G.R. No.

18316 September 23, 1922

LUZON STEVEDORING COMPANY, vs. WENCESLAO TRINIDAD, Collector of Internal
Revenue,.
Facts:

Plaintiff is engaged in the stevedoring business in said city consisting of loading and unloading
cargo from vessels in port, at certain rates of charge per unit of cargo; that all the work done by it is
conducted under the direct supervision of the officers of the ships and under the instruction given to
plaintiff’s men by the captain and officers of said ships.

The defendant alleged that during the first quarter of the year 1921 the plaintiff was engaged in
business as a contractor, its gross receipts from said business during said quarter amounting to
P242,281.33, and that the defendant, under the provisions of section 1462 of Act No. 2711, levied
and assessed on the above-mentioned amount the percentage tax amounting to P2,422.81, which the
plaintiff paid on April 18, 1921, under protest, this protest having been duly overruled by the
defendant.

Issue: Is the plaintiff a contractor?

Held:

No, plaintiff is not a contractor in the sense that that word is used in said section 1462 of Act No.
2711

Although, in a general sense, every person who enters into a contract may be called a contractor, yet
the word, for want of a better one, has come to be used with special reference to a person who, in
the pursuit of an independent business, undertakes to do a specific piece or job or work for other
persons, using his own means and methods without submitting himself to control as to the petty
details. The true test of a ‘contractor’ would seem to be that he renders the service in the course of
an independent occupation, representing the will of his employer only as to the result of his work,
and not as to the means by which it is accomplished.”
 EN BANC

G.R. No. 18316 September 23, 1922

LUZON STEVEDORING COMPANY, Plaintiff-Appellee, vs. WENCESLAO TRINIDAD, Collector of

Internal Revenue, Defendant-Appellant.

Attorney-General Villa-Real for appellant.

Fisher & DeWitt and A. M. Opisso for appellee.

JOHNSON, J.:

This action was commenced in the Court of First Instance of the City of Manila on the 18th day of May,
1921. Its purpose was to recover of the defendant as Internal Revenue Collector, the sum of
P2,422.81, which sum had been paid by the plaintiff by the plaintiff to the defendant under protest.
The defendant presented a demurrer to the complaint, which was overruled, and later answered. The
answer contained a general and special defense. In his special defense the defendant alleged that
during the first quarter of the year 1921 the plaintiff was engaged in business as a contractor, its gross
receipts from said business during said quarter amounting to P242,281.33, and that the defendant,
under the provisions of section 1462 of Act No. 2711, levied and assessed on the above-mentioned
amount the percentage tax amounting to P2,422.81, which the plaintiff paid on April 18, 1921, under
protest, this protest having been duly overruled by the defendant. chanroblesvirtualawlibrary chanrobles virtual law library

Upon the issue thus presented, the Honorable Pedro Concepcion, judge, for the reasons given in his
decision, rendered a judgment in favor of the plaintiff and against the defendant for the said sum of
P2,422.81, without any finding as to costs or interest. From that judgment the defendant appealed.
The appellant contends that the lower court committed an error in holding that the plaintiff is not a
contractor and in rendering a judgment in favor of the plaintiff. chanroblesvirtualawlibrary chanrobles virtual law library

From an examination of the evidence adduced during the trial of the cause and from the agreement of
the parties, it appears that the plaintiff is and was a corporation duly organized under the laws of the
Philippine Islands and doing business in the City of Manila; that it as engaged in the stevedoring
business in said city, and said business consisting of loading and unloading cargo from vessels in port,
at certain rates of charge per unit of cargo; that all the work done by it is conducted under the direct
supervision of the officers of the ships and under the instruction given to plaintiff's men by the captain
and officers of said ships; that no liability attaches to the plaintiff for the improper loading or unloading
of vessels, the captain being responsible for said work; that the captain answers for all the cargo
placed on board and for the manner in which said cargo is loaded; that, while it is true that the plaintiff
undertakes to work in the loading or unloading of cargo from any vessel in port, yet it always does the
work under the direct supervision of the officers of the vessel; that said supervision is so effective that,
while the loading is made, plaintiff's laborers are under the direct control of the officers of the ship;
and that said supervision is so direct, that no discretion is left to the plaintiff nor its men. It was
mutually agreed at the time of the trial that the provisions of section 1462 of Act No. 2711 had been in
force for a period of eight years (section 43, Act No. 2339; section 1617, Act No. 2657; section 1462,
Act NO. 2711) before the defendant made any effort to collect the taxes in question. chanroblesvirtualawlibrary chanrobles virtual law library

The only question presented by the appellant upon the foregoing facts is: Is the plaintiff a contractor?
Generally speaking, every person who enters into a contract may be denominated a contractor, but
evidently the Legislature did not mean to apply the word "contractor," as used in said section 1462, to
every person, partnership or corporation who entered into a contract; or, otherwise, it would not have
been necessary to have mentioned in the same section other classes of business, such as
warehousemen, proprietors of dockyards and persons selling light, heat, or power, as well as persons
engaged in conducting telephone or telegraph line or exchanges, and proprietors of steam laundries
and of shops for the constructions and repair of bicycles or vehicles of any kind, and keepers of hotels
and restaurants, etc. If the word "contractor" in said section 1462 meant every person who entered
into a contract, then it would have included warehousemen, and the other classes of business
mentioned in said section, for the reason that every transaction by the other persons mentioned in said
section is by virtue of an express or implied contract. the same thing might be said with reference to
section 1463, where keepers of every stables and garages, transportation contractors, persons who
transport passengers or freight for hire, and common carriers, etc. are also subject to an internal
revenue tax. If the Legislature had intended the word "contractor," as used in section 1462, to cover
all persons who entered into a contract then it would have been unnecessary to have mentioned the
other persons referred to in sections 1462 and 1463. chanroblesvirtualawlibrary chanrobles virtual law library

Moreover, if the general and broad meaning is to be given to the word "contractor" as used in said
section 1462, it would include banders, merchants, brokers, lawyers, farmers in the sale of their
product, and every person who enter into a contractor of whatever nature or character. It would also
include school-teachers in the public and private schools as well as common laborers who work by the
day under a contract. It would also apply to all persons loaning money upon promissory notes, for the
reason that their transaction is a contract and the parties thereto, broadly speaking, are
contractors. chanroblesvirtualawlibrary chanrobles virtual law library

From all of the foregoing it does appear that the word "contractor," as used in said section 1462, must
have a limited and a very restricted meaning. It cannot have the broad meaning which would include
every person who entered into a contract. The lower court in holding that the plaintiff was not a
contractor in the sense that that word is used in said section, relied upon the definition given in vol. 13
Corpus Juris, page 211, where we find a "contractor" defined. The definition is: "One who agrees to do
anything for another; one who executes plans under a contract; one who contracts or covenants,
whether with a government or other public body or with private parties, to furnish supplies, or to
construct works, or to erect buildings, or to perform any work or service, at a certain price to rate, as a
paving contractor, or a labor contractor; one who contracts to perform work, or supply articles on a
large scale, at a certain price or rate, as in building houses or provisioning troops, or constructing a
railroad. Although, in a general sense, every person who enters into a contract may be called a
contractor, yet the word, for want of a better one, has come to be used with special reference to a
person who, in the pursuit of an independent business, undertakes to do a specific piece or job or work
for other persons, using his own means and methods without submitting himself to control as to the
petty details. The true test of a 'contractor' would seem to be that he renders the service in the course
of an independent occupation, representing the will of his employer only as to the result of his work,
and not as to the means by which it is accomplished." ( In re Unger, 22 Okla., 755; State vs. McNally,
45 La. ann., 44, 46; Ney vs. Dubuque, etc., Railroad Co., 20 Iowa, 347, 352; Lehigh, etc.,
Co. vs. Central Railroad Co. of New Jersey, 29 N. J. Equity, 252, 255; State vs. Emerson, 72 Me., 455,
456; Todd vs. Kentucky Union Ry, Co., 52 Fed. Rep., 241, 247 [18 L. R. A., 305]; Hale vs. Johnson, 80
Ill., 185.) chanrobles virtual law library

The general rule, variously stated, is that when a person lets out work to another, the contractee
reserving no control over the work or workmen, the relation of contractor and contractee exists and
not that of master and servant, and the contractee is not liable for the negligence or improper
execution of the work by the contractor. (Laffery vs. United States Gypsum Co., 83 Kan., 349, 354.)
virtual law library
chanrobles

It the one rendering service submits himself to the direction of his employer as to the details of the
work, fulfilling his will not merely as to the result but also as to the means by which that result is to be
attained, the contractor becomes a servant and is not a contractor in respect to that work. (Shearman
and R. on Negligence, sec. 77; Knoxvill Iron Co. vs. Dobson, 7 Lea [Tenn. Rep.], 367, 374.) chanroble s virtual law library

If on the other hand a person is engaged under a contract in an independent operation not subject to
the direction and control of his employer, the relation is not regarded as that of master and servant,
but is said, in modern phrase, to be that of contractor and contractee. (Campfield vs. Lang, 25 Fed.
Rep., 128, 131.) chanrobles virtual law library

The case of Brown vs. German-American, etc. Co. (174 Pa., 443) gave a definition for a contractor,
which was adopted with approval in the case of In re Unger (22 Okla., 755) "as one who contracts or
covenants either with . . . a public body or private parties . . . to . . . contract works or erect buildings .
. . at a certain price or rate." Said definition was adopted from the Century Dictionary. The definition of
lexicographers, however, cannot always be adopted as a correct meaning for statutory words and
phrases. The intention of the Legislature and the object which it intended to attain must be taken into
consideration for the purpose of determining the meaning of words and phrases used, rather than the
set definition of lexicographers. Moreover, revenue laws imposing taxes on business must be strictly
construed in favor of the citizen. In construing a word or expression in the statute susceptible of two or
more meanings, the court will adopt that interpretation most in accord with the manifest purpose of
the statute as gathered from the context. Where a particular word is obscure or of doubtful meaning,
taken by itself, its obscurity or doubt may be removed by reference to associate words. (25 Ruling
Case Law, 994, 995.) chanroble s virtual law library
If the question presented in the interpretation of a tariff law is one of doubt, the doubt would be
resolved in favor of the importer, as duties are never imposed upon citizens upon vague and doubtful
interpretation. (Hart Ranft vs. Wiegman, 129 U.S., 609; Zamboanga Mutual Bldg. & Loan
Association vs. Rafferty, 24 Phil., 408.)chanrobles virtual law library

A very instructive decision on the question of who is a contractor, is found in the very well reasoned
case of Caldwell vs. Atlantic B.& A. Ry. Co., (161 Ala., 395). In the course of that decision the Supreme
Court of Alabama said: "'The true test of a "Contractor" would seem to be that he renders the service
in the course of an independent occupation, representing the will of his employer only as to the result
of his work, and not as to the means by which it is accomplished."' (Halstead vs. Stahl, 47 Ind. App.
600; Johns' Admr., etc. vs. Wm. H. McKnight & Co., 117 Ky., 655; Pitssburg Construction Co. vs. West
Side, etc. R. Co., 232 Pa., 578; Freidman vs. Hampden County, 204 Mass., 494; Attorney-
General vs. Detroit Board of Education, 154 Mich., 584.) chanrobles virtual law library

The appellant lays great stress upon the decision in the case of Murray vs. Currie (65 L.R.A., 470) as
well as the case of Rankin vs. Merchants, etc. Co. (54 Am. Rep., 874, 876). In the first case, however,
from a reading of the decision it will appear that "Kennedy, the stevedore, undertook to execute the
work of unloading the ship, and for that purpose a steam winch belonging to the ship was placed at his
disposal. The work of unloading was done by Kennedy under a special contract. He was acting on his
own behalf, and did not in any sense stand in the relation of servant to the defendant. He had entire
control over the work which he was doing." In the second case (Rankin vs. Merchants, etc. Co., supra)
there is nothing in the case which does not show that the stevedore was not acting under the ship's
order. The case of Haas vs. Philadelphia, etc. Co. (32 Am. Rep., 462) shows that the ship's company
had no control over the stevedore or his men or their work. The cases therefore relied upon as
authority by the appellant do not support his contention in view of the definition of a "contractor" which
is, by a large weight of authority, accepted. chanroblesvirtualawlibrary chanrobles virtual law library

From all of the foregoing it seems clear to us that the plaintiff is not a contractor in the sense that that
word is used in said section 1462 of Act No. 2711, and therefore the tax paid by the plaintiff under
protest was illegally collected and should be repaid. For all of the foregoing reasons, we are of the
opinion, and so declare, that that judgement appealed from should be affirmed. So ordered.
library
chanroblesvirtualawlibrary chanrobles virtual law

Araullo, C.J., Street, Malcolm, Avanceña, Villamor, Ostrand, Johns and Romualdez, JJ., concur.
COMMISSIONER OF CUSTOMS VS PHILIPPINE ACETYLENE
COMPANY

Facts: Philippine Acetylene Company is engaged in the manufacture of oxygen, acetylene and
nitrogen, and packaging of liquefied petroleum gas in cylinders and tanks. It imported from the
United States a custombuilt liquefied petroleum gas tank. For the said importation, the company
was assessed a special import tax amounting to PhP 3,683.00. The company paid the tax under
protest. Philippine Acetylene Company argues that it is exempt from the payment of the special
import tax. It cites as basis for its exemption Sec 6 of RA No.1394 which states that special import
taxes shall not be imposed on machinery, equipment, accessories and spare parts, imported into
the Philippines, for the use of industries. The company maintains that it is an
industry as defined in Sec 6 of RA No. 1394. The Court of Tax Appeals sustained Philippine
Acetylene Company’s contention and declared the latter exempt from the payment of the
special import tax.

Issue: Whether or not Philippine Acetylene Company may be considered engaged in an industry
as contemplated in Sec 6 of RA No. 1394 and, therefore, exempt from the payment of the special
import tax.

Held: Philippine Acetylene Company is not an industry as defined in Sec 6 of RA No. 1394. To be
an industry, the company must be engaged in some productive enterprise, not in merely
packaging an already finished product. The operation for which the company employs the gas tank
in question does not involve manufacturing or production. It is nothing but packaging; the liquefied
gas, when obtained from the refinery, has to be placed in some kind of container to facilitate its
transportation. When sold to consumers, it undergoes no change or transformation, but is merely
placed in smaller cylinders for convenience. The process is certainly not
production in any sense. The decision of the CTA is reversed and Philippine Acetylene Company
is held liable for the payment of the special import tax, as it is not an industry exempt from the
payment of such tax.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-22443 May 29, 1971

THE COMMISSIONER OF CUSTOMS, petitioner,

vs.
PHILIPPINE ACETYLENE COMPANY, and THE COURT OF TAX APPEALS, respondents.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Felicisimo R. Rosete and Solicitor
Sumilang V. Bernardo for petitioner.

Ponce Enrile, Siguion Reyna, Montecillo & Belo for respondent Philippine Acetylene Company.

MAKALINTAL, J.:

This is a petition filed by the Commissioner of Customs for review of the decision of the Court of Tax Appeals in
its Case No. 1147, ordering the herein petitioner to refund to the Philippine Acetylene Co., Inc. the amount of
P3,683.00 which it had paid under protest as special import tax on one (1) custom built liquefied petroleum gas
tank.

The facts were stipulated by the parties as follows:

1. That the Philippine Acetylene Company is a corporation duly organized and existing under the
laws of the Philippines;

2. That said company is engaged in the manufacture of oxygen, acetylene and nitrogen and
packaging of liquefied petroleum gas in cylinders and tanks;

3. That sometime in 1957 the protestant imported from the United States one custom-built
liquefied petroleum gas tank which arrived via the S/S 'PLEASANT VILLE' under Register No.
1356, and declared in Import Entry No. 94060, series of 1957; and .

4. That the amount of P3,683.00 was assessed thereon as special import tax and which (sic) was
paid under protest by the importer-protestant as evidenced by Official Receipt No. 12690 dated
February 25, 1958.

According to Charles L. Butler, manager of the Philippine Acetylene Co., Inc., the imported custom-built liquefied
petroleum gas tank is simply a large cylinder which is used as container for liquefied petroleum gas obtained
from the CALTEX Refinery in Bauan, Batangas and transported to the company's plant in Manila. The gas does
not undergo any chemical change and is sold to consumers in the same state as when it was acquired from the
refinery, except that before it is sold the gas is pumped into smaller cylinders, which are labeled with the
company's trademark "Philigas."

Under the foregoing facts the issue presented for resolution is purely one of law, namely, whether or not the
Philippine Acetylene Co., Inc., insofar as its packaging operation of liquefied petroleum gas is concerned, may
be considered engaged in an industry as contemplated in section 6 of Republic Act No. 1394 and therefore
exempt from the payment of the special import tax in respect of the gas tank in question.

Section 6 of Republic Act No. 1394, insofar as it is pertinent to the issue, provides:

Section 6. The tax provided for in section one of this Act shall not be imposed against the
importation into the Philippines of machinery and/or raw materials to be used by new and
necessary industries as determined in accordance with Republic Act numbered Nine Hundred
 and One; ...; machinery, equipment, accessories and spare parts, for the use of industries,
miners, mining enterprises planters and farmers; ...

In finding that the Philippine Acetylene Co., Inc. is engaged in industry within the meaning of the abovequoted
provision, the Tax Court held that the term industry should be understood in its ordinary and general definition,
which is any enterprise employing relatively large amounts of capital and/or labor. On such premise the Tax
Court concluded that inasmuch as the Philippine Acetylene Co., Inc. employs considerable labor and capital in
packaging liquefied petroleum gas purchased by it and selling the same for profit, it is engaged in industry and
hence is exempt from the payment of the special import tax in connection with the tank used as container.

The following observations in the brief for the petitioner are apropos:

... in the exempting provisions of Republic Act No. 1394, the exempted items are divided into
separate and specific enumerations. The term 'industries' is used in two distinct groups. The first
group of exempted industries refers exclusively to those falling under the new and necessary
industries as defined in Republic Act No. 901. In the second, the term "industries" is classed
together with the terms miners, mining enterprises, planters and farmers. ... If Congress really
intended to give the term "industries" its ordinary and general meaning and thus grant tax
exemption to all ventures and trades falling under the said ordinary and general definition, it
should have eliminated the words "new and necessary industries' and 'mining enterprises" since
these two ventures are already covered by the term "industries" in its ordinary and general
meaning. On the other hand, the fact that the language of the law specifically segregates new
and necessary industries under Republic Act No. 901 among those entitled to the tax exemption,
in effect, restricts the meaning and scope of the word "industries."

The argument appears logical and reasonable. Since the term "industries" as used in the law for the second time
is classified together with the terms "miners, mining enterprises, planters and farmers", the obvious legislative
intent is to confine the meaning of the term to activities that tend to produce or create or manufacture, such as
those of miners, mining enterprises, ]planters and farmers. The Tax Court's interpretation would lead to a Patent
inconsistency, in that while the first part of the law confines the exemption to new and necessary industries,
another part would extend the exemption to all other industries, regardless of their nature, as long as they
employ labor and capital for profit-making purposes. In granting the exemption, it would have been illogical for
Congress to specify importations needed by new and necessary industries -- as the term is defined by law and in
the same breath allow a similar exemption to all other industries in general.

The respondents make much of the interpretation of the term "industries" by the Secretary of Finance in his First
Indorsement dated November 19, 1956, to wit:

Any Productive enterprise which employs relatively large amounts of capital and/or labor falls
under the term 'industries' as used in Section 6 of Republic Act No. 1394.

Assuming ng the correctness of such interpretation, what should be noted is that it stresses
the productive aspect of the enterprise. The operation for which the respondent company employs the gas tank
in question does not involve manufacturing or production. It is nothing but packaging; the liquefied gas, when
obtained from the refinery, has to be placed in some kind of container for transportation to Manila. When sold to
consumers, it undergoes no change or transformation, but is merely placed in smaller cylinders for convenience.
The process is certainly not production in any sense.

The phrasing of Section 6 of Republic Act No. 1394, to be sure, is rather vague and infelicitious, particularly in
the repetition of the word "industries." It is such lack of precision in the law that gives rise to litigious
controversies concerning its proper application. One of the established rules of statutory construction, however,
is that tax exemptions are held strictly against the taxpayer, and if not expressly mentioned in the law must be
within its purview by clear legislative intent. In the present case the construction adhered to by the respondents
in reference to the scope of the term "industries" as employed for the second time in Section 6 of Republic Act
No. 1394 is contrary to such rule. For if the term were all inclusive, and meant industries in general, that is, those
which involve relatively large amounts of capital and/or labor regardless of their productive or non-productive
nature, there would be no point in making a separate classification with respect to "new and necessary
industries" for purposes of the tax exemption. We hold, therefore, that to be entitled to exemption under the
second classification in the statute the industry concerned, in connection with the activity for which the
importation is made, must be engaged in some productive enterprise, not in merely packaging an already
finished product to facilitate its transportation. In a comparable case this Court has held that the tax exemption in
connection with the processing of gasoline and the manufacture of lubricating oil does not extend to pump parts
imported by the processor and leased to gasoline stations for their use in servicing customers' vehicles,
overruling the argument of the petitioner therein that the marketing of its gasoline product "is corollary to or
incidental to its industrial operations." (ESSO Standard, Eastern, Inc. vs. Acting Commissioner of Customs, 18
SCRA 488).

WHEREFORE, the decision of the Court of Tax Appeals is reversed and that of the Collector of Customs of
Manila and the Commissioner of Customs upheld. Costs against respondent Philippine Acetylene Co., Inc.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Fernando, Barredo, Villamor and Makasiar, JJ., concur.

Castro and Teehankee, JJ., took no part.

Dra. Brigida Buenaseda et. al. vs. Sec. Juan Flavier et. al. [G.R. No. 106719. September
21, 1993]
15AUG
Ponente: QUIASON, J.
FACTS:
The petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary
Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court,
seeks to nullify the Order of the Ombudsman directing the preventive suspension of
petitioners Dr. Brigida S. Buenaseda et.al. The questioned order was issued in connection
with the administrative complaint filed with the Ombudsman (OBM-ADM-0-91-0151) by
the private respondents against the petitioners for violation of the Anti-Graft and Corrupt
Practices Act. The Supreme Court required respondent Secretary to comply with the
aforestated status quo order. The Solicitor General, in his comment, stated that (a) “The
authority of the Ombudsman is only to recommend suspension and he has no direct power
to suspend;” and (b) “Assuming the Ombudsman has the power to directly suspend a
government official or employee, there are conditions required by law for the exercise of
such powers; [and] said conditions have not been met in the instant case”

ISSUE:
Whether or not the Ombudsman has the power to suspend government officials and
employees working in offices other than the Office of the Ombudsman, pending the
investigation of the administrative complaints filed against said officials and employees.

HELD:
YES. Petition was dismissed, status quo lifted and set aside.

RATIO:
When the constitution vested on the Ombudsman the power “to recommend the
suspension” of a public official or employees (Sec. 13 [3]), it referred to “suspension,” as a
punitive measure. All the words associated with the word “suspension” in said provision
referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under
the rule of noscitur a sociis, the word “suspension” should be given the same sense as the
other words with which it is associated. Where a particular word is equally susceptible of
various meanings, its correct construction may be made specific by considering the
company of terms in which it is found or with which it is associated.
Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively
suspend public officials and employees facing administrative charges before him, is a
procedural, not a penal statute. The preventive suspension is imposed after compliance
with the requisites therein set forth, as an aid in the investigation of the administrative
charges.
In 1992, the NCMH Nurses Association (NCMH) filed a case of graft and corruption against
Dr. Brigida Buenaseda and several other government officials of the Department of Health
(DOH). The Ombudsman (then Conrado Vasquez), ordered the suspension of Buenaseda
et al. The suspension was carried on by then DOH Secretary Juan Flavier, being the
officer in charge over Buenaseda et al. Buenaseda et al then filed with the Supreme Court
a petition for certiorari, prohibition, and mandamus, questioning the suspension order.
NCMH submitted its Comment on the Petition where they attached a Motion for
Disbarment against the lawyers of Buenaseda et al.
Allegedly, the lawyers of Buenaseda et al advised them not to obey the suspension order,
which is a lawful order from a duly constituted authority. NCMH maintains that such
advice from the lawyers constitute a violation against the Code of Professional
Responsibility.
The Solicitor General, commenting on the case, agreed with Buenaseda’s lawyers as he
maintained that all the Ombudsman can do is to recommend suspensions not impose
them. The Sol-Gen based his argument on Section 13 (3) of the 1987 Constitution which
provides that the Office of the Ombudsman shall have inter alia the power, function, and
duty to:
Direct the officer concerned to take appropriate action against a public official or employee
at fault, and recommend his removal, suspension, demotion, fine, censure or
prosecution, and ensure compliance therewith.
ISSUES: Whether or not the Ombudsman has the power to suspend government officials.
Whether or not a Motion for Disbarment may be filed in a special civil action.
HELD: Yes, the Ombudsman may impose suspension orders. The Supreme Court clarifies
that what the Ombudsman issued is an order of preventive suspension pending the
resolution of the case or investigation thereof. It is not imposing suspension as a penalty
(not punitive suspension). What the Constitution contemplates that the Ombudsman may
recommend are punitive suspensions.
Anent the issue of the Motion for Disbarment filed with the Ombudsman, the same is not
proper. It cannot be filed in this special civil action which is confined to questions of
jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary
acts of judges and quasi-judicial officers. There is a set of procedure for the discipline of
members of the bar separate and apart from the present special civil action. However, the
lawyers of Buenaseda were reminded not be carried away in espousing their client’s cause.
The language of a lawyer, both oral or written, must be respectful and restrained in
keeping with the dignity of the legal profession and with his behavioral attitude toward his
brethren in the profession.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 106719 September 21, 1993

DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY MATIAS, Ms.
CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners,
vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES
ASSOCIATION, represented by RAOULITO GAYUTIN, respondents.

Renato J. Dilag and Benjamin C. Santos for petitioners.

Danilo C. Cunanan for respondent Ombudsman.

Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or Temporary
Restraining Order, under Rule 65 of the Revised Rules of Court.

Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992, directing the
preventive suspension of petitioners,
Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III; Conrado Rey
Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N. Lopez, Supply
Officer III, all of the National Center for Mental Health. The petition also asks for an order directing the
Ombudsman to disqualify Director Raul Arnaw and Investigator Amy de Villa-Rosero, of the Office of the
Ombudsman, from participation in the preliminary investigation of the charges against petitioner (Rollo, pp. 2-17;
Annexes to Petition, Rollo, pp. 19-21).

The questioned order was issued in connection with the administrative complaint filed with the Ombudsman
(OBM-ADM-0-91-0151) by the private respondents against the petitioners for violation of the Anti-Graft and
Corrupt Practices Act.

According to the petition, the said order was issued upon the recommendation of Director Raul Arnaw and
Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to controvert the charges filed
against them. Petitioners had sought to disqualify Director Arnaw and Investigator Villa-Rosero for manifest
partiality and bias (Rollo, pp. 4-15).

On September 10, 1992, this Court required respondents' Comment on the petition.

On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. 124-130);
Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental Manifestation" (Rollo,
pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively, averring
developments that transpired after the filing of the petition and stressing the urgency for the issuance of the writ
of preliminary injunction or temporary restraining order.

On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the meantime,
the STATUS QUO pending filing of comments by said respondents on the original supplemental manifestation"
(Rollo, p. 177).
On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to comply with the
Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203). In a Resolution dated
October 1, 1992, this Court required respondent Secretary of Health to comment on the said motion.

On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses Association
submitted its Comment to the Petition, Supplemental Petition and Urgent Supplemental Manifestation. Included
in said pleadings were the motions to hold the lawyers of petitioners in contempt and to disbar them (Rollo, pp.
210-267). Attached to the "Omnibus Submission" as annexes were the orders and pleadings filed in
Administrative Case No. OBM-ADM-0-91-1051 against petitioners (Rollo, pp. 268-480).

The Motion for Disbarment charges the lawyers of petitioners with:

(1) unlawfully advising or otherwise causing or inducing their clients — petitioners Buenaseda, et al., to openly
defy, ignore, disregard, disobey or otherwise violate, maliciously evade their preventive suspension by Order of
July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully interfering with and obstructing the implementation of the
said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of
Professional Responsibility and of unprofessional and unethical conduct "by foisting blatant lies, malicious
falsehood and outrageous deception" and by committing subornation of perjury, falsification and fabrication in
their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261-263).

On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct Respondent
Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation attached to Rollo without
pagination between pp. 613 and 614 thereof).

On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, alleging that:
(a) "despite the issuance of the September 22, 1992 Resolution directing respondents to maintain the status
quo, respondent Secretary refuses to hold in abeyance the implementation of petitioners' preventive suspension;
(b) the clear intent and spirit of the Resolution dated September 22, 1992 is to hold in abeyance the
implementation of petitioners' preventive suspension, the status quo obtaining the time of the filing of the instant
petition; (c) respondent Secretary's acts in refusing to hold in abeyance implementation of petitioners' preventive
suspension and in tolerating and approving the acts of Dr. Abueva, the OIC appointed to replace petitioner
Buenaseda, are in violation of the Resolution dated September 22, 1992; and
(d) therefore, respondent Secretary should be directed to comply with the Resolution dated September 22, 1992
immediately, by restoring the status quo ante contemplated by the aforesaid resolution" (Comment attached
to Rollo without paginations between pp. 613-614 thereof).

In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply with the
aforestated status quo order, stating inter alia, that:

It appearing that the status quo ante litem motam, or the last peaceable uncontested status
which preceded the present controversy was the situation obtaining at the time of the filing of the
petition at bar on September 7, 1992 wherein petitioners were then actually occupying their
respective positions, the Court hereby ORDERS that petitioners be allowed to perform the duties
of their respective positions and to receive such salaries and benefits as they may be lawfully
entitled to, and that respondents and/or any and all persons acting under their authority desist
and refrain from performing any act in violation of the aforementioned Resolution of September
22, 1992 until further orders from the Court (Attached to Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and
Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend suspension
and he has no direct power to suspend;" and (b) "Assuming the Ombudsman has the power to directly suspend
a government official or employee, there are conditions required by law for the exercise of such powers; [and]
said conditions have not been met in the instant case" (Attached to Rollo without pagination).

In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General that the
Ombudsman can only suspend government officials or employees connected with his office. Petitioners also
refuted private respondents' motion to disbar petitioners' counsel and to cite them for contempt (Attached
to Rollo without pagination).

The crucial issue to resolve is whether the Ombudsman has the power to suspend government officials and
employees working in offices other than the Office of the Ombudsman, pending the investigation of the
administrative complaints filed against said officials and employees.
In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent Motion to
Lift Status Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770, which provides:

Sec. 24. Preventive Suspension. — The Ombudsman or his Deputy may preventively suspend
any officer or employee under his authority pending an investigation, if in his judgment the
evidence of guilt is strong, and (a) the charge against such officer or employee involves
dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charge
would warrant removal from the service; or (c) the respondent's continued stay in office may
prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of
Ombudsman but not more than six months, without pay, except when the delay in the disposition
of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the
respondent, in which case the period of such delay shall not be counted in computing the period
of suspension herein provided.

Respondents argue that the power of preventive suspension given the Ombudsman under Section 24 of R.A.
No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which provides that the
Ombudsman shall exercise such other power or perform such functions or duties as may be provided by law."

On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution, the
Ombudsman can only recommend to the heads of the departments and other agencies the preventive
suspension of officials and employees facing administrative investigation conducted by his office. Hence, he
cannot order the preventive suspension himself.

They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the Ombudsman shall
have inter alia the power, function, and duty to:

Direct the officer concerned to take appropriate action against a public official or employee at
fault, and recommend his removal, suspension, demotion, fine, censure or prosecution, and
ensure compliance therewith.

The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has three distinct
powers, namely: (1) direct the officer concerned to take appropriate action against public officials or employees
at fault; (2) recommend their removal, suspension, demotion fine, censure, or prosecution; and (3) compel
compliance with the recommendation (Comment dated December 3, 1992, pp. 9-10).

The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears in mind that
what the Ombudsman imposed on petitioners was not a punitive but only a preventive suspension.

When the constitution vested on the Ombudsman the power "to recommend the suspension" of a public official
or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the words associated with the
word "suspension" in said provision referred to penalties in administrative cases, e.g. removal, demotion, fine,
censure. Under the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the other
words with which it is associated. Where a particular word is equally susceptible of various meanings, its correct
construction may be made specific by considering the company of terms in which it is found or with which it is
associated (Co Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247
[1966]).

Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend public officials
and employees facing administrative charges before him, is a procedural, not a penal statute. The preventive
suspension is imposed after compliance with the requisites therein set forth, as an aid in the investigation of the
administrative charges.

Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate official the
discipline or prosecution of erring public officials or employees. In order to make an intelligent determination
whether to recommend such actions, the Ombudsman has to conduct an investigation. In turn, in order for him to
conduct such investigation in an expeditious and efficient manner, he may need to suspend the respondent.

The need for the preventive suspension may arise from several causes, among them, the danger of tampering
or destruction of evidence in the possession of respondent; the intimidation of witnesses, etc. The Ombudsman
should be given the discretion to decide when the persons facing administrative charges should be preventively
suspended.

Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford, Statutory
Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The test in
determining if a statute is penal is whether a penalty is imposed for the punishment of a wrong to the public or
for the redress of an injury to an individual (59 Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp.
496-497). A Code prescribing the procedure in criminal cases is not a penal statute and is to be interpreted
liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).

The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform efficiently the
task committed to him by the Constitution. Such being the case, said statute, particularly its provisions dealing
with procedure, should be given such interpretation that will effectuate the purposes and objectives of the
Constitution. Any interpretation that will hamper the work of the Ombudsman should be avoided.

A statute granting powers to an agency created by the Constitution should be liberally construed for the
advancement of the purposes and objectives for which it was created (Cf. Department of Public Utilities v.
Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190
N.E., 438 [1934]).

In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a penalty, said:

Suspension is a preliminary step in an administrative investigation. If after such investigation, the

charges are established and the person investigated is found guilty of acts warranting his
removal, then he is removed or dismissed. This is the penalty.

To support his theory that the Ombudsman can only preventively suspend respondents in administrative cases
who are employed in his office, the Solicitor General leans heavily on the phrase "suspend any officer or
employee under his authority" in Section 24 of R.A. No. 6770.

The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which dealt with
preventive suspension and which authorized the chief of a bureau or office to "suspend any subordinate or
employee in his bureau or under his authority pending an investigation . . . ."

Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the Revised
Administrative Code also authorized the chief of a bureau or office to "suspend any subordinate officer or
employees, in his bureau or under his authority."

However, when the power to discipline government officials and employees was extended to the Civil Service
Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the President, the Department
Secretaries and the heads of bureaus and offices, the phrase "subordinate officer and employee in his bureau"
was deleted, appropriately leaving the phrase "under his authority." Therefore, Section 41 of said law only
mentions that the proper disciplining authority may preventively suspend "any subordinate officer or employee
under his authority pending an investigation . . ." (Sec. 41).

The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively suspend any
subordinate officer or employee under his authority pending an investigation" (Sec. 51).

The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the phrase to read
"suspend any officer or employee under his authority pending an investigation . . . ." The conclusion that can be
deduced from the deletion of the word "subordinate" before and the words "in his bureau" after "officer or
employee" is that the Congress intended to empower the Ombudsman to preventively suspend all officials and
employees under investigation by his office, irrespective of whether they are employed "in his office" or in other
offices of the government. The moment a criminal or administrative complaint is filed with the Ombudsman, the
respondent therein is deemed to be "in his authority" and he can proceed to determine whether said respondent
should be placed under preventive suspension.

In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion amounting to
lack of jurisdiction when he issued the suspension order without affording petitioners the opportunity to confront
the charges against them during the preliminary conference and even after petitioners had asked for the
disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor
General contends that assuming arguendo that the Ombudsman has the power to preventively suspend erring
public officials and employees who are working in other departments and offices, the questioned order remains
null and void for his failure to comply with the requisites in Section 24 of the Ombudsman Law (Comment dated
December 3, 1992, pp. 11-19).

Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly issued even
without a full-blown hearing and the formal presentation of evidence by the parties. In Nera, supra, petitioner
therein also claimed that the Secretary of Health could not preventively suspend him before he could file his
answer to the administrative complaint. The contention of petitioners herein can be dismissed perfunctorily by
holding that the suspension meted out was merely preventive and therefore, as held in Nera, there was "nothing
improper in suspending an officer pending his investigation and before tho charges against him are heard . . .
(Nera v. Garcia., supra).

There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the preventive
suspension of a respondent unless the evidence of guilt is strong and (1) the charts against such officer or
employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (2) the
charge would warrant removal from the service; or (3) the respondent's continued stay in office may prejudice
the case filed against him.

The same conditions for the exercise of the power to preventively suspend officials or employees under
investigation were found in Section 34 of R.A. No. 2260.

The import of the Nera decision is that the disciplining authority is given the discretion to decide when the
evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such
determination of guilt to the "judgment" of the Ombudsman on the basis of the administrative complaint. In the
case at bench, the Ombudsman issued the order of preventive suspension only after: (a) petitioners had filed
their answer to the administrative complaint and the "Motion for the Preventive Suspension" of petitioners, which
incorporated the charges in the criminal complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-
289; Annex 4, Rollo,
pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23 cases of
harassment by petitioners of the members of the private respondent (Annex 6, Omnibus Submission, Rollo, pp.
309-333); and (c) a preliminary conference wherein the complainant and the respondents in the administrative
case agreed to submit their list of witnesses and documentary evidence.

Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus Submission, Rollo,
pp. 336-337) while private respondents submitted their list of exhibits (Annex 9 of Omnibus Submission, Rollo,
pp. 338-348).

Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de Villa-Rosero
acted with manifest partiality and bias in recommending the suspension of petitioners. Neither can it be said that
the Ombudsman had acted with grave abuse of discretion in acting favorably on their recommendation.

The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or otherwise inducing
their clients to openly defy and disobey the preventive suspension as ordered by the Ombudsman and the
Secretary of Health can not prosper (Rollo, pp. 259-261). The Motion should be filed, as in fact such a motion
was filed, with the Ombudsman. At any rate, we find that the acts alleged to constitute indirect contempt were
legitimate measures taken by said lawyers to question the validity and propriety of the preventive suspension of
their clients.

On the other hand, we take cognizance of the intemperate language used by counsel for private respondents
hurled against petitioners and their counsel (Consolidated: (1) Comment on Private Respondent" "Urgent
Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and Supplemental Comment,
pp. 4-5).

A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both oral or
written, must be respectful and restrained in keeping with the dignity of the legal profession and with his
behavioral attitude toward his brethren in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of
abusive language by counsel against the opposing counsel constitutes at the same time a disrespect to the
dignity of the court of justice. Besides, the use of impassioned language in pleadings, more often than not,
creates more heat than light.
The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is confined to
questions of jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary acts of
judges and quasi-judicial officers. There is a set of procedure for the discipline of members of the bar separate
and apart from the present special civil action.

WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the Resolution dated
September 22, 1992 is LIFTED and SET ASIDE.

SO ORDERED.

Narvasa, C.J., Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Puno and Vitug,
JJ., concur.

Feliciano, J., is on leave.

Separate Opinions

BELLOSILLO, J., concurring:

I agree that the Ombudsman has the authority, under Sec. 24 of R.A.
No. 6770, to preventively suspend any government official or employee administratively charged before him
pending the investigation of the complaint, the reason being that respondent's continued stay in office may
prejudice the prosecution of the case.

However, in the case before us, I am afraid that the facts thus far presented may not provide adequate basis to
reasonably place petitioners under preventive suspension. For, it is not enough to rule that the Ombudsman has
authority to suspend petitioners preventively while the case is in progress before him. Equally important is the
determination whether it is necessary to issue the preventive suspension under the circumstances. Regretfully, I
cannot see any sufficient basis to justify the preventive suspension. That is why, I go for granting oral argument
to the parties so that we can truthfully determine whether the preventive suspension of respondents are
warranted by the facts. We may be suspending key government officials and employees on the basis merely of
speculations which may not serve the ends of justice but which, on the other hand, deprive them of their right to
due process. The simultaneous preventive suspension of top officials and employees of the National Center for
Mental Health may just disrupt, the hospital's normal operations, much to the detriment of public service. We
may safely assume that it is not easy to replace them in their respective functions as those substituting them
may be taking over for the first time. The proper care of mental patients may thus be unduly jeopardized and
their lives and limbs imperilled.

I would be amenable to holding oral argument to hear the parties if only to have enough factual and legal bases
to justify the preventive suspension of petitioners.

# Separate Opinions

BELLOSILLO, J., concurring:

I agree that the Ombudsman has the authority, under Sec. 24 of R.A.
No. 6770, to preventively suspend any government official or employee administratively charged before him
pending the investigation of the complaint, the reason being that respondent's continued stay in office may
prejudice the prosecution of the case.
However, in the case before us, I am afraid that the facts thus far presented may not provide adequate basis to
reasonably place petitioners under preventive suspension. For, it is not enough to rule that the Ombudsman has
authority to suspend petitioners preventively while the case is in progress before him. Equally important is the
determination whether it is necessary to issue the preventive suspension under the circumstances. Regretfully, I
cannot see any sufficient basis to justify the preventive suspension. That is why, I go for granting oral argument
to the parties so that we can truthfully determine whether the preventive suspension of respondents are
warranted by the facts. We may be suspending key government officials and employees on the basis merely of
speculations which may not serve the ends of justice but which, on the other hand, deprive them of their right to
due process. The simultaneous preventive suspension of top officials and employees of the National Center for
Mental Health may just disrupt, the hospital's normal operations, much to the detriment of public service. We
may safely assume that it is not easy to replace them in their respective functions as those substituting them
may be taking over for the first time. The proper care of mental patients may thus be unduly jeopardized and
their lives and limbs imperilled.

I would be amenable to holding oral argument to hear the parties if only to have enough factual and legal bases
to justify the preventive suspension of petitioners.
LATCHME MOTOOMULL v. JOFFRE DELA PAZ, GR No. L-45302, 1990-07-24
Facts:
It started on May 4, 1974 when, perhaps with the view of augmenting... its paid-up capital, the Board of Directors
approved Resolution No. 27, authorizing the issuance of unissued shares of stock on a one to one basis to its
stockholders on or before June 30, 1974. However, it is claimed by petitioners that on May
23, 1974, the Board of Directors amended the said resolution through its Resolution No. 33, authorizing the
issuance of unissued shares out of the capital stock on a one to two basis to its stockholders payable on or
before August 31,... 1974. The resolution was to be submittted for the approval of all the stockholders in a
special meeting to be called for the purpose two weeks from the date of the resolution. Allegedly, the resolution
was approved by the... stockholders at a special meeting held on June 11, 1974, with the qualification that a
stockholder may not be required to exercise his right under said resolution. The resolution was submitted to the
Securities and Exchange Commission by its corporate counsel
Ricardo A. Nava through a letter dated June 25, 1974, which also included the list of stockholders indicating the
number of shares to be alloted each of them from the unissued shares of stock
Petitioners Latchme Motoomull and Manuel Lacson purchased unissued stock in accordance with the resolution
and within the period stated therein, while the other stockholders did not exercise their right.
Payment of the exemption fee, however, was made only on November 29, 1974 and as such, the certificate of
exemption or resolution granting the same was issued by the Securities and Exchange Commission only on
December 4, 1974.
Proclamation No. G-74 (EXH. '27') was allegedly passed by the new members of the board of directors declaring
the foregoing stockholders as directors of the Sarkara Trading Co., Inc., for the fiscal year 1974-75. The
foregoing... incident was apparently the ultimate reason which constrained the private respondents to institute
action against petitioners.
Petitioners, on February 20, 1976, appealed to public respondent Court of Appeals under R.A. No. 5434, and on
February 26, 1976, filed an Urgent Motion for Restraining Order and Preliminary Injunction (Ibid., pp. 63-
74). Respondent Court of Appeals,... in a resolution dated February 27, 1976, gave due course to the appeal
and ordered the issuance of a restraining order (Ibid., p. 151).
Issues:
The privotal issue in this case is the meaning of the word "Court" as used in Section 5 of R.A. No. 5434,
Ruling:
From the outset, the law unequivocably stated its declared objective that appeal shall not stay the appealed
decision, award, order, etc. The exception given is where the officer or body rendering the same, or the court on
motion, after hearing... should provide otherwise. In line with the above objective, the law provides further that
the propriety of a stay granted by the officer or body rendering the award, order, decision or ruling may be raised
only by motion in the main case.
Hence, the Court of Appeals correctly interpreted that if the adverse party intends to appeal from a decision of
the SEC and pending appeal desires to stay the execution of the decision, then the motion must be filed with
and be heard by the SEC before the adverse party perfects... its appeal to the Court of Appeals (Rollo, p. 250).
By and large, such interpretation gives meaning and substance to the avowed purpose of the law where the
need for immediacy of execution of decisions arrived at by said bodies, was recognized and considered
imperative.
Principles:
More importantly, according to the maxim noscitur a socies where a particular word or phrase is ambiguous in
itself or is equally susceptible of various meanings, its correct construction may be made clear and specific by...
considering the company of words in which it is found or with which it is associated (Gonzaga, "Statutes and
Their Construction, p. 116 citing Black on Interpretation of Laws, 2d ed., pp. 194-196), or stated differently, its
obscurity or doubt may be reviewed by... reference to associate words (Luzon Stevedoring Co. v. Trinidad, 43
Phil. 804 [1922]). Accordingly, an interpretation which lead to patent inconsistency must be rejected as not in
accordance with the legislative intent (Commissioner of Customs v.
Philippine Acetylene Co., 39 SCRA 71 [1971]).
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-45302 July 24, 1990

LATCHME MOTOOMULL, and MANUEL LACSON, petitioners,

vs.
JOFFRE DELA PAZ, FILOMENA ARANAS, LADHO CHUGANI, BHAGWANI CHUGANI, THE COURT OF
APPEALS, and THE SECURITIES & EXCHANGE COMMISSION, respondents.

Estanislao A. Fernandez and Victor C. Fernandez for petitioners.

Calixto Zaldivar and Hilado, Hagad & Hilado for private respondents.

PARAS, J.:

This is a petition for review on certiorari of the November 4, 1976 resolution * of the Court of Appeals in CA-G.R. No. 05108-SP denying the issuance of a writ
of preliminary injunction and lifting the restraining order previously issued; and the December 17, 1976 resolution of the same court denying the motion for
reconsideration.

All the parties in this case are stockholders of Sarkara Trading Corporation. Said corporation was incorporated
on September 7, 1973, with an authorized capital stock of P2,000,000.00, divided into 200,000 shares of the par
value of P10.00 per share. Of the authorized stock, 51,500 shares valued at P515,000.00 were subscribed, of
which P300,000.00 was paid up. The incorporators of the corporation with their initial capital contributions, were
—

NO. OF AMOUNT SHARES PAID ON NAME SUBSCRIBED AMOUNT SUBSCRIPTION

Pacifico Aranas 5,000 P50,000 P25,000

Filomena G. Aranas 5,000 50,000 25,000 Latchme J. Motoomull 10,000 100,000 70,000 Manuel Lacson 10,000
100,000 70,000 Joeffre T. de la Paz 10,000 100,000 70,000 Lilaram Parmanand 5,000 50,000 25,000
Bhagwandas L. Chugani 2,500 25,000 12,500 Ladho L. Chugani 2,500 25,000 12,500 Rosanna M.
Jesswani 1,500 15,000 10,000 TOTAL 51,500 P515,000 P 300,000

The initial directors of the corporation were herein petitioners Latchme Motoomull and Manuel Lacson; and
herein private respondents Filomena G. Aranas, Joeffre de la Paz, and Bhagwani Chugani. The officers were
Latchme Motoomull president; Manuel Lacson, treasurer, and Filomena Aranas, secretary A few months after its
incorporation, the resources of the corporation expanded considerably brought about by the big volume of
transactions in sugar and other products and relatively high profit in its first year of operation. The business
activity on sugar, however, abruptly sagged, and the corporation decided to engage in other ventures. Such was
the state of affairs of the corporation until some factors developed which caused disunity among the
stockholders. It started on May 4, 1974 when, perhaps with the view of augmenting its paid-up capital, the Board
of Directors approved Resolution No. 27, authorizing the issuance of unissued shares of stock on a one to one
basis to its stockholders on or before June 30, 1974. However, it is claimed by petitioners that on May 23, 1974,
the Board of Directors amended the said resolution through its Resolution No. 33, authorizing the issuance of
unissued shares out of the capital stock on a one to two basis to its stockholders payable on or before August
31, 1974. The resolution was to be submitted for the approval of all the stockholders in a special meeting to be
called for the purpose two weeks from the date of the resolution. Allegedly, the resolution was approved by the
stockholders at a special meeting held on June 11, 1974, with the qualification that a stockholder may not be
required to exercise his right under said resolution. The resolution was submitted to the Securities and Exchange
Commission by its corporate counsel Ricardo A. Nava through a letter dated June 25, 1974, which also included
the list of stockholders indicating the number of shares to be alloted each of them from the unissued shares of
stock, as follows:
NAME OF NO. OF VALUE OF STOCKHOLDERS SHARES SHARES Latchme Motoomull 500 P50,000.00
Joeffre de la Paz 500 50,000.00 Manuel Lacson 500 50,000.00 Filomena Aranas 250 25,000.00 Pacifico Aranas
250 25,000.00 Ladho L. Chugani 125 12,000.00 Bhagwandas L. Chugani 125 12,500.00 Lilaran Parmanand 250
25,000.00 Rosanna Jesswani 75 7,500.00 TOTAL 2,500 P257,500.00

Petitioners Latchme Motoomull and Manuel Lacson purchased unissued stock in accordance with the resolution
and within the period stated therein, while the other stockholders did not exercise their right. Payment of the
exemption fee, however, was made only on November 29, 1974 and as such, the certificate of exemption or
resolution granting the same was issued by the Securities and Exchange Commission only on December 4,
1974. Meanwhile, because the by-laws provided that the annual stockholders' meeting should be held on the
second Saturday of September of each year, a written notice for the holding thereof on September 14, 1974 was
circularized on August 19, 1974 among the stockholders. The meeting was, however, advanced to September
11, 1974, after notification of the stockholders by telephone allegedly upon the request of Mr. and Mrs. Pacifico
Aranas who were slated to leave on September 14, 1974 for Japan. The other stockholders allegedly agreed to
this request. On this adjusted date, the meeting was held presided over by Manuel Lacson upon his designation
by the President, petitioner Latchme Motoomull. During that meeting a financial statement was submitted, but
the same was not approved by the stockholders. Thereafter, petitioner Lacson announced that an election for
the members of the board of directors would be held. This was protested by private respondents who instead
moved that the present set of officers be considered re-elected. This was not given due course by petitioner
Lacson who then distributed the ballots. The voting was by secret ballot, utilizing the cumulative system.
Thereafter, the votes were canvassed by Mr. Despi, an accountant, who announced the result which showed
that petitioners Lacson and Motoomull garnered more votes than what they should have considering the actual
number of shares subscribed. The other stockholders, particularly the private respondents, evinced surprise on
the number of votes garnered by petitioners Motoomull and Lacson. Petitioner Lacson explained that the
additional number of shares was a result of the exercise of their rights to the additional shares of stocks taken
from the unissued shares, as authorized by the stockholders in Resolution No. 33. This started the commotion,
resulting in the walk-out of some stockholders. On September 14, 1974, another meeting was held, the
proceedings of which appeared merely to be a repetition of the September 11 meeting. The minutes thereof
(Exh. '27') show that the only stockholders present were Manuel Lacson, Latchme Motoomull and Rosalina
Jesswani. Nevertheless, the meeting was held, with Rosalina Jesswani acting as the secretary. Another election
was held by these stockholders, resulting in the alleged election of the following as Directors, with the number of
votes garnered indicated opposite their respective names —

Manuel V. Lacson 520,000 Latchme Motoomull 525,000 Rosalina Jesswani 510,000 Jeoffre de la Paz 10,000
Filomena Aranas 10,000

Proclamation No. G-74 (EXH. '27') was allegedly passed by the new members of the board of directors declaring
the foregoing stockholders as directors of the Sarkara Trading Co., Inc. for the fiscal year 1974-75. The
foregoing incident was apparently the ultimate reason which constrained the private respondents to institute
action against petitioners.

First, private respondents filed Civil Case No. 11601, which is still pending trial in the then Court of First Instance
of Negros Occidental. They filed a letter-complaint dated November 26, 1976 (Rollo, p. 75) with the Securities
and Exchange Commission (SEC). In the said letter-complaint, the alleged acts ommitted by the petitioners that
jeopardize their rights are:

(a) Despite the provision in the by-laws fixing the date of the election of corporate directors, we
were sent notices of a special meeting to be held earlier and then said officers rammed through a
resolution for the election of directors on the earlier date.

(b) In order to assure their election, said officers also surreptitiously acquired additional shares of
stock from the unissued shares of the corporation in derogation of our pre-emptive rights to
purchase said shares.

(c) We have insisted on the dissolution of the corporation in view of these development but have
been unable to accomplish this due to the resistance of said officers.

(d) We no longer have any control over the disbursements of corporate funds as there has been
no meeting of the board of directors called.

(e) We have been denied access to the corporate books and records and have been compelled
to go to court to enforce this right.'
After hearing, public respondent SEC rendered a decision dated May 9, 1975 (Rollo, pp. 42-45), the dispositive
portion of which, reads:

IN VIEW OF ALL THE FOREGOING, the Commission is of the opinion and so holds that the
issuance of an additional 5,000 shares in favor of Latchme Motoomull and another 5,000 shares
of Manuel Lacson on August 28, and 29, respectively or prior to the granting of the exception
from registration thereof on December 4, 1974, is void under Section 38 of the Securities Act,
and therefore, they could not have been legally voted by them in the said meetings of September
11 and 14, 1974. It follows that the said election of directors which would have had a different
result had not the additional shares been utilized for voting, is null and void. Accordingly, the
incumbents members of the board of directors at the time of the said meetings shall continue to
hold office until their successors shall have been duly elected and qualified.

For the purpose of electing their successors, the management of the corporation is hereby
directed —

1) to call a special meeting of the stockholders to elect the members of the board of directors for
this year within a reasonable time but not later than one month from date of receipt of this order;

2) to give all the stockholders the right to subscribe to additional shares in proportion to their
holdings, pursuant to Resolution No. 33 dated May 23, 1974.

This is necessary because the stockholders could not have legally exercised their right to
subscribe up to the deadline fixed for subscription on August 31, 1974 as the exemption permit
had not yet been secured from the Commission. Every stockholder shall be accorded full
opportunity to subscribe or purchase shares in proportion to his holdings within a reasonable
time prior to the date fixed for the new election of the board of directors.

It shall, of course, be understood that those elected as directors in the special meeting of
stockholders shall only hold office until the next annual election and qualification of the
succeeding board of directors.

We need not express our opinion on the other issues.

SO ORDERED.

A Motion for Reconsideration was filed (Ibid., pp. 89-95), but the same was denied in an order dated February
5,1976 (Ibid., p. 62)

Petitioners, on February 20, 1976, appealed to public respondent Court of Appeals under R.A. No. 5434, and on
February 26, 1976, filed an Urgent Motion 'or Restraining order and Preliminary Injunction (Ibid., pp. 63-74).
Respondent Court of Appeals, in a resolution dated February 27, 1976, gave due course to the appeal and
ordered the issuance of a restraining order (Ibid., p. 151).

On March 26,1976, private respondents filed their opposition to petitioners' motion (Ibid., pp. 152-171), to which,
petitioners filed their reply dated April 21, 1976 (Ibid., pp. 172-190) while private respondents filed a Rejoinder
and Motion to Dismiss (Ibid., pp. 191-212).

After an extensive discussion of the issues by the parties in their pleadings, among which is to the effect that the
Honorable Court of Appeals not only has no jurisdiction to issue the preliminary injunction prayed for, but
altogether the Court has no jurisdiction to continue taking cognizance of the case because of the passage of
P.D. No. 902-A which transferred the jurisdiction of the appeal from the Court of Appeals to the Supreme Court.
Respondent Court of Appeals issued a resolution dated November 4, 1976 (Ibid., pp. 243-254), the decretal
portion of which, reads:

WHEREFORE, the appellant's motion for the issuance of a writ of preliminary injunction is
hereby denied and the restraining order previously issued by this Court is hereby lifted.

A Motion for Reconsideration was filed (Ibid., pp. 255-261), but the same was denied in a resolution dated
December 12, 1976 (Ibid., p. 273). Hence, the instant petition.
The First Division of this Court, after the parties had filed the required pleadings, in a resolution dated June 17,
1977 (Ibid., p. 319), resolved to give due course to the petition; and in a resolution dated July 20, 1977 (Ibid., p.
323), the case was declared submitted for decision.

The pivotal issue in this case is the meaning of the word "Court" as used in Section 5 of R.A. No. 5434, which
reads:

Sec. 5. Effect of appeal. — Appeal shall not stay the award, order, ruling, decision or judgment
unless the officer or body rendering the same or the court, on motion, after hearing, and on such
terms as it may deem just, should provided otherwise. The propriety of a stay granted by the
officer or body rendering the award, order, ruling, decision or judgment may be raised only by
motion in the main case.

Respondent Court of Appeals ruled that the word "court" in the said section refers to the Court of Agrarian
Relations and not to the Court of Appeals, the former belonging to the group of bodies whose decision under
R.A. 5434 is appealable to the latter. Otherwise stated, the power to stay the appealed decision clearly belongs
to the lower court, officer or body rendering the decision, in this case to the SEC alone and riot to the Court of
Appeals.

On the other hand, petitioners maintain that the word "court" having been separated from the phrase officer or
body rendering the same, refers to the Court of Appeals.

From the outset, the law unequivocably stated its declared objective that appeal shall not stay the appealed
decision, award, order, etc. The exception given is where the officer or body rendering the same, or the court on
motion, after hearing should provide otherwise. In line with the above objective, the law provides further that the
propriety of a stay granted by the officer or body rendering the award, order, decision or ruling may be raised
only by motion in the main case. Hence, the Court of Appeals correctly interpreted that if the adverse party
intends to appeal from a decision of the SEC and pending appeal desires to stay the execution of the decision,
then the motion must be filed with and be heard by the SEC before the adverse party perfects its appeal to the
Court of Appeals (Rollo, p. 250). i•t•c -aüsl

By and large, such interpretation gives meaning and substance to the avowed purpose of the law where the
need for immediacy of execution of decisions arrived at by said bodies, was recognized and considered
imperative.

On the other hand, the contrary view would negate the expressed mandate of the law that appeal shall not stay
the award, order, ruling, decision or judgment appealed from, should the appellate court and not the lower court
or administrative body which tried the facts, be authorized to enjoin execution thereof.

More importantly, according to the maxim noscitur a socies where a particular word or phrase is ambiguous in
itself or is equally susceptible of various meanings, its correct construction may be made clear and specific by
considering the company of words in which it is found or with which it is associated (Gonzaga, "Statutes and
Their Construction, p. 116 citing Black on Interpretation of Laws, 2d ed., pp. 194-196), or stated differently, its
obscurity or doubt may be reviewed by reference to associate words (Luzon Stevedoring Co. v. Trinidad, 43 Phil.
804 [1922]). Accordingly, an interpretation which lead to patent inconsistency must be rejected as not in
accordance with the legislative intent (Commissioner of Customs v. Philippine Acetylene Co., 39 SCRA 71
[1971]).

Thus, correct construction of the word "court" may be made clear by reference to Section 1 of R.A. No. 5434,
where the court officer or bodies whose decision, award, etc. are appealable to the Court of Appeals, are
enumerated as follows: Court of Agrarian Relations, the Secretary of Labor, the Land Registration Commission,
the Securities and Exchange Commission, the Social Security Commission, the Civil Aeronautics Board, the
Patent Office and the Agricultural Inventions Board.

From the said grouping, the enumeration in Section 5 is obviously derived and from which it is easy to see that
the word "court" means Court of Agrarian Relations and not the Court of Appeals which by no stretch of the
imagination can be deemed to belong to the same group.

As correctly stated by the Court of Appeals, while said Court possession considerable power to issue writ of
injunction either in the exercise of its original or in aid of its appellate jurisdiction, but where the law lodges the
power to enjoin in some other body or court, as in -the case at bar, the issuance of the writ by the Court of
Appeals would constitute a virtual usurpation of authority on the part of said Court. Consequently, it is evident
that R.A. 5434 merely grants the adverse party the right to appeal from such decision (Rollo, p. 253).

As to whether or not the Court of Appeals still has jurisdiction over this appeal which was perfected before P.D.
902-A transferring jurisdiction of the appeal to the SEC, is answered by this Court in the case of Bengzon v.
Inciong (91 SCRA 248, 256 [1979]) in the affirmative. It was held:

The rule is that where a court has already obtained and is exercising jurisdiction over a
controversy, its jurisdiction to proceed to the final determination of the cause is not affected by
new legislation placing jurisdiction over such proceedings in another tribunal. The exception to
the rule is where the statute expressly provides, or is construed to the effect that it is intended to
operate as to actions pending before its enactment. Where a statute changing the jurisdiction of
a court has no retroactive effect, it cannot be applied to a case that was pending prior to the
enactment of the statute...'

The exception not having been provided in P.D. 902, it is obvious that the Court of Appeals retains its jurisdiction
over the case despite the issuance of said decree.

