G.R. No.

L-571 December 3, 1902 and resulted in the acquittal of Wong Cheong and the conviction of Aun Tan, who was fined
$1,000, gold, and paid it.
THE UNITED STATES, complainant-appellant,
vs. On the 9th of May Kepner sent Hing a bill "for services in re the United States vs. Wong
THOMAS E. KEPNER, defendant-appellee. Cheong and Aun Tan, as per agreement, $500." Hing flatly refused to pay the account on
the ground that Aun Tan had been fined and that there was nothing due under the terms of
the contract. On June 20 Kepner apparently yielded the point, for on that date he borrowed
Office of the Solicitor-General Araneta, for appellant.
from Hing, his alleged debtor, $150, which he promised to repay on or before the 20th of
Frederick Garfield Waite, for appellee.
July next insuing. This he would scarcely have done if Hing had been indebted to him at
the time in the sum of $500 for services which he asserted had been then fully completed.

On the first of July, 1901, Hing went to the office of Kepner and asked him to make an effort
SMITH, J.: to get the fine remitted and the confiscated flour returned. Hing says Kepner agreed to
obtain the restoration of the fine and the and the flour for the sum of $1,000, Mexican.
Kepner says he agreed to get back the fine for consideration of $500, Mexican, and "that
Thomas E. Kepner, an attorney-at-law, was charged in the Court of First Instance of the
no agreement had been reached on the flour proposition" nor anything said on the subject
city of Manila with the crime of estafa, alleged to have been committed by him by indorsing beyond a conversation touching the making of an application for its recovery, and an offer
a warrant of the Insular Government made payable to his client, Aun Tan, and collecting
for its part to do the work for $500. Kepner presented his petition for the remission of the
and appropriating to his own use the amount due thereon without the authority or consent
fine, but for it had been acted upon officially, so far as appears from the evidence, he again
of the latter. made a demand on Hing for money, which was refused. Considering, however, that the
appellant had obtained the acquittal of Wong Cheong, Hing allowed him $250 in settlement
The accused was tried on the charge and after hearing the evidence of both sides the trial of the second contract, and the offer would appear to have been finally and definitely by
judge was of the opinion that there was evidence tending to show that the appropriation of Kepner in his letter of the 12th of August, 1901, in which he says:
the amount of the warrant was made under a bona fide claim of right. He therefore acquitted
the defendant and the fiscal appealed.
DEAR MR. HING: I am surprised that you should say that you only owe me $250, but until the fine is returned I
will let it go that way.
Wong Cheong and Aun Tan, Chinese bakers, were charged before a military commission
I have received from you $150.00
with illegally having in their possession some four hundred sacks of commissary flour, the
property of the United States, against the statute and military regulations in such cases Clothes 36.00
made and provided. On March 24, 1901, while they were in confinement, O.C. Hing, a Balance due on collections 21.25
Chinese friend of the parties, retained Kepner to obtain their release on bail and to defend
them before the military court. It was agreed that the attorney should receive for his 207.25
professional services $300, Mexican, cash, and $700, Mexican, additional on condition that
he save Wong Cheong and Aun Tan from fine or imprisonment, and secured the release
of the flour which had been seized by the authorities. After obtaining the release of his Balance due me 42.75
clients on $3,000, Mexican, bail and taking their statements, Kepner came to the conclusion Please pay balance of $42.75 to Mr. Denmar, and oblige,
on the 1st of May, 1901, that both were guilty of the offense with which they were charged
Yours, respectfully, etc.,
and that in no event would he be able to procure a release of the flour. He therefore told THOMAS E. KEPNER.
the accused Chinamen as well as Hing "that it was absolutely out of the question to stand
by the original agreement," and offered to return the $300 which had been already paid. He
finally allowed himself, however, to be persuaded to continue with the case for a The sum of $42.75 was paid by Hing as directed by this letter, and on the 12th of August,
consideration, which he says was an unconditional fee of $500 payable on the 1901, all sums then due from Hing to Kepner had been paid, and Hing so understood it.
determination of the cause. Hing says no agreement for an unconditional fee was ever
made. His story is that after Aun Tan had been released on bail Kepner declared that he
could not get the flour back and proposed that contingency should be eliminated from their Two days later, namely, on the 14th of August, 1901, although he had not yet received the
understanding. To this proposition Hing consented and Kepner agreed to secure Wong return of the fine, Kepner notified Hing that the military authorities had remitted the fine and
Cheong and Aun Tan against fine or imprisonment for the sum of $500 in addition to what requested him to call the next day "and pay his bill in this case, amounting as per agreement
he had previously received. The trial of the two men took place about the 4th of May, 1901, to $750, Mexican currency," apparently reviving his claim under the second contract and
adding $500 for an alleged completion of the third contract. Hing refused to pay, saying that
nothing was due or would become due until the fine and the flour were recovered.
On the 24th of August Kepner received $200 from Hing as a loan, according to the latter,
as a payment on the second contract, according to the former. How anything could have
become due in view of the settlement of August 12, 1901, and in view of the fact that the
fine had not been repaid, does not appear.
Although the fine was remitted and an order made for its return, Kepner found that the
money had been turned into the Insular Treasury, and that he could not get it without an
act of the Commission authorizing its payment. The mere fact that this formal act of the
Commission was required to get money out of the Treasury caused Kepner, if he is to be
believed, to despair of ever recovering the fine and he threw up the case. According to his
account he was induced to take it up again, however, for a consideration, to wit, 50 percent
of the amount recovered, which he says Hing agreed to pay. Hing says he did nothing of
the kind. However that may be, the appellant wrote a letter to General Chaffee, asking to
refer the matter to the Commission for an appropriation bill, and on the 20th of September
a warrant in favor of Aun Tan for $1,000, gold, was drawn on the Insular Treasury by the
Civil Governor and countersigned by the Auditor. The Treasurer, on the face of the warrant,
executed an order to the Chartered Bank of India, Australia and China to pay the warrant,
and the same was then delivered to Kepner. Kepner requested Aunt Tan to either indorse
it or give him power to cash it, and Aun Tan positively refused to comply. Kepner then told
Hing that he would put the warrant in his safe until they could reach some agreement. On
the 23rd of September the following letter was written to Hing by Kepner:
Mr. O.C. HING,
Calle Magallanes, No. 19, Intramuros.
MY DEAR SIR: I have to inform you that if you do not settle your
account with me before Tuesday noon (September 24) or indorse the
draft I hold I shall sue you and foreclose my lien on the draft.
Yours respectfully, etc.,
THOMAS E. KEPNER.
On the very same day, September 23, without waiting until the
following day, as indicated in his letter, Kepner, in the very teeth of Aun
Tan's refusal to indorse the draft or to authorize its collection, wrote
Aun Tan's name on the back of it by himself as attorney, presented it
to the bank, represented that he had a power of attorney to make the
indorsement, and had the full amount of the warrant credited to his
account. He would not say that this account then amounted to more
than $5.40.
On the very same 23d day of September, exclusive of the check of
Hing, he drew checks against the $1,000, gold, or $2,000, Mexican, so
credited to him, for more than $1,217.50, Mexican, to pay personal
bills, so that on the 24th of September, when he handed Hing a check
for $450, Mexican, and his receipted bill for $1,550, Mexican, the whole
$2,000, Mexican, had not only been actually appropriated but more
than $1,200, Mexican, of the sum had been actually expended by
Kepner in payment of personal accounts.
The sums paid by Hing to Kepner were $300 retainer on the first
contract $250 for the acquittal of Wong Cheong under the second
contract, and $200 advanced on the third contract for the return of the
fine and the flour $750 in all. According to Kepner there accrued to him
$300 for his retainer on the first contract, $500 under the second
contract which he claims was unconditional, $1,000 for having secured
the return of the fine, and $500 for having attempted to obtain the
redelivery of the flour, which feat, he says, he knew could not be
accomplished, and for the doing of which, he says, he never had any
understanding whatever with either Hing, Wong Cheong or Aun Tan
$2,300 in all. He admits receiving from Hing the sum of $750, leaving
a balance of $1,550, which he paid to himself by cashing the warrant
and crediting the entire proceeds to his account. That is to say,
Kepner's charges for services amounted to $300 more than the whole
amount of the fine.
