receipt of even date.
They both agreed that
Republic of the Philippines
SUPREME COURT
Baguio City
EN BANC
G.R. No. 180016 April 29, 2014
LITO CORPUZ, Petitioner,
vs.
PEOPLE OF THE
PHILIPPINES, Respondent.
DECISION
PERALTA, J.:
This is to resolve the Petition for Review on
Certiorari, under Rule 45 of the Rules of
Court, dated November 5, 2007, of petitioner
Lito Corpuz (petitioner), seeking to reverse
and set aside the Decision1 dated March 22,
2007 and Resolution2 dated September 5,
2007 of the Court of Appeals (CA), which
affirmed with modification the Decision3 dated
July 30, 2004 of the Regional Trial Court
(RTC), Branch 46, San Fernando City, finding
the petitioner guilty beyond reasonable doubt
of the crime of Estafa under Article 315,
paragraph (1), sub-paragraph (b) of the
Revised Penal Code.
The antecedent facts follow.
Private complainant Danilo Tangcoy and
petitioner met at the Admiral Royale Casino in
Olongapo City sometime in 1990. Private
complainant was then engaged in the
business of lending money to casino players
and, upon hearing that the former had some
pieces of jewelry for sale, petitioner
approached him on May 2, 1991 at the same
casino and offered to sell the said pieces of
jewelry on commission basis. Private
complainant agreed, and as a consequence,
he turned over to petitioner the following
items: an 18k diamond ring for men; a
woman's bracelet; one (1) men's necklace and
another men's bracelet, with an aggregate
value of ₱98,000.00, as evidenced by a
petitioner shall remit the proceeds of the sale,
and/or, if unsold, to return the same items,
within a period of 60 days. The period expired
without petitioner remitting the proceeds of the
sale or returning the pieces of jewelry. When
private complainant was able to meet
petitioner, the latter promised the former that
he will pay the value of the said items
entrusted to him, but to no avail.
Thus, an Information was filed against
petitioner for the crime of estafa, which reads
as follows:
That on or about the fifth (5th) day of July
1991, in the City of Olongapo, Philippines, and
within the jurisdiction of this Honorable Court,
the above-named accused, after having
received from one Danilo Tangcoy, one (1)
men's diamond ring, 18k, worth ₱45,000.00;
one (1) three-baht men's bracelet, 22k, worth
₱25,000.00; one (1) two-baht ladies' bracelet,
22k, worth ₱12,000.00, or in the total amount
of Ninety-Eight Thousand Pesos
(₱98,000.00), Philippine currency, under
expressed obligation on the part of said
accused to remit the proceeds of the sale of
the said items or to return the same, if not
sold, said accused, once in possession of the
said items, with intent to defraud, and with
unfaithfulness and abuse of confidence, and
far from complying with his aforestated
obligation, did then and there wilfully,
unlawfully and feloniously misappropriate,
misapply and convert to his own personal use
and benefit the aforesaid jewelries (sic) or the
proceeds of the sale thereof, and despite
repeated demands, the accused failed and
refused to return the said items or to remit the
amount of Ninety- Eight Thousand Pesos
(₱98,000.00), Philippine currency, to the
damage and prejudice of said Danilo Tangcoy
in the aforementioned amount.
CONTRARY TO LAW.
On January 28, 1992, petitioner, with the
assistance of his counsel, entered a plea of
not guilty. Thereafter, trial on the merits
ensued.
The prosecution, to prove the above-stated
facts, presented the lone testimony of Danilo
Tangcoy. On the other hand, the defense
presented the lone testimony of petitioner,
which can be summarized, as follows:
Petitioner and private complainant were
collecting agents of Antonio Balajadia, who is
engaged in the financing business of
extending loans to Base employees. For every
collection made, they earn a commission.
Petitioner denied having transacted any
business with private complainant.
However, he admitted obtaining a loan from
Balajadia sometime in 1989 for which he was
made to sign a blank receipt. He claimed that
the same receipt was then dated May 2, 1991
and used as evidence against him for the
supposed agreement to sell the subject pieces
of jewelry, which he did not even see.
After trial, the RTC found petitioner guilty
beyond reasonable doubt of the crime
charged in the Information. The dispositive
portion of the decision states:
WHEREFORE, finding accused LITO
CORPUZ GUILTY beyond reasonable doubt
of the felony of Estafa under Article 315,
paragraph one (1), subparagraph (b) of the
Revised Penal Code;
there being no offsetting generic aggravating
nor ordinary mitigating circumstance/s to vary
the penalty imposable;
accordingly, the accused is hereby sentenced
to suffer the penalty of deprivation of liberty
consisting of an imprisonment under the
Indeterminate Sentence Law of FOUR (4)
YEARS AND TWO (2) MONTHS of Prision
Correccional in its medium period AS
MINIMUM, to FOURTEEN (14) YEARS AND
EIGHT (8) MONTHS of Reclusion Temporal in
its minimum period AS MAXIMUM; to
indemnify private complainant Danilo Tangcoy
the amount of ₱98,000.00 as actual damages,
and to pay the costs of suit.
SO ORDERED.
The case was elevated to the CA, however,
the latter denied the appeal of petitioner and
affirmed the decision of the RTC, thus:
WHEREFORE, the instant appeal is DENIED.
The assailed Judgment dated July 30, 2004 of
the RTC of San Fernando City (P), Branch 46,
is hereby AFFIRMED with MODIFICATION on
the imposable prison term, such that accused-
appellant shall suffer the indeterminate
penalty of 4 years and 2 months of prision
correccional, as minimum, to 8 years of
prision mayor, as maximum, plus 1 year for
each additional ₱10,000.00, or a total of 7
years. The rest of the decision stands.
SO ORDERED.
Petitioner, after the CA denied his motion for
reconsideration, filed with this Court the
present petition stating the following grounds:
A. THE HONORABLE COURT OF APPEALS
ERRED IN CONFIRMING THE ADMISSION
AND APPRECIATION BY THE LOWER
COURT OF PROSECUTION EVIDENCE,
INCLUDING ITS EXHIBITS, WHICH ARE
MERE MACHINE COPIES, AS THIS
VIOLATES THE BEST EVIDENCE RULE;
B. THE HONORABLE COURT OF APPEALS
ERRED IN AFFIRMING THE LOWER
COURT'S FINDING THAT THE CRIMINAL
INFORMATION FOR ESTAFA WAS NOT
FATALLY DEFECTIVE ALTHOUGH THE
SAME DID NOT CHARGE THE OFFENSE
UNDER ARTICLE 315 (1) (B) OF THE
REVISED PENAL CODE IN THAT -
1. THE INFORMATION DID
NOT FIX A PERIOD WITHIN
WHICH THE SUBJECT
[PIECES OF] JEWELRY
SHOULD BE RETURNED, IF
UNSOLD, OR THE MONEY
TO BE REMITTED, IF SOLD;
2. THE DATE OF THE
OCCURRENCE OF THE
CRIME ALLEGED IN THE
INFORMATION AS OF 05
JULY 1991 WAS
 MATERIALLY DIFFERENT
FROM THE ONE TESTIFIED
TO BY THE PRIVATE
COMPLAINANT WHICH WAS
02 MAY 1991;
The prosecution sufficiently established all the
elements of the crime charged.
This Court finds the present petition devoid of
any merit.

C. THE HONORABLE COURT OF APPEALS The factual findings of the appellate court
ERRED IN AFFIRMING THE LOWER generally are conclusive, and carry even more
COURT'S FINDING THAT DEMAND TO weight when said court affirms the findings of
RETURN THE SUBJECT [PIECES OF] the trial court, absent any showing that the
JEWELRY, IF UNSOLD, OR REMIT THE findings are totally devoid of support in the
PROCEEDS, IF SOLD – AN ELEMENT OF records, or that they are so glaringly
THE OFFENSE – WAS PROVED; erroneous as to constitute grave abuse of
discretion.4 Petitioner is of the opinion that the
D. THE HONORABLE COURT OF APPEALS CA erred in affirming the factual findings of the
ERRED IN AFFIRMING THE LOWER trial court. He now comes to this Court raising
COURT'S FINDING THAT THE both procedural and substantive issues.
PROSECUTION'S CASE WAS PROVEN
BEYOND REASONABLE DOUBT According to petitioner, the CA erred in
ALTHOUGH - affirming the ruling of the trial court, admitting
in evidence a receipt dated May 2, 1991
1. THE PRIVATE marked as Exhibit "A" and its submarkings,
COMPLAINANT TESTIFIED although the same was merely a photocopy,
ON TWO (2) VERSIONS OF thus, violating the best evidence rule.
THE INCIDENT; However, the records show that petitioner
never objected to the admissibility of the said
2. THE VERSION OF THE evidence at the time it was identified, marked
PETITIONER – ACCUSED IS and testified upon in court by private
MORE STRAIGHTFORWARD complainant. The CA also correctly pointed
AND LOGICAL, CONSISTENT out that petitioner also failed to raise an
WITH HUMAN EXPERIENCE; objection in his Comment to the prosecution's
formal offer of evidence and even admitted
3. THE EQUIPOISE RULE having signed the said receipt. The
WAS NOT APPRECIATED IN established doctrine is that when a party failed
AND APPLIED TO THIS to interpose a timely objection to evidence at
CASE; the time they were offered in evidence, such
objection shall be considered as waived.5
4. PENAL STATUTES ARE
STRICTLY CONSTRUED Another procedural issue raised is, as claimed
AGAINST THE STATE. by petitioner, the formally defective
Information filed against him. He contends
that the Information does not contain the
In its Comment dated May 5, 2008, the Office
period when the pieces of jewelry were
of the Solicitor General (OSG) stated the
supposed to be returned and that the date
following counter-arguments:
when the crime occurred was different from
the one testified to by private complainant.
The exhibits were properly admitted inasmuch This argument is untenable. The CA did not
as petitioner failed to object to their err in finding that the Information was
admissibility. substantially complete and in reiterating that
objections as to the matters of form and
The information was not defective inasmuch substance in the Information cannot be made
as it sufficiently established the designation of for the first time on appeal. It is true that the
the offense and the acts complained of. gravamen of the crime of estafa under Article
315, paragraph 1, subparagraph (b) of the It must be remembered that petitioner was
RPC is the appropriation or conversion of convicted of the crime of Estafa under Article
money or property received to the prejudice of 315, paragraph 1 (b) of the RPC, which reads:
the owner6 and that the time of occurrence is
not a material ingredient of the crime, hence, ART. 315. Swindling (estafa). – Any person
the exclusion of the period and the wrong date who shall defraud another by any of the
of the occurrence of the crime, as reflected in means mentioned hereinbelow.
the Information, do not make the latter fatally
defective. The CA ruled: 1. With unfaithfulness or abuse of confidence,
namely:
x x x An information is legally viable as long
as it distinctly states the statutory designation xxxx
of the offense and the acts or omissions
constitutive thereof. Then Section 6, Rule 110
(b) By misappropriating or converting, to the
of the Rules of Court provides that a complaint
prejudice of another, money, goods, or any
or information is sufficient if it states the name
other personal property received by the
of the accused;
offender in trust or on commission, or for
administration, or under any other obligation
the designation of the offense by the statute; involving the duty to make delivery of or to
the acts or omissions complained of as return the same, even though such obligation
constituting the offense; the name of the be totally or partially guaranteed by a bond; or
offended party; the approximate time of the by denying having received such money,
commission of the offense, and the place goods, or other property; x x x
wherein the offense was committed. In the
case at bar, a reading of the subject
The elements of estafa with abuse of
Information shows compliance with the
confidence are as follows: (a) that money,
foregoing rule. That the time of the
goods or other personal property is received
commission of the offense was stated as " on
by the offender in trust, or on commission, or
or about the fifth (5th) day of July, 1991" is not
for administration, or under any other
likewise fatal to the prosecution's cause
obligation involving the duty to make delivery
considering that Section 11 of the same Rule
of, or to return the same; (b) that there be
requires a statement of the precise time only
misappropriation or conversion of such money
when the same is a material ingredient of the
or property by the offender or denial on his
offense. The gravamen of the crime of estafa
part of such receipt; (c) that such
under Article 315, paragraph 1 (b) of the
misappropriation or conversion or denial is to
Revised Penal Code (RPC) is the
the prejudice of another; and (d) that there is a
appropriation or conversion of money or
demand made by the offended party on the
property received to the prejudice of the
offender.8
offender. Thus, aside from the fact that the
date of the commission thereof is not an
essential element of the crime herein charged, Petitioner argues that the last element, which
the failure of the prosecution to specify the is, that there is a demand by the offended
exact date does not render the Information party on the offender, was not proved. This
ipso facto defective. Moreover, the said date Court disagrees. In his testimony, private
is also near the due date within which complainant narrated how he was able to
accused-appellant should have delivered the locate petitioner after almost two (2) months
proceeds or returned the said [pieces of from the time he gave the pieces of jewelry
jewelry] as testified upon by Tangkoy, hence, and asked petitioner about the same items
there was sufficient compliance with the rules. with the latter promising to pay them.
Accused-appellant, therefore, cannot now be
allowed to claim that he was not properly
apprised of the charges proferred against
him.7
G.R. No. 182069 - Arnold D. Vicencio v. Hon.
Reynaldo A. Villar, et al.

EN BANC

[G.R. NO. 182069 - July 03, 2012]

ARNOLD D. VICENCIO, Petitioner, v. HON.

REYNALDO A. VILLAR and HON. JUANITO G.
ESPINO, JR., in their capacity as Acting
Chairman and Commissioner, respectively, of
the Hon. Commission on Audit, and
ELIZABETH ZOSA, Respondents.

DECISION

SERENO, J.:

This is a Pctitiur; for Certiorari under Rule 64, in

relation to Rule 65 of the Rules or Court, secking
to annul Decision No. 2008-022 dated 15 February
2008 of the Commission on Audit (COA).1 ςrνll

On 30 October 2003, the City Council or the

Sangguniang Panglungsod ng Malabon (SPM),
presided over by Hon. Benjamin Galauran, then
acting Vice-Mayor, adopted and approved City
Ordinance No. 15-2003, entitled "An Ordinance
Granting Authority to the City Vice-Mayor, Hon.
Jay Jay Yambao, to Negotiate and Enter into
Contract for Consultancy Services for Consultants
in the Sanggunian Secretariat Tasked to Function
in their Respective Areas of Concern x x x."2 ςrν ll

On 9 December 2003 and 1 March 2004, the City

of Malabon, represented by Hon. Galauran,
entered into separate Contracts for Consultancy
Services with Ms. Jannette O. Vijiga,3 Mr.
Meynardo E. Virtucio4 and Mr. Hernando D.
Dabalus (2003 Consultancy Contracts).5 ςrνll

Subsequently, during the May 2004 elections,

petitioner was elected City Vice-Mayor of Malabon.
By virtue of this office, he also became the
Presiding Officer of the SPM and, at the same
time, the head of the Sanggunian Secretariat.