Finally, while it may be desirable to remand this case to the Court of Appeals considering that, what is involved
herein is merely an interlocutory order of said appellate court but it is the consistent policy of tills Court where
public interests so demands, to broaden its inquiry into a case and decide the same on the merits rather than
merely resolve the procedural question raised (Velasco v. Court of Appeals, 95 SCRA 616 [1980]). Applying the
rule enunciated in Gayos v. Gayos (67 SCRA 146 [l975]) and reiterated in Alger Electric, Inc. v. Court of
Appeals (135 SCRA 43 [1985], the Court will always strive to settle the entire controversy in a single proceeding
leaving no root or branch to bear the seeds of future litigation.

In view of the foregoing, it is evident that the disposition of the incident as well as the main issue in the case at
bar is in consonance with an efficient administration of justice, now that the facts are before this Court.

The Securities and Exchange Commission carefully analyzed Section 30 and Section 38 of the Securities Act as
amended and correctly arrived at the conclusion that under Section 30 thereof, the sale of the shares of stock
made in violation of the Act is merely voidable at the election of the purchaser who acts in good faith as when
the latter is unaware, without his fault, that they have not been registered nor exempted from registration as
provided by law. Consequently, such purchaser should not be deprived of his rights resulting from said
purchase.

On the other hand, under Section 38 of said Act, the purchaser who acquires shares knowing that they are not
registered nor exempted from registration participates in, and is equally guilty of the violation of law. Accordingly,
he cannot be accorded any rights by virtue of such acquisition (Rollo, p. 51).

Applying the foregoing analysis to the case at bar, the SEC noted that the petition for exemption was filed on
June 25, 1974, the exemption fee was paid on November 29,1974 and the resolution exempting the share from
registration was issued by the Commission only on December 4, 1974. Undoubtedly, therefore, the issuance of
10,000 additional shares on August 28 and 29, 1974 to Motoomull and Lacson respectively, which were divided
equally between them, was made pending approval of the application for exemption. In the stockholders'
meeting of September 11 and 14, 1974, these two stockholders made a surprise move by suddenly without the
knowledge of private respondents utilized the additional shares for purposes of voting, thereby enabling them to
gain control of the corporation.

Under the circumstances, Motoomull and Lacson, president and treasurer of subject corporation respectively,
knew at the time they issued the shares in question to themselves that the exemption or filing fee had not yet
been paid, much less has the corporation received the certificate or resolution of exemption from the
Commission. They cannot, therefore, claim innocence of violation of law to whom the rights provided for under
Section 30 of the Securities Act could be accorded. Consequently, the election of the Board of Directors which
would have a different result had the additional shares not been utilized for voting was declared null and void
and the incumbent members of the Board of Directors at the time of said meeting shall continue to hold office
until their successors shall have been duly elected and qualified.

The foregoing view of the Securities and Exchange Commission can hardly be faulted.

This Court has time and time again reminded litigants that the interpretation of officers of laws which are
entrusted to their administration is entitled to great respect (Sierra Madre Trust v. Hon. Secretary of Agriculture,
et al., 121 SCRA 38 [1983]), and have in their favor a presumption of legality (Espanol v. Chairman PVA, 137
SCRA 319 [1985]). Findings of administrative officials and agencies who have acquired expertise because their
i•t•c -aüsl

jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if
such findings are supported by substantial evidence (Lianga Bay Logging Co., Inc. vs. Lopez Enage, 152 SCRA
81 [1987]).

After a careful review of the records, no plausible reason could be found to disturb the findings and conclusions
of the Securities and Exchange Commission. On the contrary, an opposite view would grant premium to violators
of the law and negate the very purpose for which it was enacted.

PREMISES CONSIDERED, the petition is hereby DENIED and the resolution of the Court of Appeals
promulgated on November 4, 1976 in CA-G.R. No. 05108-SP and the decision of the SEC dated May 9, 1975,
both entitled "De la Paz v. Motoomull et. al." are AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes

* Seventh Division; penned by Associate Justice Ramon C. Gaviola, Jr. and concurred to by ate
Justices Mariano Serrano and Lorenzo Relova.
 G.R. No. 202242 July 17, 2012
FRANCISCO I. CHAVEZ, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO and REP. NIEL C. TUPAS,
JR., Respondents.
Facts:
The case is in relation to the process of selecting the nominees for the vacant seat of Supreme Court Chief Justice
following Renato Corona’s departure.
Originally, the members of the Constitutional Commission saw the need to create a separate, competent and
independent body to recommend nominees to the President. Thus, it conceived of a body representative of all the
stakeholders in the judicial appointment process and called it the Judicial and Bar Council (JBC).

In particular, Paragraph 1 Section 8, Article VIII of the Constitution states that “(1) A Judicial and Bar Council is hereby
created under the supervision of the Supreme Court composed of the Chief Justice as ex officio Chairman, the
Secretary of Justice, and a representative of the Congress as ex officio Members, a representative of the Integrated
Bar, a professor of law, a retired Member of the Supreme Court, and a representative of the private sector.” In
compliance therewith, Congress, from the moment of the creation of the JBC, designated one representative from the
Congress to sit in the JBC to act as one of the ex officio members.

In 1994 however, the composition of the JBC was substantially altered. Instead of having only seven (7) members, an
eighth (8th) member was added to the JBC as two (2) representatives from Congress began sitting in the JBC – one
from the House of Representatives and one from the Senate, with each having one-half (1/2) of a vote. During the
existence of the case, Senator Francis Joseph G. Escudero and Congressman Niel C. Tupas, Jr. (respondents)
simultaneously sat in JBC as representatives of the legislature.

It is this practice that petitioner has questioned in this petition.

The respondents claimed that when the JBC was established, the framers originally envisioned a unicameral
legislative body, thereby allocating “a representative of the National Assembly” to the JBC. The phrase, however, was
not modified to aptly jive with the change to bicameralism which was adopted by the Constitutional Commission on
July 21, 1986. The respondents also contend that if the Commissioners were made aware of the consequence of
having a bicameral legislature instead of a unicameral one, they would have made the corresponding adjustment in
the representation of Congress in the JBC; that if only one house of Congress gets to be a member of JBC would
deprive the other house of representation, defeating the principle of balance.

The respondents further argue that the allowance of two (2) representatives of Congress to be members of the JBC
does not render JBC’s purpose of providing balance nugatory; that the presence of two (2) members from Congress
will most likely provide balance as against the other six (6) members who are undeniably presidential appointees

Supreme Court held that it has the power of review the case herein as it is an object of concern, not just for a nominee
to a judicial post, but for all the citizens who have the right to seek judicial intervention for rectification of legal
blunders.

Issue:
Whether the practice of the JBC to perform its functions with eight (8) members, two (2) of whom are members of
Congress, defeats the letter and spirit of the 1987 Constitution.
Held:
No. The current practice of JBC in admitting two members of the Congress to perform the functions of the JBC is
violative of the 1987 Constitution. As such, it is unconstitutional.
One of the primary and basic rules in statutory construction is that where the words of a statute are clear, plain, and
free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. It is a well-settled
principle of constitutional construction that the language employed in the Constitution must be given their ordinary
meaning except where technical terms are employed. As such, it can be clearly and unambiguously discerned from
Paragraph 1, Section 8, Article VIII of the 1987 Constitution that in the phrase, “a representative of Congress,” the use
of the singular letter “a” preceding “representative of Congress” is unequivocal and leaves no room for any other
construction. It is indicative of what the members of the Constitutional Commission had in mind, that is, Congress may
designate only one (1) representative to the JBC. Had it been the intention that more than one (1) representative from
the legislature would sit in the JBC, the Framers could have, in no uncertain terms, so provided.

Moreover, under the maxim noscitur a sociis, where a particular word or phrase is ambiguous in itself or is equally
susceptible of various meanings, its correct construction may be made clear and specific by considering the company
of words in which it is founded or with which it is associated. Every meaning to be given to each word or phrase must
be ascertained from the context of the body of the statute since a word or phrase in a statute is always used in
association with other words or phrases and its meaning may be modified or restricted by the latter. Applying the
foregoing principle to this case, it becomes apparent that the word “Congress” used in Article VIII, Section 8(1) of the
Constitution is used in its generic sense. No particular allusion whatsoever is made on whether the Senate or the
House of Representatives is being referred to, but that, in either case, only a singular representative may be allowed
to sit in the JBC

Considering that the language of the subject constitutional provision is plain and unambiguous, there is no need to
resort extrinsic aids such as records of the Constitutional Commission. Nevertheless, even if the Court should proceed
to look into the minds of the members of the Constitutional Commission, it is undeniable from the records thereof that
it was intended that the JBC be composed of seven (7) members only. The underlying reason leads the Court to
conclude that a single vote may not be divided into half (1/2), between two representatives of Congress, or among any
of the sitting members of the JBC for that matter.

With the respondents’ contention that each representative should be admitted from the Congress and House of
Representatives, the Supreme Court, after the perusal of the records of Constitutional Commission, held that
“Congress,” in the context of JBC representation, should be considered as one body. While it is true that there are still
differences between the two houses and that an inter-play between the two houses is necessary in the realization of
the legislative powers conferred to them by the Constitution, the same cannot be applied in the case of JBC
representation because no liaison between the two houses exists in the workings of the JBC. No mechanism is
required between the Senate and the House of Representatives in the screening and nomination of judicial officers.
Hence, the term “Congress” must be taken to mean the entire legislative department.

The framers of Constitution, in creating JBC, hoped that the private sector and the three branches of government
would have an active role and equal voice in the selection of the members of the Judiciary. Therefore, to allow the
Legislature to have more quantitative influence in the JBC by having more than one voice speak, whether with one full
vote or one-half (1/2) a vote each, would “negate the principle of equality among the three branches of government
which is enshrined in the Constitution.”

It is clear, therefore, that the Constitution mandates that the JBC be composed of seven (7) members only. Thus, any
inclusion of another member, whether with one whole vote or half (1/2) of it, goes against that mandate. Section 8(1),
Article VIII of the Constitution, providing Congress with an equal voice with other members of the JBC in
recommending appointees to the Judiciary is explicit. Any circumvention of the constitutional mandate should not be
countenanced for the Constitution is the supreme law of the land. The Constitution is the basic and paramount law to
which all other laws must conform and to which all persons, including the highest officials of the land, must defer.
Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to
sway and accommodate the call of situations and much more tailor itself to the whims and caprices of the government
and the people who run it.

Notwithstanding its finding of unconstitutionality in the current composition of the JBC, all its prior official actions are
nonetheless valid. In the interest of fair play under the doctrine of operative facts, actions previous to the declaration of
unconstitutionality are legally recognized. They are not nullified.

WHEREFORE, the petition is GRANTED. The current numerical composition of the Judicial and Bar Council IS declared
UNCONSTITUTIONAL. The Judicial and Bar Council is hereby enjoined to reconstitute itself so that only one ( 1) member
of Congress will sit as a representative in its proceedings, in accordance with Section 8( 1 ), Article VIII of the 1987
Constitution. This disposition is immediately executory.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 202242 April 16, 2013

FRANCISCO I. CHAVEZ, Petitioner,

vs.
JUDICIALAND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO and REP. NIEL C. TUPAS,
JR., Respondents.

RESOLUTION

MENDOZA, J.:

This resolves the Motion for Reconsideration1 filed by the Office of the Solicitor General (OSG) on behalf of the respondents,
Senator Francis Joseph G. Escudero and Congressman Niel C. Tupas, Jr. (respondents), duly opposed 2 by the petitioner, former
Solicitor General Francisco I. Chavez (petitioner).

By way of recapitulation, the present action stemmed from the unexpected departure of former Chief Justice Renato C. Corona on
May 29, 2012, and the nomination of petitioner, as his potential successor. In his initiatory pleading, petitioner asked the Court to
determine 1] whether the first paragraph of Section 8, Article VIII of the 1987 Constitution allows more than one (1) member of
Congress to sit in the JBC; and 2] if the practice of having two (2) representatives from each House of Congress with one (1) vote
each is sanctioned by the Constitution.

On July 17, 2012, the Court handed down the assailed subject decision, disposing the same in the following manner:

WHEREFORE, the petition is GRANTED. The current numerical composition of the Judicial and Bar Council is declared
UNCONSTITUTIONAL. The Judicial and Bar Council is hereby enjoined to reconstitute itself so that only one (1) member of
Congress will sit as a representative in its proceedings, in accordance with Section 8(1), Article VIII of the 1987 Constitution.

This disposition is immediately executory.

SO ORDERED.

On July 31, 2012, following respondents’ motion for reconsideration and with due regard to Senate Resolution Nos.
111,3 112,4 113,5 and 114,6 the Court set the subject motion for oral arguments on August 2, 2012. 7 On August 3, 2012, the Court
discussed the merits of the arguments and agreed, in the meantime, to suspend the effects of the second paragraph of the
dispositive portion of the July 17, 2012 Decision which decreed that it was immediately executory. The decretal portion of the
August 3, 2012 Resolution8 reads:

WHEREFORE, the parties are hereby directed to submit their respective MEMORANDA within ten (10) days from notice. Until
further orders, the Court hereby SUSPENDS the effect of the second paragraph of the dispositive portion of the Court’s July 17,
2012 Decision, which reads: "This disposition is immediately executory." 9

Pursuant to the same resolution, petitioner and respondents filed their respective memoranda.10

Brief Statement of the Antecedents

In this disposition, it bears reiterating that from the birth of the Philippine Republic, the exercise of appointing members of the
Judiciary has always been the exclusive prerogative of the executive and legislative branches of the government. Like their
progenitor of American origins, both the Malolos Constitution 11 and the 1935 Constitution12 vested the power to appoint the
members of the Judiciary in the President, subject to confirmation by the Commission on Appointments. It was during these times
that the country became witness to the deplorable practice of aspirants seeking confirmation of their appointment in the Judiciary to
ingratiate themselves with the members of the legislative body. 13

Then, under the 1973 Constitution,14 with the fusion of the executive and legislative powers in one body, the appointment of judges
and justices ceased to be subject of scrutiny by another body. The power became exclusive and absolute to the Executive, subject
only to the condition that the appointees must have all the qualifications and none of the disqualifications.

Prompted by the clamor to rid the process of appointments to the Judiciary of the evils of political pressure and partisan
activities,15 the members of the Constitutional Commission saw it wise to create a separate, competent and independent body to
recommend nominees to the President.
Thus, it conceived of a body, representative of all the stakeholders in the judicial appointment process, and called it the Judicial and
Bar Council (JBC). The Framers carefully worded Section 8, Article VIII of the 1987 Constitution in this wise:

Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed of the Chief
Justice as ex officio Chairman, the Secretary of Justice, and a representative of the Congress as ex officio Members, a
representative of the Integrated Bar, a professor of law, a retired Member of the Supreme Court, and a representative of the private
sector.

From the moment of the creation of the JBC, Congress designated one (1) representative to sit in the JBC to act as one of the ex-
officio members.16 Pursuant to the constitutional provision that Congress is entitled to one (1) representative, each House sent a
representative to the JBC, not together, but alternately or by rotation.

In 1994, the seven-member composition of the JBC was substantially altered. An eighth member was added to the JBC as the two
1âwphi1

(2) representatives from Congress began sitting simultaneously in the JBC, with each having one-half (1/2) of a vote.17

In 2001, the JBC En Banc decided to allow the representatives from the Senate and the House of Representatives one full vote
each.18 It has been the situation since then.

Grounds relied upon by Respondents

Through the subject motion, respondents pray that the Court reconsider its decision and dismiss the petition on the following
grounds: 1] that allowing only one representative from Congress in the JBC would lead to absurdity considering its bicameral
nature; 2] that the failure of the Framers to make the proper adjustment when there was a shift from unilateralism to bicameralism
was a plain oversight; 3] that two representatives from Congress would not subvert the intention of the Framers to insulate the JBC
from political partisanship; and 4] that the rationale of the Court in declaring a seven-member composition would provide a solution
should there be a stalemate is not exactly correct.

While the Court may find some sense in the reasoning in amplification of the third and fourth grounds listed by respondents, still, it
finds itself unable to reverse the assailed decision on the principal issues covered by the first and second grounds for lack of merit.
Significantly, the conclusion arrived at, with respect to the first and second grounds, carries greater bearing in the final resolution of
this case.

As these two issues are interrelated, the Court shall discuss them jointly.

Ruling of the Court

The Constitution evinces the direct action of the Filipino people by which the fundamental powers of government are established,
limited and defined and by which those powers are distributed among the several departments for their safe and useful exercise for
the benefit of the body politic.19 The Framers reposed their wisdom and vision on one suprema lex to be the ultimate expression of
the principles and the framework upon which government and society were to operate. Thus, in the interpretation of the
constitutional provisions, the Court firmly relies on the basic postulate that the Framers mean what they say. The language used in
the Constitution must be taken to have been deliberately chosen for a definite purpose. Every word employed in the Constitution
must be interpreted to exude its deliberate intent which must be maintained inviolate against disobedience and defiance. What the
Constitution clearly says, according to its text, compels acceptance and bars modification even by the branch tasked to interpret it.

For this reason, the Court cannot accede to the argument of plain oversight in order to justify constitutional construction. As stated
in the July 17, 2012 Decision, in opting to use the singular letter "a" to describe "representative of Congress," the Filipino people
through the Framers intended that Congress be entitled to only one (1) seat in the JBC. Had the intention been otherwise, the
Constitution could have, in no uncertain terms, so provided, as can be read in its other provisions.

A reading of the 1987 Constitution would reveal that several provisions were indeed adjusted as to be in tune with the shift to
bicameralism. One example is Section 4, Article VII, which provides that a tie in the presidential election shall be broken "by a
majority of all the Members of both Houses of the Congress, voting separately." 20 Another is Section 8 thereof which requires the
nominee to replace the Vice-President to be confirmed "by a majority of all the Members of both Houses of the Congress, voting
separately."21 Similarly, under Section 18, the proclamation of martial law or the suspension of the privilege of the writ of habeas
corpus may be revoked or continued by the Congress, voting separately, by a vote of at least a majority of all its Members."22 In all
these provisions, the bicameral nature of Congress was recognized and, clearly, the corresponding adjustments were made as to
how a matter would be handled and voted upon by its two Houses.

Thus, to say that the Framers simply failed to adjust Section 8, Article VIII, by sheer inadvertence, to their decision to shift to a
bicameral form of the legislature, is not persuasive enough. Respondents cannot just lean on plain oversight to justify a conclusion
favorable to them. It is very clear that the Framers were not keen on adjusting the provision on congressional representation in the
JBC because it was not in the exercise of its primary function – to legislate. JBC was created to support the executive power to
appoint, and Congress, as one whole body, was merely assigned a contributory non-legislative function.

The underlying reason for such a limited participation can easily be discerned. Congress has two (2) Houses. The need to
recognize the existence and the role of each House is essential considering that the Constitution employs precise language in
laying down the functions which particular House plays, regardless of whether the two Houses consummate an official act by voting
jointly or separately. Whether in the exercise of its legislative23 or its non-legislative functions such as inter alia, the power of
appropriation,24 the declaration of an existence of a state of war, 25 canvassing of electoral returns for the President and Vice-
President,26 and impeachment,27 the dichotomy of each House must be acknowledged and recognized considering the interplay
between these two Houses. In all these instances, each House is constitutionally granted with powers and functions peculiar to its
nature and with keen consideration to 1) its relationship with the other chamber; and 2) in consonance with the principle of checks
and balances, as to the other branches of government.

In checkered contrast, there is essentially no interaction between the two Houses in their participation in the JBC. No mechanism is
required between the Senate and the House of Representatives in the screening and nomination of judicial officers. Rather, in the
creation of the JBC, the Framers arrived at a unique system by adding to the four (4) regular members, three (3) representatives
from the major branches of government - the Chief Justice as ex-officio Chairman (representing the Judicial Department), the
Secretary of Justice (representing the Executive Department), and a representative of the Congress (representing the Legislative
Department). The total is seven (7), not eight. In so providing, the Framers simply gave recognition to the Legislature, not because
it was in the interest of a certain constituency, but in reverence to it as a major branch of government.

On this score, a Member of Congress, Hon. Simeon A. Datumanong, from the Second District of Maguindanao, submitted his well-
considered position28 to then Chief Justice Reynato S. Puno:

I humbly reiterate my position that there should be only one representative of Congress in the JBC in accordance with Article VIII,
Section 8 (1) of the 1987 Constitution x x x.

The aforesaid provision is clear and unambiguous and does not need any further interpretation. Perhaps, it is apt to mention that
the oft-repeated doctrine that "construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them."

Further, to allow Congress to have two representatives in the Council, with one vote each, is to negate the principle of equality
among the three branches of government which is enshrined in the Constitution.

In view of the foregoing, I vote for the proposition that the Council should adopt the rule of single representation of Congress in the
JBC in order to respect and give the right meaning to the above-quoted provision of the Constitution. (Emphases and underscoring
supplied)

On March 14, 2007, then Associate Justice Leonardo A. Quisumbing, also a JBC Consultant, submitted to the Chief Justice and ex-
officio JBC Chairman his opinion,29 which reads:

8. Two things can be gleaned from the excerpts and citations above: the creation of the JBC is intended to curtail the influence of
politics in Congress in the appointment of judges, and the understanding is that seven (7) persons will compose the JBC. As such,
the interpretation of two votes for Congress runs counter to the intendment of the framers. Such interpretation actually gives
Congress more influence in the appointment of judges. Also, two votes for Congress would increase the number of JBC members
to eight, which could lead to voting deadlock by reason of even-numbered membership, and a clear violation of 7 enumerated
members in the Constitution. (Emphases and underscoring supplied)

In an undated position paper,30 then Secretary of Justice Agnes VST Devanadera opined:

As can be gleaned from the above constitutional provision, the JBC is composed of seven (7) representatives coming from different
sectors. From the enumeration it is patent that each category of members pertained to a single individual only. Thus, while we do
not lose sight of the bicameral nature of our legislative department, it is beyond dispute that Art. VIII, Section 8 (1) of the 1987
Constitution is explicit and specific that "Congress" shall have only "xxx a representative." Thus, two (2) representatives from
Congress would increase the number of JBC members to eight (8), a number beyond what the Constitution has contemplated.
(Emphases and underscoring supplied)

In this regard, the scholarly dissection on the matter by retired Justice Consuelo Ynares-Santiago, a former JBC consultant, is
worth reiterating.31 Thus:

A perusal of the records of the Constitutional Commission reveals that the composition of the JBC reflects the Commission’s desire
"to have in the Council a representation for the major elements of the community." xxx The ex-officio members of the Council
consist of representatives from the three main branches of government while the regular members are composed of various
stakeholders in the judiciary. The unmistakeable tenor of Article VIII, Section 8(1) was to treat each ex-officio member as
representing one co-equal branch of government. xxx Thus, the JBC was designed to have seven voting members with the three
ex-officio members having equal say in the choice of judicial nominees.

xxx

No parallelism can be drawn between the representative of Congress in the JBC and the exercise by Congress of its legislative
powers under Article VI and constituent powers under Article XVII of the Constitution. Congress, in relation to the executive and
judicial branches of government, is constitutionally treated as another co-equal branch in the matter of its representative in the JBC.
On the other hand, the exercise of legislative and constituent powers requires the Senate and the House of Representatives to
coordinate and act as distinct bodies in furtherance of Congress’ role under our constitutional scheme. While the latter justifies and,
in fact, necessitates the separateness of the two Houses of Congress as they relate inter se, no such dichotomy need be made
when Congress interacts with the other two co-equal branches of government.
It is more in keeping with the co-equal nature of the three governmental branches to assign the same weight to considerations that
any of its representatives may have regarding aspiring nominees to the judiciary. The representatives of the Senate and the House
of Representatives act as such for one branch and should not have any more quantitative influence as the other branches in the
exercise of prerogatives evenly bestowed upon the three. Sound reason and principle of equality among the three branches
support this conclusion. [Emphases and underscoring supplied]

The argument that a senator cannot represent a member of the House of Representatives in the JBC and vice-versa is, thus,
misplaced. In the JBC, any member of Congress, whether from the Senate or the House of Representatives, is constitutionally
empowered to represent the entire Congress. It may be a constricted constitutional authority, but it is not an absurdity.

From this score stems the conclusion that the lone representative of Congress is entitled to one full vote. This pronouncement
effectively disallows the scheme of splitting the said vote into half (1/2), between two representatives of Congress. Not only can this
unsanctioned practice cause disorder in the voting process, it is clearly against the essence of what the Constitution authorized.
After all, basic and reasonable is the rule that what cannot be legally done directly cannot be done indirectly. To permit or tolerate
the splitting of one vote into two or more is clearly a constitutional circumvention that cannot be countenanced by the Court.
Succinctly put, when the Constitution envisioned one member of Congress sitting in the JBC, it is sensible to presume that this
representation carries with him one full vote.

It is also an error for respondents to argue that the President, in effect, has more influence over the JBC simply because all of the
regular members of the JBC are his appointees. The principle of checks and balances is still safeguarded because the appointment
of all the regular members of the JBC is subject to a stringent process of confirmation by the Commission on Appointments, which
is composed of members of Congress.

Respondents’ contention that the current irregular composition of the JBC should be accepted, simply because it was only
questioned for the first time through the present action, deserves scant consideration. Well-settled is the rule that acts done in
violation of the Constitution no matter how frequent, usual or notorious cannot develop or gain acceptance under the doctrine of
estoppel or laches, because once an act is considered as an infringement of the Constitution it is void from the very beginning and
cannot be the source of any power or authority.

It would not be amiss to point out, however, that as a general rule, an unconstitutional act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not been passed at all. This rule,
however, is not absolute. Under the doctrine of operative facts, actions previous to the declaration of unconstitutionality are legally
recognized. They are not nullified. This is essential in the interest of fair play. To reiterate the doctrine enunciated in Planters
Products, Inc. v. Fertiphil Corporation:32

The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair play. It nullifies the
effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of unconstitutionality is an
operative fact and may have consequences which cannot always be ignored. The past cannot always be erased by a new judicial
declaration. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have
relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality would put the accused in
double jeopardy or would put in limbo the acts done by a municipality in reliance upon a law creating it. 33

Under the circumstances, the Court finds the exception applicable in this case and holds that notwithstanding its finding of
unconstitutionality in the current composition of the JBC, all its prior official actions are nonetheless valid.

Considering that the Court is duty bound to protect the Constitution which was ratified by the direct action of the Filipino people, it
cannot correct what respondents perceive as a mistake in its mandate. Neither can the Court, in the exercise of its power to
interpret the spirit of the Constitution, read into the law something that is contrary to its express provisions and justify the same as
correcting a perceived inadvertence. To do so would otherwise sanction the Court action of making amendment to the Constitution
through a judicial pronouncement.

In other words, the Court cannot supply the legislative omission. According to the rule of casus omissus "a case omitted is to be
held as intentionally omitted."34 "The principle proceeds from a reasonable certainty that a particular person, object or thing has
been omitted from a legislative enumeration."35 Pursuant to this, "the Court cannot under its power of interpretation supply the
omission even though the omission may have resulted from inadvertence or because the case in question was not foreseen or
contemplated."36 "The Court cannot supply what it thinks the legislature would have supplied had its attention been called to the
omission, as that would be judicial legislation."37

Stated differently, the Court has no power to add another member by judicial construction.

The call for judicial activism fails to stir the sensibilities of the Court tasked to guard the Constitution against usurpation. The Court
remains steadfast in confining its powers in the sphere granted by the Constitution itself. Judicial activism should never be allowed
to become judicial exuberance.38 In cases like this, no amount of practical logic or convenience can convince the Court to perform
either an excision or an insertion that will change the manifest intent of the Framers. To broaden the scope of congressional
representation in the JBC is tantamount to the inclusion of a subject matter which was not included in the provision as enacted.
True to its constitutional mandate, the Court cannot craft and tailor constitutional provisions in order to accommodate all of
situations no matter how ideal or reasonable the proposed solution may sound. To the exercise of this intrusion, the Court declines.

WHEREFORE, the Motion for Reconsideration filed by respondents is hereby DENIED.

The suspension of the effects of the second paragraph of the dispositive portion of the July 17, 2012 Decision of the Court, which
reads, "This disposition is immediately executory," is hereby LIFTED.

SO ORDERED.

DISSENTING OPINION

ABAD, J.:

On July 17, 2012, the Court rendered a Decision1 granting the petition for declaration of unconstitutionality, prohibition, and
injunction filed by petitioner Francisco I. Chavez, and declaring that the current numerical composition of the Judicial and Bar
Council (JBC) is unconstitutional. The Court also enjoined the JBC to reconstitute itself so that only one member of Congress will
sit as a representative in its proceedings, in accordance with Section 8(1), Article VIII of the 1987 Constitution.

On July 24, 2012, respondents Senator Francis Joseph G. Escudero and Congressman Niel C. Tupas, Jr. moved for
reconsideration.2 The Court then conducted and heard the parties in oral arguments on the following Issues:

1. Whether or not the current practice of the JBC to perform its functions with eight members, two of whom are members of
Congress, runs counter to the letter and spirit of Section 8(1), Article VIII of the 1987 Constitution.

A. Whether or not the JBC should be composed of seven members only.

B. Whether or not Congress is entitled to more than one seat in the JBC.

C. Assuming Congress is entitled to more than one seat, whether or not each representative of Congress should be entitled to
exercise one whole vote.

I maintain my dissent to the majority opinion now being reconsidered.

To reiterate, the vital question that needs to be resolved is: whether or not the Senate and the House of Representatives are
entitled to one representative each in the JBC, both with the right to cast one full vote in its deliberations.

At the core of the present controversy is Section 8(1), Article VIII of the 1987 Constitution, which provides that:

Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed of the Chief
Justice as ex officio Chairman, the Secretary of Justice, and a representative of the Congress as ex officio Members, a
representative of the Integrated Bar, a professor of law, a retired Member of the Supreme Court, and a representative of the private
sector. (Emphasis supplied)

In interpreting Section 8(1) above, the majority opinion reiterated that in opting to use the singular letter "a" to describe
"representative of the Congress," the Filipino people through the framers of the 1987 Constitution intended Congress to just have
one representative in the JBC. The majority opinion added that there could not have been any plain oversight in the wordings of the
provision since the other provisions of the 1987 Constitution were amended accordingly with the shift to a bicameral legislative
body.

The mere fact, however, that adjustments were made in some provisions should not mislead the Court into concluding that all
provisions have been amended to recognize the bicameral nature of Congress. As I have previously noted in my dissenting
opinion, Fr. Joaquin G. Bernas, a member of the Constitutional Commission himself, admitted that the committee charged with
making adjustments in the previously passed provisions covering the JBC, failed to consider the impact of the changed character of
the Legislature on the inclusion of "a representative of the Congress" in the membership of the JBC. 3

Indeed, to insist that only one member of Congress from either the Senate or the House of Representatives should sit at any time in
the JBC, is to ignore the fact that they are still separate and distinct from each other although they are both involved in law-making.
Both legislators are elected differently, maintain separate administrative organizations, and deliberate on laws independently. In
fact, neither the Senate nor the House of Representatives can by itself claim to represent the Congress.

Again, that the framers of the 1987 Constitution did not intend to limit the term "Congress" to just either of the two Houses can be
seen from the words that they used in crafting Section 8(1 ). While the provision provides for just "a representative of the
Congress," it also provides that such representation is "ex officio" or "by virtue of one's office, or position." 4

Under the Senate rules, the Chairperson of its Justice Committee is automatically the Senate representative to the JBC. In the
same way, under the House of Representatives rules, the Chairperson of its Justice Committee is the House representative to the
JBC. Consequently, there are actually two persons in Congress who hold separate offices or positions with the attached function of
sitting in the JBC. If the Court adheres to a literal translation of Section 8(1 ), no representative from Congress will qualify as "ex
officio" member of the JBC. This would deny Congress the representation that the framers of the 1987 Constitution intended it to
have.

Having said that the Senate and the House of Representatives should have one representative each in the JBC, it is logical to
conclude that each should also have the right to cast one full vote in its deliberations. To split the vote between the two legislators
would be an absurdity since it would diminish their standing and make them second class members of the JBC, something that the
Constitution clearly does not contemplate. Indeed, the JBC abandoned the half-a-vote practice on January 12, 2000 and
recognized the right of both legislators to cast one full vote each. Only by recognizing this right can the true spirit and reason of
Section 8(1) be attained.

For the above reasons, I vote to GRANT the motion for reconsideration.

ROBERTO A. ABAD
Associate Justice

DISSENTING OPINION

LEONEN, J.:

I dissent.

Both the Senate and the House of Representatives must be represented in the Judicial and Bar Council. This is the Constitution's
mandate read as a whole and in the light of the ordinary and contemporary understanding of our people of the structure of our
government. Any other interpretation diminishes Congress and negates the effectivity of its representation in the Judicial and Bar
Council.

It is a Constitution we are interpreting. More than privileging a textual preposition, our duty is to ensure that the constitutional
project ratified by our people is given full effect.

At issue in this case is the interpretation of Article VIII, Section 8 of the Constitution which provides the following:

Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme Court composed of the Chief
Justice as ex officio Chairman, the Secretary of

Justice, and a representative of the Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a
retired Member of the Supreme Court, and a representative of the private sector. (Emphasis provided)

Mainly deploying verba legis as its interpretative modality, the main opinion chooses to focus on the article "a." As correctly pointed
out in the original dissent of Justice Robert A bad, the entire phrase includes the words "representative of Congress" and "ex officio
Members." In the context of the constitutional plan involving a bicameral Congress, these words create ambiguity.

A Bicameral Congress

Our Constitution creates a Congress consisting of two chambers. Thus, in Article VI, Section 1, the Constitution provides the
following:

The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of
Representatives x x x. (Emphasis provided)

Senators are "elected at large by the qualified voters of the Philippines". 1 Members of the House of Representatives, on the other
hand, are elected by legislative districts2 or through the party list system.3 The term of a Senator4 is different from that of a Member
of the House of Representatives. 5 Therefore, the Senate and the House of Representatives while component parts of the Congress
are not the same in terms of their representation. The very rationale of a bicameral system is to have the Senators represent a
national constituency. Representatives of the House of Representatives, on the other hand, are dominantly from legislative districts
except for one fifth which are from the party list system.

Each chamber is organized separately.6 The Senate and the House each promulgates their own rules of procedure. 7 Each chamber
maintains separate Journals.8 They each have separate Records of their proceedings.9 The Senate and the House of
Representatives discipline their own respective members.10

To belabor the point: There is no presiding officer for the Congress of the Philippines, but there is a Senate President and a
Speaker of the House of Representatives. There is no single journal for the Congress of the Philippines, but there is a journal for
the Senate and a journal for the House of Representatives. There is no record of proceedings for the entire Congress of the
Philippines, but there is a Record of proceedings for the Senate and a Record of proceedings for the House of Representatives.
The Congress of the Philippines does not discipline its members. It is the Senate that promulgates its own rules and disciplines its
members. Likewise, it is the House that promulgates its own rules and disciplines its members.
No Senator reports to the Congress of the Philippines. Rather, he or she reports to the Senate. No Member of the House of
Representatives reports to the Congress of the Philippines. Rather, he or she reports to the House of Representatives.

Congress, therefore, is the Senate and the House of Representatives. Congress does not exist separate from the Senate and the
House of Representatives.

Any Senator acting ex officio or as a representative of the Senate must get directions from the Senate. By constitutional design, he
or she cannot get instructions from the House of Representatives. If a Senator represents the Congress rather than simply the
Senate, then he or she must be open to amend or modify the instructions given to him or her by the Senate if the House of
Representatives’ instructions are different. Yet, the Constitution vests disciplinary power only on the Senate for any Senator.

The same argument applies to a Member of the House of Representatives.

No Senator may carry instructions from the House of Representatives. No Member of the House of Representatives may carry
instructions from the Senate. Neither Senator nor Member of the House of Representatives may therefore represent Congress as a
whole.

The difference between the Senate and the House of Representative was a subject of discussion in the Constitutional Commission.
In the July 21, 1986 Records of the Constitutional Commission, Commissioner Jose F. S. Bengzon presented the following
argument during the discussion on bicameralism, on the distinction between Congressmen and Senators, and the role of the
Filipino people in making these officials accountable:

I grant the proposition that the Members of the House of Representatives are closer to the people that they represent. I grant the
proposition that the Members of the House of Representatives campaign on a one-to-one basis with the people in the barrios and
their constituencies. I also grant the proposition that the candidates for Senator do not have as much time to mingle around with
their constituencies in their respective home bases as the candidates for the House. I also grant the proposition that the candidates
for the Senate go around the country in their efforts to win the votes of all the members of the electorate at a lesser time than that
given to the candidates for the House of Representatives. But then the lesson of the last 14 years has made us mature in our
political thinking and has given us political will and self-determination. We really cannot disassociate the fact that the Congressman,
the Member of the House of Representatives, no matter how national he would like to think, is very much strongly drawn into the
problems of his local constituents in his own district.

Due to the maturity of the Filipinos for the last 14 years and because of the emergence of people power, I believe that this so-called
people power can be used to monitor not only the Members of the House of Representatives but also the Members of the Senate.
As I said we may have probably adopted the American formula in the beginning but over these years, I think we have developed
that kind of a system and adopted it to our own needs. So at this point in time, with people power working, it is not only the
Members of the House who can be subjected to people power but also the Members of the Senate because they can also be
picketed and criticized through written articles and talk shows. And even the people not only from their constituencies in their
respective regions and districts but from the whole country can exercise people power against the Members of the Senate because
they are supposed to represent the entire country. So while the Members of Congress become unconsciously parochial in their
desire to help their constituencies, the Members of the Senate are there to take a look at all of these parochial proposals and
coordinate them with the national problems. They may be detached in that sense but they are not detached from the people
because they themselves know and realize that they owe their position not only to the people from their respective provinces but
also to the people from the whole country. So, I say that people power now will be able to monitor the activities of the Members of
the House of Representatives and that very same people power can be also used to monitor the activities of the Members of the
Senate.11

Commissioner Bengzon provided an illustration of the fundamental distinction between the House of Representatives and the
Senate, particularly regarding their respective constituencies and electorate. These differences, however, only illustrate that the
work of the Senate and the House of Representatives taken together results in a Congress functioning as one branch of
government. Article VI, Section 1, as approved by the Commission, spoke of one Congress whose powers are vested in both the
House of Representatives and the Senate.

Thus, when the Constitution provides that a "representative of Congress" should participate in the Judicial and Bar Council, it
cannot mean a Senator carrying out the instructions of the House or a Member of the House of Representative carrying out
instructions from the Senate. It is not the kind of a single Congress contemplated by our Constitution. The opinion therefore that a
Senator or a Member of the House of Representative may represent the Congress as a whole is contrary to the intent of the
Constitution. It is unworkable.

One mechanism used in the past to work out the consequence of the majority’s opinion is to allow a Senator and a Member of the
House of Representative to sit in the Judicial and Bar Council but to each allow them only half a vote.

Within the Judicial and Bar Council, the Chief Justice is entitled to one vote. The Secretary of Justice is also entitled to one whole
vote and so are the Integrated Bar of the Philippines, the private sector, legal academia, and retired justices. Each of these sectors
are given equal importance and rewarded with one whole vote. However, in this view, the Senate is only worth fifty percent of the
wisdom of these sectors. Likewise, the wisdom of the House of Representatives is only worth fifty percent of these institutions.

This is constitutionally abominable. It is inconceivable that our people, in ratifying the Constitution granting awesome powers to
Congress, intended to diminish its component parts. After all, they are institutions composed of people who have submitted
themselves to the electorate. In creating shortlists of possible candidates to the judiciary, we can safely suppose that their input is
not less than the input of the professor of law or the member of the Integrated Bar of the Philippines or the member from the private
sector.

The other solution done in the past was to alternate the seat between a Senator and a Member of the House of Representatives.

To alternate the seat given to Congress between the Senate and the House of Representatives would mean not giving a seat to the
Congress at all. Again, when a Senator is seated, he or she represents the Senate and not Congress as a whole. When a Member
of the House of Representative is seated, he or she can only represent Congress as a whole. Thus, alternating the seat not only
diminishes congressional representation; it negates it.

Constitutional Interpretation

The argument that swayed the majority in this case’s original decision was that if those who crafted our Constitution intended that
there be two representatives from Congress, it would not have used the preposition "a" in Article VIII, Section 8 (1). However,
beyond the number of representatives, the Constitution intends that in the Judicial and Bar Council, there will be representation
from Congress and that it will be "ex officio", i.e., by virtue of their positions or offices. We note that the provision did not provide for
a number of members to the Judicial and Bar Council. This is unlike the provisions creating many other bodies in the Constitution. 12

In other words, we could privilege or start our interpretation only from the preposition "a" and from there provide a meaning that
ensures a difficult and unworkable result -- one which undermines the concept of a bicameral congress implied in all the other 114
other places in the Constitution that uses the word "Congress".

Or, we could give the provision a reasonable interpretation that is within the expectations of the people who ratified the Constitution
by also seeing and reading the words "representative of Congress" and "ex officio."

This proposed interpretation does not violate the basic tenet regarding the authoritativeness of the text of the Constitution. It does
not detract from the text. It follows the canonical requirement of verba legis. But in doing so, we encounter an ambiguity.

In Macalintal v. Presidential Electoral Tribunal,13 we said:

As the Constitution is not primarily a lawyer’s document, it being essential for the rule of law to obtain that it should ever be present
in the people’s consciousness, its language as much as possible should be understood in the sense they have in common use.
What it says according to the text of the provision to be construed compels acceptance and negates the power of the courts to alter
it, based on the postulate that the framers and the people mean what they say. Thus these are cases where the need for
construction is reduced to a minimum.

However, where there is ambiguity or doubt, the words of the Constitution should be interpreted in accordance with the intent of its
framers or ratio legis et anima. A doubtful provision must be examined in light of the history of the times, and the condition and
circumstances surrounding the framing of the Constitution. In following this guideline, courts should bear in mind the object sought
to be accomplished in adopting a doubtful constitutional provision, and the evils sought to be prevented or remedied. Consequently,
the intent of the framers and the people ratifying the constitution, and not the panderings of self-indulgent men, should be given
effect.

Last, ut magis valeat quam pereat – the Constitution is to be interpreted as a whole. We intoned thus in the landmark case of Civil
Liberties Union v. Executive Secretary:

It is a well-established rule in constitutional construction that no one provision of the Constitution is to be separated from all the
others, to be considered alone, but that all the provisions bearing upon a particular subject are to be brought into view and to be so
interpreted as to effectuate the great purposes of the instrument. Sections bearing on a particular subject should be considered and
interpreted together as to effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if
by any reasonable construction, the two can be made to stand together.

In other words, the court must harmonize them, if practicable, and must lean in favor of a construction which will render every word
operative, rather than one which may make the words idle and nugatory. (Emphasis provided)

And in Civil Liberties Union v. Executive Secretary,13 we said:

A foolproof yardstick in constitutional construction is the intention underlying the provision under consideration. Thus, it has been
held that the Court in construing a Constitution should bear in mind the object sought to be accomplished by its adoption, and the
evils, if any, sought to be prevented or remedied. A doubtful provision will be examined in the light of the history of the times, and
the condition and circumstances under which the Constitution was framed. The object is to ascertain the reason which induced the
framers of the Constitution to enact the particular provision and the purpose sought to be accomplished thereby, in order to
construe the whole as to make the words consonant to that reason and calculated to effect that purpose.

The authoritativeness of text is no excuse to provide an unworkable result or one which undermines the intended structure of
government provided in the Constitution. Text is authoritative, but it is not exhaustive of the entire universe of meaning.
There is no compelling reason why we should blind ourselves as to the meaning of "representative of Congress" and "ex officio."
There is no compelling reason why there should only be one representative of a bicameral Congress.

Proposed Reasons for Only One Representative of Congress

The first reason to support the need for only one representative of Congress is the belief that there needs to be an odd number in
the Judicial and Bar Council.

This is true only if the decision of the constitutional organ in question is a dichotomous one, i.e., a yes or a no. It is in this sense that
a tie-breaker will be necessary.

However, the Judicial and Bar Council is not that sort of a constitutional organ. Its duty is to provide the President with a shortlist of
candidates to every judicial position. We take judicial notice that for vacancies, each member of the Judicial and Bar Council is
asked to list at least three (3) names. All these votes are tallied and those who garner a specific plurality are thus put on the list and
transmitted to the President. There had been no occasion when the Judicial and Bar Council ever needed to break a tie. The
Judicial and Bar Council’s functions proceed regardless of whether they have seven or eight members.

The second reason that the main opinion accepted as persuasive was the opinion that Congress does not discharge its function to
check and balance the power of both the Judiciary and the Executive in the Judicial and Bar Council. From this premise, it then
proceeds to argue that the Representative of Congress, who is ex officio, does not need to consult with Congress as a whole.

This is very perplexing and difficult to accept.

By virtue of the fundamental premise of separation of powers, the appointing power in the judiciary should be done by the Supreme
Court. However, for judicial positions, this is vested in the Executive. Furthermore, because of the importance of these
appointments, the President’s discretion is limited to a shortlist submitted to him by the Judicial and Bar Council which is under the
supervision of the Supreme Court but composed of several components.

The Judicial and Bar Council represents the constituents affected by judicial appointments and by extension, judicial decisions. It
provides for those who have some function vis a vis the law that should be applied and interpreted by our courts. Hence,
represented are practicing lawyers (Integrated Bar of the Philippines), prosecutors (Secretary of the Department of Justice), legal
academia (professor of law), and judges or justices (retired justice and the Chief Justice). Also represented in some way are those
that will be affected by the interpretation directly (private sector representative).

Congress is represented for many reasons.

One, it crafts statutes and to that extent may want to ensure that those who are appointed to the judiciary are familiar with these
statutes and will have the competence, integrity, and independence to read its meaning.

Two, the power of judicial review vests our courts with the ability to nullify their acts. Congress, therefore, has an interest in the
judicial philosophy of those considered for appointment into our judiciary.

Three, Congress is a political organ. As such, it is familiar with the biases of our political leaders including that of the President.
Thus, it will have greater sensitivity to the necessity for political accommodations if there be any. Keeping in mind the independence
required of our judges and justices, the Members of Congress may be able to appreciate the kind of balance that will be necessary
-- the same balance that the President might be able to likewise appreciate -- when putting a person in the shortlist of judicial
candidates. Not only do they appreciate this balance, they embody it. Senators and Members of the House of Representatives
(unlike any of the other members of the Judicial and Bar Council), periodically submit themselves to the electorate.

It is for these reasons that the Congressional representatives in the Judicial and Bar Council may be instructed by their respective
chambers to consider some principles and directions. Through resolutions or actions by the Congressional Committees they
represent, the JBC Congressional representatives’ choices may be constrained. Therefore, they do not sit there just to represent
themselves. Again, they are "representatives of Congress" "ex officio".

The third reason to support only one representative of Congress is the belief that there is the "unmistakable tenor" in the provision
in question that one co-equal branch should be represented only by one Representative. 14 It may be true that the Secretary of
Justice is the political alter ego of the President or the Executive. However, Congress as a whole does not have a political alter ego.
In other words, while the Executive may be represented by a single individual, Congress cannot be represented by an individual.
Congress, as stated earlier, operates through the Senate and the House of Representatives. Unlike the Executive, the Legislative
branch cannot be represented by only one individual.

A Note on the Work of the Constitutional Commission

Time and again, we have clarified the interpretative value to Us of the deliberations of the Constitutional Commission. Thus in Civil
Liberties Union v. Executive Secretary, we emphasized:

While it is permissible in this jurisdiction to consult the debates and proceedings of the constitutional convention in order to arrive at
the reason and purpose of the resulting Constitution, resort thereto may be had only when other guides fail as said proceedings are
powerless to vary the terms of the Constitution when the meaning is clear. Debates in the constitutional convention ‘are of value as
showing the views of the individual members, and as indicating the reason for their votes, but they give Us no light as to the views
of the large majority who did not talk, much less of the mass or our fellow citizens whose votes at the polls gave that instrument the
force of fundamental law. We think it safer to construe the constitution from what appears upon its face.’The proper interpretation
therefore depends more on how it was understood by the people adopting it than in the framers’ understanding
thereof.15 (Emphasis provided)

Also worth Our recall is the celebrated comment of Charles P. Curtis, Jr. on the role of history in constitutional exegesis: 16

The intention of the framers of the Constitution, even assuming we could discover what it was, when it is not adequately expressed
in the Constitution, that is to say, what they meant when they did not say it, surely that has no binding force upon us. If we look
behind or beyond what they set down in the document, prying into what else they wrote and what they said, anything we
may find is only advisory. They may sit in at our councils. There is no reason why we should eavesdrop on
theirs.17 (Emphasis provided)

In addition to the interpretative value of the discussion in the Constitutional Commission, we should always be careful when we
quote from their records without understanding their context.

The Committees of the Constitutional Commission were all tasked to finish their reports not later than July 7, 1986. 18 The Second
and Third Readings were scheduled to finish not later than August 15, 1986.19 The members of the Sponsorship and Style
Committee were tasked to finish their work of formulating and polishing the style of the final draft of the new Constitution scheduled
for submission to the entire membership of the Commission not later than August 25, 1986.20

The Rules of the Constitutional Commission also provided for a process of approving resolutions and amendments.

Constitutional proposals were embodied in resolutions signed by the author. 21 If they emanated from a committee, the resolution
was signed by its chairman.22 Resolutions were filed with the Secretary-General.23 The First Reading took place when the titles of
the resolutions were read and referred to the appropriate committee.24

The Committees then submitted a Report on each resolution.25 The Steering Committee took charge of including the committee
report in the Calendar for Second Reading.26 The Second Reading took place on the day set for the consideration of a
resolution.27 The provisions were read in full with the amendments proposed by the committee, if there were any.28

A motion to close debate took place after three speeches for and two against, or if only one speech has been raised and none
against it.29 The President of the Constitutional Commission had the prerogative to allow debates among those who had indicated
that they intended to be heard on certain matters. 30 After the close of the debate, the Constitutional Commission proceeded to
consider the Committee amendments.31

After a resolution was approved on Second Reading, it was included in the Calendar for Third Reading. 32 Neither further debate nor
amendment shall be made on the resolution on its Third Reading. 33 All constitutional proposals approved by the Commission after
Third Reading were referred to the Committees on Sponsorship and Style for collation, organization, and consolidation into a
complete and final draft of the Constitution.34 The final draft was submitted to the Commission for the sole purpose of determining
whether it reflects faithfully and accurately the proposals as approved on Second Reading. 35

With respect to the provision which is now Article VIII, Section 8 (1), the timetable was as follows:

On July 10, 1986, the Committee on the Judiciary presented its Report to the Commission.36 Deliberations then took place on the
same day; on July 11, 1986; and on July 14, 1986. It was on July 10 that Commissioner Rodrigo raised points regarding the
Judicial and Bar Council.37 The discussion spoke of the Judicial and Bar Council having seven members.

Numerous mentions of the Judicial and Bar Council being comprised of seven members were also made by Commissioners on July
14, 1986. On the same day, the amended article was approved by unanimous voting. 38

On July 19, 1986, the vote on Third Reading on the Article on the Judiciary took place.39 The vote was 43 and none against.40

Committee Report No. 22 proposing an article on a National Assembly was reported out by July 21, 1986. 41 It provided for a
unicameral assembly. Commissioner Hilario Davide, Jr., made the presentation and stated that they had a very difficult decision to
make regarding bicameralism and unicameralism.42 The debate occupied the Commission for the whole day.

Then, a vote on the structure of Congress took place. 43 Forty four (44) commissioners cast their votes during the roll call.44 The vote
was 23 to 22.45

On October 8, 1986, the Article on the Judiciary was reopened for purposes of introducing amendments to the proposed Sections
3, 7, 10, 11, 13, and 14.46

On October 9, 1986, the entire Article on the Legislature was approved on Third Reading. 47

By October 10, 1986, changes in style on the Article on the Legislature were introduced.48
On October 15, 1986, Commissioner Guingona presented the 1986 Constitution to the President of the Constitutional Commission,
Cecilia Munoz-Palma.49

It is apparent that the Constitutional Commission either through the Style and Sponsorship Committee or the Committees on the
Legislature and the Judiciary was not able to amend the provision concerning the Judicial and Bar Council after the Commission
had decided to propose a bicameral Congress. We can take judicial notice of the chronology of events during the deliberations of
the Constitutional Commission. The chronology should be taken as much as the substance of discussions exchanged between the
Commissioners.

The quotations from the Commissioners mentioned in the main opinion and in the proposed resolution of the present Motion for
Reconsideration should thus be appreciated in its proper context.

The interpellation involving Commissioners Rodrigo and Concepcion took place on July 10, 1986 and on July 14, 1986. 50 These
discussions were about Committee Report No. 18 on the Judiciary. Thus:

MR. RODRIGO: Let me go to another point then.

On page 2, Section 5, there is a novel provision about appointments of members of the Supreme Court and of judges of lower
courts. At present it is the President who appoints them. If there is a Commission on Appointments, then it is the President with the
confirmation of the Commission on Appointments. In this proposal, we would like to establish a new office, a sort of a board
composed of seven members, called the Judicial and Bar Council. And while the President will still appoint the members of the
judiciary, he will be limited to the recommendees of this Council.

xxxx

MR. RODRIGO: Of the seven members of the Judicial and Bar Council, the President appoints four of them who are the regular
members.

xxxx

MR. CONCEPCION: The only purpose of the Committee is to eliminate partisan politics. 51

xxxx

It must also be noted that during the same day and in the same discussion, both Commissioners Rodrigo and Concepcion later on
referred to a ‘National Assembly’ and not a ‘Congress,’ as can be seen here:

MR. RODRIGO: Another point. Under our present Constitution, the National Assembly may enact rules of court, is that right? On
page 4, the proviso on lines 17 to 19 of the Article on the Judiciary provides:

The National Assembly may repeal, alter, or supplement the said rules with the advice and concurrence of the Supreme Court.

MR. CONCEPCION: Yes.

MR. RODRIGO: So, two things are required of the National Assembly before it can repeal, alter or supplement the rules concerning
the protection and enforcement of constitutional rights, pleading, etc. — it must have the advice and concurrence of the Supreme
Court.

MR. CONCEPCION: That is correct.52

On July 14, 1986, the Commission proceeded with the Period of Amendments. This was when the exchange noted in the main
opinion took place. Thus:

MR. RODRIGO: If my amendment is approved, then the provision will be exactly the same as the provision in the 1935
Constitution, Article VIII, Section 5.

xxxx

If we do not remove the proposed amendment on the creation of the Judicial and Bar Council, this will be a diminution of the
appointing power of the highest magistrate of the land, of the President of the Philippines elected by all the Filipino people. The
appointing power will be limited by a group of seven people who are not elected by the people but only appointed.

Mr. Presiding Officer, if this Council is created, there will be no uniformity in our constitutional provisions on appointments. The
members of the Judiciary will be segregated from the rest of the government. Even a municipal judge cannot be appointed by the
President except upon recommendation or nomination of three names by this committee of seven people, commissioners of the
Commission on Elections, the COA and Commission on Civil Service x x x even ambassadors, generals of the Army will not come
under this restriction. Why are we going to segregate the Judiciary from the rest of our government in the appointment of the high-
ranking officials?

Another reason is that this Council will be ineffective. It will just besmirch the honor of our President without being effective at all
because this Council will be under the influence of the President. Four out of seven are appointees of the President, and they can
be reappointed when their term ends. Therefore, they would kowtow to the President. A fifth member is the Minister of Justice, an
alter ego of the President. Another member represents the legislature. In all probability, the controlling party in the legislature
belongs to the President and, therefore, this representative from the National Assembly is also under the influence of the President.
And may I say, Mr. Presiding Officer, that even the Chief Justice of the Supreme Court is an appointee of the President. So, it is
futile; he will be influenced anyway by the President. 53

It must again be noted that during this day and period of amendments after the quoted passage in the Decision, the Commission
later on made use of the term ‘National Assembly’ and not ‘Congress’ again:

MR. MAAMBONG: Presiding Officer and members of the Committee, I propose to delete the last sentence on Section 16, lines 28
to 30 which reads: "The Chief Justice shall address the National Assembly at the opening of each regular session."

May I explain that I have gone over the operations of other deliberative assemblies in some parts of the world, and I noticed that it
is only the Chief Executive or head of state who addresses the National Assembly at its opening. When we say "opening," we are
referring to the first convening of any national assembly. Hence, when the Chief Executive or head of state addresses the National
Assembly on that occasion, no other speaker is allowed to address the body.

So I move for the deletion of this last sentence.54

Based on the chronology of events, the discussions cited by the main ponencia took place when the commissioners were still
contemplating a unicameral legislature in the course of this discussion. Necessarily, only one Representative would be needed to
fully effect the participation of a unicameral legislature. Therefore, any mention of the composition of the JBC having seven
members in the records of the Constitutional Commission, particularly during the dates cited, was obviously within the context that
the Commission had not yet voted and agreed upon a bicameral legislature.

The composition of the Congress as a bilateral legislature became final only after the JBC discussions as a seven-member Council
indicated in the Records of the Constitutional Commission took place. This puts into the proper context the recognition by
Commissioner Christian Monsod on July 30, 1986, which runs as follows:

Last week, we voted for a bicameral legislature. Perhaps it is symptomatic of what the thinking of this group is, that all the
provisions that were being drafted up to that time assumed a unicameral government. 55

The repeated mentions of the JBC having seven members as indicated in the Records of the Constitutional Commission do not
justify the points raised by petitioner. This is a situation where the records of the Constitutional Commission do not serve even as
persuasive means to ascertain intent at least in so far as the intended numbers for the Judicial and Bar Council. Certainly they are
not relevant even to advise us on how Congress is to be represented in that constitutional organ.

We should never forget that when we interpret the Constitution, we do so with full appreciation of every part of the text within an
entire document understood by the people as they ratified it and with all its contemporary consequences. As an eminent author in
constitutional theory has observed while going through the various interpretative modes presented in jurisprudence: "x x x all of the
methodologies that will be discussed, properly understood, figure in constitutional analysis as opportunities: as starting points,
constituent parts of complex arguments, or concluding evocations." 56

Discerning that there should be a Senator and a Member of the House of Representatives that sit in the Judicial and Bar Council so
that Congress can be fully represented ex officio is not judicial activism. It is in keeping with the constitutional project of a bicameral
Congress that is effective whenever and wherever it is represented. It is in tune with how our people understand Congress as
described in the fundamental law. It is consistent with our duty to read the authoritative text of the Constitution so that ordinary
people who seek to understand this most basic law through Our decisions would understand that beyond a single isolated text --
even beyond a prepos1t10n in Article VIII, Section 8 (1 ), our primordial values and principles are framed, congealed and will be
given full effect.

In a sense, we do not just read words in a legal document; we give meaning to a Constitution.

For these reasons, I vote to grant the Motion for Reconsideration and deny the Petition for lack of merit
Mutuc vs. COMELEC
AMELITO R. MUTUC, petitioner, vs.
COMMISSION ON ELECTIONS, respondent.

G.R. NO. L-32717

November 26, 1970

FERNANDO, J.:

FACTS:

The Commission on Elections (COMELEC) prohibited petitioner Amelito Mutuc, a candidate for the position of a delegate to the
Constitutional Convention, from using “jingles in his mobile units equipped with sound systems and loud speakers” on 22
October 1970. Petitioner impugned the act of respondent as violative of his right to free speech. Respondent however
contended that the prohibition was premised on a provision of the Constitutional Convention Act, which made it unlawful for
candidates “to purchase, produce, request or distribute sample ballots, or electoral propaganda gadgets such as pens, lighters,
fans (of whatever nature), flashlights, athletic goods or materials, wallets, bandanas, shirts, hats, matches, cigarettes, and the
like, whether of domestic or foreign origin.” It was its contention that the jingle proposed to be used by petitioner is the
recorded or taped voice of a singer and therefore a tangible propaganda material, under the phrase “and the like.”

ISSUE:
Whether “jingles” falls down on the prohibited electoral propaganda gadgets of R.A. No. 6132.

RULING:

For respondent Commission, the last three words sufficed to justify such an order. We view the matter differently. What was
done cannot merit our approval under the well-known principle of ejusdem generis, the general words following any
enumeration being applicable only to things of the same kind or class as those specifically referred to. It is quite apparent that
what was contemplated in the Act was the distribution of gadgets of the kind referred to as means of inducement to obtain a
favorable vote for the candidate responsible for distribution.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-32717 November 26, 1970

AMELITO R. MUTUC, petitioner, vs. COMMISSION ON ELECTIONS, respondent.

Amelito R. Mutuc in his own behalf. Romulo C. Felizmena for respondent.

FERNANDO, J.:

The invocation of his right to free speech by petitioner Amelito Mutuc, then a candidate for delegate to the
Constitutional Convention, in this special civil action for prohibition to assail the validity of a ruling of respondent
Commission on Elections enjoining the use of a taped jingle for campaign purposes, was not in vain. Nor could it be
considering the conceded absence of any express power granted to respondent by the Constitutional Convention Act
to so require and the bar to any such implication arising from any provision found therein, if deference be paid to the
principle that a statute is to be construed consistently with the fundamental law, which accords the utmost priority to
freedom of expression, much more so when utilized for electoral purposes. On November 3, 1970, the very same day
the case was orally argued, five days after its filing, with the election barely a week away, we issued a minute
resolution granting the writ of prohibition prayed for. This opinion is intended to explain more fully our decision.

