quasi-judicial agencies, boards or
commissions, such as the Board of Commissioners and the Board of Special Inquiry.

Respondent, on the other hand, contends that petitioners are not quasi-judicial agencies and
are not in equal rank with Regional Trial Courts.

Under Sec. 21 (1) of Batas Pambansa Blg. 129, the Regional Trial Courts have concurrent
jurisdiction with this Court and the Court of Appeals to issue "writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpusand injunction which may be enforced in
any part of their respective regions, . . ." Thus, the RTCs are vested with the power to determine
whether or not there has been a grave abuse of discretion on the part of any branch or
instrumentality of the government.

It is true that under Sec. 9 (3) of Batas Pambansa Blg. 129, the Court of Appeals is vested with
—

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, order,
or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, board
or commission, except those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the provisions of this Act, and of sub-paragraph (1)
of the third paragraph of and sub-paragraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948.
It does not provide, however, that said exclusive appellate jurisdiction of the Court of Appeals
extends to all quasi-judicial agencies. The quasi-judicial bodies whose decisions are exclusively
appealable to the Court of Appeals are those which under the law, Republic Act No. 5434, or
their enabling acts, are specifically appealable to the Court of Appeals (Presidential Anti-Dollar
Salting Task Force vs. Court of Appeals, 171 SCRA 348 [1989]; Lupangco vs. Court of Appeals,
160 SCRA 848 [1988]). Thus, under Republic Act No. 5434, it is specifically provided that the
decisions of the Land Registration Commission (LRC), the Social Security Commission (SSC),
Civil Aeronautics Board (CAB), the Patent Office and the Agricultural Invention Board are
appealable to the Court of Appeals.

In the Presidential Anti-Dollar Salting Task Force (supra), this Court clarified the matter when
We ruled:

Under our Resolution dated January 11, 1983:

. . . The appeals to the Intermediate Appellate Court (now Court of Appeals) from
quasi-judicial bodies shall continue to be governed by the provisions of Republic
Act No. 5434 insofar as the same is not inconsistent with the provisions of B.P.
Blg. 129.

The pertinent provisions of Republic Act No. 5434 are as follows:

Sec. 1. Appeals from specified agencies.— Any provision of existing law or Rules
of Court to the contrary notwithstanding, parties aggrieved by a final ruling,
award, order, or decision, or judgment of the Court of Agrarian Relations; the
Secretary of Labor under Section 7 of Republic Act Numbered Six hundred and
two, also known as the "Minimum Wage Law"; the Department of Labor under
Section 23 of Republic Act Numbered Eight hundred seventy-five, also known as
the "Industrial Peace Act"; the Land Registration Commission; the Social Security
Commission; the Civil Aeronautics Board; the Patent Office and the Agricultural
Inventions Board, may appeal therefrom to the Court of Appeals, within the
period and in the manner herein provided, whether the appeal involves questions
of fact, mixed questions of fact and law, or questions of law, or all three kinds of
questions. From final judgments or decisions of the Court of Appeals, the
aggrieved party may appeal by certiorari to the Supreme Court as provided under
Rule 45 of the Rules of Court.

Because of subsequent amendments, including the abolition of various special courts,

jurisdiction over quasi-judicial bodies has to be, consequently, determined by the
corresponding amendatory statutes. Under the Labor Code, decisions and awards of the
National Labor Relations Commission are final and executory, but, nevertheless,
reviewable by this Court through a petition for certiorari and not by way of appeal.

Under the Property Registration Decree, decision of the Commission of Land

Registration, en consulta, are appealable to the Court of Appeals.

The decisions of the Securities and Exchange Commission are likewise appealable to
the Appellate Court, and so are decisions of the Social Security Commission.
 As a rule, where legislation provides for an appeal from decisions of certain
administrative bodies to the Court of Appeals, it means that such bodies are co-equal
with the Regional Trial Courts, in terms of rank and stature, and logically, beyond the
control of the latter. (Emphasis supplied)

There are quasi-judicial agencies, as the National Labor Relations Commissions, whose
decisions are directly appealable to this Court. It is only when a specific law, as Republic Act
No. 5434, provides appeal from certain bodies or commissions to the Court of Appeals as the
Land Registration Commission (LRC), Securities and Exchange Commission (SEC) and others,
that the said commissions or boards may be considered co-equal with the RTCs in terms of
rank, stature and are logically beyond the control of the latter.

However, the Bureau of Immigration (or CID) is not among those quasi-judicial agencies
specified by law whose decisions, orders, and resolutions are directly appealable to the Court of
Appeals. In fact, its decisions are subject to judicial review in accordance with Sec. 25, Chapter
4, Book VII of the 1987 Administrative Code, which provides as follows:

Sec. 25. Judicial Review.—(1) Agency decisions shall be subject to judicial review in
accordance with this chapter and applicable laws.

xxx xxx xxx

(6) The review proceeding shall be filed in the court specified in the statute or, in the
absence thereof, in any court of competent jurisdiction in accordance with the provisions
on venue of the Rules of Court.