To complement the manpower requirements of the

existing Sanggunian Secretariat, petitioner
deemed it necessary to hire the services of
consultants with the end view of augmenting and
upgrading its performance capability for the
effective operation of the legislative machinery of
the city.
Petitioner thus wrote a letter dated 19 July 2004
to Atty. Danilo T. Diaz, the City Legal Officer of
Malabon, inquiring as to whether it was still
necessary for the SPM to ratify a newly entered
contract of consultancy services between it and
the candidate for the consultancy position. The
letter states in part: ς ηα ñrοbl ε š ν ιr†υ αl lα ω lιbrαrÿ
This is an inquiry regarding the hiring of
consultants by virtue of an ordinance giving
authority to the City Vice Mayor to enter into
consultancy services (Ordinance no. 15-2003).
As you very well know, the services of the
consultants hired by the former administration,
particularly by the Sangguniang Panglungsod,
ended last June 30, 2004. Hence, we are
confronted by this inquiry: Would there still be a
need for the Sangguniang Panglungsod to ratify a
newly entered contract of consultancy services
between the SP and the candidate for said
consultancy position? Kindly render your humble
opinion on the matter.6
chanrobles vi rt ual law li bra ry
Atty. Diaz then responded to the said inquiry
through a letter dated 26 July 2004, which
categorically stated that ratification was no longer
necessary, provided that the services to be
contracted were those stipulated in the ordinance.
The letter states thus:
ςηα ñrοb lε š ν ιr†υ αl lα ω lιbrαrÿ
In response to your query contained in your letter
dated July 19, 2004, regarding the hiring of
consultants for the Sanggunian Secretariat by
virtue of Ordinance No. 15-2003, giving authority
to the City Vice Mayor to enter into consultancy
services and whether there is still a need for
ratification of said consultancy contract by the
Sangunian, the answer is, such a ratification is no
longer necessary provided that the contract of
consultancy services to be executed is precisely
the services stipulated in said ordinance. In
essence, the Ordinance no. 15-2003 already
stated what consultancy services should be
secured and hence, if the contract for consultancy
services to be executed is precisely those as
provided in said ordinance, ratification is a mere
suplasage.7 ςrνll
chanrobles vi rt ual law li bra ry
On 21 January 2005, the SPM adopted City
Ordinance No. 01-2005 entitled "An Ordinance
Appropriating Funds to Cover the Various
Expenditures and Activities of the Local
Government of Malabon City for the Period from
January 01, 2005 to December 31, 2005." The
total amount of funds appropriated
was P511,070,019 for the spending of the entire
city government. Out of this amount, P 792,000
was earmarked for consultancy services under the
Legislative Secretariat.
On 1 February 2005, petitioner, representing the
City Government of Malabon City, entered into
Contracts for Consultancy Services with Ms.
Jennifer S. Catindig8 and Atty. Rodolfo C. delos
Santos (2005 Consultancy Contracts).9 On 11
February 2005, another Contract for Consultancy
Services was entered into between Mr. Marvin T.
Amiana10 and the city government.
After the signing of their respective contracts, the
three consultants rendered consultancy services to
the SPM. Thereafter, they were correspondingly
paid for their services pursuant to the contracts
therefor.
On 19 December 2005, Audit Observation
Memorandum (AOM) No. 2005-12-01911 was
issued by Ms. Atenie F. Padilla, Supervising Auditor
ςrνll of the City Auditor s Office, Malabon City,
disallowing the amount of three hundred eighty-
four thousand nine hundred eighty pesos
(P384,980) for being an improper disbursement.
The AOM disclosed the following pertinent findings:
 City Ordinance No. 15-2003 dated October
30, 2003 was used as basis of authority in
hiring consultants. Analysis of the said
City Ordinance revealed that it specifically
authorized the former Vice-Mayor, Hon.
Mark Allan Jay G. Yambao to enter into a
contract for consultancy services in the
Sangguniang Secretariat covering the
period June to December 2003 only. Said
ordinance does not give authority to the
incumbent City Vice-Mayor Arnold D.
Vicencio to hire consultants for CY 2005.
 Progress accomplishment report for the
month, to determine the services
rendered were not attached to the
disbursement vouchers.
 No information as to what method had
been made by BAC in the hiring of
individual consultants whether through the
selection from several registered
professionals who offered consulting
services or through direct hiring without
the intervention of the BAC.
  Copies of the approved contracts together
with supporting documents were not
submitted to the City Auditor s Office
within five (5) days from execution of the
contract for review and evaluation
contrary to COA Circular No. 76-34 dated
July 15, 1976, thus the City Auditor s
Office was precluded to conduct timely
review/evaluation to inform management
of whatever deficiencies noted so that
consultants hired by petitioner rendered services
covering the period January to December 2005. In
its view, the hiring of these consultants and the
services they rendered were in good faith.
Aggrieved by the disallowance, petitioner appealed
it to the Adjudication and Settlement Board (ASB)
of the COA. On 12 June 2007, the ASB issued
Decision No. 2007-030,16 the dispositive portion of
which reads as follows: ςη αñ rοbl ε š νιr⠀ υαl lαω l ιbrα rÿ

immediate remedial measures could be

properly taken.12
Premises considered, the instant appeal of Hon.
Arnold Vicencio is hereby denied. Accordingly,
On 12 May 2006, respondent Elizabeth S. Zosa Notice of Disallowance No. 06-009-101 (05) dated
issued Notice of Disallowance (ND) No. 06-009- 12 May 2006 involving the amount of P384,980.00
101 (05)13 containing the result of the evaluation representing fees to consultants Mr. Marvin T.
conducted on the AOM issued by Ms. Padilla. The Amiana, Atty. Rodolfo Delos Santos and Ms.
persons held liable for the disallowed amount Jennifer Catindig, is hereby affirmed. However, the
relative to the hiring of the three consultants were instant appeal of Mr. Estaquio Angeles is hereby
the following: (1) petitioner, in his capacity as City granted. Mr. Angeles is therefore excluded from
Vice-Mayor, for certifying that the expenses/cash the persons liable listed under Notice of
advances were necessary, lawful and incurred Disallowance No. 06-009-101 (05).17 ς rνll

under his direct supervision and for approving the

transaction; (2) Mr. Eustaquio M. Angeles, in his chanrobles vi rt ual law li bra ry

capacity as Officer-in-Charge, City Accountant, for

certifying to the completeness and propriety of the Thereafter, herein petitioner filed a letter dated 7
supporting documents of the expenditures; and July 2007,18 addressed to Hon. Guillermo N.
(3) Ms. Catindig, Atty. Delos Santos, and Mr. Carague, COA Chairperson. The letter prayed for
Amiana, as payees. The above-named persons the reversal and setting aside of the earlier
were further directed to settle the said Decision of the ASB. On 15 February 2008, public
disallowance immediately. Pursuant to Sections respondent issued the assailed Order. It appears
48, 50 and 51 of Presidential Decree No. (P.D.) that the letter of petitioner was treated as an
1445, the parties found liable had a period of six appeal to the Commission Proper of the COA and
months within which to file an appeal. The was subsequently denied. The dispositive portion
disallowance was anchored on the following states: ςrαl αω

findings: ςη αñrοbl ε š νιr†υαl l αω l ιb rα rÿ

WHEREFORE, premises considered, the instant

- There was no authority for the incumbent City motion for reconsideration, which was treated as
Vice-Mayor Arnold D. Vicencio to hire consultants an appeal, is denied.19 ςrν ll

for CY 2005. City Ordinance No. 15-2003 dated

October 30, 2003 which was used as basis of On 28 March 2008, the instant Petition was filed,
authority to hire consultants specifically authorized raising the following issue:
the former Vice-Mayor, Hon. Mark Allan Jay G.
ςrαlα ω

Yambao to enter into a contract for consultancy

services in the Sangguniang Secretariat covering WHETHER OR NOT PUBLIC RESPONDENT
the period June to December 2003 only. COMMISSION ON AUDIT COMMITTED SERIOUS
ERRORS AND GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR EXCESS
- There were no Progress Accomplishment Reports OFJURISDICTION WHEN IT AFFIRMED ASB
for the month, to determine the services rendered. DECISION NO. 2007-030, RELATIVE TO THE
DISALLOWANCE OF DISBURSEMENTS
- No information as to what method had been CONCERNING THE SERVICES RENDERED BY
made by BAC in the hiring of individual consultants HIRED CONSULTANTS FOR THE SANGGUNIANG
whether through the selection from several PANLUNGSOD NG MALABON.
registered professionals who offered consulting
services or through direct hiring without the On 8 April 2008, this Court directed respondents to
intervention of the BAC.14 ςrνl l

comment on the Petition. On 28 July 2008, they

chanrobles vi rt ual law li bra ry
filed their Comment, in which they averred that
Ordinance No. 15-2003 specifically authorized the
expenditure of funds for the compensation of
On 22 June 2006, the SPM wrote a
consultants only from June to December 2003.
letter15 informing Ms. Padilla that the three
Thus, the contracts for consultancy entered into in
2005 were contrary to the ordinance cited and
were therefore void for being unauthorized and
bereft of any legal basis. There is also no room for
interpretation of the ordinance, as the same is
clear, and, additionally, actually contains no
preamble. Further, respondents argue that to
allow the disbursement of public funds to pay for
the services of the consultants, despite the
absence of authority for the same, would allow a
circumvention of the applicable COA rules and
circulars.
Petitioner thereafter filed his Reply to the
Comment, in compliance with this Court s 12
August 2008 Resolution. In his Reply, he
contended that he had the authority to enter into
the consultancy contracts pursuant to Ordinance
No. 15-2003. As the ordinance was ambiguous,
there was a need to interpret its provisions by
looking into the intent of the law. He also
manifested that the Ombusdman had dismissed
the administrative and criminal Complaints for
violation of Republic Act No. (R.A.) 6713 and for
Usurpation of Authority, previously filed against
him over the same transactions. The Ombudsman
held that, while Ordinance No. 15-2003 specifically
mentions then Vice-Mayor Yambao, the intent in
passing the law may not be ignored. It was the
intention of the city council to authorize the Office
of the Vice-Mayor to enter into consultancy
contracts, and not Vice-Mayor Yambao only.
Petitioner also argued that the ends of substantial
justice and equity would be better served by
allowing the disbursement for consultancy services
that have already been rendered.
We deny the Petition.
At the outset, we note that the Petition has a
procedural flaw that should merit its outright
dismissal. Through the Verification and
Certification attached to the instant Petition,
petitioner states that the contents of the Petition
"are true and correct of [his] own personal
knowledge and belief and based on authentic
records and/or documents."20 ς rν ll
Section 4, Rule 7 of the Rules of Court provides
that a pleading required to be verified which
contains a verification based on "information and
belief" or "knowledge, information and belief,"
shall be treated as an unsigned pleading. A
pleading, therefore, in which the verification is
based merely on the party s knowledge and belief
as in the instant Petition produces no legal effect,
subject to the discretion of the court to allow the
deficiency to be remedied.21
ς rν ll
In any case, we find no grave abuse of discretion
on the part of the COA in issuing the assailed
Decision.
Petitioner contends that the ordinance authorizes
the Office of the Vice-Mayor, and not Vice-Mayor
Yambao in particular, to enter into consultancy
contracts. Notably, it was even Hon. Vice-Mayor
Benjamin C. Galauran, who was acting Vice-Mayor
at the time, who entered into the 2003
Consultancy Contracts. Petitioner also argues that
there is no indication from the preamble of the
ordinance, which can be read from the minutes of
the SPM meeting, that the ordinance was
specifically designed to empower only Vice-Mayor
Yambao, or to limit such power to hire for the
period June to December 2003 only.
We disagree.
Under Section 456 of R.A. 7160, or the Local
Government Code, the following are the powers
and duties of a city vice-mayor:
ARTICLE II
The City Vice-Mayor
SECTION 456. Powers, Duties and Compensation.
(a) The city vice-mayor shall: ς ηα ñrοblεš ν ιr†υαl l αω lιb rα rÿ
(1) Be the presiding officer of the sangguniang
panlungsod and sign all warrants drawn on the city
treasury for all expenditures appropriated for the
operation of the sangguniang panlungsod;
(2) Subject to civil service law, rules and
regulations, appoint all officials and employees of
the sangguniang panlungsod, except those whose
manner of appointment is specifically provided in
this Code;
(3) Assume the office of the city mayor for the
unexpired term of the latter in the event of
permanent vacancy as provided for in Section 44,
Book I of this Code;
(4) Exercise the powers and perform the duties
and functions of the city mayor in cases of
temporary vacancy as provided for in Section 46,
Book I of this Code; and cralawlib rary
(5) Exercise such other powers and perform such
other duties and functions as may be prescribed
by law or ordinance.
chanrobles vi rt ual law li bra ry
 thereof, pursuant to the pertinent provision,
(b) The city vice-mayor shall receive a monthly aforecited, in Chapter 4, Section 336 of R.A. 7160;
compensation corresponding to Salary Grade
twenty-eight (28) for a highly urbanized city and That copies of this ordinance be furnished all
Salary Grade twenty-six (26) for a component city, concerned for their information and guidance.
as prescribed under R.A. No. 6758 and the
implementing guidelines issued pursuant thereto. Adopted: October 30, 2003.23 ς rν ll

chanrobles vi rt ual law li bra ry

Ordinance No. 15-2003 is clear and precise and

Under this provision, therefore, there is no leaves no room for interpretation. It only
inherent authority on the part of the city vice- authorized the then City Vice-Mayor to enter into
mayor to enter into contracts on behalf of the local consultancy contracts in the specific areas of
government unit, unlike that provided for the city concern. Further, the appropriations for this
mayor.22 Thus, the authority of the vice-mayor to particular item were limited to the savings for the
enter into contracts on behalf of the city was period June to December 2003. This was an
strictly circumscribed by the ordinance granting it. additional limitation to the power granted to Vice-
Ordinance No. 15-2003 specifically authorized Mayor Yambao to contract on behalf of the city.
Vice-Mayor Yambao to enter into contracts for The fact that any later consultancy contract would
consultancy services. As this is not a power or necessarily require further appropriations from the
duty given under the law to the Office of the Vice- city council strengthens the contention that the
Mayor, Ordinance No. 15-2003 cannot be power granted under Ordinance No. 15-2003 was
construed as a "continuing authority" for any limited in scope. Hence, petitioner was without
person who enters the Office of the Vice-Mayor to authority to enter into the 2005 Consultancy
enter into subsequent, albeit similar, contracts. Contracts.

Ordinance No. 15-2003 provides in full: ς rαl αω

Where the words of a statute are clear, plain, and
free from ambiguity, it must be given its literal
meaning and applied without attempted
City Ordinance No. 15-2003
interpretation.24 Thus, the ordinance should be
applied according to its express terms, and
An Ordinance Granting Authority to the City Vice interpretation would be resorted to only where a
Mayor, Hon. Jay Jay G. Yambao, to Negotiate, and literal interpretation would be either impossible or
Enter into a Contract for Consultancy Services in absurd or would lead to an injustice.25 In the
the Sanggunian Secretariat Tasked to Function in instant case, there is no reason to depat1 from
their Respective Areas of Concern, as this rule, since the subject ordinance is not at all
Aforementioned, To Wit: ςη αñ rοbl ε š νιr⠀ υαl lαω lιb rα rÿ
impossible, absurd, or unjust.

(1) A Legal Consultant Section 103 of P.O. 1445 declares that

expenditures of government funds or uses of
(2) A Consultant on Education Affairs and government property in violation of law or
regulations shall be a personal liability of the
official or employee found to be directly
(3) A Management Consultant
responsible therefor. The public official's personal
chanrobles vi rt ual law li bra ry
liability arises only if the expenditure of
government funds was made in violation of law. In
That said consultants shall be paid/compensated this case, petitioner's act of entering into a
at the rate of Twenty Two Thousand Pesos contract on behalf of the local government unit
(P22,000.00) each, per month, effective upon without the requisite authority therefor was in
approval of this ordinance subject to the usual violation of the Local Government Code. While
accounting and auditing procedures, rules and/or petitioner may have relied on the opinion of the
regulations; City Legal Officer, such reliance only serves to
buttress his good faith. It does not, however,
exculpate him from his personal liability under P.D.
That the source of funds for appropriations thereof 1445.
shall be made available for expenditures to be
earmarked for payment/compensation for said
consultants, covering the period from June to In sum, the COA's assailed Decision was made in
December of 2003, thereby authorizing further the faithful compliance with its mandate and in
City Vice Mayor to effect the necessary funding judicious exercise of its general audit power as
conferred on it by the Constitution26 ςrν ll
The COA was merely fulfilling its mandate in
observing the policy that government funds and
property should be fully protected and conserved;
and that irregular, unnecessary, excessive or Republic of the Philippines
extravagant expenditures or uses of such funds SUPREME COURT
and property should be prevented.27 Thus, no Manila
grave abuse of discretion may be imputed to the
COA.
EN BANC
WHEREFORE, the Commission on Audit Decision
dated 4 January 2008 is hereby AFFIRMED. G.R. No. L-3629 March 19, 1951

SO ORDERED. ELISEO SILVA, petitioner,

vs.
BELEN CABRERA, respondent.

Rivera, Castaño, Medina and Lozada and

Roman Cruz for petitioner.
Evaristo R. Sandoval for respondent.