In this special civil action for prohibition filed on October 29, 1970, petitioner, after setting forth his being a resident of
Arayat, Pampanga, and his candidacy for the position of delegate to the Constitutional Convention, alleged that
respondent Commission on Elections, by a telegram sent to him five days previously, informed him that his certificate
of candidacy was given due course but prohibited him from using jingles in his mobile units equipped with sound
systems and loud speakers, an order which, according to him, is "violative of [his] constitutional right ... to freedom of
speech." There being no plain, speedy and adequate remedy, according to petitioner, he would seek a writ of
1

prohibition, at the same time praying for a preliminary injunction. On the very next day, this Court adopted a resolution
requiring respondent Commission on Elections to file an answer not later than November 2, 1970, at the same time
setting the case for hearing for Tuesday November 3, 1970. No preliminary injunction was issued. There was no
denial in the answer filed by respondent on November 2, 1970, of the factual allegations set forth in the petition, but
the justification for the prohibition was premised on a provision of the Constitutional Convention Act, which made it
2

unlawful for candidates "to purchase, produce, request or distribute sample ballots, or electoral propaganda gadgets
such as pens, lighters, fans (of whatever nature), flashlights, athletic goods or materials, wallets, bandanas, shirts,
hats, matches, cigarettes, and the like, whether of domestic or foreign origin." It was its contention that the jingle
3

proposed to be used by petitioner is the recorded or taped voice of a singer and therefore a tangible propaganda
material, under the above statute subject to confiscation. It prayed that the petition be denied for lack of merit. The
case was argued, on November 3, 1970, with petitioner appearing in his behalf and Attorney Romulo C. Felizmena
arguing in behalf of respondent.

This Court, after deliberation and taking into account the need for urgency, the election being barely a week away,
issued on the afternoon of the same day, a minute resolution granting the writ of prohibition, setting forth the absence
of statutory authority on the part of respondent to impose such a ban in the light of the doctrine of ejusdem generis as
well as the principle that the construction placed on the statute by respondent Commission on Elections would raise
serious doubts about its validity, considering the infringement of the right of free speech of petitioner. Its concluding
portion was worded thus: "Accordingly, as prayed for, respondent Commission on Elections is permanently restrained
and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of
political jingles by candidates. This resolution is immediately executory." 4

1. As made clear in our resolution of November 3, 1970, the question before us was one of power. Respondent
Commission on Elections was called upon to justify such a prohibition imposed on petitioner. To repeat, no such
authority was granted by the Constitutional Convention Act. It did contend, however, that one of its provisions referred
to above makes unlawful the distribution of electoral propaganda gadgets, mention being made of pens, lighters, fans,
flashlights, athletic goods or materials, wallets, bandanas, shirts, hats, matches, and cigarettes, and concluding with
the words "and the like." For respondent Commission, the last three words sufficed to justify such an order. We view
5

the matter differently. What was done cannot merit our approval under the well-known principle of ejusdem generis,
the general words following any enumeration being applicable only to things of the same kind or class as those
specifically referred to. It is quite apparent that what was contemplated in the Act was the distribution of gadgets of
6

the kind referred to as a means of inducement to obtain a favorable vote for the candidate responsible for its
distribution.
The more serious objection, however, to the ruling of respondent Commission was its failure to manifest fealty to a
cardinal principle of construction that a statute should be interpreted to assure its being in consonance with, rather
than repugnant to, any constitutional command or prescription. Thus, certain Administrative Code provisions were
7

given a "construction which should be more in harmony with the tenets of the fundamental law." The desirability of
8

removing in that fashion the taint of constitutional infirmity from legislative enactments has always commended itself.
The judiciary may even strain the ordinary meaning of words to avert any collision between what a statute provides
and what the Constitution requires. The objective is to reach an interpretation rendering it free from constitutional
defects. To paraphrase Justice Cardozo, if at all possible, the conclusion reached must avoid not only that it is
unconstitutional, but also grave doubts upon that score. 9

2. Petitioner's submission of his side of the controversy, then, has in its favor obeisance to such a cardinal precept.
The view advanced by him that if the above provision of the Constitutional Convention Act were to lend itself to the
view that the use of the taped jingle could be prohibited, then the challenge of unconstitutionality would be difficult to
meet. For, in unequivocal language, the Constitution prohibits an abridgment of free speech or a free press. It has
been our constant holding that this preferred freedom calls all the more for the utmost respect when what may be
curtailed is the dissemination of information to make more meaningful the equally vital right of suffrage. What
respondent Commission did, in effect, was to impose censorship on petitioner, an evil against which this constitutional
right is directed. Nor could respondent Commission justify its action by the assertion that petitioner, if he would not
resort to taped jingle, would be free, either by himself or through others, to use his mobile loudspeakers. Precisely, the
constitutional guarantee is not to be emasculated by confining it to a speaker having his say, but not perpetuating
what is uttered by him through tape or other mechanical contrivances. If this Court were to sustain respondent
Commission, then the effect would hardly be distinguishable from a previous restraint. That cannot be validly done. It
would negate indirectly what the Constitution in express terms assures. 10

3. Nor is this all. The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of
any public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of
government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost rung
in the legal hierarchy. The three departments of government in the discharge of the functions with which it is entrusted
have no choice but to yield obedience to its commands. Whatever limits it imposes must be observed. Congress in the
enactment of statutes must ever be on guard lest the restrictions on its authority, whether substantive or formal, be
transcended. The Presidency in the execution of the laws cannot ignore or disregard what it ordains. In its task of
applying the law to the facts as found in deciding cases, the judiciary is called upon to maintain inviolate what is
decreed by the fundamental law. Even its power of judicial review to pass upon the validity of the acts of the
coordinate branches in the course of adjudication is a logical corollary of this basic principle that the Constitution is
paramount. It overrides any governmental measure that fails to live up to its mandates. Thereby there is a recognition
of its being the supreme law.

To be more specific, the competence entrusted to respondent Commission was aptly summed up by the present Chief
Justice thus: "Lastly, as the branch of the executive department — although independent of the President — to which
the Constitution has given the 'exclusive charge' of the 'enforcement and administration of all laws relative to the
conduct of elections,' the power of decision of the Commission is limited to purely 'administrative questions.'" It has
11

been the constant holding of this Court, as it could not have been otherwise, that respondent Commission cannot
exercise any authority in conflict with or outside of the law, and there is no higher law than the Constitution. Our
12

decisions which liberally construe its powers are precisely inspired by the thought that only thus may its responsibility
under the Constitution to insure free, orderly and honest elections be adequately fulfilled. There could be no
13

justification then for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech. Petitioner's case, as was obvious from the time of its
filing, stood on solid footing.

WHEREFORE, as set forth in our resolution of November 3, 1970, respondent Commission is permanently restrained
and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of
political taped jingles. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Barredo and Villamor, JJ., concur.

Dizon and Makasiar, JJ., are on leave.

Separate Opinions

TEEHANKEE, J., concurring:

In line with my separate opinion in Badoy vs. Ferrer on the unconstitutionality of the challenged provisions of the 1971
1

Constitutional Convention Act, I concur with the views of Mr. Justice Fernando in the main opinion that "there could be
no justification .... for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech." I would only add the following observations:

This case once again calls for application of the constitutional test of reasonableness required by the due process
clause of our Constitution. Originally, respondent Commission in its guidelines prescribed summarily that the use by a
candidate of a "mobile unit — roaming around and announcing a meeting and the name of the candidate ... is
prohibited. If it is used only for a certain place for a meeting and he uses his sound system at the meeting itself, there
is no violation." Acting upon petitioner's application, however, respondent Commission ruled that "the use of a sound
2

system by anyone be he a candidate or not whether stationary or part of a mobile unit is not prohibited by the 1971
Constitutional Convention Act" but imposed the condition — "provided that there are no jingles and no streamers or
posters placed in carriers."

Respondent Commission's narrow view is that "the use of a 'jingle,' a verbally recorded form of election propaganda,
is no different from the use of a 'streamer' or 'poster,' a printed form of election propaganda, and both forms of election
advertisement fall under the prohibition contained in sec. 12 of R.A. 6132," and "the record disc or tape where said
'jingle' has been recorded can be subject of confiscation by the respondent Commission under par. (E) of sec. 12 of
R.A. 6132." In this modern day and age of the electronically recorded or taped voice which may be easily and
inexpensively disseminated through a mobile sound system throughout the candidate's district, respondent
Commission would outlaw "recorded or taped voices" and would exact of the candidate that he make use of the
mobile sound system only by personal transmission and repeatedly personally sing his "jingle" or deliver his spoken
message to the voters even if he loses his voice in the process or employ another person to do so personally even if
this should prove more expensive and less effective than using a recorded or taped voice.

Respondent Commission's strictures clearly violate, therefore, petitioner's basic freedom of speech and expression.
They cannot pass the constitutional test of reasonableness in that they go far beyond a reasonable relation to the
proper governmental object and are manifestly unreasonable, oppressive and arbitrary.

Insofar as the placing of the candidate's "streamers" or posters on the mobile unit or carrier is concerned, respondent
Commission's adverse ruling that the same falls within the prohibition of section 12, paragraphs (C) and (E) has not
been appealed by petitioner. I would note that respondent Commission's premise that "the use of a 'jingle' ... is no
different from the use of a 'streamer' or 'poster' "in that these both represent forms of election advertisements — to
make the candidate and the fact of his candidacy known to the voters — is correct, but its conclusion is not. The
campaign appeal of the "jingle" is through the voters' ears while that of the "streamers" is through the voters' eyes. But
if it be held that the Commission's ban on "jingles" abridges unreasonably, oppressively and arbitrarily the candidate's
right of free expression, even though such "jingles" may occasionally offend some sensitive ears, the Commission's
ban on "streamers" being placed on the candidate's mobile unit or carrier, which "streamers" are less likely to offend
the voters' sense of sight should likewise be held to be an unreasonable, oppressive and arbitrary curtailment of the
candidate's same constitutional right.

The intent of the law to minimize election expenses as invoked by respondent Commission, laudable as it may be,
should not be sought at the cost of the candidate's constitutional rights in the earnest pursuit of his candidacy, but is to
be fulfilled in the strict and effective implementation of the Act's limitation in section 12(G) on the total expenditures
that may be made by a candidate or by another person with his knowledge and consent.
# Separate Opinions

TEEHANKEE, J., concurring:

In line with my separate opinion in Badoy vs. Ferrer on the unconstitutionality of the challenged provisions of the 1971
1

Constitutional Convention Act, I concur with the views of Mr. Justice Fernando in the main opinion that "there could be
no justification .... for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech." I would only add the following observations:

This case once again calls for application of the constitutional test of reasonableness required by the due process
clause of our Constitution. Originally, respondent Commission in its guidelines prescribed summarily that the use by a
candidate of a "mobile unit — roaming around and announcing a meeting and the name of the candidate ... is
prohibited. If it is used only for a certain place for a meeting and he uses his sound system at the meeting itself, there
is no violation." Acting upon petitioner's application, however, respondent Commission ruled that "the use of a sound
2

system by anyone be he a candidate or not whether stationary or part of a mobile unit is not prohibited by the 1971
Constitutional Convention Act" but imposed the condition — "provided that there are no jingles and no streamers or
posters placed in carriers."

Respondent Commission's narrow view is that "the use of a 'jingle,' a verbally recorded form of election propaganda,
is no different from the use of a 'streamer' or 'poster,' a printed form of election propaganda, and both forms of election
advertisement fall under the prohibition contained in sec. 12 of R.A. 6132," and "the record disc or tape where said
'jingle' has been recorded can be subject of confiscation by the respondent Commission under par. (E) of sec. 12 of
R.A. 6132." In this modern day and age of the electronically recorded or taped voice which may be easily and
inexpensively disseminated through a mobile sound system throughout the candidate's district, respondent
Commission would outlaw "recorded or taped voices" and would exact of the candidate that he make use of the
mobile sound system only by personal transmission and repeatedly personally sing his "jingle" or deliver his spoken
message to the voters even if he loses his voice in the process or employ another person to do so personally even if
this should prove more expensive and less effective than using a recorded or taped voice.

Respondent Commission's strictures clearly violate, therefore, petitioner's basic freedom of speech and expression.
They cannot pass the constitutional test of reasonableness in that they go far beyond a reasonable relation to the
proper governmental object and are manifestly unreasonable, oppressive and arbitrary.

Insofar as the placing of the candidate's "streamers" or posters on the mobile unit or carrier is concerned, respondent
Commission's adverse ruling that the same falls within the prohibition of section 12, paragraphs (C) and (E) has not
been appealed by petitioner. I would note that respondent Commission's premise that "the use of a 'jingle' ... is no
different from the use of a 'streamer' or 'poster' "in that these both represent forms of election advertisements — to
make the candidate and the fact of his candidacy known to the voters — is correct, but its conclusion is not. The
campaign appeal of the "jingle" is through the voters' ears while that of the "streamers" is through the voters' eyes. But
if it be held that the Commission's ban on "jingles" abridges unreasonably, oppressively and arbitrarily the candidate's
right of free expression, even though such "jingles" may occasionally offend some sensitive ears, the Commission's
ban on "streamers" being placed on the candidate's mobile unit or carrier, which "streamers" are less likely to offend
the voters' sense of sight should likewise be held to be an unreasonable, oppressive and arbitrary curtailment of the
candidate's same constitutional right.

The intent of the law to minimize election expenses as invoked by respondent Commission, laudable as it may be,
should not be sought at the cost of the candidate's constitutional rights in the earnest pursuit of his candidacy, but is to
be fulfilled in the strict and effective implementation of the Act's limitation in section 12(G) on the total expenditures
that may be made by a candidate or by another person with his knowledge and consent.
PRIVATE ACTS AND CONTRACTS STATUTE

EMETERIA LIWAG, Petitioner vs. HAPPY GLEN LOOP HOMEOWNERS ASSOCIATION, INC., Respondent
G. R. No. 189755
July 04, 2012
Sereno, J.

FACTS

In 1978, F. G. R. Sales, the original developer of Happy Glen Loop, loaned from Ernesto Marcelo, owner of T. P.
Marcelo Realty Corporation. The former failed to settle its debts with the latter, so, he assigned all his rights to Marcelo
over several parcels of land in the Subdivision including the receivables from the lots already sold.

As the successor-in-interest, Marcelo represented to lot buyers, the National Housing Authority (NHA) and the
Human Settlement Regulatory Commission (HSRC) that a water facility is available in the subdivision. The said water
facility has been the only source of water of the residents for thirty (30) years.

In September 1995, Marcelo sold Lot 11, Block 5 to Hermogenes Liwag. As a result, Transfer Certificate of Title
(TCT) No. C-350099 was issued to the latter. In 2003, Hermogenes died. Petitioner, wife of Hermogenes, subsequently
wrote to the respondent Association demanding the removal of the overhead water tank over the parcel of land. The
latter refused and filed a case before the Housing and Land Use Regulatory Board against T. P. Marcelo Realty
Corporation, petitioner and the surviving heirs of Hermogenes.

The HLURB ruling was in favor of the respondent Association. One of the things it affirmed was the existence of
an easement for water system/facility or open space on Lot 11, Block 5 of TCT No. C-350099 wherein the deep well and
overhead tank are situated. However, on appeal before the HLURB Board of Commissioners, the Board found that Lot
11, Block 5 was not an open space

ISSUE

Whether or not Lot 11, Block 5 of the Happy Glen Loop is considered an “open space” as defined in P. D. 1216.

RULING

Yes, the aforementioned parcel of land is considered an “open space.” The Court used the basic statutory
construction principle of ejusdem generis to determine whether the area falls under “other similar facilities and
amenities” since P. D. 1216 makes no specific mention of areas reserved for water facilities.

Ejusdem generis states that where a general word or phrase follows an enumeration of particular and specific
words of the same class, the general word or phrase is to be construed to include – or to be restricted to – things akin
to or resembling, or of the same kind or class as, those specifically mentioned. Applying that principle, the Court found
out that the enumeration refers to areas reserved for the common welfare of the community. Therefore, the phrase
“other similar facilities and amenities” should be interpreted in like manner.

It is without a doubt that the facility was used for the benefit of the community. Water is a basic necessity,
without which, survival in the community would be impossible.
 SECOND DIVISION

[G.R. NO. 189755 - July 4, 2012]

EMETERIA LIWAG, Petitioner, v. HAPPY GLEN LOOP HOMEOWNERS ASSOCIATION, INC., Respondent.

DECISION

SERENO, J.:

This Rule 45 Petition assails the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-GR SP No. 100454. The CA
affirmed with modification the Decision3 and Order4 of the Office of the President (O.P.) in OP Case No. 05-G-224, which
had set aside the Decision5 of the Board of Commissioners of the Housing and Land Use Regulatory Board (HLURB) in
HLURB Case No. REM-A-041210-0261 and affirmed the Decision6 of the Housing and Land Use Arbiter in HLURB Case No.
REM-030904-12609.

The controversy stems from a water facility in Happy Glen Loop Subdivision (the Subdivision), which is situated in
Deparo, Caloocan City.

Sometime in 1978, F.G.R. Sales, the original developer of Happy Glen Loop, obtained a loan from Ernesto Marcelo
(Marcelo), the owner of T.P. Marcelo Realty Corporation. To settle its debt after failing to pay its obligation, F.G.R. Sales
assigned to Marcelo all its rights over several parcels of land in the Subdivision, as well as receivables from the lots
already sold.7 ςrνll

As the successor-in-interest of the original developer, Marcelo represented to subdivision lot buyers, the National Housing
Authority (NHA) and the Human Settlement Regulatory Commission (HSRC) that a water facility was available in the
Subdivision.8 ςrνll

For almost 30 years, the residents of the Subdivision relied on this facility as their only source of water.9 This fact was
acknowledged by Marcelo and Hermogenes Liwag (Hermogenes), petitioner s late husband who was then the president of
respondent Happy Glen Loop Homeowners Association (Association).10 ςrνll

Sometime in September 1995, Marcelo sold Lot 11, Block No. 5 to Hermogenes. As a result, Transfer Certificate of Title
(TCT) No. C-350099

was issued to him. When Hermogenes died in 2003, petitioner Emeteria P. Liwag subsequently wrote a letter to
respondent Association, demanding the removal of the overhead water tank from the subject parcel of land. 11 ςrνll

Refusing to comply with petitioner s demand, respondent Association filed before the HLURB an action for specific
performance; confirmation, maintenance and donation of water facilities; annulment of sale; and cancellation of TCT No.
350099 against T.P. Marcelo Realty Corporation (the owner and developer of the Subdivision), petitioner Emeteria, and
the other surviving heirs of Hermogenes.

After the parties submitted their respective position papers, Housing and Land Use Arbiter Joselito Melchor (Arbiter
Melchor) ruled in favor of the Association. He invalidated the transfer of the parcel of land in favor of Hermogenes in a
Decision dated 5 October 2004, the dispositive portion of which reads: 12 ςrνll

WHEREFORE, premises considered, judgment is hereby rendered as follows: ςηαñrοblεš νιr†υα l lαω lιbrαrÿ

1. Confirming the existence of an easement for water system/facility or open space on Lot 11, Block 5 of TCT No. C-
350099 wherein the deep well and overhead tank are situated,

2. Making the Temporary Restraining Order dated 01 April 2004 permanent so as to allow the continuous use and
maintenance of the said water facility, i.e., deep well and over head water tank, on the subject lot, by the complainant s
members and residents of the subject project, and restraining all the respondents from committing the acts complained
of and as described in the complaint,

3. Declaring as void ab initio the deed of sale dated 26 February 2001, involving Lot 11, Block 5 in favor of spouses
Liwag, and TCT No. C-350099 in the name of same respondents without prejudice to complainant s right to institute a
criminal action in coordination with the prosecuting arms of the government against respondents Marcelo and Liwag, and
furthermore, with recourse by Liwag against T.P. and/or Marcelo to ask for replacement for controverted lot with a new
one within the subject project; and cralawlibrary

4. Ordering respondents, jointly and severally, to pay complainant the amount of P 10,000.00 as attorney s fees and the
amount of P 20,000.00 as damages in favor of the complainant s members.
chanrobles virtual law l ibrary
SO ORDERED.

On appeal before the HLURB Board of Commissioners, the Board found that Lot 11, Block 5 was not an open space.
Moreover, it ruled that Marcelo had complied with the requirements of Presidential Decree No. (P.D.) 1216 with the
donation of 9,047 square meters of open space and road lots. It further stated that there was no proof that Marcelo or
the original subdivision owner or developer had at any time represented that Lot 11, Block 5 was an open space. It
therefore concluded that the use of the lot as site of the water tank was merely tolerated.13 ςrνll

Respondent Association interposed an appeal to the OP, which set aside the Decision of the HLURB Board of
Commissioners and affirmed that of the Housing and Land Use Arbiter.14 ςrνll

The OP ruled that Lot 11, Block 5 was an open space, because it was the site of the water installation of the Subdivision,
per Marcelo s official representation on file with the HLURB National Capital Region Field Office. The OP further ruled that
the open space required under P.D. 957 excluded road lots; and, thus, the Subdivision s open space was still short of
that required by law. Finally, it ruled that petitioner Liwag was aware of the representations made by Marcelo and his
predecessors-in-interest, because he had acknowledged the existence of a water installation system as per his Affidavit
of 10 August 1982.15 ςrνll

Petitioner Liwag unsuccessfully moved for reconsideration,16 then filed a Rule 43 Petition for Review before the CA.17 ςrνll

The CA affirmed that the HLURB possessed jurisdiction to invalidate the sale of the subject parcel of land to Hermogenes
and to invalidate the issuance of TCT No. C-350099 pursuant thereto.18 The appellate court agreed with the OP that an
easement for water facility existed on the subject parcel of land and formed part of the open space required to be
reserved by the subdivision developer under P.D. 957.19 However, it ruled that Arbiter Melchor should not have
recommended the filing of a criminal action against petitioner, as she was not involved in the development of the
Subdivision or the sale of its lots to buyers.20 The CA likewise deleted the award of attorney s fees and damages in favor
of respondent.21 ςrνll

Aggrieved, petitioner filed the instant Petition before this Court.

The Court s Ruling

We affirm the ruling of the appellate court.

The HLURB has exclusive jurisdiction

over the case at bar

The jurisdiction of the HLURB is outlined in P.D. 1344, "Empowering the National Housing Authority to Issue Writ of
Execution in the Enforcement of its Decision under Presidential Decree No. 957," viz: ςrαlαω

Sec. 1. In the exercise of its functions to regulate real estate trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing Authority shall have the exclusive jurisdiction to hear and decide
cases of the following nature. ςηαñrοblε š νιr†υαl lαω lιbrαrÿ

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and cralawlibrary

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, broker or salesman.
chanrobles virtual law l ibrary

When respondent Association filed its Complaint before the HLURB, it alleged that Marcelo s sale of Lot 11, Block 5 to
Hermogenes was done in violation of P.D. 957 in the following manner: ςrαlαω

12. Through fraudulent acts and connivance of [T.P. and Ernesto Marcelo] and the late Liwag and without the knowledge
and consent of the complainants all in violation of P.D. 957 and its implementing regulations, respondents T.P. and
Ernesto Marcelo transferred the same lot where the deep well is located which is covered by TCT No. C-41785 in favor of
spouses Hermogenes Liwag and Emeteria Liwag to the great damage and prejudice of complainants x x x.22 (Empasis in
the original)

We find that this statement sufficiently alleges that the subdivision owner and developer fraudulently sold to Hermogenes
the lot where the water facility was located. Subdivisions are mandated to maintain and provide adequate water facilities
for their communities.23 Without a provision for an alternative water source, the subdivision developer s alleged sale of
the lot where the community s sole water source was located constituted a violation of this obligation. Thus, this
allegation makes out a case for an unsound real estate business practice of the subdivision owner and developer. Clearly,
the case at bar falls within the exclusive jurisdiction of the HLURB.

It is worthy to note that the HLURB has exclusive jurisdiction over complaints arising from contracts between the
subdivision developer and the lot buyer, or those aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations to make the Subdivision a better place to live in.24 This interpretation is in line with
one of P.D. 957 s "Whereas clauses," which provides: ςrαlαω

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have
reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home
and lot buyers. x x x.

P.D. 957 was promulgated to closely regulate real estate subdivision and condominium businesses. 25 Its provisions were
intended to encompass all questions regarding subdivisions and condominiums. 26 The decree aimed to provide for an
appropriate government agency, the HLURB, to which aggrieved parties in transactions involving subdivisions and
condominiums may take recourse.27 ςrνll

II

An easement for water facility exists on Lot 11, Block 5 of Happy Glen Loop Subdivision

Easements or servitudes are encumbrances imposed upon an immovable for the benefit of another immovable belonging
to a different owner,28 for the benefit of a community, 29 or for the benefit of one or more persons to whom the
encumbered estate does not belong.30 ςrνll

The law provides that easements may be continuous or discontinuous and apparent or non-apparent. The pertinent
provisions of the Civil Code are quoted below: ςrαlαω

Art. 615. Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without the intervention of any act of man.

Discontinuous easements are those which are used at intervals and depend upon the acts of man.

Apparent easements are those which are made known and are continually kept in view by external signs that reveal the
use and enjoyment of the same.

Non-apparent easements are those which show no external indication of their existence.

In this case, the water facility is an encumbrance on Lot 11, Block 5 of the Subdivision for the benefit of the community.
It is continuous and apparent, because it is used incessantly without human intervention, and because it is continually
kept in view by the overhead water tank, which reveals its use to the public.

Contrary to petitioner s contention that the existence of the water tank on Lot 11, Block 5 is merely tolerated, we find
that the easement of water facility has been voluntarily established either by Marcelo, the Subdivision owner and
developer; or by F.G.R. Sales, his predecessor-in-interest and the original developer of the Subdivision. For more than 30
years, the facility was continuously used as the residents sole source of water.31 The Civil Code provides that continuous
and apparent easements are acquired either by virtue of a title or by prescription of 10 years. 32 It is therefore clear that
an easement of water facility has already been acquired through prescription.

III

Lot 11, Block 5 of Happy Glen Loop Subdivision forms part of its open space

The term "open space" is defined in P.D. 1216 as "an area reserved exclusively for parks, playgrounds, recreational uses,
schools, roads, places of worship, hospitals, health centers, barangay centers and other similar facilities and amenities.33 ςrνll

The decree makes no specific mention of areas reserved for water facilities. Therefore, we resort to statutory construction
to determine whether these areas fall under "other similar facilities and amenities."

The basic statutory construction principle of ejusdem generis states that where a general word or phrase follows an
enumeration of particular and specific words of the same class, the general word or phrase is to be construed to include
or to be restricted to things akin to or resembling, or of the same kind or class as, those specifically mentioned.34 ςrνll
Applying this principle to the afore-quoted Section 1 of P.D. 1216, we find that the enumeration refers to areas reserved
for the common welfare of the community. Thus, the phrase "other similar facilities and amenities" should be interpreted
in like manner.

Here, the water facility was undoubtedly established for the benefit of the community. Water is a basic need in human
settlements,35 without which the community would not survive. We therefore rule that, based on the principle of ejusdem
generis and taking into consideration the intention of the law to create and maintain a healthy environment in human
settlements,36 the location of the water facility in the Subdivision must form part of the area reserved for open space.

IV

The subject parcel of land is beyond the commerce of man and its sale is prohibited under the law

The law expressly provides that open spaces in subdivisions are reserved for public use and are beyond the commerce of
man.37 As such, these open spaces are not susceptible of private ownership and appropriation. We therefore rule that the
sale of the subject parcel of land by the subdivision owner or developer to petitioner s late husband was contrary to law.
Hence, we find no reversible error in the appellate court s Decision upholding the HLURB Arbiter s annulment of the Deed
of Sale.

Petitioner attempts to argue in favor of the validity of the sale of the subject parcel of land by invoking the principle of
indefeasibility of title and by arguing that this action constitutes a collateral attack against her title, an act proscribed by
the Property Registration Decree.

Petitioner is mistaken on both counts.

First, the rule that a collateral attack against a Torrens title is prohibited by law38 finds no application to this case.

There is an attack on the title when the object of an action is to nullify a Torrens title, thus challenging the judgment or
proceeding pursuant to which the title was decreed.39 In the present case, this action is not an attack against the validity
of the Torrens title, because it does not question the judgment or proceeding that led to the issuance of the title. Rather,
this action questions the validity of the transfer of land from Marcelo to petitioner s husband. As there is no attack direct
or collateral against the title, petitioner s argument holds no water.

Second, the principle of indefeasibility of title is not absolute, and there are well-defined exceptions to this rule.40 In
Aqualab Philippines, Inc. v. Heirs of Pagobo,41 we ruled that this defense does not extend to a transferee who takes the
title with knowledge of a defect in that of the transferee s predecessor-in-interest.

In this case, Spouses Liwag were aware of the existence of the easement of water facility when Marcelo sold Lot 11,
Block 5 to them. Hermogenes even executed an Affidavit dated 10 August 1982 attesting to the sufficiency of the water
supply coming from an electrically operated water pump in the Subdivision.42 It is undisputed that the water facility in
question was their only water source during that time. As residents of the Subdivision, they had even benefited for
almost 30 years from its existence. Therefore, petitioner cannot be shielded by the principle of indefeasibility and
conclusiveness of title, as she was not an innocent purchaser in good faith and for value.

From the discussion above, we therefore conclude that the appellate court committed no reversible error in the assailed
Decision and accordingly affirm it in toto.

WHEREFORE, premises considered, the instant Petition for Review is DENIED, and the assailed Decision and Resolution of
the Court of Appeals in CA-GR SP No. 100454 are hereby AFFIRMED.

SO ORDERED.
PELIZLOY REALTY CORPORATION, represented herein by its President, GREGORY K. LOY, Petitioner, vs. THE
PROVINCE OF BENGUET, Respondent.

G.R. No. 183137, 10 April 2013.

LEONEN, J.:

Petitioner Pelizloy Realty Corporation owns Palm Grove Resort in Tuba, Benguet, which has facilities like swimming pools, a spa
and function halls.

In 2005, the Provincial Board of Benguet approved its Revenue Code of 2005. Section 59, the tax ordinance levied a 10%
amusement tax on gross receipts from admissions to "resorts, swimming pools, bath houses, hot springs and tourist spots."

Pelizloy's posits that amusement tax is an ultra vires act. Thus, it filed an appeal/petition before the Secretary of Justice. Upon the
Secretary’s failure to decide on the appeal within sixty days, Pelizloy filed a Petition for Declaratory Relief and Injunction before the
RTC.

Pelizloy argued that the imposition was in violation of the limitation on the taxing powers of local government units under Section
133 (i) of the Local Government Code, which provides that the exercise of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of percentage or value-added tax (VAT) on sales, barters or exchanges or similar
transactions on goods or services except as otherwise provided.

The Province of Benguet assailed the that the phrase ‘other places of amusement’ in Section 140 (a) of the LGC encompasses
resorts, swimming pools, bath houses, hot springs, and tourist spots since Article 131 (b) of the LGC defines "amusement" as
"pleasurable diversion and entertainment synonymous to relaxation, avocation, pastime, or fun."

RTC rendered a Decision assailed Decision dismissing the Petition for Declaratory Relief and Injunction for lack of merit.
Procedurally, the RTC ruled that Declaratory Relief was a proper remedy. However, it gave credence to the Province of Benguet's
assertion that resorts, swimming pools, bath houses, hot springs, and tourist spots are encompassed by the phrase ‘other places of
amusement’ in Section 140 of the LGC.

ISSUE: W/N provinces are authorized to impose amusement taxes on admission fees to resorts, swimming pools, bath houses,
hot springs, and tourist spots for being "amusement places" under the LGC.

RULING: NO.

Amusement taxes are percentage taxes. However, provinces are not barred from levying amusement taxes even if amusement
taxes are a form of percentage taxes. The levying of percentage taxes is prohibited "except as otherwise provided" by the LGC.
Section 140 provides such exception.

Section 140 expressly allows for the imposition by provinces of amusement taxes on "the proprietors, lessees, or operators of
theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement."

However, resorts, swimming pools, bath houses, hot springs, and tourist spots are not among those places expressly mentioned by
Section 140 of the LGC as being subject to amusement taxes. Thus, the determination of whether amusement taxes may be levied
on admissions to these places hinges on whether the phrase ‘other places of amusement’ encompasses resorts, swimming pools,
bath houses, hot springs, and tourist spots.

Under the principle of ejusdem generis, "where a general word or phrase follows an enumeration of particular and specific words of
the same class or where the latter follow the former, the general word or phrase is to be construed to include, or to be restricted to
persons, things or cases akin to, resembling, or of the same kind or class as those specifically mentioned."

Section 131 (c) of the LGC already provides a clear definition: "Amusement Places" include theaters, cinemas, concert halls,
circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or
performances.

As defined in The New Oxford American Dictionary, ‘show’ means "a spectacle or display of something, typically an impressive
one"; while ‘performance’ means "an act of staging or presenting a play, a concert, or other form of entertainment." As such, the
ordinary definitions of the words ‘show’ and ‘performance’ denote not only visual engagement (i.e., the seeing or viewing of things)
but also active doing (e.g., displaying, staging or presenting) such that actions are manifested to, and (correspondingly) perceived
by an audience.

Considering these, it is clear that resorts, swimming pools, bath houses, hot springs and tourist spots cannot be considered venues
primarily "where one seeks admission to entertain oneself by seeing or viewing the show or performances". While it is true that they
may be venues where people are visually engaged, they are not primarily venues for their proprietors or operators to actively
display, stage or present shows and/or performances.
 Republic of the Philippines
SUPREME COURT
Baguio City

THIRD DIVISION

G.R. No. 183137 April 10, 2013

PELIZLOY REALTY CORPORATION, represented herein by its President, GREGORY K. LOY, Petitioner,
vs.
THE PROVINCE OF BENGUET, Respondent.

DECISION

LEONEN, J.:

The principal issue in this case is the scope of authority of a province to impose an amusement tax.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that the December 10, 2007 decision of the
Regional Trial Court,- Branch 62, La Trinidad, Benguet in Civil Case No. 06-CV-2232 be reversed and set aside and a new one
issued in which: ( 1) respondent Province of Benguet is declared as having no authority to levy amusement taxes on admission
fees for resorts, swimming pools, bath houses, hot springs, tourist spots, and other places for recreation; (2) Section 59, Article X of
the Benguet Provincial Revenue Code of 2005 is declared null and void; and (3) the respondent Province of Benguet is
permanently enjoined from enforcing Section 59, Article X of the Benguet Provincial Revenue Code of 2005.

Petitioner Pelizloy Realty Corporation ("Pelizloy") owns Palm Grove Resort, which is designed for recreation and which has
facilities like swimming pools, a spa and function halls. It is located at Asin, Angalisan, Municipality of Tuba, Province of Benguet.

On December 8, 2005, the Provincial Board of the Province of Benguet approved Provincial Tax Ordinance No. 05-107, otherwise
known as the Benguet Revenue Code of 2005 ("Tax Ordinance"). Section 59, Article X of the Tax Ordinance levied a ten percent
(10%) amusement tax on gross receipts from admissions to "resorts, swimming pools, bath houses, hot springs and tourist spots."
Specifically, it provides the following:

Article Ten: Amusement Tax on Admission

Section 59. Imposition of Tax. There is hereby levied a tax to be collected from the proprietors, lessees, or operators of theaters,
cinemas, concert halls, circuses, cockpits, dancing halls, dancing schools, night or day clubs, and other places of amusement at the
rate of thirty percent (30%) of the gross receipts from admission fees; and

A tax of ten percent (10%) of gross receipts from admission fees for boxing, resorts, swimming pools, bath houses, hot springs, and
tourist spots is likewise levied. [Emphasis and underscoring supplied]

Section 162 of the Tax Ordinance provided that the Tax Ordinance shall take effect on January 1, 2006.

It was Pelizloy's position that the Tax Ordinance's imposition of a 10% amusement tax on gross receipts from admission fees for
resorts, swimming pools, bath houses, hot springs, and tourist spots is an ultra vires act on the part of the Province of Benguet.
Thus, it filed an appeal/petition before the Secretary of Justice on January 27, 2006.

The appeal/petition was filed within the thirty (30)-day period from the effectivity of a tax ordinance allowed by Section 187 of
Republic Act No. 7160, otherwise known as the Local Government Code (LGC). 1 The appeal/petition was docketed as MSO-OSJ
Case No. 03-2006.

Under Section 187 of the LGC, the Secretary of Justice has sixty (60) days from receipt of the appeal to render a decision. After the
lapse of which, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.

Treating the Secretary of Justice's failure to decide on its appeal/petition within the sixty (60) days provided by Section 187 of the
LGC as an implied denial of such appeal/petition, Pelizloy filed a Petition for Declaratory Relief and Injunction before the Regional
Trial Court, Branch 62, La Trinidad, Benguet. The petition was docketed as Civil Case No. 06-CV-2232.

Pelizloy argued that Section 59, Article X of the Tax Ordinance imposed a percentage tax in violation of the limitation on the taxing
powers of local government units (LGUs) under Section 133 (i) of the LGC. Thus, it was null and void ab initio. Section 133 (i) of the
LGC provides:

Section 133. Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise provided herein, the
exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:

xxx
(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as
otherwise provided herein

The Province of Benguet assailed the Petition for Declaratory Relief and Injunction as an improper remedy. It alleged that once a
tax liability has attached, the only remedy of a taxpayer is to pay the tax and to sue for recovery after exhausting administrative
remedies.2

On substantive grounds, the Province of Benguet argued that the phrase ‘other places of amusement’ in Section 140 (a) of the
LGC3 encompasses resorts, swimming pools, bath houses, hot springs, and tourist spots since "Article 220 (b) (sic)" of the LGC
defines "amusement" as "pleasurable diversion and entertainment x x x synonymous to relaxation, avocation, pastime, or
fun."4 However, the Province of Benguet erroneously cited Section 220 (b) of the LGC. Section 220 of the LGC refers to valuation of
real property for real estate tax purposes. Section 131 (b) of the LGC, the provision which actually defines "amusement", states:

Section 131. Definition of Terms. - When used in this Title, the term:

xxx

(b) "Amusement" is a pleasurable diversion and entertainment. It is synonymous to relaxation, avocation, pastime, or fun On
December 10, 2007, the RTC rendered the assailed Decision dismissing the Petition for Declaratory Relief and Injunction for lack of
merit.

Procedurally, the RTC ruled that Declaratory Relief was a proper remedy. On the validity of Section 59, Article X of the Tax
Ordinance, the RTC noted that, while Section 59, Article X imposes a percentage tax, Section 133 (i) of the LGC itself allowed for
exceptions. It noted that what the LGC prohibits is not the imposition by LGUs of percentage taxes in general but the "imposition
and levy of percentage tax on sales, barters, etc., on goods and services only." 5 It further gave credence to the Province of
Benguet's assertion that resorts, swimming pools, bath houses, hot springs, and tourist spots are encompassed by the phrase
‘other places of amusement’ in Section 140 of the LGC.

On May 21, 2008, the RTC denied Pelizloy’s Motion for Reconsideration.

Aggrieved, Pelizloy filed the present petition on June 10, 2008 on pure questions of law. It assailed the legality of Section 59, Article
X of the Tax Ordinance as being a (supposedly) prohibited percentage tax per Section 133 (i) of the LGC.

In its Comment, the Province of Benguet, erroneously citing Section 40 of the LGC, argued that Section 59, Article X of the Tax
Ordinance does not levy a percentage tax "because the imposition is not based on the total gross receipts of services of the
petitioner but solely and actually limited on the gross receipts of the admission fees collected."6 In addition, it argued that provinces
can validly impose amusement taxes on resorts, swimming pools, bath houses, hot springs, and tourist spots, these being
‘amusement places’.

For resolution in this petition are the following issues:

1. Whether or not Section 59, Article X of Provincial Tax Ordinance No. 05-107, otherwise known as the Benguet Revenue
Code of 2005, levies a percentage tax.

2. Whether or not provinces are authorized to impose amusement taxes on admission fees to resorts, swimming pools,
bath houses, hot springs, and tourist spots for being "amusement places" under the Local Government Code.

The power to tax "is an attribute of sovereignty,"7 and as such, inheres in the State. Such, however, is not true for provinces, cities,
municipalities and barangays as they are not the sovereign;8 rather, they are mere "territorial and political subdivisions of the
Republic of the Philippines".9

The rule governing the taxing power of provinces, cities, muncipalities and barangays is summarized in Icard v. City Council of
Baguio:10

It is settled that a municipal corporation unlike a sovereign state is clothed with no inherent power of taxation. The charter or statute
must plainly show an intent to confer that power or the municipality, cannot assume it. And the power when granted is to be
construed in strictissimi juris. Any doubt or ambiguity arising out of the term used in granting that power must be resolved against
the municipality. Inferences, implications, deductions – all these – have no place in the interpretation of the taxing power of a
municipal corporation.11 [Underscoring supplied]

Therefore, the power of a province to tax is limited to the extent that such power is delegated to it either by the Constitution or by
statute. Section 5, Article X of the 1987 Constitution is clear on this point:

Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees and
charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy.
Such taxes, fees, and charges shall accrue exclusively to the local governments. [Underscoring supplied]
Per Section 5, Article X of the 1987 Constitution, "the power to tax is no longer vested exclusively on Congress; local legislative
bodies are now given direct authority to levy taxes, fees and other charges."12 Nevertheless, such authority is "subject to such
guidelines and limitations as the Congress may provide". 13

In conformity with Section 3, Article X of the 1987 Constitution, 14 Congress enacted Republic Act No. 7160, otherwise known as the
Local Government Code of 1991. Book II of the LGC governs local taxation and fiscal matters.

Relevant provisions of Book II of the LGC establish the parameters of the taxing powers of LGUS found below.

First, Section 130 provides for the following fundamental principles governing the taxing powers of LGUs:

1. Taxation shall be uniform in each LGU.

2. Taxes, fees, charges and other impositions shall:

a. be equitable and based as far as practicable on the taxpayer's ability to pay;

b. be levied and collected only for public purposes;

c. not be unjust, excessive, oppressive, or confiscatory;

d. not be contrary to law, public policy, national economic policy, or in the restraint of trade.

3. The collection of local taxes, fees, charges and other impositions shall in no case be let to any private person.

4. The revenue collected pursuant to the provisions of the LGC shall inure solely to the benefit of, and be subject to the
disposition by, the LGU levying the tax, fee, charge or other imposition unless otherwise specifically provided by the LGC.

5. Each LGU shall, as far as practicable, evolve a progressive system of taxation.

Second, Section 133 provides for the common limitations on the taxing powers of LGUs. Specifically, Section 133 (i) prohibits the
levy by LGUs of percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services
except as otherwise provided by the LGC.

As it is Pelizloy’s contention that Section 59, Article X of the Tax Ordinance levies a prohibited percentage tax, it is crucial to
understand first the concept of a percentage tax.

In Commissioner of Internal Revenue v. Citytrust Investment Phils. Inc.,15 the Supreme Court defined percentage tax as a "tax
measured by a certain percentage of the gross selling price or gross value in money of goods sold, bartered or imported; or of the
gross receipts or earnings derived by any person engaged in the sale of services." Also, Republic Act No. 8424, otherwise known
as the National Internal Revenue Code (NIRC), in Section 125, Title V,16 lists amusement taxes as among the (other) percentage
taxes which are levied regardless of whether or not a taxpayer is already liable to pay value-added tax (VAT).

Amusement taxes are fixed at a certain percentage of the gross receipts incurred by certain specified establishments.

Thus, applying the definition in CIR v. Citytrust and drawing from the treatment of amusement taxes by the NIRC, amusement taxes
are percentage taxes as correctly argued by Pelizloy.

However, provinces are not barred from levying amusement taxes even if amusement taxes are a form of percentage taxes.
Section 133 (i) of the LGC prohibits the levy of percentage taxes "except as otherwise provided" by the LGC.

Section 140 of the LGC provides:

SECTION 140. Amusement Tax - (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or
operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than
thirty percent (30%) of the gross receipts from admission fees.

(b) In the case of theaters of cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or
operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or
operators and the distributors of the cinematographic films.

(c) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary
and oratorical presentations, except pop, rock, or similar concerts shall be exempt from the payment of the tax herein
imposed.
 (d) The Sangguniang Panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. In case
of fraud or failure to pay the tax, the Sangguniang Panlalawigan may impose such surcharges, interests and penalties.

(e) The proceeds from the amusement tax shall be shared equally by the province and the municipality where such
amusement places are located. [Underscoring supplied]

Evidently, Section 140 of the LGC carves a clear exception to the general rule in Section 133 (i). Section 140 expressly allows for
the imposition by provinces of amusement taxes on "the proprietors, lessees, or operators of theaters, cinemas, concert halls,
circuses, boxing stadia, and other places of amusement."

However, resorts, swimming pools, bath houses, hot springs, and tourist spots are not among those places expressly mentioned by
Section 140 of the LGC as being subject to amusement taxes. Thus, the determination of whether amusement taxes may be levied
on admissions to resorts, swimming pools, bath houses, hot springs, and tourist spots hinges on whether the phrase ‘other places
of amusement’ encompasses resorts, swimming pools, bath houses, hot springs, and tourist spots.

Under the principle of ejusdem generis, "where a general word or phrase follows an enumeration of particular and specific words of
the same class or where the latter follow the former, the general word or phrase is to be construed to include, or to be restricted to
persons, things or cases akin to, resembling, or of the same kind or class as those specifically mentioned."17

The purpose and rationale of the principle was explained by the Court in National Power Corporation v. Angas 18 as follows:

The purpose of the rule on ejusdem generis is to give effect to both the particular and general words, by treating the particular
words as indicating the class and the general words as including all that is embraced in said class, although not specifically named
by the particular words. This is justified on the ground that if the lawmaking body intended the general terms to be used in their
unrestricted sense, it would have not made an enumeration of particular subjects but would have used only general terms. [2
Sutherland, Statutory Construction, 3rd ed., pp. 395-400].19

In Philippine Basketball Association v. Court of Appeals,20 the Supreme Court had an opportunity to interpret a starkly similar
provision or the counterpart provision of Section 140 of the LGC in the Local Tax Code then in effect. Petitioner Philippine
Basketball Association (PBA) contended that it was subject to the imposition by LGUs of amusement taxes (as opposed to
amusement taxes imposed by the national government). In support of its contentions, it cited Section 13 of Presidential Decree
1âwphi1

No. 231, otherwise known as the Local Tax Code of 1973, (which is analogous to Section 140 of the LGC) providing the following:

Section 13. Amusement tax on admission. - The province shall impose a tax on admission to be collected from the proprietors,
lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement xxx.

Applying the principle of ejusdem generis, the Supreme Court rejected PBA's assertions and noted that:

In determining the meaning of the phrase 'other places of amusement', one must refer to the prior enumeration of theaters,
cinematographs, concert halls and circuses with artistic expression as their common characteristic. Professional basketball games
do not fall under the same category as theaters, cinematographs, concert halls and circuses as the latter basically belong to artistic
forms of entertainment while the former caters to sports and gaming. 21 [Underscoring supplied]

However, even as the phrase ‘other places of amusement’ was already clarified in Philippine Basketball Association, Section 140 of
the LGC adds to the enumeration of 'places of amusement' which may properly be subject to amusement tax. Section 140
specifically mentions 'boxing stadia' in addition to "theaters, cinematographs, concert halls and circuses" which were already
mentioned in PD No. 231. Also, 'artistic expression' as a characteristic does not pertain to 'boxing stadia'.

In the present case, the Court need not embark on a laborious effort at statutory construction. Section 131 (c) of the LGC already
provides a clear definition of ‘amusement places’:

Section 131. Definition of Terms. - When used in this Title, the term:

xxx

(c) "Amusement Places" include theaters, cinemas, concert halls, circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or performances [Underscoring supplied]

Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are bound by a common typifying characteristic in that they
are all venues primarily for the staging of spectacles or the holding of public shows, exhibitions, performances, and other events
meant to be viewed by an audience. Accordingly, ‘other places of amusement’ must be interpreted in light of the typifying
characteristic of being venues "where one seeks admission to entertain oneself by seeing or viewing the show or performances" or
being venues primarily used to stage spectacles or hold public shows, exhibitions, performances, and other events meant to be
viewed by an audience.

As defined in The New Oxford American Dictionary, 22 ‘show’ means "a spectacle or display of something, typically an impressive
one";23 while ‘performance’ means "an act of staging or presenting a play, a concert, or other form of entertainment."24 As such, the
ordinary definitions of the words ‘show’ and ‘performance’ denote not only visual engagement (i.e., the seeing or viewing of things)
but also active doing (e.g., displaying, staging or presenting) such that actions are manifested to, and (correspondingly) perceived
by an audience.

Considering these, it is clear that resorts, swimming pools, bath houses, hot springs and tourist spots cannot be considered venues
primarily "where one seeks admission to entertain oneself by seeing or viewing the show or performances". While it is true that they
may be venues where people are visually engaged, they are not primarily venues for their proprietors or operators to actively
display, stage or present shows and/or performances.

Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do not belong to the same category or class as theaters,
cinemas, concert halls, circuses, and boxing stadia. It follows that they cannot be considered as among the ‘other places of
amusement’ contemplated by Section 140 of the LGC and which may properly be subject to amusement taxes.

At this juncture, it is helpful to recall this Court’s pronouncements in Icard:

The power to tax when granted to a province is to be construed in strictissimi juris. Any doubt or ambiguity arising out of the term
used in granting that power must be resolved against the province. Inferences, implications, deductions – all these – have no place
in the interpretation of the taxing power of a province. 25

In this case, the definition of' amusement places' in Section 131 (c) of the LGC is a clear basis for determining what constitutes the
'other places of amusement' which may properly be subject to amusement tax impositions by provinces. There is no reason for
going beyond such basis. To do otherwise would be to countenance an arbitrary interpretation/application of a tax law and to inflict
an injustice on unassuming taxpayers.

The previous pronouncements notwithstanding, it will be noted that it is only the second paragraph of Section 59, Article X of the
Tax Ordinance which imposes amusement taxes on "resorts, swimming pools, bath houses, hot springs, and tourist spots". The
first paragraph of Section 59, Article X of the Tax Ordinance refers to "theaters, cinemas, concert halls, circuses, cockpits, dancing
halls, dancing schools, night or day clubs, and other places of amusement". In any case, the issues raised by Pelizloy are
1âwphi1

pertinent only with respect to the second paragraph of Section 59, Article X of the Tax Ordinance. Thus, there is no reason to
invalidate the first paragraph of Section 59, Article X of the Tax Ordinance. Any declaration as to the Province of Benguet's lack of
authority to levy amusement taxes must be limited to admission fees to resorts, swimming pools, bath houses, hot springs and
tourist spots.

Moreover, the second paragraph of Section 59, Article X of the Tax Ordinance is not limited to resorts, swimming pools, bath
houses, hot springs, and tourist spots but also covers admission fees for boxing. As Section 140 of the LGC allows for the
imposition of amusement taxes on gross receipts from admission fees to boxing stadia, Section 59, Article X of the Tax Ordinance
must be sustained with respect to admission fees from boxing stadia.

WHEREFORE, the petition for review on certiorari is GRANTED. The second paragraph of Section 59, Article X of the Benguet
Provincial Revenue Code of 2005, in so far as it imposes amusement taxes on admission fees to resorts, swimming pools, bath
houses, hot springs and tourist spots, is declared null and void. Respondent Province of Benguet is permanently enjoined from
enforcing the second paragraph of Section 59, Article X of the Benguet Provincial Revenue Code of 2005 with respect to resorts,
swimming pools, bath houses, hot springs and tourist spots.

SO ORDERED.
Cagayan Valley Enterprises vs CA

FACTS

1. La Tondena Inc (LTI) registered with the Phil Patent Office 350 cc. White flint bottles it had been using for its gin named Ginebra San Miguel.

2. LTI filed a case for injunction and damages against Cagayan Valley Enterprises, Inc. (Cagayan, for brevity) for using the 350 c.c., white flint bottles
with the mark "La Tondeña Inc." and "Ginebra San Miguel" stamped or blown-in therein by filling the same with Cagayan's liquor product bearing the
label "Sonny Boy" for commercial sale and distribution, without LTI's written consent

3. In its subsequent pleadings, Cagayan contended that the bottles they are using are not the registered bottles of LTI since the former was using the
bottles marked with "La Tondeña, Inc." and "Ginebra San Miguel" but without the words "property of" indicated in said bottles as stated in the sworn
statement attached to the certificate of registration of LTI for said bottles.

4. CA Ruled injunction as permanent, Cagayan filed an MR but was denied. Hence, this present petition

ISSUE/S

W/N Cagayan can used the bottles

RULING & RATIO

NO THEY CANNOT

RA 623 grants protection to a qualified manufacturer who successfully registered with the Philippine Patent Office its duly stamped or marked bottles,
boxes, casks and other similar containers. The mere use of registered bottles or containers without the written consent of the manufacturer is
prohibited, the only exceptions being when they are used as containers for "sisi," bagoong," "patis" and similar native products.

It is an admitted fact that herein petitioner Cagayan buys from junk dealers and retailers bottles which bear the marks or names La Tondeña Inc." and
"Ginebra San Miguel" and uses them as containers for its own liquor products. The contention of Cagayan that the aforementioned bottles without
the words "property of" indicated thereon are not the registered bottles of LTI, since they do not conform with the statement or description in
the supporting affidavits attached to the original registration certificate and renewal, is untenable.

Republic Act No. 623 which governs the registration of marked bottles and containers merely requires that the bottles, in order to be eligible for
registration, must be stamped or marked with the names of the manufacturers or the names of their principals or products, or other marks
of ownership. No drawings or labels are required but, instead, two photographs of the container, duly signed by the applicant, showing clearly and
legibly the names and other marks of ownership sought to be registered and a bottle showing the name or other mark or ownership, irremovably
stamped or marked, shall be submitted.

-The term "Name or Other Mark of Ownership" means the name of the applicant or the name of his principal, or of the product, or other
mark of ownership. The second set of bottles of LTI without the words "property of" substantially complied with the requirements of Republic Act No.
623, as amended, since they bear the name of the principal, La Tondeña Inc., and of its product, Ginebra San Miguel. The omitted words "property
of" are not of such vital indispensability such that the omission thereof will remove the bottles from the protection of the law. The owner of a trade-
mark or trade-name, and in this case the marked containers, does not abandon it by making minor modifications in the mark or name itself. W ith much
more reason will this be true where what is involved is the mere omission of the words "property of" since even without said words the ownership of
the bottles is easily Identifiable. The words "La Tondeña Inc." and "Ginebra San Miguel" stamped on the bottles, even without the words "property of,"
are sufficient notice to the public that those bottles so marked are owned by LTI.

-Petitioner also claims that hard liquor is not included under the term "other lawful beverages" as provided in Section I of Republic Act No.
623, as amended by Republic Act No. 5700, this is without merit. The title of the law itself, which reads " An Act to Regulate the Use of Duly
Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers" clearly shows the legislative intent to give
protection to all marked bottles and containers of all lawful beverages regardless of the nature of their contents. The words "other lawful
beverages" is used in its general sense, referring to all beverages not prohibited by law. Beverage is defined as a liquor or liquid for drinking. Hard
liquor, although regulated, is not prohibited by law, hence it is within the purview and coverage of Republic Act No. 623, as amended.

Decision of CA Affirmed and petition is denied

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 78413 November 8, 1989

CAGAYAN VALLEY ENTERPRISES, INC., Represented by its President, Rogelio Q. Lim, petitioner,
vs.
THE HON. COURT OF APPEALS and LA TONDEÑA, INC., respondents.

Efren M. Cacatian for petitioners.

San Jose, Enrique, Lacas, Santos and Borje for private respondent.

REGALADO, J.:

This petition for review on certiorari seeks the nullification of the decision of the Court of Appeals of December 5, 1986 in CA-G.R. CV No. 06685
which reversed the decision of the trial court, and its resolution dated May 5, 1987 denying petitioner's motion for reconsideration.

The following antecedent facts generative of the present controversy are not in dispute.

Sometime in 1953, La Tondeña, Inc. (hereafter, LTI for short) registered with the Philippine Patent Office pursuant to Republic Act No. 623 the 350
1

c.c. white flint bottles it has been using for its gin popularly known as "Ginebra San Miguel". This registration was subsequently renewed on
December 4, 1974. 2

On November 10, 1981, LTI filed Civil Case No. 2668 for injunction and damages in the then Branch 1, Court of First Instance of Isabela against
Cagayan Valley Enterprises, Inc. (Cagayan, for brevity) for using the 350 c.c., white flint bottles with the mark "La Tondeña Inc." and "Ginebra San
Miguel" stamped or blown-in therein by filling the same with Cagayan's liquor product bearing the label "Sonny Boy" for commercial sale and
distribution, without LTI's written consent and in violation of Section 2 of Republic Act No. 623, as amended by Republic Act No. 5700. On the same
date, LTI further filed an ex parte petition for the issuance of a writ of preliminary injunction against the defendant therein. On November 16, 1981,
3

the court a quo issued a temporary restraining order against Cagayan and its officers and employees from using the 350 c.c. bottles with the marks
"La Tondeña" and "Ginebra San Miguel." 4

Cagayan, in its answer, alleged the following defenses:

5

1. LTI has no cause of action due to its failure to comply with Section 21 of Republic Act No. 166 which requires the giving of
notice that its aforesaid marks are registered by displaying and printing the words "Registered in the Phil. Patent Office" or "Reg
Phil. Pat. Off.," hence no suit, civil or criminal, can be filed against Cagayan;

2. LTI is not entitled to any protection under Republic Act No. 623, as amended by Republic Act No. 5700, because its
products, consisting of hard liquor, are not among those contemplated therein. What is protected under said law are beverages
like Coca-cola, Royal Tru-Orange, Lem-o-Lime and similar beverages the bottles whereof bear the words "Reg Phil. Pat. Off.;"

3. No reservation of ownership on its bottles was made by LTI in its sales invoices nor does it require any deposit for the retention of said bottles;
and

4. There was no infringement of the goods or products of LTI since Cagayan uses its own labels and trademark on its product.

In its subsequent pleadings, Cagayan contended that the bottles they are using are not the registered bottles of LTI since the former was using the
bottles marked with "La Tondeña, Inc." and "Ginebra San Miguel" but without the words "property of" indicated in said bottles as stated in the sworn
statement attached to the certificate of registration of LTI for said bottles.

On December 18, 1981, the lower court issued a writ of preliminary injunction, upon the filing of a bond by LTI in the sum of P50,000.00, enjoining
Cagayan, its officers and agents from using the aforesaid registered bottles of LTI. 6

After a protracted trial, which entailed five (5) motions for contempt filed by LTI against Cagayan, the trial court rendered judgment in favor of
7

Cagayan, ruling that the complaint does not state a cause of action and that Cagayan was not guilty of contempt. Furthermore, it awarded damages
in favor of Cagayan.

LTI appealed to the Court of Appeals which, on December 5, 1986 rendered a decision in favor of said appellant, the dispositive portion whereof
reads:

WHEREFORE, the decision appealed from is hereby SET ASIDE and judgment is rendered permanently enjoining the
defendant, its officers and agents from using the 350 c.c. white flint bottles with the marks of ownership "La Tondeña, Inc." and
"Ginebra San Miguel", blown-in or stamped on said bottles as containers for defendant's products.

The writ of preliminary injunction issued by the trial court is therefore made permanent.
 Defendant is ordered to pay the amounts of:

(1) P15,000.00 as nominal or temperate damages;

(2) P50,000.00 as exemplary damages;

(3) P10,000.00 as attorney's fees; and

(4) Costs of suit. 8

On December 23, 1986, Cagayan filed a motion for reconsideration which was denied by the respondent court in its resolution dated May 5, 1987,
hence the present petition, with the following assignment of errors:

I. The Court of Appeals gravely erred in the decision granting that "there is, therefore, no need for plaintiff
to display the words "Reg. Phil. Pat. Off." in order for it to succeed in bringing any injunction suit against
defendant for the illegal use of its bottles. Rep. Act No. 623, as amended by Rep. Act No. 5700 simply
provides and requires that the marks or names shall be stamped or marked on the containers."

II. The Court of Appeals gravely erred in deciding that "neither is there a reason to distinguish between the
two (2) sets of marked bottles-those which contain the marks "Property of La Tondeña, Inc., Ginebra San
Miguel," and those simply marked La Tondeña Inc., Ginebra San Miguel'. By omitting the words "property
of" plaintiff did not open itself to violation of Republic Act No. 623, as amended, as having registered its
marks or names it is protected under the law."

III. The Honorable Court of Appeals gravely erred in deciding that the words "La Tondeña, Inc. and Ginebra
San Miguel" are sufficient notice to the defendant which should have inquired from the plaintiff or the
Philippine Patent Office, if it was lawful for it to re-use the empty bottles of the plaintiff.

IV. The Honorable Court of Appeals gravely erred in deciding that defendant-appellee cannot claim good
faith from using the bottles of plaintiff with marks "La Tondeña, Inc." alone, short for the description
contained in the sworn statement of Mr. Carlos Palanca, Jr., which was a requisite of its original and
renewal registrations.

V. The Honorable Court of Appeals gravely erred in accommodating the appeal on the dismissals of the
five (5) contempt charges.

VI. The Honorable Court of Appeals gravely erred in deciding that the award of damages in favor of the
defendant-appellee, petitioner herein, is not in order. Instead it awarded nominal or temperate, exemplary
damages and attorney's fees without proof of bad faith. 9

The pertinent provisions of Republic Act No. 623, as amended by Republic Act No. 5700, provides:

SECTION 1. Persons engaged or licensed to engage in the manufacture, bottling, or selling of soda water, mineral or aerated
waters, cider, milk, cream or other lawful beverages in bottles, boxes, casks, kegs, or barrels and other similar containers, or in
the manufacturing, compressing or selling of gases such as oxygen, acytelene, nitrogen, carbon dioxide ammonia, hydrogen,
chloride, helium, sulphur, dioxide, butane, propane, freon, melthyl chloride or similar gases contained in steel cylinders, tanks,
flasks, accumulators or similar containers, with the name or the names of their principals or products, or other marks of
ownership stamped or marked thereon, may register with the Philippine Patent Office a description of the names or marks, and
the purpose for which the containers so marked and used by them, under the same conditions, rules, and regulations, made
applicable by law or regulation to the issuance of trademarks.