Said provision of the Administrative Code, which is subsequent to B.P. Blg. 129 and which thus
modifies the latter, provides that the decision of an agency like the Bureau of Immigration
should be subject to review by the court specified by the statute or in the absence thereof, it is
subject to review by any court of competent jurisdiction in accordance with the provisions on
venue of the Rules of Court.

B.P. Blg. 129 did not intend to raise all quasi-judicial bodies to the same level or rank of the
RTC except those specifically provided for under the law as aforestated. As the Bureau of
Immigration is not of equal rank as the RTC, its decisions may be appealable to, and may be
reviewed through a special civil action for certiorari by, the RTC (Sec. 21, (1) BP 129).

True, it is beyond cavil that the Bureau of Immigration has the exclusive authority and
jurisdiction to try and hear cases against an alleged alien, and in the process, determine also
their citizenship (Lao Gi vs. Court of Appeals, 180 SCRA 756 [1989]). And a mere claim of
citizenship cannot operate to divest the Board of Commissioners of its jurisdiction in deportation
proceedings (Miranda vs. Deportation Board, 94 Phil. 531 [1954]).

However, the rule enunciated in the above-cases admits of an exception, at least insofar as
deportation proceedings are concerned. Thus, what if the claim to citizenship of the alleged
deportee is satisfactory? Should the deportation proceedings be allowed to continue or should
the question of citizenship be ventilated in a judicial proceeding? In Chua Hiong vs. Deportation
Board (96 Phil. 665 [1955]), this Court answered the question in the affirmative, and We quote:
 When the evidence submitted by a respondent is conclusive of his citizenship, the right
to immediate review should also be recognized and the courts should promptly enjoin
the deportation proceedings. A citizen is entitled to live in peace, without molestation
from any official or authority, and if he is disturbed by a deportation proceeding, he has
the unquestionable right to resort to the courts for his protection, either by a writ
of habeas corpus or of prohibition, on the legal ground that the Board lacks jurisdiction. If
he is a citizen and evidence thereof is satisfactory, there is no sense nor justice in
allowing the deportation proceedings to continue, granting him the remedy only after the
Board has finished its investigation of his undesirability.

. . . And if the right (to peace) is precious and valuable at all, it must also be protected on
time, to prevent undue harassment at the hands of ill-meaning or misinformed
administrative officials. Of what use is this much boasted right to peace and liberty if it
can be availed of only after the Deportation Board has unjustly trampled upon it,
besmirching the citizen's name before the bar of public opinion? (Emphasis supplied)

The doctrine of primary jurisdiction of petitioners Board of Commissioners over deportation

proceedings is, therefore, not without exception (Calacday vs. Vivo, 33 SCRA 413 [1970]; Vivo
vs. Montesa, 24 SCRA 155 [1967]). Judicial intervention, however, should be granted only in
cases where the "claim of citizenship is so substantial that there are reasonable grounds to
believe that the claim is correct. In other words, the remedy should be allowed only on sound
discretion of a competent court in a proper proceeding (Chua Hiong vs. Deportation
Board, supra; Co. vs. Deportation Board, 78 SCRA 107 [1977]). It appearing from the records
that respondent's claim of citizenship is substantial, as We shall show later, judicial intervention
should be allowed.

In the case at bar, the competent court which could properly take cognizance of the proceedings
instituted by respondent Gatchalian would nonetheless be the Regional Trial Court and not the
Court of Appeals in view of Sec. 21 (1), BP 129, which confers upon the former jurisdiction over
actions for prohibition concurrently with the Court of Appeals and the Supreme Court and in line
with the pronouncements of this Court in Chua Hiong and Co cases.

Ordinarily, the case would then be remanded to the Regional Trial Court. But not in the case at
bar.1âwphi1 Considering the voluminous pleadings submitted by the parties and the evidence
presented, We deem it proper to decide the controversy right at this instance. And this course of
action is not without precedent for "it is a cherished rule of procedure for this Court to always
strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the
seeds of future litigation. No useful purpose will be served if this case is remanded to the trial
court only to have its decision raised again to the Court of Appeals and from there to this Court"
(Marquez vs. Marquez, 73 Phil. 74; Keramic Industries, Inc. vs. Guerrero, 61 SCRA 265 [1974])
Alger Electric, Inc. vs. Court of Appeals (135 SCRA 37 [1985]), citing Gayos vs. Gayos (67
SCRA 146 [1975]).