The appellant's account of his transactions with his clients is such that
his credit as a witness is wholly destroyed as to the disputed facts of
the case. His own story shows him to be a man lacking in principle and
wholly unworthy of the honorable profession to which he unfortunately
belongs. He may have been entirely right in canceling his first contract
to defend the accused Chinamen for a retainer of $300 and $700
additional, contingent on the result. But why did he wait from March 24
until May 1, the eve of the trial, before doing so? Was it to diminish the
chance of the engagement of other counsel and so force his clients to
accept such terms as he might offer? He may not have been actuated
by any such motive, but in view of his subsequent conduct it smacks
of it. The circumstances may have justified his agreeing for a fee of
$500 to obtain a return of the fine which had been justly imposed on
Aun Tan, whom he knew to be guilty, but what is his justification for
breaking his agreement in the very moment of success and forcing his
clients to agree to pay double his fee for the very same service? Why
did he state to Hing after the fine had been remitted by competent
authority that he could not recover the money when all that remained
to be done was a mere authorization of the Commission which would
have been conceded, as it was, for the bare asking? Was it to give him
an excuse to extort from his clients an additional fee of $500 for the
very trivial service of writing a letter to General Chafee asking him to
notify the Commission that the fine had been remitted in order that an
appropriation bill might be passed enabling the withdrawal of the
money from the Insular Treasury? What right did he have to collect
$500 for endeavoring to obtain a return of the confiscated flour, a
charge which he admits was for a service impossible of
accomplishment and wholly unwarranted by any understanding
whatever with his clients? But if he can fairly explain all this, under what
rule of law or morals does he justify his act of representing to the bank
that he had authority from Aun Tan to collect the insular warrant when
he knew that such authority had been definitely, positively, and
expressly refused?
Kepner's own testimony justifies the court in concluding that he sought
to take a grossly unfair advantage of a confidential relation, and that
he is unworthy of credence.
The allegation of the complaint that the unlawful misappropriation of
the proceeds of the warrant was to the prejudice of Aun Tan may be
disregarded by virtue of section 7 of General Orders, No. 58, which
declares that when an offense shall have been described in the
complaint with sufficient certainty to identify the act, an erroneous
allegation as to the person injured shall be deemed immaterial. In any
event the defect, if defect it was, was one of form which did not tend to
prejudice any substantial right of the defendant on the merits, and can
not, therefore, under the provisions of section 10 of the same order,
affect the present proceeding.

It has been stipulated between the appellant and the fiscal that certain
The second agreement, as testified to by Hing, is therefore accepted
affidavits may be considered as evidence on the review and
by the court and Kepner's account as to that agreement and the
examination of the record by this court on appeal. These affidavits
subsequent agreements is rejected. Considering that all he
show that Kepner on the 12th of October, 1901, after the question of
accomplished for his clients was to save them from fine or
the validity of his indorsement had been called to his attention by the
imprisonment in conformity with the second contract, and considering
bank, volunteered to make good to the bank any deficiency which
that he was paid $750 for the service, there only remained $50 due
might exist between his account and the amount of the warrant, and
him at the time he cashed the warrant. He therefore unlawfully
that to make this amount good he deposited with the bank, after his
misappropriated $1,500, viewing the case from the standpoint that the
arrest and on the 30th of October, 1901, $2,000, Mexican. The
money was the money of Aun Tan and giving Kepner credit for the
affidavits further show that on the 10th of May, 1902, he effected a full,
$450 check delivered to Hing. But if we admit the truth of all that the
voluntary, and satisfactory settlement with his client of all financial
accused says, if we forget that he took out of the warrant $500 for
differences.
services rendered to secure the flour without either contract,
agreement, or understanding with his clients to justify it, if we concede
that in all his transactions with Aun Tan he acted in good faith, he is His promise to return the money about the time he was threatened with
nevertheless guilty of the crime of estafa. arrest, and his subsequent return of it after his arrest, as well as the
settlement of his financial differences with his clients, constitute no
defense to the crime, which, if committed at all by him, was committed
The warrant delivered into his hands, drawn by the Insular Government
on the 23rd of September, 1901. Restitution is not even an attenuating
in favor of Aun Tan on the Chartered Bank, was the property of Aun
circumstance under article 9 of the Penal Code. It is a matter to be
Tan, but the money which it represented was not, until it had been
considered solely by the Executive in the exercise of the pardoning
delivered to the bank for payment, properly and legally indorsed by
power.
Aun Tan, or by his authority. Aun Tan had no money in the bank and
no monetary loss was inflicted on him by illegally cashing his warrant.
The injury to him was the delay, annoyance, and damage caused by The judgment of the lower court acquitting the defendant is reversed
the unlawful misappropriation of the warrant. The injury to him was the with costs against the respondent.
delay, annoyance, and damage caused by the unlawful
misappropriation of the warrant. In a word, the bank would have been
Taking into consideration all the evidence in the case the court finds:
compelled to pay Aun Tan the amount of the warrant, notwithstanding
a previous payment to Kepner.
First. That the defendant received on the 21st of September, 1901,
from the Insular Government for the use and benefit and as the
If this be so, on the undisputed facts in the case the defendant
property of his client a certain warrant drawn in favor of said Aun Tan
withdrew from the Chartered Bank and appropriated to his own use
for the sum of $1,000, gold, which the Insular Treasurer, by proper
$2,000, Mexican, of its funds by representing to the bank that he had
order on its face, directed the Chartered Bank of India, Australia and
a power and authority which he did not possess, and that constitutes
China to pay to said Aun Tan.
the crime of estafa under the provisions of article 535, subdivision 1,
of the Penal Code.
Second. That said defendant, against the will and without the consent
of said Aun Tan, wrote the name of Aun Tan by himself as attorney on
 the back of said warrant and presented the same to the said bank for
payment.
Third. That he represented and stated to said bank that he had a power
of attorney from Aun Tan to make such indorsement, and that his
representation and statement to that effect to the bank was false and
untrue, as he, the said defendant, well knew when he made it.
Fourth. That in consequence of said unauthorized indorsement by the
defendant and his aforesaid false representation and statement to the
bank said warrant was cashed, and the whole amount thereof, $2,000,
Mexican, credited to appellant's personal account in said bank on the
23rd of September, 1901.
Fifth. That afterwards, and on said 23rd of September, 1901,
defendant used of said sum so credited to his said account more than
$1,217.50, Mexican, and possibly $1337.50, Mexican, for the payment
of personal bills and expenses.
Sixth. That on the 24th of September, 1901, defendant delivered to
O.C. Hing for Aun Tan his personal check on said bank for $450, and
his receipted bill of $1,550 for services rendered, but that said check
was never cashed by Aun Tan nor was said bill for $1,550 accepted
as correct or just.
304, and because the law permits only "acceptance or discount of backpay certificates,"
not the repayment of loans. The court a quo held that section 2 of Republic Act No. 304 is
permissive merely, and that even if where mandatory, plaintiff's case can not fall thereunder
because he is not acquiring property for a home or construing a residential house, but
compelling the acceptance of his backpay certificate to pay a debt he contracted after the
enactment of Republic Act No. 304. It, therefore, dismissed the complaint with costs.
The appeal involves the interpretation of section 2 of Republic Act No. 302, which provides:
. . . And provided, also, That investment funds or banks or other financial
institutions owned or controlled by the Government shall, subject to the
availability of loanable funds, and any provision of the their charters, articles of
incorporation's, by-laws, or rules and regulations to the contrary notwithstanding,
accept or discount at not more than two per centum per annum for ten years such
certificate for the following purposes only: (1) the acquisition of real property for
use as the applicant's home, or (2) the building or construction of the residential
house of the payee of said certificate: . . .
It is first contended by the appellant that the above provision is mandatory, not only because
it employs the word "shall", which in its ordinary signification is mandatory, not permissive,
but also because the provision is applicable to institutions of credit under the control of the
Government, and because otherwise the phrases "subject to availability of loanable funds"
and "any provisions of this charter, . . . and regulations to the contrary notwithstanding"
would be superfluous.

It is true that its ordinary signification the word "shall" is imperative.