SEC. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or seller, who has
succesfully registered the marks of ownership in accordance with the provisions of the next preceding section, to fill such
bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks, accumulators or other similar containers so marked or stamped, for
the purpose of sale, or to sell, disposed of, buy or traffic in, or wantonly destroy the same, whether filled or not, to use the
same, for drinking vessels or glasses or drain pipes, foundation pipes, for any other purpose than that registered by the
manufacturer, bottler or seller. Any violation of this section shall be punished by a fine of not more than one thousand pesos or
imprisonment of not more than one year or both.

SEC. 3. The use by any person other than the registered manufacturer, bottler or seller, without written permission of the latter
of any such bottle, cask, barrel, keg, box, steel cylinders, tanks, flask, accumulators, or other similar containers, or the
possession thereof without written permission of the manufacturer, by any junk dealer or dealer in casks, barrels, kegs boxes,
steel cylinders, tanks, flasks, accumulators or other similar containers, the same being duly marked or stamped and registered
as herein provided, shall give rise to a prima facie presumption that such use or possession is unlawful.

The above-quoted provisions grant protection to a qualified manufacturer who successfully registered with the Philippine Patent Office its duly
stamped or marked bottles, boxes, casks and other similar containers. The mere use of registered bottles or containers without the written consent
of the manufacturer is prohibited, the only exceptions being when they are used as containers for "sisi," bagoong," "patis" and similar native
products. 10

It is an admitted fact that herein petitioner Cagayan buys from junk dealers and retailers bottles which bear the marks or names La Tondeña Inc."
and "Ginebra San Miguel" and uses them as containers for its own liquor products. The contention of Cagayan that the aforementioned bottles
without the words "property of" indicated thereon are not the registered bottles of LTI, since they do not conform with the statement or description in
the supporting affidavits attached to the original registration certificate and renewal, is untenable.
Republic Act No. 623 which governs the registration of marked bottles and containers merely requires that the bottles, in order to be eligible for
registration, must be stamped or marked with the names of the manufacturers or the names of their principals or products, or other marks of
ownership. No drawings or labels are required but, instead, two photographs of the container, duly signed by the applicant, showing clearly and
legibly the names and other marks of ownership sought to be registered and a bottle showing the name or other mark or ownership, irremovably
stamped or marked, shall be submitted. 11

The term "Name or Other Mark of Ownership" means the name of the applicant or the name of his principal, or of the product, or other mark of
12

ownership. The second set of bottles of LTI without the words "property of" substantially complied with the requirements of Republic Act No. 623, as
amended, since they bear the name of the principal, La Tondeña Inc., and of its product, Ginebra San Miguel. The omitted words "property of" are
not of such vital indispensability such that the omission thereof will remove the bottles from the protection of the law. The owner of a trade-mark or
trade-name, and in this case the marked containers, does not abandon it by making minor modifications in the mark or name itself. With much 13

more reason will this be true where what is involved is the mere omission of the words "property of" since even without said words the ownership of
the bottles is easily Identifiable. The words "La Tondeña Inc." and "Ginebra San Miguel" stamped on the bottles, even without the words "property
of," are sufficient notice to the public that those bottles so marked are owned by LTI.

The claim of petitioner that hard liquor is not included under the term "other lawful beverages" as provided in Section I of Republic Act No. 623, as
amended by Republic Act No. 5700, is without merit. The title of the law itself, which reads " An Act to Regulate the Use of Duly Stamped or Marked
Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers" clearly shows the legislative intent to give protection to all marked bottles and
containers of all lawful beverages regardless of the nature of their contents. The words "other lawful beverages" is used in its general sense,
referring to all beverages not prohibited by law. Beverage is defined as a liquor or liquid for drinking. Hard liquor, although regulated, is not
14

prohibited by law, hence it is within the purview and coverage of Republic Act No. 623, as amended.

Republic Act No. 623, as amended, has for its purpose the protection of the health of the general public and the prevention of the spread of
contagious diseases. It further seeks to safeguard the property rights of an important sector of Philippine industry. As held by this Court
15

in Destileria Ayala, Inc. vs. Tan Tay & Co., the purpose of then Act 3070, was to afford a person a means of Identifying the containers he uses in
16

the manufacture, preservation, packing or sale of his products so that he may secure their registration with the Bureau of Commerce and Industry
and thus prevent other persons from using them. Said Act 3070 was substantially reenacted as Republic Act No. 623. 17

The proposition that Republic Act No. 623, as amended, protects only the containers of the soft drinks enumerated by petitioner and those similar
thereto, is unwarranted and specious. The rule of ejusdem generis cannot be applied in this case. To limit the coverage of the law only to those
enumerated or of the same kind or class as those specifically mentioned will defeat the very purpose of the law. Such rule of ejusdem generis is to
be resorted to only for the purpose of determining what the intent of the legislature was in enacting the law. If that intent clearly appears from other
parts of the law, and such intent thus clearly manifested is contrary to the result which would be reached by the appreciation of the rule of ejusdem
generis, the latter must give way. 18

Moreover, the above conclusions are supported by the fact that the Philippine Patent Office, which is the proper and competent government agency
vested with the authority to enforce and implement Republic Act No. 623, registered the bottles of respondent LTI as containers for gin and issued
in its name a certificate of registration with the following findings:

It appearing, upon due examination that the applicant is entitled to have the said MARKS OR NAMES registered under R.A.
No. 623, the said marks or names have been duly registered this day in the PATENT OFFICE under the said Act, for gin,
Ginebra San Miguel. 19

While executive construction is not necessarily binding upon the courts, it is entitled to great weight and consideration. The reason for this is that
such construction comes from the particular branch of government called upon to implement the particular law involved. 20

Just as impuissant is petitioners contention that respondent court erred in holding that there is no need for LTI to display the words "Reg Phil. Pat.
Off." in order to succeed in its injunction suit against Cagayan for the illegal use of the bottles. To repeat, Republic Act No. 623 governs the
registration of marked bottles and containers and merely requires that the bottles and/or containers be marked or stamped by the names of the
manufacturer or the names of their principals or products or other marks of ownership. The owner upon registration of its marked bottles, is vested
by law with an exclusive right to use the same to the exclusion of others, except as a container for native products. A violation of said right gives use
to a cause of action against the violator or infringer.

While Republic Act No. 623, as amended, provides for a criminal action in case of violation, a civil action for damages is proper under Article 20 of
the Civil Code which provides that every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for
the same. This particular provision of the Civil Case was clearly meant to complement all legal provisions which may have inadvertently failed to
provide for indemnification or reparation of damages when proper or called for. In the language of the Code Commission "(t)he foregoing rule
pervades the entire legal system, and renders it impossible that a person who suffers damage because another has violated some legal provisions,
should find himself without relief." Moreover, under Section 23 of Republic Act No. 166, as amended, a person entitled to the exclusive use of a
21

registered mark or tradename may recover damages in a civil action from any person who infringes his rights. He may also, upon proper showing,
be granted injunction.

It is true that the aforesaid law on trademarks provides:

SEC. 21. Requirements of notice of registration of trade-mark.-The registrant of a trade-mark, heretofore registered or
registered under the provisions of this Act, shall give notice that his mark is registered by displaying with the same as used the
words 'Registered in the Philippines Patent Office' or 'Reg Phil. Pat. Off.'; and in any suit for infringement under this Act by a
registrant failing so to mark the goods bearing the registered trade-mark, no damages shall be recovered under the provisions
of this Act, unless the defendant has actual notice of the registration.

Even assuming that said provision is applicable in this case, the failure of LTI to make said marking will not bar civil action against petitioner
Cagayan. The aforesaid requirement is not a condition sine qua non for filing of a civil action against the infringer for other reliefs to which the
plaintiff may be entitled. The failure to give notice of registration will not deprive the aggrieved party of a cause of action against the infringer but, at
the most, such failure may bar recovery of damages but only under the provisions of Republic Act No. 166.
However, in this case an award of damages to LTI is ineluctably called for. Petitioner cannot claim good faith. The record shows that it had actual
knowledge that the bottles with the blown-in marks "La Tondeña Inc." and "Ginebra San Miguel" are duly registered. In Civil Case No. 102859 of the
Court of First Instance of Manila, entitled "La Tondeña Inc. versus Diego Lim, doing business under the name and style 'Cagayan Valley Distillery,' "
a decision was rendered in favor of plaintiff therein on the basis of the admission and/or acknowledgment made by the defendant that the bottles
marked only with the words "La Tondeña Inc." and "Ginebra San Miguel" are registered bottles of LTI. 22

Petitioner cannot avoid the effect of the admission and/or acknowledgment made by Diego Lim in the said case. While a corporation is an entity
separate and distinct from its stock-holders and from other corporations with which it may be connected, where the discreteness of its personality is
used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons, or
in the case of two corporations, merge them into one. When the corporation is the mere alter ego or business conduit of a person, it may be
disregaded. 23

Petitioner's claim that it is separate and distinct from the former Cagayan Valley Distillery is belied by the evidence on record. The following facts
warrant the conclusion that petitioner, as a corporate entity, and Cagayan Valley Distillery are one and the same. to wit: (1) petitioner is being
managed by Rogelio Lim, the son of Diego Lim, the owner and manager of Cagayan Valley Distellery; (2) it is a family corporation; (3) it is an
24

admitted fact that before petitioner was incorporated it was under a single proprietorship; (4) petitioner is engaged in the same business as
25

Cagayan Valley Distillery, the manufacture of wines and liquors; and (5) the factory of petitioner is located in the same place as the factory of the
former Cagayan Valley Distillery.

It is thus clear that herein petitioner is a mere continuation and successor of Cagayan Valley Distillery. It is likewise indubitable that the admission
made in the former case, as earlier explained, is binding on it as cogent proof that even before the filing of this case it had actual knowledge that the
bottles in dispute were registered containers of LTI As held in La Campana Coffee Factory, Inc., et al. vs. Kaisahan Ng Mga Manggagawa sa La
Campana (KKM), et al., where the main purpose in forming the corporation was to evade one's subsidiary liability for damages in a criminal case,
26

the corporation may not be heard to say that it has a personality separate and distinct from its members, because to allow it to do so would be to
sanction the use of the fiction of corporate entity as a shield to further an end subversive of justice.

Anent the several motions of private respondent LTI to have petitioner cited for contempt, we reject the argument of petitioner that an appeal from a
verdict of acquittal in a contempt, proceeding constitutes double jeopardy. A failure to do something ordered by the court for the benefit of a party
constitutes civil contempt. As we held in Converse Rubber Corporation vs. Jacinto Rubber & Plastics Co., Inc.:
27

...True it is that generally, contempt proceedings are characterized as criminal in nature, but the more accurate juridical concept
is that contempt proceedings may actually be either civil or criminal, even if the distinction between one and the other may be
so thin as to be almost imperceptible. But it does exist in law. It is criminal when the purpose is to vindicate the authority of the
court and protect its outraged dignity. It is civil when there is failure to do something ordered by a court to be done for the
benefit of a party (3 Moran Rules of Court, pp. 343-344, 1970 ed.; see also Perkins vs. Director of Prisons, 58 Phil. 272; Harden
vs. Director of Prisons, 81 Phil. 741.) And with this distinction in mind, the fact that the injunction in the instant case is
manifestly for the benefit of plaintiffs makes of the contempt herein involved civil, not criminal. Accordingly, the conclusion is
inevitable that appellees have been virtually found by the trial court guilty of civil contempt, not criminal contempt, hence, the
rule on double jeopardy may not be invoked. 28

The contempt involved in this case is civil and constructive in nature, it having arisen from the act of Cagayan in violating the writ of preliminary
injunction of the lower court which clearly defined the forbidden act, to wit:

NOW THEREFORE, pending the resolution of this case by the court, you are enjoined from using the 350 c.c. white flint bottles
with the marks La Tondeña Inc.,' and 'Ginebra San Miguel' blown-in or stamped into the bottles as containers for the
defendant's products. 19

On this incident, two considerations must be borne in mind. Firstly, an injunction duly issued must be obeyed, however erroneous the action of the
court may be, until its decision is overruled by itself or by a higher court. Secondly, the American rule that the power to judge a contempt rests
30

exclusively with the court contemned does not apply in this Jurisdiction. The provision of the present Section 4, Rule 71 of the Rules of Court as to
where the charge may be filed is permissive in nature and is merely declaratory of the inherent power of courts to punish contumacious conduct.
Said rules do not extend to the determination of the jurisdiction of Philippine courts. In appropriate case therefore, this Court may, in the interest of
31

expedient justice, impose sanctions on contemners of the lower courts.

Section 3 of Republic Act No. 623, as amended, creates a prima facie presumption against Cagayan for its unlawful use of the bottles registered in
the name of LTI Corollarily, the writ of injunction directing petitioner to desist from using the subject bottles was properly issued by the trial court.
Hence, said writ could not be simply disregarded by Cagayan without adducing proof sufficient to overcome the aforesaid presumption. Also, based
on the findings of respondent court, and the records before us being sufficient for arbitrament without remanding the incident to the court
a quo petitioner can be adjudged guilty of contempt and imposed a sanction in this appeal since it is a cherished rule of procedure for this Court to
always strive to settle the entire controversy in a single proceeding, We so impose such penalty concordant with the preservative principle and as
32

demanded by the respect due the orders, writs and processes of the courts of justice.

WHEREFORE, judgment is hereby rendered DENYING the petition in this case and AFFIRMING the decision of respondent Court of Appeals.
Petitioner is hereby declared in contempt of court and ORDERED to pay a fine of One Thousand Pesos (P1,000.00), with costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-11305 May 21, 1958

DOMINADOR P. CANLAS and THE MANILA PENCIL CO., as successor of the PHILIPPINE CONSOLIDATED FREIGHT
LINES, INC., petitioners,
vs.
THE REPUBLIC OF THE PHILIPPINES and the HONS. AUGUSTO P. LUCIANO and ROMAN UMALI, Associate Judges of the
Court of Tax Appeals, respondents.

P. N. Evangelista for petitioners.

Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose P. Alejandro and Special Attorney Librada del
Rosario Natividad for respondents.

FELIX, J.:

The Manila Pencil Company, a corporation duly organized and existing under the laws of the Philippines with Dominador P. Canlas
for its president and general manager, appears to be the successor in interest of the Philippine Consolidated Freight Lines, inc.,
assuming all the obligations the latter had with third parties in connection with its past operation. From 1947 to 1951, the Philippine
Consolidated Freight Lines, Inc., ran a bus and trucking service within the compound of the Clark Field Air Base in Pampanga
pursuant to a license issued in its favor by the Philippine Ryukyus Command (PHILRYCOM). For income derived from said
operation, the corporation filed its income tax returns and was assessed as follows: P4,285.74 for the fiscal year ending August 31,
1947; P21,733.66, for the fiscal year ending August 31, 1948; P7,933.57 and P3,332.00, for the fiscal years ending August 31,
1949, and August 31, 1951, respectively. It appears on record that of these assessments said company paid the amount of
P4,000.00 as part payment of the income tax allegedly due for 1947.

On March 24, 1954, the Solicitor General filed a complaint with the Court of First Instance of Manila (Civil Case No. 22366) against
the Manila Pencil Company, as successor-in-interest of the Philippine Consolidated Freight Lines, Inc., and Dominador Canlas as
president thereof, contending that despite repeated demands, they had failed to pay the following amounts which were said to be
due the Government as income taxes, to wit:

(1) Deficiency income tax for fiscal year ending August 31,
1947 ................. P1,084.97
(2) Income tax for fiscal year ending August 31, 1947
.................................... 285.74
(3) Income tax for fiscal year ending August 31, 1948
.................................... 21,733.66
(4) Income tax for fiscal year ending August 31, 1949
.................................... 7,933.57
(5) Income tax for fiscal year ending August 31, 1951
.................................... 3,332.00

It was thus prayed that defendants be ordered to pay the obligations so indicated plus the corresponding delinquency penalties and
for costs. To this complaint, defendants filed a motion to dismiss based on prescription and for lack of jurisdiction, but before said
motion could be resolved, Republic Act No. 1125 creating the Court of Tax Appeals was enacted and pursuant to Section 22
thereof, said case was elevated to the latter Tribunal for adjudication.

As the motion for the dismissal of the action was denied, defendants led their answer claiming that the income on which plaintiff
was trying to collect were received exclusively from the operation of its freight and passenger bus service within the Clark Field Air
Base and therefore embraced within the exemption provided for by Article XVIII of the Military Bases Agreement concluded
between the governments of the Philippines and the United States. Defendants prayed the Court that plaintiff be required to refund
to defendant Manila Pencil Company the sum of P2,350.74 illegally collected; that AISCO Bond No. 4419 of the Associated
Insurance and Surety Co., Inc., in favor of the Collector of Internal Revenue, which defendants filed to prevent the distraint of their
properties pending the final disposition of the case, be cancelled; and in the event that the Court would find a case against the
Manila Pencil Company, defendant Dominador P. Canlas be excluded therein.

The issues having been joined, the case was set for hearing and basing on the stipulation of facts agreed upon by the parties, the
Court of Tax Appeals rendered judgment holding defendants liable for the payment of the deficiency income tax for 1947 and for
income taxes for the years 1949 and 1951, although they were absolved of the liability with respect to the income taxes for the
years 1947 and 1948 on the ground of prescription. Upon defendants' motion for reconsideration, said decision was modified so as
to deduct from the amount said to be due the Government the sum of P3,526.47 secured by the AISCO Bond No. 4419 which was
already received by the Collector of Internal Revenue. But as defendants' asseveration that they were totally exempted from the
payment of said taxes was denied, the matter was brought to this Court by way of a petition for review, praying that the decision of
the court a quo be declared erroneous and the Collector of Internal Revenue be required to refund the amount of P2,350.74
allegedly collected illegally from them and for such other relief as may be proper in the premises.

There is no dispute as to the fact that defendant Manila Pencil Company, as successor-in-interest of the Philippine Consolidated
Freight Lines, Inc., was engaged in and duly licensed by the U. S. military authorities to operate a freight and bus service within the
Clark Field Air Base, a military reservation established in conformity with the agreement concluded between the Governments of
the Philippines and the United States on March 14, 1947 (43 Off. Gaz., No. 3, p. 1020). And as such grantee of a franchise, which
this Court has held to be embraced within the meaning of the word "concession" appearing in the treaty and was declared
exempted from the payment of the contractor's tax (Araneta vs. Manila Pencil Company, G.R. No. L-8182, June 29, 1957),
defendant corporation also claimed exemption from the payment of income tax on earnings derived from such undertaking. In
advancing such contention, defendants relied on the provisions of Article XVIII of the Bases Agreement the pertinent portion of
which reads as follows:

ARTICLE XVIII. — SALES AND SERVICES WITHIN THE BASES

1. It is mutually agreed that the United States shall have the right to establish on bases, free of all licenses;
fees; sales, excise or OTHER TAXES, or imposts; Government agencies, including concessions, such as sales
commissaries and posts exchanges, messes and social clubs, for the exclusive use of the United States military forces
and authorized civilian personnel and their families. The merchandise or services sold or dispensed by such agencies
shall be free of all taxes, duties and inspection by the Philippine authorities. . . .

While it may be argued that a tax on the income derived from the operation of a concession falls under the term "other taxes"
included in the enumeration of the imposts from which a Government agency or private concessioner (of which defendant
corporation is considered as one) is exempted, yet a careful perusal of the same would reveal that what is being exempted from the
payment of such exactions is the establishment of the agency or concession designed for the exclusive use of the U.S. military
forces and authorized civil personnel and their families. Considering that the concession itself and the income accruing therefrom
are subject to different taxes, and taking into account the sentence following the enumeration which specifies the "merchandise or
services sold or dispensed by such agencies" to be free from taxes or duties, it becomes all too obvious that the privilege is
intended merely to be confined to the latter and to no other. Inclusio unius exclusio est alterius. Moreover, exemption from income
tax is treated separately under a different provision of the treaty which reads as follows:

ARTICLE XII.—INTERNAL REVENUE TAX EXEMPTION

1. No member of the United States armed forces, EXCEPT Filipino citizens, serving in the Philippines in connection with
the bases and residing in the Philippines by reason only of such service, or his dependents, shall be liable to pay income
tax in the Philippines except in respect of income derived from Philippines sources.

2. No national of the United States serving in or employed he Philippines in connection with the construction,
maintenance, operation or defense of the bases and residing in the Philippines by reason only of such employment, or his
spouse, shall be liable to pay income tax in the Philippines except in respect of income derived from Philippine sources or
sources other than the United States sources.

3. . . .

4. . . .

It is clear from the foregoing that if ever the signatories to the said treaty intended to grant exemption from income taxes collectible
by the Philippine Government, said privilege was allowed only to members of the United States armed forces, nationals of said
country, and their dependents and families, to the exclusion of Filipino citizens. And it dispels the least doubt, if there may be any
as to the merit of defendant's claim, for the insertion of the phrase "other taxes" is manifestly intended to cover imposts other than
sales or excise taxes on the undertaking itself and not taxes on income which is specially taken care of by another provision of the
same treaty.

Wherefore, the appealed decision of the lower Court, as corrected by its resolution of September 10, 1956, is hereby affirmed, with
costs against defendants. It is so ordered.

Paras, C.J., Bengzon, Montemayor, Reyes, A., Angelo, Labrador, Concepcion, Reyes, J.B.L., and Endencia, JJ., concur.
ESCRIBANO vs AVILA

FACTS:

The governor-elect of Cotabato, Congressman Salipada K. Pendatun, filed directly a complaint for libel with the Court
of First Instance against Mayor Jose Escribano of Tacurong, Cotabato on September 25, 1968.

According to the complaint, Escribano was charged with having said in a speech, which was broadcasted on a radio
station that, “Mr. Pendatun is the worst animal that ever live in this province.”

Mayor Escribano questioned the authority of Judge Avila to conduct the preliminary investigation of the offense. In
line to this claim, Judge Avila ruled in his orders of march 5, 20 and 27, 1969 that he had the power to conduct
preliminary investigation

Escribano filed in this Court against Judge Avila and Pendatun the instant special civil actions of certiorari and
prohibition on April 1, 1969, praying that the said orders of Judge Avila be set aside. On April 18, Escribano filed a
supplemental petition to annul Judge Avila’s order of March 29, 1969. In that order he found that Pendatun’s
evidence had “established a probable cause to believe that” libel by radio had been committed and that Escribano
“probably committed the same.” The city fiscal field an information for libel against Escribano.

Escribano invokes the provisions of Article 360 of the Revised Penal Code, whiwch were inserted by Republic Act No.
4363, which do not empower the Court of First Instance to conduct a preliminary investigation of written
defamations.

ISSUE:

Whether or not the authority to conduct the preliminary investigation of the crime of libel committed by means of
radio at Cotabato City is invested in their Court of First Instance, or,

Whether or not the power is lodged exclusively in the city attorney of that city.

HELD:

The Court of First Instance has the authority to conduct preliminary investigations of the crime of libel.

Court of First Instance may conduct preliminary investigations because this power is not lodged exclusively in the
city attorney. The enumeration in the law of the public officers and the courts that may conduct preliminary
investigations was designed to divest the ordinary municipal court of that power but not to deprive the Court of First
Instance of that same power.

The power of the CFT to conduct a preliminary investigation is derived from the constitutional grant of power for a
judge to hold a preliminary examination and to issue warrants of arrest and search warrants. What is important to
remember is that preliminary investigations by the CFT is the exception to the rule and not the general rule.

Legislative body, by means of that amendment of Article 360, never intended to take away the jurisdiction of the
proper Court of First Instance to conduct a preliminary Investigation in libel cases.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-30375 September 12, 1978

JOSE ESCRIBANO, petitioner,

vs.
HON. DAVID P. AVILA, as Presiding Judge of the Court of First Instance of Cotabato (First Branch) and SALIPADA K.
PENDATUN, respondents.

Jose W. Diokno for petitioner.

M. C. Sicat for private respondent.

AQUINO, J.:

This case is about the jurisdiction of the Court of First Instance to conduct the preliminary investigation of a complaint for written
defamation.

On September 25, 1968 Congressman Salipada K. Pendatun, the governor-elect of Cotabato, filed directly with the Court of First
Instance of that province (now North Cotabato) a complaint for libel against Mayor Jose Escribano of Tacurong, Cotabato (now the
province of Sultan Kudarat). The complaint was subscribed and sworn to before respondent Judge David P. Avila. It was supported
by the affidavit of Acting Governor Simeon Datumanong.

In that complaint Escribano was charged with having said in a speech, which was broadcasted on August 26, 1968 by a radio
station at Cotabato City, that "Mr. Pendatun is the worst animal that ever live (fixed) in this province" criminal Case No. 5283).

Escribano questioned Judge Avila's authority to conduct the preliminary investigation of the offense. Judge Avila in his orders of
March 5, 20 and 27, 1969 ruled that he had the power to conduct the preliminary investigation. He received complainant's
evidence.

On April 1, 1969 Escribano filed in this Court against Judge Avila and Pendatun the instant special civil actions of certiorari and
prohibition, praying that the said orders of Judge Avila be set aside. The respondents were required to answer the petition. No
restraining order was issued.

On April 18 Escribano filed a supplemental petition to annul Judge Avila's order of March 29, 1969. In that order he found that
Pendatun's evidence had "established a probable cause to believe that" libel by radio had been committed and that Escribano
"probably committed the same". Judge Avila ordered the arrest of Escribano, fixed the bail at three thousand pesos, and referred
the case to the city fiscal of Cotabato for the filing of the corresponding information. A warrant of arrest was issued on March 31.
Sometime before April 16 the city fiscal filed an information for libel against Escribano.

On August 10, 1970 this Court issued a resolution restraining Judge Avila from proceeding with the arraignment of Escribano.

The issue is whether the Court of First Instance of Cotabato is invested with authority to conduct the preliminary investigation of the
crime of libel committed by means of radio at Cotabato City or whether that power is lodged exclusively in the city attorney of that
city.

Petitioner Escribano, in support of his contention that the city fiscal of Cotabato is the only functionary empowered to conduct the
preliminary investigation of the libel charge, invokes the following provisions of the charter of Cotabato City, Republic Act No. 2364,
as amended by Republic Act No. 3332:

SEC. 23. The city attorney — His compensation powers and duties. — The provisions of Commonwealth Act
Numbered Four hundred nine to the contrary notwithstanding, the city shall have an attorney who shall be the
chief legal adviser of the city. ... The city attorney shall have the following powers and duties:

xxx xxx xxx

(f) He shall investigate an charges of crimes, misdemeanors and violations of laws and city ordinances and
prepare the necessary informations or make the necessary complaints against the persons accused. ...
 (g) He shall have charge of the prosecution of all crimes, misdemeanors and violations of laws and city
ordinances triable in the Court of First Instance of Cotabato, and the municipal court of the city, and shall
discharge all the duties in respect to Criminal prosecutions enjoined by law upon provincial fiscals.

He cites the ruling in Sayo. vs. Chief of Police 80 Phil. 859; Montelibano vs. Ferrer and Benares, 97 Phil. 228, and Guerrero vs.
Ferrer, 106 Phil. 1163, that in chartered cities the city fiscal has the exclusive authority to conduct preliminary investigations.

He also invokes the following provisions of article 360 of the Revised Penal Code, which were inserted by Republic Act No. 4363,
approved on June 19, 1965, and which do not empower the Court of First Instance to conduct a preliminary investigation of written
defamations:

Preliminary investigations of criminal actions for written defamations as provided for in the chapter shall be
conducted by the provincial or city fiscal of the province or city, or by the municipal court of the city or capital of
the province where such actions may be instituted in accordance with the provisions of this article.

On the other hand, complainant Pendatun and respondent Judge rely on section 13, Rule 112 of the Rules of Court to support their
view that the Court of First Instance of Cotabato could conduct the preliminary investigation:

SEC. 13. Preliminary examination and investigation by the judge of the Court of First Instance. — Upon complaint
filed directly with the Court of First Instance, without previous preliminary examination and investigation
conducted by the of the judge thereof shall either refer the complaint to the municipal judge referred to in the
second paragraph of section 2 hereof for preliminary examination and investigation, or himself conduct both
preliminary examination and investigation simultaneously in the manner provided in the preceding sections, and
should be find reasonable ground to believe that the defendant has committed the offense charged, he shall
issue a warrant for his arrest, and thereafter refer the case to the fiscal for the filing of the corresponding
information.

Was it intended by Republic Act No. 4363, in specifying that the preliminary investigation of criminal actions for written defamations
may be conducted by the provincial or city fiscal of the province or city, or the municipal court of the city or capital of the province,
where the criminal action may be filed to exclude the Court of First Instance from conducting such preliminary investigation and to
entrust that power exclusively to those fiscals and courts? (Libel by means of radio is a written defamation under article 355 of the
Revised Penal Code).

As admitted by the petitioner, the purpose of the amendment is to prevent the complainants in written defamation cases from
harassing the accused by means of out-of-town libel suits, meaning complaints filed in remote municipal courts (Time, Inc. vs.
Reyes, L-28882, May 31, 1971, 39 SCRA 303, 311; p. 11, Memorandum, p. 11 3, Rollo).

The rule is that in construing a statute the mischief intended to be removed or suppressed and the causes which induced the
enactment of a law are important factors to be considered in its construction (2 Sutherland on Statutory Construction, 885886, cited
in Philippine Sugar Centrals Agency vs. Collector of Customs, 51 Phil. 131, 145).

Therefore, it is safe to conclude that the enumeration in the amendatory law of the public officers and the courts that may conduct
the preliminary investigation of complaints for written defamation was designed to divest the ordinary municipal court of that power
but not to deprive the proper Court of First Instance of that same power.

Article 360 in its original form provided that the venue of the criminal and civil actions for written defamations is the province
wherein the libel was published, displayed or exhibited, regardless of the place where the same was written, printed or composed.
Article 360 originally did not specify the public officers and the courts that may conduct the preliminary investigation of complaints
for libel.

Before article 360 was amended, the rule was that a criminal action for libel may be instituted in any jurisdiction where the libelous
article was published or circulated, irrespective of where it was written or printed (People vs. Borja, 43 Phil. 618).

Under that rule, the criminal action is transitory and the injured party has a choice of venue.

Experience had shown that under that old rule the offended party could harass the accused in a libel case by laying the venue Of
the Criminal action in a remote or distant place.

Thus, in connection with an article published in the Daily Mirror and the Philippines Free Press, Pio Pedrosa, Manuel V. Villareal
and Joaquin Roces were charged with libel in the justice of the peace court of San Fabian, Pangasinan (Amansec vs. De Guzman
93 Phil. 933). To forestall such harassment, Republic Act No. 4363 laid down the following rules on the venue of the criminal and
civil actions in written defamations: *

1. General rule: The action may be filed in the Court of First Instance of the province or city where the libelous article is printed and first published or where any of the offended parties actually resides at the time of
the commission of the offense.

2. If the offended party is a public officer with office in Manila at the time the offense was committed, the venue is Manila or the city
or province where the libelous article is printed and first published.
3. Where an offended party is a public official with office outside of Manila, the venue is the province or the city where he held office
at the time of the commission of the offense or where the libelous article is printed and first published.

4. If an offended party is a private person, the venue is his place of residence at the time of the commission of the offense or where
the libelous article is printed and first published.

The common feature of the foregoing rules is that whether the offended party is a public officer or a private person, he has always
the option to file the action in the Court of First Instance of the province or city where the libelous article is printed or first published.

Congress did not confine the amendatory law to laying down the guidelines for the venue of criminal and civil actions. Since, as
already noted, its purpose is to minimize the filing in municipal courts of out-of-town libel suit this the lawmaking body, in order to
attain that objective, deprived the ordinary municipal courts of the power to conduct. the preliminary investigation of a criminal
action for written defamation.

In other words, the amendment contains not only the rules limiting the venue of the criminal and civil actions to the Court of First
Instance of the province or city where the libelous matter is printed and first published, or where the offended party held office or
resided at the time the libel was committed, but it also specifies that the preliminary investigation should be conducted by the
provincial or city fiscal of the province or city or by the municipal court of the city or capital of the province where the action may be
instituted. (See People and Navarro vs. Hechanova, L-26459, November 29, 1973, 54 SCRA 101).

It should be repeated that the amendment, in specifying those who may conduct the preliminary investigation, deprived the ordinary
municipal court of that power in cases of written, defamations. And it should be recalled that the power of the ordinary municipal
court to conduct such preliminary investigations under the old law facilitated the filing of libel cases in remote municipal courts and
the consequent harassment of the accused.

That purpose of the amendment has nothing to do with the power of the Court of First Instance to conduct preliminary
investigations in criminal cases cognizable by it. To retain that power of the Court of First Instance would in a way be an
implementation of the purpose of the amendment, which is to prevent complainants from harassing and embarrassing the accused
with libel suits in distant municipalities.

Therefore, it can be stated without fear of successful contradiction that the lawmaking body, by means of that amendment, never
intended to take away the jurisdiction of the proper Court of First Instance to conduct a preliminary investigation in libel cases. The
amendment merely sought to strip the ordinary municipal court (not the municipal court ee of the provincial capital or the city court)
of its power to hold a preliminary investigation of written defamations.

The fact that the Court of First Instance is not mentioned in Article 360 as a tribunal that may conduct the preliminary investigation
of libel cases would seem to suggest that it cannot conduct such preliminary investigation, following the maxim inclusio unius est
exclusio alterius (the inclusion of one thing is the exclusion of another or the enumeration of particular things excludes the Idea of
something else not mentioned, applied in Acosta vs. Flor, 5 Phil. 18; De la Rosa vs. Revita Santos, 10 Phil. 148, 149; Conde vs.
Abaya, 13 Phil. 249; Tavora vs. Gavina, 79 Phil. 421, 435; In re Guzman, 73 Phil. 51; In re Estate of Enriquez and Reyes, 29 Phil.
167; Weigall vs. Shuster, 11 Phil. 340, 357; Vega vs. Municipal Board of Iloilo 94 Phil. 949, 953; Gomez vs. Ventura, 54 Phil. 726;
Mendenilla vs. Onandia, 115 Phil. 534, 539; Canlas and Manila Pencil Co. vs. Republic, 103 Phil. 712, 716; Lao Oh Kim vs. Reyes,
103 Phil. 1139).

Under that canon of legal hermeneutics, where a statute directs the performance of certain acts by a particular person or class of
persons, it implies that it shall not be done otherwise or by a different person or class of persons (82 C.J.S. 667668).

That maxim is not a rule of law. It is just a tool of statutory construction or a means of ascertaining the legislative intent. It is not of
universal application and is not conclusive. It cannot be used to defeat the plainly indicated purpose of the lawmaking body (82
C.J.S. 668). The maxim is inapplicable if there is some special reason for mentioning one thing and none for mentioning another
which is otherwise within the statute, so that the absence of any mention of such other will not exclude it (82 C.J.S. 670).

The maxim does not apply in case a statute appears upon its face to limit the operation of its provisions to particular persons or
things by enumerating them, but no reason exists why other persons or things not so enumerated should not have been included,
and manifest injustice win follow by not so including them (Springer vs. Philippine Islands, 72 Law. ed. 845, 227 U.S 189; People
vs. Manahan, 115 Phil. 657,6681).

The maxim is no more than an auxiliary rule of interpretation to be ignored where other circumstances indicate the enumeration
was not intended to be exclusive" (Manabat vs. De Aquino, 92 Phil. 1026, 1027).

The maxim cannot be applied in this case because, as shown above, the fact that the Court of First Instance is not mention in the
amendment, as being empowered to conduct a preliminary investigation in cases of written defamation, has nothing to do with the
purpose of the amendment. It should be stressed that in construing a law, the court must look to the object to be accomplished, the
evils and mischief sought to be remedied, or the purpose to be subserved, and it should give the law a reasonable or liberal
construction which win best effect its purpose rather than one which win defeat it (82 C.J.S. 593)

It is reasonable to surmise that the Court of First Instance was not mentioned due to inadvertence. That oversight is not unusual
since preliminary investigations are usually conducted by municipal courts and fiscals. In practice, a preliminary investigation by the
Court of First Instance is the exception, not the general rule.
In this connection, it is pertinent to cite the recent ruling that the power of the Court of First Instance to conduct a pre investigation
is derived from the constitutional provision that "no warrants shall issue but upon probable cause, to be determined by the judge
after examination under oath or affirmation of the complaint and the witness he may produce" (Sec. 1[3], Art. 111, now Sec. 3, Art.
IV, 1973 Constitution; Collector of Customs vs. Villaluz, L-34038, June 18,1976 and five other cases, 71 SCRA 356).

Implicit in that provision is the constitutional grant of power to the judge to hold a preliminary examination and to issue warrants of
arrest and search warrants. That which is plainly implied in the language of a law is as much a part of it as that which is expressed
(In re McCulloch Dick, 38 Phil 41, 45, 90). The term "judge" embraces a judge of the Court of First Instance. Its coverage is not
restricted to judges of inferior courts.

The silence of article 360 on the power of a judge of the Court of First Instance to conduct a p investigation of criminal actions for
written defamations does not preclude a judge of that court from holding such investigation.

However, the exercise of that power is tied up with the rules on the venue of a criminal action for written defamation. That power is
lodged in the Court of First Instance of the city or province where the libelous article was printed or first published or where the
offended party actually resided, or where the offended public official held office, at the time of the commission of the offense.

Escribano's contention that in chartered cities the city fiscal has the exclusive authority to conduct preliminary investigations is not
correct. While section 23(f) of the Charter of Cotabato City (Republic Act No. 2364) empowers its city attorney to "investigate all
charges of crimes, misdemeanors and violations of laws and city ordinances and prepare the necessary informations or make the
necessary complaints against the persons accused", that power is not exclusive.

Section 78 of the same charter provides that the municipal or city court of Catabato City "may also conduct preliminary
investigations for any offense, without regard to the limits of punishments", a provision which is found in section 87 of the Judiciary
Law and in section 2, Rule 112 of the Rules of Court.

That same power is found in the last sentence of section 41 of Republic Act No. 409, the Revised Charter of Manila, which took
effect on June 18, 1949 or after Sayo vs. Chief of Police of Manila, 80 Phil. 859 was decided.

But that provision is not found in Commonwealth Act No. 326, the charter of Bacolod City, under which Montelibano vs. Ferrer. 97
Phil. 228 and Guerrero vs. Ferrer, 106 Phil. 1163 were decided, nor is it found in the old Manila Charter contained in the Revised
Administrative Code.

Hence, in the Sayo, Montelibano and Guerrero cases, it was held that the city court could not conduct pre investigations. (See
Callanta vs. Villanueva, L-24646 and 24674, June 20, 1977, 77 SCRA 377).

WHEREFORE, the petition is dismissed with costs against the petitioner.

SO ORDERED.

Castro, C.J., Antonio, Muñoz Palma, Santos, Fernandez and Guerrero, JJ., concur.

Separate Opinions

TEEHANKEE, J., concurring:

I concur in the dismissal of the petition. The mere non-mention of judges of the Court of First Instance as among those authorized
to conduct preliminary investigations of criminal actions for written defamation under R.A. 4363 (which amended Art. 360 of the
Revised Penal Code So as to provide a more restricted venue for criminal and civil actions for damages in cases of written
defamation under said Code) cannot be construed to mean a withdrawal of the constitutional and statutory power of the Court of
First Instance to conduct preliminary investigations.

As the Court held in Collector of Customs vs. Villaluz "the power of the city prosecutors to conduct preliminary examination and
1

investigation (minus the authority to issue warrants of arrest or search warrant) is purely statutory. On the other hand, the judge
derives his authority not only from the Rules of Court, but also and originally — from the fundamental law to which all other laws are
subordinate. If an objection must be raised, it should be against the authority of the fiscal to exercise such power of preliminary
investigation, which, as has been stated, is merely statutory. No less than the Constitution confers upon the judge the power to
conduct such examination and investigation."

Aside from the provision of Rule 112, section 13 of the Rules of Court, the statutory power of judges of the Court of First Instance to
conduct preliminary investigations is recognized and reaffirmed in Republic Act 5180, "An Act prescribing a uniform system of
preliminary investigation by provincial and city fiscals and their assistants, and by state attorneys or their assistants' ...
"except when an investigation has been conducted by a judge of first instance, city or municipal judge or other officer in accordance
with law and the Rules of Court of the Philippines."

While the aforesaid amendatory R.A. 4363 was enacted to minimize the filing in municipal courts of out-of-town libel suits expressly
for the purpose of preventing harassment of the alleged offenders in written defamation cases through the filing of such suits in
remote towns, the said Act did not in law remove the general power of the judges of such ordinary municipal courts of their power
derived from the Constitution, as well as from the statute and Rules of Court, to conduct preliminary investigations. Rather, what
was effected was a withdrawal of the venue and jurisdiction over such cases from the ordinary municipal courts which was a valid
exercise of the power of Congress to define and allocate the jurisdiction of the various lower courts.

The main opinion mentions in passing that "in the Sayo Montelibano and Guerrero cases it was held that the city court could not
2 3 4

conduct preliminary investigations," thus giving the impression that the ruling in said cases that under the charters of the cities of
5

Manila and Bacolod the power to conduct preliminary investigations is exclusively lodged in the city fiscal is still in force. I hold the
view that the city charter provisions of Manila and Bacolod (as well as of Quezon City , and Cebu for that matter) do not grant the
6 7

city fiscal and his assistants sole authority to conduct investigation for offenses committed within their respective cities to the
exclusion of the regular courts therein. Such city charter provisions, to my mind, merely constitute the basis of the city fiscal
authority to concoct preliminary investigations but do not serve to withdraw from the Courts of First Instance as well as from the city
courts therein their power to conduct preliminary examinations and investigations.

I believe that this was the thrust of the Court's holding in Collector of Customs vs. Villaluz, supra, that

It is true that this COURT held expressly and impliedly that under the charters of the cities of Manila, Bacolod and
Cebu, the power to conduct preliminary investigation is exclusively lodged in the city prosecutor (Sayo vs. Chief
of Police, 80 Phil 859, 868-869, May 12, 1948; Espiritu vs. De la Rosa, 45 O.G 196; Montelibano vs. Ferrer, 97
Phil. 228, June 23, 1955; and Balite vs. People, 18 SCRA 280, 285-286, Sept. 30, 1966). But the charters of the
cities of Manila, Bacolod and Cebu do not contain any provision making such grant of power to city
prosecutors exclusive of the courts (Kapunan, Criminal Procedure, 3rd Edition, 1960), which cannot be deprived
of such authority to conduct preliminary examination because said prerogative Of the courts emanates from
the Constitution itself. Unless the Constitution is amended the judge cannot be divested of such a power, which is
an essential element of the cardinal right of an individual against unreasonable searches and seizures. If the
present city charters conferred on city fiscals or city prosecutors the power to issue warrants of arrest, it would be
an unconstitutional grant of power under the 1935 Constitution. As heretofore intimated, the present practice or
rule of court authorizing the judge to issue warrants of arrest based on the preliminary investigation conducted by
the city fiscal seems to violate the 1935 Constitution, which requires the judge himself to conduct the preliminary
examination. Neither the judge nor the law can delegate such an authority to another public officer without
trenching upon this constitutional guarantee against unreasonable searches and seizures.

The theory that Courts of First Instance and Circuit Criminal Courts Judges cannot exercise the power of
preliminary examination and investigation, and that as a necessary consequence, they cannot also issue
warrants of arrest, obviously collides with the 1935 and 1973 Constitutions.

Moreover, the theory tolerates an unthinkable — because anomalous — situation wherein the Court of First
Instance and the Circuit Criminal Court must wait for prosecutors and courts inferior to them to conduct the
preliminary examination and/or to issue the needed warrants of arrest before they could effectively exercise their
power to try and decide the cases failing under their respective jurisdiction. This situation would make the Courts
of First Instance and Circuit Criminal Courts totally dependent upon state prosecutors and municipal courts,
which are inferior to them, for their proper functioning. The possibility that the administration of criminal justice
might stand still will not be very remote. 8

Consequently, the rulings in the cited cases of Sayo, Montelibano, Guerrero and other cases must be deemed to have been
abandoned and it must be held now that as a general rule and without exception, Courts of First Instance and city courts,
regardless of the provisions in their charters which grant the city fiscal authority to also conduct preliminary investigations, must be
deemed to have retained the power Of preliminary examination and investigation, which cannot be taken from them by mere
statute.

This is as a matter of strict power, since the function of the courts as we stress in Villaluz, supra, is the hearing and determination of
cases in litigations before them. Hence, as therein stated, pursuant to the Court's constitutional power of administrative supervision
over all courts , "Circuit C Judges [as well as Court of First Instance and City Court Judges], therefore, should not encumber
9

themselves with the pre examination and investigation of criminal complaints, which they should refer to the ... provincial or city
fiscal who in turn can utilize the assistance of the state prosecutor to conduct such preliminary examination and investigation." 10

BARREDO, J., dissenting:

Dissents on the ground that it is my firm con. conviction. that courts of first instance have no power to conduct preliminary
investigation as I have explained in my separate opinion in Villaluz, 71 SCRA 412-425.

Concepcion Jr., J., took no part.

FERNANDO, J., dissenting:

It is with regret that I find myself unable to join the scholarly and exhaustive opinion of Justice Aquino. He is of the view that "the
recent ruling that the power 6f the Court of First Instance to conduct a preliminary investigation is derived from the constitutional
provision that 'no warrants shall issue but upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce' (Sec. 113t Art. 111, now Sec. 3, Art. IV, 1973 Constitution;
Collector of Customs v. Villaluz, L-34038, June 18, 1976 and five other 71 SCRA 356)." My concurrence in Villaluz did not go that
1

far.
I explained why: "At that, there is still need, it seems to me, for a few words not only to set forth the extent of my agreement with my
brethren but also to indicate what for me are the precise limits of our holding. The full and exhaustive treatment of the specific issue
dealing with the power of the circuit c to conduct p examination, with historical and textual allusions to the previous judicial
pronouncements and comparable statutory provisions, certainly a virtue to be commended, may for those not sufficiently
discerning, yield implications which, for me, go further than is intended by us. It is my understanding then that the decision reached
is at most an affirmation that the present Constitution, as did the 1935 Constitution, confers the power to conduct preliminary
examination preparatory to issuing a warrant of arrest, to a circuit criminal court judge. Even then, however, he should for sound
policy reasons curb any eagerness or propensity to make use of such competence." 2

The next paragraph of my concurrence deals with the matter further: "To repeat, it is solely the first stage in the criminal process
that may lead to the apprehension of the accused that has been passed upon by this Court. It has not considered the second stage,
that of preliminary investigation proper, one of equal significance. As far back as 1910, its importance was stressed in United States
v. Grant and Kennedy. Thus: 'The object or purpose of a preliminary investigation, or a previous inquiry of some kind, before an
accused person is placed upon trial, is to secure the innocent against hasty, malicious, and oppressive prosecutions, and to protect
him from an open and public accusation of crime, from the trouble, expense, and anxiety of a public trial, and also to protect State
from useless and expensive trials.' It is of the essence then that the accused should be heard. There are overtones in the opinion of
the Court susceptible to being misinterpreted in this regard, if it be assumed that upon the termination of the preliminary
examination the arraignment and trial could then proceed. I would dissociate myself from such a view. I am gratified therefore that it
is made explicit therein that our ruling is limited to the power of a judge under the Circuit Criminal Court Act to conduct a preliminary
investigation, it is my understanding that the question has been left open." 3

With the categorical pronouncement in the opinion of the Court that Villaluz is to be interpreted as recognizing the power of the
Court of First Instance to conduct a pre investigation by virtue of the constitutional provision cited, which for me, applied only to pre
examinations, I have no choice but to dissent. It is my considered view that in the absence of a statutory grant, a court of first
instance cannot exercise the power of holding a pre investigation, as it more of the prosecuting rather than the judicial function
unlike a preliminary examination, which as the first Step in the deprivation of one's liberty, is deemed best left in judicial hands.4

Separate Opinions

TEEHANKEE, J., concurring:

I concur in the dismissal of the petition. The mere non-mention of judges of the Court of First Instance as among those authorized
to conduct preliminary investigations of criminal actions for written defamation under R.A. 4363 (which amended Art. 360 of the
Revised Penal Code So as to provide a more restricted venue for criminal and civil actions for damages in cases of written
defamation under said Code) cannot be construed to mean a withdrawal of the constitutional and statutory power of the Court of
First Instance to conduct preliminary investigations.

As the Court held in Collector of Customs vs. Villaluz "the power of the city prosecutors to conduct preliminary examination and
1

investigation (minus the authority to issue warrants of arrest or search warrant) is purely statutory. On the other hand, the judge
derives his authority not only from the Rules of Court, but also and originally — from the fundamental law to which all other laws are
subordinate. If an objection must be raised, it should be against the authority of the fiscal to exercise such power of preliminary
investigation, which, as has been stated, is merely statutory. No less than the Constitution confers upon the judge the power to
conduct such examination and investigation."

Aside from the provision of Rule 112, section 13 of the Rules of Court, the statutory power of judges of the Court of First Instance to
conduct preliminary investigations is recognized and reaffirmed in Republic Act 5180, "An Act prescribing a uniform system of
preliminary investigation by provincial and city fiscals and their assistants, and by state attorneys or their assistants' ...
"except when an investigation has been conducted by a judge of first instance, city or municipal judge or other officer in accordance
with law and the Rules of Court of the Philippines."

While the aforesaid amendatory R.A. 4363 was enacted to minimize the filing in municipal courts of out-of-town libel suits expressly
for the purpose of preventing harassment of the alleged offenders in written defamation cases through the filing of such suits in
remote towns, the said Act did not in law remove the general power of the judges of such ordinary municipal courts of their power
derived from the Constitution, as well as from the statute and Rules of Court, to conduct preliminary investigations. Rather, what
was effected was a withdrawal of the venue and jurisdiction over such cases from the ordinary municipal courts which was a valid
exercise of the power of Congress to define and allocate the jurisdiction of the various lower courts.

The main opinion mentions in passing that "in the Sayo Montelibano and Guerrero cases it was held that the city court could not
2 3 4

conduct preliminary investigations," thus giving the impression that the ruling in said cases that under the charters of the cities of
5

Manila and Bacolod the power to conduct preliminary investigations is exclusively lodged in the city fiscal is still in force. I hold the
view that the city charter provisions of Manila and Bacolod (as well as of Quezon City , and Cebu for that matter) do not grant the
6 7

city fiscal and his assistants sole authority to conduct investigation for offenses committed within their respective cities to the
exclusion of the regular courts therein. Such city charter provisions, to my mind, merely constitute the basis of the city fiscal
authority to concoct preliminary investigations but do not serve to withdraw from the Courts of First Instance as well as from the city
courts therein their power to conduct preliminary examinations and investigations.

I believe that this was the thrust of the Court's holding in Collector of Customs vs. Villaluz, supra, that

It is true that this COURT held expressly and impliedly that under the charters of the cities of Manila, Bacolod and
Cebu, the power to conduct preliminary investigation is exclusively lodged in the city prosecutor (Sayo vs. Chief
 of Police, 80 Phil 859, 868-869, May 12, 1948; Espiritu vs. De la Rosa, 45 O.G 196; Montelibano vs. Ferrer, 97
Phil. 228, June 23, 1955; and Balite vs. People, 18 SCRA 280, 285-286, Sept. 30, 1966). But the charters of the
cities of Manila, Bacolod and Cebu do not contain any provision making such grant of power to city
prosecutors exclusive of the courts (Kapunan, Criminal Procedure, 3rd Edition, 1960), which cannot be deprived
of such authority to conduct preliminary examination because said prerogative Of the courts emanates from
the Constitution itself. Unless the Constitution is amended the judge cannot be divested of such a power, which is
an essential element of the cardinal right of an individual against unreasonable searches and seizures. If the
present city charters conferred on city fiscals or city prosecutors the power to issue warrants of arrest, it would be
an unconstitutional grant of power under the 1935 Constitution. As heretofore intimated, the present practice or
rule of court authorizing the judge to issue warrants of arrest based on the preliminary investigation conducted by
the city fiscal seems to violate the 1935 Constitution, which requires the judge himself to conduct the preliminary
examination. Neither the judge nor the law can delegate such an authority to another public officer without
trenching upon this constitutional guarantee against unreasonable searches and seizures.

The theory that Courts of First Instance and Circuit Criminal Courts Judges cannot exercise the power of
preliminary examination and investigation, and that as a necessary consequence, they cannot also issue
warrants of arrest, obviously collides with the 1935 and 1973 Constitutions.

Moreover, the theory tolerates an unthinkable — because anomalous — situation wherein the Court of First
Instance and the Circuit Criminal Court must wait for prosecutors and courts inferior to them to conduct the
preliminary examination and/or to issue the needed warrants of arrest before they could effectively exercise their
power to try and decide the cases failing under their respective jurisdiction. This situation would make the Courts
of First Instance and Circuit Criminal Courts totally dependent upon state prosecutors and municipal courts,
which are inferior to them, for their proper functioning. The possibility that the administration of criminal justice
might stand still will not be very remote.8

Consequently, the rulings in the cited cases of Sayo, Montelibano, Guerrero and other cases must be deemed to have been
abandoned and it must be held now that as a general rule and without exception, Courts of First Instance and city courts,
regardless of the provisions in their charters which grant the city fiscal authority to also conduct preliminary investigations, must be
deemed to have retained the power Of preliminary examination and investigation, which cannot be taken from them by mere
statute.

This is as a matter of strict power, since the function of the courts as we stress in Villaluz, supra, is the hearing and determination of
cases in litigations before them. Hence, as therein stated, pursuant to the Court's constitutional power of administrative supervision
over all courts , "Circuit C Judges [as well as Court of First Instance and City Court Judges], therefore, should not encumber
9

themselves with the pre examination and investigation of criminal complaints, which they should refer to the ... provincial or city
fiscal who in turn can utilize the assistance of the state prosecutor to conduct such preliminary examination and investigation." 10

BARREDO, J., dissenting:

Dissents on the ground that it is my firm con. conviction. that courts of first instance have no power to conduct preliminary
investigation as I have explained in my separate opinion in Villaluz, 71 SCRA 412-425.

Concepcion Jr., J., took no part.

FERNANDO, J., dissenting:

It is with regret that I find myself unable to join the scholarly and exhaustive opinion of Justice Aquino. He is of the view that "the
recent ruling that the power 6f the Court of First Instance to conduct a preliminary investigation is derived from the constitutional
provision that 'no warrants shall issue but upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce' (Sec. 113t Art. 111, now Sec. 3, Art. IV, 1973 Constitution;
Collector of Customs v. Villaluz, L-34038, June 18, 1976 and five other 71 SCRA 356)." My concurrence in Villaluz did not go that
1

far.

I explained why: "At that, there is still need, it seems to me, for a few words not only to set forth the extent of my agreement with my
brethren but also to indicate what for me are the precise limits of our holding. The full and exhaustive treatment of the specific issue
dealing with the power of the circuit c to conduct p examination, with historical and textual allusions to the previous judicial
pronouncements and comparable statutory provisions, certainly a virtue to be commended, may for those not sufficiently
discerning, yield implications which, for me, go further than is intended by us. It is my understanding then that the decision reached
is at most an affirmation that the present Constitution, as did the 1935 Constitution, confers the power to conduct preliminary
examination preparatory to issuing a warrant of arrest, to a circuit criminal court judge. Even then, however, he should for sound
policy reasons curb any eagerness or propensity to make use of such competence." 2

The next paragraph of my concurrence deals with the matter further: "To repeat, it is solely the first stage in the criminal process
that may lead to the apprehension of the accused that has been passed upon by this Court. It has not considered the second stage,
that of preliminary investigation proper, one of equal significance. As far back as 1910, its importance was stressed in United States
v. Grant and Kennedy. Thus: 'The object or purpose of a preliminary investigation, or a previous inquiry of some kind, before an
accused person is placed upon trial, is to secure the innocent against hasty, malicious, and oppressive prosecutions, and to protect
him from an open and public accusation of crime, from the trouble, expense, and anxiety of a public trial, and also to protect State
from useless and expensive trials.' It is of the essence then that the accused should be heard. There are overtones in the opinion of
the Court susceptible to being misinterpreted in this regard, if it be assumed that upon the termination of the preliminary
examination the arraignment and trial could then proceed. I would dissociate myself from such a view. I am gratified therefore that it
is made explicit therein that our ruling is limited to the power of a judge under the Circuit Criminal Court Act to conduct a preliminary
investigation, it is my understanding that the question has been left open." 3

With the categorical pronouncement in the opinion of the Court that Villaluz is to be interpreted as recognizing the power of the
Court of First Instance to conduct a pre investigation by virtue of the constitutional provision cited, which for me, applied only to pre
examinations, I have no choice but to dissent. It is my considered view that in the absence of a statutory grant, a court of first
instance cannot exercise the power of holding a pre investigation, as it more of the prosecuting rather than the judicial function
unlike a preliminary examination, which as the first Step in the deprivation of one's liberty, is deemed best left in judicial hands.4
SARIO MALINIAS, petitioner,
vs.
THE COMMISSION ON ELECTIONS, TEOFILO CORPUZ, ANACLETO TANGILAG and VICTOR
DOMINGUEZ, respondents.
G.R. No. 146943, October 4, 2002

FACTS:

On July 31, 1998, Sario Malinias and Roy S. Pilando, who were candidates for governor and congress
representative positions, respectively, filed a complaint with the COMELEC's Law Department against Victor
Dominguez, Anacleto Tangilag and others for their violation of the following laws:

1. Section 25 of R.A. No. 6646; and

2. Sections 232 and 261 (i) of B.P. Blg. 881.

Dominguez was then the incumbent Congressman of Poblacion, Sabangan, Mountain Province. Corpuz was
then the Provincial Director of the Philippine National Police in Mountain Province while Tangilag was then
the Chief of Police of the Municipality of Bontoc, Mountain Province.

The petitioners said that due to said violations, their supporters were deprived from participating in the
canvassing of election returns as they were blocked by a police checkpoint in the course of their way to the
canvassing site at the Provincial Capitol Building in Bontoc, Mountain Province.

Among the private respondents, only Corpuz and Tangilag submitted their joint Counter-Affidavit, wherein
they admitted that they ordered the establishment of checkpoints all over the province to enforce the
COMELEC Gun Ban and its other pertinent rules pursuant to COMELEC Res. No. 2968 purposive of the
maintenance of peace and order around the vicinity of the canvassing site.

Also, they said that the presence of the policemen within the said area is to prevent some groups who were
reportedly had the intention to disrupt the canvass proceedings. They claimed that such a response was not
unwarranted as this has already happened in the past, wherein, in fact, the petitioners were among them.

COMELEC’s Ruling:

After investigating the allegations, COMELEC ruled to dismiss the petition against the respondents for
insufficiency of evidence to establish probable cause. Malinias filed an MR but it was also denied for failure
of adducing additional evidence thereon.

Not satisfied with the same, Malinias filed to SC a petition for review on certiorari on this case.

ISSUE:

Did COMELEC abuse its discretion in dismissing the complaint for lack of probable cause?

RATIO DECIDENDI OF SC:

No. SC AFFIRMED the decision of COMELEC and found the conduct of its investigation and ruling on the
case to be in accord with its jurisdiction and duties under the law. In this case, COMELEC did not commit
any grave abuse of discretion as there is nothing capricious or despotic in the manner of their resolution of
the said complaint, hence, SC cannot issue the extraordinary writ of certiorari.

On the said violations, the only evidence that was successfully presented by the petitioner is the mass-
affidavits of his supporters, which were considered self-serving and cannot be admitted by the court thus,
the same are not enough to prove his claims.

Also, the allege violation of the respondents of Sec. 25 of R.A. 6646 and Sec. 232 of B.P. Blg. No. 881 are
not included in the acts defined as punishable criminal election offenses under Sec. 27 of R.A. 6646 and
Sec. 261 and 262 of B.P. Blg. No. 881, respectively.
Here, Sec. 25 merely highlights one of the rights of a political party or candidate during elections whereas,
the violation of Sec. 232, which enumerates the persons who are not allowed inside the canvassing site,
can only be subjected to an administrative disciplinary action and cannot be punished by imprisonment as
provided for under Sec. 264 of the same law.

Moreover, it is clear in the defense of the respondents that they did not violate Sec. 261 (i), a criminal
offense, which prohibits any officer or employee of political offices or police force from intervening in any
election campaign or from engaging in any partisan activity except to vote or maintain public order.

In the said defense, the respondents said that setting up the checkpoints was done to enforce the
COMELEC's firearms ban, pursuant to COMELEC Resolution No. 2968 and not to prejudice any candidate
from participating in the canvassing. As such, the actions of the respondents are deemed lawful and not in
excess of their authority.

Ruling related to Statutory Construction

Under the rule of statutory construction of expressio unius est exclusio alterius, there is no ground to order
the COMELEC to prosecute private respondents for alleged violation of Section 232 of B.P. Blg. 881
precisely because this is a non-criminal act.

"It is a settled rule of statutory construction that the express mention of one person, thing, or consequence
implies the exclusion of all others. The rule is expressed in the familiar maxim, expressio unius est exclusio
alterius.

The rule of expressio unius est exclusio alterius is formulated in a number of ways. One variation of the rule
is the principle that what is expressed puts an end to that which is implied. Expressium facit cessare
tacitum. Thus, where a statute, by its terms, is expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters.
 REPUBLIC OF THE PHILIPPINES SUPREME COURT MANILA

EN BANC

G.R. No. 146943 - October 4, 2002

SARIO MALINIAS, Petitioner, vs. THE COMMISSION ON ELECTIONS, TEOFILO CORPUZ, ANACLETO
TANGILAG and VICTOR DOMINGUEZ, Respondents.