In Lianga Bay Logging Co., Inc. vs. Court of Appeals (157 SCRA 357 [1988]), We also stated:

Remand of the case to the lower court for further reception of evidence is not necessary
where the court is in a position to resolve the dispute based on the records before it. On
many occasions, the Court, in the public interest and the expeditious administration of
justice, has resolved actions on the merits instead of remanding them to the trial court
for further proceedings, such as where the ends of justice would not be subserved by the
 remand of the case or when public interest demands an early disposition of the case or
where the trial court had already received all the evidence of the parties (Quisumbing vs.
CA, 112 SCRA 703; Francisco, et al., vs. The City of Davao, et al., supra; Republic vs.
Security Credit & Acceptance Corp., et al., 19 SCRA 58; Samal vs. CA, supra; Republic
vs. Central Surety & Insurance Co., 25 SCRA 641).

Likewise in Tejones vs. Gironella (159 SCRA 100 [1988]), We said:

Sound practice seeks to accommodate the theory which avoids waste of time, effort and
expense, both to the parties and the government, not to speak of delay in the disposal of
the case (cf. Fernandez vs. Garcia, 92 Phil. 592, 297). A marked characterstic of our
judicial set-up is that where the dictates of justice so demand . . . the Supreme Court
should act, and act with finality (Li Siu Liat vs. Republic, 21 SCRA 1039,
1046, citingSamal vs. CA, 99 Phil. 230 and US vs. Gimenez, 34 Phil. 74.) (Beautifont,
Inc. vs. Court of appeals, et al., Jan. 29, 1988; See also Labo vs. Commission on
Elections, 176 SCRA 1 [1989]).

Respondent Gatchalian has adduced evidence not only before the Regional Trial Court but also
before Us in the form of public documents attached to his pleadings. On the other hand, Special
Prosecutor Renato Mabolo in his Manifestation (dated September 6, 1990; Rollo, p. 298,
counter-petition) before the Bureau of Immigration already stated that there is no longer a need
to adduce evidence in support of the deportation charges against respondent. In addition,
petitioners invoke that this Court's decision in Arocha vs. Vivo and Vivo vs. Arca (supra), has
already settled respondent's alienage. Hence, the need for a judicial determination of
respondent's citizenship specially so where the latter is not seeking admission, but is already in
the Philippines (for the past thirty [30] years) and is being expelled (Chua Hiong vs. Deportation
Board, supra).

According to petitioners, respondent's alienage has been conclusively settled by this Court in
the Arocha and Vivocases, We disagree. It must be noted that in said cases, the sole issue
resolved therein was the actual date of rendition of the July 6, 1962 decision of the then board
of Commissioners, i.e., whether the decision was rendered on July 6, 1962 or on July 20, 1962
it appearing that the figure (date) "20" was erased and over it was superimposed the figure "6"
thereby making the decision fall within the one-year reglementary period from July 6, 1961
within which the decision may be reviewed. This Court did not squarely pass upon any question
of citizenship, much less that of respondent's who was not a party in the aforesaid cases. The
said cases originated from a petition for a writ of habeas corpus filed on July 21, 1965 by
Macario Arocha in behalf of Pedro Gatchalian. Well settled is the rule that a person not party to
a case cannot be bound by a decision rendered therein.

Neither can it be argued that the Board of Commissioners' decision (dated July 6, 1962) finding
respondent's claim to Philippine citizenship not satisfactorily proved, constitute res judicata. For
one thing, said decision did not make any categorical statement that respondent Gatchalian is a
Chinese. Secondly, the doctrine of res judicata does not apply to questions of citizenship (Labo
vs. Commission on Elections (supra); citing Soria vs. Commissioner of Immigration, 37 SCRA
213; Lee vs. Commissioner of Immigration, 42 SCRA 561 [1971]; Sia Reyes vs. Deportation
Board, 122 SCRA 478 [1983]).

In Moy Ya Lim vs. Commissioner of Immigration (41 SCRA 292 [1971]) and in Lee vs.
Commissioner of Immigration (supra), this Court declared that:
 (e)verytime the citizenship of a person is material or indispensable in a judicial or
administrative case, whatever the corresponding court or administrative authority
decides therein as to such citizenship is generally not considered as res adjudicata,
hence it has to be threshed out again and again as the occasion may demand.

An exception to the above rule was laid by this Court in Burca vs. Republic (51 SCRA 248
[1973]), viz:

We declare it to be a sound rule that where the citizenship of a party in a case is

definitely resolved by a court or by an administrative agency, as a material issue in the
controversy, after a full-blown hearing with the active participation of the Solicitor
General or his authorized representative, and this finding or the citizenship of the party is
affirmed by this Court, the decision on the matter shall constitute conclusive proof of
such party's citizenship in any other case or proceeding. But it is made clear that in no
instance will a decision on the question of citizenship in such cases be considered
conclusive or binding in any other case or proceeding, unless obtained in accordance
with the procedure herein stated.