MONTEMAYOR, J.:

In the Public Service Commission Belen

Cabrera filed an application for a certificate of
public convenience to install, maintain, and
operate in the City of Lipa, an ice plant with a
15-ton daily productive capacity and to sell the
produce of said plant in several municipalities
of Batangas province as well as in the City of
Lipa. Eliseo Silva and Opulencia & Lat,
holdres of certificates of public convenience to
operate each a 15-ton ice plant, opposed the
application on the ground that their service
was adequate for the needs of the public, and
that public convenience did not require the
operation of the ice plant applied for by
Cabrera. Instead of the Commission
conducting the corresponding hearing in order
to receive the evidence to be presented by
applicant and oppositors, Commissioner
Feliciano Ocampo by order dated July 14,
1949, commissioned Atty. Antonio H.
Aspillera, Chief of the Legal Division "to take
the testimony of witnesses" in this case
pursuant to the provisions of section 32 of
Commonwealth Act No. 146 known as the
Public Act Attorney Aspillera conducted
hearings, and received extensive evidence,
oral and documentary, the transcript of the
stenographic notes taken consisting of 227
pages. Thereafter, the Commission in banc
rendered a decision, the dispositive part of
which reads as follows:
 In view of the foregoing, and finding
from the evidence that public interests
and convenience will be promoted in a
proper and suitable manner by
authorizing the applicant to operate a
10-ton ice plant in Lipa City, and that
applicant is a Filipino citizen and is
financially qualified to install and
operate a 10-ton ice plant, the
oppositions of Eliseo Silva and
Opulencia & Lat are hereby overruled,
and a certificate of public convenience
to operate a 10-ton ice plant in the
City of Lipa is hereby granted to the
applicant herein, Belen Cabrera, the
said certificate to be subject to the
following.
Eliseo Silva, one of the oppositors filed the
present petition for review assigning two
errors, to wit:
ERROR I. — That section 3 prohibits
a hearing before any person other
than a Commissioner in contested
cases; consequently, the delegation
made by the Commission to Attorney
Aspillera is illegal and contrary to law.
ERROR II. — That the decision is not
supported by evidence to warrant the
Grant of the certificate to applicant-
respondent Belen Cabrera.
We shall address ourselves to the first
assigned error because the determination of
the same disposes of this appeal. The legal
point raised in this assignment of error was
also raised before the Commission. At the
beginning of the hearing before Attorney
Aspillera, counsel for oppositors, Silva, now
petitioner, asked that the hearing be had
before one of the Commissioners because it
was a contested case. When his petition was
overruled, he made it of record that his
continuing "with the hearing of this case shall
not be understood as a waiver of our
objection" (t. s. n., p. 3). It is therefore clear
that petitioner is not raising this issue here for
the first time.
While petitioner Silva contends that the
delegation made by the Commission to
Attorney Aspillera to take the testimony of
witnesses was illegal and contrary to the
provisions of section 3 of the Public Service
Act as amended by Republic Act No. 178,
respondent equally claims that said delegation
is perfectly proper and legal. It will be
remembered that the delegation to receive
testimony was made under the provisions of
section 32 of the Public Service Act (Com. Act
No. 146). Said section reads as follows:
SEC. 32. The Commission may, in
any investigation or hearing, by its
order in writing, cause the depositions
of witnesses residing within or without
the Philippines to be taken in the
manner prescribed by the Code of
Civil Procedure. The Commission may
also, by proper order, commission any
of the attorneys of the Commission or
chiefs of division to receive evidence,
and it may likewise commission any
clerk the court of first instance of
justice of the Peace of the Philippines
to take the testimony of the witnesses
any case pending before the
Commission where such witnesses
reside in places distant from Manila
and it would be inconvenient and
expensive for them to appear
personally before the Commission. It
shall be the duty of the clerk of the
Court of First Instance or justice of the
peace so commissioned to designate
promptly a date or dates for the taking
of such evidence, giving timely notice
to the parties, and on such date to
proceed to take the evidence,
reducing it to writing. After the
evidence has been taken, the justice
of the peace shall forthwith certify to
the correctness of the testimony of the
witnesses and forward it to the
Commission. It shall be the duty of the
respective parties to furnish
stenographers for taking and
transcribing the testimony taken. In
case there was no stenographers
available, the testimony shall be taken
in long-hand by such person as the
justice of the peace may designate.
 For the convenience of the parties the
Commission may also commission
any other person to take the evidence
in the same manner.
For purpose of reference we are also
reproducing the pertinent portion of section 3
of the same Act as amended by Republic Act
No. 178, relied upon by the petitioner:
All the powers herein vested upon the
Commission shall be considered
vested upon any of the Commissioner,
acting either individually or jointly as
hereinafter provided. The
Commissioners shall equitably divide
among themselves all pending cases
and those that may hereafter be
submitted to the Commission, in such
manner and from as they determine,
and shall proceed to hear and
determine the cases assigned to
each; Provided, however, That (1)
all contested cases, (2) all cases
involving the fixing of rates, and (3) all
petitions for reconsideration of orders
or decisions shall be heard by the
Commission in banc, and the
affirmative vote of at least two
Commissioner shall be necessary for
the promulgation of a decision or a
non-interlocutory order: And, provided,
further, That in cases (1) and (2) the
Commission may delegate
the reception of the evidence to one of
the Commissioners, who shall report
to the Commission in banc, the
evidence so received by him to enable
it to render its decision. (Underlining is
ours)
After examining the law, particularly the
language used in section 3 and 32, above-
quoted, we agree with the petitioner that the
delegation made to Attorney Aspillera
especially considering the manner in which he
received the evidence, was contrary to the
provisions of the public Service Act.
The law (sec. 3) is clear that in a contested
case like the present, only the Commission in
banc is authorized to conduct the hearing,
although said Commission may delegate the
reception of the evidence to one of the
Commissioners who shall report to the
Commission in banc, the evidence so
received by him.
Under Commonwealth Act No. 146 before it
was amended by Republic Act No. 178, the
Public Service Commission only of a Public
Service Commissioner and a deputy
Commissioner. The Deputy Commissioner
acted only on matters delegated to him by the
Public Service Commissioner, and in case of
the latter's absence, illness or incapacity, he
acted in his stead. The Public Service
Commissioner alone heard and disposed of all
cases, contested and non-contested. There
could therefore be no hearing or decision in
banc. The Legislature in promulgating
Commonwealth Act 146 evidently believed
that one Commissioner, either the Public
Service Commissioner or his deputy if
properly commissioned, was sufficient to hear
and decide even contested cases and cases
involving the fixing of rates. Under said
Commonwealth Act 146 before amendment,
particularly section 32 thereof, the
Commission besides authorizing the taking of
depositions and the testimonies of the
witnesses by clerk of courts of first instance
and justice of the peace in the provinces, also
authorized the reception of evidence by the
Commission's attorneys and chiefs of
divisions. Then came Republic Act 178
amending sections 2 and 3 of Commonwealth
Act 146 making the Commission to consist of
one Public Service Commissioners and two
Associate Public Service Commissioner under
the second section, and under section 3, as
already seen from the reproduction of said
section, requiring that all contested cases
involving the fixing of rates, he heard and
decided by the three Commissioners in banc
although the reception of evidence may be
delegated to one of the Commissioners alone.
The inference is obvious. In contested cases
like present, the Legislature did not wish to
entrust the holding of a hearing and the
reception of evidence to anyone but the three
Commissioners acting in banc or one of them
when properly authorized.
It is urged on the part of the respondent that
the order of delegation in favor of Atty.
Aspillera "was a mere authority `to take the
testimony of witnesses in the above-entitled
case', which in fact is in the form of a
deposition and not a reception of evidence,
much less a hearing" (p. 9, brief for
respondent), and so does not violate section
3. An examination of the record does not
support this contention. What Atty. Aspillera
did was to represent the Commission, act as a
sort of Commissioner, conduct hearings,
receive evidence, oral and documentary, and
pass upon petitions and objections as they
came up in the course of said hearing. He
even addressed questions to the witnesses.
He passed upon the competency and
admissibility of exhibits and admitted them. In
the transcript of the stenographic notes, Atty.
Aspillera is repeatedly referred to as the
"Commission" and the proceedings had
before him on different dates as "hearings". (t.
s. n. pp. 1, 3, 52, 62, 86, 90.) After the
submission of the evidence Atty. Aspillera
declared the "Case submitted". (t. s. n. p.
227.) It is obvious that the evidence received
by Atty. Aspillera were not mere depositions
or testimonies, and that his actuation that of a
mere official like a justice of the peace
receiving a deposition under the provisions of
Rule 18 of the Rules of Court. The role played
by Atty. Aspillera was rather that of a
Commissioner under Rule 34 wherein he
acted as a representative of the Commission
that made the delegation to him, passed upon
petitions and objections during the trial, either
overruling or sustaining the same and ordered
witnesses to answer if the objection to the
question was overruled, and then making his
findings and report to the body that
commissioned him.
Respondent cites the case of Abel G. Flores,
applicant vs. A. L. Ammen Transportation Co.,
Inc., oppositor, case No. 27141 of the Public
Service Commission wherein the same point
of the legality of a delegation to take testimony
was involved. The oppositor in that case
believing that the Commission exceeded its
jurisdiction in making the delegation, brought
the case to this Supreme Court under G.R.
No. L-1637 but its petition for certiorari was
dismissed for lack of merit. From this,
respondent infers that even in contested
cases the reception of evidence may be
delegated to a person other than one of the
Commissioners. We have examined that case
and we find that the authority given there was
not to receive evidence but to take a
deposition and that the person delegated was
a justice of the peace. We quote a portion of
the order of Associate Commissioner Gabriel
P. Prieto in that case:
Es verdad que el articulo 3 de la Ley
claramente dispone que en los
asuntos contenciosos y en que
envuelven la fijacion de tarifas la
Comision solo puede delegar la
recepcion de lads pruebas a
cualquiera de sus Comisionados. Pero
tambien es cierto, que la deposicion
no una delegacion de la recepcion de
las pruebas, porque al funcionario que
la toma, la ley no le concede las
facultades del tribunal que ha
ordenado dicha deposicion. En efecto,
la Regla 18 de los Reglamentos que
regula esta actuacion, no autoriza al
funcionario que toma la deposicion
para resolver las cuestiones que
surgen o se suscitan durante su
actuacion; no le faculta para hacer sus
conclusiones de hecho o de derecho;
ni le permite, siquiera, rendir informe o
report de todo lo actuado. Su unica
ogligacion es certificar la declaracion
tal como ha sido prestada por el
deponente. El que toma la deposicion
no es como el arbitro o comisionado
de que habla la Regla 34 de los
Reglamentos, que actua por
delegacion y obra en representacion
del tribunal que le ha nombrado.
It will readily be noticed from the portion of the
order above-quoted that Commissioner Prieto
admits that under section 3 as amended, in
contested cases and cases involving the fixing
of rates, the Commission may delegate the
reception of evidence only to one of the
Commissioners and to no one else.
The respondent also calls our attention to the
case of Cebu Transit Co. Inc., vs. Jereza, (58
Phil., 760), wherein this court held that the
Commission was authorized to designate
Commissioners for the purpose of receiving
evidence, and that the law did not contain any
prohibition. That case is inapplicable for at
that time in the year 1933 when the case was
decided, Republic Act 178 had not yet been
promulgated, said Act having passed only in
1947.
In conclusion, we hold that under the
provisions of section 3 of the Public Service
Act as amended by Republic Act 178, the
reception of evidence in a contested case may
be delegated only to one of the
Commissioners and to no one else, it being
understood that such reception of evidence
consists in conducting hearings, receiving
evidence, oral and documentary, passing
upon the relevancy and competency of the
same, ruling upon petitions and objections
that come up in course of the hearings, and
receiving and rejecting evidence in
accordance with said rulings. However, under
section 32, of the same Act, even in contested
cases or cases involving the fixing of rates,
any attorney of chief of division of the
Commission, a clerk of court of Courts of First
Instance, or a Justice of the Peace, may be
authorized to take depositions or receive the
testimonies of witnesses, provided that the
same is done under provisions of Rule 18 of
the Rules of Court.
We realize that our present ruling will greatly
handicap the Public Service Commission and
slow down its tempo in the disposal of
contested cases and cases involving the fixing
of rates, especially where the witnesses
reside in the provinces; but where the law is
clear, neither this court nor the commission
may on grounds of convenience, expediency
or prompt dispatch of cases, disregard the law
or circumvent the same. The remedy lies with
the Legislature if it could be convinced of the
necessity of amending the law, and
persuaded to approve a suitable amendment.
Finding that the delegation of the reception of
evidence in this case as well as the exercise
of the authority so given, are in violation of
section 3 of the Public Service Act as
amended, we set aside the order of delegation
of July 14, 1949, and declare all the
proceedings had thereunder to be null and
void. Setting aside the decision appealed
from, let this case be returned to the Public
Service Commission so that evidence may be
submitted by the parties in a hearings before
the Commission in banc of before any of the
Commissioners if properly authorized, unless
of course, said parties agree at said hearing
or hearings to re-submit the evidence already
presented and taken down, with such
modifications and under such conditions as
they may agree upon, including such other
evidence which they may wish to present.
There is no pronouncement as to costs. So
ordered.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-34568 March 28, 1988
RODERICK DAOANG, and ROMMEL
DAOANG, assisted by their father, ROMEO
DAOANG, petitioners,
vs.
THE MUNICIPAL JUDGE, SAN NICOLAS,
ILOCOS NORTE, ANTERO AGONOY and
AMANDA RAMOS-AGONOY, respondents.
PADILLA, J.:
This is a petition for review on certiorari of the decision, dated 30
June 1971, rendered by the respondent judge * in Spec. Proc.
No. 37 of Municipal Court of San Nicolas, Ilocos Norte, entitled:
"In re Adoption of the Minors Quirino Bonilla and Wilson Marcos;
Antero Agonoy and Amanda R. Agonoy, petitioners", the
dispositive part of which reads, as follows:
Wherefore, Court renders
judgment declaring that
henceforth Quirino Bonilla and
Wilson Marcos be, to all
legitimate intents and
purposes, the children by
adoption of the joint petitioners
Antero Agonoy and Amanda
R. Agonoy and that the former
be freed from legal obedience
and maintenance by their
respective parents, Miguel
Bonilla and Laureana Agonoy
 for Quirino Bonilla and
Modesto Marcos and
Benjamina Gonzales for
Wilson Marcos and their family
names 'Bonilla' and 'Marcos'
be changed with "Agonoy",
which is the family name of the
petitioners.
Successional rights of the
children and that of their
adopting parents shall be
governed by the pertinent
provisions of the New Civil
Code.
Let copy of this decision be
furnished and entered into the
records of the Local Civil
Registry of San Nicolas, Ilocos
Norte, for its legal effects at
the expense of the
petitioners. 1
The undisputed facts of the case are as
follows:
On 23 March 1971, the respondent spouses
Antero and Amanda Agonoy filed a petition
with the Municipal Court of San Nicolas, Ilocos
Norte, seeking the adoption of the minors
Quirino Bonilla and Wilson Marcos. The case,
entitled: "In re Adoption of the Minors Quirino
Bonilla and Wilson Marcos, Antero Agonoy
and Amanda Ramos-Agonoy, petitioners",
was docketed therein as Spec. Proc. No. 37. 2
The petition was set for hearing on 24 April
1971 and notices thereof were caused to be
served upon the office of the Solicitor General
and ordered published in the ILOCOS TIMES,
a weekly newspaper of general circulation in
the province of Ilocos Norte, with editorial
offices in Laoag City. 3
On 22 April 1971, the minors Roderick and
Rommel Daoang, assisted by their father and
guardian ad litem, the petitioners herein, filed
an opposition to the aforementioned petition
for adoption, claiming that the spouses Antero
and Amanda Agonoy had a legitimate
daughter named Estrella Agonoy, oppositors'
mother, who died on 1 March 1971, and
therefore, said spouses were disqualified to
adopt under Art. 335 of the Civil Code. 4
After the required publication of notice had
been accomplished, evidence was presented.
Thereafter, the Municipal Court of San
Nicolas, Ilocos Norte rendred its decision,
granting the petition for adoption. 5
Hence, the present recourse by the petitioners
(oppositors in the lower court).
The sole issue for consideration is one of law
and it is whether or not the respondent
spouses Antero Agonoy and Amanda Ramos-
Agonoy are disqualified to adopt under
paragraph (1), Art. 335 of the Civil Code.
The pertinent provision of law reads, as
follows:
Art. 335. The following cannot
adopt:
(1) Those who have legitimate,
legitimated, acknowledged
natural children, or children by
legal fiction;
xxx xxx xxx
In overruling the opposition of the herein
petitioners, the respondents judge held that
"to add grandchildren in this article where no
grandchil is included would violate to (sic) the
legal maxim that what is expressly included
would naturally exclude what is not included".
But, it is contended by the petitioners, citing
the case of In re Adoption of Millendez,6 that
the adoption of Quirino Bonilla and Wilson
Marcos would not only introduce a foreign
element into the family unit, but would result in
the reduction of their legititimes. It would also
produce an indirect, permanent and
irrevocable disinheritance which is contrary to
the policy of the law that a subsequent
reconciliation between the offender and the
offended person deprives the latter of the right
to disinherit and renders ineffectual any
disinheritance that may have been made.
We find, however, that the words used in
paragraph (1) of Art. 335 of the Civil Code, in
enumerating the persons who cannot adopt,
are clear and unambiguous. The children
mentioned therein have a clearly defined
meaning in law and, as pointed out by the
respondent judge, do not include
grandchildren.
Well known is the rule of statutory
construction to the effect that a statute clear
and unambiguous on its face need not be
interpreted; stated otherwise, the rule is that
only statutes with an ambiguous or doubtful
meaning may be the subject of statutory
construction. 7
Besides, it appears that the legislator, in
enacting the Civil Code of the Philippines,
obviously intended that only those persons
who have certain classes of children, are
disqualified to adopt. The Civil Code of Spain,
which was once in force in the Philippines,
and which served as the pattern for the Civil
Code of the Philippines, in its Article 174,
disqualified persons who have legitimate or
legitimated descendants from adopting. Under
this article, the spouses Antero and Amanda
Agonoy would have been disqualified to adopt
as they have legitimate grandchildren, the
petitioners herein. But, when the Civil Code of
the Philippines was adopted, the word
"descendants" was changed to "children", in