Seventh. That neither on the 23rd of September, G.R. No. L-4712 July 11, 1952

In common or ordinary parlance, and in its ordinary signification, the term "shall"
RAMON DIOKNO, plaintiff-appellant,
is a word of command, and one which has always or which must be given
vs.
compulsory meaning; as denoting obligation. It has a preemptory meaning, and
REHABILITATION FINANCE CORPORATION, defendant-appellee.
it is generally imperative or mandatory. It has the invariable significance of
operating to impose a duty which may be enforced, particularly if public policy is
Sixto de la Costa for appellee. in favor of this meaning or when addressed to public officials, or where a public
interest is involved, or where the public or persons have rights which ought to be
exercised or enforced, unless a contrary intent appears. People vs. O'Rourke, 13
LABRADOR, J.:
P. 2d. 989, 992, 124 Cal. App. 752. (39 Words and Phrases, Permanent Ed., p.
90.)
Plaintiff is the holder of a backpay certificate of indebtedness issued by the Treasurer of
the Philippines under the provisions of Republic Act No. 304 of a face value of P75,857.14
The presumption is that the word "shall" in a statute is used is an imperative, and
dated August 30, 1948. On or about November 10, 1050, when the action was brought, he
not in a directory, sense. If a different interpretation is sought, it must rest upon
had an outstanding loan with the Rehabilitation Finance Corporation, contracted therewith something in the character of the legislation or in the context which will justify a
on January 27, 1950, in the total sum of P50,000, covered by a mortgage on his property
different meaning. Haythorn vs. Van Keuren & Son, 74 A. 502, 504, 79 N. J. L.
situated at 44 Alhambra, Ermita, Manila, with interest at 4 per cent per annum, of which
101; Board of Finance of School City of Aurora vs. People's Nat. Bank of
P47,355.28 was still unpaid. In this action he seeks to compel the defendant corporation to Lawrenceburg, 89 N. E. 904, 905 44 Ind. App. 578. (39 Words and Phrases,
accept payment of the balance of his indebted with his backpay certificate. The defendant
Permanent Ed., p. 93.)
resists the suit on the ground that plaintiffs' demand is not only not authorized by section 2
of Republic Act No. 304 but contrary to the provisions thereof, and furthermore because
plaintiff's loan was obtain on January 27, 1950, much after the passage of Republic Act No.
However, the rule is not absolute; it may be construed as "many", when so required by the
context or by the intention of the statute.
In the ordinary signification, "shall" is imperative, and not permissive, though it
may have the latter meaning when required by the context. Town of
Milton vs. Cook, 138 N.E. 589, 590, 244 Mass. 93. (39 Words and Phrases,
Permanent Ed., p. 89.)
"Must" or "shall" in a statute is not always imperative, but may be consistent with
an exercise of discretion. In re O'Hara, 82 N.Y.S. 293, 296, 40 Misc. 355, citing
In re Thurber's Estate, 162 N.Y. 244, 252, 56 N.E. 638, 639. (Ibid. p. 92.)
The word "shall" is generally regarded as imperative, but in some context it is
given a permissive meaning, the intended meaning being determined by what is
intended by the statute. National Transit Corporation Co. vs. Boardman, 197 A.
239, 241, 328, Pa. 450.
The word "shall" is to be construed as merely permissive, where no public benefit
or private right requires it to be given an imperative meaning
Sheldon vs. Sheldon, 134 A. 904, 905, 100 N.J. Ex. 24.
Presumption is that word "shall" in ordinance, is mandatory; but, where it is
necessary to give effect to legislative intent, the word will be construed as "may."
City of Colorado Springs vs. Street, 254 p. 440, 441, 81 Colo. 181.
The word "shall" does not necessarily indicate a mandatory behest. Grimsrud vs.
Johnson, 202 N. W. 72, 73, 162 Minn. 98.
Words like "may," "must," "shall" etc., are constantly used in statutes without
intending that they shall be taken literally, and in their construction the object
evidently designed to be reached limits and controls the literal import of the terms
and phrases employed. Fields vs. United States, 27 App. D. C. 433, 440. (39
Words and Phrases, Permanent Ed., 89, 92).
In this jurisdiction the tendency has been to interpret the word "shall" as the context or a
reasonable construction of the statute in which it is used demands or requires. Thus the
provision of section 11 of Rule 4 of the Rules requiring a municipal judge or a justice of the
peace to render judgment of the conclusion of the trial has been held in the directory.
1 (b) To grant loans to provincial, city and municipal governments for the
(Alejandro vs. Judge of First Instance 40 Off. Gaz., 9th Supp., 261). In like manner section
178 of the Election Law, in so far a it requires that appeals shall be decided in three months,
2 bridges, slaughterhouses, and other self-liquidating or income-producing
has been to the directory for the Court of Appeals. (Querubin vs. The Court of Appeals, 46
Off. Gaz., 155).
In the provision subject controversy, it is to be noted that the verb-phrase "shall accept or
discount" has two modifiers, namely, "subject to availability of loanable funds" and "at not
more that two per centum per annum for ten years." As to the second modifier, the interest
to be charged, there seems to be no question that the verb phrase is mandatory, because
not only does the law use "at not more" but the legislative purpose and intent, to conserve
the value of the backpay certificate for the benefit of the holders, for whose benefit the same
have been issued, can be carried out by fixing a maximum limit for discounts. But as to
when the discounting or acceptance shall be made, the context and the sense demand a
contrary interpretation. The phrase "subject" means "being under the contingency of"
(Webster's Int. Dict.) a condition. If the acceptance or discount of the certificates to be
"subject" to the condition of the availability of a loanable funds, it is evident that the
Legislature intended that the acceptance shall be allowed on the condition that there are
"available loanable funds." In other words, acceptance or discount is to be permitted only if
there are loanable funds.
Let us now consider the meaning of the condition imposed for accepting or discounting
certificates, the "availability of loanable funds." On this issue the appellant contends that
the mere fact that P50,000 was loaned to him and that the Rehabilitation Finance
Corporation has been granting loans up to the time plaintiff offered to pay the loan with his
certificate — these prove that there are "available loanable funds". As the court a quo did
not pass on such availability, he also contends that this is a question of fact to be
determined by the courts. The defendant denies the existence of "available loanable funds."
The gist of plaintiffs' contention is that any and all funds of the Rehabilitation Finance
Corporation are subject to the provision of the discount or acceptance of the certificates;
that of defendant-appellee is that only funds made available for the purpose of discounting
backpay certificates may be used for such purpose and that at the time the action was filed
there was no such funds.
The Rehabilitation Finance Corporation was created by Republic Act No. 85, which was
approved on October 29, 1946. The corporation was created "to provide credit facilities for
the rehabilitation and development of agriculture, commerce, and industry, the
reconstruction of property damaged by war, and the broadening and diversification of the
national economy" (section 1), and to achieve the above aims it was granted the following
powers:
SEC. 2. Corporate powers. — The Rehabilitation Finance Corporation shall have
the power:
(a) To grant loans for home building and for the rehabilitation, establishment or
development of any agricultural, commercial or industrial enterprise, including
public utilities;
rehabilitation, construction or reconstruction of public markets, waterworks, toll
services;
(c) To grant loans to agencies and corporations owned or controlled by the
Government of the Republic of the Philippines for the production and distribution
of electrical power, for the purchase and subdivision of rural and urban estates,
 for housing projects, for irrigation and waterworks systems, and for other
essential industrial and agricultural enterprises;
(d) To grant loans to cooperative associations to facilitate production, the
marketing of crops, and the acquisition of essential commodities;
(e) To underwrite, purchase, own, sell, mortgage or otherwise dispose of stocks,
bonds, debentures, securities and other evidences of indebtedness issued for or
in connection with any project or enterprise referred to in the proceeding
paragraphs;
(f) To issue bonds, debentures, securities, collaterals, and other obligations with
the approval of the President, but in no case to exceed at any one time an
aggregate amount equivalent to one hundred per centum of its subscribed capital
and surplus. . . .
If the Rehabilitation Finance Corporation is to carry out the aims and purposes for which it
was created, It must evolve a definite plan of the industries or activities which it should be
rehabilitate, establish, or develop, and apportion its available funds and resources among
these, consistent with the policies outlined in its charter.