Thus, in order that the doctrine of res judicata may be applied in cases of citizenship, the
following must be present: 1) a person's citizenship must be raised as a material issue in a
controversy where said person is a party; 2) the Solicitor General or his authorized
representative took active part in the resolution thereof, and 3) the finding or citizenship is
affirmed by this Court.

Gauged by the foregoing, We find the pre-conditions set forth in Burca inexistent in
the Arocha and Vivo cases relied upon by petitioners. Indeed, respondent William Gatchalian
was not even a party in said cases.

Coming now to the contention of petitioners that the arrest of respondent follows as a matter of
consequence based on the warrant of exclusion issued on July 6, 1962, coupled with
the Arocha and Vivo cases (Rollo, pp. 33), the Court finds the same devoid of merit.

Sec. 37 (a) of Commonwealth Act No. 613, as amended, otherwise known as the Immigration
Act of 1940, reads:

Sec. 37. (a) The following aliens shall be arrested upon the warrant of the Commissioner
of Immigration or of any other officer designated by him for the purpose and deported
upon the warrant of the Commissioner of Immigration after a determination by the Board
of Commissioner of the existence of the ground for deportation as charged against the
alien. (Emphasis supplied)

From a perusal of the above provision, it is clear that in matters of implementing the Immigration
Act insofar as deportation of aliens are concerned, the Commissioner of Immigration may issue
warrants of arrest only after a determination by the Board of Commissioners of the existence of
the ground for deportation as charged against the alien. In other words, a warrant of arrest
issued by the Commissioner of Immigration, to be valid, must be for the sole purpose of
executing a final order of deportation. A warrant of arrest issued by the Commissioner of
Immigration for purposes of investigation only, as in the case at bar, is null and void for being
unconstitutional (Ang Ngo Chiong vs. Galang, 67 SCRA 338 [1975] citing Po Siok Pin vs. Vivo,
62 SCRA 363 [1975]; Vivo vs. Montesa, 24 SCRA 155; Morano vs. Vivo, 20 SCRA 562; Qua
Chee Gan vs. Deportation Board, 9 SCRA 27 [1963]; Ng Hua To vs. Galang, 10 SCRA 411; see
also Santos vs. Commissioner of Immigration, 74 SCRA 96 [1976]).

As We held in Qua Chee Gan vs. Deportation Board (supra), "(t)he constitution does not
distinguish warrants between a criminal case and administrative proceedings. And if one
suspected of having committed a crime is entitled to a determination of the probable cause
against him, by a judge, why should one suspected of a violation of an administrative nature
deserve less guarantee?" It is not indispensable that the alleged alien be arrested for purposes
of investigation. If the purpose of the issuance of the warrant of arrest is to determine the
existence of probable cause, surely, it cannot pass the test of constitutionality for only judges
can issue the same (Sec. 2, Art. III, Constitution).

A reading of the mission order/warrant of arrest (dated August 15, 1990; Rollo, p. 183, counter-
petition) issued by the Commissioner of Immigration, clearly indicates that the same was issued
only for purposes of investigation of the suspects, William Gatchalian included. Paragraphs 1
and 3 of the mission order directs the Intelligence Agents/Officers to:

xxx xxx xxx

1. Make a warrantless arrest under the Rules of Criminal Procedure, Rule 113, Sec. 5,
for violation of the Immigration Act, Sec. 37, para. a; Secs. 45 and 46 Administrative
Code;

xxx xxx xxx

3. Deliver the suspect to the Intelligence Division and immediately conduct custodial
interrogation, after warning the suspect that he has a right to remain silent and a right to
counsel; . . .

Hence, petitioners' argument that the arrest of respondent was based, ostensibly, on the July 6,
1962 warrant of exclusion has obviously no leg to stand on. The mission order/warrant of arrest
made no mention that the same was issued pursuant to a final order of deportation or warrant of
exclusion.

But there is one more thing that militates against petitioners' cause. As records indicate, which
petitioners conveniently omitted to state either in their petition or comment to the counter-
petition of respondent, respondent Gatchalian, along with others previously covered by the 1962
warrant of exclusion, filed a motion for re-hearing before the Board of Special Inquiry (BSI)
sometime in 1973.