paragraph (1) of Article 335.
Adoption used to be for the benefit of the
adoptor. It was intended to afford to persons
who have no child of their own the consolation
of having one, by creating through legal
fiction, the relation of paternity and filiation
where none exists by blood relationship. 8 The
present tendency, however, is geared more
towards the promotion of the welfare of the
child and the enhancement of his
opportunities for a useful and happy life, and
every intendment is sustained to promote that
objective.9 Under the law now in force, having
legitimate, legitimated, acknowledged natural
children, or children by legal fiction, is no
longer a ground for disqualification to adopt. 10
WHEREFORE, the petition is DENIED. The
judgment of the Municipal Court of San
Nicolas, Ilocos Norte in Spec. Proc. No. 37 is
AFFIRMED. Without pronouncement as to
costs in this instance.
SO ORDERED.
THIRD DIVISION
G.R. No. 102858 July 28, 1997
THE DIRECTOR OF
LANDS, Petitioner, v. COURT OF
APPEALS and TEODORO ABISTADO,
substituted by MARGARITA,
MARISSA, MARIBEL, ARNOLD and
MARY ANN, all surnamed
ABISTO, Respondents.
PANGANIBAN, J.:
Is newspaper publication of the notice of
initial hearing in an original land
registration case mandatory or
directory?
Statement of the Case
The Court of Appeals ruled that it was
merely procedural and that the failure to
cause such publication did not deprive
the trial court of its authority to grant
the application. But the Solicitor General
disagreed and thus filed this petition to
set aside the Decision 1 promulgated on
July 3, 1991 and the subsequent
Resolution 2 promulgated on November
19, 1991 by Respondent Court of
Appeals 3 in CA-G.R. CV No. 23719. The
dispositive portion of the challenged
Decision reads: 4
WHEREFORE, premises considered, the
judgment of dismissal appealed from is
hereby set aside, and a new one
entered confirming the registration and
title of applicant, Teodoro Abistado,
Filipino, a resident of Barangay 7,
Poblacion Mamburao, Occidental
Mindoro, now deceased and substituted
by Margarita, Marissa, Maribel, Arnold
and Mary Ann, all surnamed Abistado,
represented by their aunt, Miss Josefa
Abistado, Filipinos, residents of
Poblacion Mamburao, Occidental
Mindoro, to the parcel of land covered
under MSI (IV-A-8) 315-D located in
Poblacion Mamburao, Occidental
Mindoro.
The oppositions filed by the Republic of
the Philippines and private oppositor are
hereby dismissed for want of evidence.
Upon the finality of this decision and
payment of the corresponding taxes due
on this land, let an order for the
issuance of a decree be issued.
The Facts
On December 8, 1986, Private
Respondent Teodoro Abistado filed a
petition for original registration of his
title over 648 square meters of land
under Presidential Decree (PD) No.
1529. 5 The application was docketed as
Land Registration Case (LRC) No. 86
and assigned to Branch 44 of the
Regional Trial Court of Mamburao,
Occidental Mindoro. 6 However, during
the pendency of his petition, applicant
died. Hence, his heirs - Margarita,
Marissa, Maribel, Arnold and Mary Ann,
all surnamed Abistado - represented by
their aunt Josefa Abistado, who was
appointed their guardian ad litem, were
substituted as applicants.
The land registration court in its decision
dated June 13, 1989 dismissed the
petition "for want of jurisdiction."
However, it found that the applicants
through their predecessors-in-interest
had been in open, continuous, exclusive
and peaceful possession of the subject
land since 1938.
In dismissing the petition, the trial court
reasoned: 7
. . . However, the Court noted that
applicants failed to comply with the
provisions of Section 23 (1) of PD 1529,
requiring the Applicants to publish the
notice of Initial Hearing (Exh. "E") in a
newspaper of general circulation in the
Philippines. Exhibit "E" was only
published in the Official Gazette
(Exhibits "F" and "G"). Consequently,
the Court is of the well considered view
that it has not legally acquired
jurisdiction over the instant application
for want of compliance with the
mandatory provision requiring
publication of the notice of initial
hearing in a newspaper of general
circulation.
The trial court also cited Ministry of
Justice Opinion No. 48, Series of 1982,
which in its pertinent portion provides: 8
It bears emphasis that the publication
requirement under Section 23 [of PD
1529] has a two-fold purpose; the first,
which is mentioned in the provision of
the aforequoted provision refers to
publication in the Official Gazette, and is
jurisdictional; while the second, which is
mentioned in the opening clause of the
same paragraph, refers to publication
not only in the Official Gazette but also
in a newspaper of general circulation,
and is procedural. Neither one nor the
other is dispensable. As to the first,
publication in the Official Gazette is
indispensably necessary because
without it, the court would be powerless
to assume jurisdiction over a particular
land registration case. As to the second,
publication of the notice of initial
hearing also in a newspaper of general
circulation is indispensably necessary as
a requirement of procedural due
process; otherwise, any decision that
the court may promulgate in the case
would be legally infirm.
Unsatisfied, private respondents
appealed to Respondent Court of
Appeals which, as earlier explained, set
aside the decision of the trial court and
ordered the registration of the title in
the name of Teodoro Abistado.
The subsequent motion for
reconsideration was denied in the
challenged CA Resolution dared
November 19, 1991.
The Director of Lands represented by
the Solicitor General thus elevated this
recourse to us. This Court notes that the
petitioner's counsel anchored his
petition on Rule 65. This is an error. His
remedy should be based on Rule 45
because he is appealing a final
disposition of the Court of Appeals.
Hence, we shall treat his petition as one
for review under Rule 45, and not
for certiorari under Rule 65. 9
The Issue
Petitioner alleges that Respondent Court
of Appeals committed "grave abuse of
discretion" 10 in holding -
. . . that publication of the petition for
registration of title in LRC Case No. 86
need not be published in a newspaper of
general circulation, and in not
dismissing LRC Case No. 86 for want of
such publication.
Petitioner points out that under Section
23 of PD 1529, the notice of initial
hearing shall be "published both in the
Official Gazette and in a newspaper of
general circulation." According to
petitioner, publication in the Official
Gazette is "necessary to confer
jurisdiction upon the trial court, and . . .
in . . . a newspaper of general
circulation to comply with the notice
requirement of due process." 11
Private respondents, on the other hand,
contend that failure to comply with the
requirement of publication in a
newspaper of general circulation is a
mere "procedural defect." They add that
publication in the Official Gazette is
sufficient to confer jurisdiction. 12
In reversing the decision of the trial
court, Respondent Court of Appeals
ruled: 13
. . . although the requirement of
publication in the Official Gazette and in
a newspaper of general circulation is
couched in mandatory terms, it cannot
be gainsaid that the law also mandates
with equal force that publication in the
Official Gazette shall be sufficient to
confer jurisdiction upon the court.
Further, Respondent Court found that
the oppositors were afforded the
opportunity "to explain matters fully and
present their side." Thus, it justified its
disposition in this wise: 14
. . . We do not see how the lack of
compliance with the required procedure
prejudiced them in any way. Moreover,
the other requirements of: publication in
the Official Gazette, personal notice by
mailing, and posting at the site and
other conspicuous places, were complied
with and these are sufficient to notify
any party who is minded to make any
objection of the application for
registration.
The Court's Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of
Presidential Decree No. 1529 requiring
publication of the notice of initial
hearing reads as follows:
Sec. 23. Notice of initial hearing,
publication, etc. - The court shall, within
five days from filing of the application,
issue an order setting the date and hour
of the initial hearing which shall not be
earlier than forty-five days nor later
than ninety days from the date of the
order.
The public shall be given notice of initial
hearing of the application for land
registration by means of (1) publication;
(2) mailing; and (3) posting.
1. By publication. -
Upon receipt of the order of the court
setting the time for initial hearing, the
Commissioner of Land Registration shall
cause a notice of initial hearing to be
published once in the Official Gazette
and once in a newspaper of general
circulation in the Philippines: Provided,
however, that the publication in the
Official Gazette shall be sufficient to
confer jurisdiction upon the court. Said
notice shall be addressed to all persons
appearing to have an interest in the
land involved including the adjoining
owners so far as known, and "to all
whom it may concern." Said notice shall
also require all persons concerned to
appear in court at a certain date and
time to show cause why the prayer of
said application shall not be granted.
xxx xxx xxx
Admittedly, the above provision
provides in clear and categorical terms
that publication in the Official Gazette
suffices to confer jurisdiction upon the
land registration court. However, the
question boils down to whether, absent
any publication in a newspaper of
general circulation, the land registration
court can validly confirm and register
the title of private respondents.
We answer this query in the negative.
This answer is impelled by the demands
of statutory construction and the due
process rationale behind the publication
requirement.
The law used the term "shall" in
prescribing the work to be done by the
Commissioner of Land Registration upon
the latter's receipt of the court order
setting the time for initial hearing. The
said word denotes an imperative and
thus indicates the mandatory character
of a statute. 15While concededly such
literal mandate is not an absolute rule in
statutory construction, as its import
ultimately depends upon its context in
the entire provision, we hold that in the
present case the term must be
understood in its normal mandatory
meaning. In Republic
vs. Marasigan,16 the Court through Mr.
Justice Hilario G. Davide, Jr. held that
Section 23 of PD 1529 requires notice of
the initial hearing by means of (1)
publication, (2) mailing and (3) posting,
all of which must be complied with. "If
the intention of the law were otherwise,
said section would not have stressed in
detail the requirements of mailing of
notices to all persons named in the
petition who, per Section 15 of the
Decree, include owners of adjoining
properties, and occupants of the land."
Indeed, if mailing of notices is essential,
then by parity of reasoning, publication
in a newspaper of general circulation is
likewise imperative since the law
included such requirement in its detailed
provision.
It should be noted further that land
registration is a proceeding in
rem. 17 Being in rem, such proceeding
requires constructive seizure of the land
as against all persons, including the
state, who have rights to or interests in
the property. An in rem proceeding is
validated essentially through
publication. This being so, the process
must strictly be complied with.
Otherwise, persons who may be
interested or whose rights may be
adversely affected would be barred from
contesting an application which they had
no knowledge of. As has been ruled, a
party as an owner seeking the
inscription of realty in the land
registration court must prove by
satisfactory and conclusive evidence not
only his ownership thereof but the
identity of the same, for he is in the
same situation as one who institutes an
action for recovery of realty. 18 He must
prove his title against the whole world.
This task, which rests upon the
applicant, can best be achieved when all
persons concerned - nay, "the whole
world" - who have rights to or interests
in the subject property are notified and
effectively invited to come to court and
show cause why the application should
not be granted. The elementary norms
of due process require that before the
claimed property is taken from
concerned parties and registered in the
name of the applicant, said parties must
be given notice and opportunity to
oppose.
It may be asked why publication in a
newspaper of general circulation should
be deemed mandatory when the law
already requires notice by publication in
the Official Gazette as well as by mailing
and posting, all of which have already
been complied with in the case at hand.
The reason is due process and the
reality that the Official Gazette is not as
widely read and circulated as
newspapers and is oftentimes delayed in
its circulation, such that the notices
published therein may not reach the
interested parties on time, if at all.
Additionally, such parties may not be
owners of neighboring properties, and
may in fact not own any other real
estate. In sum, the all-encompassing in
rem nature of land registration cases,
the consequences of default orders
issued against the whole world and the
objective of disseminating the notice in
as wide a manner as possible demand a
mandatory construction of the
requirements for publication, mailing
and posting.
Admittedly, there was failure to comply
with the explicit publication requirement
of the law. Private respondents did not
proffer any excuse; even if they had, it
would not have mattered because the
statute itself allows no excuses.
Ineludibly, this Court has no authority to
dispense with such mandatory
requirement. The law is unambiguous
and its rationale clear. Time and again,
this Court has declared that where the
law speaks in clear and categorical
language, there is no room for
interpretation, vacillation or
equivocation; there is room only for
application. 19 There is no alternative.
Thus, the application for land
registration filed by private respondents
must be dismissed without prejudice to
reapplication in the future, after all the
legal requisites shall have been duly
complied with.
WHEREFORE, the petition is GRANTED
and the assailed Decision and Resolution
are REVERSED and SET ASIDE. The
application of private respondent for
land registration is DISMISSED without
prejudice. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 190102 July 11, 2012
ACCENTURE, INC., Petitioner,
vs.
COMMISSIONER OF INTERNAL
REVENUE, Respondent.
DECISION
SERENO, J.:
This is a Petition filed under Rule 45 of the
1997 Rules of Civil Procedure, praying for the
reversal of the Decision of the Court of Tax
Appeals En Banc (CTA En Banc ) dated 22
September 2009 and its subsequent
Resolution dated 23 October 2009.1
Accenture, Inc. (Accenture) is a corporation
engaged in the business of providing
management consulting, business strategies
development, and selling and/or licensing of
software.2 It is duly registered with the Bureau
of Internal Revenue (BIR) as a Value Added
Tax (VAT) taxpayer or enterprise in
accordance with Section 236 of the National
Internal Revenue Code (Tax Code).3
On 9 August 2002, Accenture filed its Monthly
VAT Return for the period 1 July 2002 to 31
August 2002 (1st period). Its Quarterly VAT
Return for the fourth quarter of 2002, which
covers the 1st period, was filed on 17
September 2002; and an Amended Quarterly
VAT Return, on 21 June 2004.4 The following
are reflected in Accenture’s VAT Return for
the fourth quarter of 2002:5
1âw phi1
Accenture filed its Monthly VAT Return for the
month of September 2002 on 24 October
2002; and that for October 2002, on 12
November 2002. These returns were
amended on 9 January 2003. Accenture’s
Quarterly VAT Return for the first quarter of
2003, which included the period 1 September
2002 to 30 November 2002 (2nd period), was
filed on 17 December 2002; and the Amended
Quarterly VAT Return, on 18 June 2004. The
latter contains the following information:6
The monthly and quarterly VAT returns of
Accenture show that, notwithstanding its
application of the input VAT credits earned
from its zero-rated transactions against its
output VAT liabilities, it still had excess or
unutilized input VAT credits. These VAT
credits are in the amounts of P9,355,809.80
for the 1st period and P27,682,459.38 for the
2nd period, or a total of P37,038,269.18.7
Out of the P37,038,269.18, only
P35,178,844.21 pertained to the allocated
input VAT on Accenture’s "domestic
purchases of taxable goods which cannot be
directly attributed to its zero-rated sale of
services."8 This allocated input VAT was
broken down to P8,811,301.66 for the 1st
period and P26,367,542.55 for the 2nd
period.9
The excess input VAT was not applied to any
output VAT that Accenture was liable for in the
same quarter when the amount was earned—
or to any of the succeeding quarters. Instead,
it was carried forward to petitioner’s 2nd
Quarterly VAT Return for 2003.10
Thus, on 1 July 2004, Accenture filed with the
Department of Finance (DoF) an
administrative claim for the refund or the
issuance of a Tax Credit Certificate (TCC).
The DoF did not act on the claim of
Accenture. Hence, on 31 August 2004, the
latter filed a Petition for Review with the First
Division of the Court of Tax Appeals
(Division), praying for the issuance of a TCC
in its favor in the amount of P35,178,844.21.
The Commissioner of Internal Revenue (CIR),
in its Answer,11 argued thus:
1. The sale by Accenture of goods and
services to its clients are not zero-
rated transactions.
2. Claims for refund are construed
strictly against the claimant, and
Accenture has failed to prove that it is
entitled to a refund, because its claim
has not been fully substantiated or
documented.
In a 13 November 2008 Decision,12 the
Division denied the Petition of Accenture for
failing to prove that the latter’s sale of services
to the alleged foreign clients qualified for zero
percent VAT.13
In resolving the sole issue of whether or not
Accenture was entitled to a refund or an
issuance of a TCC in the amount of
P35,178,844.21,14 the Division ruled that
Accenture had failed to present evidence to
prove that the foreign clients to which the
former rendered services did business outside
the Philippines.15 Ruling that Accenture’s
services would qualify for zero-rating under
the 1997 National Internal Revenue Code of
the Philippines (Tax Code) only if the recipient
of the services was doing business outside of
the Philippines,16 the Division cited
Commissioner of Internal Revenue v.
Burmeister and Wain Scandinavian Contractor
Mindanao, Inc. (Burmeister)17 as basis.
Accenture appealed the Division’s Decision
through a Motion for Reconsideration
(MR).18 In its MR, it argued that the reliance of
the Division on Burmeister was misplaced19 for
the following reasons:
1. The issue involved in Burmeister
was the entitlement of the applicant to
a refund, given that the recipient of its
service was doing business in the
Philippines; it was not an issue of
failure of the applicant to present
evidence to prove the fact that the
recipient of its services was a foreign
corporation doing business outside the
Philippines.20
2. Burmeister emphasized that, to
qualify for zero-rating, the recipient of
the services should be doing business
outside the Philippines, and Accenture
had successfully established that.21
3. Having been promulgated on 22
January 2007 or after Accenture filed
its Petition with the Division,
Burmeister cannot be made to apply
to this case.22
Accenture also cited Commissioner of Internal
Revenue v. American Express (Amex)23 in
support of its position. The MR was denied by
the Division in its 12 March 2009 Resolution.24
Accenture appealed to the CTA En Banc.
There it argued that prior to the amendment
introduced by Republic Act No. (R.A.)
9337, 25 there was no requirement that the
services must be rendered to a person
engaged in business conducted outside the
Philippines to qualify for zero-rating. The CTA
En Banc agreed that because the case
pertained to the third and the fourth quarters
of taxable year 2002, the applicable law was
the 1997 Tax Code, and not R.A. 9337.26 Still,
it ruled that even though the provision used in
Burmeister was Section 102(b)(2) of the
earlier 1977 Tax Code, the pronouncement
therein requiring recipients of services to be
engaged in business outside the Philippines to
qualify for zero-rating was applicable to the
case at bar, because Section 108(B)(2) of the
1997 Tax Code was a mere reenactment of
Section 102(b)(2) of the 1977 Tax Code.
The CTA En Banc concluded that Accenture
failed to discharge the burden of proving the
latter’s allegation that its clients were foreign-
based.27
Resolute, Accenture filed a Petition for Review
with the CTA En Banc, but the latter affirmed
the Division’s Decision and Resolution.28 A
subsequent MR was also denied in a
Resolution dated 23 October 2009.
Hence, the present Petition for Review29 under
Rule 45.
In a Joint Stipulation of Facts and Issues, the