DECISION

CARPIO, J.:

The Case

Before us is a petition for review on certiorari1 of the Resolutions of the Commission on Elections ("COMELEC" for
brevity) en banc2 dated June 10, 1999 and October 26, 2000. The assailed Resolutions dismissed the
complaint3 filed by petitioner Sario Malinias ("Malinias" for brevity) and Roy S. Pilando ("Pilando" for brevity) for
insufficiency of evidence to establish probable cause for violation of Section 25 of Republic Act No. 6646 4 and
Sections 232 and 261 (i) of Batas Pambansa Blg. 881.5

The Facts

Petitioner Malinias was a candidate for governor whereas Pilando was a candidate for congressional representative
of Mountain Province in the May 11, 1998 elections.6

The Provincial Board of Canvassers held the canvassing of election returns at the second floor of the Provincial
Capitol Building in Bontoc, Mountain Province from May 11, 1998 to May 15, 1998. 7

On July 31, 1998, Malinias and Pilando filed a complaint with the COMELEC's Law Department for violation of
Section 25 of R.A. No. 6646, and Sections 232 and 261 (i) of B.P. Blg. 881, against Victor Dominguez, Teofilo
Corpuz, Anacleto Tangilag, Thomas Bayugan, Jose Bagwan who was then Provincial Election Supervisor, and the
members of the Provincial Board of Canvassers. Victor Dominguez ("Dominguez" for brevity) was then the
incumbent Congressman of Poblacion, Sabangan, Mountain Province. Teofilo Corpuz ("Corpuz" for brevity) was
then the Provincial Director of the Philippine National Police in Mountain Province while Anacleto Tangilag
("Tangilag" for brevity) was then the Chief of Police of the Municipality of Bontoc, Mountain Province.

Malinias and Pilando alleged that on May 15, 1998 a police checkpoint at Nacagang, Sabangan, Mountain Province
blocked their supporters who were on their way to Bontoc, and prevented them from proceeding to the Provincial
Capitol Building. Malinias and Pilando further alleged that policemen, upon orders of private respondents,
prevented their supporters, who nevertheless eventually reached the Provincial Capitol Building, from entering the
capitol grounds.

In their complaint, Malinias and Pilando requested the COMELEC and its Law Department to investigate and
prosecute private respondents for the following alleged unlawful acts.

"3. That on May 15, 1998 at the site of the canvassing of election returns for congressional and provincial returns
located at the second floor of the Provincial Capitol Building the public and particularly the designated
representatives/watchers of both affiants were prevented from attending the canvassing.

xxx

4. That the aforementioned "Mass-affidavits" support our allegations in this affidavit-complaint that we and our
supporters were prevented from attending the provincial canvassing because of the illegal checkpoint/blockade
set-up by policemen in Nakagang, Tambingan, Sabangan, Mt. Province and as an evidence to these allegations,
Certification of the Police Station is hereto attached as Annex "D" and affidavits of supporters hereto attached as
Annex "E", both made an integral part of this affidavit-complaint; and that said "mass-affidavits" show that the
Provincial canvassing were not made public or (sic) candidates and their representatives/watchers prevented
because of barricade, closure of canvassing rooms, blockade by armed policemen that coerce or threaten the
people, the candidates or their representatives from attending the canvassing; 8

In support of the complaint, several supporters of Malinias and Pilando executed so-called "mass affidavits"
uniformly asserting that private respondents, among others, (1) prevented them from attending the provincial
canvassing, (2) padlocked the canvassing area, and (3) threatened the people who wanted to enter the
canvassing room. They likewise alleged that the Provincial Board of Canvassers never allowed the canvassing to be
made public and consented to the exclusion of the public or representatives of other candidates except those of
Dominguez.9

Consequently, the COMELEC's Law Department conducted a preliminary investigation during which only Corpuz
and Tangilag submitted their joint Counter-Affidavit.

In their Counter-Affidavit, Corpuz and Tangilag admitted ordering the setting up of a checkpoint at Nacagang,
Sabangan, Mountain Province and securing the vicinity of the Provincial Capitol Building, to wit:

"3. We admit having ordered the setting up of check points in Nakagang, Tambingan, Sabangan, Mountain
Province; as in fact, this is not the only checkpoint set up in the province. There are other checkpoints established
in other parts of the province, to enforce the COMELEC gun ban and other pertinent rules issued by the
Commission on Election during the election period.

4. Policemen were posted within the vicinity of the capitol grounds in response to earlier information that some
groups were out to disrupt the canvass proceedings which were being conducted in the second floor of the
Provincial Capitol Building. This is not remote considering that this had happened in the past elections. In fact,
during the canvass proceeding on May 15, 1998 a large group of individuals identified with no less than affiants-
complainants Roy S. Pilando and Sario Malinias was conducting a rally just in front of the capitol, shouting
invectives at certain candidates and their leaders. This group likewise were holding placards and posted some in
front of the capitol building.

x x x"10

After the investigation, in a study dated May 26, 1999, the COMELEC's Law Department recommended to the
COMELEC en banc the dismissal of the complaint for lack of probable cause. 11

In a Resolution dated June 10, 1999, the COMELEC en banc dismissed the complaint of Malinias and Pilando for
insufficiency of evidence to establish probable cause against private respondents. On October 26, 2000, the
COMELEC dismissed Malinias' Motion for Reconsideration.

Hence, Malinias filed the instant petition.

The Comelec's Ruling

In dismissing the complaint against private respondents, the COMELEC ruled as follows:

"As appearing in the Minutes of Provincial Canvass, complainant Roy Pilando was present during the May 15, 1998
Provincial Canvass. He even participated actively in a discussion with the members of the Board and the counsel of
Congressman Dominguez. The minutes also disclosed that the lawyers of LAMMP, the watchers, supporters of
other candidates and representatives of the Integrated Bar of the Philippines were present at one time or another
during the canvass proceedings. The minutes does not indicate any charges of irregularities inside and within the
vicinity of the canvassing room.

Pursuant to Comelec Res. No. 2968 promulgated on January 7, 1998, checkpoints were established in the entire
country to effectively implement the firearms ban during the election period from January 11, 1998 to June 10,
1998. In Mountain Province, there were fourteen (14) checkpoints established by the Philippine National Police
way before the start of the campaign period for the May 11, 1998 elections including the subject checkpoint at
Nacagang, Tambingan, Sabangan, Mountain Province. Thus, the checkpoint at Sabangan, Mountain Province was
not established as alleged only upon request of Congressman Dominguez on May 15, 1998 but way before the
commencement of the campaign period. Granting arguendo that the Congressman did make a request for a
checkpoint at Sitio Nacagang, it would be a mere surplusage as the same was already existing.

Furthermore, an alleged text of a radio message requesting advice from the PNP Provincial Director at Bontoc, Mt.
Province was attached to complainants' affidavit-complaint. However, said person by the name of Mr. Palicos was
never presented to affirm the truth of the contents and the signature appearing therein." 12

Finding that Malinias failed to adduce new evidence, the COMELEC dismissed Malinias' Motion for
Reconsideration.13

The Court's Ruling

The sole issue for resolution is whether the COMELEC gravely abused its discretion in dismissing Malinias and
Pilando's complaint for insufficiency of evidence to establish probable cause for alleged violation of Section 25 of
R.A. No. 6646 and Sections 232 and 261 (i) of B.P. 881.
We rule that the COMELEC did not commit grave abuse of discretion.

For this Court to issue the extraordinary writ of certiorari, the tribunal or administrative body must have issued the
assailed decision, order or resolution in a capricious and despotic manner.

"There is grave abuse of discretion justifying the issuance of the writ of certiorari when there is a capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction; where the power is exercised in an arbitrary
or despotic manner by reason of passion, prejudice, or personal hostility, amounting to an evasion of positive duty
or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law." 14

Such is not the situation in the instant case. The COMELEC dismissed properly the complaint of Malinias and
Pilando for insufficient evidence, and committed no grave abuse of discretion amounting to lack or excess of
jurisdiction.

First, Malinias charged private respondents with alleged violation of Section 25 of Republic Act No. 6646, quoted,
as follows:

"Sec. 25. Right to be Present and to Counsel During the Canvass. Any registered political party, coalition of
parties, through their representatives, and any candidate has the right to be present and to counsel during the
canvass of the election returns; Provided, That only one counsel may argue for each political party or candidate.
They shall have the right to examine the returns being canvassed without touching them, make their observations
thereon, and file their challenge in accordance with the rules and regulations of the Commission. No dilatory action
shall be allowed by the board of canvassers."

In the present case, Malinias miserably failed to substantiate his claim that private respondents denied him his
right to be present during the canvassing. There was even no showing that Malinias was within the vicinity of the
Provincial Capitol Building or that private respondents prevented him from entering the canvassing room.

As found by the COMELEC and admitted by Malinias, Pilando was present and even participated actively in the
canvassing.15 Malinias failed to show that his rights as a gubernatorial candidate were prejudiced by the alleged
failure of his supporters to attend the canvassing. Malinias claimed that even though Pilando was present during
the canvassing, the latter was only able to enter the room after eluding the policemen and passing through the
rear entrance of the Provincial Capitol Building.16 This allegation, however, is not supported by any clear and
convincing evidence. Pilando himself, who was purportedly prevented by policemen from entering the canvassing
room, failed to attest to the veracity of this statement rendering the same self-serving and baseless.

In an analogous case where a political candidate's watcher failed to attend the canvass proceedings, this Court
held:

"Another matter which militates against the cause of petitioner is that he has not shown that he suffered prejudice
because of the failure of his watcher to attend the canvassing. Had the watcher been present, what substantive
issues would he have raised? Petitioner does not disclose. Could it be that even if the watcher was present, the
result of the canvassing would have been the same?"

There is therefore no merit in petitioner's claim that respondent Commission on Elections gravely abused its
discretion in issuing its questioned decision. And, as emphatically stated in Sidro v. Comelec, 102 SCRA 853, this
Court has invariably followed the principle that "in the absence of any jurisdictional infirmity or an error of law of
the utmost gravity, the conclusion reached by the respondent Commission on a matter that falls within its
competence is entitled to the utmost respect, xxx." There is justification in this case to reiterate this principle." 17

Assuming that Pilando in fact entered the canvassing room only after successfully evading the policemen
surrounding the Provincial Capitol grounds, Pilando could have easily complained of this alleged unlawful act
during the canvass proceedings. He could have immediately reported the matter to the Provincial Board of
Canvassers as a violation of Section 25 of R.A. No. 6646. However, Pilando opted simply to raise questions on
alleged irregularities in the municipal canvassing.18 While he had the opportunity to protest the alleged
intimidation committed by policemen against his person, it is quite surprising that he never mentioned anything
about it to the Provincial Board of Canvassers.

Surprisingly, the COMELEC and private respondents apparently overlooked that R.A. No. 6646 does not punish a
violation of Section 25 of the law as a criminal election offense. Section 25 merely highlights one of the recognized
rights of a political party or candidate during elections, aimed at providing an effective safeguard against fraud or
irregularities in the canvassing of election returns. Section 27 19 of R.A. No. 6646, which specifies the election
offenses punishable under this law, does not include Section 25.

Malinias further claims that, in violation of this right, his supporters were blocked by a checkpoint set-up at
Nacagang, Sabangan, Mountain Province. This allegation is devoid of any basis to merit a reversal of the
COMELEC's ruling. Malinias' supporters who were purportedly blocked by the checkpoint did not confirm or
corroborate this allegation of Malinias.

Moreover, the police established checkpoints in the entire country to implement the firearms ban during the
election period. Clearly, this is in consonance with the constitutionally ordained power of the COMELEC to deputize
government agencies and instrumentalities of the Government for the exclusive purpose of ensuring free, orderly,
honest, peaceful and credible elections.20

Second, Malinias maintains that Corpuz and Tangilag entered the canvassing room in blatant violation of Section
232 of B.P. Blg. 881. His sole basis for this allegation is the affidavit of his supporters who expressly stated that
they saw Dominguez and Corpuz (only) enter the canvassing room.21 Malinias likewise contends that "Corpuz and
Tangilag impliedly admitted that they were inside or at least within the fifty (50) meter radius of the canvassing
room as they were able to mention the names of the persons who were inside the canvassing room in their
Counter-Affidavit."22

The provision of law which Corpuz and Tangilag allegedly violated is quoted as follows:

"Sec. 232. Persons not allowed inside the canvassing room. It shall be unlawful for any officer or member of the
Armed Forces of the Philippines, including the Philippine Constabulary, or the Integrated National Police or any
peace officer or any armed or unarmed persons belonging to an extra-legal police agency, special forces, reaction
forces, strike forces, home defense forces, barangay self-defense units, barangay tanod, or of any member of the
security or police organizations or government ministries, commissions, councils, bureaus, offices,
instrumentalities, or government-owned or controlled corporation or their subsidiaries or of any member of a
privately owned or operated security, investigative, protective or intelligence agency performing identical or
similar functions to enter the room where the canvassing of the election returns are held by the board of
canvassers and within a radius of fifty meters from such room: Provided, however, That the board of canvassers
by a majority vote, if it deems necessary, may make a call in writing for the detail of policemen or any peace
officers for their protection or for the protection of the election documents and paraphernalia in the possession of
the board, or for the maintenance of peace and order, in which case said policemen or peace officers, who shall be
in proper uniform, shall stay outside the room within a radius of thirty meters near enough to be easily called by
the board of canvassers at any time."

Again, the COMELEC and private respondents overlooked that Section 232 of B.P. Blg. 881 is not one of the
election offenses explicitly enumerated in Sections 261 and 262 of B.P. Blg. 881. While Section 232 categorically
states that it is unlawful for the persons referred therein to enter the canvassing room, this act is not one of the
election offenses criminally punishable under Sections 261 and 262 of B.P. Blg. 881. Thus, the act involved in
Section 232 of B.P. Blg. 881 is not punishable as a criminal election offense. Section 264 of B.P. Blg. 881 provides
that the penalty for an election offense under Sections 261 and 262 is imprisonment of not less than one year but
not more than six years.

Under the rule of statutory construction of expressio unius est exclusio alterius, there is no ground to order the
COMELEC to prosecute private respondents for alleged violation of Section 232 of B.P. Blg. 881 precisely because
this is a non-criminal act.

"It is a settled rule of statutory construction that the express mention of one person, thing, or consequence
implies the exclusion of all others. The rule is expressed in the familiar maxim, expressio unius est exclusio
alterius.

The rule of expressio unius est exclusio alterius is formulated in a number of ways. One variation of the rule is the
principle that what is expressed puts an end to that which is implied. Expressium facit cessare tacitum. Thus,
where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction,
be extended to other matters.

xxx

The rule of expressio unius est exclusio alterius and its variations are canons of restrictive interpretation. They are
based on the rules of logic and the natural workings of the human mind. They are predicated upon one's own
voluntary act and not upon that of others. They proceed from the premise that the legislature would not have
made specified enumeration in a statute had the intention been not to restrict its meaning and confine its terms to
those expressly mentioned."23

Also, since private respondents are being charged with a criminal offense, a strict interpretation in favor of private
respondents is required in determining whether the acts mentioned in Section 232 are criminally punishable under
Sections 26124 and 26225 of B.P. Blg. 881. Since Sections 261 and 262, which lists the election offenses punishable
as crimes, do not include Section 232, a strict interpretation means that private respondents cannot be held
criminally liable for violation of Section 232.
This is not to say that a violation of Section 232 of B.P. Blg. 881 is without any sanction. Though not a criminal
election offense, a violation of Section 232 certainly warrants, after proper hearing, the imposition of
administrative penalties. Under Section 2, Article IX-C of the Constitution, the COMELEC may recommend to the
President the imposition of disciplinary action on any officer or employee the COMELEC has deputized for violation
of its directive, order or decision.26 Also, under the Revised Administrative Code,27 the COMELEC may recommend
to the proper authority the suspension or removal of any government official or employee found guilty of violation
of election laws or failure to comply with COMELEC orders or rulings.

In addition, a careful examination of the evidence presented by Malinias shows that the same are insufficient to
justify a finding of grave abuse of discretion on the part of the COMELEC. Obviously, the evidence relied upon by
Malinias to support his charges consisted mainly of affidavits prepared by his own supporters. The affidavits of
Malinias' own supporters, being self-serving, cannot be accepted at face value under the circumstances. As this
Court has often stated, "reliance should not be placed on mere affidavits." 28

Besides, if Corpuz really entered the canvassing room, then why did Pilando and the representatives of other
candidates, who were inside the room, fail to question this alleged wrongful act during the canvassing? Malinias'
contention that Corpuz and Tangilag impliedly admitted they were inside the canvassing room because they
mentioned the names of the persons present during the canvassing deserves scant consideration as the same is
not supported by any evidence.

Finally, Malinias asserts that private respondents should be held liable for allegedly violating Section 261 (i) of B.
P. Blg. 881 because the latter engaged in partisan political activity. This provision states:

"Sec. 261 (i) Intervention of public officers and employees. Any officer or employee in the civil service, except
those holding political offices; any officer, employee, or member of the Armed Forces of the Philippines, or any
police force, special forces, home defense forces, barangay self-defense units and all other para-military units that
now exist or which may hereafter be organized who, directly or indirectly, intervenes in any election campaign or
engages in any partisan political activity, except to vote or to preserve public order, if he is a peace officer."

Section 79, Article X of B.P. Blg. 881 defines the term "partisan political activity" as an act designed to promote
the election or defeat of a particular candidate or candidates to a public office." 29 Malinias asserts that, in setting
up a checkpoint at Nacagang, Tambingan, Sabangan, Mountain Province and in closing the canvassing room,
Corpuz and Tangilag unduly interfered with his right to be present and to counsel during the canvassing. This
interference allegedly favored the other candidate.

While Corpuz and Tangilag admitted ordering the setting up of the checkpoint, they did so to enforce the
COMELEC's firearms ban, pursuant to COMELEC Resolution No. 2968, among others.30 There was no clear
indication that these police officers, in ordering the setting up of checkpoint, intended to favor the other
candidates. Neither was there proof to show that Corpuz and Tangilag unreasonably exceeded their authority in
implementing the COMELEC rules. Further, there is no basis to rule that private respondents arbitrarily deprived
Malinias of his right to be present and to counsel during the canvassing.

The act of Corpuz and Tangilag in setting up the checkpoint was plainly in accordance with their avowed duty to
maintain effectively peace and order within the vicinity of the canvassing site. Thus, the act is untainted with any
color of political activity. There was also no showing that the alleged closure of the provincial capitol grounds
favored the election of the other candidates.

In summary, we find that there is no proof that the COMELEC issued the assailed resolutions with grave abuse of
discretion. We add that this Court has limited power to review findings of fact made by the COMELEC pursuant to
its constitutional authority to investigate and prosecute actions for election offenses. 31 Thus, where there is no
proof of grave abuse of discretion, arbitrariness, fraud or error of law, this Court may not review the factual
findings of the COMELEC, nor substitute its own findings on the sufficiency of evidence. 32

WHEREFORE, the instant Petition is DISMISSED. The assailed Resolutions of public respondent COMELEC are
AFFIRMED. Costs against petitioner.

SO ORDERED.
[G.R. No. 132527. July 29, 2005]
COCONUT OIL REFINERS ASSOCIATION, INC. vs. HON. RUBEN TORRES

This is a Petition for Prohibition and Injunction seeking to enjoin and prohibit the Executive Branch from allowing, and
the private respondents from continuing with, the operation of tax and duty-free shops located at the Subic Special
Economic Zone (SSEZ) and the Clark Special Economic Zone (CSEZ), and to declare Section 5 of EO No. 80, EO No.
97-A, and Section 4 of BCDA Board Resolution No. 93-05-034 as unconstitutional, illegal, and void.

FACTS: On March 13, 1992, RA No. 7227 was enacted, providing for, among other things, the sound and balanced
conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the form
of special economic zones in order to promote the economic and social development of Central Luzon in particular and
the country in general. Among the salient provisions are as follows: “SECTION 12. x x x The Subic Special Economic
Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and
capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and
duty-free importations of raw materials, capital and equipment. However, exportation or removal of goods from the
territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines; x x x”

On April 3, 1993, President Fidel V. Ramos issued EO No. 80, which declared, among others, that Clark shall have all
the applicable incentives granted to the Subic Special Economic and Free Port Zone under RA No. 7227.

Pursuant to the directive under EO No. 80, the BCDA passed Board Resolution No. 93-05-034 on May 18, 1993, allowing
the tax and duty-free sale at retail of consumer goods imported via Clark for consumption outside the CSEZ.

On June 10, 1993, the President issued EO No. 97 and subsequently, EO No. 97-A to Clarifying the Tax and Duty Free
Incentive within the Subic Special Economic Zone Pursuant to RA No. 7227. EO No. 97-A further provides that $100
monthly and $200 yearly tax-free shopping privileges is granted to SSEZ residents living outside the Secured Area of
the SSEZ and to Filipinos aged 15 and over residing outside the SSEZ.

ISSUE: Whether or not the assailed issuances are unconstitutional, illegal and void for being an exercise of executive
lawmaking, contrary to RA No. 7227 and in violation of the Constitutional provisions, particularly the equal protection
clause, prohibition of unfair competition and combinations in restraint of trade, and preferential use of Filipino labor,
domestic materials and locally produced goods?

HELD: On the issue of executive legislation, petitioners contend that the wording of RA No. 7227 clearly limits the
grant of tax incentives to the importation of raw materials, capital and equipment only. Hence, they claim that the assailed
issuances constitute executive legislation for invalidly granting tax incentives in the importation of consumer goods such
as those being sold in the duty-free shops, in violation of the letter and intent of RA No. 7227. The Court held that
Section 12 of RA No. 7227 clearly does not restrict the duty-free importation only to 'raw materials, capital and
equipment. To limit the tax-free importation privilege of enterprises located inside the special economic zone only to raw
materials, capital and equipment clearly runs counter to the intention of the Legislature to create a free port where the
'free flow of goods or capital within, into, and out of the zones' is insured. The phrase 'tax and duty-free importations of
raw materials, capital and equipment was merely cited as an example of incentives that may be given to entities
operating within the zone. Moreover, the records of the Senate containing the discussion of the concept of 'special
economic zone in Section 12 (a) of Republic Act No. 7227 show the legislative intent that consumer goods entering the
SSEZ which satisfy the needs of the zone and are consumed there are not subject to duties and taxes in accordance
with Philippine laws. However, the second sentences of paragraphs 1.2 and 1.3 of EO No. 97-A, allowing tax and duty-
free removal of goods to certain individuals, even in a limited amount, from the Secured Area of the SSEZ, are null and
void for being contrary to Section 12 of RA No. 7227. Said Section clearly provides that exportation or removal of goods
from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to
customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines.

On the other hand, insofar as the CSEZ is concerned, the case for an invalid exercise of executive legislation is tenable.
While Section 12 of RA No. 7227 expressly provides for the grant of incentives to the SSEZ, it fails to make any similar
grant in favor of other economic zones, including the CSEZ. Tax and duty-free incentives being in the nature of tax
exemptions, the basis thereof should be categorically and unmistakably expressed from the language of the statute.
Consequently, in the absence of any express grant of tax and duty-free privileges to the CSEZ in RA No. 7227, there
would be no legal basis to uphold the questioned portions of two issuances: Section 5 of Executive Order No. 80 and
Section 4 of BCDA Board Resolution No. 93-05-034, which both pertain to the CSEZ.

On the issue on equal protection, it is an established principle of constitutional law that the guaranty of the equal
protection of the laws is not violated by a legislation based on a reasonable classification. Classification, to be valid,
must (1) rest on substantial distinction, (2) be germane to the purpose of the law, (3) not be limited to existing conditions
only, and (4) apply equally to all members of the same class. In this case, the Court found that there’s real and substantial
distinction between residents within the secured area and those living within the economic zone but outside the fenced-
off area. A significant distinction between the two groups is that enterprises outside the zones maintain their businesses
within Philippine customs territory, while private respondents and the other duly-registered zone enterprises operate
within the so-called 'separate customs territory. The classification is also germane to the purpose of RA No. 7227
because its purpose is to convert the lands formerly occupied by the US military bases into economic or industrial areas.
In furtherance of such objective, Congress deemed it necessary to extend economic incentives to the establishments
within the zone to attract and encourage foreign and local investors. The classification, moreover, is not limited to the
existing conditions when the law was promulgated, but to future conditions as well, inasmuch as the law envisioned the
former military reservation to ultimately develop into a self-sustaining investment center. And, lastly, the classification
applies equally to all retailers found within the 'secured area.

On the issue of unfair competition, the Court held that the mere fact that incentives and privileges are granted to
certain enterprises to the exclusion of others does not render the issuance unconstitutional for espousing unfair
competition. Said constitutional prohibition cannot hinder the Legislature from using tax incentives as a tool to pursue
RA No. 7227’s policies of developing the SSEZ into a self-sustaining entity that will generate employment and attract
foreign and local investment.

Lastly, on the issue of preferential use of Filipino labor, materials and goods, the Court held that this Constitutional
provision did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in
the development of the Philippine economy. In fact, it allows an exchange on the basis of equality and reciprocity,
frowning only on foreign competition that is unfair. Furthermore, Executive Department, with its subsequent issuance of
Executive Order Nos. 444 and 303, has already provided certain measures to prevent that unfair competition.

WHEREFORE, the petition is PARTLY GRANTED. Section 5 of Executive Order No. 80 and Section 4 of BCDA Board
Resolution No. 93-05-034 are hereby declared NULL and VOID and are accordingly declared of no legal force and
effect. All portions of Executive Order No. 97-A are valid and effective, except the second sentences in paragraphs 1.2
and 1.3 of said Executive Order, which are hereby declared INVALID.
 Republic of the Philippines
SUPREME COURT

EN BANC

G.R. No. 132527. July 29, 2005

COCONUT OIL REFINERS ASSOCIATION, INC. represented by its President, JESUS L. ARRANZA, PHILIPPINE
ASSOCIATION OF MEAT PROCESSORS, INC. (PAMPI), represented by its Secretary, ROMEO G. HIDALGO, FEDERATION
OF FREE FARMERS (FFF), represented by its President, JEREMIAS U. MONTEMAYOR, and BUKLURAN NG
MANGGAGAWANG PILIPINO (BMP), represented by its Chairperson, FELIMON C. LAGMAN, Petitioners,
vs.
HON. RUBEN TORRES, in his capacity as Executive Secretary; BASES CONVERSION AND DEVELOPMENT AUTHORITY,
CLARK DEVELOPMENT CORPORATION, SUBIC BAY METROPOLITAN AUTHORITY, 88 MART DUTY FREE, FREEPORT
TRADERS, PX CLUB, AMERICAN HARDWARE, ROYAL DUTY FREE SHOPS, INC., DFS SPORTS, ASIA PACIFIC, MCI DUTY
FREE DISTRIBUTOR CORP. (formerly MCI RESOURCES, CORP.), PARK & SHOP, DUTY FREE COMMODITIES, L.
FURNISHING, SHAMBURGH, SUBIC DFS, ARGAN TRADING CORP., ASIPINE CORP., BEST BUY, INC., PX CLUB, CLARK
TRADING, DEMAGUS TRADING CORP., D.F.S. SPORTS UNLIMITED, INC., DUTY FREE FIRST SUPERSTORE, INC.,
FREEPORT, JC MALL DUTY FREE INC. (formerly 88 Mart [Clark] Duty Free Corp.), LILLY HILL CORP., MARSHALL,
PUREGOLD DUTY FREE, INC., ROYAL DFS and ZAXXON PHILIPPINES, INC., Respondents.

DECISION

AZCUNA, J.:

This is a Petition for Prohibition and Injunction seeking to enjoin and prohibit the Executive Branch, through the public respondents
Ruben Torres in his capacity as Executive Secretary, the Bases Conversion Development Authority (BCDA), the Clark
Development Corporation (CDC) and the Subic Bay Metropolitan Authority (SBMA), from allowing, and the private respondents
from continuing with, the operation of tax and duty-free shops located at the Subic Special Economic Zone (SSEZ) and the Clark
Special Economic Zone (CSEZ), and to declare the following issuances as unconstitutional, illegal, and void:

1. Section 5 of Executive Order No. 80, 1 dated April 3, 1993, regarding the CSEZ.

2. Executive Order No. 97-A, dated June 19, 1993, pertaining to the SSEZ.

3. Section 4 of BCDA Board Resolution No. 93-05-034,2 dated May 18, 1993, pertaining to the CSEZ.

Petitioners contend that the aforecited issuances are unconstitutional and void as they constitute executive lawmaking, and that
they are contrary to Republic Act No. 72273 and in violation of the Constitution, particularly Section 1, Article III (equal protection
clause), Section 19, Article XII (prohibition of unfair competition and combinations in restraint of trade), and Section 12, Article XII
(preferential use of Filipino labor, domestic materials and locally produced goods).

The facts are as follows:

On March 13, 1992, Republic Act No. 7227 was enacted, providing for, among other things, the sound and balanced conversion of
the Clark and Subic military reservations and their extensions into alternative productive uses in the form of special economic
zones in order to promote the economic and social development of Central Luzon in particular and the country in general. Among
the salient provisions are as follows:

SECTION 12. Subic Special Economic Zone. —

...

The abovementioned zone shall be subject to the following policies:

(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local
Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and
investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign
investments;

(b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or
movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives
such as tax and duty-free importations of raw materials, capital and equipment. However, exportation or removal of goods from the
territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and
taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines;4

(c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall be
imposed within the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the gross income earned by all
businesses and enterprises within the Subic Special Ecoomic Zone shall be remitted to the National Government, one percent (1%)
each to the local government units affected by the declaration of the zone in proportion to their population area, and other factors.
In addition, there is hereby established a development fund of one percent (1%) of the gross income earned by all businesses and
enterprises within the Subic Special Economic Zone to be utilized for the development of municipalities outside the City of
Olangapo and the Municipality of Subic, and other municipalities contiguous to the base areas.

...

SECTION 15. Clark and Other Special Economic Zones. — Subject to the concurrence by resolution of the local government units
directly affected, the President is hereby authorized to create by executive proclamation a Special Economic Zone covering the
lands occupied by the Clark military reservations and its contiguous extensions as embraced, covered and defined by the 1947
Military Bases Agreement between the Philippines and the United States of America, as amended, located within the territorial
jurisdiction of Angeles City, Municipalities of Mabalacat and Porac, Province of Pampanga and the Municipality of Capas, Province
of Tarlac, in accordance with the policies as herein provided insofar as applicable to the Clark military reservations.

The governing body of the Clark Special Economic Zone shall likewise be established by executive proclamation with such powers
and functions exercised by the Export Processing Zone Authority pursuant to Presidential Decree No. 66 as amended.

The policies to govern and regulate the Clark Special Economic Zone shall be determined upon consultation with the inhabitants of
the local government units directly affected which shall be conducted within six (6) months upon approval of this Act.

Similarly, subject to the concurrence by resolution of the local government units directly affected, the President shall create other
Special Economic Zones, in the base areas of Wallace Air Station in San Fernando, La Union (excluding areas designated for
communications, advance warning and radar requirements of the Philippine Air Force to be determined by the Conversion
Authority) and Camp John Hay in the City of Baguio.

Upon recommendation of the Conversion Authority, the President is likewise authorized to create Special Economic Zones covering
the Municipalities of Morong, Hermosa, Dinalupihan, Castillejos and San Marcelino.

On April 3, 1993, President Fidel V. Ramos issued Executive Order No. 80, which declared, among others, that Clark shall have all
the applicable incentives granted to the Subic Special Economic and Free Port Zone under Republic Act No. 7227. The pertinent
provision assailed therein is as follows:

SECTION 5. Investments Climate in the CSEZ. — Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall
promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in consultation with
the local government units and pertinent government departments for implementation by the CDC.

Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA 7227
and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments Code of 1987, the Foreign
Investments Act of 1991 and new investments laws which may hereinafter be enacted.

The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited investment incentives, while the CSEZ Sub-
Zone covering the rest of the CSEZ shall have limited incentives. The full incentives in the Clark SEZ Main Zone and the limited
incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA.

Pursuant to the directive under Executive Order No. 80, the BCDA passed Board Resolution No. 93-05-034 on May 18, 1993,
allowing the tax and duty-free sale at retail of consumer goods imported via Clark for consumption outside the CSEZ. The assailed
provisions of said resolution read, as follows:

Section 4. SPECIFIC INCENTIVES IN THE CSEZ MAIN ZONE. – The CSEZ-registered enterprises/businesses shall be entitled to
all the incentives available under R.A. No. 7227, E.O. No. 226 and R.A. No. 7042 which shall include, but not limited to, the
following:

I. As in Subic Economic and Free Port Zone:

A. Customs:

...

4. Tax and duty-free purchase and consumption of goods/articles (duty free shopping) within the CSEZ Main Zone.

5. For individuals, duty-free consumer goods may be brought out of the CSEZ Main Zone into the Philippine Customs territory but
not to exceed US$200.00 per month per CDC-registered person, similar to the limits imposed in the Subic SEZ. This privilege shall
be enjoyed only once a month. Any excess shall be levied taxes and duties by the Bureau of Customs.

On June 10, 1993, the President issued Executive Order No. 97, "Clarifying the Tax and Duty Free Incentive Within the Subic
Special Economic Zone Pursuant to R.A. No. 7227." Said issuance in part states, thus:
SECTION 1. On Import Taxes and Duties – Tax and duty-free importations shall apply only to raw materials, capital goods and
equipment brought in by business enterprises into the SSEZ. Except for these items, importations of other goods into the SSEZ,
whether by business enterprises or resident individuals, are subject to taxes and duties under relevant Philippine laws.

The exportation or removal of tax and duty-free goods from the territory of the SSEZ to other parts of the Philippine territory shall be
subject to duties and taxes under relevant Philippine laws.

Nine days after, on June 19, 1993, Executive Order No. 97-A was issued, "Further Clarifying the Tax and Duty-Free Privilege
Within the Subic Special Economic and Free Port Zone." The relevant provisions read, as follows:

SECTION 1. The following guidelines shall govern the tax and duty-free privilege within the Secured Area of the Subic Special
Economic and Free Port Zone:

1.1 The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely tax and duty-free
area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing within the Secured Area are free to
import raw materials, capital goods, equipment, and consumer items tax and duty-free. Consumption items, however, must be
consumed within the Secured Area. Removal of raw materials, capital goods, equipment and consumer items out of the Secured
Area for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may be provided
herein.

1.2. Residents of the SSEFPZ living outside the Secured Area can enter the Secured Area and consume any quantity of
consumption items in hotels and restaurants within the Secured Area. However, these residents can purchase and bring out of the
Secured Area to other parts of the Philippine territory consumer items worth not exceeding US$100 per month per person. Only
residents age 15 and over are entitled to this privilege.

1.3. Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of consumption items in hotels
and restaurants within the Secured Area. However, they can purchase and bring out [of] the Secured Area to other parts of the
Philippine territory consumer items worth not exceeding US$200 per year per person. Only Filipinos age 15 and over are entitled to
this privilege.

Petitioners assail the $100 monthly and $200 yearly tax-free shopping privileges granted by the aforecited provisions respectively
to SSEZ residents living outside the Secured Area of the SSEZ and to Filipinos aged 15 and over residing outside the SSEZ.

On February 23, 1998, petitioners thus filed the instant petition, seeking the declaration of nullity of the assailed issuances on the
following grounds:

I.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD
RESOLUTION NO. 93-05-034 ARE NULL AND VOID [FOR] BEING AN EXERCISE OF EXECUTIVE LAWMAKING.

II.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD
RESOLUTION NO. 93-05-034 ARE UNCONSTITUTIONAL FOR BEING VIOLATIVE OF THE EQUAL PROTECTION CLAUSE
AND THE PROHIBITION AGAINST UNFAIR COMPETITION AND PRACTICES IN RESTRAINT OF TRADE.

III.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD
RESOLUTION NO. 93-05-034 ARE NULL AND VOID [FOR] BEING VIOLATIVE OF REPUBLIC ACT NO. 7227.

IV.

THE CONTINUED IMPLEMENTATION OF THE CHALLENGED ISSUANCES IF NOT RESTRAINED WILL CONTINUE TO
CAUSE PETITIONERS TO SUFFER GRAVE AND IRREPARABLE INJURY. 5

In their Comments, respondents point out procedural issues, alleging lack of petitioners’ legal standing, the unreasonable delay in
the filing of the petition, laches, and the propriety of the remedy of prohibition.

Anent the claim on lack of legal standing, respondents argue that petitioners, being mere suppliers of the local retailers operating
outside the special economic zones, do not stand to suffer direct injury in the enforcement of the issuances being assailed herein.
Assuming this is true, this Court has nevertheless held that in cases of paramount importance where serious constitutional
questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even where there is no
direct injury to the party claiming the right of judicial review. 6
In the same vein, with respect to the other alleged procedural flaws, even assuming the existence of such defects, this Court, in the
exercise of its discretion, brushes aside these technicalities and takes cognizance of the petition considering the importance to the
public of the present case and in keeping with the duty to determine whether the other branches of the government have kept
themselves within the limits of the Constitution.7

Now, on the constitutional arguments raised:

As this Court enters upon the task of passing on the validity of an act of a co-equal and coordinate branch of the Government, it
bears emphasis that deeply ingrained in our jurisprudence is the time-honored principle that a statute is presumed to be valid.8 This
presumption is rooted in the doctrine of separation of powers which enjoins upon the three coordinate departments of the
Government a becoming courtesy for each other’s acts. 9 Hence, to doubt is to sustain. The theory is that before the act was done or
the law was enacted, earnest studies were made by Congress, or the President, or both, to insure that the Constitution would not
be breached.10 This Court, however, may declare a law, or portions thereof, unconstitutional where a petitioner has shown a clear
and unequivocal breach of the Constitution, not merely a doubtful or argumentative one.11 In other words, before a statute or a
portion thereof may be declared unconstitutional, it must be shown that the statute or issuance violates the Constitution clearly,
palpably and plainly, and in such a manner as to leave no doubt or hesitation in the mind of the Court. 12

The Issue on Executive Legislation

Petitioners claim that the assailed issuances (Executive Order No. 97-A; Section 5 of Executive Order No. 80; and Section 4 of
BCDA Board Resolution No. 93-05-034) constitute executive legislation, in violation of the rule on separation of powers. Petitioners
argue that the Executive Department, by allowing through the questioned issuances the setting up of tax and duty-free shops and
the removal of consumer goods and items from the zones without payment of corresponding duties and taxes, arbitrarily provided
additional exemptions to the limitations imposed by Republic Act No. 7227, which limitations petitioners identify as follows:

(1) [Republic Act No. 7227] allowed only tax and duty-free importation of raw materials, capital and equipment.

(2) It provides that any exportation or removal of goods from the territory of the Subic Special Economic Zone to other parts of the
Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of
the Philippines.

Anent the first alleged limitation, petitioners contend that the wording of Republic Act No. 7227 clearly limits the grant of tax
incentives to the importation of raw materials, capital and equipment only. Hence, they claim that the assailed issuances constitute
executive legislation for invalidly granting tax incentives in the importation of consumer goods such as those being sold in the duty-
free shops, in violation of the letter and intent of Republic Act No. 7227.

A careful reading of Section 12 of Republic Act No. 7227, which pertains to the SSEZ, would show that it does not restrict the duty-
free importation only to "raw materials, capital and equipment." Section 12 of the cited law is partly reproduced, as follows:

SECTION 12. Subic Special Economic Zone. —

...

The abovementioned zone shall be subject to the following policies:

...

(b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or
movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives
such as tax and duty-free importations of raw materials, capital and equipment. However, exportation or removal of goods from the
territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and
taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines. 13

While it is true that Section 12 (b) of Republic Act No. 7227 mentions only raw materials, capital and equipment, this does not
necessarily mean that the tax and duty-free buying privilege is limited to these types of articles to the exclusion of consumer goods.
It must be remembered that in construing statutes, the proper course is to start out and follow the true intent of the Legislature and
to adopt that sense which harmonizes best with the context and promotes in the fullest manner the policy and objects of the
Legislature.14

In the present case, there appears to be no logic in following the narrow interpretation petitioners urge. To limit the tax-free
importation privilege of enterprises located inside the special economic zone only to raw materials, capital and equipment clearly
runs counter to the intention of the Legislature to create a free port where the "free flow of goods or capital within, into, and out of
the zones" is insured.

The phrase "tax and duty-free importations of raw materials, capital and equipment" was merely cited as an example of incentives
that may be given to entities operating within the zone. Public respondent SBMA correctly argued that the maxim expressio unius
est exclusio alterius, on which petitioners impliedly rely to support their restrictive interpretation, does not apply when words are
mentioned by way of example.15 It is obvious from the wording of Republic Act No. 7227, particularly the use of the phrase "such
as," that the enumeration only meant to illustrate incentives that the SSEZ is authorized to grant, in line with its being a free port
zone.

Furthermore, said legal maxim should be applied only as a means of discovering legislative intent which is not otherwise manifest,
and should not be permitted to defeat the plainly indicated purpose of the Legislature. 16

The records of the Senate containing the discussion of the concept of "special economic zone" in Section 12 (a) of Republic Act
No. 7227 show the legislative intent that consumer goods entering the SSEZ which satisfy the needs of the zone and are
consumed there are not subject to duties and taxes in accordance with Philippine laws, thus:

Senator Guingona. . . . The concept of Special Economic Zone is one that really includes the concept of a free port, but it is
broader. While a free port is necessarily included in the Special Economic Zone, the reverse is not true that a free port would
include a special economic zone.

Special Economic Zone, Mr. President, would include not only the incoming and outgoing of vessels, duty-free and tax-free, but it
would involve also tourism, servicing, financing and all the appurtenances of an investment center. So, that is the concept, Mr.
President. It is broader. It includes the free port concept and would cater to the greater needs of Olangapo City, Subic Bay and the
surrounding municipalities.

Senator Enrile. May I know then if a factory located within the jurisdiction of Morong, Bataan that was originally a part of the Subic
Naval reservation, be entitled to a free port treatment or just a special economic zone treatment?

Senator Guingona. As far as the goods required for manufacture is concerned, Mr. President, it would have privileges of duty-free
and tax-free. But in addition, the Special Economic Zone could embrace the needs of tourism, could embrace the needs of
servicing, could embrace the needs of financing and other investment aspects.

Senator Enrile. When a hotel is constructed, Mr. President, in this geographical unit which we call a special economic zone, will
the goods entering to be consumed by the customers or guests of the hotel be subject to duties?

Senator Guingona. That is the concept that we are crafting, Mr. President.

Senator Enrile. No. I am asking whether those goods will be duty-free, because it is constructed within a free port.

Senator Guingona. For as long as it services the needs of the Special Economic Zone, yes.

Senator Enrile. For as long as the goods remain within the zone, whether we call it an economic zone or a free port, for as long as
we say in this law that all goods entering this particular territory will be duty-free and tax-free, for as long as they remain there,
consumed there or reexported or destroyed in that place, then they are not subject to the duties and taxes in accordance with the
laws of the Philippines?

Senator Guingona. Yes.17

Petitioners rely on Committee Report No. 1206 submitted by the Ad Hoc Oversight Committee on Bases Conversion on June 26,
1995. Petitioners put emphasis on the report’s finding that the setting up of duty-free stores never figured in the minds of the
authors of Republic Act No. 7227 in attracting foreign investors to the former military baselands. They maintain that said law aimed
to attract manufacturing and service enterprises that will employ the dislocated former military base workers, but not investors who
would buy consumer goods from duty-free stores.

The Court is not persuaded. Indeed, it is well-established that opinions expressed in the debates and proceedings of the
Legislature, steps taken in the enactment of a law, or the history of the passage of the law through the Legislature, may be resorted
to as aids in the interpretation of a statute with a doubtful meaning.18 Petitioners’ posture, however, overlooks the fact that the 1995
Committee Report they are referring to came into being well after the enactment of Republic Act No. 7227 in 1993. Hence, as
pointed out by respondent Executive Secretary Torres, the aforementioned report cannot be said to form part of Republic Act No.
7227’s legislative history.

Section 12 of Republic Act No. 7227, provides in part, thus:

SEC. 12. Subic Special Economic Zone. -- . . .

The abovementioned zone shall be subject to the following policies:

(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local
Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and
investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign
investments. 19

The aforecited policy was mentioned as a basis for the issuance of Executive Order No. 97-A, thus:
WHEREAS, Republic Act No. 7227 provides that within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the Subic Special Economic and Free Port Zone
(SSEFPZ) shall be developed into a self-sustaining industrial, commercial, financial and investment center to generate employment
opportunities in and around the zone and to attract and promote productive foreign investments; and

WHEREAS, a special tax and duty-free privilege within a Secured Area in the SSEFPZ subject, to existing laws has been
determined necessary to attract local and foreign visitors to the zone.

Executive Order No. 97-A provides guidelines to govern the "tax and duty-free privileges within the Secured Area of the Subic
Special Economic and Free Port Zone." Paragraph 1.6 thereof states that "(t)he sale of tax and duty-free consumer items in the
Secured Area shall only be allowed in duly authorized duty-free shops."

The Court finds that the setting up of such commercial establishments which are the only ones duly authorized to sell consumer
items tax and duty-free is still well within the policy enunciated in Section 12 of Republic Act No. 7227 that ". . .the Subic Special
Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and investment center to
generate employment opportunities in and around the zone and to attract and promote productive foreign investments."
(Emphasis supplied.)

However, the Court reiterates that the second sentences of paragraphs 1.2 and 1.3 of Executive Order No. 97-A, allowing tax
and duty-free removal of goods to certain individuals, even in a limited amount, from the Secured Area of the SSEZ, are null and
void for being contrary to Section 12 of Republic Act No. 7227. Said Section clearly provides that "exportation or removal of
goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines."

On the other hand, insofar as the CSEZ is concerned, the case for an invalid exercise of executive legislation is tenable.

In John Hay Peoples Alternative Coalition, et al. v. Victor Lim, et al.,20 this Court resolved an issue, very much like the one herein,
concerning the legality of the tax exemption benefits given to the John Hay Economic Zone under Presidential Proclamation No.
420, Series of 1994, "CREATING AND DESIGNATING A PORTION OF THE AREA COVERED BY THE FORMER CAMP JOHN
AS THE JOHN HAY SPECIAL ECONOMIC ZONE PURSUANT TO REPUBLIC ACT NO. 7227."

In that case, among the arguments raised was that the granting of tax exemptions to John Hay was an invalid and illegal exercise
by the President of the powers granted only to the Legislature. Petitioners therein argued that Republic Act No. 7227 expressly
granted tax exemption only to Subic and not to the other economic zones yet to be established. Thus, the grant of tax exemption to
John Hay by Presidential Proclamation contravenes the constitutional mandate that "[n]o law granting any tax exemption shall be
passed without the concurrence of a majority of all the members of Congress." 21

This Court sustained the argument and ruled that the incentives under Republic Act No. 7227 are exclusive only to the SSEZ. The
President, therefore, had no authority to extend their application to John Hay. To quote from the Decision:

More importantly, the nature of most of the assailed privileges is one of tax exemption. It is the legislature, unless limited by a
provision of a state constitution, that has full power to exempt any person or corporation or class of property from taxation, its power
to exempt being as broad as its power to tax. Other than Congress, the Constitution may itself provide for specific tax exemptions,
or local governments may pass ordinances on exemption only from local taxes.

The challenged grant of tax exemption would circumvent the Constitution’s imposition that a law granting any tax exemption must
have the concurrence of a majority of all the members of Congress. In the same vein, the other kinds of privileges extended to the
John Hay SEZ are by tradition and usage for Congress to legislate upon.

Contrary to public respondents’ suggestions, the claimed statutory exemption of the John Hay SEZ from taxation should be
manifest and unmistakable from the language of the law on which it is based; it must be expressly granted in a statute stated in a
language too clear to be mistaken. Tax exemption cannot be implied as it must be categorically and unmistakably expressed.

If it were the intent of the legislature to grant to John Hay SEZ the same tax exemption and incentives given to the Subic SEZ, it
would have so expressly provided in R.A. No. 7227. 22

In the present case, while Section 12 of Republic Act No. 7227 expressly provides for the grant of incentives to the SSEZ, it fails to
make any similar grant in favor of other economic zones, including the CSEZ. Tax and duty-free incentives being in the nature of
tax exemptions, the basis thereof should be categorically and unmistakably expressed from the language of the statute.
Consequently, in the absence of any express grant of tax and duty-free privileges to the CSEZ in Republic Act No. 7227, there
would be no legal basis to uphold the questioned portions of two issuances: Section 5 of Executive Order No. 80 and Section 4 of
BCDA Board Resolution No. 93-05-034, which both pertain to the CSEZ.

Petitioners also contend that the questioned issuances constitute executive legislation for allowing the removal of consumer goods
and items from the zones without payment of corresponding duties and taxes in violation of Republic Act No. 7227 as Section 12
thereof provides for the taxation of goods that are exported or removed from the SSEZ to other parts of the Philippine territory.
On September 26, 1997, Executive Order No. 444 was issued, curtailing the duty-free shopping privileges in the SSEZ and the
CSEZ "to prevent abuse of duty-free privilege and to protect local industries from unfair competition." The pertinent provisions of
said issuance state, as follows:

SECTION 3. Special Shopping Privileges Granted During the Year-round Centennial Anniversary Celebration in 1998. — Upon
effectivity of this Order and up to the Centennial Year 1998, in addition to the permanent residents, locators and employees of the
fenced-in areas of the Subic Special Economic and Freeport Zone and the Clark Special Economic Zone who are allowed unlimited
duty free purchases, provided these are consumed within said fenced-in areas of the Zones, the residents of the municipalities
adjacent to Subic and Clark as respectively provided in R.A. 7227 (1992) and E.O. 97-A s. 1993 shall continue to be allowed One
Hundred US Dollars (US$100) monthly shopping privilege until 31 December 1998. Domestic tourists visiting Subic and Clark shall
be allowed a shopping privilege of US$25 for consumable goods which shall be consumed only in the fenced-in area during their
visit therein.

SECTION 4. Grant of Duty Free Shopping Privileges Limited Only To Individuals Allowed by Law. — Starting 1 January 1999, only
the following persons shall continue to be eligible to shop in duty free shops/outlets with their corresponding purchase limits:

a. Tourists and Filipinos traveling to or returning from foreign destinations under E.O. 97-A s. 1993 — One Thousand US Dollars
(US$1,000) but not to exceed Ten Thousand US Dollars (US$10,000) in any given year;

b. Overseas Filipino Workers (OFWs) and Balikbayans defined under R.A. 6768 dated 3 November 1989 — Two Thousand US
Dollars (US$2,000);

c. Residents, eighteen (18) years old and above, of the fenced-in areas of the freeports under R.A. 7227 (1992) and E.O. 97-A s.
1993 — Unlimited purchase as long as these are for consumption within these freeports.

The term "Residents" mentioned in item c above shall refer to individuals who, by virtue of domicile or employment, reside on
permanent basis within the freeport area. The term excludes (1) non-residents who have entered into short- or long-term property
lease inside the freeport, (2) outsiders engaged in doing business within the freeport, and (3) members of private clubs (e.g., yacht
and golf clubs) based or located within the freeport. In this regard, duty free privileges granted to any of the above individuals (e.g.,
unlimited shopping privilege, tax-free importation of cars, etc.) are hereby revoked. 23

A perusal of the above provisions indicates that effective January 1, 1999, the grant of duty-free shopping privileges to domestic
tourists and to residents living adjacent to SSEZ and the CSEZ had been revoked. Residents of the fenced-in area of the free port
are still allowed unlimited purchase of consumer goods, "as long as these are for consumption within these freeports." Hence, the
only individuals allowed by law to shop in the duty-free outlets and remove consumer goods out of the free ports tax-free are
tourists and Filipinos traveling to or returning from foreign destinations, and Overseas Filipino Workers and Balikbayans as defined
under Republic Act No. 6768.24

Subsequently, on October 20, 2000, Executive Order No. 303 was issued, amending Executive Order No. 444. Pursuant to the
limited duration of the privileges granted under the preceding issuance, Section 2 of Executive Order No. 303 declared that "[a]ll
special shopping privileges as granted under Section 3 of Executive Order 444, s. 1997, are hereby deemed terminated. The grant
of duty free shopping privileges shall be restricted to qualified individuals as provided by law."

It bears noting at this point that the shopping privileges currently being enjoyed by Overseas Filipino Workers, Balikbayans, and
tourists traveling to and from foreign destinations, draw authority not from the issuances being assailed herein, but from Executive
Order No. 4625 and Republic Act No. 6768, both enacted prior to the promulgation of Republic Act No. 7227.

From the foregoing, it appears that petitioners’ objection to the allowance of tax-free removal of goods from the special economic
zones as previously authorized by the questioned issuances has become moot and academic.

In any event, Republic Act No. 7227, specifically Section 12 (b) thereof, clearly provides that "exportation or removal of goods from
the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and
taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines."

Thus, the removal of goods from the SSEZ to other parts of the Philippine territory without payment of said customs duties and
taxes is not authorized by the Act. Consequently, the following italicized provisions found in the second sentences of paragraphs
1.2 and 1.3, Section 1 of Executive Order No. 97-A are null and void:

1.2 Residents of the SSEFPZ living outside the Secured Area can enter and consume any quantity of consumption items in hotels
and restaurants within the Secured Area. However, these residents can purchase and bring out of the Secured Area to other parts
of the Philippine territory consumer items worth not exceeding US $100 per month per person. Only residents age 15 and over are
entitled to this privilege.

1.3 Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of consumption items in hotels
and restaurants within the Secured Area. However, they can purchase and bring out of the Secured Area to other parts of the
Philippine territory consumer items worth not exceeding US $200 per year per person. Only Filipinos age 15 and over are entitled to
this privilege.26
A similar provision found in paragraph 5, Section 4(A) of BCDA Board Resolution No. 93-05-034 is also null and void. Said
Resolution applied the incentives given to the SSEZ under Republic Act No. 7227 to the CSEZ, which, as aforestated, is without
legal basis.

Having concluded earlier that the CSEZ is excluded from the tax and duty-free incentives provided under Republic Act No. 7227,
this Court will resolve the remaining arguments only with regard to the operations of the SSEZ. Thus, the assailed issuance that will
be discussed is solely Executive Order No. 97-A, since it is the only one among the three questioned issuances which pertains to
the SSEZ.

Equal Protection of the Laws

Petitioners argue that the assailed issuance (Executive Order No. 97-A) is violative of their right to equal protection of the laws, as
enshrined in Section 1, Article III of the Constitution. To support this argument, they assert that private respondents operating inside
the SSEZ are not different from the retail establishments located outside, the products sold being essentially the same. The only
distinction, they claim, lies in the products’ variety and source, and the fact that private respondents import their items tax-free, to
the prejudice of the retailers and manufacturers located outside the zone.

Petitioners’ contention cannot be sustained. It is an established principle of constitutional law that the guaranty of the equal
protection of the laws is not violated by a legislation based on a reasonable classification. 27 Classification, to be valid, must (1) rest
on substantial distinction, (2) be germane to the purpose of the law, (3) not be limited to existing conditions only, and (4) apply
equally to all members of the same class. 28

Applying the foregoing test to the present case, this Court finds no violation of the right to equal protection of the
laws. First, contrary to petitioners’ claim, substantial distinctions lie between the establishments inside and outside the zone,
justifying the difference in their treatment. In Tiu v. Court of Appeals,29 the constitutionality of Executive Order No. 97-A was
challenged for being violative of the equal protection clause. In that case, petitioners claimed that Executive Order No. 97-A was
discriminatory in confining the application of Republic Act No. 7227 within a secured area of the SSEZ, to the exclusion of those
outside but are, nevertheless, still within the economic zone.

Upholding the constitutionality of Executive Order No. 97-A, this Court therein found substantial differences between the retailers
inside and outside the secured area, thereby justifying a valid and reasonable classification:

Certainly, there are substantial differences between the big investors who are being lured to establish and operate their industries
in the so-called "secured area" and the present business operators outside the area. On the one hand, we are talking of billion-peso
investments and thousands of new jobs. On the other hand, definitely none of such magnitude. In the first, the economic impact will
be national; in the second, only local. Even more important, at this time the business activities outside the "secured area" are not
likely to have any impact in achieving the purpose of the law, which is to turn the former military base to productive use for the
benefit of the Philippine economy. There is, then, hardly any reasonable basis to extend to them the benefits and incentives
accorded in R.A. 7227. Additionally, as the Court of Appeals pointed out, it will be easier to manage and monitor the activities within
the "secured area," which is already fenced off, to prevent "fraudulent importation of merchandise" or smuggling.

It is well-settled that the equal-protection guarantee does not require territorial uniformity of laws. As long as there are actual and
material differences between territories, there is no violation of the constitutional clause. And of course, anyone, including the
petitioners, possessing the requisite investment capital can always avail of the same benefits by channeling his or her resources or
business operations into the fenced-off free port zone.30

The Court in Tiu found real and substantial distinctions between residents within the secured area and those living within the
economic zone but outside the fenced-off area. Similarly, real and substantial differences exist between the establishments herein
involved. A significant distinction between the two groups is that enterprises outside the zones maintain their businesses within
Philippine customs territory, while private respondents and the other duly-registered zone enterprises operate within the so-called
"separate customs territory." To grant the same tax incentives given to enterprises within the zones to businesses operating outside
the zones, as petitioners insist, would clearly defeat the statute’s intent to carve a territory out of the military reservations in Subic
Bay where free flow of goods and capital is maintained.

The classification is germane to the purpose of Republic Act No. 7227. As held in Tiu, the real concern of Republic Act No. 7227 is
to convert the lands formerly occupied by the US military bases into economic or industrial areas. In furtherance of such objective,
Congress deemed it necessary to extend economic incentives to the establishments within the zone to attract and encourage
foreign and local investors. This is the very rationale behind Republic Act No. 7227 and other similar special economic zone laws
which grant a complete package of tax incentives and other benefits.

The classification, moreover, is not limited to the existing conditions when the law was promulgated, but to future conditions as well,
inasmuch as the law envisioned the former military reservation to ultimately develop into a self-sustaining investment center.

And, lastly, the classification applies equally to all retailers found within the "secured area." As ruled in Tiu, the individuals and
businesses within the "secured area," being in like circumstances or contributing directly to the achievement of the end purpose of
the law, are not categorized further. They are all similarly treated, both in privileges granted and in obligations required.

With all the four requisites for a reasonable classification present, there is no ground to invalidate Executive Order No. 97-A for
being violative of the equal protection clause.
Prohibition against Unfair Competition

and Practices in Restraint of Trade

Petitioners next argue that the grant of special tax exemptions and privileges gave the private respondents undue advantage over
local enterprises which do not operate inside the SSEZ, thereby creating unfair competition in violation of the constitutional
prohibition against unfair competition and practices in restraint of trade.

The argument is without merit. Just how the assailed issuance is violative of the prohibition against unfair competition and practices
in restraint of trade is not clearly explained in the petition. Republic Act No. 7227, and consequently Executive Order No. 97-A,
cannot be said to be distinctively arbitrary against the welfare of businesses outside the zones. The mere fact that incentives and
privileges are granted to certain enterprises to the exclusion of others does not render the issuance unconstitutional for espousing
unfair competition. Said constitutional prohibition cannot hinder the Legislature from using tax incentives as a tool to pursue its
policies.

Suffice it to say that Congress had justifiable reasons in granting incentives to the private respondents, in accordance with Republic
Act No. 7227’s policy of developing the SSEZ into a self-sustaining entity that will generate employment and attract foreign and
local investment. If petitioners had wanted to avoid any alleged unfavorable consequences on their profits, they should upgrade
their standards of quality so as to effectively compete in the market. In the alternative, if petitioners really wanted the preferential
treatment accorded to the private respondents, they could have opted to register with SSEZ in order to operate within the special
economic zone.

Preferential Use of Filipino Labor, Domestic Materials

and Locally Produced Goods

Lastly, petitioners claim that the questioned issuance (Executive Order No. 97-A) openly violated the State policy of promoting the
preferential use of Filipino labor, domestic materials and locally produced goods and adopting measures to help make them
competitive.

Again, the argument lacks merit. This Court notes that petitioners failed to substantiate their sweeping conclusion that the issuance
has violated the State policy of giving preference to Filipino goods and labor. The mere fact that said issuance authorizes the
importation and trade of foreign goods does not suffice to declare it unconstitutional on this ground.

Petitioners cite Manila Prince Hotel v. GSIS31 which, however, does not apply. That case dealt with the policy enunciated under the
second paragraph of Section 10, Article XII of the Constitution, 32 applicable to the grant of rights, privileges, and concessions
"covering the national economy and patrimony," which is different from the policy invoked in this petition, specifically that of giving
preference to Filipino materials and labor found under Section 12 of the same Article of the Constitution. (Emphasis supplied).

In Tañada v. Angara,33 this Court elaborated on the meaning of Section 12, Article XII of the Constitution in this wise:

[W]hile the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it
recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection
of Filipino enterprises only against foreign competition and trade practices that are unfair. In other words, the Constitution did not
intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the
Philippine economy. While the Constitution does not encourage the unlimited entry of foreign goods, services and investments into
the country, it does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on
foreign competition that is unfair.34

This Court notes that the Executive Department, with its subsequent issuance of Executive Order Nos. 444 and 303, has provided
certain measures to prevent unfair competition. In particular, Executive Order Nos. 444 and 303 have restricted the special
shopping privileges to certain individuals.35 Executive Order No. 303 has limited the range of items that may be sold in the duty-free
outlets,36 and imposed sanctions to curb abuses of duty-free privileges.37 With these measures, this Court finds no reason to strike
down Executive Order No. 97-A for allegedly being prejudicial to Filipino labor, domestic materials and locally produced goods.