On March 14, 1973, the Board of Special Inquiry, after giving due course to the motion for re-
hearing, submitted a memorandum to the then Acting Commissioner Victor Nituda (Annex "5",
counter-petition) recommending 1 the reconsideration of the July 6, 1962 decision of the then
Board of Commissioners which reversed the July 6, 1961 decision of the then Board of Special
Inquiry No. 1 and 2 the lifting of the warrants of arrest issued against applicants. The
memorandum inferred that the "very basis of the Board of Commissioners in reversing the
decision of the Board of Special Inquiry was due to a forged cablegram by the then Secretary of
Foreign Affairs, . . ., which was dispatched to the Philippine Consulate in Hong Kong authorizing
the registration of applicants as P.I. citizens." The Board of Special Inquiry concluded that "(i)f at
all, the cablegram only led to the issuance of their Certificate(s) of Identity which took the place
of a passport for their authorized travel to the Philippines. It being so, even if the applicants
could have entered illegally, the mere fact that they are citizens of the Philippines entitles them
to remain in the country."

On March 15, 1973, then Acting Commissioner Nituda issued an Order (Annex "6", counter-
petition) which affirmed the Board of Special Inquiry No. 1 decision dated July 6, 1961 admitting
respondent Gatchalian and others as Filipino citizens; recalled the July 6, 1962 warrant of arrest
and revalidated their Identification Certificates.

The above order admitting respondent as a Filipino citizen is the last official act of the
government on the basis of which respondent William Gatchalian continually exercised the
rights of a Filipino citizen to the present. Consequently, the presumption of citizenship lies in
favor of respondent William Gatchalian.

There should be no question that Santiago Gatchalian, grandfather of William Gatchalian, is a

Filipino citizen. As a matter of fact, in the very order of the BOC of July 6, 1962, which reversed
the July 6, 1961 BSI order, it is an accepted fact that Santiago Gatchalian is a Filipino. The
opening paragraph of said order states:

The claim to Filipino citizenship of abovenamed applicants is based on the citizenship of

one Santiago Gatchalian whose Philippine citizenship was recognized by the Bureau of
Immigration in an Order dated July 12, 1960. (Annex "37", Comment with Counter-
Petition).

Nonetheless, in said order it was found that the applicants therein have not satisfactorily proven
that they are the children and/or grandchildren of Santiago Gatchalian. The status of Santiago
Gatchalian as a Filipino was reiterated in Arocha and Arca (supra) where advertence is made to
the "applicants being the descendants of one Santiago Gatchalian, a Filipino." (at p. 539).

In the sworn statement of Santiago Gatchalian before the Philippine Consul in Hongkong in
1961 (Annex "1" to the Comment of petitioners to Counter-Petition), he reiterated his status as a
Philippine citizen being the illegitimate child of Pablo Pacheco and Marciana Gatchalian, the
latter being a Filipino; that he was born in Manila on July 25, 1905; and that he was issued
Philippine Passport No. 28160 (PA-No. A91196) on November 18, 1960 by the Department of
Foreign Affairs in Manila. In his affidavit of January 23, 1961 (Annex "5", counter-petition),
Santiago reiterated his claim of Philippine citizenship as a consequence of his petition for
cancellation of his alien registry which was granted on February 18, 1960 in C.E.B. No. 3660-L;
and that on July 20, 1960, he was recognized by the Bureau of Immigration as a Filipino and
was issued Certificate No. 1-2123.

The dissenting opinions of my esteemed brethrens, Messrs. Justices F.P. Feliciano and H.G.
Davide, Jr., proposing to re-open the question of citizenship of Santiago Gatchalian at this stage
of the case, where it is not even put in issue, is quite much to late. As stated above, the records
of the Bureau of Immigration show that as of July 20, 1960, Santiago Gatchalian had been
declared to be a Filipino citizen. It is a final decision that forecloses a re-opening of the same 30
years later. Petitioners do not even question Santiago Gatchalian's Philippine citizenship. It is
the citizenship of respondent William Gatchalian that is in issue and addressed for
determination of the Court in this case.
Furthermore, petitioners' position is not enhanced by the fact that respondent's arrest came
twenty-eight (28) years after the alleged cause of deportation arose. Section 37 (b) of the
Immigration Act states that deportation "shall not be effected . . . unless the arrest in the
deportation proceedings is made within five (5) years after the cause of deportation arises."
In Lam Shee vs. Bengzon (93 Phil. 1065 [1953]), We laid down the consequences of such
inaction, thus:

There is however an important circumstance which places this case beyond the reach of
the resultant consequence of the fraudulent act committed by the mother of the minor
when she admitted that she gained entrance into the Philippines by making use of the
name of a Chinese resident merchant other than that of her lawful husband, and that is,
that the mother can no longer be the subject of deportation proceedings for the simple
reason that more than 5 years had elapsed from the date of her admission. Note that the
above irregularity was divulged by the mother herself, who in a gesture of sincerity,
made an spontaneous admission before the immigration officials in the investigation
conducted in connection with the landing of the minor on September 24, 1947, and not
through any effort on the part of the immigration authorities. And considering this frank
admission, plus the fact that the mother was found to be married to another Chinese
resident merchant, now deceased, who owned a restaurant in the Philippines valued at
P15,000 and which gives a net profit of P500 a month, the immigration officials then
must have considered the irregularity not serious enough when, inspire of that finding,
they decided to land said minor "as a properly documented preference quota immigrant"
(Exhibit D). We cannot therefore but wonder why two years later the immigration officials
would reverse their attitude and would take steps to institute deportation proceedings
against the minor.