parties and the Division have agreed to submit
the following issues for resolution:
1. Whether or not Petitioner’s sales of
goods and services are zero-rated for
VAT purposes under Section
108(B)(2)(3) of the 1997 Tax Code.
2. Whether or not petitioner’s claim for
refund/tax credit in the amount of
P35,178,884.21 represents unutilized
input VAT paid on its domestic
purchases of goods and services for
 the period commencing from 1 July
2002 until 30 November 2002.
3. Whether or not Petitioner has
carried over to the succeeding taxable
quarter(s) or year(s) the alleged
unutilized input VAT paid on its
domestic purchases of goods and
services for the period commencing
from 1 July 2002 until 30 November
2002, and applied the same fully to its
output VAT liability for the said period.
4. Whether or not Petitioner is entitled
to the refund of the amount of
P35,178,884.21, representing the
unutilized input VAT on domestic
purchases of goods and services for
the period commencing from 1 July
2002 until 30 November 2002, from its
sales of services to various foreign
clients.
5. Whether or not Petitioner’s claim for
refund/tax credit in the amount of
P35,178,884.21, as alleged unutilized
input VAT on domestic purchases of
goods and services for the period
covering 1 July 2002 until 30
November 2002 are duly
substantiated by proper documents.30
For consideration in the present Petition are
the following issues:
1. Should the recipient of the services
be "doing business outside the
Philippines" for the transaction to be
zero-rated under Section 108(B)(2) of
the 1997 Tax Code?
2. Has Accenture successfully proven
that its clients are entities doing
business outside the Philippines?
Recipient of services must be doing business
outside the Philippines for the transactions to
qualify as zero-rated.
Accenture anchors its refund claim on Section
112(A) of the 1997 Tax Code, which allows
the refund of unutilized input VAT earned from
zero-rated or effectively zero-rated sales. The
provision reads:
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 of 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. Section 108(B)
referred to in the foregoing provision was first
seen when Presidential Decree No. (P.D.)
199431 amended Title IV of P.D. 1158,32 which
is also known as the National Internal
Revenue Code of 1977. Several Decisions
have referred to this as the 1986 Tax Code,
even though it merely amended Title IV of the
1977 Tax Code.
Two years thereafter, or on 1 January 1988,
Executive Order No. (E.O.) 27333 further
amended provisions of Title IV. E.O. 273 by
transferring the old Title IV provisions to Title
VI and filling in the former title with new
provisions that imposed a VAT.
The VAT system introduced in E.O. 273 was
restructured through Republic Act No. (R.A.)
7716.34 This law, which was approved on 5
May 1994, widened the tax base. Section 3
thereof reads:
SECTION 3. Section 102 of the National
Internal Revenue Code, as amended, is
hereby further amended to read as follows:
"SEC. 102. Value-added tax on sale of
services and use or lease of properties. x x x
xxx xxx xxx
"(b) Transactions subject to zero-rate. — The
following services performed in the Philippines
by VAT-registered persons shall be subject to
0%:
"(1) Processing, manufacturing or
repacking goods for other persons
doing business outside the Philippines
which goods are subsequently
exported, where the services are paid
for in acceptable foreign currency and
accounted for in accordance with the
rules and regulations of the Bangko
Sentral ng Pilipinas (BSP).
"(2) Services other than those
mentioned in the preceding sub-
paragraph, the consideration for which
is paid for in acceptable foreign
currency and accounted for in
accordance with the rules and
regulations of the Bangko Sentral ng
Pilipinas (BSP)."
Essentially, Section 102(b) of the 1977 Tax
Code—as amended by P.D. 1994, E.O. 273,
and R.A. 7716—provides that if the
consideration for the services provided by a
VAT-registered person is in a foreign
currency, then this transaction shall be
subjected to zero percent rate.
The 1997 Tax Code reproduced Section
102(b) of the 1977 Tax Code in its Section
108(B), to wit:
(B) Transactions Subject to Zero Percent (0%)
Rate. - The following services performed in
the Philippines by VAT- registered persons
shall be subject to zero percent (0%) rate.
(1) Processing, manufacturing or
repacking goods for other persons
doing business outside the Philippines
which goods are subsequently
exported, where the services are paid
for in acceptable foreign currency and
accounted for in accordance with the
rules and regulations of the Bangko
Sentral ng Pilipinas (BSP);
(2) Services other than those
mentioned in the preceding
paragraph, the consideration for which
is paid for in acceptable foreign
currency and accounted for in
accordance with the rules and
regulations of the Bangko Sentral ng
Pilipinas (BSP); x x x.
On 1 November 2005, Section 6 of R.A. 9337,
which amended the foregoing provision,
became effective. It reads:
SEC. 6. Section 108 of the same Code, as
amended, is hereby further amended to read
as follows:
"SEC. 108. Value-added Tax on Sale of
Services and Use or Lease of
Properties. -
(B) Transactions Subject to Zero Percent (0%)
Rate. - The following services performed in
the Philippines by VAT-registered persons
shall be subject to zero percent (0%) rate:
(1) Processing, manufacturing or
repacking goods for other persons
doing business outside the Philippines
which goods are subsequently
exported, where the services are paid
for in acceptable foreign currency and
accounted for in accordance with the
rules and regulations of the Bangko
Sentral ng Pilipinas (BSP);
"(2) Services other than those
mentioned in the preceding paragraph
rendered to a person engaged in
business conducted outside the
Philippines or to a nonresident person
not engaged in business who is
outside the Philippines when the
 services are performed, the
consideration for which is paid for in
acceptable foreign currency and
accounted for in accordance with the
rules and regulations of the Bangko
Sentral ng Pilipinas (BSP); x x x."
(Emphasis supplied)
The meat of Accenture’s argument is that
nowhere does Section 108(B) of the 1997 Tax
Code state that services, to be zero-rated,
should be rendered to clients doing business
outside the Philippines, the requirement
introduced by R.A. 9337.35 Required by
Section 108(B), prior to the amendment, is
that the consideration for the services
rendered be in foreign currency and in
accordance with the rules of the Bangko
Sentral ng Pilipinas (BSP). Since Accenture
has complied with all the conditions imposed
in Section 108(B), it is entitled to the refund
prayed for.
In support of its claim, Accenture cites Amex,
in which this Court supposedly ruled that
Section 108(B) reveals a clear intent on the
part of the legislators not to impose the
condition of being "consumed abroad" in order
for the services performed in the Philippines to
be zero-rated.36
The Division ruled that this Court, in Amex
and Burmeister, did not declare that the
requirement—that the client must be doing
business outside the Philippines—can be
disregarded, because this requirement is
expressly provided in Article 108(2) of the Tax
Code.37
Accenture questions the Division’s application
to this case of the pronouncements made in
Burmeister. According to petitioner, the
provision applied to the present case was
Section 102(b) of the 1977 Tax Code, and not
Section 108(B) of the 1997 Tax Code, which
was the law effective when the subject
transactions were entered into and a refund
was applied for.
In refuting Accenture’s theory, the CTA En
Banc ruled that since Section 108(B) of the
1997 Tax Code was a mere reproduction of
Section 102(b) of the 1977 Tax Code, this
Court’s interpretation of the latter may be used
in interpreting the former, viz:
In the Burmeister case, the Supreme Court
harmonized both Sections 102(b)(1) and
102(b)(2) of the 1977 Tax Code, as amended,
pertaining to zero-rated transactions. A
parallel approach should be accorded to the
renumbered provisions of Sections 108(B)(2)
and 108(B)(1) of the 1997 NIRC. This means
that Section 108(B)(2) must be read in
conjunction with Section 108(B)(1). Section
108(B)(2) requires as follows: a) services
other than processing, manufacturing or
repacking rendered by VAT registered
persons in the Philippines; and b) the
transaction paid for in acceptable foreign
currency duly accounted for in accordance
with BSP rules and regulations. The same
provision made reference to Section 108(B)(1)
further imposing the requisite c) that the
recipient of services must be performing
business outside of Philippines. Otherwise, if
both the provider and recipient of service are
doing business in the Philippines, the sale
transaction is subject to regular VAT as
explained in the Burmeister case x x x.
xxx xxx xxx
Clearly, the Supreme Court’s pronouncements
in the Burmeister case requiring that the
recipient of the services must be doing
business outside the Philippines as mandated
by law govern the instant case.38
Assuming that the foregoing is true, Accenture
still argues that the tax appeals courts cannot
be allowed to apply to Burmeister this Court’s
interpretation of Section 102(b) of the 1977
Tax Code, because the Petition of Accenture
had already been filed before the case was
even promulgated on 22 January 2007,39 to
wit:
x x x. While the Burmeister case forms part of
the legal system and assumes the same
authority as the statute itself, however, the
same cannot be applied retroactively against
the Petitioner because to do so will be
prejudicial to the latter.40
The CTA en banc is of the opinion that
Accenture cannot invoke the non-retroactivity
of the rulings of the Supreme Court, whose
interpretation of the law is part of that law as
of the date of its enactment.41
We rule that the recipient of the service must
be doing business outside the Philippines for
the transaction to qualify for zero-rating under
Section 108(B) of the Tax Code.
This Court upholds the position of the CTA en
banc that, because Section 108(B) of the
1997 Tax Code is a verbatim copy of Section
102(b) of the 1977 Tax Code, any
interpretation of the latter holds true for the
former.
Moreover, even though Accenture’s Petition
was filed before Burmeister was promulgated,
the pronouncements made in that case may
be applied to the present one without violating
the rule against retroactive application. When
this Court decides a case, it does not pass a
new law, but merely interprets a preexisting
one.42 When this Court interpreted Section
102(b) of the 1977 Tax Code in Burmeister,
this interpretation became part of the law from
the moment it became effective. It is
elementary that the interpretation of a law by
this Court constitutes part of that law from the
date it was originally passed, since this
Court's construction merely establishes the
contemporaneous legislative intent that the
interpreted law carried into effect.43
Accenture questions the CTA’s application of
Burmeister, because the provision interpreted
therein was Section 102(b) of the 1977 Tax
Code. In support of its position that Section
108 of the 1997 Tax Code does not require
that the services be rendered to an entity
doing business outside the Philippines,
Accenture invokes this Court’s
pronouncements in Amex. However, a reading
of that case will readily reveal that the
provision applied was Section 102(b) of the
1977 Tax Code, and not Section 108 of the
1997 Tax Code. As previously mentioned, an
interpretation of Section 102(b) of the 1977
Tax Code is an interpretation of Section 108
of the 1997 Tax Code, the latter being a mere
reproduction of the former.
This Court further finds that Accenture’s
reliance on Amex is misplaced.
We ruled in Amex that Section 102 of the
1977 Tax Code does not require that the
services be consumed abroad to be zero-
rated. However, nowhere in that case did this
Court discuss the necessary qualification of
the recipient of the service, as this matter was
never put in question. In fact, the recipient of
the service in Amex is a nonresident foreign
client.
The aforementioned case explains how the
credit card system works. The issuance of a
credit card allows the holder thereof to obtain,
on credit, goods and services from certain
establishments. As proof that this credit is
extended by the establishment, a credit card
draft is issued. Thereafter, the company
issuing the credit card will pay for the
purchases of the credit card holders by
redeeming the drafts. The obligation to collect
from the card holders and to bear the loss—in
case they do not pay—rests on the issuer of
the credit card.
The service provided by respondent in Amex
consisted of gathering the bills and credit card
drafts from establishments located in the
Philippines and forwarding them to its parent
company's regional operating centers outside
the country. It facilitated in the Philippines the
collection and payment of receivables
belonging to its Hong Kong-based foreign
client.
The Court explained how the services
rendered in Amex were considered to have
been performed and consumed in the
Philippines, to wit:
Consumption is "the use of a thing in a way
that thereby exhausts it." Applied to services,
the term means the performance or
"successful completion of a contractual duty,
usually resulting in the performer’s release
from any past or future liability x x x." The
services rendered by respondent are
performed or successfully completed upon its
sending to its foreign client the drafts and bills
it has gathered from service establishments
here. Its services, having been performed in
the Philippines, are therefore also consumed
in the Philippines.44
The effect of the place of consumption on the
zero-rating of the transaction was not the
issue in Burmeister. Instead, this Court
1âwphi1
addressed the squarely raised issue of
whether the recipient of services should be
doing business outside the Philippines for the
transaction to qualify for zero-rating. We ruled
that it should. Thus, another essential
condition for qualification for zero-rating under
Section 102(b)(2) of the 1977 Tax Code is that
the recipient of the business be doing that
business outside the Philippines. In clarifying
that there is no conflict between this
pronouncement and that laid down in Amex,
we ruled thus:
x x x. As the Court held in Commissioner of
Internal Revenue v. American Express
International, Inc. (Philippine Branch), the
place of payment is immaterial, much less is
the place where the output of the service is
ultimately used. An essential condition for
entitlement to 0% VAT under Section 102 (b)
(1) and (2) is that the recipient of the services
is a person doing business outside the
Philippines. In this case, the recipient of the
services is the Consortium, which is doing
business not outside, but within the
Philippines because it has a 15-year contract
to operate and maintain NAPOCOR’s two
100-megawatt power barges in Mindanao.
(Emphasis in the original)45
In Amex we ruled that the place of
performance and/or consumption of the
service is immaterial. In Burmeister, the Court
found that, although the place of the
consumption of the service does not affect the
entitlement of a transaction to zero-rating, the
place where the recipient conducts its
business does.
Amex does not conflict with Burmeister. In
fact, to fully understand how Section 102(b)(2)
of the 1977 Tax Code—and consequently
Section 108(B)(2) of the 1997 Tax Code—was
intended to operate, the two aforementioned
cases should be taken together. The zero-
rating of the services performed by
respondent in Amex was affirmed by the
Court, because although the services
rendered were both performed and consumed
in the Philippines, the recipient of the service
was still an entity doing business outside the
Philippines as required in Burmeister.
That the recipient of the service should be
doing business outside the Philippines to
qualify for zero-rating is the only logical
interpretation of Section 102(b)(2) of the 1977
Tax Code, as we explained in Burmeister:
This can only be the logical interpretation of
Section 102 (b) (2). If the provider and
recipient of the "other services" are both doing
business in the Philippines, the payment of
foreign currency is irrelevant. Otherwise,
those subject to the regular VAT under
Section 102 (a) can avoid paying the VAT by
simply stipulating payment in foreign currency
inwardly remitted by the recipient of services.
To interpret Section 102 (b) (2) to apply to a
payer-recipient of services doing business in
the Philippines is to make the payment of the
regular VAT under Section 102 (a) dependent
on the generosity of the taxpayer. The
provider of services can choose to pay the
regular VAT or avoid it by stipulating payment
in foreign currency inwardly remitted by the
payer-recipient. Such interpretation removes
Section 102 (a) as a tax measure in the Tax
Code, an interpretation this Court cannot
sanction. A tax is a mandatory exaction, not a
voluntary contribution.
xxx xxx xxx
Further, when the provider and recipient of
services are both doing business in the
Philippines, their transaction falls squarely
under Section 102 (a) governing domestic
sale or exchange of services. Indeed, this is a
purely local sale or exchange of services
subject to the regular VAT, unless of course
the transaction falls under the other provisions
of Section 102 (b).
Thus, when Section 102 (b) (2) speaks of
"services other than those mentioned in the
preceding subparagraph," the legislative intent
is that only the services are different between
subparagraphs 1 and 2. The requirements for
zero-rating, including the essential condition
that the recipient of services is doing business
outside the Philippines, remain the same
under both subparagraphs. (Emphasis in the
original)46
Lastly, it is worth mentioning that prior to the
promulgation of Burmeister, Congress had
already clarified the intent behind Sections
102(b)(2) of the 1977 Tax Code and 108(B)(2)
of the 1997 Tax Code amending the earlier
provision. R.A. 9337 added the following
phrase: "rendered to a person engaged in
business conducted outside the Philippines or
to a nonresident person not engaged in
business who is outside the Philippines when
the services are performed."
Accenture has failed to establish that the
recipients of its services do business outside
the Philippines.
Accenture argues that based on the
documentary evidence it presented,47 it was
able to establish the following circumstances:
1. The records of the Securities and
Exchange Commission (SEC) show
that Accenture’s clients have not
established any branch office in which
to do business in the Philippines.
2. For these services, Accenture bills
another corporation, Accenture
Participations B.V. (APB), which is
likewise a foreign corporation with no
"presence in the Philippines."
3. Only those not doing business in
the Philippines can be required under
BSP rules to pay in acceptable
currency for their purchase of goods
and services from the Philippines.
Thus, in a domestic transaction, where
the provider and recipient of services
are both doing business in the
Philippines, the BSP cannot require
any party to make payment in foreign
currency.48
Accenture claims that these documentary
pieces of evidence are supported by the
Report of Emmanuel Mendoza, the Court-
commissioned Independent Certified Public
Accountant. He ascertained that Accenture’s
gross billings pertaining to zero-rated sales
were all supported by zero-rated Official
Receipts and Billing Statements. These
documents show that these zero-rated sales
were paid in foreign exchange currency and
duly accounted for in the rules and regulations
of the BSP.49
In the CTA’s opinion, however, the documents
presented by Accenture merely substantiate
the existence of the sales, receipt of foreign
currency payments, and inward remittance of
the proceeds of these sales duly accounted
for in accordance with BSP rules. Petitioner
presented no evidence whatsoever that these
clients were doing business outside the
Philippines.50
Accenture insists, however, that it was able to
establish that it had rendered services to
foreign corporations doing business outside
the Philippines, unlike in Burmeister, which
allegedly involved a foreign corporation doing
business in the Philippines.51
We deny Accenture’s Petition for a tax refund.
The evidence presented by Accenture may
have established that its clients are
foreign. This fact does not automatically
1âwphi 1
mean, however, that these clients were doing
business outside the Philippines. After all, the
Tax Code itself has provisions for a foreign
corporation engaged in business within the
Philippines and vice versa, to wit:
SEC. 22. Definitions - When used in this Title:
xxx xxx xxx
(H) The term "resident foreign
corporation" applies to a foreign
corporation engaged in trade or
business within the Philippines.
(I) The term ‘nonresident foreign
corporation’ applies to a foreign
 corporation not engaged in trade or
business within the Philippines.
(Emphasis in the original)
Consequently, to come within the purview of