WHEREFORE, the petition is PARTLY GRANTED. Section 5 of Executive Order No. 80 and Section 4 of BCDA Board Resolution
No. 93-05-034 are hereby declared NULL and VOID and are accordingly declared of no legal force and effect. Respondents are
hereby enjoined from implementing the aforesaid void provisions. All portions of Executive Order No. 97-A are valid and effective,
except the second sentences in paragraphs 1.2 and 1.3 of said Executive Order, which are hereby declared INVALID.

No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-26762 August 29, 1975

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner,

vs.
THE PUBLIC SERVICE COMMISSION, respondent.

G.R. No. L-26765 August 29, 1975

MANILA ELECTRIC COMPANY, petitioner,

vs.
THE PUBLIC SERVICE COMMISSION, respondent.

RESOLUTION

MAKALINTAL, C.J.:

In its decision dated August 31, 1970, this Court affirmed with modification the position of the Public Service Commission (now this Specialized Regulatory Boards or "SRB") on the
interpretation and application of Section 40, paragraph (e), of the Public Service Act (146), as amended by Section 5 of Republic Act 3792. The said section as amended reads as
follows:

Section forty of the same Act, as amended by Commonwealth Act numbered Four Hundred Fifty-Four, is hereby further amended to read as follows:

Section 40. The Commission is authorized and ordered to charge and collect from any public service or applicant, as the case may be, the following fees as
reimbursement of its expenses in the authorization, supervision and/or regulation of public services.

(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of
their rates, twenty centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have been issued, of the
capital invested, or of the property and equipment, whichever is higher.

As construed by the Public Service Commission, the foregoing provision lays down as basis for computing the amount of supervision and/or regulation fees payable by a public utility
organized as a stock corporation either the capital stock or the property and equipment, whichever is higher; and if the public utility is an entity without shares of stock, the basis for
computation is either the capital invested or the property and equipment, whichever is higher. The modification introduced by this Court in its decision of August 31, 1970 is that the
property and equipment shall be net of depreciation. In other words, as thus decided, the alternative basis added by the amendatory Act (3792), namely, the property and equipment, is
made applicable to all public utilities, whether they have or have not issued shares of stock.

Before this Court for resolution is the second motion for reconsideration and supplemental second motion for reconsideration filed by the petitioners Philippine Long Distance
Telephone Company and Manila Electric Company. They contend that the amendment introduced by Section 5 of Republic Act 3792 did not change the basis for computing the
supervision and/or regulation fees due from stock corporations; that such basis is still only the capital stock subscribed or paid and not such capital stock or the property and
equipment, whichever is higher; that the amendment altered the basis only with respect to public utilities not organized as stock corporations, as to which it is now the capital
invested or the property and equipment, whichever is higher.

In the decision which is now sought to be reconsidered this Court relied heavily on the theory that Section 5 of Republic Act 3792 is a tax measure intended to Fraise revenue and
therefore the amounts collected as supervision and/or regulation fees thereunder need have no reasonable relation to the cost of such supervision and/or regulation.

Reference was made in the briefs for the petitioners to the "confiscatory and unreasonable" character of the fees, if considered as taxes and computed on the basis of "the property
and equipment." Inasmuch as the case was tried before the Public Service Commission on the theory that such fees were purely regulatory in character, so that the parties have no
adequate opportunity to submit evidence on their being confiscatory and unreasonable," this Court, by resolution of August 30, 1971, remanded the case to the Public Service
Commission for reception of evidence on such alleged confiscatory and unreasonable character of the fees prescribed by Section 40(e) of the Public Service Act as amended, if
interpreted so as to make the alternative basis of computation (property and equipment) applicable to public utilities organized as stock corporations.

In October 1972 the Public Service Commission was abolished and its powers and functions were transferred to another entity called the Specialized Regulatory Boards (SRB). The
petitioners and the SRB thereafter entered into a Stipulation of Facts, which they submitted to this Court on January 16, 1975. Subsequently they filed their respective memoranda. In
its memorandum the SRB repudiates the previous position of the Public Service Commission and in effect makes common cause with the petitioners, stating that Section 5 of
Republic Act 3792 was not intended as a tax measure and that "it is not only material in this incident to rule on said issue but likewise in the public interest that the Honorable Court in
passing upon this issue, make a categorical pronouncement that the same is a simple regulatory legislation."

It is important to recall at this juncture, in view of the submission of the SRB on this point, that previous decisions of this Court construing the provision of Section 40 of the Public
Service Act before its amendment by R.A. 3792 held that the fees being collected thereunder were not in the nature of taxes but were fees for purposes of the regulatory functions of
the Public Service Commission. Manila Electric Co. v. Public Service Commission, 4 SCRA 1200; Manila Electric Co. v. Auditor General, et al., 40 O.G. No. 13, p. 2629. In this latter case
this Court said:

xxx xxx xxx

Debe notarse que el articulo citado se refiere a 'derechos', los derechos que la Comision de Servicios Publicos esta autorizada a cobrar para resarcirse de los
gastos en que ella o sus agentes incurren por el trabajo que supone el ejercicio por la misma de su poder de supervision y reglamentacion de las
operaciones y actividades que en el referido articulo se enumeran; y debe notarse tambien que hace uso de dicho vocable 'derechos', por lo menos tres
veces, indudablemente, con el fin de que no pueda haber dudas de que permite y quiere que la Comision cobre por supervision y reglamentacion no
impuestos, sino derechos. ...

We are of the opinion that neither the amendment introduced by Section 5 of Republic Act 3792 to Section 40(e) of the Public Service Act nor the automatic appropriation clause added
to the last paragraph thereof altered the nature of the fees in question as held by this Court in those decisions.

The stipulation of the parties bring out a number of significant facts. At the rate of P0.20 for every P100.00 or fraction thereof of the gross value of the respective properties and
equipment in service of the petitioners, the SRB has computed the fees which they would have paid every year from 1964 to 1974, inclusive, as follows:

PROPERTY & EQUIPMENT YEAR IN SERVICE BILL

 1964 P107,176,764.00 P 214,353.60

1965 172,345,729.00 344,691.60

1966 240,809,709.00 418,619.60

P 1967 268,357,379.00 536,714.80

L 1968 427,254,070.00 854,508.20

D 1969 523,076,219.00 1,046,152.60

T 1970 624,204,203.00 1,248,408.60

1971 1,100,768,321.00 2,201,536.80

1972 1,220,149,965.00 2,440,300.00

1973 1,451,945,532.00 2,903,891.20

1974 1,506,101,070.00 3,012,202.20 P15,284,379.20

1964 363,762,931.00 727,526.00

M 1965 413,462,327.00 826,924.80

E 1966 632,619,666.00 1,265,239.40

R 1967 709,020,839.00 1,418,041.80

A 1968 818,130,654.00 1,636,261.40

L 1969 990,687,198.00 1,981,374.40

C 1970 1,336,644,914.00 2,673,290.00

O 1971 2,119,221,085.00 4,238,442.20

1972 2,348,189,689.00 4,696,379.40

1973 2,840,609,818.00 5,681,219.80

1974 2,945,650,790.00 5,891,301.60 P31,036,000.80

Actually, however, the fees were collected not on the basis of the gross value of their properties and equipment in service but on the respective outstanding capital stock; and the
amounts of the collections were as follows:

OUTSTANDING AMOUNT CAPITAL PAID O. R. NO. DATE

YEAR STOCK

1964 P21,717,300.00 43,434.60 F-7955614 Sept. 23 '64

1965 21,192,110.00 42,384.40 F-3875980 Sept. 29 '65

1966 32,477,730.00 64,955.46 G-3713477 Sept. 28 '66

P 1967 55,213,000.00 110,426.00 H-1509656 Sept. 23 '67

L 1968 55,414,120.00 110,828.24 H-9569483 Sept. 27 '68

D 1969 46,957,860.00 93,915.72 I-5273602 Sept. 24 '69

T 1970 54,554,310.00 109,108.80 2888344 K Sept. 28 '71

1971 54,309,340.00 108,618.68 9175075 Sept. 28 '71

1972 54,629,570.00 109,259.14 6993568 M Sept. 29 '72

1973 55,556,330.00 111,112.66 2368444 Sept. 25 '73

1974 110,242,750.00 220,485.50 88745-KI Sept. 25 '74

P1,124,529.20

OUTSTANDING CAPITAL AMOUNT

YEAR STOCK PAID O. R. NO. DATE

1964 75,150,000.00 150,300.00 7956880 Sept. 30 '64

1965 77,771,000.00 155,542.00 7427760 Sept. 30 '65

1966 77,171,000.00 155,542.00 371433 Sept. 30 '66

M 1967 78,861,880.00 157,723.76 2515473 Sept. 29 '67

E 1968 79,410,260.00 158,820.60 9570258 Sept. 30 '68

R 1969 80,897,960.00 161,796.00 6048254 Oct. 21 '69

 A 1970 85,616,630.00 171,233.40 2888663-K Sept. 30 '70

L 1971 87,282,050.00 174,564.20 9176488-L Sept. 29 '71

C 1972 91,845,020.00 183,690.20 6988431 Sept. 15 '72

O 1973 341,749,070.00 683,498.20 2369885-O Sept. 26 '73

1974 341,796,130.00 683,592.20 9294134-P Sept. 30 '74

P2,836,302.58

The stipulation of the parties also projects the amounts of the fees which would have been collected on the basis of the value of the properties and equipment in service minus
depreciation. The Philippine Long Distance Telephone Company would have paid during the years 1964-1974, inclusive, the total amount of P9,832,145.65; and the Meralco the total
amount of P21,223,640.60.

There are altogether 14,637 public utility operators and/or companies in the Philippines under different categories, as follows:

a. land transportation — 13,924

b. telephone service — 74

c. electric service — 493

d. shipping, ferryboat &

waterboat service — 99

e. radio-communications — 25

f. waterworks & canal service — 22 14,637

The total collections in the form of supervision and/or regulation fees from these public utilities from 1964-1974, inclusive, amounted to P26,964,845.37. It will be noted that of this total,
almost 4 million pesos, or approximately 15%, came from just the two petitioners herein, out of the more than 14,000 public utilities in the entire Philippines. This proportion is
undoubtedly more than the proportionate supervision and/or regulation services the two petitioners have been receiving.

Another significant fact which is pointed out in the stipulation is that out of all the collections under Section 40 of the Public Service Act, the Public Service Commission, now the SRB,
had accumulated as of June 30, 1974 a total savings of P28,007,408.09, which amount may be disbursed by the SRB for the purposes enumerated in said section, specifically
"additional needed personnel services, maintenance and operating expenses, acquisition of urgently needed vehicles, furniture and equipment, maintenance of an adequate reference
library, acquisition of a lot and building for the [Board] and other expenses necessary for efficient administration and effective supervision and regulation of public services."

Upon considerations of fairness and equity, We find the common plea of both the petitioners and the respondent SRB fully justified. But the respondent has called our attention to an
even more compelling, because practical, consideration in this case, which is, that to interpret the supervision and/or regulation fees in question as taxes under the theory that the
intention is to raise revenue would entail self-defeating consequences which, in the ultimate analysis, would be contrary to public interest.

The franchise of each of these two petitioners contains the so-called "in lieu of" provision. In the case of the Meralco the franchise tax paid by it "shall be in lieu of all taxes and
assessments of whatsoever nature and by whatsoever authority upon the privileges, earnings, income, franchises, ... of the grantee, from which taxes and assessments the grant
hereby expressly exempted." (Par. 9, Part II of Act 484 as adopted in R.A. Nos. 150 and 4159) In the case of the PLDT, it pays a percentage tax on all gross receipts .... transacted under
its franchise, and "the said percentage shall be in lieu of all taxes on this franchise or earnings thereof." (Act No. 3436, as amended by C.A. 407 and R.A. 6146).

In an opinion dated August 8, 1974, the Department of Justice ruled that a provision in a legislative franchise which ordains that the franchise tax prescribed therein should be "in lieu
of all taxes" is equivalent to a "complete foreclosure against the imposition of any other tax or decree of the tax therein vested by any of the state's taxing authorities." The ruling was
reiterated in another opinion of the same office rendered on October 14, 1974 and in a similar opinion of the Secretary of Finance dated March 19, 1975. These opinions are not in
question here and are binding upon the respondent SRB, which is an agency under the Executive Department. To insist therefore that Section 40(e) of the Public Service Act amended
is not only for the purpose of regulation and/or supervision but is a tax measure would preclude the collection of the fees thereunder.

Respondent SRB adverts to a number of cogent circumstances in support of its position. We quote from its memorandum:

xxx xxx xxx

Indeed, Respondent is unable to comprehend the law in question as a tax measure, for the following reasons:

First, the law in question, Section 40(e) of the Public Service Act, as amended by Republic Act No. 3792 is found in Chapter VI of the said law under the
heading of 'FEES'.

Second, a 'tax' is imposed under the taxing power of government principally for the purpose of raising revenues. (Tabacos de Filipinas vs. City of Manila, G.R.
No.
L-1669, June 29, 1963, 8 SCRA 367). The law in question, however, merely authorizes and requires the collection of 'fees' as reimbursement of its (SRB's)
expenses in the AUTHORIZATION, SUPERVISION AND/OR REGULATION of public services. (Sec. 40(e), opening paragraph). By its own express provision,
therefore, the aforesaid law can be construed as no more than a regulatory measure related to the supervision and regulation of public utilities that are
subject to the jurisdiction of the SRB, and not as a legislative instrument mainly for the purpose of raising revenues.

Third, the last paragraph of Section 40(e) provides that: .

Aside from the appropriations for the Commission under the Annual General Appropriations Act, any unexpended balance of the
fees collected by the Commission under this section shall be constituted receipts automatically appropriated each year, and
together with any surplus in the standardizing meter laboratory revolving fund under Commonwealth Act numbered Three Hundred
Forty Nine, shall be disbursed by the Public Service Commissioner in accordance with special budget to be approved by the
Department of Justice, the Budget Commission and the Office of the President of the Philippines for additional needed personal
service maintenance and operating expenses, acquisition of urgently needed vehicles, furniture and equipment, maintenance of an
adequate reference library, acquisition of a lot and building for the Commission, and other expenses necessary for efficient
administration and effective supervision and regulation of public services. (emphasis supplied)

It is, therefore, clear from the aforequoted paragraph that the funding of the projects enumerated therein is merely a secondary objective of the law in
question to attain the primary purpose of regulation and supervision of all utilities failing under respondent jurisdiction. The language of the aforequoted
paragraph is plain that the regulatory fees required to be collected are not primarily intended to fund said projects but that only the "unexpended balance of
the fees collected by the Commission under this Section" if any shall be utilized for said projects. In other words, it is not the collection themselves that
Congress had addressed to the funding of the said projects but only "the unexpended balance thereof" when any such excess is realized.
 Fourth, this Honorable Court itself in the case of Meralco vs. PSC, 4 SCRA 1,200, held that Section 40 of the Public Service Act is not a tax measure but a
simple regulatory provision for the collection of fees. This judicial finding could not have been affected or in any manner modified by the enactment of R.A.
3792 since the said Act as stated in its own Explanatory Note, was simply intended to double the then applicable rate of collectible supervision fees from the
public services in the Philippines. Respondent reproduces hereunder the said explanatory note in full, as follows:

3. Increase in the supervisory and regulation fees collectible by the Commission and making them receipts automatically
appropriated.

The Supreme Court has taken judicial notice that legal fees fixed before the war can no longer finance the administration of justice.
This was expressed in its resolution doubling the legal fees from 1960. The fees collected by the Commission serve a similar
purpose as fees collectibles, under the Rules of Court. Therefore, we propose a similar increase in the fees provided in the Public
Act (fixed in 1936) to insure better service and make the Commission a self-supporting Agency.

We also propose that adequate funds be appropriated so that the Commission can take care of its needs and achieve its purposes. It
is prudent to have a ready reserve of funds rather than wait for an appropriation, because delays can be costly. These funds shall be
used for the appointment of needed personnel, acquisition and maintenance of a reference library and of a lot and permanent
building, and for other necessary expenses. The use of these funds shall be regulated by special budgets to be approved by the
Department of Justice, the Budget Commission, and the Office of the President. (Emphasis supplied).

The intention of Congress in the passage of R.A. 3792, therefore, was not to invest upon the fees in question the character or attributes of a 'tax,' but rather
and simply to double or revise upwards the then existing rate of the said fees.

Fifth, Republic Act No. 3792 originated from the Committee on Transportation of the House of Representatives of the then Philippine Congress. (Par. XV,
Stipulation of Facts). If it was the legislature's intent or purpose to enact the same as a tax measure, rules obliged that the origin and sponsorship thereof
should be by the House's Committee On Ways and Means.

Other significant facts that respondent SRB brings to our attention are:

First: Up to last year, respondent has been collecting the questioned supervision fees from corporate utilities like the petitioners herein on the basis of their
subscribed capital stock (Stipulation of Facts, Par. II). For this it accumulated a total savings of P28,007,408.09 as of June 30, 1974 which is available for the
projects listed in the last paragraph of the subject statute. (Idem., par. XIII). It is clear therefore, that even on the basis of such subscribed capital stock, the
purposes for which R.A. 3792 was enacted would still be amply served.

Second. Respondent, has noted that our interpretation of the law in question so as to collect supervision fees on the basis of 'property and equipment in
service, net of depreciation,' has self-defeating consequences which in the ultimate analysis is not conducive to public interest and welfare. Rather than
encourage the improvement and expansion of their existing facilities, public utilities either defer or delay such projects because of anxiety over a marked
increase in assessable supervision fees that such an expansion or increase of equipment would entail.

Third: An assessment of the fees in question on the basis of 'property and equipment in service, net of depreciation,' will mean a liability therefor of at least
P2,058,378.41 and P3,976,510.80 for PLDT and MERALCO, respectively, for the year 1974 alone. (Par. III). In all candor, these amounts are rather difficult to
reconcile with respondent's contention that the said collections are merely in the nature of regulatory fees.

It is quite clear, for the reasons above stated, that the supervision and/or regulation fees imposed by Section 40(e) of the Public Service Act, as amended by R.A. 3792, are not taxes
but are exactly what the provision says, and therefore the nature and amount of such fees must be reasonably related to the cost of such supervision and/or regulation. It is equally
clear that to base the computation of the fees on the value of the properties and equipment of the petitioners, with or without depreciation, would be to ignore altogether the
requirement of such reasonable relation.

The intention of Congress in enacting the law in question is explicitly stated in the provision itself, namely: "For annual reimbursement of expenses incurred by the Commission in
the supervision of other public services and/or in the regulation or fixing of their rates, ...," (Emphasis supplied). As pointed out by respondent SRB (supra) the explanatory note of
House Bill 4613, which became R.A. 3792, states that the purpose of the amendment to Section 40 was merely to double the fees collected by the Public Service Commission in the
same way that the Supreme Court doubled the fees collectible under the Rules of Court. * The stipulation of facts submitted by the parties shows that if the collection is based on the value of the property and equipment in service minus depreciation it would not only double the amounts collected prior to the
amendment but make them almost 10 times more insofar as the two petitioners are concerned. Such a result could not have been in the mind of the lawmaking body, considering especially the explanatory note which accompanied the bill when it was filed.

Moreover, it would be violative of the principle that there must be a reasonable relation between the amounts collected as regulatory and/or supervision fees and the cost of such
regulation and/or supervision.

It may be noted that the term "property and equipment" carries no qualification. It does not specify whether it means the original cost of acquisition, the original cost minus
depreciation (although in the decision sought to be reconsidered this interpretation was adopted), the market value, or the cost of construction and/or acquisition minus the amount of
loan obligations incurred for that purpose and still outstanding. In the resolution of this Court of May 8, 1975 the parties were required to submit their views on whether this last
alternative would be justifiable under Section 40(e) of the Public Service Act.

Both parties have rejected this basis of computation on the grounds that it is not warranted by the language of the provision in question; that it would pose considerable
administrative and accounting problems and generate disputes and disagreements in the manner of collection; and that it would not furnish a stable basis at all because the amount of
unpaid financing (a great part of it from foreign sources) for the construction and/or acquisition of property and equipment varies from time to time, depending not only on the periodic
payments made by the petitioners but also on fluctuating values of foreign currencies vis-a-vis the Philippine peso.

Premises considered, this Court hereby reconsiders its decision of August 31, 1970; declares that the assessments under Section 40(e) of the Public Service Act, as amended by
Republic Act No. 3792, are not taxes but regulation and supervision fees imposed pursuant to the exercise of police power; and rules that the basis for the computation thereof insofar
as petitioners are concerned is and remains "the capital stock subscribed or paid" and not, alternatively, the property and equipment.

Fernando, Teehankee, Esguerra, Muñoz Palma, Aquino, Concepcion, Jr. and Martin, JJ., concur.

Makasiar, J., votes to maintain the decision of April 31, 1970 for the reasons therein stated.

Antonio, J., is on leave. *

Separate Opinions
CASTRO, J., concurring:

The resolution penned by Chief Justice Makalintal compels my concurrence. I fully agree (1) that the fees imposed by Section 40(e) of the Public Service Act, as amended by Republic
Act 3792, are supervision and/or regulation fees, and not taxes; (2) that they are exactly what the provision says they are; (3) that therefore the nature and amount of such fees must be
reasonably related to the cost of such supervision and/or regulation; and (4) that to base the computation of the fees on the value of the properties and equipment of the petitioners,
with or without depreciation, would be to ignore altogether the requirement of such reasonable relation.

I wish to add my views on the matter, of legal hermeneutics, which to me is likewise a vital determinant of the issue at bar.

Section 40(e) of the Public Service Act, as amended by Republic Act, 3792, reads as follows:

(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of
their rates, twenty centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, if no shares have been issued, of the
capital invested, or of the property and equipment, whichever is higher.

The basic issue is whether the added phrase, "or of the property and equipment, whichever is higher," was intended as an alternative only to the immediately antecedent phrase, "of
the capital invested," or also to the previous one, namely "of the capital stock subscribed or paid."

The relevant and pertinent Congressional records do not at all provide any indication of the meaning intended by the lawmaking body.

The task may, however, be simplified by supplying the words which obviously were deliberately omitted and merely indicated by means of a comma between the phrase, "or if no
shares have been issued," and the clause, "of the capital invested, or of the property and equipment, whichever is higher." The omitted words thus supplied, the provision would read
as follows:

(e) For annual reimbursement of expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of their
rates, twenty centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have been issued, twenty
centavos for each one hundred pesos or a fraction thereof, of the capital invested, or of the property and equipment, whichever is higher.

Viewed from this perspective, the meaning of the provision, as intended by the lawmaking body, becomes unmistakable, which is, to make the alternative basis of computation
(property and equipment)applicable exclusively to the case or situation to which it obviously relates, namely, "if no shares have been issued."

The rule that a qualifying or relative word or clause, such as "which," "said," and "such," is to be construed as applying to the words, phrase or clause next preceding or, as is
frequently stated, to the next preceding antecedent, and not as extending to or including others more remote, unless a contrary intention appears (Crawford, Sec. 193, p 331), may be
applied in the present case. This rule is known as the doctrine of last antecedent, which is both a rule of grammar and a rule of law (Wood vs. Baldwin, 10 N.Y. S. 195).

In fine, the basis for the computation of the fees collectible from stock corporations for supervision and/or regulation is "twenty centavos for each one hundred pesos or fraction
thereof, of the capital stock subscribed or paid." If no shares have been issued, as in the case of non-stock corporations, the basis for the computation of the fees collectible for
supervision and/or regulation is "twenty centavos for each one hundred pesos or fraction thereof .... of the capital invested, or of the property and equipment, whichever is higher."

BARREDO, J., concurring:

I find it difficult to sanction the contention that the clause "or of the property or equipment, whichever is higher" in the last part of the amended paragraph (e) of Section 40 of CA 146
applies to non-stock corporations but does not apply to stock corporations. The reason for the distinction escapes me. If the value of the property or equipment of a non-stock
corporation can be used as alternate base for the computation of the fee it should pay, I cannot see why the same alternative may not be applied to stock corporations. I do not believe
there is really such impossibility to determine the amount of capital invested in a non-stock corporation as to warrant the inference that the legislature intended to provide another
base insofar as such corporations are concerned, for the simple reason that throughout the years prior to Republic Act 3792, the capital invested in non-stock corporations had always
been the basis of the fee paid by them under the original text of Section 40(e) of Commonwealth Act 146 as amended by Commonwealth Act 454, and it does not appear that in any of
those years, the Public Service Commission was unable to collect the stipulated fee because the capital invested could not be determined.

But I concur in the view that the provision in question is not and could not have been intended to be a tax measure. The legislature that approved it did not mean it to be so, as proven
incontestibly by the fact that the amendatory bill which later became Republic Act 3792 originated from the Committee on Transportation and not from the Committee on Ways and
Means of the House of Representatives as would have been the case pursuant to the rules of the House. Moreover, the explanatory note itself of the said bill states categorically that
its purpose is only to double the amount of the fee which used to be paid previously, which fee was unquestionably for supervision and regulation, and not for revenue. The reason 1

behind the increase is to keep it abreast of the increase of the corresponding fees in the courts and other administrative ag encies performing more or less similar functions as the Public Service
Commission. What is more, the amendment in question expressly states that the fee to be collected is for "reimbursement of the expenses incurred by the Commission in the supervision" of public
services not only in paragraph (e) itself but in the main provision preceding the enumeration of all the collectible fees. Of course, with the increased fees, it was anticipated that somehow there might
be some excess of collections over and above what might be needed for the expenses of regulation, inspection and supervision and so, in order that such excess may legally be utilized for other
purposes, the amendment had to provide for authority to that end, hence the automatic appropriation clause at the end of the section. In other words, contrary to the holding in Our decision of
August 31, 1970, whatever revenue Act there is in the amendment could not have been its motivation, since it relates only to "any unexpended balance of the fees collected", which is naturally
uncertain and speculative as to how much the surplus or savings would be.

Another circumstance, not less persuasive, that convinces me that taxation was not in the mind of the legislature is that most if not all public service operators of consequence or from whom the
biggest amounts could be collected are holders of legislative franchises. Such are the cases of Meralco and the PLDT, who alone, according to the stipulation of facts before Us, have been paving
at least 15% of the total fees collected from all public services coming under the provision in dispute. As stated in the main opinion of the Chief Justice, under their respective legislative franchises,
these corporations are required to pay a fixed percentage tax in lieu of all other taxes of whatever nature. I cannot believe that the legislature intended to repeal or amend such special provision thru
the amendments here in dispute. Nor could it have done so, considering that a specific provision in a legislative franchise to the effect that a tax equivalent to a certain percentage of the gross
earnings of the grantee shall be in lieu of all taxes of any kind or nature and that said grantee shall be exempt from the payment of such other taxes cannot be repealed or amended by a general law
containing an apparently repugnant provision, unless the intent to repeal is expressed in unmistakable terms in the subsequent legislation. (Visayan Electric Co., S.A. vs. David, 92 Phil. 969.) The
reason for such ruling is given in the cited case of Manila Railroad Co. vs. Rafferty, 40 Phil. 224 which held thus:

It is a canon of statutory construction that a later statute, general in its terms and not expressly repealing a prior special statute, will ordinarily not affect the speci al
provisions of such earlier statute. (Steamboat Company vs. Collector, 18 Wall. [U.S.], 478; Cass County vs. Gillett, 100 U.S., 585; Minnesota vs. Hitchcock, 185 U.S., 373,
396.)

Where there are two statutes, the earlier special and the later general—the terms of the general broad enough to include the matter provided for in the special—the fact
that one is special and the other is general creates a presumption that the special is to be considered as remaining an exception to the general, one as a general law of
the land, the other as the law of a particular case. (State vs. Stoll, 17 Wall, [U.S.], 425.)

Said Act No. 1510 is a charter granted to the plaintiff company by the Government of the Philippine Islands. It is in the nature of a private contract. It is not a law
constituting a part of the machinery of the general government. It was adopted after careful consideration of the private rights of the plaintiff in relation with the resultant
benefits to the State. It stands upon a different footing from the general law. When a charter is granted, it constitutes a certain property right. Charters or special laws,
such as Act No. 1510, stand upon a different footing from general laws. Once granted, a charter becomes a private contract and cannot be altered nor amended except
by (consent of all concerned, unless that right is expressly reserved. (Dartmouth College vs. Woodword, 4 Wheat., 578.) The reason for the rule is clear. The Legislature,
in passing a special charter, have their attention directed to the special fact and circumstances which the Act or charter is intended to meet. The Legislature consider and
make provision for all the circumstances of the particular case. The Legislature having specially considered all of the facts and circumstances in the particular case in
granting a special charter, it not be considered that the Legislature, by adopting a general law containing provisions repugnant to the provisions of the charter, and without
making any mention of its intention to amend or modify the charter, intended to amend, repeal, or modify the special act. (Lewis vs. Cook County, 74 111. App., 151;
Philippine Railway Co. vs. Nolting, 34 Phil., 401.)
I do not believe that Justice Laurel's postulation in Pangasinan Transportation Co. vs. The Public Service Commission, 70 Phil. 221, to the effect that the Constitution does not permit the granting of
irrepealable or unamendable franchises, to which I adhere, covers the situation on hand, since the point here is that the repeal must be expressed not merely implied.

Indeed, before the amendment of the last paragraph of Section 40 of Commonwealth Act 146, holders of legislative franchises containing special fixed tax clauses were exempt from even the
regulation and inspection fees provided in said section. Under the amendment, that exemption was removed, but recognizing precisely the character and nature of the fees prescribed by the
amended section as mainly for reimbursement of expenses, and I am referring to all the fees prescribed in Section 40 and not only to those in paragraph (e), the amendment provides that the
excess is automatically appropriated to supplement the budgetary and other appropriations for the maintenance and operation of the Public Service Commission. In other words, the purpose of the
automatic appropriation is not to legalize and conceptualize such excess as tax but rather to provide legal authority for the utilization thereof to augment the budgetary appropriations for the
Commission. Accordingly, the construction of the amendments must be restrictive rather than expansive.

Factually, it is clearly demonstrated, as may be seen in the main opinion, that to uphold the view that the frame of reference or basis of computation of the fees should be the value of the property
and equipment of the operators covered by the provision will surely amount to the imposition of excessive and confiscatory fees or taxes. In this connection, Our decision of August 31, 1970 did take
note of the point that the fees under discussion, if collected on the basis of property or equipment, would be "confiscatory and violative of substantive due process" but declined to rule on the matter
because petitioners "have not submitted ... evidentiary data to substantiate this point" and "that the amounts to be collected are large do not, per se alone, suffice to establish their confiscatory
character." (34 SCRA pp. 615-616.) And it was precisely to give the parties an opportunity to present evidence on such score that in Our resolution exactly a year after, that is, of August 31, 1971,
We returned the case to the Public Service Commission for further proceedings. Now that there is not only evidence of the petitioners but a stipulation of facts of the parties showing that the huge
amount to be collected would be exceedingly out of proportion to the returns that could be expected by petitioners, even if the minusdepreciation formula adopted in Our decision of 1970 were to be
followed, We cannot close Our eyes anymore to the obvious unfairness and inequity of accepting the alternate base indicated in the provision. Indeed, it is undeniable that the application of such
base would be self-defeating in the end, since it would be hardly possible for the operators to expand or improve their facilities, not to say to survive. Besides, it would also be self-defeating in the
sense that to consider the amendment as a tax measure would subject the provision to the exemptions in the franchises of the petitioners I have already referred to above.

It is my considered opinion that regardless of the basis of computation, whether it be shares of stock subscribed or sold, the capital invested of a non-stock corporation, or the property or equipment
of the public services concerned, the application of the amendment may not be done in a manner that will render it unreasonable and confiscatory. Even conceding for a moment that the power to
2

tax includes the power to destroy, I am not persuaded that the government is deliberately applying such absolutist principle in this instance. I believe that the doubling of the amount of the fee
satisfies already the legislative intent permissible within law and equity. As a matter of fact, without using the alternate base in dispute, according to the stipulation of facts, the accumulated surplus
of the fees collected by the Commission, now the Specialized Regulatory Board, as of June 30, 1974 has been already P28,007,408.09. Certainly, by all standards, such amount is more than what
could be expected of any secondary source of funds. And since the respondent Specialized Regulatory Board itself which is charged with the duty, in the first instance, of determining the bases of
the fees and of collecting the same, has already deviced its own practical way of implementing the amendment by using the outstanding shares of stock of petitioners as basis, I feel it is but fitting
and proper that its construction be sanctioned, the same being the nearest approach there is to the clear legislative intent. Indeed, I visualize complications and difficulties, if things were to be done
otherwise. For instance, if the amendment were to be considered as a tax measure as to the excess over the amount needed for regulatory purposes, then an involved computation would have to
be made in order to separate such excess and determine the respective shares of the petitioners therein the should be exempt from its operation pursuant to the corresponding provisions of their
respective franchises. And should this be mathematically possible to determine, then the other question will arise as to whether or not, the exemption would not result in unequal protection of the
laws insofar as the operators holding franchises or certificates to operate other than legislative are concerned.

Premises considered, my vote is to approve the bases of computation of the fees in question agreed to by the respondent Specialized Regulatory Board and to reconsider our previous decision
accordingly. It is understood that with respect to the non-stock corporations and entities other than stock corporations, the amount of capital invested should be the basis of the fees to be collected
from them. Otherwise stated, my considered opinion is that construing the amendments in question together with all the other related provisions of Commonwealth Act 146, as previously amended,
in the light of the applicable principles in taxation, the alternate base of property or equipment mentioned in the amendment of paragraph (e,) of Section 40 cannot legally be operative.

Separate Opinions

CASTRO, J., concurring:

The resolution penned by Chief Justice Makalintal compels my concurrence. I fully agree (1) that the fees imposed by Section 40(e) of the Public Service Act, as amended by Republic Act 3792, are
supervision and/or regulation fees, and not taxes; (2) that they are exactly what the provision says they are; (3) that therefore the nature and amount of such fees must be reasonably related to the
cost of such supervision and/or regulation; and (4) that to base the computation of the fees on the value of the properties and equipment of the petitioners, with or without depreciation, would be to
ignore altogether the requirement of such reasonable relation.

I wish to add my views on the matter, of legal hermeneutics, which to me is likewise a vital determinant of the issue at bar.

Section 40(e) of the Public Service Act, as amended by Republic Act, 3792, reads as follows:

(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of their rates,
twenty centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, if no shares have been issued, of the capital invested, or of the
property and equipment, whichever is higher.

The basic issue is whether the added phrase, "or of the property and equipment, whichever is higher," was intended as an alternative only to the immediately antecedent phrase, "of the capital
invested," or also to the previous one, namely "of the capital stock subscribed or paid."

The relevant and pertinent Congressional records do not at all provide any indication of the meaning intended by the lawmaking body.

The task may, however, be simplified by supplying the words which obviously were deliberately omitted and merely indicated by means of a comma between the phrase, "or if no shares have been
issued," and the clause, "of the capital invested, or of the property and equipment, whichever is higher." The omitted words thus supplied, the provision would read as follows:

(e) For annual reimbursement of expenses incurred by the Commission in the supervision of other public services and/or in the regulation or fixing of their rates, twenty
centavos for each one hundred pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have been issued, twenty centavos for each one hundred
pesos or a fraction thereof, of the capital invested, or of the property and equipment, whichever is higher.

Viewed from this perspective, the meaning of the provision, as intended by the lawmaking body, becomes unmistakable, which is, to make the alternative basis of computation (property and
equipment)applicable exclusively to the case or situation to which it obviously relates, namely, "if no shares have been issued."

The rule that a qualifying or relative word or clause, such as "which," "said," and "such," is to be construed as applying to the words, phrase or clause next preceding or, as is frequently stated, to the
next preceding antecedent, and not as extending to or including others more remote, unless a contrary intention appears (Crawford, Sec. 193, p 331), may be applied in the present case. This rule
is known as the doctrine of last antecedent, which is both a rule of grammar and a rule of law (Wood vs. Baldwin, 10 N.Y. S. 195).

In fine, the basis for the computation of the fees collectible from stock corporations for supervision and/or regulation is "twenty centavos for each one hundred pesos or fraction thereof, of the capital
stock subscribed or paid." If no shares have been issued, as in the case of non-stock corporations, the basis for the computation of the fees collectible for supervision and/or regulation is "twenty
centavos for each one hundred pesos or fraction thereof .... of the capital invested, or of the property and equipment, whichever is higher."

BARREDO, J., concurring:

I find it difficult to sanction the contention that the clause "or of the property or equipment, whichever is higher" in the last part of the amended paragraph (e) of Section 40 of CA 146 applies to non-
stock corporations but does not apply to stock corporations. The reason for the distinction escapes me. If the value of the property or equipment of a non-stock corporation can be used as alternate
base for the computation of the fee it should pay, I cannot see why the same alternative may not be applied to stock corporations. I do not believe there is really such impossibility to determine the
amount of capital invested in a non-stock corporation as to warrant the inference that the legislature intended to provide another base insofar as such corporations are concerned, for the simple
reason that throughout the years prior to Republic Act 3792, the capital invested in non-stock corporations had always been the basis of the fee paid by them under the original text of Section 40(e)
of Commonwealth Act 146 as amended by Commonwealth Act 454, and it does not appear that in any of those years, the Public Service Commission was unable to collect the stipulated fee
because the capital invested could not be determined.

But I concur in the view that the provision in question is not and could not have been intended to be a tax measure. The legislature that approved it did not mean it to be so, as proven incontestibly
by the fact that the amendatory bill which later became Republic Act 3792 originated from the Committee on Transportation and not from the Committee on Ways and Means of the House of
Representatives as would have been the case pursuant to the rules of the House. Moreover, the explanatory note itself of the said bill states categorically that its purpose is only to double the
amount of the fee which used to be paid previously, which fee was unquestionably for supervision and regulation, and not for revenue. The reason behind the increase is to keep it abreast of the
1

increase of the corresponding fees in the courts and other administrative agencies performing more or less similar functions as the Public Service Commission. What is more, the amendment in
question expressly states that the fee to be collected is for "reimbursement of the expenses incurred by the Commission in th e supervision" of public services not only in paragraph (e) itself but in
the main provision preceding the enumeration of all the collectible fees. Of course, with the increased fees, it was anticipated that somehow there might be some excess of collections over and
above what might be needed for the expenses of regulation, inspection and supervision and so, in order that such excess may legally be utilized for other purposes, the amendment had to provide
for authority to that end, hence the automatic appropriation clause at the end of the section. In other words, contrary to the holding in Our decision of August 31, 1970, whatever revenue Act there is
in the amendment could not have been its motivation, since it relates only to "any unexpended balance of the fees collected", which is naturally uncertain and speculative as to how much the surplus
or savings would be.

Another circumstance, not less persuasive, that convinces me that taxation was not in the mind of the legislature is that most if not all public service operators of consequence or from whom the
biggest amounts could be collected are holders of legislative franchises. Such are the cases of Meralco and the PLDT, who alone, according to the stipulation of facts before Us, have been paving
at least 15% of the total fees collected from all public services coming under the provision in dispute. As stated in the main opinion of the Chief Justice, under their respective legislative franchises,
these corporations are required to pay a fixed percentage tax in lieu of all other taxes of whatever nature. I cannot believe that the legislature intended to repeal or amend such special provision thru
the amendments here in dispute. Nor could it have done so, considering that a specific provision in a legislative franchise to the effect that a tax equivalent to a certain percentage of the gross
earnings of the grantee shall be in lieu of all taxes of any kind or nature and that said grantee shall be exempt from the payment of such other taxes cannot be repealed or amended by a general law
containing an apparently repugnant provision, unless the intent to repeal is expressed in unmistakable terms in the subsequent legislation. (Visayan Electric Co., S.A. vs. David, 92 Phil. 969.) The
reason for such ruling is given in the cited case of Manila Railroad Co. vs. Rafferty, 40 Phil. 224 which held thus:

It is a canon of statutory construction that a later statute, general in its terms and not expressly repealing a prior special statute, will ordinarily not affect the special
provisions of such earlier statute. (Steamboat Company vs. Collector, 18 Wall. [U.S.], 478; Cass County vs. Gillett, 100 U.S., 585; Minnesota vs. Hitchcock, 185 U.S., 373,
396.)

Where there are two statutes, the earlier special and the later general—the terms of the general broad enough to include the matter provided for in the special—the fact
that one is special and the other is general creates a presumption that the special is to be considered as remaining an exception to the general, one as a general law of
the land, the other as the law of a particular case. (State vs. Stoll, 17 Wall, [U.S.], 425.)

Said Act No. 1510 is a charter granted to the plaintiff company by the Government of the Philippine Islands. It is in the nature of a private contract. It is not a law
constituting a part of the machinery of the general government. It was adopted after careful consideration of the private rights of the plaintiff in relation with the resultant
benefits to the State. It stands upon a different footing from the general law. When a charter is granted, it constitutes a certain property right. Charters or special laws,
such as Act No. 1510, stand upon a different footing from general laws. Once granted, a charter becomes a private contract and cannot be altered nor amended except
by (consent of all concerned, unless that right is expressly reserved. (Dartmouth College vs. Woodword, 4 Wheat., 578.) The reason for the rule is clear. The Legislature,
in passing a special charter, have their attention directed to the special fact and circumstances which the Act or charter is intended to meet. The Legislature consider and
make provision for all the circumstances of the particular case. The Legislature having specially considered all of the facts and circumstances in the particular case in
granting a special charter, it not be considered that the Legislature, by adopting a general law containing provisions repugnant to the provisions of the charter, and without
making any mention of its intention to amend or modify the charter, intended to amend, repeal, or modify the special act. (Lewis vs. Cook County, 74 111. App., 151;
Philippine Railway Co. vs. Nolting, 34 Phil., 401.)

I do not believe that Justice Laurel's postulation in Pangasinan Transportation Co. vs. The Public Service Commission, 70 Phil. 221, to the effect that the Constitution does not permit the granting of
irrepealable or unamendable franchises, to which I adhere, covers the situation on hand, since the point here is that the repeal must be expressed not merely implied.

Indeed, before the amendment of the last paragraph of Section 40 of Commonwealth Act 146, holders of legislative franchises containing special fixed tax clauses were exempt from even the
regulation and inspection fees provided in said section. Under the amendment, that exemption was removed, but recognizing precisely the character and nature of the fees prescribed by the
amended section as mainly for reimbursement of expenses, and I am referring to all the fees prescribed in Section 40 and not only to those in paragraph (e), the amendment provides that the
excess is automatically appropriated to supplement the budgetary and other appropriations for the maintenance and operation of the Public Service Commission. In other words, the purpose of the
automatic appropriation is not to legalize and conceptualize such excess as tax but rather to provide legal authority for the utilization thereof to augment the budgetary appropriations for the
Commission. Accordingly, the construction of the amendments must be restrictive rather than expansive.

Factually, it is clearly demonstrated, as may be seen in the main opinion, that to uphold the view that the frame of reference or basis of computation of the fees should be the value of the property
and equipment of the operators covered by the provision will surely amount to the imposition of excessive and confiscatory fees or taxes. In this connection, Our decision of August 31, 1970 did take
note of the point that the fees under discussion, if collected on the basis of property or equipment, would be "confiscatory and violative of substantive due process" but declined to rule on the matter
because petitioners "have not submitted ... evidentiary data to substantiate this point" and "that the amounts to be collected are large do not, per se alone, suffice to establish their confiscatory
character." (34 SCRA pp. 615-616.) And it was precisely to give the parties an opportunity to present evidence on such score that in Our resolution exactly a year after, that is, of August 31, 1971,
We returned the case to the Public Service Commission for further proceedings. Now that there is not only evidence of the petitioners but a stipulation of facts of the parties showing that the huge
amount to be collected would be exceedingly out of proportion to the returns that could be expected by petitioners, even if the minusdepreciation formula adopted in Our decision of 1970 were to be
followed, We cannot close Our eyes anymore to the obvious unfairness and inequity of accepting the alternate base indicated in the provision. Indeed, it is undeniable that the application of such
base would be self-defeating in the end, since it would be hardly possible for the operators to expand or improve their facilities, not to say to survive. Besides, it would also be self-defeating in the
sense that to consider the amendment as a tax measure would subject the provision to the exemptions in the franchises of the petitioners I have already referred to above.

It is my considered opinion that regardless of the basis of computation, whether it be shares of stock subscribed or sold, th e capital invested of a non-stock corporation, or the property or equipment
of the public services concerned, the application of the amendment may not be done in a manner that will render it unreasonable and confiscatory. Even conceding for a moment that the power to
2

tax includes the power to destroy, I am not persuaded that the government is deliberately applying such absolutist principle in this instance. I believe that the doubling of the amount of the fee
satisfies already the legislative intent permissible within law and equity. As a matter of fact, without using the alternate base in dispute, according to the stipulation of facts, the accumulated surplus
of the fees collected by the Commission, now the Specialized Regulatory Board, as of June 30, 1974 has been already P28,007,408.09. Certainly, by all standards, such amount is more than what
could be expected of any secondary source of funds. And since the respondent Specialized Regulatory Board itself which is charged with the duty, in the first instance, of determining the bases of
the fees and of collecting the same, has already deviced its own practical way of implementing the amendment by using the outstanding shares of stock of petitioners as basis, I feel it is but fitting
and proper that its construction be sanctioned, the same being the nearest approach there is to the clear legislative intent. Indeed, I visualize complications and difficulties, if things were to be done
otherwise. For instance, if the amendment were to be considered as a tax measure as to the excess over the amount needed for regulatory purposes, then an involved computation would have to
be made in order to separate such excess and determine the respective shares of the petitioners therein the should be exempt from its operation pursuant to the corresponding provisions of their
respective franchises. And should this be mathematically possible to determine, then the other question will arise as to whether or not, the exemption would not result in unequal protection of the
laws insofar as the operators holding franchises or certificates to operate other than legislative are concerned.

Premises considered, my vote is to approve the bases of computation of the fees in question agreed to by the respondent Specialized Regulatory Board and to reconsider our previous decision
accordingly. It is understood that with respect to the non-stock corporations and entities other than stock corporations, the amount of capital invested should be the basis of the fees to be collected
from them. Otherwise stated, my considered opinion is that construing the amendments in question together with all the other related provisions of Commonwealth Act 146, as previously amended,
in the light of the applicable principles in taxation, the alternate base of property or equipment mentioned in the amendment of paragraph (e,) of Section 40 cannot legally be operative.
Facts:
Guillermo Manantan was charged with a violation of Section 54, Revised Election Code. However, Manantan claims
that as "justice of peace", the defendant is not one of the officers enumerated in the said section. The lower court
denied the motion to dismiss holding that a justice of peace is within the purview of Section 54.
Under Section 54, "No justice, judge, fiscal, treasurer, or assessor of any province, no officer or employee of the Army,
no member of the national, provincial, city, municipal or rural police force and no classified civil service officer or
employee shall aid any candidate, or exert any influence in any manner in a election or take part therein, except to
vote, if entitled thereto, or to preserve public peace, if he is a peace officer.".
Defendant submits that the said election was taken from Section 449 of the Revised Administration Code wherein, "No
judge of the First Instance, justice of the peace, or treasurer, fiscal or assessor of any province and no officer or
employee of the Philippine Constabulary, or any Bureau or employee of the classified civil service, shall aid any
candidate or exert influence in any manner in any election or take part therein otherwise than exercising the right to
vote.". He claims that the words "justice of peace" was omitted revealed the intention of Legislature to exclude justices
of peace from its operation.

Issue:
Is justice of peace included in the prohibition of Section 64 of the Revised Election Code?

Held:
Yes, it is included in Section 54. Justices of the peace were expressly included in Section 449 of the Revised
Administrative Code because the kinds of judges therein were specified, i.e., judge of the First Instance and justice of
the peace. In Section 54, however, there was no necessity therefore to include justices of the peace in the
enumeration because the legislature had availed itself of the more generic and broader term, "judge.", which includes
all kinds of judges.
A "justice of the peace" is a judge. A "judge" is a public officer, who, by virtue of his office, is clothed with judicial
authority. This term includes all officers appointed to to decide litigated questions while acting in that capacity,
including justices of the peace, and even jurors, it is said, who are judges of facts.
From the history of Section 54 of REC, the first omission of the word "justice of the peace" was effected in Section 48
of Commonwealth Act No. 357 and not in the present code as averred by defendant-appellee. Whenever the word
"judge" was qualified by the phrase "of the First Instance', the words "justice of the peace" were omitted. It follows that
when the legislature omitted the words "justice of the peace" in RA 180, it did not intend to exempt the said officer
from its operation. Rather, it had considered the said officer as already comprehended in the broader term "judge".
The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendant-appellee. Under the said
rule, a person, object or thing omitted from an enumeration must be held to have been omitted intentionally. However,
it is applicable only if the omission has been clearly established. In the case at bar, the legislature did not exclude or
omit justices of the peace from the enumeration of officers precluded from engaging in partisan political activities. In
Section 54, justices of the peace were just called "judges". Also, the application of this rule does not proceed from the
mere fact that a case is criminal in nature, but rather from a reasonable certainty that a particular person, object or
thing has been omitted from a legislative enumeration. In the case at bar, there is no omission but only substitution of
terms.
The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such
laws; instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the
meaning of penal laws.
Also, the purpose of the statute s to enlarge the officers within its purview. Justices of the Supreme Court, the Court of
Appeals, and various judges, such as the judges of the Court of Industrial Relations, judges of the Court of Agrarian
Relations, etc., who were not included in the prohibition under the old statute, are now within its encompass.
The rule "expressio unius est exclusion alterius" has been erroneously applied by CA and lower courts because they
were not able to give reasons for the exclusion of the legislature for the term "justices of peace".
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 14129 July 31, 1962

PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
GUILLERMO MANANTAN, defendant-appellee.

Office of the Solicitor General for plaintiff-appellant.

Padilla Law Office for defendant-appellee.

REGALA, J.:

This is an appeal of the Solicitor General from the order of the Court of First Instance of Pangasinan dismissing the information
against the defendant.

The records show that the statement of the case and the facts, as recited in the brief of plaintiff-appellant, is complete and accurate.
The same is, consequently, here adopted, to wit:

In an information filed by the Provincial Fiscal of Pangasinan in the Court of First Instance of that Province, defendant
Guillermo Manantan was charged with a violation Section 54 of the Revised Election Code. A preliminary investigation
conducted by said court resulted in the finding a probable cause that the crime charged as committed by defendant.
Thereafter, the trial started upon defendant's plea of not guilty, the defense moved to dismiss the information on the
ground that as justice of the peace the defendant is one of the officers enumerated in Section 54 of the Revised Election
Code. The lower court denied the motion to dismiss holding that a justice of the peace is within the purview Section 54. A
second motion was filed by defense counsel who cited in support thereof the decision of the Court of Appeals in People
vs. Macaraeg, (CA-G.R. No. 15613-R, 54 Off. Gaz., pp. 1873-76) where it was held that a justice of the peace is excluded
from the prohibition of Section 54 of the Revised Election Code. Acting on this second motion to dismiss, the answer of the
prosecution, the reply of the defense, and the opposition of the prosecution, the lower court dismissed the information
against the accused upon the authority of the ruling in the case cited by the defense.

Both parties are submitting this case upon the determination of this single question of law: Is a justice the peace included in the
prohibition of Section 54 of the Revised Election Code?

Section 54 of the said Code reads:

No justice, judge, fiscal, treasurer, or assessor of any province, no officer or employee of the Army, no member of the
national, provincial, city, municipal or rural police force and no classified civil service officer or employee shall aid any
candidate, or exert any influence in any manner in a election or take part therein, except to vote, if entitled thereto, or to
preserve public peace, if he is a peace officer.

Defendant-appellee argues that a justice of the peace is not comprehended among the officers enumerated in Section 54 of the
Revised Election Code. He submits the aforecited section was taken from Section 449 of the Revised Administrative Code, which
provided the following:

SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the peace, or
treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary, or any Bureau or
employee of the classified civil service, shall aid any candidate or exert influence in any manner in any election or take
part therein otherwise than exercising the right to vote.

When, therefore, section 54 of the Revised Election Code omitted the words "justice of the peace," the omission revealed the
intention of the Legislature to exclude justices of the peace from its operation.

The above argument overlooks one fundamental fact. It is to be noted that under Section 449 of the Revised Administrative Code,
the word "judge" was modified or qualified by the phrase "of First instance", while under Section 54 of the Revised Election Code,
no such modification exists. In other words, justices of the peace were expressly included in Section 449 of the Revised
Administrative Code because the kinds of judges therein were specified, i.e., judge of the First Instance and justice of the peace. In
Section 54, however, there was no necessity therefore to include justices of the peace in the enumeration because the legislature
had availed itself of the more generic and broader term, "judge." It was a term not modified by any word or phrase and was
intended to comprehend all kinds of judges, like judges of the courts of First Instance, Judges of the courts of Agrarian Relations,
judges of the courts of Industrial Relations, and justices of the peace.

It is a well known fact that a justice of the peace is sometimes addressed as "judge" in this jurisdiction. It is because a justice of the
peace is indeed a judge. A "judge" is a public officer, who, by virtue of his office, is clothed with judicial authority (U.S. v. Clark, 25
Fed. Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a public officer lawfully appointed to decide litigated
questions according to law. In its most extensive sense the term includes all officers appointed to decide litigated questions while
acting in that capacity, including justices of the peace, and even jurors, it is said, who are judges of facts."

A review of the history of the Revised Election Code will help to justify and clarify the above conclusion.

The first election law in the Philippines was Act 1582 enacted by the Philippine Commission in 1907, and which was later amended
by Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4 amendments, however, only Act No. 1709 has a relation to the discussion of
the instant case as shall be shown later.) Act No. 1582, with its subsequent 4 amendments were later on incorporated Chapter 18
of the Administrative Code. Under the Philippine Legislature, several amendments were made through the passage of Acts Nos.
2310, 3336 and 3387. (Again, of these last 3 amendments, only Act No. 3587 has pertinent to the case at bar as shall be seen
later.) During the time of the Commonwealth, the National Assembly passed Commonwealth Act No. 23 and later on enacted
Commonwealth Act No. 357, which was the law enforced until June 1947, when the Revised Election Code was approved. Included
as its basic provisions are the provisions of Commonwealth Acts Nos. 233, 357, 605, 666, 657. The present Code was further
amended by Republic Acts Nos. 599, 867, 2242 and again, during the session of Congress in 1960, amended by Rep. Acts Nos.
3036 and 3038. In the history of our election law, the following should be noted:

Under Act 1582, Section 29, it was provided:

No public officer shall offer himself as a candidate for elections, nor shall he be eligible during the time that he holds said
public office to election at any municipal, provincial or Assembly election, except for reelection to the position which he
may be holding, and no judge of the First Instance, justice of the peace, provincial fiscal, or officer or employee of the
Philippine Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner or take part in
any municipal, provincial, or Assembly election under the penalty of being deprived of his office and being disqualified to
hold any public office whatsoever for a term of 5 year: Provide, however, That the foregoing provisions shall not be
construe to deprive any person otherwise qualified of the right to vote it any election." (Enacted January 9, 1907; Took
effect on January 15, 1907.)

Then, in Act 1709, Sec. 6, it was likewise provided:

. . . No judge of the First Instance, Justice of the peace provincial fiscal or officer or employee of the Bureau of
Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner to take part in any
municipal provincial or Assembly election. Any person violating the provisions of this section shall be deprived of his office
or employment and shall be disqualified to hold any public office or employment whatever for a term of 5 years, Provided,
however, that the foregoing provisions shall not be construed to deprive any person otherwise qualified of the right to vote
at any election. (Enacted on August 31, 1907; Took effect on September 15, 1907.)

Again, when the existing election laws were incorporated in the Administrative Code on March 10, 1917, the provisions in question
read:

SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the peace, or
treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary or any Bureau or
employee of the classified civil service, shall aid any candidate or exert influence in any manner in any election or take
part therein otherwise than exercising the right to vote. (Emphasis supplied)

After the Administrative Code, the next pertinent legislation was Act No. 3387. This Act reads:

SEC. 2636. Officers and employees meddling with the election. — Any judge of the First Instance, justice of the peace,
treasurer, fiscal or assessor of any province, any officer or employee of the Philippine Constabulary or of the police of any
municipality, or any officer or employee of any Bureau of the classified civil service, who aids any candidate or violated in
any manner the provisions of this section or takes part in any election otherwise by exercising the right to vote, shall be
punished by a fine of not less than P100.00 nor more than P2,000.00, or by imprisonment for not less than 2 months nor
more than 2 years, and in all cases by disqualification from public office and deprivation of the right of suffrage for a period
of 5 years. (Approved December 3, 1927.) (Emphasis supplied.)

Subsequently, however, Commonwealth Act No. 357 was enacted on August 22, 1938. This law provided in Section 48:

SEC. 48. Active Interventation of Public Officers and Employees. — No justice, judge, fiscal, treasurer or assessor of any
province, no officer or employee of the Army, the Constabulary of the national, provincial, municipal or rural police, and no
classified civil service officer or employee shall aid any candidate, nor exert influence in any manner in any election nor
take part therein, except to vote, if entitled thereto, or to preserve public peace, if he is a peace officer.

This last law was the legislation from which Section 54 of the Revised Election Code was taken.

It will thus be observed from the foregoing narration of the legislative development or history of Section 54 of the Revised Election
Code that the first omission of the word "justice of the peace" was effected in Section 48 of Commonwealth Act No. 357 and not in
the present code as averred by defendant-appellee. Note carefully, however, that in the two instances when the words "justice of
the peace" were omitted (in Com. Act No. 357 and Rep. Act No. 180), the word "judge" which preceded in the enumeration did not
carry the qualification "of the First Instance." In other words, whenever the word "judge" was qualified by the phrase "of the First
Instance", the words "justice of the peace" would follow; however, if the law simply said "judge," the words "justice of the peace"
were omitted.

The above-mentioned pattern of congressional phraseology would seem to justify the conclusion that when the legislature omitted
the words "justice of the peace" in Rep. Act No. 180, it did not intend to exempt the said officer from its operation. Rather, it had
considered the said officer as already comprehended in the broader term "judge".

It is unfortunate and regrettable that the last World War had destroyed congressional records which might have offered some
explanation of the discussion of Com. Act No. 357 which legislation, as indicated above, has eliminated for the first time the words
"justice of the peace." Having been completely destroyed, all efforts to seek deeper and additional clarifications from these records
proved futile. Nevertheless, the conclusions drawn from the historical background of Rep. Act No. 180 is sufficiently borne out by
reason hid equity.

Defendant further argues that he cannot possibly be among the officers enumerated in Section 54 inasmuch as under that said
section, the word "judge" is modified or qualified by the phrase "of any province." The last mentioned phrase, defendant submits,
cannot then refer to a justice of the peace since the latter is not an officer of a province but of a municipality.

Defendant's argument in that respect is too strained. If it is true that the phrase "of any province" necessarily removes justices of
the peace from the enumeration for the reason that they are municipal and not provincial officials, then the same thing may be said
of the Justices of the Supreme Court and of the Court of Appeals. They are national officials. Yet, can there be any doubt that
Justices of the Supreme Court and of the Court of Appeals are not included in the prohibition? The more sensible and logical
interpretation of the said phrase is that it qualifies fiscals, treasurers and assessors who are generally known as provincial officers.

The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendant-appellee. Under the said rule, a person,
object or thing omitted from an enumeration must be held to have been omitted intentionally. If that rule is applicable to the present,
then indeed, justices of the peace must be held to have been intentionally and deliberately exempted from the operation of Section
54 of the Revised Election Code.

The rule has no applicability to the case at bar. The maxim "casus omisus" can operate and apply only if and when the omission
has been clearly established. In the case under consideration, it has already been shown that the legislature did not exclude or omit
justices of the peace from the enumeration of officers precluded from engaging in partisan political activities. Rather, they were
merely called by another term. In the new law, or Section 54 of the Revised Election Code, justices of the peace were just called
"judges."

In insisting on the application of the rule of "casus omisus" to this case, defendant-appellee cites authorities to the effect that the
said rule, being restrictive in nature, has more particular application to statutes that should be strictly construed. It is pointed out
that Section 54 must be strictly construed against the government since proceedings under it are criminal in nature and the
jurisprudence is settled that penal statutes should be strictly interpreted against the state.

Amplifying on the above argument regarding strict interpretation of penal statutes, defendant asserts that the spirit of fair play and
due process demand such strict construction in order to give "fair warning of what the law intends to do, if a certain line is passed,
in language that the common world will understand." (Justice Holmes, in McBoyle v. U.S., 283 U.S. 25, L. Ed. 816).

The application of the rule of "casus omisus" does not proceed from the mere fact that a case is criminal in nature, but rather from a
reasonable certainty that a particular person, object or thing has been omitted from a legislative enumeration. In the present case,
and for reasons already mentioned, there has been no such omission. There has only been a substitution of terms.

The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such laws; instead,
the rule merely serves as an additional, single factor to be considered as an aid in determining the meaning of penal laws. This has
been recognized time and again by decisions of various courts. (3 Sutherland, Statutory Construction, p. 56.) Thus, cases will
frequently be found enunciating the principle that the intent of the legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is to be
noted that a strict construction should not be permitted to defeat the policy and purposes of the statute (Ash Sheep Co. v. U.S., 252
U.S. 159). The court may consider the spirit and reason of a statute, as in this particular instance, where a literal meaning would
lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the law makers (Crawford, Interpretation of Laws,
Sec. 78, p. 294). A Federal District court in the U.S. has well said:

The strict construction of a criminal statute does not mean such construction of it as to deprive it of the meaning intended.
Penal statutes must be construed in the sense which best harmonizes with their intent and purpose. (U.S. v. Betteridge 43
F. Supp. 53, 56, cited in 3 Sutherland Statutory Construction 56.)