Under the circumstances obtaining in this case, we believe that much as the attitude of
the mother would be condemned for having made use of an improper means to gain
entrance into the Philippines and acquire permanent residence there, it is now too late,
not to say unchristian, to deport the minor after having allowed the mother to remain
even illegally to the extent of validating her residence by inaction, thus allowing the
period of prescription to set in and to elapse in her favor. To permit his deportation at this
late hour would be to condemn him to live separately from his mother through no fault of
his thereby leaving him to a life of insecurity resulting from lack of support and protection
of his family. This inaction or oversight on the part of immigration officials has created an
anomalous situation which, for reasons of equity, should be resolved in favor of the
minor herein involved. (Emphasis supplied)

In the case at bar, petitioners' alleged cause of action and deportation against herein
respondent arose in 1962. However, the warrant of arrest of respondent was issued by
Commissioner Domingo only on August 15, 1990 — 28 long years after. It is clear that
petitioners' cause of action has already prescribed and by their inaction could not now be validly
enforced by petitioners against respondent William Gatchalian. Furthermore, the warrant of
exclusion dated July 6, 1962 was already recalled and the Identification certificate of
respondent, among others, was revalidated on March 15, 1973 by the then Acting
Commissioner Nituda.

It is also proposed in the dissenting opinions of Messrs. Justices Feliciano and Davide, Jr., that
the BOC decision dated July 6, 1962 and the warrant of exclusion which was found to be valid
in Arocha should be applicable to respondent William Gatchalian even if the latter was not a
party to said case. They also opined that under Sec. 37 (b) of the Immigration Act, the five (5)
years limitation is applicable only where the deportation is sought to be effected under clauses
of Sec. 37 (b) other than clauses 2, 7, 8, 11 and 12 and that no period of limitation is applicable
in deportations under clauses 2, 7, 8, 11 and 12.

The Court disagrees. Under Sec. 39 of the Immigration Act, it is reiterated that such deportation
proceedings should be instituted within five (5) years. Section 45 of the same Act provides penal
sanctions for violations of the offenses therein enumerated with a fine of "not more than
P1,000.00 and imprisonment for not more than two (2) years and deportation if he is an alien."
Thus:

Penal Provisions

Sec. 45. Any individual who—

(a) When applying for an immigration document personates another individual, or falsely
appears in the name of deceased individual, or evades the immigration laws by
appearing under an assumed name; fictitious name; or

(b) Issues or otherwise disposes of an immigration document, to any person not

authorized by law to receive such document; or

(c) Obtains, accepts or uses any immigration document, knowing it to be false; or

(d) Being an alien, enters the Philippines without inspection and admission by the
immigration officials, or obtains entry into the Philippines by wilful, false, or misleading
representation or wilful concealment of a material fact; or

(e) Being an alien shall for any fraudulent purpose represent himself to be a Philippine
citizen in order to evade any requirement of the immigration laws; or

(f) In any immigration matter shall knowingly make under oath any false statement or
representations; or

(g) Being an alien, shall depart from the Philippines without first securing an immigration
clearance certificates required by section twenty-two of this Act; or

(h) Attempts or conspires with another to commit any of the foregoing acts, shall be
guilty of an offense, and upon conviction thereof, shall be fined not more than one
thousand pesos, and imprisoned for not more than two years, and deported if he is an
alien. (Emphasis supplied)

Such offenses punishable by correctional penalty prescribe in 10 years (Art. 90, Revised Penal
Code); correctional penalties also prescribe in 10 years (Art. 92, Revised Penal Code).

It must be noted, however, that under Sec. 1, Act No. 3326 [1926], as amended, (Prescription
for Violations Penalized by Special Acts and Municipal Ordinances) "violations penalized by
special acts shall, unless otherwise provided in such acts, prescribe in accordance with the
following rules: . . .c) after eight years for those punished by imprisonment for two years or
more, but less than six years; . . ."

Consequently, no prosecution and consequent deportation for violation of the offenses

enumerated in the Immigration Act can be initiated beyond the eight-year prescriptive period,
the Immigration Act being a special legislation.