As of May 31, 1948, immediately prior to the passage of the Backpay Law, it had granted
the following classes of loans:
Agricultural loans ........................................................
Industrial loans ............................................................
Real Estate Loans ........................................................
Loans for purchase, Subdivision and Resale of Landed EstatesRehabilitation Finance Corporation by the issue of the bonds, at rates of interest of more
.........................................................
Loans to Provinces, Cities, and Municipalities for Self-liquidating Projectswould be loans for holders of backpay certificates, but none for rehabilitation or
..............................................
Total Loans .................................................. P90,090,77.68
(Exhibit 2)
As of February 2, 1951, the corporation had accepted in payment of loans granted before and activities, and the whole scheme of national financial organization and development
June 18, 1948, the total amount of P8,225,229.96, as required by section 2 of the Backpay disrupted. It seems evident that the legislature never could have intended such absurd
Law. (See Exhibit 11, p.4.).
The third anniversary report of the Rehabilitation Finance Corporation dated January 2,
1950 (Exhibit 1,), shows that the funds originally available to the corporation came from the
following sources:
Funds made available:
Initial cash capital ................................................................
Cash Transferred from Financial Rehabilitation Funds ....
Cash received from Surplus Property Commission .......
Cash received from Phil. Shipping Adm. ...........................
Cash payment of capital ..................................................
Proceeds of bond issues ..................................................
Advances from the Central Bank .......................................
There was also collectible from the loans the total amount of P28,659,442.12, so that the
total cash available to the corporation from January 2, 1947, to November 30, 1949, was
P180,041,670.04. But the Total amount of loans already approved as of the last date was
P203,667,403.78 and the total of approved loans pending release was P25,342,020.78,
and the only cash balance available in November, 1949, to meet these approved loans was
P1,716,286.71.
It may readily be seen from the above data that were we to follow appellant's theory and
contention that the law is mandatory, the loan he had applied for, as well as that of any
holder of a backpay certificate, would have to be paid out of this available cash, pursuant
to the alleged mandate of section 2 of the Backpay Law. The compulsory acceptance and
discount of certificates will bring about, as a direct and necessary consequence, the
suspension of all, if not of most, of the activities of the Rehabilitation Finance Corporation;
P23,610,350.74
and no agricultural or industrial loans, or loans to financial institutions and local
22,717,565.87
governments for their markets, waterworks, etc., would be granted until all the backpay
certificates (amounting to some hundred millions of pesos) shall heave been accepted or
34,601,258.29
discounted. And as the defendant-appellant forcefully argues, even funds obtained by the
than 2 per cent, the rate fixed for the discount of the backpay certificates, will have to be
7,271,258.78
loaned to holders of backpay certificates at a loss, to the prejudice of the corporation. There
1,889,763.00or development of industries, or of the national economy; there would be
reconstruction,
funds for employees' loans, but none for the improvements of public services, etc., as all
Rehabilitation Finance Corporation funds will be necessary to meet the demands of holders
of backpay certificates. And if it be remembered that the provision is intended for all financial
institutions controlled by the Government, the consequences would be felt by all industries
consequences, even with all the sympathy that it is showing for holders of backpay
certificates.
But while we agree with the appellee that it could not have been the intention of Congress
to disrupt the whole scheme of rehabilitation, reconstruction, and development envisioned
in the Rehabilitation Act, by its passage of section 2 of the Backpay Law, neither we are
prepared to follow appellee's insinuation that the section is impracticable or impossible of
execution by the Rehabilitation Finance Corporation in the situation in which its funds and him. The trial court held that the above resolution was illegal and that its unauthorized
resources were at the time of the trial. In our opinion, what the Legislature intended by the enactment (which he called a "wrong") does not justify its repetition for the benefit of
provision in dispute is that the Rehabilitation Finance Corporation, through its Board of appellant. As we have indicated above, we believe that its approval (not any supposed
Directors, should from time to time set aside some reasonable amount for the discount of discrimination on behalf of some special holders) can be defended under the law, but that
backpay certificates, when this can be done without unduly taxing its resources, or unduly the passage of a similar resolution can not be enjoined by an action of mandamus.
prejudicing the plan of rehabilitation and development that it has mapped out, or that which
the corresponding authority has laid down as a policy. This legislative intention can be
We must admit, however, that appellant's case is not entirely without any merit or
inferred from the fact that Congress itself expressly ordered that all financial institutions
justification; similar situations have already been favorably acted upon by the Congress,
accept or discount backpay certificates in payment of those loans, evidently laying down
when it ordered that certificates be accepted in payment of outstanding obligations, and by
an example to be followed by financial institutions under its control. The loans granted under
the Rehabilitation Finance Corporation in its above-mentioned resolution. But we feel we
section 2 of the law by the Rehabilitation Finance Corporation amounted to P8,225,229.96.
are powerless to enforce his claim, as the acceptance and discount to backpay certificates
It is shown or even presented that the payment of this considerable amount has impaired
has been placed within the sound discretion of the rehabilitation Finance Corporation, and
or disrupted the activities of the Rehabilitation Finance Corporation. It is not claimed, either,
subject to the availability of loanable funds, and said discretion may not be reviewed or
that at the time of the filing of appellant's action the Rehabilitation Finance Corporation was
controlled by us. It is clear that this remedy must be available in other quarters, not in the
in no position to set aside a modest sum, in a manner similar to the creation of a sinking
courts of justice.
fund, for the discount of backpay certificates to help the Government comply with its
financial commitments. We are convinced that the Rehabilitation Finance Corporation may,
without impairment of its activities, set aside from time to time, say, half a million pesos or For all the foregoing considerations, we are constrained to dismiss the appeal, with coasts
a considerable part thereof, for the payment of backpay certificates. But these against the appellant.
circumstances notwithstanding, we are of the opinion that the law in question (section 2 of
the Backpay Law), in so far as the discount and acceptance of backpay certificates are
Paras, C.J., Feria, Pablo, Padilla, Tuason, Montemayor, and Bautista Angelo, JJ., concur.
concerned, should be interpreted to be directory merely, not mandatory, as claimed by
plaintiff-appellant, the same to be construed as a directive for the Rehabilitation Finance
Corporation to invest a reasonable portion of its funds for the discount of backpay
certificates, from time to time and in its sound discretion, as circumstances and its
resources may warrant.
1901, nor on the 24th of the same month and year G.R. No. 83341 January 30,
1990
Having come to the conclusion that section 2 of the Backpay Law is directly merely, we now
address ourselves to the propriety of the action, which the plaintiff and appellant labels
specific performance. As the action is not based on any contractual relation between the ARNEL P. MISOLAS, petitioner,
plaintiff and appellant and the defendant and appellee, it may be one for specific vs.
performance; it is in effect predicated on a supposed legal duty imposed by law and is HON. BENJAMIN V. PANGA, as Judge of RTC Branch 33, Cadlan Pili, Camarines Sur
properly the designated as a special civil action of mandamus because the appellant seeks and PEOPLE OF THE PHILIPPINES, respondents.
to compel the appellee to accept his backpay certificate in payment of his outstanding
obligation. We are not impressed by the defense technical in a sense, that the Rehabilitation Soliman M. Santos, Jr. counsel de oficio for petitioner.
Finance Corporation is not expressly authorized to accept certificates in payment of
outstanding loans. There is no provision expressly authorizing this procedure or system;
but neither is there one prohibiting it. The legislature has once ordered it; the Rehabilitation
Finance Corporation has once authorized it. We believe the legislature could not have
intended to discriminate against those who have already built their houses, who have CORTES, J.:
contracted obligations in so doing. We prefer to predicate court ruling that this special action
does not lie on the ground that the duty imposed by the Backpay Law upon the appellee as
to the acceptance or discount of backpay certificates is neither clear nor ministerial, but This petition for certiorari ascribes grave abuse of discretion amounting to lack or excess
discretionary merely and that mandamus does not issue to control the exercise of discretion of jurisdiction to the respondent judge who denied petitioner's motion to quash the
of public officer. (Viuda e hijos de Crispulo Zamora vs. Wright and Segado, 53 Phil., 613, information filed against him as well as his motion for reconsideration.