Section 108(B)(2), it is not enough that the
recipient of the service be proven to be a
foreign corporation; rather, it must be
specifically proven to be a nonresident foreign
corporation.
There is no specific criterion as to what
constitutes "doing" or "engaging in" or
"transacting" business. We ruled thus in
Commissioner of Internal Revenue v. British
Overseas Airways Corporation:52
x x x. There is no specific criterion as to what
constitutes "doing" or "engaging in" or
"transacting" business. Each case must be
judged in the light of its peculiar environmental
circumstances. The term implies a continuity
of commercial dealings and arrangements,
and contemplates, to that extent, the
performance of acts or works or the exercise
of some of the functions normally incident to,
and in progressive prosecution of commercial
gain or for the purpose and object of the
business organization. "In order that a foreign
corporation may be regarded as doing
business within a State, there must be
continuity of conduct and intention to establish
a continuous business, such as the
appointment of a local agent, and not one of a
temporary character."53
A taxpayer claiming a tax credit or refund has
the burden of proof to establish the factual
basis of that claim. Tax refunds, like tax
1âw phi 1
exemptions, are construed strictly against the
taxpayer.54
Accenture failed to discharge this burden. It
alleged and presented evidence to prove only
that its clients were foreign entities. However,
as found by both the CTA Division and the
CTA En Banc, no evidence was presented by
Accenture to prove the fact that the foreign
clients to whom petitioner rendered its
services were clients doing business outside
the Philippines.
As ruled by the CTA En Banc, the Official
Receipts, Intercompany Payment Requests,
Billing Statements, Memo Invoices-
Receivable, Memo Invoices-Payable, and
Bank Statements presented by Accenture
merely substantiated the existence of sales,
receipt of foreign currency payments, and
inward remittance of the proceeds of such
sales duly accounted for in accordance with
BSP rules, all of these were devoid of any
evidence that the clients were doing business
outside of the Philippines.55
WHEREFORE, the instant Petition is
DENIED. The 22 September 2009 Decision
and the 23 October 2009 Resolution of the
Court of Tax Appeals En Banc in C.T.A. EB
No. 477, dismissing the Petition for the refund
of the excess or unutilized input VAT credits of
Accenture, Inc., are AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-42935 February 15, 1935
FELIPE REGALADO, petitioner,
vs.
JOSE YULO, Secretary of Justice,
JUAN G. LESACA, Judge of First Instance
of Albay,
and ESTEBAN T. VILLAR, respondents.
L.R. Peña for petitioner.
Office of the Solicitor-General Hilado for
respondents.
Respondent Villar in his own behalf.
MALCOLM, J.:
This is an action of quo warranto originally
brought in this court to determine the
respective rights of the petitioner Felipe
Regalado and one of the respondents,
Esteban T. Villar, to the office of justice of the
peace of Malinao, Albay. The issue in the
case is whether or not under the provisions of
section 203 of the Administrative Code, as
amended by Act No. 3899, the justices of the
peace and auxiliary justices of the peace
appointed prior to the approval of the last
mentioned Act who reached the age of sixty-
five years after said Act took effect shall cease
to hold office upon reaching the age of sixty-
five years.
The facts as stipulated are principally the
following: Felipe Regalado qualified for the
office of justice of the peace of Malinao,
Albay, on April 12, 1906. On September 13,
1934, Regalado became sixty-five years of
age. As a consequence, shortly thereafter, the
judge of first instance of Albay, acting in
accordance with instructions from the
Secretary of Justice, designated Esteban T.
Villar, justice of the peace of Tabaco, Albay, to
act as justice of the peace of Malinao, Albay.
Regalado surrendered the office to Villar
under protest. On December 17, 1934, Villar
qualified as justice of the peace of Malinao,
Albay, and entered upon the discharge of the
duties of the office.
The text of section 203 of the Administrative
Code, as amended by Act No. 3899, reads in
Spanish, the language in which this Act was
enacted by the Philippine Legislature, as
follows:
ART. 203. Nombramiento y
distribucion de jueces de paz. — El
Gobernador General nombrara, con el
consejo y consentimiento del Senado
de Filipinas, un juez de paz y un juez
de paz auxilizr para la Ciudad de
Baguio y para cada
municipio, township, y distrito
municipal da las Islas Filipinas y si el
interes publico asi lo exigiere para
cualquier otra division politica de
menos importancia y territorio no
organizado en dichas
Islas: Entendiendose, Que los jueces
de paz y jueces de paz auxiliares
seran nombrados para servir cumplir
sesenta y cinco años de
edad: Entendiendose, ademas, Que
los actuales jueces de paz y jueces de
paz auxiliares que al tiempo de la
vigencia de esta Ley hayan cumplido
sesenta y cinco años de edad,
cesaran el primero de enero de mil
novecientos treinta y tres en sus
cargos; y el Gobernador General, con
el consejo y consentimiento del
Senado de Filipinas, hara nuevos
nombramientos para cubrir las
vacantes que habran de ocurir por
ministerio de esta Ley.
The English version of the same codal
section, as amended, reads as follows:
SEC. 203. Appointment and
distribution of justices of the peace. —
One justice of the peace and one
auxiliary justice of the peace shall be
appointed by the Governor-General,
with the advise and consent of the
Philippine Senate, for the City of
Baguio, and for each municipality,
township, and municipal district in the
Philippine Islands, and if the public
interests shall so require, for any other
minor political division or unorganized
territory in said Islands: Provided, That
justices and auxiliary justices of the
peace shall be appointed to serve until
they have reached the age of sixty-five
years: Provided, further, That the
present justices and auxiliary justices
of the peace who shall, at the time this
Act takes effect, have completed sixty-
five years of age, shall automatically
cease to hold office on January first,
nineteen hundred and thirty-three; and
the Governor-General, with the advise
and consent of the Philippine Senate,
shall make new appointments to cover
the vacancies occurring by operation
of this Act.
Petitioner Regalado insists that the law is
clear and accordingly needs no interpretation.
The meaning of the law according to him is
that only those justice of the peace and
auxiliary justices of the peace ceased to hold
office who had completed sixty-five years of
age on or before November 16, 1931, when
Act No. 3899 took effect. On the other hand,
the Solicitor-General, as attorney for the
respondents, admits that the provisions of the
second proviso added to section 203 of the
Administrative Code by Act No. 3899, are not
very specific, but that according to the real
intention of the law the only sensible and
proper construction that could be place on the
proviso in question in that under its provisions
all justices of the peace and auxiliary justices
of the peace, whether appointed prior to the
approval of the Act or subsequent thereto,
who had completed the age of sixty-five years
of age at the time of the approval of the Act,
and those who shall complete that age
thereafter, shall cease to hold office, the
former on January 1, 1933, and the latter at
the time they complete that age.
All are agreed that the language which should
prevail in the interpretation of Act No. 3899 is
Spanish, but that the English text may be
consulted to explain the Spanish. The English
text is deficient in that it includes the word
"automatically", the equivalent of which does
not appear in the Spanish. Also, in the
Administrative Code containing a compilation
of section 203, as amended, the word "office"
was omitted after the word "hold". Finally, the
spanish uses the term "al teimpo de la
vigencia de esta ley", translated into English
as "at the time this Act takes effect". But the
Solicitor-General insists that the equivalent of
the term "al" is "at" and that "at" can be
construed as equivalent to "during".
The Solicitor-General properly invites attention
to the history of the law and from that history
would deduce the legislative intention to be
effectuated. Let us briefly notice this point.
Originally judges of first instance and justices
of the peace had no age limits on their tenures
of office. Eventually, however, the Philippine
Legislature enacted Act No. 2347. That law
not only provided that judges of first instance
shall serve until they have reached the age of
sixty-five years, but it further provided that "...
the present judges of Courts of First Instance
... vacate their positions on the taking effect of
this Act: and the Governor-General, with the
advice and consent of the Philippine
Commission, shall make new appointments of
judges of the Courts of First Instance ... ." This
law was held valid. (Chanco vs. Imperial
[1916], 34 Phil., 329.) Subsequently section
203 of the Administrative Code, relating to
justices of the peace, was amended by
section 1 of Act No. 3107 by adding at the end
thereof the following proviso: "... Provided,
That justices and auxiliary justices of the
peace shall be appointed to serve until they
have reached the age of sixty-five years." It
was held that the law should be given
prospective effect only and was not applicable
to justices and auxiliary justices of the peace
appointed before it went into effect.
(Segovia vs. Noel [1925], 47 Phil., 543.)
Thereafter the matter again came before the
Philippine Legislature and apparently it was in
the mind of certain members of the
Legislature to make the law fixing the age limit
for justices of the peace retroactive in nature.
At least the bill as introduced in the Senate,
and providing: "Entendiendose, ademas, Que
los actuales jueces de paz y jueces de paz
auxiliares que al tiempo de la vigencia de esta
Ley hayan cumplido sesenta y cinco años de
edad, cesaran automaticamente en sus
cargos; y el Gobernador General, con el
consejo y consentimiento del Senado de
Filipinas, hara nuevos nombramientos para
cubrir las vacantes que habran de ocurrir por
ministerio de esta ley," — appears to have
had this purpose both because of the langage
used and because of what can be gleaned
from the debates on the bill while it was under
consideration in the Senate. But when the bill
left the Philippine Legislature it was in a
different form, for the word "automaticamente"
had been omitted and instead there was to be
found the words "el primero de enero de mil
novecientos treinta y tres".
The Solicitor-General finally points out that the
Secretary of Justice has consistently
interpreted the proviso in question as
meaning, that all justices of the peace and
auxiliary justices of the peace no matter when
appointed who had completed the age of
sixty-five years prior to the approval of the law
and those who shall complete that age
thereafter, shall cease to hold office upon their
attaining that age. It is of course a cardinal
rule that the practical construction of a statute
by the department whose duty it is to carry it
into execution is entitled to great weight.
Nevertheless the court is not bound by such
construction and the rule does not apply in
cases where the construction is not doubtful.
The fundamental purpose in enacting Act No.
3899, it is argued, was to correct the
phraseology of the first proviso to section 203
of the Administrative Code added thereto by
Act No. 3107, and to place justices of the
peace and auxiliary justices of the peace on
the same footing as regards their cessation
from office by reason of age. We are asked for
effectuate this legislative purpose. We would
accede if that result was obtainable by any
logical construction of the law whether strict or
liberal. But we cannot reach that result when
to do so compels us to rewrite a law and to
insert words or phrases not found in it. If the
court should do that it would pass beyond the
bounds of judicial power to usurp legislative
power.
The intent of the Legislature to be ascertained
and enforced is the intent expressed in the
words of the statute. If legislative intent is not
expressed in some appropriate manner, the
courts cannot by interpretation speculate as to
an intent and supply a meaning not found in
the phraseology of the law. In other words, the
courts cannot assume some purpose in no
way expressed and then construe the statute
to accomplish this supposed intention.
Delving a little more deeply into the meaning
of the law as applied to the case of the
petitioner, at the time Act No. 3899 took effect
he was one of the "actuales jueces de paz"
(present justices of the peace). Giving the
term "al tiempo de la vigencia de la ley" the
ordinary meaning of "at the time this Act takes
effect," which was on November 16, 1931, on
that date the petitioner was not sixty-five years
of age. Proceeding further, the phrase "hayan
cumplido se senta cinco años de edad",
appearing in English as "have completed
sixty-five years of age", is of the past tense
and could not regularly be taken to
contemplate the future. Finally the phrase "el
primero de enero de mil novecientos treinta y
tres", in English "on January first nineteen
hundred and thirty-three", is also a date in the
past, for on that date the petitioner had not yet
reached the age of sixty-five.
Before we conclude, let us again return to the
consideration of the law and see if it would be
possible under any logical interpretation, to
give the law the meaning which the
Government insists it should have. Supposing
we give to the phrase "al tiempo de la vigencia
de esta ley" the unusual meaning of "within
the time this Act is effective", but having done
so, we then reach the barrier that the
petitioner within the time this Act is effective
must have completed sixty-five years of age
and cease to hold office on January 1, 1933.
The petitioner having become sixty-five years
of age on September 13, 1934, could not be
included under a law which required justices
of the peace sixty-five years of age to cease
to hold office on January 1, 1933.
For the reasons given, we are of the opinion
that the natural and reasonable meaning of
the language used in Act No. 3899 leaves
room for no other deduction than that a justice
of the peace appointed prior to the approval of
the Act and who completed sixty-five years of
age on September 13, 1934, subsequent to
the approval of the Act, which was on
November 16, 1931, and who by the law was
required to cease to hold office on January 1,
1933, is not affected by the said Act.
Accordingly it is our judgment that the
respondent Esteban T. Villar be ousted from
the office of justice of the peace of Malinao,
Albay, and that the petitioner Felipe Regalado
be placed in possession of the same. So
ordered, without special pronouncement as to
the costs.
Villa-Real, Imperial, Butte, and Goddard, JJ.,
concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22301 August 30, 1967
THE PEOPLE OF THE
PHILIPPINES, plaintiff-appellee,
vs.
MARIO MAPA Y MAPULONG, defendant-
appellant.
Francisco P. Cabigao for defendant-appellant.
Office of the Solicitor General Arturo A.
Alafriz, Assistant Solicitor General F. R.
Rosete and Solicitor O. C. Hernandez for
plaintiff-appellee.
FERNANDO, J.:
The sole question in this appeal from a
judgment of conviction by the lower court is
whether or not the appointment to and holding
of the position of a secret agent to the
provincial governor would constitute a
sufficient defense to a prosecution for the
crime of illegal possession of firearm and
ammunition. We hold that it does not.
The accused in this case was indicted for the
above offense in an information dated August
14, 1962 reading as follows: "The undersized
accuses MARIO MAPA Y MAPULONG of a
violation of Section 878 in connection with
Section 2692 of the Revised Administrative
Code, as amended by Commonwealth Act No.
56 and as further amended by Republic Act
No. 4, committed as follows: That on or about
the 13th day of August, 1962, in the City of
Manila, Philippines, the said accused did then
and there wilfully and unlawfully have in his
possession and under his custody and control
one home-made revolver (Paltik), Cal. 22,
without serial number, with six (6) rounds of
ammunition, without first having secured the
necessary license or permit therefor from the
corresponding authorities. Contrary to law."
When the case was called for hearing on
September 3, 1963, the lower court at the
outset asked the counsel for the accused:
"May counsel stipulate that the accused was
found in possession of the gun involved in this
case, that he has neither a permit or license to
possess the same and that we can submit the
same on a question of law whether or not an
agent of the governor can hold a firearm
without a permit issued by the Philippine
Constabulary." After counsel sought from the
fiscal an assurance that he would not question
the authenticity of his exhibits, the
understanding being that only a question of
law would be submitted for decision, he
explicitly specified such question to be
"whether or not a secret agent is not required
to get a license for his firearm."
Upon the lower court stating that the fiscal
should examine the document so that he
could pass on their authenticity, the fiscal
asked the following question: "Does the
accused admit that this pistol cal. 22 revolver
with six rounds of ammunition mentioned in
the information was found in his possession
on August 13, 1962, in the City of Manila
without first having secured the necessary
license or permit thereof from the
corresponding authority?" The accused, now
the appellant, answered categorically: "Yes,
Your Honor." Upon which, the lower court
made a statement: "The accused admits, Yes,
and his counsel Atty. Cabigao also affirms that
the accused admits."
Forthwith, the fiscal announced that he was
"willing to submit the same for decision."
Counsel for the accused on his part presented
four (4) exhibits consisting of his appointment
"as secret agent of the Hon. Feliciano
Leviste," then Governor of Batangas, dated
June 2, 1962;1 another document likewise
issued by Gov. Leviste also addressed to the
accused directing him to proceed to Manila,
Pasay and Quezon City on a confidential
mission;2 the oath of office of the accused as
such secret agent,3 a certificate dated March
11, 1963, to the effect that the accused "is a
secret agent" of Gov. Leviste.4 Counsel for the
accused then stated that with the presentation
of the above exhibits he was "willing to submit
the case on the question of whether or not a
secret agent duly appointed and qualified as
such of the provincial governor is exempt from
the requirement of having a license of
firearm." The exhibits were admitted and the
parties were given time to file their respective
memoranda.
1äwphï1.ñët
Thereafter on November 27, 1963, the lower
court rendered a decision convicting the
accused "of the crime of illegal possession of
firearms and sentenced to an indeterminate
penalty of from one year and one day to two
years and to pay the costs. The firearm and
ammunition confiscated from him are forfeited
in favor of the Government."
The only question being one of law, the
appeal was taken to this Court. The decision
must be affirmed.
The law is explicit that except as thereafter
specifically allowed, "it shall be unlawful for
any person to . . . possess any firearm,
detached parts of firearms or ammunition
therefor, or any instrument or implement used
or intended to be used in the manufacture of
firearms, parts of firearms, or
ammunition."5 The next section provides that
"firearms and ammunition regularly and
lawfully issued to officers, soldiers, sailors, or
marines [of the Armed Forces of the
Philippines], the Philippine Constabulary,
guards in the employment of the Bureau of
Prisons, municipal police, provincial
governors, lieutenant governors, provincial
treasurers, municipal treasurers, municipal
mayors, and guards of provincial prisoners
and jails," are not covered "when such
firearms are in possession of such officials
and public servants for use in the performance
of their official duties."6
The law cannot be any clearer. No provision is
made for a secret agent. As such he is not
exempt. Our task is equally clear. The first
and fundamental duty of courts is to apply the
law. "Construction and interpretation come
only after it has been demonstrated that
application is impossible or inadequate
without them."7 The conviction of the accused
must stand. It cannot be set aside.
Accused however would rely on People v.
Macarandang,8 where a secret agent was
acquitted on appeal on the assumption that
the appointment "of the accused as a secret
agent to assist in the maintenance of peace
and order campaigns and detection of crimes,
sufficiently put him within the category of a
"peace officer" equivalent even to a member
of the municipal police expressly covered by
section 879." Such reliance is misplaced. It is
not within the power of this Court to set aside