The Court, therefore, holds that the period of effecting deportation of an alien after entry or a
warrant of exclusion based on a final order of the BSI or BOC are not imprescriptible. The law
itself provides for a period of prescription. Prescription of the crime is forfeiture or loss of the
rights of the State to prosecute the offender after the lapse of a certain time, while prescription
of the penalty is the loss or forfeiture by the government of the right to execute the final
sentence after the lapse of a certain time (Padilla, Criminal Law, Vol. 1, 1974, at p. 855).

"Although a deportation proceeding does not partake of the nature of a criminal action, however,
considering that it is a harsh and extraordinary administrative proceeding affecting the freedom
and liberty of a person, the constitutional right of such person to due process should not be
denied. Thus, the provisions of the Rules of Court of the Philippines particularly on criminal
procedure are applicable to deportation proceedings." (Lao Gi vs. Court of Appeals, supra).
Under Sec. 6, Rule 39 of the Rules of Court, a final judgment may not be executed after the
lapse of five (5) years from the date of its entry or from the date it becomes final and executory.
Thereafter, it may be enforced only by a separate action subject to the statute of limitations.
Under Art. 1144 (3) of the Civil Code, an action based on judgment must be brought within 10
years from the time the right of action accrues.

In relation to Sec. 37 (b) of the Immigration Act, the rule, therefore, is:

1. Deportation or exclusion proceedings should be initiated within five (5) years after the cause
of deportation or exclusion arises when effected under any other clauses other than clauses 2,
7, 8, 11 and 12 and of paragraph (a) of Sec. 37 of the Immigration Act; and

2. When deportation or exclusion is effected under clauses 2, 7, 8, 11 and 12 of paragraph (a)

of Sec. 37, the prescriptive period of the deportation or exclusion proceedings is eight (8) years.

In the case at bar, it took petitioners 28 years since the BOC decision was rendered on July 6,
1962 before they commenced deportation or exclusion proceedings against respondent William
Gatchalian in 1990. Undoubtedly, petitioners' cause of action has already prescribed. Neither
may an action to revive and/or enforce the decision dated July 6, 1962 be instituted after ten
(10) years (Art. 1144 [3], Civil Code).

Since his admission as a Filipino citizen in 1961, respondent William Gatchalian has
continuously resided in the Philippines. He married Ting Dee Hua on July 1, 1973 (Annex "8",
counter-petition) with whom he has four (4) minor children. The marriage contract shows that
said respondent is a Filipino (Annex "8"). He holds passports and earlier passports as a Filipino
(Annexes "9", "10" & "11", counter-petition). He is a registered voter of Valenzuela, Metro Manila
where he has long resided and exercised his right of suffrage (Annex 12, counter-petition). He
engaged in business in the Philippines since 1973 and is the director/officer of the International
Polymer Corp. and Ropeman International Corp. as a Filipino (Annexes, "13" & "14", counter-
petition). He is a taxpayer. Respondent claims that the companies he runs and in which he has
a controlling investment provides livelihood to 4,000 employees and approximately 25,000
dependents. He continuously enjoyed the status of Filipino citizenship and discharged his
responsibility as such until petitioners initiated the deportation proceedings against him.

"The power to deport an alien is an act of the State. It is an act by or under the authority of the
sovereign power. It is a police measure against undesirable aliens whose presence in the
country is found to be injurious to the public good and domestic tranquility of the people" (Lao Gi
vs. Court of Appeals, supra). How could one who has helped the economy of the country by
providing employment to some 4,000 people be considered undesirable and be summarily
deported when the government, in its concerted drive to attract foreign investors, grants Special
Resident Visa to any alien who invest at least US$50,000.00 in the country? Even assuming
arguendo that respondent is an alien, his deportation under the circumstances is unjust and
unfair, if not downright illegal. The action taken by petitioners in the case at bar is diametrically
opposed to settled government policy.

Petitioners, on the other hand, claim that respondent is an alien. In support of their position,
petitioners point out that Santiago Gatchalian's marriage with Chu Gim Tee in China as well as
the marriage of Francisco (father of William) Gatchalian to Ong Chiu Kiok, likewise in China,
were not supported by any evidence other than their own self-serving testimony nor was there
any showing what the laws of China were. It is the postulate advanced by petitioners that for the
said marriages to be valid in this country, it should have been shown that they were valid by the
laws of China wherein the same were contracted. There being none, petitioners conclude that
the aforesaid marriages cannot be considered valid. Hence, Santiago's children, including
Francisco, followed the citizenship of their mother, having been born outside of a valid marriage.
Similarly, the validity of the Francisco's marriage not having been demonstrated, William and
Johnson followed the citizenship of their mother, a Chinese national.