621; Blanco vs. Board of Medical Examiners, 46 Phil., 190 192, citing Lamb vs. Phipps, 22
Phil., 456; Gonzales vs. Board of Pharmacy, 20 Phil., 367, etc.) It is, however, argued on The case brings into focus our laws on subversion and subversion-related offenses.
behalf of the appellant that inasmuch as the Board of Directors of the Rehabilitation Finance
Corporation has seen fit to approve a resolution accepting backpay certificates amounting
to P151,000 (Exhibit H), law and equity demand that the same privilege should be accorded The controversy arose from the following facts:
After receiving information from an unidentified informant that members of the New
People's Army (NPA) were resting in a suspected "underground house" in Foster Village,
Del Carmen, Pili, Camarines Sur, elements of the Philippine Constabulary (PC) raided said
house in the early morning of August 8, 1987. Three persons were inside the house,
petitioner and two women known by the aliases "Ka Donna" and "Ka Menchie" but the
women were able to escape in the confusion during the raid. The house was searched and
the raiders found in a red bag under a pillow allegedly used by petitioner a .20 gauge
Remington shotgun and four live rounds of ammunition. Petitioner was arrested and
brought to the PC headquarters. On September 4, 1987, an information charging petitioner
with illegal possession of firearms and ammunition under Presidential Decree No. 1866
was filed by the provincial fiscal. The information alleged that the firearm and ammunition
were used in furtherance of subversion so as to qualify the offense under the third
paragraph of Section 1 of P.D. No. 1866, which provides:
If the violation of this Section is in furtherance of, or incident to, or in connection
with the crimes of rebellion, insurrection or subversion, the penalty of death shall
be imposed.
Upon arraignment, the petitioner, with the assistance of counsel de oficio pleaded "not
guilty" to the charge. However, a few days later, the same counsel (also his counsel in this
petition) filed a motion to withdraw the plea on the ground that there was basis for the filing
of a motion to quash. Respondent judge gave petitioner time to file a motion to quash.
Petitioner filed a motion to quash on the following grounds:
(1) that the facts charged do not constitute an offense because the information
does not charge the proper offense since from the allegations the offense that
may be charged is either subversion or rebellion; and
(2) that the trial court had no jurisdiction over the person of petitioner because of
violations of his constitutional rights, i.e, his arrest and the seizure of the firearm
and ammunition were illegal.
Respondent judge denied the motion to quash for lack of merit in an order dated January
7, 1988. Petitioner moved for reconsideration, but such was denied on February 15, 1988.
Hence, this petition.
1. The petition, reiterating the grounds alleged in the motion to quash, centers on
the argument that the third paragraph of Section 1 of P.D. No. 1866, which
penalizes illegal possession of firearms and ammunition committed in
furtherance of, or incident to, or in connection with the crimes of rebellion,
insurrection, or subversion, should be stricken down as unconstitutional. In the
words of petitioner:
Unconstitutional because it is violative of the due process clause, particularly
substantive due process against arbitrary laws. Arbitrary because it disregards
the overwhelming weight of national as well as international laws and
jurisprudence behind the Hernandez (99 Phil. 515) and Geronimo (100 Phil. 90)
rulings on the doctrine of absorption of common crimes in rebellion.
If murder is absorbed in rebellion, with more reason should illegal possession of
firearms be absorbed in rebellion and for that matter subversion.
While it is true that subversion is an entirely different and distinct crime from
rebellion, both are recognized as political offenses. So much so that in the
Guidelines for the Grant of Pardon to Political Detainees/Prisoners, the latter are
defined as those charged detained or imprisoned for rebellion or subversion,
among others.
The idea of absorption of illegal possession of firearms in subversion is also
bolstered by the fact that in Republic Act 1700, as amended, subversion or its
penalty is qualified when the subversive "takes up arms against the
Government."
It cannot be said that P.D. No. 1866 is an exception to
the Hernandez and Geronimo rulings. On the contrary, it is the other way around
by virtue of the overwhelming weight of national as well as international laws and
jurisprudence which form part of the law and legal system of the land.
xxx xxx xxx
... an armed subversive or rebel is to be distinguished from a common criminal
illegally possessing a firearm. The former should be charged with subversion or
rebellion, absorbing his illegal possession of firearm. His illegal possession of
firearm is not the main thing. It is only incidental to his involvement in subversion
or rebellion. (Petition, pp. 5-6; Rollo, pp. 5-6).
Republic Act No. 1700, as amended, provides in Section 4 that "if such member [of the
Communist Party of the Philippines and/or its successor or of any subversive association]
takes up arms against the Government, he shall be punished by prision mayor to reclusion
perpetua with all the accessory penalties provided therefor in the Revised Penal Code."
Thus, given the particular facts of the case, petitioner could be charged either under P.D.
No. 1866 or R.A. No. 1700. But as bluntly pointed out by petitioner:
. . . It is a matter of public knowledge that the military has even admitted its policy
or practice of charging armed subversives or rebels with "qualified" illegal
possession of firearms instead of subversion or rebellion for two reasons: (1) the
former is easier to prosecute than the latter, and (2) the former has a higher
penalty than the latter. [Petition, p. 6; Rollo, p. 6].
Undeniably, it is easier to prove that a person has unlawfully possessed a firearm and/or
ammunition under P.D. No. 1866 than to establish that he had knowingly, wilfully and by
overt acts affiliated himself with, became or remained a member of the Communist Party of
the Philippines and/or its successor or of any subversive organization under R.A. No. 1700,
as conviction under the latter "requires that membership must be knowing or active, with
specific intent to further the illegal objectives of the Party' [People v. Ferrer, G.R. Nos. L-
32613-14, December 27, 1972, 48 SCRA 382].
However, that the same act may be penalized under two different statutes with different
penalties, even if considered highly advantageous to the prosecution and onerous to the
accused, will not necessarily call for the invalidation of the third paragraph of Section 1 of
P.D. No. 1866 which provides for the higher penalty.
Neither would the doctrines enunciated by the Court in Hernandez and Geronimo,
and People v. Rodriguez [107 Phil. 659] save the day for petitioner.
In Hernandez, the accused were charged with the complex crime of rebellion with murder,
arson and robbery while in Geronimo, the information was for the complex crime of rebellion
with murder, robbery and kidnapping. In those two cases the Court held that aforestated
common crimes cannot be complexed with rebellion as these crimes constituted the means
of committing the crime of rebellion. These common crimes constituted the acts of
"engaging in war" and "committing serious violence" which are essential elements of the
crime of rebellion [See Arts. 134-135, Revised Penal Code] and, hence, are deemed
absorbed in the crime of rebellion. Consequently, the accused can be held liable only for
the single crime of rebellion.
On the other hand, in Rodriguez, the Court ruled that since the accused had already been
charged with rebellion, he can no longer be charged for illegal possession of firearms for
the same act of unauthorized possession of firearm on which the charge of rebellion was
based, as said act constituted the very means for the commission of rebellion. Thus, the
illegal possession of the firearm was deemed absorbed in the crime of rebellion.
However, in the present case, petitioner is being charged specifically for the qualified
offense of illegal possession of firearms and ammunition under P.D. 1866. HE IS NOT
BEING CHARGED WITH THE COMPLEX CRIME OF SUBVERSION WITH ILLEGAL
POSSESSION OF FIREARMS. NEITHER IS HE BEING SEPARATELY CHARGED FOR
SUBVERSION AND FOR ILLEGAL POSSESSION OF FIREARMS. Thus, the rulings of the
Court in Hernandez, Geronimo and Rodriquez find no application in this case.