the clear and explicit mandate of a statutory
provision. To the extent therefore that this
decision conflicts with what was held
in People v. Macarandang, it no longer speaks
with authority.
Wherefore, the judgment appealed from is
affirmed.
EN BANC
G.R. No. 227158, April 18, 2017
JOSEPH C.
DIMAPILIS, Petitioner, v. COMMISSION ON
ELECTIONS, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for certiorari1 with
urgent prayer for the issuance of a Temporary
Restraining Order and/or a Status Quo Ante Order
and/or a Writ of Preliminary Injunction, assailing
the Resolutions dated April 11, 20162 and August
31, 20163 of respondent Commission on Elections
(COMELEC) in SPA No. 13-436 (BRGY) (MP),
which cancelled the Certificate of Candidacy (CoC)
filed by petitioner Joseph C. Dimapilis (petitioner)
for the position of Punong Barangay of Barangay
Pulung Maragul, Angeles City (Brgy. Pulung
Maragul) for the October 28, 2013 Barangay
Elections (2013 Barangay Elections), annulled his
proclamation as the winner, and directed the
Barangay Board of Canvassers to reconvene and
proclaim the qualified candidate who obtained the
highest number of votes as the duly-elected
official for the said post.
The Facts
Petitioner was elected as Punong Barangay of
Brgy. Pulung Maragul in the October 2010
Barangay Elections. He ran for re-election for the
same position in the 2013 Barangay Elections,
and filed his CoC4on October 11, 2013, declaring
under oath that he is "eligible for the office [he
seeks] to be elected to." Ultimately, he won in the
said elections and was proclaimed as the duly
elected Punong Barangay of Brgy. Pulung Maragul
on October 29, 2013.5
On even date, the COMELEC Law Department filed
a Petition for Disqualification6 against petitioner
pursuant to Section 40 (b)7 of Republic Act No.
7160,8 otherwise known as the "Local
Government Code of 1991" (LGC). It claimed that
petitioner was barred from running in an
election9 since he was suffering from the
accessory penalty of perpetual disqualification to
hold public office as a consequence of his
dismissal from service10 as then Kagawad of Brgy.
Pulung Maragul, after being found guilty, along
with others, of the administrative offense of
Grave Misconduct, in a Consolidated
Decision11 dated June 23, 2009 (OMB
Consolidated Decision) and an Order12 dated
November 10, 2009 (collectively, OMB rulings)
rendered by the Office of the Ombudsman (OMB)
in OMB-L-A-08-0401-G, and allied cases.13
On December 17, 2013, the COMELEC Second
Division issued an Order14 directing petitioner to
file his answer.
In his Verified Answer cum Memorandum15 dated
February 24, 2014, petitioner averred that the
petition should be dismissed, considering that: (a)
while the petition prayed for his disqualification, it
partakes the nature of a petition to deny due
course to or cancel CoC under Section 7816 of the
Omnibus Election Code of the Philippines
(OEC),17 and combining these two distinct and
separate actions in one petition is a ground for
the dismissal of the petition18 pursuant to the
COMELEC Rules of Procedure19 (COMELEC Rules);
(b) the COMELEC Law Department is not a proper
party to a petition for disqualification, and cannot
initiate such case motu proprio; 20 and (c) the
Regional Trial Court of Angeles City, Branch 58
(RTC of Angeles City) had permanently enjoined
the implementation of the aforesaid OMB
Consolidated Decision in a November 8, 2013
Resolution21 in Civil Case No. 15325, grounded on
the condonation doctrine.22
The COMELEC Law Department countered
petitioner's averments, maintaining that it has the
authority to file motu proprio cases, and
reiterating its earlier arguments.23
On the other hand, the OMB submitted its
Comment24 on April 8, 2014, averring that the
OMB rulings had attained finality as early as May
28, 2010 for failure of petitioner to timely appeal
to the Court of Appeals (CA), rendering him
disqualified from running for any elective
position.25
The COMELEC Second Division Ruling
In a Resolution26 dated April 11, 2016, the
COMELEC Second Division granted the petition,
and cancelled petitioner's CoC, annulled his
proclamation as the winner, and directed the
Barangay Board of Canvassers to reconvene and
proclaim the qualified candidate who garnered the
highest number of votes as the duly-
elected Punong Barangay of Brgy. Pulung
Maragul.27
It treated the petition as one for cancellation of
CoC pursuant to Section 78 of the OEC,
notwithstanding that it was captioned as a
"Petition for Disqualification" under Section 40 (b)
of the LGC, holding that the nature of the petition
is not determined by the caption given to it by the
parties, but is based on the allegations it
presented.28 It ruled that petitioner committed
material misrepresentation in solemnly avowing
that he was eligible to run for the office he seeks
to be elected to, when he was actually suffering
from perpetual disqualification to hold public
office by virtue of a final judgment dismissing him
from service.29
The COMELEC Second Division likewise upheld its
Law Department's authority to initiate motu
proprio the Petition for Disqualifcation as being
subsumed under the COMELEC's Constitutional
mandate to enforce and administer laws relating
to the conduct of elections.30
Finally, it rejected petitioner's invocation of the
condonation doctrine as jurisprudentially
established in Aguinaldo v. Santos31 since the
same had already been abandoned in the 2015
case of Carpio Morales v. Binay, Jr. (Carpio
Morales).32 It ruled that the doctrine cannot apply
to petitioner, who was clearly established to be
suffering from perpetual disqualification to hold
public office, which rendered him ineligible,
voided his CoC from the beginning, and barred his
re-election.33 Consequently, it declared petitioner
to be not a candidate at all in the 2013 Barangay
Elections; hence, the votes cast in his favor
should not be counted.34
Petitioner moved for
reconsideration,35 maintaining that: (a) the
petition should have been outrightly dismissed as
the same is a combination of a disqualification
case and a petition to deny due course to or
cancel CoC, which is proscribed by the COMELEC
Rules;36(b) he was not dismissed or removed
from service since the CA had permanently
enjoined the execution of the OMB Consolidated
Decision in a December 17, 2009 Decision37 in
CA-G.R. SP No. 109986, which was affirmed by
this Court in its Resolution38 dated August 2, 2010
in G.R. No. 192325;39(c) the RTC of Angeles City,
Branch 60 had already dismissed the criminal
case against him that was anchored on the same
basis as the administrative cases before the OMB,
in a November 20, 2015 Order40 in Criminal Case
No. 09-5047;41and (d) petitioner's re-election
as Punong Barangay of Brgy. Pulung Maragul in
the 2013 Barangay Elections operated as a
condonation of his alleged misconduct.42
The COMELEC En Banc Ruling
In a Resolution43 dated August 31, 2016, the
COMELEC En Banc denied petitioner's motion for
reconsideration and affirmed the ruling of its
Second Division. It explained that petitioner's
reliance on the aforesaid CA Decision and RTC
Order was misplaced, observing that: (a) the
evident intent of the CA Decision was only to
enjoin the implementation of the OMB
Consolidated Decision, while petitioner's motion
for reconsideration was pending, and not
thereafter;44 and (b) absolution from a criminal
charge is not a bar to an administrative
prosecution and vice versa.45
Hence, this petition.
The Issues Before the Court
The essential issue for the Court's resolution is
whether or not the COMELEC gravely abused its
discretion in cancelling petitioner's CoC.
The Court's Ruling
The petition is without merit.
I. Petitioner's perpetual
disqualification to hold
public office is a material
fact involving eligibility.
A CoC is a formal requirement for eligibility to
public office.46 Section 74 of the OEC provides
that the CoC of the person filing it shall state,
among others, that he is eligible for the office he
seeks to run, and that the facts stated therein are
true to the best of his knowledge. To be "eligible"
relates to the capacity of holding, as well as that
of being elected to an office.47 Conversely,
"ineligibility" has been defined as a
"disqualification or legal incapacity to be elected
to an office or appointed to a particular
position."48 In this relation, a person intending
to run for public office must not only possess
the required qualifications for the position
for which be or she intends to run, but must
also possess none of the grounds for
disqualification under the law.49
In this case, petitioner had been found guilty of
Grave Misconduct by a final judgment, and
punished with dismissal from service with all its
accessory penalties, including perpetual
disqualification from holding public
office.50 Verily, perpetual disqualification to
bold public office is a material fact involving
eligibility51 which rendered petitioner's CoC void
from the start since he was not eligible to run for
any public office at the time he filed the same.
II. The COMELEC has the
duty to motu proprio bar
from running for public
office those suffering
from perpetual
disqualification to hold
public office.
Under Section 2 (1), Article IX (C) of the 1987
Constitution, the COMELEC has the duty to
"[e]nforce and administer all laws and regulations
relative to the conduct of an election x x x." The
Court had previously ruled that the COMELEC
has the legal duty to cancel the CoC of
anyone suffering from the accessory penalty
of perpetual disqualification to hold public
office, albeit, arising from a criminal
conviction.52 Considering, however, that Section
52 (a), Rule 10 of the Revised Rules on
Administrative Cases in the Civil Service similarly
imposes the penalty of perpetual disqualification
from holding public office as an accessory to the
penalty of dismissal from service, the Court sees
no reason why the ratiocination enunciated in
such earlier criminal case should not apply
here, viz.:
Even without a petition under either x x x Section
78 of the Omnibus Election Code, or under
Section 40 of the Local Government Code, the
COMELEC is under a legal duty to cancel the
certificate of candidacy of anyone suffering
from the accessory penalty of perpetual
special disqualification to run for public
office by virtue of a final judgment of
conviction. The final judgment of conviction is
notice to the COMELEC of the disqualification of
the convict from running for public office. The law
itself bars the convict from running for public
office, and the disqualification is part of the final
judgment of conviction. The final judgment of the
court is addressed not only to the Executive
branch, but also to other government agencies
tasked to implement the final judgment under the
law.
Whether or not the COMELEC is expressly
mentioned in the judgment to implement the
disqualification, it is assumed that the
portion of the final judgment on
disqualification to run for elective public
office is addressed to the COMELEC because
under the Constitution the COMELEC is duty
bound to "[e]nforce and administer all laws
and regulations relative to the conduct of an
election." The disqualification of a convict to run
for public office under the Revised Penal Code, as
affirmed by final judgment of a competent court,
is part of the enforcement and administration of
"all laws" relating to the conduct of elections.
To allow the COMELEC to wait for a person to file
a petition to cancel the certificate of candidacy of
one suffering from perpetual special
disqualification will result in the anomaly that
these cases so grotesquely exemplify. Despite a
prior perpetual special disqualification, Jalosjos
was elected and served twice as mayor. The
COMELEC will be grossly remiss in its
constitutional duty to "enforce and
administer all laws" relating to the conduct
of elections if it does not motu proprio bar
from running for public office those suffering
from perpetual special disqualification by
virtue of a final judgment.53 (Emphases and
underscoring supplied)
In Romeo G. Jalosjos v. COMELEC54(Jalosjos), the
Court had illumined that while the denial of due
course to and/or cancellation of one's CoC
generally necessitates the exercise of the
COMELEC's quasi-judicial functions commenced
through a petition based on either Sections 12
or 78 of the OEC, or Section 40 of the
LGC, when the grounds therefor are
rendered conclusive on account of final and
executorv judgments, as in this case, such
exercise falls within the COMELEC's
administrative functions.55 To note, the choice
as to which action to commence belongs to the
petitioner:
What is indisputably clear is that the false
material representation of Jalosjos is a ground for
a petition under Section 78. However, since the
false material representation arises from a crime
penalized by prisión mayor, a petition under
Section 12 of the Omnibus Election Code or
Section 40 of the Local Government Code can also
be properly filed. The petitioner has a choice
whether to anchor his petition on Section 12 or
Section 78 of the Omnibus Election Code, or on
Section 40 of the Local Government Code. The
law expressly provides multiple remedies and the
choice of which remedy to adopt belongs to the
petitioner.56
As petitioner's disqualification to run for public
office pursuant to the final and executory OMB
rulings dismissing him from service now stands
beyond dispute, it is incumbent upon the
COMELEC to cancel petitioner's CoC as a
matter of course, else it be remiss in fulfilling its
Constitutional duty to enforce and administer all
laws and regulations relative to the conduct of an
election.
Accordingly, the Court finds no merit to
petitioner's claim57 of denial of due process
because even though the special circumstance
extant herein calls for the outright cancellation of
his CoC in the exercise of the COMELEC's
administrative function, it even allowed him to
submit his Verified Answer cum Memorandum to
explain his side, and to file a motion for
reconsideration from its resolution.
III. Petitioner's re-election
as Punong Barangav of
Brgy. Pulung Maragul in
the 2013 Barangay
Elections cannot
operate as a
condonation of his
alleged misconduct.
In Carpio Morales, the Court abandoned the
"condonation doctrine," explaining that "[e]lection
is not a mode of condoning an administrative
offense, and there is simply no constitutional or
statutory basis in our jurisdiction to support the
notion that an official elected for a different term
is fully absolved of any administrative liability
arising from an offense done during a prior
term.58
Although Carpio Morales clarified that such
abandonment should be prospectively
applied59 (thus, treating the condonation doctrine
as "good law" when the COMELEC's petition was
commenced on October 29, 2013, and when
petitioner filed his Verified
Answer cum Memorandum invoking the same),
the parameters for the operation of such doctrine
simply do not obtain in petitioner's favor.
Prior to Carpio Morales, the Court, in the 1996
case of Reyes v. COMELEC60 (Reyes), had
illumined that the rationale in
the Aguinaldo cases61 was hinged on the
expiration of the term of office during which the
misconduct was committed before a decision
could be rendered in the administrative case
seeking the candidate's removal. As such, his or
her re-election bars removal for said misconduct
since removal cannot extend beyond the term
when the misconduct was
committed.62Reyes likewise noted that
the Aguinaldo cases involved a misconduct
committed prior to the enactment of the LGC, and
there was no existing provision similar to Section
40 (b), disqualifying a person from running for
any elective local position as a consequence of his
removal from office as a result of an
administrative case.63 Thus, it rejected
petitioner's invocation of the condonation
doctrine, holding that:
Second. The next question is whether the
reelection of petitioner rendered the
administrative charges against him moot and
academic. Petitioner invokes the ruling
in Aguinaldo v. COMELEC [(see supra note 31)],
in which it was held that a public official could not
be removed for misconduct committed during a
prior term and that his reelection operated as a
condonation of the officer's previous misconduct
to the extent of cutting off the right to remove
him therefor. But that was because in that
case, before the petition questioning the
validity of the administrative decision
removing petitioner could be decided, the
term of office during which the alleged
misconduct was committed expired.
Removal cannot extend beyond the term
during which the alleged misconduct was
committed. If a public official is not removed
before his term of office expires, he can no
longer be removed if he is thereafter
reelected for another term. This is the
rationale for the ruling in the
two Aguinaldo cases.
The case at bar is the very opposite of those
cases. Here, although petitioner Reyes brought an
action to question the decision in the
administrative case, the temporary restraining
order issued in the action he brought lapsed, with
the result that the decision was served on
petitioner and it thereafter became final on
April 3, 1995, because petitioner failed to
appeal to the Office of the President. He was
thus validly removed from office and,
pursuant to Section 40 (b) of the Local
Government Code, he was disqualified from
running for reelection.
It is noteworthy that at the time
the Aguinaldo cases were decided there was no
provision similar to Section 40 (b) which
disqualifies any person from running for any
elective position on the ground that he has been
removed as a result of an administrative case.
The Local Government Code of 1991 x x x could
not be given retroactive effect. x x x.64
x x x x (Emphases supplied; citations omitted)
In this case, the OMB rulings dismissing petitioner
for Grave Misconduct had already attained finality
on May 28, 2010, which date was even prior to
his first election as Punong Barangay of Brgy.
Pulung Maragul in the October 2010 Barangay
Elections. As above-stated, "[t]he penalty of
dismissal [from service] shall carry with it that of
cancellation of eligibility, forfeiture of retirement
benefits, and the perpetual disqualification for re-
employment in the government service, unless
otherwise provided in the decision."65 Although
the principal penalty of dismissal appears to have
not been effectively implemented (since petitioner
was even able to run and win for two [2]
consecutive elections), the corresponding
accessory penalty of perpetual disqualification
from holding public office had already rendered
him ineligible to run for any elective local
position. Bearing the same sense as its criminal
law counterpart,66the term perpetual in this
administrative penalty should likewise connote a
lifetime restriction and is not dependent on the
term of any principal penalty. It is undisputable
that this accessory penalty sprung from the same
final OMB rulings, and therefore had already
attached and consequently, remained effective at
the time petitioner filed his CoC on October 11,
2013 and his later re-election in 2013. Therefore,
petitioner could not have been validly re-elected
so as to avail of the condonation doctrine, unlike
in other cases where the condonation doctrine
was successfully invoked67 by virtue of re-
elections which overtook and thus, rendered moot
and academic pending administrative cases.
IV. With the cancellation of
his CoC, petitioner is
deemed to have not
been a candidate in the
2013 Barangay
Elections, and all his
votes are to be
considered stray votes.
A person whose CoC had been cancelled is
deemed to have not been a candidate at all
because his CoC is considered void ab initio, and
thus, cannot give rise to a valid candidacy and
necessarily to valid votes.68The cancellation of the
CoC essentially renders the votes cast for him or
her as stray votes,69 and are not considered in
determining the winner of an election.70 This
would necessarily invalidate his
proclamation71 and entitle the qualified candidate
receiving the highest number of votes to the
position.72 Apropos is the Court's ruling
in Maquiling v. COMELEC,73 to wit:
As in any contest, elections are governed by rules
that determine the qualifications and
disqualifications of those who are allowed to
participate as players. When there are
participants who turn out to be ineligible,
their victory is voided and the laurel is
awarded to the next in rank who does not
possess any of the disqualifications nor lacks
any of the qualifications set in the rules to
be eligible as candidates.
as contemplated in the Local Government Code.
There is no vacancy to speak of as the de
jure officer, the rightful winner in the elections,
has the legal right to assume the position.77
WHEREFORE, the petition is DISMISSED. The
Resolutions dated April 11, 2016 and August 31,
2016 of respondent the Commission on Elections
in SPA No. 13-436 (BRGY) (MP) are
hereby AFFIRMED.Petitioner Joseph C. Dimapilis
is ORDERED to cease and desist from discharging
the functions of the Punong Barangay of Barangay
Pulung Maragul, Angeles City.
SO ORDERED.