As well stated by the Supreme Court of the United States, the language of criminal statutes, frequently, has been narrowed where
the letter includes situations inconsistent with the legislative plan (U.S. v. Katz, 271 U.S. 354; See also Ernest Brunchen,
Interpretation of the Written Law (1915) 25 Yale L.J. 129.)

Another reason in support of the conclusion reached herein is the fact that the purpose of the statute is to enlarge the officers within
its purview. Justices of the Supreme Court, the Court of Appeals, and various judges, such as the judges of the Court of Industrial
Relations, judges of the Court of Agrarian Relations, etc., who were not included in the prohibition under the old statute, are now
within its encompass. If such were the evident purpose, can the legislature intend to eliminate the justice of the peace within its
orbit? Certainly not. This point is fully explained in the brief of the Solicitor General, to wit:
 On the other hand, when the legislature eliminated the phrases "Judge of First Instance" and justice of the peace", found
in Section 449 of the Revised Administrative Code, and used "judge" in lieu thereof, the obvious intention was to include in
the scope of the term not just one class of judges but all judges, whether of first Instance justices of the peace or special
courts, such as judges of the Court of Industrial Relations. . . . .

The weakest link in our judicial system is the justice of the peace court, and to so construe the law as to allow a judge
thereof to engage in partisan political activities would weaken rather than strengthen the judiciary. On the other hand,
there are cogent reasons found in the Revised Election Code itself why justices of the peace should be prohibited from
electioneering. Along with Justices of the appellate courts and judges of the Court of First Instance, they are given
authority and jurisdiction over certain election cases (See Secs. 103, 104, 117-123). Justices of the peace are authorized
to hear and decided inclusion and exclusion cases, and if they are permitted to campaign for candidates for an elective
office the impartiality of their decisions in election cases would be open to serious doubt. We do not believe that the
legislature had, in Section 54 of the Revised Election Code, intended to create such an unfortunate situation. (pp. 708,
Appellant's Brief.)

Another factor which fortifies the conclusion reached herein is the fact that the administrative or executive department has regarded
justices of the peace within the purview of Section 54 of the Revised Election Code.

In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary of Justice, etc. (G.R. No. L-12601), this Court did not give due
course to the petition for certiorari and prohibition with preliminary injunction against the respondents, for not setting aside, among
others, Administrative Order No. 237, dated March 31, 1957, of the President of the Philippines, dismissing the petitioner as justice
of the peace of Carmen, Agusan. It is worthy of note that one of the causes of the separation of the petitioner was the fact that he
was found guilty in engaging in electioneering, contrary to the provisions of the Election Code.

Defendant-appellee calls the attention of this Court to House Bill No. 2676, which was filed on January 25, 1955. In that proposed
legislation, under Section 56, justices of the peace are already expressly included among the officers enjoined from active political
participation. The argument is that with the filing of the said House Bill, Congress impliedly acknowledged that existing laws do not
prohibit justices of the peace from partisan political activities.

The argument is unacceptable. To begin with, House Bill No. 2676 was a proposed amendment to Rep. Act No. 180 as a whole
and not merely to section 54 of said Rep. Act No. 180. In other words, House Bill No. 2676 was a proposed re-codification of the
existing election laws at the time that it was filed. Besides, the proposed amendment, until it has become a law, cannot be
considered to contain or manifest any legislative intent. If the motives, opinions, and the reasons expressed by the individual
members of the legislature even in debates, cannot be properly taken into consideration in ascertaining the meaning of a statute
(Crawford, Statutory Construction, Sec. 213, pp. 375-376), a fortiori what weight can We give to a mere draft of a bill.

On law reason and public policy, defendant-appellee's contention that justices of the peace are not covered by the injunction of
Section 54 must be rejected. To accept it is to render ineffective a policy so clearly and emphatically laid down by the legislature.

Our law-making body has consistently prohibited justices of the peace from participating in partisan politics. They were prohibited
under the old Election Law since 1907 (Act No. 1582 and Act No. 1709). Likewise, they were so enjoined by the Revised
Administrative Code. Another which expressed the prohibition to them was Act No. 3387, and later, Com. Act No. 357.

Lastly, it is observed that both the Court of Appeals and the trial court applied the rule of "expressio unius, est exclusion alterius" in
arriving at the conclusion that justices of the peace are not covered by Section 54. Said the Court of Appeals: "Anyway, guided by
the rule of exclusion, otherwise known as expressio unius est exclusion alterius, it would not be beyond reason to infer that there
was an intention of omitting the term "justice of the peace from Section 54 of the Revised Election Code. . . ."

The rule has no application. If the legislature had intended to exclude a justice of the peace from the purview of Section 54, neither
the trial court nor the Court of Appeals has given the reason for the exclusion. Indeed, there appears no reason for the alleged
change. Hence, the rule of expressio unius est exclusion alterius has been erroneously applied. (Appellant's Brief, p. 6.)

Where a statute appears on its face to limit the operation of its provisions to particular persons or things by enumerating
them, but no reason exists why other persons or things not so enumerated should not have been included, and manifest
injustice will follow by not so including them, the maxim expressio unius est exclusion alterius, should not be invoked.
(Blevins v. Mullally 135 p. 307, 22 Cal. App. 519.) .

FOR THE ABOVE REASONS, the order of dismissal entered by the trial court should be set aside and this case is remanded for
trial on the merits.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera and Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.
NUEVA ERA VS. MARCOS
G.R No. 169435 February 27, 2008
FACTS: The Sangguniang Bayan of the Municipality of Marcos passed a resolution claiming a
portion of Nueva Era due to the creation of Marcos Town in the Province of Ilocos Norte pursuant
to the description of Marcos' eastern boundaries as stated in the second paragraph of Republic Act
(R.A.) No. 3753. Marcos submitted its claim to the Sangguniang Panlalawigan of Ilocos Norte.
Petitioner Nueva Era, contended that its entire land area was an ancestral domain of
the "tinguians," an indigenous cultural community, which must be protected and therefore must
be preserved as part of Nueva Era. In addition, according to petitioner, Marcos was created out of
the territory of Dingras only and since R.A. No. 3753 specifically mentioned seven (7) barrios of
Dingras to become Marcos, the area which should comprise Marcos should not go beyond the
territory of said barrios.
The Sangguniang Panlalawigan of Ilocos Norte ruled in favor of Nueva Era. On appeal by Marcos,
the RTC affirmed the decision of the SP. Uncontented, Marcos filed a petition for review of the
RTC decision before the CA, which reversed and set aside the decision of the SP and RTC.
ISSUE: WON THE MODE OF APPEAL ADOPTED BY MARCOS IN BRINGING THE CASE TO
THE CA IS PROPER
RULING: Yes, Marcos correctly appealed the RTC judgment via petition for review under Rule 42.
Under Section 118 (b) of the Local Government Code, "boundary disputes involving two (2) or
more municipalities within the same province shall be referred for settlement to the sangguniang
panlalawigan concerned." The dispute shall be formally tried by the said sanggunian in case the
disputing municipalities fail to effect an amicable settlement. The SP of Ilocos validly took
cognizance of the dispute between the parties. The appeal of the SP judgment to the RTC was
likewise properly filed by Marcos before the RTC. The problem, however, lies in whether the RTC
judgment may still be further appealed to the CA. The CA pronounced that the RTC decision on the
boundary dispute was not appealable to it. It ruled that no further appeal of the RTC decision may
be made pursuant to Section 119 of the Local Government Code.
However, the SC ruled that the CA erred in declaring that only the RTC has appellate jurisdiction
over the judgment of the SP.
Appeal is a purely statutory right and it cannot be exercised unless it is expressly granted by law.
Nevertheless, the CA can pass upon the petition for review precisely because the law allows it. B.P.
Blg. 129, as amended, which is supplemented by Rule 42 of the Rules of Civil Procedure, gives the
CA the authority to entertain appeals of such judgments and final orders rendered by the RTC in
the exercise of its appellate jurisdiction.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 169435 February 27, 2008

MUNICIPALITY OF NUEVA ERA, ILOCOS NORTE, represented by its Municipal Mayor, CAROLINE ARZADON-GARVIDA, petitioner,
vs.
MUNICIPALITY OF MARCOS, ILOCOS NORTE, represented by its Municipal Mayor, SALVADOR PILLOS, and the HONORABLE COURT OF
APPEALS, respondents.

DECISION

REYES, R.T., J.:

AS the law creating a municipality fixes its boundaries, settlement of boundary disputes between municipalities is facilitated by carrying into effect the law that created
them.

Any alteration of boundaries that is not in accordance with the law creating a municipality is not the carrying into effect of that law but its amendment, which only the
Congress can do. 1

For Our review on certiorari is the Decision2 of the Court of Appeals (CA) reversing to a certain extent that 3 of the Regional Trial Court (RTC), Branch 12, Laoag City,
Ilocos Norte, in a case that originated from the Sangguniang Panlalawigan (SP) of Ilocos Norte about the boundary dispute between the Municipalities of Marcos and
Nueva Era in Ilocos Norte.

The CA declared that Marcos is entitled to have its eastern boundary extended up "to the boundary line between the province of Ilocos Norte and Kalinga-Apayao."4 By
this extension of Marcos' eastern boundary, the CA allocated to Marcos a portion of Nueva Era's territory.

The Facts

The Municipality of Nueva Era was created from the settlements of Bugayong, Cabittaoran, Garnaden, Padpadon, Padsan, Paorpatoc, T ibangran, and Uguis which were
previously organized as rancherias, each of which was under the independent control of a chief. Governor General Francis Burton Harrison, acting on a resolution
passed by the provincial government of Ilocos Norte, united these rancherias and created the township of Nueva Era by virtue of Executive Order (E.O.) No. 66 5 dated
September 30, 1916.

The Municipality of Marcos, on the other hand, was created on June 22, 1963 pursuant to Republic Act (R.A.) No. 3753 entitled "An Act Creating the Municipality of
Marcos in the Province of Ilocos Norte." Section 1 of R.A. No. 3753 provides:

SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas and Agunit in the Municipality of Dingras, Provinc e of Ilocos Norte, are hereby
separated from the said municipality and constituted into a new and separate municipality to be known as the Municipality of Marcos, with the following
boundaries:

On the Northwest, by the barrios Biding-Rangay boundary going down to the barrios Capariaan-Gabon boundary consisting of foot path and feeder road; on
the Northeast, by the Burnay River which is the common boundary of barrios Agunit and Naglayaan; on the East, by the Ilocos N orte-Mt. Province boundary;
on the South, by the Padsan River which is at the same time the boundary between the municipalities of Banna and Dingras; on the West and Southwest, by
the boundary between the municipalities of Batac and Dingras.

The Municipality of Marcos shall have its seat of government in the barrio of Biding.

Based on the first paragraph of the said Section 1 of R.A. No. 3753, it is clear that Marcos shall be derived from the listed barangays of Dingras, namely: Capariaan,
Biding, Escoda, Culao, Alabaan, Ragas and Agunit. The Municipality of Nueva Era or any of its barangays was not mentioned. Hence, if based only on said paragraph, it
is clear that Nueva Era may not be considered as a source of territory of Marcos.

There is no issue insofar as the first paragraph is concerned which named only Dingras as the mother municipality of Mar cos. The problem, however, lies in the
description of Marcos' boundaries as stated in the second paragraph, particularly in the phrase: "on the East, by the Ilocos Norte-Mt. Province boundary."

It must be noted that the term "Mt. Province" stated in the above phrase refers to the present adjoining provinces of Benguet, Mountain Province, Ifugao, Kalinga and
Apayao, which were then a single province.

Mt. Province was divided into the four provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao by virtue of R.A. No. 4695 which was enacted on June 18,
1966. On February 14, 1995, the province of Kalinga-Apayao, which comprises the sub-provinces of Kalinga and Apayao, was further converted into the regular
provinces of Kalinga and Apayao pursuant to R.A. No. 7878.

The part of then Mt. Province which was at the east of Marcos is now the province of Apayao. Hence, the eastern boundary referred to by the second paragraph of
Section 1 of R.A. No. 3753 is the present Ilocos Norte-Apayao boundary.

On the basis of the said phrase, which described Marcos' eastern boundary, Marcos claimed that the middle portion of Nueva Era, which adjoins its eastern side, formed
part of its territory. Its reasoning was founded upon the fact that Nueva Era was between Marcos and the Ilocos Norte-Apayao boundary such that if Marcos was to be
bounded on the east by the Ilocos Norte-Apayao boundary, part of Nueva Era would consequently be obtained by it. 6

Marcos did not claim any part of Nueva Era as its own territory until after almost 30 years, 7 or only on March 8, 1993, when its Sangguniang Bayan passed Resolution
No. 93-015.8 Said resolution was entitled: "Resolution Claiming an Area which is an Original Part of Nueva Era, But Now Separated Due to the Creation of Marcos Town
in the Province of Ilocos Norte."

Marcos submitted its claim to the SP of Ilocos Norte for its consideration and approval. The SP, on the other hand, required Marcos to submit its position paper. 9
In its position paper, Marcos alleged that since its northeastern and eastern boundaries under R.A. No. 3753 were the Burnay River and the Ilocos Norte-Mountain
Province boundary, respectively, its eastern boundary should not be limited to the former Dingras-Nueva Era boundary, which was coterminous and aligned with the
eastern boundary of Dingras. According to Marcos, its eastern boundary should extend further to the east or up to the Ilocos-Norte-Mt. Province boundary pursuant to
the description of its eastern boundary under R.A. No. 3753. 10

In view of its claim over the middle portion of Nueva Era, Marcos posited that Nueva Era was cut into two parts. And since the law required that the land area of a
municipality must be compact and contiguous, Nueva Era's northern isolated portion could no longer be considered as its territory but that of Marcos'. Thus, Marcos
claimed that it was entitled not only to the middle portion 11 of Nueva Era but also to Nueva Era's isolated northern portion. These areas claimed by Marcos were
within Barangay Sto. Niño, Nueva Era.

Nueva Era reacted to the claim of Marcos through its Resolution No. 1, Series of 1993. It alleged that since time immemorial, its entire land area was an ancestral
domain of the "tinguians," an indigenous cultural community. It argued to the effect that since the land being claimed by Marcos must be protected for the tinguians, it
must be preserved as part of Nueva Era. 12

According to Nueva Era, Marcos was created out of the territory of Dingras only. And since R.A. No. 3753 specifically mention ed seven (7) barrios of Dingras to become
Marcos, the area which should comprise Marcos should not go beyond the territory of said barrios. 13

From the time Marcos was created in 1963, its eastern boundary had been considered to be aligned and coterminous with the eastern boundary of the adjacent
municipality of Dingras. However, based on a re-survey in 1992, supposedly done to conform to the second paragraph of Section 1 of R.A. No. 3753, an area of 15,400
hectares of Nueva Era was alleged to form part of Marcos. 14 This was the area of Barangay Sto. Niño, Nueva Era that Marcos claimed in its position paper.

On March 29, 2000, the SP of Ilocos Norte ruled in favor of Nueva Era. The fallo of its decision15 reads:

WHEREFORE, in view of all the foregoing, this Body has no alternative but to dismiss, as it hereby DISMISSES said petition for lack of merit. The disputed
area consisting of 15,400 hectares, more or less, is hereby declared as part and portion of the territorial jurisdiction of r espondent Nueva Era.16

R.A. No. 3753 expressly named the barangays that would comprise Marcos, but none of Nueva Era's barangays were mentioned. The SP thus construed, applying the
rule of expressio unius est exclusio alterius, that no part of Nueva Era was included by R.A. No. 3753 in creating Marcos. 17

The SP ratiocinated that if Marcos was to be bounded by Mt. Province, it would encroach upon a portion, not only of Nueva Era but also of Abra. Thus:

x x x Even granting, for the sake of argument, that the eastern boundary of Marcos is indeed Mountain Province, Marcos will then be claiming a portion of
Abra because the province, specifically Barangay Sto. Niño, Nueva Era, is actually bounded on the East by the Province of Abra. Abra is situated between
and separates the Provinces of Ilocos Norte and Mountain Province.

This is precisely what this body would like to avoid. Statutes should be construed in the light of the object to be achieved and the evil or mischief to be
suppressed, and they should be given such construction as will advance the object, suppress the mischief and secure the benef its intended.18 (Citations
omitted)

The SP further explained:

Invariably, it is not the letter, but the spirit of the law and the intent of the legislature that is important. When the int erpretation of the statute according to the
exact and literal import of its words would lead to absurdity, it should be construed according to the spirit and reason, dis regarding if necessary the letters of
the law. It is believed that congress did not intend to have this absurd situation to be created when it created the Municipality of Marcos. This body, by the
mandate given to it by the RA 7160 otherwise known Local Government Code, so believes that respondent Nueva Era or any portio n thereof has been
excluded from the ambit of RA 3753. Under the principle of "espressio (sic) unios (sic) est exclusio alterius," by expressly naming the barangays that will
comprise the town of Marcos, those not mentioned are deemed excluded. In Republic Act 4354, where Section 2 thereof enumerated the barrios comprising
the City of Davao excluding the petitioner Barrio Central as part of the said City, the court held that there arose a prima facie conclusion that the said law
abolished Barrio Central as part of Davao City.

Historically, the hinterlands of Nueva Era have been known to be the home of our brothers and sisters belonging to peculiar groups of non-(C)hristian
inhabitants with their own rich customs and traditions and this body takes judicial notice that the inhabitants of Nueva Era have proudly claimed to be a part of
this rich culture. With this common ancestral heritage which unfortunately is absent with Marcos, let it not be disturbed. 19 (Emphasis ours and citations
omitted)

RTC Decision

On appeal by Marcos, the RTC affirmed the decision of the SP in its decision 20 of March 19, 2001. The dispositive part of the RTC decision reads:

WHEREFORE, the instant appeal is hereby DISMISSED. The questioned decision of the Sangguniang Panlalawigan of Ilocos Norte is hereby AFFIRMED.

No costs.

SO ORDERED.21

The RTC reasoned out in this wise:

The position of the Municipality of Marcos is that the provision of R.A. 3753 as regards its boundary on the East which is th e "Ilocos Norte-Mt. Province"
should prevail.

On the other hand, the Municipality of Nueva Era posits the theory that only the barrios of the Municipality of Dingras as stated in R.A. 3753 should be
included in the territorial jurisdiction of the Municipality of Marcos. The Sangguniang Panlalawigan agreed with the position of Nueva Era.

xxxx

An examination of the Congressional Records during the deliberations of the R.A. 3753 (House Bill No. 3721) shows the Explanatory Note of Congressman
Simeon M. Valdez, 2nd District, Ilocos Norte, to wit:
 EXPLANATORY NOTE

This bill seeks to create in the Province of Ilocos Norte a new municipality to be known as the Municipality of Marcos, to be comprised by the
present barrios of Capariaan, Biding Escoda, Culao, Alabaan, Ragas and Agunit, all in the Municipality of Dingras of the same province. The seat
of government will be in the sitio of San Magro in the present barrio of Ragas.

xxxx

On the other hand, the Municipality of Dingras will not be adversely affected too much because its finances will still be sound and stable. Its
capacity to comply with its obligations, especially to its employees and personnel, will not be diminished nor its operations p aralyzed. On the
contrary, economic development in both the mother and the proposed municipalities will be accelerated.

In view of the foregoing, approval of this bill is earnestly requested.

(Sgd.) SIMEON M. VALDEZ

Congressman, 2nd District
Ilocos Norte22

Parenthetically, the legislative intent was for the creation of the Municipality of Marcos, Ilocos Norte from the barrios (barangays) of the
Municipality of Dingras, Ilocos Norte only. Hence, the Municipality of Marcos cannot add any area beyond the territorial jurisdiction of the
Municipality of Dingras, Ilocos Norte. This conclusion might have been different only if the area being claimed by the Municipality of Marcos is
within the territorial jurisdiction of the Municipality of Dingras and not the Municipality of Nueva Era. In such case, the two conflicting provisions
may be harmonized by including such area within the territorial jurisdiction of the Municipality of Dingras as within the ter ritorial jurisdiction of the
Municipality of Marcos.23 (Emphasis ours)

CA Disposition

Still determined to have a more extensive eastern boundary, Marcos filed a petition for review 24 of the RTC decision before the CA. The issues raised by Marcos before
the CA were:

1. Whether or not the site of Hercules Minerals and Oil, Inc. which is within a Government Forest Reservation in Barangay Sto. Niño, formerly of Nueva Era,
is a part of the newly created Municipality of Marcos, Ilocos Norte.

2. Whether or not the portion of Barangay Sto. Niño on the East which is separated from Nueva Era as a result of the full implementation of the boundaries of
the new Municipality of Marcos belongs also to Marcos or to Nueva Era. 25

The twin issues involved two portions of Nueva Era, viz.: (1) middle portion, where Hercules Minerals and Oil, Inc. is located; and (2) northern portion of Nueva Era,
which, according to Marcos, was isolated from Nueva Era in view of the integration to Marcos of said middle portion.

Marcos prayed before the CA that the above two portions of Nueva Era be declared as part of its own territory. It alleged that it was entitled to the middle portion of
Nueva Era in view of the description of Marcos' eastern boundary under R.A. No. 3753. Marcos likewise contended that it was entitled to the northern portion of Nueva
Era which was allegedly isolated from Nueva Era when Marcos was created. It posited that such isolation of territory was contrary to law because the law required that a
municipality must have a compact and contiguous territory. 26

In a Decision27 dated June 6, 2005, the CA partly reversed the RTC decision with the following disposition:

WHEREFORE, we partially GRANT the petition treated as one for certiorari. The Decisions of both the Sangguniang Panlalawigan and Regional Trial
Court of Ilocos Norte are REVERSED and SET ASIDE insofar as they made the eastern boundary of the municipality of Marcos co-terminous with the
eastern boundary of Dingras town, and another is rendered extending the said boundary of Marcos to the boundary line between the province of Ilocos Norte
and Kalinga-Apayao, but the same Decisions are AFFIRMED with respect to the denial of the claim of Marcos to the detached northern portion
of barangay Sto. Niño which should, as it is hereby ordered to, remain with the municipality of Nueva Era. No costs.

SO ORDERED.28

In concluding that the eastern boundary of Marcos was the boundary line between Ilocos Norte and Kalinga-Apayao, the CA gave the following explanation:

Clearly then, both the SP and the RTC erred when they ruled that the eastern boundary of Marcos is only coterminous with the east ern boundary of the adjacent
municipality of Dingras and refused to extend it up to the boundary line between the provinces of Iloc os Norte and Mountain Province (Kalinga-Apayao). R.A. No. 3753,
the law creating Marcos, is very explicit and leaves no room for equivocation that the boundaries of Marcos town are:

"On the Northwest by the barrios Biding-Rangay boundary going down to the barrios Capariaan-Gabon boundary consisting of foot path and
feeder road; on the Northeast, by the Burnay River which is the common boundary of barrios Agunit and Naglayaan; on the East, by the Ilocos
Norte-Mt. Province boundary; on the South by the Padsan River, which is at the same time the boundary between the municipalities of Banna
and Dingras; on the West and Southwest by the boundary between the municipalities of Batac and Dingras."

To stop short at the eastern boundary of Dingras as the eastern boundary also of Marcos and refusing to go farther to the boundary line between Ilocos Norte
and Mountain Province (Kalinga-Apayao) is tantamount to amending the law which Congress alone can do. Both the SP and RTC have no competence to
undo a valid act of Congress.

It is not correct to say that Congress did not intend to take away any part of Nueva Era and merge it with Marcos for it is c hargeable with conclusive
knowledge that when it provided that the eastern boundary of Marcos is the boundary line between Ilocos Norte and Mountain Province, (by the time of both
the SB and RTC Decision was already Kalinga-Apayao), it would be cutting through a portion of Nueva Era. As the law is written so must it be applied. Dura
lex sed lex!29

The CA likewise held that the province Abra was not located between Marcos and Kalinga-Apayao; and that Marcos would not encroach upon a portion of Abra for it to
be bounded by Kalinga-Apayao, to wit:

Nueva Era's contention that to lay out the eastern jurisdiction of Marcos to the boundary line between Ilocos Norte and Mount ain Province (Kalinga-Apayao)
would mean annexing part of the municipality of Itnig, province of Abra to Marcos as Abra is between Ilocos Norte and Mountain Province is geographically
 erroneous. From Nueva Era's own map of Region 1, which also depicts the locations of Kalinga-Apayao, Abra, Mountain Province, Benguet and Nueva
Vizcaya after the partition of the old Mountain Province into the provinces of Kalinga-Apayao, Ifugao, Mountain Province and Benguet, the province of Abra is
situated far to the south of Kalinga Apayao and is between the latter and the present Mountain Province, which is farther south of Abra. Abra is part of the
eastern boundary of Ilocos Sur while Kalinga-Apayao is the eastern boundary of Ilocos Norte. Hence, in no way will the eastern boundary of the municipality
of Marcos encroach upon a portion of Abra. 30

However, Marcos' claim over the alleged isolated northern portion of Nueva Era was denied. The CA ruled:

Going now to the other area involved, i.e., the portion of Sto. Niño that is separated from its mother town Nueva Era and now lies east of the municipalities of
Solsona and Dingras and north of Marcos, it bears stressing that it is not included within the area of Marcos as defined by l aw. But since it is already
detached from Sto. Niño, Marcos is laying claim to it to be integrated into its territory by the SP because it is contiguous to a portion of said municipality.

We hold that the SP has no jurisdiction or authority to act on the claim, for it will necessarily substantially alter the north eastern and southern boundaries of
Marcos from that defined by law and unduly enlarge its area. Only Congress can do that. True, the SP may substantially alter the boundary of
a barangay within its jurisdiction. But this means the alteration of the boundary of a barangay in relation to another barangay within the same
municipality for as long as that will not result in any change in the boundary of that municipality. The area in dispute therefore remains to be a part of Sto.
Niño, a barangay of Nueva Era although separated by the newly created Marcos town pursuant to Section 7(c) of the 1991 Local Government Code which
states:

SEC. 7. Creation and Conversion. - As a general rule, the creation of a local government unit or its conversion from one level to another shall be
based on verifiable indicators of viability and projected capacity to provide services, to wit:

xxxx

(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local government unit independent of the
others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet
the requirements of its populace. 31

The CA also expressed the view that Marcos adopted the wrong mode of appeal in bringing the case to it. The case, according t o the CA, was appealable only to the
RTC. Nonetheless, despite its pronouncement that the case was dismissible, the CA took cognizance of the same by treating it as one for certiorari, to wit:

A final word. At the outset, we agonized over the dilemma of choosing between dismissing outright the petition at bar or entertaining it. This is for the simple
reason that a petition for review is a mode of appeal and is not appropriate as the Local Government Code provides for the remedy of appeal in boundary
disputes only to the Regional Trial Court but not any further appeal to this Court. Appeal is a purely statutory right. It cannot be exercised unless it is
expressly granted by law. This is too basic to require the citation of supporting authority.

xxxx

By the same token, since the Local Government Code does not explicitly grant the right of further appeal from decisions of the RTCs in boundary disputes
between or among local government units, Marcos town cannot exercise that right from the adverse decision of the RTC of Ilocos Norte. Nonetheless,
because of the transcendental legal and jurisdictional issues involved, we solved our inceptive dilemma by treating the petition at bar as a special civil action
for certiorari.32

Nueva Era was not pleased with the decision of the CA. Hence, this petition for review on certiorari under Rule 45.

Issues

Nueva Era now raises the following issues:

a) Whether or not, the Court of Appeals has jurisdiction on the Petition for Review on Appeal, since Sec. 119 of the Local Government Code, which provides
that "An appeal to the Decision of the Sangguniang Panlalawigan is exclusively vested to the Regional Trial Court, without further Appeal to the Court of
Appeals";

b) Whether or not, the Court of Appeals gravely abused its discretion, in treating the Petition for Review On Appeal, filed under Rule 45, Revised Rules of
Court, as a Petition for Certiorari, under Rule 65 of the Revised Rules of Court;

c) Whether or not, the Court of Appeals erred in its appreciation of facts, in declaring that MARCOS East is not coterminous with the Eastern boundary of its
mother town-Dingras. That it has no factual and legal basis to extend MARCOS territory beyond Brgys. Agunit (Ferdinand) and Culao (Elizabeth) of Marcos,
and to go further East, by traversing and disintegrating Brgy. Sto. Niño, and drawing parallel lines from Sto. Niño, there lies Abra, not Mt. Province or Kalinga-
Apayao. 33

Basically, there are two (2) issues to resolve here: (1) whether or not the mode of appeal adopted by Marcos in bringing the case to the CA is proper; and (2) whether or
not the eastern boundary of Marcos extends over and covers a portion of Nueva Era.

Our Ruling

Marcos correctly appealed the RTC judgment via petition for review under Rule 42.

Under Section 118(b) of the Local Government Code, "(b)oundary disputes involving two (2) or more municipalities within the s ame province shall be referred for
settlement to the sangguniang panlalawigan concerned." The dispute shall be formally tried by the said sanggunian in case the disputing municipalities fail to effect an
amicable settlement.34

The SP of Ilocos validly took cognizance of the dispute between the parties. The appeal of the SP judgment to the RTC was lik ewise properly filed by Marcos before the
RTC. The problem, however, lies in whether the RTC judgment may still be further appealed to the CA.

The CA pronounced that the RTC decision on the boundary dispute was not appealable to it. It ruled that no further appeal of the RTC decision may be made pursuant to
Section 119 of the Local Government Code35 which provides:
 SECTION 119. Appeal. - Within the time and manner prescribed by the Rules of Court, any party may elevate the decision of the sanggunian concerned to
the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing
thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes.

The CA concluded that since only the RTC was mentioned as appellate court, the case may no longer be further appealed to it. The CA stated that "(a)ppeal is a purely
statutory right. It cannot be exercised unless it is expressly granted by law. This is too basic to require the citation of supporting authority." 36

The CA, however, justified its taking cognizance of the case by declaring that: "because of the transcendental legal and jurisdictional issues involved, we solved our
inceptive dilemma by treating the petition at bar as a special civil action for certiorari."37

The CA erred in declaring that only the RTC has appellate jurisdiction over the judgment of the SP.

True, appeal is a purely statutory right and it cannot be exercised unless it is expressly granted by law. Nevertheless, the CA can pass upon the petition for review
precisely because the law allows it.

Batas Pambansa (B.P.) Blg. 129 or the Judiciary Reorganization Act of 1980, as amended by R.A. No. 7902, 38 vests in the CA the appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, among others. 39 B.P.
Blg. 129 has been further supplemented by the 1997 Rules of Civil Procedure, as amended, which provides for the remedy of app eal via petition for review under Rule
42 to the CA in cases decided by the RTC in the exercise of its appellate jurisdiction.

Thus, the CA need not treat the appeal via petition for review filed by Marcos as a petition for certiorari to be able to pass upon the same. B.P. Blg. 129, as amended,
which is supplemented by Rule 42 of the Rules of Civil Procedure, gives the CA the authority to entertain appeals of such judgments and final orders rendered by the
RTC in the exercise of its appellate jurisdiction.

At the time of creation of Marcos, approval in a plebiscite of the creation of a local government unit is not required.

Section 10, Article X of the 1987 Constitution provides that:

No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the
criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. 40

The purpose of the above constitutional provision was acknowledged by the Court through Justice Reynato S. Puno in Miranda v. Aguirre,41 where it was held that:

The 1987 Constitution, more than any of our previous Constitutions, gave more reality to the sovereignty of our people for it was borne out of the people
power in the 1986 EDSA revolution. Its Section 10, Article X addressed the undesirable practice in the past whereby local government units were created,
abolished, merged or divided on the basis of the vagaries of politics and not of the welfare of the people. Thus, the consent of the people of the local
government unit directly affected was required to serve as a checking mechanism to any exercise of legislative power creating, di viding, abolishing, merging
or altering the boundaries of local government units. It is one instance where the people in their sovereign capacity decide on a matter that affects them -
direct democracy of the people as opposed to democracy thru people's representatives. This plebiscite requirement is also in accord with the philosophy of
the Constitution granting more autonomy to local government units.42

Nueva Era contends that the constitutional and statutory 43 plebiscite requirement for the creation of a local government unit is applicable to this case. It posits that the
claim of Marcos to its territory should be denied due to lack of the required plebiscite.

We agree with Nueva Era's contention that Marcos' claim over parts of its territory is not tenable. However, the reason is not the lack of the required plebiscite under the
1987 and 1973 constitutions and the Local Government Code of 1991 but other reasons as will be discussed below.

At the time Marcos was created, a plebiscite was not required by law to create a local government unit. Hence, Marcos was val idly created without conducting a
plebiscite. As a matter of fact, no plebiscite was conducted in Dingras, where it was derived.

Lex prospicit, non respicit. The law looks forward, not backward. 44 It is the basic norm that provisions of the fundamental law should be given prospective application only,
unless legislative intent for its retroactive application is so provided. 45

In the comparable case of Ceniza v. Commission on Elections 46 involving the City of Mandaue, the Court has this to say:

Petitioners assail the charter of the City of Mandaue as unconstitutional for not having been ratified by the residents of the city in a plebiscite. This contention
is untenable. The Constitutional requirement that the creation, division, merger, abolition, or alteration of the boundary of a province, c ity, municipality, or
barrio should be subject to the approval by the majority of the votes cast in a plebiscite in the governmental unit or units affected is a new requirement that
came into being only with the 1973 Constitution. It is prospective in character and therefore cannot affect the creation of the City of Mandaue which came into
existence on June 21, 1969.47 (Citations omitted and underlining supplied).

Moreover, by deciding this case, We are not creating Marcos but merely interpreting the law that created it. Its creation was already a fait accompli. Therefore, there is no
reason for Us to further require a plebiscite.

As pointed out by Justice Isagani Cruz, to wit:

Finally, it should be observed that the provisions of the Constitution should be given only a prospective application unless the contrary is clearly intended.
Were the rule otherwise, rights already acquired or vested might be unduly disturbed or withdrawn even in the absence of an unmistakable intention to place
them within the scope of the Constitution. 48

No part of Nueva Era's territory was taken for the creation of Marcos under R.A. No. 3753.

Only the barrios (now barangays) of Dingras from which Marcos obtained its territory are named in R.A. No. 3753. To wit:

SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas and Agunit in the Municipality of Dingras, Province of Ilocos Norte, are hereby
separated from the said municipality and constituted into a new and separate municipality to be known as the Municipality of Marcos, with the following
boundaries:
Since only the barangays of Dingras are enumerated as Marcos' source of territory, Nueva Era's territory is, therefore, excluded.

Under the maxim expressio unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. If a statute enumerates the things
upon which it is to operate, everything else must necessarily and by implication be excluded from its operation and effect. 49 This rule, as a guide to probable legislative
intent, is based upon the rules of logic and natural workings of the human mind. 50

Had the legislature intended other barangays from Nueva Era to become part of Marcos, it could have easily done so by clear and concise language. Where the terms
are expressly limited to certain matters, it may not by interpretation or construction be extended to other matters. 51 The rule proceeds from the premise that the legislature
would not have made specified enumerations in a statute had the intention been not to restrict its meaning and to confine its terms to those expressly mentioned. 52

Moreover, since the barangays of Nueva Era were not mentioned in the enumeration of barangays out of which the territory of Marcos shall be set, their omission must
be held to have been done intentionally. This conclusion finds support in the rule of casus omissus pro omisso habendus est, which states that a person, object or thing
omitted from an enumeration must be held to have been omitted intentionally. 53

Furthermore, this conclusion on the intention of the legislature is bolstered by the explanatory note of the bill which paved the way for the creation of Marcos. Said
explanatory note mentioned only Dingras as the mother municipality of Marcos.

Where there is ambiguity in a statute, as in this case, courts may resort to the explanatory note to clarify the ambiguity an d ascertain the purpose and intent of the
statute.54

Despite the omission of Nueva Era as a mother territory in the law creating Marcos, the latter still contends that said law i ncluded Nueva Era. It alleges that based on the
description of its boundaries, a portion of Nueva Era is within its territory.

The boundaries of Marcos under R.A. No. 3753 read:

On the Northwest, by the barrios Biding-Rangay boundary going down to the barrios Capariaan-Gabon boundary consisting of foot path and feeder road; on
the Northeast, by the Burnay River which is the common boundary of barrios Agunit and Naglayaan; on the East, by the Ilocos Norte-Mt. Province boundary;
on the South, by the Padsan River which is at the same time the boundary between the municipalities of Banna and Dingras; on the West and Southwest, by
the boundary between the municipalities of Batac and Dingras.

Marcos contends that since it is "bounded on the East, by the Ilocos Norte-Mt. Province boundary," a portion of Nueva Era formed part of its territory because, according
to it, Nueva Era is between the Marcos and Ilocos Norte-Mt. Province boundary. Marcos posits that in order for its eastern side to reach the Ilocos Norte-Mt. Province
boundary, it will necessarily traverse the middle portion of Nueva Era.

Marcos further claims that it is entitled not only to the middle portion of Nueva Era but also to its northern portion which, as a consequence, was isolated from the major
part of Nueva Era.

We cannot accept the contentions of Marcos.

Only Dingras is specifically named by law as source territory of Marcos. Hence, the said description of boundaries of Marcos is descriptive only of the listed barangays of
Dingras as a compact and contiguous territory.

Considering that the description of the eastern boundary of Marcos under R.A. No. 3753 is ambiguous, the same must be interpreted in light of the legislative intent.

The law must be given a reasonable interpretation, to preclude absurdity in its application. 55 We thus uphold the legislative intent to create Marcos out of the territory of
Dingras only.

Courts must give effect to the general legislative intent that can be discovered from or is unraveled by the four corners of the statute, and in order to discover said intent,
the whole statute, and not only a particular provision thereof, should be considered. 56 Every section, provision or clause of the statute must be expounded by reference to
each other in order to arrive at the effect contemplated by the legislature. The intention of the legislator must be ascertai ned from the whole text of the law, and every
part of the act is to be taken into view. 57

It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very purpose for which they were passed. This Court has in many cases
involving the construction of statutes always cautioned against narrowly interpreting a statute as to defeat the purpose of t he legislature and stressed that it is of the
essence of judicial duty to construe statutes so as to avoid such a deplorable result (of injustice or absurdity) and that th erefore "a literal interpretation is to be rejected if
it would be unjust or lead to absurd results."58

Statutes are to be construed in the light of the purposes to be achieved and the evils sought to be remedied. Thus, in constr uing a statute, the reason for its enactment
should be kept in mind and the statute should be construed with reference to the intended scope and purpose. The court may consider the spir it and reason of the
statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers.59

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is partly REVERSED. The Decision of the Regional Trial Court in Ilocos Norte is
Reinstated.

SO ORDERED.
People v. Tamani1

Facts:

On February 14, 1963, the lower court found Tamani guilty of consummated and attempted murder. On February 25,
1963, Tamani’s counsel received a copy of the decision and consequently filed for a motion for reconsideration on March
1, 1963. It was denied. On July 13, 1963, the lower court sent a denial order to the counsel through his wife via registered
mail. On September 10, 1963, the said counsel appealed the lower court’s decision. Then, the appellees argued that
the appeal should be dismissed contending that the appeal should have been made up to July 24, 1963 which is the 15
day period of appeal from the date of notice and not from the date of promulgation. Thus, the appellees claimed that the
appeal was filed 47 days late.2

Issue:

Whether the 15-day period should commence from the date of promulgation or from the date of notice of the decision.

Held:

Appeal was dismissed. The 15-day period should commence from the date of promulgation.

Ratio:

Rule 122 of the Rules of Court provides:

SEC. 6. When appeal to be taken.— an appeal must be taken within fifteen (15) days from promulgation
or notice of the judgment or order appealed from. This period for perfecting an appeal shall be
interrupted from the time a motion for new trial is filed until notice of the order overruling the motion
shall have been served upon the defendant or his attorney.3

The assumption that the fifteen-day period should be counted from February 25, 1963, when a copy of the decision was
allegedly served on appellant's counsel by registered mail, is not well-taken. The word "promulgation" in section 6 should
be construed as referring to "judgment" while the word "notice" should be construed as referring to "order". That
construction is sanctioned by the rule of reddendo singula singulis: "referring each to each; referring each phrase or
expression to its appropriate object", or "let each be put in its proper place, that is, the words should be taken
distributively". Therefore, when the order denying appellant's motion for reconsideration was served by registered mail
on July 13th on appellant's counsel, he had only 1 day within which to file his notice of appeal and not 11 days. Appellant
Tamani's notice of appeal, filed on September 10, 1963, was 58 days late. 4

1
G.R. Nos. L-22160 & L-22161, January 21, 1974.
2
Id.
3
Rules of Court, Rule 122, § 6.
4
Id. at 1.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. L-22160 & L-22161 January 21, 1974

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
TEODORO TAMANI, accused-appellant.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Felicisimo R. Rosete and Solicitor Norberto P. Eduardo for plaintiff-
appellee.

Constancio S. Vitug for accused-appellant.

AQUINO, J.: 1äwphï1.ñët

This is an appeal of defendant Teodoro Tamani y Marinay from the decision of the Court of First Instance of Isabela, (a) sentencing him to
"life imprisonment" for the murder of Jose Siyang and ordering him to indemnify the victim's heirs in the sum of P6,000 and (b) further
sentencing him to an indeterminate penalty of two (2) years, four (4) months and one (1) day of prision correccional to eight (8) years and
twenty-one (21) days of prision mayor for the attempted murder of Eduardo Domingo and ordering him to indemnify the victim in the sum
of P2,000 (Crim. Cases Nos. II-192 and II-198).

Issue as to dismissal of the appeal.—After the appellant had filed his brief, the Solicitor General filed a motion to dismiss the appeal on
the ground that the notice of appeal was forty-seven days late. Appellant's counsel de oficio did not oppose the motion. Action thereon
was "deferred until this case is considered on the merits". (Resolution of March 7, 1967). The motion to dismiss is reiterated in appellee's
brief. That preliminary question should first be resolved.

The lower court's decision convicting defendant Tamani was promulgated on February 14, 1963. A copy thereof was served on his
counsel on February 25, 1963. On March 1, 1963 he filed a motion for reconsideration. It was denied. A copy of the order of denial was
served by registered mail on July 13, 1963 on defendant's counsel through his wife. He had eleven days or up to July 24, 1963 within
which to appeal (if the reglementary fifteen-day period for appeal should be computed from the date of notification and not from the date
of promulgation of the decision). He filed his notice of appeal only on September 10, 1963 or forty eight days from July 24th.

Silvestre B. Bello, defendant's counsel, filed a sworn statement, accompanying the notice of appeal. In that affidavit, he stated that the
trial court's order, denying his motion for reconsideration, although admittedly received by his wife on July 13th, was never brought to
his attention and that he came to know of the order only on September 7th when he verified the expediente of the case and discovered
that an order of denial had been issued. He averred that his wife must have lost the envelope containing the order.

The trial court opined that the wife's affidavit should have been submitted and that the defendant should have filed a motion praying that
the tardy appeal be given due course.

After considering the gravity of the two penalties imposed on the accused and the earnest plea of defense counsel, the trial court gave
due course to the appeal without prejudice to the right of the Solicitor General to "raise the question of jurisdiction on the ground of a
very much belated appeal".

Rule 122 of the Rules of Court provides:

SEC. 6. When appeal to be taken.—An appeal must be taken within fifteen (15) days from promulgation or notice of the
judgment or order appealed from. This period for perfecting an appeal shall be interrupted from the time a motion for
new trial is filed until notice of the order overruling the motion shall have been served upon the defendant or his
attorney.

The word "must" in section 6 is synonymous with "ought". It connotes compulsion or mandatoriness. The clear terms of section 6 leave
no room for doubt that the appeal should be effected within fifteen days from the promulgation of the judgment.

The counsel for appellant Tamani must have so understood that import of section 6 (which is confirmed by the practice in trial courts) as
evinced by the fact that his motion for reconsideration was filed on March 1st, which was the fifteenth or last day of the reglementary
period.

The assumption that the fifteen-day period should be counted from February 25, 1963, when a copy of the decision was allegedly served
on appellant's counsel by registered mail, is not well-taken. The word "promulgation" in section 6 should be construed as referring to
"judgment" (see section 6 of Rule 120), while the word "notice" should be construed as referring to "order". That construction is
sanctioned by the rule of reddendo singula singulis: "referring each to each; referring each phrase or expression to its appropriate
object", or "let each be put in its proper place, that is, the words should be taken distributively" (76 C. J. S. 175).
Therefore, when the order denying appellant's motion for reconsideration was served by registered mail on July 13th on appellant's
counsel, he had only one (1) day within which to file his notice of appeal and not eleven days. That construction is an application by
analogy or in a suppletory character of the rule governing appeals in civil cases which is embodied in section 3, Rule 41 of the Rules of
Court.

Appellant Tamani's notice of appeal, filed on September 10, 1963, was fifty-eight days late. A regoristic application of section 6 justifies
the dismissal of his appeal, as prayed for by the prosecution.

However, considering that appellants right to seek a review of his case was lost by reason of his counsel's inadvertence and considering
further that the briefs have been submitted, the Court has resolved to review the record to obviate any possible miscarriage of justice
(Cf. Marbury vs. Madison, 1 Cranch 135, 2 L. ed. 60, where Chief Justice Marshall discussed the merits of a mandamus action although
the Court held that it had no power to issue that writ).

Uncontroverted facts.—There is no dispute that sometime after twilight on the night of June 11, 1953 in the place called Centro at the
commercial street of Angadanan, Isabela, Jose Siyang (Syang), the town assistant sanitary inspector, was mortally wounded by gunfire.
Death resulted from internal hemorrhage caused by the following four (4) through and through gunshot wounds which followed an
oblique direction from the point of entry to exit:

1. Entry, chest about 2-½ inches from level of the nipple. Exit, at the back level of twelfth dorsal vertebrae to the right
side.

2. Entry, above right clavicle (suprasternal notch) middle portion. Exit, at the back at the level of the right angle of
scapula.

3. Entry, anterior aspect of left shoulder. Exit, at the back of shoulder about 2-½ inches from tip of armpit (left side).

4. Entry, anterior aspect of right forearm middle in slight oblique direction from the point of entry to exit. (Exh. F.
Certificate issued by Pablo H. Gaffud, M.D.).

By means of the same gunfire, an attempt was made to kill Mayor Eduardo Domingo. He sustained a through and through wound in the
palm of his right hand which caused his confinement in the Isabela Provincial Hospital from June 11 to 22, 1953 (Exh. E, Certificate
issued by J. L. Maddela, Sr., Resident Physician).

More than three years from the time that tragedy transpired, or on October 2 and 3, 1956, appellant Tamani signed and thumbmarked two
sworn statements before the agents of the National Bureau of Investigation (NBI), wherein he confessed that he was the one who shot
Siyang and Mayor Domingo; that his companion on the occasion of the shooting was Domingo Cadawan; that on the morning of June 11,
1953 he and Cadawan were dismissed as policemen and that Vice-Mayor Villamor Tamani, Matias de la Fuente and Rufino de los Santos
instigated him to liquidate Mayor Domingo (Exh. A and B). The two statements are in English, a language which Tamani understands (19
tsn II Valencia).

Inasmuch as the crimes, murder and attempted murder, have been proven, meaning that the corpus delicti had been established, and
appellant Tamani had confessed having committed the same, there should be an airtight case against him. Rule 133 of the Rules of Court
provides:

SEC. 3. Extrajudicial confession, not sufficient ground for conviction.—An extrajudicial confession made by an
accused, shall not be sufficient ground for conviction, unless corroborated by evidence of corpus delicti. (Same as
See. 96, Rule 123, 1940 Rules of Court).

Tamani's confession is corroborated by the undisputed evidence of the corpus delicti.

However, during the trial, he repudiated his confession. He assailed its voluntariness. He set up the defense of alibi. Through his
principal witness, Francisco Siyang, the father of the deceased Jose Siyang, he endeavored to prove that the latter was shot by
Policemen Gaspar Ibarra and Melchor Tumaneng. Thus, a simple case, where the extrajudicial confession is corroborated by evidence of
the corpus delicti, became controversial, complicated and perplexing.

Version of the prosecution.—In addition to Tamani's extrajudicial confession (Exh. A and B), the prosecution offered the testimonies of
complainant Domingo, Doctor Pablo H. Gaffud, Juana Vittori Vda. de Ibarra, Emiteria Ibarra, Ilustre D. Mendoza, Mariano G. Almeda,
Teodoro Colobong and Martin Caniero.

The prosecution's evidence discloses that Domingo was the mayor of Angadanan since 1947. Prior to June 11, 1953, he was suspended
from office by the Governor. During Domingo's suspension, Villamor Tamani, the vice-mayor, functioned as acting mayor. He appointed
as policeman his second cousin, appellant Teodoro Tamani who was then twenty-four years old. The vice-mayor used to appoint
Teodoro Tamani as policeman whenever Domingo was suspended. Teodoro Tamani resigned as policeman shortly before June 11th. In
the afternoon of June 10th, Domingo was reinstated and he reassumed the office of mayor.

The reinstatement of Domingo was obviously resented by Vice-Mayor Villamor Tamani because it meant the termination of his tenure as
acting mayor. On June 10th Teodoro Tamani and Domingo Cadawan (also a former policeman like Teodoro Tamani) were summoned for
a conference by the vice-mayor to his house at Barrio Aniog, Angadanan. Present at the conference were the vice-mayor and his men,
Matias de la Fuente and Rufino de los Santos. It was decided at that meeting that Mayor Domingo should be liquidated. De la Fuente
handed to Teodoro Tamani a carbine.

Appellant Tamani and Cadawan spent the night in the vice-mayor's house. On the following morning of June 11th, Cadawan was sent on
a mission to the poblacion of Angadanan to ascertain the whereabouts of the quarry, Mayor Domingo. At around seven o'clock in the
evening, Cadawan returned to the vice-mayor's house and apprised appellant Tamani that Domingo was in front of the store of Pedro Pua
at the town's commercial street.

Cadawan and Teodoro Tamani proceeded with dispatch to the poblacion, making shortcuts by passing through the yards of neighboring
houses. Tamani carried the carbine. On entering the yard of the house adjoining Pedro Pua's store, Cadawan stumbled. The resulting
noise attracted the attention of the owner of the house, Mrs. Ibarra, who focused a flashlight at Tamani and, on recognizing him, uttered
his nickname, Doro. She had known Doro since childhood. She saw that he was carrying a gun.

She had just taken her supper. She and her daughter, Emiteria Ibarra, were sitting on the veranda. It was while chewing her buyo that
Mrs. Ibarra heard somebody trip in her yard on the cement floor intended as the base of a tank. Almost simultaneously, she heard the
grunting (ngik-ngik) of her pig. When she trained her flashlight on the intruder and recognized Doro (appellant Tamani) with a gun and
called him, the latter answered, "Tia" (Aunt).

Mrs. Ibarra saw that Teodoro Tamani passed under the eaves of her house, crossed the bamboo fence separating her from the vacant lot
of Pedro Pua and proceeded to the corner of the vacant lot near the gate of galvanized iron sheets and the edge of the cemented
pavement which was in front of Pedro Pua's store (see sketch, Exh. C). As appellant Tamani passed the fence, he produced a "cracking
noise". Emiteria Ibarra testified:

Q. Who say (saw) Teodoro Tamani? — A. My mother and myself, sir.

Q. What was the appearance of Teodoro Tamani when you saw him after your mother lighted him
with the light of the flashlight? — A. When my mother flashed the flashlight towards him at the
same time my mother called, "Doro" and then he answered "TIA" and he was carrying a firearm, sir.

Q. Why do you know that when you and your mother heard the cracking of the fence Teodoro
Tamani went inside the fence? — A. We know it because of the cracking of the fence, besides that
we saw him proceeded towards the fence, sir.

Q. After Teodoro Tamani entered that fence as you say, what happened, if any? — A. He proceeded
towards the gate of the Chinese, sir.

Q. What happened, if any, after Teodoro Tamani went to that gate? — A. Upon arriving at the gate
we heard the gun reports, sir.

Q. How many gun reports, if you remember? — A. Maybe eight (8) or nine (9), sir.

Q. Do you know where the gun reports came from? — A. Yes, sir, because I saw the sparks of the
bullets when they were fired, sir.

Q. Did you know who fired? — A. I know, sir.

Q. Who? — A. Teodoro Tamani, because he was the only one who entered with a gun, sir (74-75 tsn
Jan. 16, 1959).

Q. Who fired? — A. Teodoro Tamani, sir.

Q. Why do you say that he was the one who fired? — A. Because the gun reports came from the
place where he stood at the gate, sir (77 tsn Jan. 16, 1959).

From the place where Cadawan and Tamani had positioned themselves, they had a good view, through the holes of the gate, of Mayor
Domingo and his group in front of Pua's store (Exh. A). The mayor was engaged in conversation with a group of persons on the
cemented pavement ( pasillo of sidewalk) in the front of the store in Centro at the town's commercial street. Standing near the wall of the
store were Hermoso Alicam, Liberato Tanam, Primitivo Tallog, Martin Caniero, Toedoro Colobong, Gaspar Ibarra, Francisco Siyang and
Gonzalo Siyang. Mayor Domingo was standing in front of the group, walking and gesticulating as he talked. Jose Siyang was leaning
against a post somewhat apart from the group (Exh. C, 6 tsn March 3, 1959).

Mayor Domingo was recounting his experience in Manila during his suspension. He was standing on the culvert which bridged the canal
separating the pasillo and the street (See Exh. C). As he talked, he gestured and swung his hands up and down with palms open, facing
Pua's store and his audience. Jose Siyang, who was apart from the group of listeners, was about two to three meters on Mayor
Domingo's right, leaning one of the post which supported the roof shading the pasillo or cemented pavement. Jose Siyang was in line
with Mayor Domingo while, in contrast, the group of listeners was standing side by side close to the galvanized iron wall of the store,
facing Mayor Domingo who was telling stories.

In the meanwhile, Teodoro Tamani and Cadawan were standing on the vacant lot in close proximity to the gate of galvanized iron sheets
where the pasillo ended. Cadawan opened a hole in the gate, about three inches in diameter, through which Teodoro Tamani inserted the
barrel of the carbine. Tamani fired at Mayor Domingo who was the target. Jose Siyang, a second cousin of Teodoro Tamani, like Vice-
Mayor Tamani, "was farther on the right side of Mayor Domingo along the line of fire" (Exh. A). Appellant Tamani fired two volleys. Mrs.
Ibarra and her daughter saw from the veranda the flashes of fire emitted by the carbine of Teodoro Tamani. They left the veranda and
<äre||anº•1àw>

went inside the house.

At the moment the first volley of gunshots was fired, which was between seven and seven-thirty, Mayor Domingo had raised his right
hand. The palm of his right hand was hit. Jose Siyang was also hit. Domingo and his listeners dispersed and sought refuge inside Pua's
store. While Domingo ran for cover, a second volley was fired. The volley's came from behind the iron gate on the vacant lot or "from the
southwest end" of the cemented pavement behind the gate. While inside the store, Mayor Domingo heard the moaning of someone in an
agony of pain. That person turned out to be Jose Siyang who had sustained four gunshot wounds and was hovering between life and
death. Siyang died before eleven o'clock that same night.

Constabulary soldiers and peace officers arrived at the scene of the shooting and conducted an investigation. Mayor Domingo was taken
to the provincial hospital. Doctor Gaffud conducted an autopsy on the body of Jose Siyang in the municipal building. On the following
day empty shells were found by the Constabulary soldiers near the galvanized iron gate (6 tsn. III Calixto).

Teodoro Tamani and Cadawan left the scene of the shooting. They ran, passing the same route that they had taken in coming, and went
direct to the house of Vice-Mayor Villamor Tamani in Barrio Aniog. Teodoro Tamani stayed overnight in the house of the vice-mayor.
Cadawan, who reported to the vice-mayor that Mayor Domingo was dead, proceeded to Barrio Clakcab and returned the murder weapon
to Matias de la Fuente.

The trial court accepted the foregoing version as the basis of the judgment of conviction. It noted that in 1956 when NBI Agent Mariano G.
Almeda arranged a confrontation between Teodoro Tamani and Mrs. Ibarra, she identified him as the person whom she saw in her yard in
the evening of June 11, 1953. During the confrontation, Tamani trembled, became pale and remained silent.

Teodoro Tamani sometime after the shooting went into hiding at Cabagan and Santo Tomas, Isabela, where he was arrested by Mayor
Domingo by virtue of a warrant of arrest issued in Criminal Cases Nos. 245 and 246 of the justice of the peace court of Angadanan (Exh.
3, 4, 5 and 6, 11 tsn March 3, 1959). Appellant went into hiding although his wife was about to deliver her baby.

As to the motive for shooting Mayor Domingo, Teodoro Tamani explained that Vice-Mayor Villamor Tamani, his second cousin, ordered
the liquidation of the mayor so that he could not assume office and the vice-mayor would become mayor (Exh. A). Appellant Tamani was
chosen to execute that task because he had lost his job as policeman when Mayor Domingo was reinstated (Exh. A, p. 2).

On the other hand, Mayor Domingo said that when Teodoro Tamani was still a policeman, the mayor had scolded him for not reporting
for work and for working as cook of Vice-Mayor Villamor Tamani and plowing his field. The other motive was that since Teodoro Tamani
is a relative of the vice-mayor, who was a "political enemy" of the mayor, he (appellant Tamani) could act as a policeman when the vice-
mayor became mayor after the elimination of the incumbent mayor (11 tsn March 3, 1959).

On the credibility of the prosecution eyewitness, Mrs. Ibarra, the trial judge made the following findings:

The Court concentrated attention on the attitude and observed the gestures, features, demeanor and manner of
testifying and the emphasis, gestures and inflection of the voice of prosecution witness Juana Vitorri de Ibarra during
all the time she was on the witness stand in the direct and cross-examination, and her answers were prompt, concise,
responsive to interrogatories, outspoken, and entirely devoid of evasion or any semblance of shuffling, and her entire
testimony was given with calm, self-possession, an erect front, and unhesitating accent. The Court is convinced of her
sincerity and credibility and the truthfulness of her testimony, in great contrast with defendant's manner of testifying.
(pp. 859-60, Record).

The trial court concluded that the intended victim was Mayor Domingo and not Jose Siyang.

Appellant's version and contentions.—In this appeal appellant's counsel de oficio argues that the trial court erred (1) in disbelieving
Tamani's alibi; (2) in assuming that his extrajudicial confession was voluntary; (3) in not giving credence to the testimony of defense
witness Francisco Siyang, that his son, Jose Siyang, was shot by Policemen Gaspar Ibarra and Melchor Tumaneng; (4) in giving
credence to circumstantial evidence, and (5) in the alternative, in not holding that appellant Tamani committed the complex crime of
homicide with lesiones grave.

Appellant Tamani, having abjured his confession, gave the following version of the case by means of his testimony and the testimony of
his other witness, Francisco Siyang(Syang):

Francisco Siyang was the father of Jose Siyang, the town sanitary inspector, who with his wife and four children, resided with Francisco
Siyang at his house in Centro, Angadanan. Francisco Siyang is an uncle of Vice-Mayor Villamor Tamani. At around six-thirty in the
evening of June 11, 1953 Venancio Respicio dropped at the house of Jose Siyang and invited him for a walk. Francisco Siyang followed
his son to the store of Pedro Pua which was around four blocks from their house.

Francisco Siyang noticed that Jose Siyang was in front of Pua's store with Mayor Domingo, Policemen Alfonso Gomez, Gaspar Ibarra,
Graciano Manguelod and Melchor Tumaneng, teachers Primitivo Tallog, Teodoro Colobong and Martin Caniero, Mariano Dalodad (a
barber) and Juaning Aliangan, a farmer. Jose Siyang was leaning against a post, obliquely at the right of Mayor Domingo. Francisco
Siyang allegedly approached Jose and told him that his wife and children were waiting for him so that they could take supper. Jose
answered "yes, father".

While Francisco Siyang and Jose Siyang were standing side by side in front of Pua's store, Mayor Domingo made a signal by stretching
and raising his hand with open palm and bringing it down. Suddenly, Policeman Ibarra, who was standing in front of Jose Siyang, fired
his carbine at the latter, hitting Jose Siyang in the chest. Policeman Tumaneng followed by firing with his carbine successive shots at
Jose Siyang, hitting the latter in the breast. Tumaneng was on the right side of Ibarra, obliquely facing Jose Siyang.

After Jose Siyang fell, Francisco Siyang went to his succor and raised him. Jose Siyang told his father: "Father, I am dying, my children."
When Jose Siyang was brought to the municipal building, he was breathing feebly. He could not talk anymore. He expired in the
municipal building. His body was brought home by Francisco Siyang.

In the morning of June 12th, Vice-Mayor Villamor Tamani with some Constabulary soldiers arrived at the house of Francisco Siyang while
the remains of Jose Siyang still lay in state. After the burial of Jose Siyang in the afternoon, a Constabulary sergeant investigated
Francisco Siyang and took him to Ilagan, where he was further investigated. He gave a sworn statement accusing Ibarra and Tumaneng
of having killed Jose Siyang (Exh. 1).
On the basis of that statement, a criminal complaint for the murder of Jose Siyang was filed on June 20, 1953 by Constabulary Lieutenant
Tomas P. Gonzales in the justice of the peace court of Angadanan against Venancio Respicio and Policemen Ibarra, Tumaneng and
Manguelod (Exh. 2, Crim. Case No. 244). The complaint was dismissed on August 12, 1953.