Even the dictum in Hernandez that,
... national, as well as international, laws and jurisprudence overwhelmingly favor
the proposition that common crimes, perpetrated in furtherance of a political
offense, are divested of their character as "common" offenses and assume the
political complexion of the main crime of which they are mere ingredients, and,
consequently, cannot be punished separately from the principal offense, or
complexed with the crime, to justify the imposition of the greater penalty. [At 541.]
which petitioner relies on, cannot find application in this case considering that the
Legislature had deemed it fit to provide for two distinct offenses: (1) illegal possession of
firearms qualified by subversion (P.D. No. 1866) and (2) subversion qualified by the taking
up of arms against the Government (R.A. No. 1700), which the Legislature has the power
to do. The practical result of this may be harsh or it may pose grave difficulty on an accused
in instances similar to those that obtain in the present case, but the wisdom of the
Legislature in the lawful exercise of its power to enact laws is something that the Court
cannot inquire into as it would be in derogation of the principle of separation of powers. In
the words of Chief Justice Fernando:
xxx xxx xxx
6. Nor could such a provision be nullified on the allegation that it constitutes "an
insult to the personal integrity and official dignity" of public officials. On its face,
it cannot thus be stigmatized. As to its being unnecessary, it is well to remember
that this Court, in the language of Justice Laurel, "does not pass upon questions
of wisdom, justice or expediency of legislation." As expressed by Justice Tuazon:
"It is not the province of the courts to supervise legislation and keep it within the
bounds of propriety and common sense. That is primarily and exclusively a
legislative concern." There can be no objection then to the observation of Justice
Montemayor: "As long as laws do not violate any Constitutional provision, the
Courts merely interpret and apply them regardless of whether or not they are
wise or salutary." For they, according to Justice Labrador, "are not supposed to
override legitimate policy and ..., never inquire into the wisdom of the law.
It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales
v. Commission on Elections, that only congressional power or competence, not
the wisdom of the action taken, may be the basis for declaring a statute invalid.
That is as it ought to be. The principle of separation of powers has in the main
wisely allocated the respective authority of each department and confined its
jurisdiction to such a sphere. There would then be intrusion not allowable under
the Constitution if on a matter left to the discretion of a coordinate branch, the
judiciary would substitute its own. If there be adherence to the rule of law, as
there ought to be, the last offender should be the courts of justice, to which rightly
litigants submit their controversy precisely to maintain unimpaired the supremacy
of legal norms and prescriptions. The attack on the validity of the challenged
provisions likewise insofar as there may be objections, even if valid and cogent,
on its wisdom cannot be sustained. [Morfe v. Mutuc, G.R. No. L-2038 id. January
31, 1968, 22 SCRA 424, 450-451].
Then, that P.D. No. 1866 was enacted by deposed former President Marcos (pursuant to
his law-making powers under the 1973 Constitution) is not by itself a legal argument for its
invalidation. The 1987 Constitution expressly provides that "[a]ll existing laws, decrees,
executive orders, proclamations, letters of instruction, and other executive issuances not
inconsistent with this Constitution shall remain operative until amended, repealed or
revoked." [Art. XVIII, Sec. 3].
The remedy lies with the present Legislature to correct the situation through remedial
legislation if it finds a failure of logic and reason in the existing statutes on political offenses.
. . . If remedial measures are deemed necessary, let Congress provide the same.
Courts have no authority to grant relief against the evils that may result from the
operation of unwise or imperfect legislation, unless its flaw partakes of the nature
of a constitutional infirmity ... Nin Bay Mining Co. v. Municipality of Roxas,
Palawan, G.R. No. L-20125, July 20,1965,14 SCRA 660, 666].
That the facts charged comply with the elements of the offense penalized in the third
paragraph of Section 1 of P.D. No. 1866 is not disputed. But petitioner asserts that the
nature of his alleged acts requires that he be charged with subversion or with rebellion
instead of qualified illegal possesion of firearms and ammunition, perhaps in view of the
lower penalty for subversion and rebellion. Quashal of the information cannot be had on
this ground, the matter of what offense to charge in the information being within the
prosecutor's sound discretion. As the Court stated in the case of People v. Pineda [G.R.
No. L-26222, July 21, 1967, 20 SCRA 748]:
. . . The question of instituting a criminal charge is one addressed to the sound
discretion of the investigating Fiscal. The information he lodges in court must
have to be supported by the facts brought about by an inquiry made by him. It
stands to reason then to say that in a clash of views between the judge who did
not investigate and the fiscal who did, or between the fiscal and the offended
party or the defendant, those of the Fiscal's should normally prevail. In this
regard, he ordinarily cannot be subject to dictation. . . . [At 756].
In sum, petitioner's case for the declaration of unconstitutionality of the third paragraph of
Section 1 of P.D. No. 1866 is wanting in legal basis.
In this separate opinion, Mr. Justice Sarmiento espouses the view that P.D. No. 1866
should be struck down as unconstitutional for being a bill of attainder.
Initially, it must be pointed out that the petition never challenged P.D. No. 1866 on that
ground. As discussed earlier, petitioner objected to P.D. 1866 on the ground of substantive
due process. Established rules of constitutional litigation would, therefore, bar an inquiry
based on the theory that P.D. No. 1866 constitutes a bill of attainder. It must also be noted
that while petitioner challenges only the third paragraph of section 1 of P.D. No. 1866, Mr.
Justice Sarmiento would have the other portions of the law invalidated. Again, this is
impermissible.
But even if a challenge on the ground that P.D. 1866 is a bill of attainder could be
appropriately considered, it will still be met with little success. The Court, in People v. Ferrer,
supra, defined a bill of attainder as a legislative act which inflicts punishment on individuals
or members of a particular group without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the imposition of a punishment,
penal or otherwise, and the lack of judicial trial. This last element, the total lack of court
intervention in the finding of guilt and the determination of the actual penalty to be imposed,
is the most essential [Id. at pp. 395-397; 400-401]. P.D. No. 1866 does not possess the
elements of a bill of attainder. It does not seek to inflict punishment without a judicial trial.
Nowhere in the measure is there a finding of guilt and an imposition of a corresponding
punishment. What the decree does is to define the offense and provide for the penalty that
may be imposed, specifying the qualifying circumstances that would aggravate the offense.
There is no encroachment on the power of the court to determine after due hearing whether
the prosecution has proved beyond reasonable doubt that the offense of illegal possession
of firearms has been committed and that the qualifying circumstance attached to it has been
established also beyond reasonable doubt as the Constitution and judicial precedents
require.
The presumption of constitutionality attaches to legislative acts [Yu Cong Eng v. Trinidad,
47 Phil. 387 (1925); Morfe v. Mutuc, G.R. No. L-20387, January 31, 1968, 22 SCRA 425].
Before a statute or a portion thereof may be declared unconstitutional, "it must be shown
that the statute violates the constitution clearly, palpably plainly, and in such a manner as
to leave no doubt or hesitation in the mind of the Court." [SINCO PHILIPPINE POLITICAL
LAW 525 (11th ed., 1960, citing Sharpless v. Mayor, 21 Pa. 147; also quoted in Alba v.
Evangelists, 100 Phil. 683 (1957)]. "Thus, to justify the nullification of a law, there must be
a clear and unequivocal breach of the Constitution, not a doubtful and argumentative
implication." [Peralta v. COMELEC, G.R. No. L-47771, March 11, 1978, 82 SCRA 30, 55].,
Absent a clear showing that the challenged measure ousts the courts from the function of
passing upon the question of guilt or innocence of the accused and an unequivocal
demonstration that P.D. No. 1866, by legislative fiat, declares the petitioner guilty of a crime
and imposes directly the penalty prescribed thereunder, the challenge will have to be
rejected.
Neither can the Court strike down P.D. No. 1866 for snowing the possibility of a second
jeopardy, as Mr. Justice Sarmiento suggests. It must be pointed out that at the time this
petition was filed, there had been no previous conviction, acquittal or dismissal. Hence, the
question of a second or double jeopardy does not arise. This is manifest from the
Constitution, which provides:
Sec. 21. No person shall be twice put in jeopardy of punishment for the same
offense. If an act is punished by a law and an ordinance, conviction or acquittal
under either shall constitute a bar to another prosecution for the same act. [Art.
III.]
More particularly, Rule 117 of the Rules of Court states:
SEC. 7. Former conviction or acquittal; double jeopardy. — When an accused
has been convicted or acquitted, or the case against him dismissed or otherwise
terminated without Ms express consent by a court of competent jurisdiction, upon
a valid complaint or information or other formal charge sufficient in form and
substance to sustain a conviction and after the accused had pleaded to the
charge, the conviction or acquittal of the accused or the dismissal of the case
shall be a bar to another prosecution for the offense charged, or for any attempt
to commit the same or frustration thereof, or for any offense which necessarily
 includes or is necessary included in the offense charged in the former complaint In view thereof, the Court finds it unnecessary to resolve the second issue.
or information.