xxxx

x x x The second-placer in the vote count is

actually the first-placer among the qualified
candidates.

That the disqualified candidate has already been

proclaimed and has assumed office is of no
moment. The subsequent disqualification based
on a substantive ground that existed prior to the FIRST DIVISION
filing of the certificate of candidacy voids not only
the COC but also the proclamation.74 (Emphasis
supplied) G.R. No. 155344 January 20, 2004

ROLANDO N. CANET, Petitioner,

In light of the cancellation of petitioner's CoC due
to ineligibility existing at the time of filing, he was
never a valid candidate for the position of Punong
Barangay of Brgy. Pulung Maragul in the 2013
Barangay Elections, and the votes cast for him
are considered stray votes. Thus, the qualified
candidate for the said post who received the
highest number of valid votes shall be proclaimed
the winner.75
It is likewise imperative for the eligible candidate
who garnered the highest number of votes to
assume the office. In Svetlana P. Jalosjos v.
COMELEC,76 the Court explained:
There is another more compelling reason why the
eligible candidate who garnered the highest
number of votes must assume the office. The
ineligible candidate who was proclaimed and who
already assumed office is a de facto officer by
virtue of the ineligibility.
The rule on succession in Section 44 of the Local
Government Code cannot apply in instances when
a de facto officer is ousted from office and the de
jure officer takes over. The ouster of a de
facto officer cannot create a permanent vacancy
vs.
MAYOR JULIETA A. DECENA, Respondent.
DECISION
YNARES-SANTIAGO, J.:
On July 27, 1998, the Sangguniang Bayan of
Bula, Camarines Sur, passed Resolution No.
049, Series of 1998,1authorizing petitioner
Rolando N. Canet to establish, operate and
maintain a cockpit in Sitio, Cabaya, San
Roque, Bula, Camarines Sur.
Subsequently, the Sangguniang Bayan
passed Ordinance No. 001, Series of 1999,
entitled "An Ordinance Regulating the
Operation of Cockpits and Other Related
Game-Fowl Activities in the Municipality of
Bula, Camarines Sur and Providing Penalties
for any Violation to (sic) the Provisions
Thereof."2 Upon transmittal to respondent
Mayor Julieta A. Decena of the said
municipality, it was noted that the Ordinance
does not contain rules and regulations on
cockfighting and other related game fowl
activities and a separability clause. The
Ordinance was returned to the Sangguniang
Bayan. In Resolution No. 078, Series of 1999,
Sangguniang Bayan resolved to withdraw, set
aside and shelf indefinitely Ordinance No.
001, Series of 1999.3
Meanwhile, petitioner, relying on Resolution
No. 049, Series of 1998, of the Sangguniang
Bayan, filed an application for a mayor’s
permit to operate, establish and maintain a
cockpit in Sitio Cabuya, San Roque, Bula,
Camarines Sur. Respondent Mayor Julieta
Decena denied the application on the ground,
among others, that under the Local
Government Code of 1991, the authority to
give licenses for the establishment, operation
and maintenance of cockpits as well as the
regulation of cockfighting and commercial
breeding of gamecocks is vested in the
Sangguniang Bayan.4
Therefore, she cannot issue the said permit
inasmuch as there was no ordinance passed
by the Sangguniang Bayan authorizing the
same.
On July 26, 1999, petitioner filed a
complaint5 against respondent Mayor with the
Regional Trial Court of Pili, Camarines Sur,
Branch XXXI, which was docketed as Special
Civil Action No. P-84-99, for Mandamus and
Damages with Application for Preliminary
Mandatory Injunction. Respondent moved for
the dismissal of the complaint.
A Resolution was issued by the trial court on
January 27, 2000, the dispositive portion of
which reads:
WHEREFORE, in view of the foregoing, the
motion to dismiss is hereby denied. Let a writ
of preliminary mandatory injunction issue
upon the posting of an injunction bond by the
plaintiff in the amount of FIFTY THOUSAND
PESOS (P50,000.00) executed to defendant
to stand for all the damages which she may
sustain if it should be finally found that plaintiff
is not entitled thereto, said mandatory
injunction ordering and commanding herein
defendant, incumbent Mayor of the
Municipality of Bula, Camarines Sur to
approve and issue forthwith the Mayor’s
Permit and to accept the fees therefor for
plaintiff to establish, maintain and operate a
cockpit in Cabaya, San Roque, Bula,
Camarines Sur. Upon finality of this resolution,
let the main case be set for further
proceedings.
SO ORDERED.6
The writ of preliminary mandatory injunction
was issued on February 1, 2000.7
Respondent filed a petition for certiorari and
prohibition with the Court of Appeals,
docketed as CA-G.R. SP No. 57797.8 On April
3, 2000, the Court of Appeals issued a
temporary restraining order,9 directing
petitioner and the presiding judge to
temporarily cease and desist from enforcing
the writ of preliminary mandatory injunction
issued on February 1, 2000 in Special Civil
Action No. P-84-99.
On June 3, 2002, the Court of Appeals
rendered the assailed Decision, the
dispositive portion of which reads:
WHEREFORE, the petition is granted and the
questioned January 27, 2000 Resolution and
February 1, 2000 writ of preliminary
mandatory injunction issued by respondent
Judge are ANNULLED AND SET ASIDE while
the writ of preliminary injunction heretofore
issued by this Court on July 10, 2000 is made
permanent. No costs.
SO ORDERED.10
Petitioner filed a Motion for Reconsideration
which was denied for lack of merit in a
Resolution dated August 2002.11
Hence, this petition for review.
The core issue in this petition is whether or
not respondent, in her capacity as Municipal
Mayor, can be compelled to issue the
necessary business permit to petitioner
absent a municipal ordinance which would
empower her to do so.
The pertinent provision of law in contention is
Section 447 (a) (3) (v) of the Local
Government Code of 1991 (Republic Act No.
7160), which reads:
SEC. 447. Powers, Functions and
Compensation. (a) The Sangguniang Bayan
as the legislative body of the municipality shall
enact ordinances, approve resolutions and
appropriate funds for the general welfare of
the municipality and its inhabitants pursuant to
Section 16 of this Code and in the proper
exercise of the corporate powers of the
municipality as provided for under Section 22,
and shall:
xxx xxx xxx
(3) Subject to the provisions of Book II of this
Code, grant franchises, enact ordinances
levying taxes, fees and charges upon such
conditions and for such purposes intended to
promote the general welfare of the inhabitants
of the municipality, and pursuant to this
legislative authority shall:
xxx xxx xxx
(v) Any law to the contrary notwithstanding,
authorize and license the establishment,
operation and maintenance of cockpits and
regulate cockfighting and commercial
breeding of gamecocks: Provided, That
existing rights should not be prejudiced.
Petitioner admits that there is no ordinance in
Bula, Camarines Sur which authorizes the
grant of a mayor’s permit to operate and
maintain a cockfighting arena. However, he
invokes Resolution No. 049, S. 1998, wherein
the Sangguniang Bayan authorized him to
operate a cockpit. Furthermore, he cites
Municipal Tax Ordinances Nos. 01, S. 1989,
and 05, S. 1993, which generally provide for
the issuance of a mayor’s permit for the
operation of businesses.
Municipal Tax Ordinances Nos. 01, S. 1989
and 05, S. 1993 contain general provisions for
the issuance of business permits but do not
contain specific provisions prescribing the
reasonable fees to be paid in the operation of
cockpits and other game fowl activities.
It was Ordinance No. 001, S. 1999 which
provided for the collection of application filing
fees, ocular inspection fees, mayor’s permit
fees, filing fees for the institution of
complaints, entrance fees and special derby
assessments for the operation of
cockpits.12 This Ordinance, however, was
withdrawn by the Sangguniang Bayan.
Hence, there being in effect no ordinance
allowing the operation of a cockpit, Resolution
No. 049, S. 1998, authorizing petitioner to
establish, operate and maintain a cockpit in
Bula, Camarines Sur cannot be implemented.
Suffice it to state in this regard that to compel
respondent to issue the mayor’s permit would
not only be a violation of the explicit provisions
of Section 447 of the Local Government Code
of 1991, but would also be an undue
encroachment on respondent’s administrative
prerogatives.
Along the same vein, to read into the
ordinances relied upon by petitioner objects
which were neither specifically mentioned nor
enumerated would be to run afoul of the
dictum that where a statute, by its terms, is
expressly limited to certain matters, it may not,
by interpretation or construction, be extended
to other matters.13 In other words, it is a basic
precept of statutory construction that the
express mention of one person, thing, act, or
consequence excludes all others, as
expressed in the oft-repeated maxim
expression unius est exlusio
alterius.14 Elsewise stated, expressium facit
cessare tacitum – what is expressed puts an
end to what is implied.15 The rule proceeds
from the premise that the legislative body
would not have made specific enumerations in
a statute, if it had the intention not to restrict
its meaning and confine its terms to those
expressly mentioned.
Even on the assumption that there is in fact a
legislative gap caused by such an omission,
neither could the Court presume otherwise
and supply the details thereof, because a
legislative lacuna cannot be filled by judicial
fiat.16Indeed, courts may not, in the guise of
interpretation, enlarge the scope of a statute
and include therein situations not provided nor
intended by the lawmakers. An omission at
the time of the enactment, whether careless or
calculated, cannot be judicially supplied
however after later wisdom may recommend
the inclusion.17 Courts are not authorized to
insert into the law what they think should be in
it or to supply what they think the legislature
would have supplied if its attention has been
called to the omission.181âwphi 1

Courts should not, by construction, revise

even the most arbitrary and unfair action of
the legislature, nor rewrite the law to conform
with what they think should be the law.19 Nor
may they interpret into the law a requirement
which the law does not prescribe.20 Where a
statute contains no limitations in its operation
or scope, courts should not engraft any.21 And
where a provision of law expressly limits its
application to certain transactions, it cannot be
extended to other transactions by
interpretation.22 To do any of such things would
be to do violence to the language of the law
and to invade the legislative sphere.23

It should, furthermore, be borne in mind that

cockfighting although authorized by law is still
a form of gambling. Gambling is essentially
antagonistic to the aims of enhancing national
productivity and self-reliance.24 As has been
previously said, a statute which authorizes a
gambling activity or business should be strictly
construed, and every reasonable doubt
resolved so as to limit rather than expand the
powers and rights claimed by franchise
holders under its authority.25

WHEREFORE, in view of all the foregoing, the

petition is hereby DENIED for lack of merit.
The Decision of the Court of Appeals dated
June 3, 2002 in CA-G.R. SP No. 57797 is
AFFIRMED in toto.

SO ORDERED.