After a careful consideration of petitioner's argument, We find that it cannot be sustained.

In Miciano vs. Brimo (50 Phil. 867 [1924]; Lim and Lim vs. Collector of Customs, 36 Phil. 472;
Yam Ka Lim vs. Collector of Customs, 30 Phil. 46 [1915]), this Court held that in the absence of
evidence to the contrary, foreign laws on a particular subject are presumed to be the same as
those of the Philippines. In the case at bar, there being no proof of Chinese law relating to
marriage, there arises the presumption that it is the same as that of Philippine law.

The lack of proof of Chinese law on the matter cannot be blamed on Santiago Gatchalian much
more on respondent William Gatchalian who was then a twelve-year old minor. The fact is, as
records indicate, Santiago was not pressed by the Citizenship Investigation Board to prove the
laws of China relating to marriage, having been content with the testimony of Santiago that the
Marriage Certificate was lost or destroyed during the Japanese occupation of China. Neither
was Francisco Gatchalian's testimony subjected to the same scrutiny by the Board of Special
Inquiry. Nevertheless, the testimonies of Santiago Gatchalian and Francisco Gatchalian before
the Philippine consular and immigration authorities regarding their marriages, birth and
relationship to each other are not self-serving but are admissible in evidence as statements or
declarations regarding family reputation or tradition in matters of pedigree (Sec. 34, Rule 130).
Furtheremore, this salutary rule of evidence finds support in substantive law. Thus, Art. 267 of
the Civil Code provides:

Art. 267. In the absence of a record of birth, authentic document, final judgment or
possession of status, legitimate filiation may be proved by any other means allowed by
the Rules of Court and special laws. (See also Art. 172 of the Family Code)
Consequently, the testimonies/affidavits of Santiago Gatchalian and Francisco Gatchalian
aforementioned are not self-serving but are competent proof of filiation (Art. 172 [2], Family
Code).

Philippine law, following the lex loci celebrationis, adheres to the rule that a marriage formally
valid where celebrated is valid everywhere. Referring to marriages contracted abroad, Art. 71 of
the Civil Code (now Art. 26 of the Family Code) provides that "(a)ll marriages performed outside
of the Philippines in accordance with the laws in force in the country where they were
performed, and valid there as such, shall also be valid in this country . . ." And any doubt as to
the validity of the matrimonial unity and the extent as to how far the validity of such marriage
may be extended to the consequences of the coverture is answered by Art. 220 of the Civil
Code in this manner: "In case of doubt, all presumptions favor the solidarity of the family.
Thus, every intendment of law or facts leans toward the validity of marriage, the indissolubility of
the marriage bonds, the legitimacy of children, the community of property during marriage, the
authority of parents over their children, and the validity of defense for any member of the family
in case of unlawful aggression." (Emphasis supplied). Bearing in mind the "processual
presumption" enunciated in Miciano and other cases, he who asserts that the marriage is not
valid under our law bears the burden of proof to present the foreign law.

Having declared the assailed marriages as valid, respondent William Gatchalian follows the
citizenship of his father Francisco, a Filipino, as a legitimate child of the latter. Francisco, in turn
is likewise a Filipino being the legitimate child of Santiago Gatchalian who (the latter) is
admittedly a Filipino citizen whose Philippine citizenship was recognized by the Bureau of
Immigration in an order dated July 12, 1960.

Finally, respondent William Gatchalian belongs to the class of Filipino citizens contemplated
under Sec. 1, Article IV of the Constitution, which provides:

Sec. 1. The following are citizens of the Philippines:

(1) Those who are citizens of the Philippines at the time of the adoption of this
Constitution. . . .

This forecloses any further question about the Philippine citizenship of respondent William
Gatchalian.

The Court is not unaware of Woong Woo Yiu vs. Vivo (13 SCRA 552 [1965]) relied upon by
petitioners. The ruling arrived thereat, however, cannot apply in the case at bar for the simple
reason that the parties therein testified to have been married in China by a village leader, which
undoubtedly is not among those authorized to solemnize marriage as provided in Art. 56 of the
Civil Code (now Art. 7, Family Code).

Premises considered, the Court deems it unnecessary to resolve the other issues raised by the
parties.

WHEREFORE, G.R. Nos. 95122-23 is DISMISSED for lack of merit; G.R. Nos. 95612-13 is
hereby GRANTED and respondent William Gatchalian is declared a Filipino citizen. Petitioners
are hereby permanently enjoined from continuing with the deportation proceedings docketed as
DC No. 90-523 for lack of jurisdiction over respondent Gatchalian, he being a Filipino citizen;
Civil Cases No. 90-54214 and 3431-V-90 pending before respondent judges are likewise
DISMISSED. Without pronouncement as to costs.

SO ORDERED.