WHEREFORE, in view of petitioner's failure to clearly and unequivocally establish that the
xxx xxx xxx third paragraph of Section 1 of P.D. No. 1866 violates the Constitution, the petition is hereby
DISMISSED.
The right against double jeopardy is a matter which the accused may raise in a motion to
quash [Sec. 3(h) Rule 117]. But, precisely, petitioner's motion to quash flied in the trial court SO ORDERED.
did not raise the issue of double jeopardy because it had not arisen. The Court cannot
anticipate that the opportunity for a second jeopardy will still arise if he is acquitted or
Fernan. C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco,
convicted as charged under P.D. 1866.
Padilla, Bidin, Griño-Aquino and Medialdea, JJ., concur.
Regalado, J., In the result.
Moreover, even if such a subsequent or second jeopardy does arise, P.D. No. 1866 will not
be rendered unconstitutional. That an accused will be exposed to double jeopardy if he is
prosecuted under another law is not a ground to nullify that law. Double jeopardy is merely
a defense that an accused may raise to defeat a subsequent prosecution or conviction for
the same offense. Separate Opinions

2. The thrust of petitioner's contention that the trial court had not acquired
jurisdiction over his person is that his constitutional rights against unlawful arrest
and unreasonable searches and seizures had been violated. He asserts that he
CRUZ, J., dissenting:
was arrested in contravention of the clear provisions on arrests in the Revised
Rules of Court. He concludes that since his arrest was unlawful, the search
pursuant thereto which yielded the shotgun and the live rounds of ammunition I join Justice Sarmiento's dissent, with these additional brief observations. As I submitted
was also illegal. in Guazon v. De Villa, G.R. No. 80508, we should not unreasonably inhibit ourselves on
technical grounds when a constitutional question is presented to us for resolution. An
When the case was assigned to the ponente, she had intended to consider and to resolve unconstitutional act is illegal per se and must be slain on sight. It should not be reprieved
simply because it has not been properly challenged, to be struck down only if and when all
this issue, it having been squarely raised in the petition. However, in an unexpected turn of
the formal requirements are satisfied. If and when. In the meantime, the lawless act
events, petitioner filed a Manifestation dated September 18, 1989, wherein he averred:
continues to corrode the Constitution, and all because we have refused to act.

1. He has filed a bond in the trial court and the same was approved on September
SARMIENTO, J., dissenting:
14, 1989.

2. He is well aware that the filing of a bail bond has the effect of waiving the right
to question the irregularity of an arrest (Callanta vs. Villanueva, 77 SCRA
377; Bagcal vs. Villaraza, 120 SCRA 525).
It perplexes me why this dissent should first of all merit what appears to be repartees from
the majority. I am but casting a contrary vote, which, after all, is in performance of a
1
constitutional duty.

3. Be that as it may, the irregularity of the arrest was only a secondary issue in
the instant Petition. The principal issue is still the unconstitutionality of the third
paragraph of Section 1 of P.D. No. 1866 insofar as it penalizes illegal possession
of firearms 'in furtherance of, or incident to, or in connection with the crimes of
rebellion, insurrection or subversion'.
The Court takes this to mean that petitioner is submitting the case for decision on the sole
issue that P.D. No. 1866 is unconstitutional and is abandoning the issue of the legality of
the search and his arrest.
I am also concerned at how this case has journeyed from ponente to ponente and opinion
to opinion, which, rather than expedited its resolution, has delayed it-at the expense of the
accused-petitioner.
I was originally assigned to write the decision in this case, and as early as June, 1989, I
was ready. On June 14, 1989, I started circulating a decision granting the petition and
declaring Presidential Decree No. 1866, as amended by Presidential Decree No. 1878-A,
unconstitutional and of no force and effect. Meanwhile, Madame Justice Irene Cortes
disseminated a dissent. By July 18, 1989, my ponencia had been pending in the office of
2
the Chief Justice for promulgation. It carried signatures of concurrence of eight Justices
(including mine), a slim majority, but a majority nonetheless. Five Justices, on the other
hand, joined Justice Cortes in her dissent. The Chief Justice did not sign the decision on
his word that he was filing a dissent of his own.
Subsequently, and as events would soon unfold quickly and dramatically, the Chief Justice
returned my decision to the Court en banc, and declared that unless somebody changed
his mind, he was promulgating my decision. Justice Edgardo Paras, who was one of the
eight who had stamped their imprimatur on my decision, indicated that he did not want to
"clip the wings of the military" and that he was changing his mind. This sudden reversement
under the circumstances surrounding its manifestation, took me aback for which I strongly
voiced my protest for a case (although the majority is very slim) that I had thought was a
settled matter.
I am aware that similar events in the Supreme Court are nothing uncommon. The following
are the ringing words of my distinguished colleague, Justice Ameurfina Melencio-Herrera,
but they could just as well have been mine, as far as the instant controversy is concerned,
and I could not have put it any better:
It has taken all of a year and four months to what, I hope, will see the final
disposition of this case, notwithstanding periodic reminders for an earlier
resolution. It is this delay that has caused me a great deal of concern. It is, to me,
a crying example of justice delayed and is by no means "much ado about
nothing," ... Nor is the question involved "none too important." ... The bone of
contention is whether or not a criminal complaint, which is an offense against the
State, may be dismissed on the basis of an amicable settlement between the
complainant and the accused, who is a public officer.
As assigned initially, I was to prepare the opinion of the Court. My original
"ponencia" annulling the Order of respondent Municipal Judge Eriberto H.
Espiritu dismissing the criminal case against respondent Mayor Emiliano
Caruncho, granting the petition for Certiorari and Mandamus, and ordering
respondent Municipal Judge to reinstate and proceed with the trial on the merits
of the criminal case against respondent Mayor without further delay, was
3
circulated beginning July 30, 1982.
The following is my dissenting opinion based mainly on my original ponencia.
I hold to be unconstitutional Presidential Decree No. 1866, "CODIFYING THE LAWS ON
ILLEGAL/UNLAWFUL POSSESSION, MANUFACTURE. DEALING IN, ACQUISITION OR
DISPOSITION, OF FIREARMS, AMMUNITION OR EXPLOSIVES, AND IMPOSING
STIFFER PENALTIES FOR CERTAIN VIOLATIONS THEREOF AND FOR RELEVANT
PURPOSES," specifically, sections 1 and 3 thereof, thus:
SECTION 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession
of Firearms and Ammunition or Instruments used or Intended to be Used in the
Manufacture of Firearms and Ammunition. — The penalty of reclusion
temporal in its maximum period to reclusion perpetua shall be imposed upon any
person who shall unlawfully manufacture, deal in, acquire, dispose, or possess
any firearm, part of firearm, ammunition or machinery, tool or instrument used or
intended to be used in the manufacture of any firearm or ammunition.
If homicide or murder is committed with the use of an unlicensed firearm, the
penalty of death shall be imposed.
If the violation of this Section is in furtherance of, or incident to, or in connection
with the crimes of rebellion, insurrection or subversion, the penalty of death shall
be imposed.
The penalty of reclusion temporal in its maximum period to reclusion
perpetua shall be imposed upon the owner, president, manager, director or other
responsible officer of any public or private firm, company, corporation or entity,
who shall willfully or knowingly allow any of the firearms owned by such firm,
company, corporation or entity to be used by any person or persons found guilty
of violating the provisions of the preceding paragraphs.
The penalty of prision mayor shall be imposed upon any person who shall carry
4
any licensed firearm outside his residence without legal authority therefor.
xxx xxx xxx
SEC. 3. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of
Explosives. — The penalty of reclusion temporal in its maximum period
to reclusion perpetua shall be imposed upon any person who shall unlawfully
manufacture, assemble, deal in, acquire, dispose or possess handgrenade(s)
rifle grenade(s) and other explosives, including but not limited to "pillbox bombs",
molotov cocktail bombs", "firebombs", or other incendiary devices capable of
producing destructive effect on contiguous objects or causing injury or death to
any person.