Other complaints for the murder of Jose Siyang and for frustrated murder perpetrated on Mayor Domingo were filed in the justice of the
peace court against Villamor Tamani, Teodoro Tamani, Domingo Cadawan, Rufino de los Santos and Matias de la Fuente but they were
later dismiss (Exh. 3 to 6, Crim. Cases Nos. 245 and 246).

In October, 1956 Mariano G. Almeda of the NBI headed a team of agents that investigated the shooting of Jose Siyang and Mayor
Domingo. Francisco Siyang was investigated orally in Ilagan by Almeda. The investigation was interrupted by former Congressman
Samuel Reyes. It was not finished.

Appellant Tamani, in support of his alibi, testified that Jose Siyang was his second cousin. Tamani was a resident of Centro in
the poblacion of Angadanan. At around three o'clock in the afternoon of June 11, 1953 he was in the house of Vice-Mayor Villamor
Tamani in Barrio Aniog. He wanted a recommendation for a job in the Angadanan Sawmill. The place known as Centro in the poblacion,
where Pedro Pua's store is located, is around two kilometers from Barrio Aniog. Vice-Mayor Tamani gave to Teodoro Tamani the
recommendation between four and five o'clock. The vice-mayor prevailed upon Teodoro Tamani to stay and they agreed to go to town on
the following day.

So, Teodoro Tamani slept in the house of his cousin, the vice-mayor, on the night of June 11th. On the morning of June 12th, Vice-Mayor
Tamani and Teodoro Tamani went together to Centro in the poblacion. When they reached Centro, they learned of Jose Siyang's death,
for which reason they viewed his body in the house of Francisco Siyang. They arrived at Siyang's house at around eight and eight-thirty
in the morning. They learned that Jose Siyang was shot in front of Pedro Pua's store.

Teodoro Tamani did not go to the Angadanan Sawmill on June 12th. He delivered the letter of recommendation on June 13th to the
manager of the sawmill. He worked in the sawmill as laborer for two weeks only. He resigned due to the heavy work. He could not
remember the name of the manager of the sawmill.

He denied that he shot Jose Siyang and Mayor Domingo. He did not participate in the commission of the crime. He said that he was in the
house of Vice-Mayor Tamani on the night of June 11th.

On October 2, 1956 NBI Agent Almeda picked him up from his house for questioning in connection with the shooting of Siyang and
Mayor Domingo. Almeda was accompanied by Alfonso Salvador, a Constabulary soldier. Tamani was brought to the municipal building.
From there, he was taken to Ilagan. He was brought by Almeda to the provincial jail at Calamagui, Isabela, where he (Tamani) was
delivered to Pedro Tamayo, a prisoner who was acted as mayor of the cell (brigada). Tamani was formally received by the provincial
guard from Almeda at around six and six-thirty in the evening of October 2nd.

Upon delivering Tamani to Tamayo, Almeda allegedly told Tamayo: "Bahala kayo rian, Tamayo, at ako ang bahala sa iyo". Twenty
minutes later, Pedro Tamayo, Juanito Dassig, Juan Pecano, Ernesto Castañeda and other convicts started maltreating Tamani. The
alleged maltreatment consisted of the following:

First, they ordered Tamani to squat on the cemented floor inside the cell (brigada).

Second, after squatting on the cement floor, they ordered Tamani to stand and then started boxing him for one hour.

Third, they removed all his clothings and put Tamani inside a drum where prisoners dropped their human waste. He
was required to stay inside the drum for five minutes, after which they brought him out and poured on him water to
was his body from the human waste.

Fourth, they made Tamani pulverized pepper and they placed the pulverized pepper in his anus, penis and testicles.

Tamani was maltreated because the tormentors wanted him to admit that he was the one who shot Jose Siyang and Mayor Domingo. As
he could not endure the maltreatment he admitted he had shot Siyang and Domingo. The maltreatment was stopped after he made the
admission.

Around ten to ten-thirty on that same night, Almeda returned to the jail and asked Tamayo: "Does he admit now?" Tamayo answered in
the affirmative. Almeda then took Tamani out of the jail and brought him to the second floor of Puring's Restaurant. Almeda called for NBI
Agent No. 101 who came out of a room with a typewriter. Agent No. 101 placed his typewriter on a table. Almeda told Tamani "Now, I am
going to take your statement that you shot Jose Siyang and Mayor Domingo."

At first Tamani told Almeda that he knew nothing about the shooting because he was in Barrio Aniog when Domingo and Siyang were
shot. Thereupon, Almeda told Tamani not to deny the shooting because Juana Vitorri Vda. de Ibarra recognized him when he stum bled
before the shooting at a place near the fence between the lots of Pedro Pua and Mrs. Ibarra. Tamani maintained his innocence about the
shooting.

Thereafter, Almeda and NBI Agent No. 101 slapped the face of Tamani. They brought him to a toilet. They pushed his head into the toilet
bowl (iniodoro). They held his hair and pushed his face toward the mouth of the toilet bowl for five minutes. When Tamani could not
endure the torture anymore, he told Almeda that he would admit the crime. Almeda and Agent No. 101 brought Tamani to the table on the
second floor of Puring's Restaurant. Almeda told Tamani: "You better admit now that you shot the two victims, that you took the gun
from Matias de la Fuente and that Villamor Tamani and Rufino de los Santos are the masterminds".

Tamani admitted that version for fear that he would again be maltreated. His affidavit, Exhibit A, was signed at Puring's Restaurant on the
night of October 2, 1956. The contents of Exhibit A "are all the versions of Director Almeda". Tamani admitted his signature and
thumbmarks in Exhibit A. On the following morning of October 3rd, Almeda and Agent No. 101 brought back Tamani to the jail.
Tamani admits that he signed Exhibit B also, his supplementary confession. However, he insists that he signed it on the night of October
2nd and not on October 3rd. He said that he never excluded Domingo Cadawan and that he never incriminated himself as the triggerman.
He might have signed Exhibit B in connection with his signing of Exhibit A on the night of October 2nd because when he signed Exhibit
A, there were several sheets of paper which he signed and thumbmarked. He allegedly did not know the contents of Exhibit B when he
affixed his signature thereon. He says that the incriminatory statements in Exhibits A and B are not true. (See pp. 3-4, 17-28, Appellant's
Brief).

The trial court rejected the foregoing version of the defense after noting the improbabilities in Francisco Siyang's testimony and after
concluding that the appellant had not overcome the presumption that his confession was voluntarily executed.

The shooting incident was undoubtedly another episode in the political rivalry between Mayor Domingo and Vice-Mayor Tamani. That
circumstance has given a political complexion to these two cases. It may explain why the evidence has become muddled, if not baffling.
It was to be expected that, to suit the ulterior motivations of the contending parties there would be same insidious manipulation of the
evidence.

Thus, on June 12th, the day following the shooting and before Jose Siyang was interred, Constabulary soldiers, accompanied by Vice-
Mayor Villamor Tamani, investigated Francisco Siyang (51-52 tsn Aug. 26, 1960). On June 14, 1953, or four days after the shooting and
while Mayor Domingo was in the hospital, Francisco Siyang (the uncle of Villamor Tamani and the star witness for the defense and the
father of the victim, Jose Siyang) executed an affidavit in Ilagan about the shooting. He made it appear in that statement that Patrolmen
Ibarra and Tumaneng, two followers of Mayor Domingo, were the killers of Jose Siyang and that they commenced to shoot Siyang when
Mayor Domingo made a prearranged signal (Exh. 1).

As already noted, on the basis of that affidavit, Constabulary Lieutenant Tomas P. Gonzales filed in the justice of the peace court of
Angadanan a complaint for murder against Policemen Ibarra, Tumaneng and Manguelod and one Venancio Respicio, an alleged nephew
of the mayor (Exh. 2, Crim. Case No. 244). According to Francisco Siyang's affidavit, Respicio, a compadre of Jose Siyang, acted as
decoy in bringing Jose Siyang to the place where he was assassinated. Domingo repeatedly denied that Respicio was his relative by
consanguinity or affinity. Francisco Siyang made it appear that his son was murdered because he testified against Domingo in the case
where the latter was charged with theft. Because of that theft case Domingo was suspended. That murder complaint (Exh. 2) against the
followers of Mayor Domingo was dismissed.

After the mayor was released from the hospital, he and the chief of police investigated the shooting. The chief of the police filed a
complaint for murder dated July 8, 1953 against Vice-Mayor Tamani, Teodoro Tamani, Rufino de los Santos, Matias de la Fuente, Arsenio
Dayang and Medardo Tamani. The complaint was amended by including Domingo Cadawan as a defendant and excluding Dayang
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and Medardo Tamani (Exh. 3 and 4, Crim. Case No. 245). For the shooting of Mayor Domingo, a complaint for frustrated murder was filed
by the chief of police against the same persons (Exh. 5 and 6, Crim. Case No. 246).

Both complaints were dismissed apparently for lack of evidence. As the shooting was unsolved crime, the intervention of the NBI
became necessary.

On June 4, 1956 Francisco Siyang executed an affidavit in Ilagan before NBI Agent No. 39. He deviated from his 1953 affidavit by naming
Melchor Tumaneng alone ("Melchor Tomines") as the assassin of his son, Jose Siyang. He stuck to his original theory that Mayor
Domingo masterminded the assassination of his son (Exh. G).

As already noted, four months later, or on October 2 and 3, 1956, an NBI investigating team headed by Mariano G. Almeda, a lawyer and
an assistant to the NBI Director, secured a confession from appellant Teodoro Tamani that he, with the assistance of Domingo Cadawan,
shot Mayor Domingo and Jose Siyang (Exh. A and B). It may be assumed that the NBI was asked to handle the case so that political
considerations would not color and influence the course and outcome of the investigation.

Before Tamani executed his confession, Almeda and his agents, assisted by Constabulary soldiers, interviewed several persons in
Angadanan and made an ocular inspection of the scene of the crime. They investigated Mrs. Ibarra and her daughter. They learned that
Teodoro Tamani had entered Mrs. Ibarra's yard and was recognized by her and that, immediately thereafter, she heard gunshots from the
direction where Tamani had posted himself. Thus, Tamani became a prime suspect. He was apprehended and brought to the house of
Mrs. Ibarra for a confrontation. Almeda testified:

Q. What did you do, if any, when Teodoro Tamani was brought to the house of Juana Vittori Vda. de
Ibarra? — A. In the presence of Juana Vittori Vda. de Ibarra and her daughter I confronted them and
asked Juana Vittori Vda. de Ibarra and her daughter whether they knew Teodoro Tamani and both
claimed that he is the very same fellow who entered the yard that night with a gun and also they
heard shots from the direction of the said accused Teodoro Tamani after which Teodoro Tamani
was trembling and he became pale.

Q. And did Teodoro Tamani say anything when he was pointed out by Juana Vittori Vda. de Ibarra
and her daughter? — A. He did not utter anything. He simply became pale and trembling. (16 tsn
June 12, 1958, II Valencia).

Tamani's confession (Exh. A and B) was the basis of the information for murder and frustrated murder against him in these two cases.

Findings: Appellant Tamani's defense of alibi, which can be fabricated with facility, cannot be given serious consideration. Assuming that
he was in Barrio Aniog in the afternoon and night of June 11th, it was physically possible for him to be at the scene of the shooting at the
time that it was perpetrated and return to the house of Vice-Mayor Tamani in Barrio Aniog. That place was only two kilometers from the
store of Pedro Pua. The victim was shot in front of the store.

The settled rule is that an alibi, to be tenable, must be such as to preclude the possibility of the presence of the accused at the scene of
the crime or its immediate vicinity at the time of its commission. "The accused must show that he was at some other place for such
period of time that it was impossible for him to have been at the place where the crime was committed at the time of its commission"
(People vs. Lumantas, L-28355, July 17, 1969, 2 SCRA 764, 768).
Appellant's alibi does not satisfy that basic requirement. Moreover, it was not corroborated by Vice-Mayor Tamani or by any other
person. Its concocted character is manifest.

Appellant Tamani argues that he signed his confession, Exhibit A, because he was tortured or maltreated. He claim that he does not
remember having signed his supplementary confession (Exh. B) although he admits the authenticity of his signature and thumbmark
therein.

NBI Agents Almeda and Mendoza testified that Tamani's sworn statements were freely executed. Tamani's testimony on the alleged
maltreatment was not corroborated. As correctly noted by the Solicitor General, certain details in the confession, which only Tamani
could have supplied, are indications of its voluntariness and give it spontaneity and coherence.

Those details are (a) that Teodoro Tamani and Cadawan conferred with Vice-Mayor Villamor Tamani in the latter's house at Aniog at three
o'clock in the afternoon of the day preceding the shooting; (b) that Matias de la Fuente and Rufino de los Santos were present at the
conference and it was decided to liquidate Mayor Domingo to enable the vice mayor to act as mayor; (c) that De la Fuente handed to
Tamani and Cadawan the carbine to be used in the killing; (d) that Cadawan and Tamani slept in the vice-mayor's house on the night of
June 10, 1953; (e) that Cadawan went to the poblacion in the morning of June 11th in order to ascertain the whereabouts of Mayor
Domingo; (f) that Cadawan returned in the afternoon and informed Tamani that Domingo was at Pua's store; (g) that Cadawan stumbled
in the yard of Mrs. Ibarra; (h) that after firing the shots, the two returned to the vice-mayor's house; (i) that Teodoro Tamani slept in the
house of the vice-mayor after the assassination; (j) that Jose Siyang was standing on the right side of Mayor Domingo "along the line of
fire"; (k) that Jose Siyang was his second cousin and the second cousin of the vice-mayor and (l) that the hole in the gate was three
inches in diameter.

Those circumstances might not have been known if the confession had been executed under duress. NBI Agents Almeda and Mendoza
could not have manufactured all these details.

There is one significant inconsistency in appellant Tamani's testimony on March 26, 1962 which impairs his credibility. He claimed that
his supplementary confession, Exh. B, was translate to him in Tagalog but that he did not understand Tagalog on or before October 3,
1956 (117 tsn I Valencia). However, when he testified on January 11, 1962 and he was asked to repeat what NBI Agent Almeda told in
Tagalog to the prisoner, Pedro Tamayo, Tamani was able to repeat verbatim the word: "Bahala kayo rian Tamayo at ako ang bahala sa
iyo" (83 tsn II Calixto). He repeated the same Tagalog words in the later part of his testimony (86 tsn) and at the hearing on April 5, 1962
(127 tsn I Valencia).

Agent Almeda testified that appellant Tamani understands English, being a former policeman, and that Tamani read Exhibit B, which is in
English and which NBI Agent Mendoza translated to him in Ilocano. Tamani did not deny that he knows English. His petition to this Court
that he be granted bail, which petition bears his signature, is in English. (See Rollo).

There is no merit in appellant Tamani's contention that the trial court erred in not giving credence to the testimony of Francisco Siyang
(Syang) that Jose Siyang was shot by policemen Ibarra and Tumaneng, the latter being allegedly a houseboy of Mayor Domingo. The
inconsistencies on vital details in Siyang's two affidavits and his testimony signify that he deliberately perverted the truth. His testimony
exhibits the earmarks of untrustworthiness. It was squarely refuted by Martin Caniero and Teodoro Colobong. It should be underscored
that Francisco Siyang is the uncle of the vice-mayor (58 tsn Aug. 26, 1960).

In his 1953 affidavit (Exh. 1) he declared that Policemen Ibarra and Tumaneng shot his son, Jose Siyang, whereas, in his 1965 affidavit
(Exh. G) he alleged that only Tumaneng (Tomines) shot his son.

Francisco Siyang, a farmer, was already seventy-six years old when he testified in 1960. On direct examination he testified that his son
was shot in the breast by Gaspar Ibarra, who was immediately followed by Melchor Tumaneng. Tumaneng allegedly hit Jose Siyang in
the left part of the breast below the clavicle (48 tsn I Valencia). That was also Francisco Siyang's declaration in his 1953 affidavit (Exh. 1):
that Ibarra fired first.

However, Francisco Siyang on cross-examination testified differently. He declared that Tumaneng fired first and that the second shot was
fired by Ibarra. Francisco Siyang said that he was sure that Tumaneng fired first at his son (89, 92, 93 tsn I Valencia). The following is an
example of his confusing testimony:

Q. How many shots did Gaspar Ibarra fire at your son? — A. Only one, sir.

Q. Who fired the two first shots, if you know? — A. Melchor Tumaneng, sir.

Q. Did you actually see or not the two successive shots at your son? — A. I saw him, sir.

Q. Who fired the other two shots which according to you your son was hit by five (5) gunshots — A.
Gaspar Ibarra, sir.

Q. Do you mean to say that Gaspar Ibarra fired first one shot and then two shots, all in all three
shots? — A. Gaspar Ibarra fired only one, sir. (93 tsn I Valencia).

Q. Who was the first who shot your son, according to you? — A. Melchor Tumaneng.

Q. Where was Melchor Tumaneng at the moment he shot you? — A. He was at the gate of the fence.

Q. But he was inside with the group of persons at the media de agua of the store of Pedro Pua. Is
it? — A. Yes, sir (21 tsn I Calixto).
NBI Agent Almeda, after investigating Francisco Siyang, found his theory incredible. Almeda did not believe that Francisco Siyang could
have seen or identified the assailant who was behind the fence. According to Almeda, Francisco Siyang merely suspected certain person
as the killers of his son. He could not identify positively the killers.

Other grave inconsistencies in Francisco Siyang's affidavits and testimony are discussed in the trial court's decision.

Appellant Tamani further contends that the trial court erred in relying on thirteen circumstances in order to convince itself that Tamani
was the culprit. Among those circumstances are that Tamani went into hiding sometime after the shooting and that the motive for the
attempted murder of Mayor Domingo was to prevent his reinstatement and to enable the vice-mayor to become permanent mayor and
ensure that appellant Tamani would again become a policemen.

Judge Pedro C. Quinto's painstaking analysis of the evidence and his conscientious scrutiny of the discrepancies in the testimony and
affidavits of Francisco Siyang demonstrate that the guilt of Tamani has been proven beyond reasonable doubt. A thorough perusal of the
record leads to the conclusion that the trial court did not commit the errors imputed to it by the appellant.

The act of shooting Siyang at a distance, without the least expectation on his part that he would be assaulted, is murder because of the
attendance of the qualifying circumstance of treachery (alevosia). Appellant Tamani deliberately employed a mode of execution which
tended directly and specially to ensure the consummation of the killing without any risk to himself arising from the defense which the
victim could have made (Par. 16, Art. 14, Revised Penal Code). Siyang, unarmed and without any intimation that the gunshots intended
for Mayor Domingo would hit him, was not in a position to defend himself against the unseen assailant. Treachery may be appreciated
even if there was a mistake as to the victim (People vs. Mabug-at, 51 Phil. 967; People vs. Guillen, 85 Phil. 307).

As to Mayor Domingo, the accused was not able to perform all the acts of execution which would consummate the killing (Art. 6, Revised
Penal Code). The accused was not able to do so, not because of his spontaneous desistance but because he failed to inflict on the mayor
a mortal wound. The mayor was able to avoid the second volley by taking refuge in the store of Pedro Pua. But there is no doubt that the
accused was animated by the intent to kill and that the shooting was perpetrated in a treacherous manner. Hence, the offense against the
mayor is attempted murder (People vs. Kalalo, 59 Phil. 715).

The alternative contention of appellant Tamani that should be convicted of the complex crime of homicide with lesiones graves is not
well-taken. As already pointed out, the killing of Siyang cannot be characterized as homicide. It was qualified by treachery. There was
intent to kill in the shooting of the mayor. So, the wound inflicted on him cannot be regarded as a mere physical injury. It was overt act
manifesting the willful design of the accused to liquidate the mayor.

The infliction of the four fatal gunshot wounds on Siyang and of the wound in the palm of the mayor's right hand was not the result of a
single act. The injuries were the consequences of two volley of gunshots. Hence, the assaults on Siyang and the mayor cannot be
<äre||anº•1àw>

categorized as a complex crime.

To convict the accused of the complex crime of murder with attempted murder would result in the imposition of the death penalty. That
eventuality would be worse for him.

There being no mitigating nor aggravating circumstances, the penalty of reclusion perpetua should be imposed on the appellant for the
killing of Siyang. (Arts. 64 [1] and 248, Revised Penal Code). The use of the term "life imprisonment" is not proper (People vs. Mobe, 81
Phil. 58).

WHEREFORE, the appeal is dismissed with costs against the appellant. So ordered.

Zaldivar, Fernando and Fernandez, JJ., concur. 1äwphï1.ñët

Barredo, J., took no part.

Separate Opinions

ANTONIO, J., concurring.:

In the dismissal of the appeal on the ground that the judgment of the laws must become final after the lapse of the period for perfecting
an appeal. (Sec. 7, Rule 120.)

Separate Opinions

ANTONIO, J., concurring.:

In the dismissal of the appeal on the ground that the judgment of the laws must become final after the lapse of the period for perfecting
an appeal. (Sec. 7, Rule 120.)
CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO L. ATIENZA,
in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, et.al vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST
DEVELOPMENT CORPORATION
G.R. No. 118127, April 12, 2005
FACTS: Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the
business of operating hotels, motels, hostels and lodging houses. It built and opened Victoria Court in Malate which
was licensed as a motel although duly accredited with the DOT as a hotel. On 28 June 1993, MTDC filed a Petition for
Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 with the
lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L.
Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it
includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.
Enacted by the City Council and approved by petitioner City Mayor, the said Ordinance is entitled–

AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN

FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA,
PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.
Judge Laguio rendered the assailed Decision (in favour of respondent).

On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the
lower court in its ruling:

(1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive
exercise of police power;
(2) It erred in holding that the questioned Ordinance contravenes P.D. 499 which allows operators of all kinds of
commercial establishments, except those specified therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.

ISSUE: WON the ordinance is unconstitutional.

HELD: The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did,
ultra vires and therefore null and void.
The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it
must not only be within the corporate powers of the local government unit to enact and must be passed according to
the procedure prescribed by law, it must also conform to the following substantive requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council
acting as agent of Congress. This delegated police power is found in Section 16 of the LGC, known as the general
welfare clause.
The inquiry in this Petition is concerned with the validity of the exercise of such delegated power.

A. The Ordinance contravenes

the Constitution

The enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to
general laws.
The police power granted to LGUs must always be exercised with utmost observance of the rights of the people to due
process and equal protection of the law. Due process requires the intrinsic validity of the law in interfering with the
rights of the person to his life, liberty and property.

Requisites for the valid exercise

of Police Power are not met

To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it
from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as
distinguished from those of a particular class, require an interference with private rights, but the means adopted must
be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.60 It
must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can
work. A reasonable relation must exist between the purposes of the police measure and the means employed for its
accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to
private property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into
private rights a violation of the due process clause.

The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the
community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City
Council’s police powers, the means employed for the accomplishment thereof were unreasonable and unduly
oppressive.

The worthy aim of fostering public morals and the eradication of the community’s social ills can be achieved through
means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute
prohibition. The closing down and transfer of businesses or their conversion into businesses “allowed” under the
Ordinance have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the
enumerated establishments will not per se protect and promote the social and moral welfare of the community; it will
not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual
disease in Manila.

The enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the
community. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be
punished. It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked
assumption.

If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose
reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their
licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations; and it may
even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end.

It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the
governmental interference itself, infringes on the constitutional guarantees of a person’s fundamental right to liberty
and property.

Modality employed is
unlawful taking

It is an ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose
goes beyond regulation and must be recognized as a taking of the property without just compensation.78 It is intrusive
and violative of the private property rights of individuals.

There are two different types of taking that can be identified. A “possessory” taking occurs when the government
confiscates or physically occupies property. A “regulatory” taking occurs when the government’s regulation leaves no
reasonable economically viable use of the property.

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. When
the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the
common good, that is, to leave his property economically idle, he has suffered a taking.

The Ordinance gives the owners and operators of the “prohibited” establishments three (3) months from its approval
within which to “wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert
said businesses to other kinds of business allowable within the area.” The directive to “wind up business operations”
amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless
the owner converts his establishment to accommodate an “allowed” business, the structure which housed the previous
business will be left empty and gathering dust. It is apparent that the Ordinance leaves no reasonable economically
viable use of property in a manner that interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed
businessesare confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in
Section 4 of the Ordinance is also equivalent to a “taking” of private property.

Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid
exercise of police power, which limits a “wholesome” property to a use which can not reasonably be made of it
constitutes the taking of such property without just compensation. Private property which is not noxious nor intended
for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the
principles of justice as we know them. The police powers of local government units which have always received broad
and liberal interpretation cannot be stretched to cover this particular taking.

Further, The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments.
Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications
whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to
be tested, are unreasonable and invalid. The Ordinance should have established a rule by which its impartial
enforcement could be secured. Similarly, the Ordinance does not specify the standards to ascertain which
establishments “tend to disturb the community,” “annoy the inhabitants,” and “adversely affect the social and moral
welfare of the community.”

The cited case supports the nullification of the Ordinance for lack of comprehensible standards to guide the law
enforcers in carrying out its provisions.

Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process
clause. These lawful establishments may be regulated, but not prevented from carrying on their business.

B. The Ordinance violates Equal

Protection Clause

In the Court’s view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses
or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals
and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels,
lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are
not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on
substantial distinctions bearing a just and fair relation to the purpose of the Ordinance.

The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area
but not outside of this area. A noxious establishment does not become any less noxious if located outside the area.

The standard “where women are used as tools for entertainment” is also discriminatory as prostitutionone of the
hinted ills the Ordinance aims to banishis not a profession exclusive to women. Both men and women have an equal
propensity to engage in prostitution. Thus, the discrimination is invalid.

C. The Ordinance is repugnant

to general laws; it is ultra vires

The Ordinance is in contravention of the Code (Sec 458) as the latter merely empowers local government units to
regulate, and not prohibit, the establishments enumerated in Section 1 thereof.

With respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the
general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment,
operation and maintenance of such establishments.

It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the
abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the
immediate safety of persons and property and may be summarily abated under the undefined law of necessity. It can
not be said that motels are injurious to the rights of property, health or comfort of the community. It is a legitimate
business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not
per se a nuisance warranting its summary abatement without judicial intervention.
Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly
argued by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The
decree allowed the establishment and operation of all kinds of commercial establishments except warehouse or open
storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral
establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the
powers of the council to enact but the same must not be in conflict with or repugnant to the general law.

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is
constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it
is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be
forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and
void.

Petition Denied.
 EN BANC

G.R. No. 118127 April 12, 2005

CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of
the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON.
AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G.
VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F.
CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON.
MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR.,
HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D.
HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON.
MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON.
ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as
councilors of the City of Manila, Petitioner,
vs.
HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT
CORPORATION, Respondents.

DECISION

TINGA, J.:

I know only that what is moral is what you feel good after and what is immoral is what you feel bad after.

Ernest Hermingway
Death in the Afternoon, Ch. 1

It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else,
who would be well-intentioned in his dishonesty.

J. Christopher Gerald
Bonaparte in Egypt, Ch. I

The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the
Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of
Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail
to pass the test of constitutionality.

The pivotal issue in this Petition under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision in Civil
1 2

Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court), is the validity of Ordinance No. 7783 (the Ordinance) of
3

the City of Manila.

4

The antecedents are as follows:

Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels
and lodging houses. It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of
5

Tourism as a hotel. On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary
6

Restraining Order (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon.
7

Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels
and inns as among its prohibited establishments, be declared invalid and unconstitutional. 8

Enacted by the City Council on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the said Ordinance is entitled–
9

AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF

AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR
VIOLATION THEREOF, AND FOR OTHER PURPOSES. 10

The Ordinance is reproduced in full, hereunder:

SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership, corporation or
entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street
in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any
business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in
entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral
welfare of the community, such as but not limited to:

1. Sauna Parlors

2. Massage Parlors

3. Karaoke Bars
 4. Beerhouses

5. Night Clubs

6. Day Clubs

7. Super Clubs

8. Discotheques

9. Cabarets

10. Dance Halls

11. Motels

12. Inns

SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from issuing permits,
temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the
preceding section.

SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are
hereby given three (3) months from the date of approval of this ordinance within which to wind up business operations or to
transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within
the area, such as but not limited to:

1. Curio or antique shop

2. Souvenir Shops

3. Handicrafts display centers

4. Art galleries

5. Records and music shops

6. Restaurants

7. Coffee shops

8. Flower shops

9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family entertainment that cater to both
local and foreign clientele.

10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and theatrical plays, art
exhibitions, concerts and the like.

11. Businesses allowable within the law and medium intensity districts as provided for in the zoning ordinances for Metropolitan
Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop, gasoline service station, light industry
with any machinery, or funeral establishments.

SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1)
year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical
person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case
of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently.

SEC. 5. This ordinance shall take effect upon approval.

Enacted by the City Council of Manila at its regular session today, March 9, 1993.

Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)

In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments, motels
and inns such as MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not
"services or facilities for entertainment," nor did they use women as "tools for entertainment," and neither did they "disturb the community," "annoy
the inhabitants" or "adversely affect the social and moral welfare of the community."11
MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit
the operation of motels as Section 458 (a) 4 (iv) of the Local Government Code of 1991 (the Code) grants to the City Council only the power to
12

regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments;
(2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499 which specifically declared portions of the Ermita-Malate area as a
13

commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the
motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post
facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDC's
constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as
a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial
of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels,
lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area. 14

In their Answer dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to "prohibit certain forms of
15

entertainment in order to protect the social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government
Code, which reads, thus:
16

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall
enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

....

(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for
said purpose shall:

....

(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical
performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly
those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or,
prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.

Citing Kwong Sing v. City of Manila, petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to
17

control, to govern and to restrain places of exhibition and amusement. 18

Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of the community
in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409, otherwise known as the Revised Charter of the
19

City of Manila (Revised Charter of Manila) which reads, thus:

20

ARTICLE III

THE MUNICIPAL BOARD

. . .

Section 18. Legislative powers. – The Municipal Board shall have the following legislative powers:

. . .

(kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the
promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others
as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the
violation of ordinances which shall not exceed two hundred pesos fine or six months' imprisonment, or both such fine and imprisonment,
for a single offense.

Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to prove its illegality or
unconstitutionality. 21

Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply disauthorized certain forms of
businesses and allowed the Ermita-Malate area to remain a commercial zone. The Ordinance, the petitioners likewise claimed, cannot be assailed
22

as ex post facto as it was prospective in operation. The Ordinance also did not infringe the equal protection clause and cannot be denounced as
23

class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila. 24

On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order against the
enforcement of the Ordinance. And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.
25 26

After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The
dispositive portion of said Decision reads: 27

WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and
making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs.
 SO ORDERED. 28

Petitioners filed with the lower court a Notice of Appeal on 12 December 1994, manifesting that they are elevating the case to this Court under then
29

Rule 42 on pure questions of law. 30

On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower court in its ruling: (1) It
erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred
in holding that the questioned Ordinance contravenes P.D. 499 which allows operators of all kinds of commercial establishments, except those
31

specified therein; and (3) It erred in declaring the Ordinance void and unconstitutional. 32

In the Petition and in its Memorandum, petitioners in essence repeat the assertions they made before the lower court. They contend that the
33

assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local
government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code. They34

allege that the Ordinance is a valid exercise of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity. 35

In its Memorandum dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void for being repugnant to the
36

general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory and
amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City
Mayor or any officer unregulated discretion in the execution of the Ordinance absent rules to guide and control his actions.

This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A
long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court
harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes that the Ordinance is not the fitting means to
that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null
and void.

The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and
sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from
attempts at rendering them worthless.

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to
the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be
partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be
unreasonable. 37

Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws. The Ordinance must satisfy
38

two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should
be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives
stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative
power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. 39

This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution
strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or
modify or violate it.
40

The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress.
Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared
objects of their creation. This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz:
41

SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential
to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced
ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.

Local government units exercise police power through their respective legislative bodies; in this case, the sangguniang panlungsod or the city
council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the
province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the
province/city/ municipality provided under the Code. The inquiry in this Petition is concerned with the validity of the exercise of such delegated
42

power.

The Ordinance contravenes

the Constitution

The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the
limitation that its exercise must be reasonable and for the public good. In the case at bar, the enactment of the Ordinance was an invalid exercise of
43

delegated power as it is unconstitutional and repugnant to general laws.

The relevant constitutional provisions are the following:

SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are
essential for the enjoyment by all the people of the blessings of democracy. 44
 SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women
and men. 45

SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal
protection of laws.
46

Sec. 9. Private property shall not be taken for public use without just compensation. 47

A. The Ordinance infringes

the Due Process Clause

The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property without due process of
law. . . ." 48

There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order
that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the
supremacy of reason, obedience to the dictates of justice, and as such it is a limitation upon the exercise of the police power.
49 50

The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual
from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to
protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary
mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law. 51

The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the
guaranty insofar as their property is concerned. 52

This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process" and "substantive due
process."

Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty,
or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide
when it takes a particular action. 53

Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a person's life, liberty, or
property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action. Case law in the
54

United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used. For example, if a law is in an
55

area where only rational basis review is applied, substantive due process is met so long as the law is rationally related to a legitimate government
purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due
process only if it can prove that the law is necessary to achieve a compelling government purpose. 56

The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process
and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically as its exercise is subject to a qualification,
57

limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill
of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of
public interest or public welfare. Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and
58

property. 59

Requisites for the valid exercise

of Police Power are not met

To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the imputation of
constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals. It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can
60

work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even
under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily
invaded. 61

Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights a violation of
62

the due process clause.

The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the Ermita-Malate area which are
allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges,
hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila had already taken judicial notice of the "alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part
63

to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for
prostitutes and thrill-seekers." 64

The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake
of argument that the objectives of the Ordinance are within the scope of the City Council's police powers, the means employed for the
accomplishment thereof were unreasonable and unduly oppressive.

It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and
social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be
achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The
closing down and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable relation to the
accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and promote the social
and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread
of sexual disease in Manila.

Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may
lawfully prohibit, it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day
65

clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The
enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the community.

That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on
the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the
substitute establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were to be followed, in the remote
instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering
the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the
prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the Tradition of Christians
churches continually recall the presence and universality of sin in man's history. 66

The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the
community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a
venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisance per
se on a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its
supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be
laid bare to the estimation of the authorities.

The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not
foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The
City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are
covenants, premiums and blessings of democracy.

While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators
of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those
individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to
those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose
reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise
its authority to suspend or revoke their licenses for these violations; and it may even impose increased license fees. In other words, there are other
67

means to reasonably accomplish the desired end.

Means employed are

constitutionally infirm

The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs,
discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated
establishments are given three (3) months from the date of approval of the Ordinance within which "to wind up business operations or to transfer to
any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." Further, it states in
Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and
padlocked permanently."

It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental interference itself, infringes
on the constitutional guarantees of a person's fundamental right to liberty and property.

Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint
or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right
of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common
welfare." In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn
68

his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty. 69

The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of "liberty." It said:
70

While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth Amendments], the term
denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common
occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the
dictates of his own conscience, and generally to enjoy those privileges long recognized…as essential to the orderly pursuit of happiness
by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed.

In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation,
contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person
in making these choices, the U.S. Supreme Court explained:

These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and
autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own
concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the
attributes of personhood where they formed under compulsion of the State. 71
Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinance may seek autonomy for these
purposes.

Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the
motel's premisesbe it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the
Constitution. Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their
72

dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice. Their right to liberty under the due
73

process clause gives them the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the
law. Liberty should be the rule and restraint the exception.

Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a
repository of freedom. The right to be let alone is the beginning of all freedomit is the most comprehensive of rights and the right most valued by
civilized men. 74

The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v.
Mutuc, borrowing the words of Laski, so very aptly stated:
75

Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so
fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which
are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will
to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no
longer a master of himself is in any real sense free.

Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a compelling state
interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional
protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen. 76

There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to
the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in
criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice.
Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their
choice.

Modality employed is
unlawful taking

In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its
property. The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs
77

its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An
ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be
recognized as a taking of the property without just compensation. It is intrusive and violative of the private property rights of individuals.
78

The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without just compensation." The
provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take
property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too,
it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the
guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by
the public as a whole. 79

There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates or physically occupies
property. A "regulatory" taking occurs when the government's regulation leaves no reasonable economically viable use of the property. 80

In the landmark case of Pennsylvania Coal v. Mahon, it was held that a taking also could be found if government regulation of the use of property
81

went "too far." When regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and
compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. 82

No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes
recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the
U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks
whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the
public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action. 83

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable
use of property in a manner that interferes with reasonable expectations for use. A regulation that permanently denies all economically beneficial or
84

productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the
owner acquired the land make the use prohibitable. When the owner of real property has been called upon to sacrifice all economically beneficial
85

uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking. 86

A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a
regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred,
depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with
reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings
clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne
by the public as a whole. 87
A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it
has an unduly harsh impact on the distinct investment-backed expectations of the owner. 88

The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months from its approval within which to "wind up
business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable
within the area." The directive to "wind up business operations" amounts to a closure of the establishment, a permanent deprivation of property, and
is practically confiscatory. Unless the owner converts his establishment to accommodate an "allowed" business, the structure which housed the
previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle.
Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned
within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with
reasonable expectations for use.

The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed businessesare confiscatory
as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a "taking" of
private property.

The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies
as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The
proffered solution does not put an end to the "problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and
oppressive. The conversion into allowed enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee
shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay,
even without compensation.

The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or
transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as
a whole.

Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power,
which limits a "wholesome" property to a use which can not reasonably be made of it constitutes the taking of such property without just
compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation.
Such principle finds no support in the principles of justice as we know them. The police powers of local government units which have always
received broad and liberal interpretation cannot be stretched to cover this particular taking.

Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of
police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is
intended for a public use or purpose and is therefore "wholesome." If it be of public benefit that a "wholesome" property remain unused or relegated
89

to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for
public use.90

Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides the discretion vested in
them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its
ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as
this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary
will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinance should have
established a rule by which its impartial enforcement could be secured. 91

Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be
observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers
in carrying out its provisions. 92

Thus, in Coates v. City of Cincinnati, as cited in People v. Nazario,

93
the U.S. Supreme Court struck down an ordinance that had made it illegal for
94

"three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." The ordinance
was nullified as it imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.' "

Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to disturb the community," "annoy the inhabitants,"
and "adversely affect the social and moral welfare of the community." The cited case supports the nullification of the Ordinance for lack of
comprehensible standards to guide the law enforcers in carrying out its provisions.

Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful
establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of
a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not
countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property.

Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the ill-considered Ordinance enacted by the
City Council.

In FW/PBS, INC. v. Dallas, the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented businesses," which are defined to
95

include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter
centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of
businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to
produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary
effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom
of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study
which the city considered, was adequate to support the city's determination that motels permitting room rentals for fewer than ten (10 ) hours should
be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no
discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that
have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs.

The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity
was upheld.

The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, it needs pointing out, is also different from this case
96

in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to
practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the
ordinance did not prohibit motels. The Ordinance in this case however is not a regulatory measure but is an exercise of an assumed power to
prohibit. 97

The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of citizens. For being
unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid.

B. The Ordinance violates Equal

Protection Clause

Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities
imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against
others. The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or
98

other classes in like circumstances. The "equal protection of the laws is a pledge of the protection of equal laws." It limits governmental
99 100

discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned. 101

The Court has explained the scope of the equal protection clause in this wise:

… What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The ideal situation is for the law's benefits to
be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs
of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however,
in the opinion that what in fact exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into
account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in
fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty
and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the
governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the
very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason
decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated
in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue
preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances
which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated
in the same fashion, whatever restrictions cast on some in the group equally binding on the rest. 102

Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all
of the people without violating the equal protection clause. The classification must, as an indispensable requisite, not be arbitrary. To be valid, it
103

must conform to the following requirements:

1) It must be based on substantial distinctions.

2) It must be germane to the purposes of the law.

3) It must not be limited to existing conditions only.

4) It must apply equally to all members of the class. 104

In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar
establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason
exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant
case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on
substantial distinctions bearing a just and fair relation to the purpose of the Ordinance.

The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside of this
area. A noxious establishment does not become any less noxious if located outside the area.

The standard "where women are used as tools for entertainment" is also discriminatory as prostitutionone of the hinted ills the Ordinance aims to
banishis not a profession exclusive to women. Both men and women have an equal propensity to engage in prostitution. It is not any less grave a
sin when men engage in it. And why would the assumption that there is an ongoing immoral activity apply only when women are employed and be
inapposite when men are in harness? This discrimination based on gender violates equal protection as it is not substantially related to important
government objectives. Thus, the discrimination is invalid.
105

Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws.

C. The Ordinance is repugnant

to general laws; it is ultra vires
The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the
establishments enumerated in Section 1 thereof.

The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and other similar
establishments is found in Section 458 (a) 4 (iv), which provides that:

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall
enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

. . .

(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for
said purpose shall:

. . .

(iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments, including tourist guides and transports . . . .

While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and to prohibit certain
forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows:

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall
enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

. . .

(4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for
said purpose shall:

. . .

(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical
performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly
those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or,
prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.

Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the
only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the
power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments. It is well to recall the rulings of the
Court in Kwong Sing v. City of Manila that:
106

The word "regulate," as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control, to
govern, and to restrain; but "regulate" should not be construed as synonymous with "suppress" or "prohibit." Consequently, under the
power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the employment or
business shall be exercised. 107

And in People v. Esguerra, wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the selling, giving and
108

dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit. The Court therein declared that:

(A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor
traffic, power to prohibit is impliedly withheld.
109

These doctrines still hold contrary to petitioners' assertion that they were modified by the Code vesting upon City Councils prohibitory powers.
110

Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage parlors, and other
places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such
other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" and to
"prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community" are stated in the second
and third clauses, respectively of the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is
pertinent to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses in which these powers are set forth are
independent of each other albeit closely related to justify being put together in a single enumeration or paragraph. These powers, therefore, should
111

not be confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition. 112

The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation among which are
beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools,
public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration
therefore cannot be included as among "other events or activities for amusement or entertainment, particularly those which tend to disturb the
community or annoy the inhabitants" or "certain forms of amusement or entertainment" which the City Council may suspend, suppress or prohibit.
The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied or incidental to the
exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt or
ambiguity arising out of the terms used in granting said powers must be construed against the City Council. Moreover, it is a general rule in
113

statutory construction that the express mention of one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio
unius est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the
construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict
construction.114

The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code and of Art. 3, Sec. 18
(kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra, is instructive. It held
115

that:

The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code, refers
to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for the power
to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold that,
under the general power granted by section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision
of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power to regulate,
the selling, giving away and dispensing of intoxicating liquors.

On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail and override the earlier
law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant thereto. As
between two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later prevails, since it is the latest
expression of legislative will. If there is an inconsistency or repugnance between two statutes, both relating to the same subject matter, which
116

cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and
override the earlier.
117

Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an existing law but no
provisions expressly repealing them. Such repeals have been divided into two general classes: those which occur where an act is so inconsistent or
irreconcilable with an existing prior act that only one of the two can remain in force and those which occur when an act covers the whole subject of
an earlier act and is intended to be a substitute therefor. The validity of such a repeal is sustained on the ground that the latest expression of the
legislative will should prevail.
118

In addition, Section 534(f) of the Code states that "All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly." Thus, submitting to petitioners' interpretation that the Revised Charter of Manila empowers the City Council to prohibit motels, that
portion of the Charter stating such must be considered repealed by the Code as it is at variance with the latter's provisions granting the City Council
mere regulatory powers.

It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of nuisances without
judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of persons and property and may be
summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the rights of property, health or comfort of the
community. It is a legitimate business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is
not per se a nuisance warranting its summary abatement without judicial intervention. 119

Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another section of the Code which is
reproduced as follows:

Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall
enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall:

. . .

(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places,
vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of
chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile
delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities
inimical to the welfare and morals of the inhabitants of the city;

. . .

If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in Section 1 of
the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit under the above-quoted
Section. The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and expand the City Council's powers in the
second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these establishments
may only be regulated in their establishment, operation and maintenance.

It is important to distinguish the punishable activities from the establishments themselves. That these establishments are recognized legitimate
enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local Government Taxation expressly mentioned
proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as among the "contractors"
defined in paragraph (h) thereof. The same Section also defined "amusement" as a "pleasurable diversion and entertainment," "synonymous to
relaxation, avocation, pastime or fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and other places of
amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances." Thus, it can be inferred that the Code
considers these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means that
words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force and effect, and, if
possible, rendering none of them useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where words under
consideration appear in different sections or are widely dispersed throughout an act the same principle applies. 120

Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued by MTDC, the statute
had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of all kinds
of commercial establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry
with any machinery or funeral establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the
powers of the council to enact but the same must not be in conflict with or repugnant to the general law. As succinctly illustrated in Solicitor General
121

v. Metropolitan Manila Authority:122

The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by
virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of
revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of
subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at all times the will of
their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail against the decree, which
has the force and effect of a statute.123

Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held that although the
presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the
invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence. The exercise of police power by the
local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy or is
unreasonable, oppressive, partial, discriminating or in derogation of a common right. 124

Conclusion

All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm.
The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may
attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is
therefore ultra vires, null and void.

Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the cleansing of the Ermita-
Malate area of its social sins. Police power legislation of such character deserves the full endorsement of the judiciary we reiterate our support for
it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or constitutional authority to stand on. Local legislative bodies, in
this case, the City Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or
conversion without infringing the constitutional guarantees of due process and equal protection of laws not even under the guise of police power.

WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinance void is AFFIRMED. Costs
against petitioners.

SO ORDERED.
ABS-CBN vs. CTA G.R. No. L-52307
Retroactive Effect of Tax Statues

Republic of the Philippines

Supreme Court Ruling

G.R. No. L-52307 October 12, 1981

ABS-CBN Broadcasting Corporation, Petitioner

vs.

Court of Tax Appeals and the Commissioner of Internal revenue, Respondent

FACTS:

The ABS-CBN Broadcasting Corporation (herein shall be called the “Company”) was engaged in the business of telecasting local as well as foreign
films acquired from foreign corporations not engaged in trade or business with the Philippines. Under Section 24 (b) of the National Revenue Code,
a withholding tax of 30% (RA 2343). It was implemented through Circular No. V-334. Pursuant to the foregoing, ABS-CBN dutifully withheld and
turned over to the BIR the amount of 30% of one-half of the film rentals paid by it to foreign corporations not engaged in trade or business within
the Philippines. The last year that ABS-CBN withheld taxes pursuant to the foregoing Circular was in 1968.

RA 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30 % to 35 % and revising the tax basis from “such amount”
referring to rents, etc. to “gross income.” The following was implemented by Circular No. 4-71.

Petitioner requested for a reconsideration and withdrawal of the assessment.

ISSUE/S:

Whether or not respondent can apply General Circular No. 4-71 retroactively and issue a deficiency assessment against petitioner.

HELD/DECISION:

Any rulings or circulars promulgated by the CIR have no retroactive application when it would be prejudicial to taxpayers. The retroactive
application of Memorandum Circular No. 4-71 prejudices ABS-CBN since:

1. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968 for a period of time
commencing in 1965.

2. ABS-CBN was no longer in a position to withhold taxes due from foreign corporations because it had already remitted all film rentals and no
longer had any control over them when the new Circular was issued.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-52306 October 12, 1981

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
COURT OF TAX APPEALS and THE COMMISSIONER OF INTERNAL REVENUE, respondents.

MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of the Court of Tax Appeals in C.T.A. Case No. 2809, dated November 29, 1979, which
affirmed the assessment by the Commissioner of Internal Revenue, dated April 16, 1971, of a deficiency withholding income tax against petitioner,
ABS-CBN Broadcasting Corporation, for the years 1965, 1966, 1967 and 1968 in the respective amounts of P75,895.24, P99,239.18, P128,502.00
and P222, 260.64, or a total of P525,897.06.

During the period pertinent to this case, petitioner corporation was engaged in the business of telecasting local as well as foreign films acquired
from foreign corporations not engaged in trade or business within the Philippines. for which petitioner paid rentals after withholding income tax of
30%of one-half of the film rentals.

In so far as the income tax on non-resident corporations is concerned, section 24 (b) of the National Internal Revenue Code, as amended by
Republic Act No. 2343 dated June 20, 1959, used to provide:

(b) Tax on foreign corporations.—(1) Non-resident corporations.— There shall be levied, collected, and paid for each taxable
year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not
engaged in trade or business within the Philippines, from an sources within the Philippines, as interest, dividends, rents,
salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or
periodical gains, profits, and income, a tax equal to thirty per centum of such amount. (Emphasis supplied)

On April 12, 1961, in implementation of the aforequoted provision, the Commissioner of Internal Revenue issued General Circular No. V-334
reading thus:

In connection with Section 24 (b) of Tax Code, the amendment introduced by Republic Act No. 2343, under which an income
tax equal to 30% is levied upon the amount received by every foreign corporation not engaged in trade or business within the
Philippines from all sources within this country as interest, dividends, rents, salaries, wages, premiums, annuities,
compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, it
has been determined that the tax is still imposed on income derived from capital, or labor, or both combined, in accordance with
the basic principle of income taxation (Sec. 39, Income Tax Regulations), and that a mere return of capital or investment is not
income (Par. 5,06, 1 Mertens Law of Federal 'Taxation). Since according to the findings of the Special Team who inquired into
business of the non-resident foreign film distributors, the distribution or exhibition right on a film is invariably acquired for a
consideration, either for a lump sum or a percentage of the film rentals, whether from a parent company or an independent
outside producer, apart of the receipts of a non-resident foreign film distributor derived from said film represents, therefore, a
return of investment.

xxx xxx xxx

4. The local distributor should withhold 30% of one-half of the film rentals paid to the non-resident foreign film distributor and
pay the same to this office in accordance with law unless the non- resident foreign film distributor makes a prior settlement of its
income tax liability. (Emphasis ours).

Pursuant to the foregoing, petitioner dutifully withheld and turned over to the Bureau of Internal Revenue the amount of 30% of one-half of the film
rentals paid by it to foreign corporations not engaged in trade or business within the Philippines. The last year that petitioner withheld taxes
pursuant to the foregoing Circular was in 1968.

On June 27, 1968, Republic Act No. 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30 % to 35 % and revising the tax
basis from "such amount" referring to rents, etc. to "gross income," as follows:

(b) Tax on foreign corporations.—(1) Non-resident corporations.—A foreign corporation not engaged in trade or business in the
Philippines including a foreign life insurance company not engaged in the life insurance business in the Philippines shall pay a
tax equal to thirty-five per cent of the gross income received during each taxable year from all sources within the Philippines, as
interests, dividends, rents, royalties, salaries, wages, premiums, annuities, compensations, remunerations for technical services
or otherwise, emoluments or other fixed or determinable annual, periodical or casual gains, profits, and income, and capital
gains, Provided however, That premiums shah not include reinsurance premiums. (Emphasis supplied)

On February 8, 1971, the Commissioner of Internal Revenue issued Revenue Memorandum Circular No. 4-71, revoking General Circular No. V-
334, and holding that the latter was "erroneous for lack of legal basis," because "the tax therein prescribed should be based on gross income
without deduction whatever," thus:
 After a restudy and analysis of Section 24 (b) of the National Internal Revenue Code, as amended by Republic Act No. 5431,
and guided by the interpretation given by tax authorities to a similar provision in the Internal Revenue Code of the United
States, on which the aforementioned provision of our Tax Code was patterned, this Office has come to the conclusion that the
tax therein prescribed should be based on gross income without t deduction whatever. Consequently, the ruling in General
Circular No. V-334, dated April 12, 1961, allowing the deduction of the proportionate cost of production or exhibition of motion
picture films from the rental income of non- resident foreign corporations, is erroneous for lack of legal basis.

In view thereof, General Circular No. V-334, dated April 12, 1961, is hereby revoked and henceforth, local films distributors and
exhibitors shall deduct and withhold 35% of the entire amount payable by them to non-resident foreign corporations, as film
rental or royalty, or whatever such payment may be denominated, without any deduction whatever, pursuant to Section 24 (b),
and pay the withheld taxes in accordance with Section 54 of the Tax Code, as amended.

All rulings inconsistent with this Circular is likewise revoked. (Emphasis ours)

On the basis of this new Circular, respondent Commissioner of Internal Revenue issued against petitioner a letter of assessment and demand dated
April 15, 1971, but allegedly released by it and received by petitioner on April 12, 1971, requiring them to pay deficiency withholding income tax on
the remitted film rentals for the years 1965 through 1968 and film royalty as of the end of 1968 in the total amount of P525,897.06 computed as
follows:

1965

Total amount remitted

P
511,059.48

Withholding tax due 153,318.00

thereon

Less: Amount already 89,000.00

assessed

Balance P64,318.00

Add: 1/2% mo. int. fr. 11,577.24

4-16-66 to 4-16-69

Total amount due & P

collectible 75,895.24

1966

Total amount remitted

P373,492.24

Withholding tax 112,048.00

due thereon

Less: Amount 27,947.00

already assessed

Balance 84,101.00

Add: 11/2%mo. int. 15,138.18

fr. 4-16-67 to 4-
116-70

Total amount due P99,239.18

& collectible

1967

Total amount remitted

P601,160.65

Withholding 180,348.00
tax due
thereon

Less: 71,448.00
Amount
already
assessed

Balance 108,900.00

Add: 1/2% 19,602.00

mo. int. fr. 4-
16-68 to 4-
16-71
 Total P128,502.00
amount due
& collectible

1968

Total amount remitted

P881,816.92

Withholding tax 291,283.00

due thereon

Less: Amount 92,886.00

already
assessed

Balance P198,447.00

Add: 1/2% mo. 23,813.64

int. fr. 4-16-69
to 4-29-71

Total amount P222,260.44 1

due &
collectible

On May 5, 1971, petitioner requested for a reconsideration and withdrawal of the assessment. However, without acting thereon, respondent, on
April 6, 1976, issued a warrant of distraint and levy over petitioner's personal as well as real properties. The petitioner then filed its Petition for
Review with the Court of Tax Appeals whose Decision, dated November 29, 1979, is, in turn, the subject of this review. The Tax Court held:

For the reasons given, the Court finds the assessment issued by respondent on April 16, 1971 against petitioner in the amounts
of P75,895.24, P 99,239.18, P128,502.00 and P222,260.64 or a total of P525,897.06 as deficiency withholding income tax for
the years 1965, 1966, 1967 and 1968, respectively, in accordance with law. As prayed for, the petition for review filed in this
case is dismissed, and petitioner ABS-CBN Broadcasting Corporation is hereby ordered to pay the sum of P525,897.06 to
respondent Commissioner of Internal Revenue as deficiency withholding income tax for the taxable years 1965 thru 1968, plus
the surcharge and interest which have accrued thereon incident to delinquency pursuant to Section 51 (e) of the National
Internal Revenue Code, as amended.

WHEREFORE, the decision appealed from is hereby affirmed at petitioner's cost.

SO ORDERED. 2

The issues raised are two-fold:

I. Whether or not respondent can apply General Circular No. 4-71 retroactively and issue a deficiency assessment against
petitioner in the amount of P 525,897.06 as deficiency withholding income tax for the years 1965, 1966, 1967 and 1968.

II. Whether or not the right of the Commissioner of Internal Revenue to assess the deficiency withholding income tax for the
year 196,5 has prescribed. 3

Upon the facts and circumstances of the case, review is warranted.

In point is Sec. 338-A (now Sec. 327) of the Tax Code. As inserted by Republic Act No. 6110 on August 9, 1969, it provides:

Sec. 338-A. Non-retroactivity of rulings. — Any revocation, modification, or reversal of and of the rules and regulations
promulgated in accordance with the preceding section or any of the rulings or circulars promulgated by the Commissioner of
Internal Revenue shall not be given retroactive application if the relocation, modification, or reversal will be prejudicial to the
taxpayers, except in the following cases: (a) where the taxpayer deliberately mis-states or omits material facts from his return or
any document required of him by the Bureau of Internal Revenue: (b) where the facts subsequently gathered by the Bureau of
Internal Revenue are materially different from the facts on which the ruling is based; or (c) where the taxpayer acted in bad
faith. (italics for emphasis)

It is clear from the foregoing that rulings or circulars promulgated by the Commissioner of Internal Revenue have no retroactive application where to
so apply them would be prejudicial to taxpayers. The prejudice to petitioner of the retroactive application of Memorandum Circular No. 4-71 is
beyond question. It was issued only in 1971, or three years after 1968, the last year that petitioner had withheld taxes under General Circular No. V-
334. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968 for a period of time
commencing in 1965. Petitioner was no longer in a position to withhold taxes due from foreign corporations because it had already remitted all film
rentals and no longer had any control over them when the new Circular was issued. And in so far as the enumerated exceptions are concerned,
admittedly, petitioner does not fall under any of them.

Respondent claims, however, that the provision on non-retroactivity is inapplicable in the present case in that General Circular No. V-334 is a nullity
because in effect, it changed the law on the matter. The Court of Tax Appeals sustained this position holding that: "Deductions are wholly and
exclusively within the power of Congress or the law-making body to grant, condition or deny; and where the statute imposes a tax equal to a
specified rate or percentage of the gross or entire amount received by the taxpayer, the authority of some administrative officials to modify or
change, much less reduce, the basis or measure of the tax should not be read into law." Therefore, the Tax Court concluded, petitioner did not
4

acquire any vested right thereunder as the same was a nullity.

The rationale behind General Circular No. V-334 was clearly stated therein, however: "It ha(d) been determined that the tax is still imposed on
income derived from capital, or labor, or both combined, in accordance with the basic principle of income taxation ...and that a mere return of capital
or investment is not income ... ." "A part of the receipts of a non-resident foreign film distributor derived from said film represents, therefore, a return
of investment." The Circular thus fixed the return of capital at 50% to simplify the administrative chore of determining the portion of the rentals
covering the return of capital." 5

Were the "gross income" base clear from Sec. 24 (b), perhaps, the ratiocination of the Tax Court could be upheld. It should be noted, however, that
said Section was not too plain and simple to understand. The fact that the issuance of the General Circular in question was rendered necessary
leads to no other conclusion than that it was not easy of comprehension and could be subjected to different interpretations.

In fact, Republic Act No. 2343, dated June 20, 1959, supra, which was the basis of General Circular No. V-334, was just one in a series of
enactments regarding Sec. 24 (b) of the Tax Code. Republic Act No. 3825 came next on June 22, 1963 without changing the basis but merely
adding a proviso (in bold letters).

(b) Tax on foreign corporation.—(1) Non-resident corporations. — There shall be levied, collected and paid for each taxable
year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not
engaged in trade or business within the Philippines, from all sources within the Philippines, as interest, dividends, rents,
salaries, wages, premiums annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or
periodical gains, profits, and income, a tax equal to thirty per centum of such amount: PROVIDED, HOWEVER, THAT
PREMIUMS SHALL NOT INCLUDE REINSURANCE PREMIUMS. (double emphasis ours).

Republic Act No. 3841, dated likewise on June 22, 1963, followed after, omitting the proviso and inserting some words (also in bold letters).

(b) Tax on foreign corporations.—(1) Non-resident corporations.—There shall be levied, collected and paid for each taxable
year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not
engaged in trade or business within the Philippines, from all sources within the Philippines, as interest, dividends, rents,
salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or
periodical OR CASUAL gains, profits and income, AND CAPITAL GAINS, a tax equal to thirty per centum of such
amount. (double emphasis supplied)
6

The principle of legislative approval of administrative interpretation by re-enactment clearly obtains in this case. It provides that "the re-enactment of
a statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive construction. Note should be taken of
7

the fact that this case involves not a mere opinion of the Commissioner or ruling rendered on a mere query, but a Circular formally issued to "all
internal revenue officials" by the then Commissioner of Internal Revenue.

It was only on June 27, 1968 under Republic Act No. 5431, supra, which became the basis of Revenue Memorandum Circular No. 4-71, that Sec.
24 (b) was amended to refer specifically to 35% of the "gross income."

This Court is not unaware of the well-entrenched principle that the Government is never estopped from collecting taxes because of mistakes or
errors on the part of its
agents. In fact, utmost caution should be taken in this regard. But, like other principles of law, this also admits of exceptions in the interest of
8 9

justice and fairplay. The insertion of Sec. 338-A into the National Internal Revenue Code, as held in the case of Tuason, Jr. vs. Lingad, is 10

indicative of legislative intention to support the principle of good faith. In fact, in the United States, from where Sec. 24 (b) was patterned, it has
been held that the Commissioner of Collector is precluded from adopting a position inconsistent with one previously taken where injustice would
result therefrom, or where there has been a misrepresentation to the taxpayer.
11 12

We have also noted that in its Decision, the Court of Tax Appeals further required the petitioner to pay interest and surcharge as provided for in
Sec. 51 (e) of the Tax Code in addition to the deficiency withholding tax of P 525,897.06. This additional requirement is much less called for
because the petitioner relied in good faith and religiously complied with no less than a Circular issued "to all internal revenue officials" by the highest
official of the Bureau of Internal Revenue and approved by the then Secretary of Finance. 13

With the foregoing conclusions arrived at, resolution of the issue of prescription becomes unnecessary.

WHEREFORE, the judgment of the Court of Tax Appeals is hereby reversed, and the questioned assessment set aside. No costs.

SO ORDERED.