Any person who commits any of the crimes defined in the Revised Penal Code
or special laws with the use of the aforementioned explosives, detonation agents
or incendiary devices, which results in the death of any person or persons shall
be punished with the penalty of death.
If the violation of this Section is ill furtherance of, or incident to, or in connection
with the crimes of rebellion, insurrection or subversion, the penalty of death shall
be imposed.
The penalty of reclusion temporal in its maximum period to reclusion
perpetua shall be imposed upon the owner, president, manager, or director or
other responsible officer of ally public or private firm, company, corporation or
entity, who shall willfully or knowingly allow any of the explosives owned by such
 firm, company, corporation or entity to be used by any person or persons found
5
guilty of violation the provisions of the preceding paragraphs.
I find, first and foremost, the law to be a bill of attainder the aforequoted provisions
specifically, as it has been defined, that is, "a legislative enactment which inflicts
6
punishment without trial. It is a bill of attainder so I submit, because it presumes the
accused, upon conviction, to be guilty as well-of the crimes (murder and homicide under
the second paragraph of Section One, and the rebellion, insurrection, and subversion under
the third paragraph of Section Three) that supposedly merely qualify the offense of "illegal
possession" (or "illegal manufacture" as the case may be) when the accused has not been
tried and found guilty of either crimes in any judicial proceeding. In the case at bar, the fact
that the petitioner has been charged with illegal possession of firearms "in furtherance of
subversion" means that the petitioner has committed subversion, notwithstanding the fact
that he is not standing trial for subversion.
I am aware that this suit has been brought on the theory that the charge of "illegal
possession" against the accused supposedly offends the rulings in People v.
7 8 9
Hernandez People v. Geronimo and People v. Rodriguez and not, rather, on the
constitutionality of Presidential Decree No. 1866 as amended. It is my view, however, that
the case is nonetheless ripe for constitutional adjudication albeit the constitutional question
has not been asserted. It has indeed been held:
But we must state that the general rule admits of exceptions. Courts, in the exercise of
sound discretion, may determine the time when a question affecting the constitutionality of
a statute should be presented. (In Re Woolsey [1984], 95 N.Y., 135,144.) Thus, in criminal
cases, although there is a very sharp conflict of authorities, it is said that the question may
be raised for the first time at any stage of the proceedings, either in the trial court or on
appeal. (12 C.J., p. 786.) Even in civil cases, it has been held that is it the duty of a court
to pass on the constitutional question, though raised for the first time on appeal, if it appears
that a determination of the question is necessary to a decision of the case. (McCabes Adm'x
vs. Maysville & B.S.R. Co. [1910], 136 Ky., 674; 124 S.W., 892; Lohmeyer vs. St. Louis
Cordage Co., [1908]. 214 Mo., 685; 113 S.W., 1108; Carmody vs. St. Louis Transit co
10
[1905],188 Mo., 572; 87 S.W., 913.)
The fact that the accused has not been charged with the complex crime of subversion and
illegal possession of firearms (which can not be done) does not, to me, acquit the Decree.
The fact that "in the present case, petitioner is being charged specifically for the qualified
11
offense of illegal possession of firearms and ammunition. . " to me, makes a good
scrabble game, but it is nothing else. There is no gainsaying the fact that the conviction of
the petitioner (assuming that the petitioner is convicted) under the statute, will carry with it
the stain of subversion although he had not been charged with subversion. This, so I submit,
12
does violence to due process and the constitutional guaranty against hazy accusations.
I likewise find the law to be vague and in violation of the double jeopardy clause of the
Charter. It is vague because it is unsure which offense to punish: Illegal Possession or
Subversion. It states that subversion merely qualifies the primary offense of "illegal
possession" yet, if this is so, the accused may still be held guilty of subversion later.
However, if the accused has been found liable for illegal possession in furtherance of
subversion, it means that he is also guilty of subversion, which would clearly not require a
subsequent prosecution.
The very efforts of this Court to make anything out of this strange animal have not been, so
13
I submit, encouraging. In one case, a prosecution for illegal possession of unlicensed
firearm used in parricide under the provisions of Presidential Decree No. 9 (which sired
Presidential Decree No. 1866), it was held that "[t]he offense of 'Illegal Possession of
14
Unlicensed Firearm used in Parricide" includes the lesser offense of Parricide." If this
were so, then, subversion would have been an ingredient of "illegal possession". So also,
conviction thereof should be an abatement of any proceeding for the other, yet, in a
15
subsequent ruling, it was said that "illegal possession" used in the commission of
homicide "does not operate to extinguish [any] criminal liability for" homicide. Apparently,
as the state of the law stands now, "illegal possession" (or "manufacture") does not stop a
later prosecution for subversion (or murder or homicide), (as Tangan tells us) but just as
apparently, we would have made possible a prosecution for a crime which constitutes but
an element of the "primary offense" (as Lazaro tells us), possible.
Clearly, the statute allows the possibility of a double jeopardy. I submit that while double
jeopardy is a matter of defense, the fact alone that the law permits such a possibility is
sufficient to assail it for breach of due process.
The fact that the accused has posted bail is of no moment. It would not have, for me,
rescued the statute from constitutional infirmity, notwithstanding the petitioner's
"acceptance" (by posting bail) of the legality of the proceedings against him.
Presidential Decree No. 1866, it has to be noted, was not passed by the regular legislature.
It is one of the many presidential issuances which had served the Marcos dictatorship, and
served it well, as an instrument of repression during the years of dissent and resistance.
Because of it, many courageous freedom fighters perished or languished in various places
of detention throughout our country. It is unfortunate that this oppressive Presidential
Decree has been allowed to remain in our statute books after the apparatus of dictatorship
had been dismantled and supposed freedom attained, and sadly, it is still being used as
incessantly as in the previous regime. It is an anachronism in the broad democratic space
or what little we have of it today. I am, accordingly, for striking the Decree down.
was any greater sum due from said Aun Tan to said defendant than
the sum of $50, Mexican.
Taking into consideration the provisions of article 534, article 535, Nos.
1 and 5, and article 58 of the Penal Code, the court finds as a
conclusion of law from the foregoing facts that the defendant, Thomas
E. Kepner, willfully, illegally, fraudulently, and feloniously
misappropriated and converted to his own use said warrant and the
sum of money which he collected thereon, and that he is guilty of the
 crime of estafa within the intent and meaning of article 535,
subdivisions 1 and 5, of the Penal Code.
Wherefore, by reason of the law in such cases made an provided and
the articles of the Penal Code above cited, the court orders and
adjudges that the defendant, Thomas E. Kepner, be, and he is hereby,
condemned to one year eight months and twenty-one days of presidio
correccional, and to the suspension from every public office,
profession, trade, and right of suffrage, with costs.
Taking into consideration that the amount collected on the warrant was
returned to the bank on the 30th of October, 1901, and that all financial
differences between the defendant and Aun Tan were finally amicably
settled in May, 1902, no judgment for the return of the money is made,
but it is ordered and adjudged that the warrant which forms a part of
the record herein be returned to Aun Tan and that the clerk attach to
the record a duly certified copy of said warrant in lieu thereof. So
ordered.
G.R. No. 94723 August 21, 1997
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural
Guardian, and Spouses FEDERICO N. SALVACION, JR., and EVELINA E.
SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG
BARTELLI y NORTHCOTT, respondents.
TORRES, JR., J.:
In our predisposition to discover the "original intent" of a statute, courts become the
unfeeling pillars of the status quo. Ligle do we realize that statutes or even constitutions are
bundles of compromises thrown our way by their framers. Unless we exercise vigilance,
the statute may already be out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:
a.) Immediately upon the filing of this petition, an Order be issued
restraining the respondents from applying and enforcing Section 113
of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of petitioners and
respondents;
2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary
to the provisions of the Constitution, hence void; because its provision
that "Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever
i.) has taken away the right of petitioners to have
the bank deposit of defendant Greg Bartelli y
Northcott garnished to satisfy the judgment
rendered in petitioners' favor in violation of
substantive due process guaranteed by the
Constitution;
ii.) has given foreign currency depositors an
undue favor or a class privilege in violation of the
equal protection clause of the Constitution;
iii.) has provided a safe haven for criminals like
the herein respondent Greg Bartelli y Northcott
since criminals could escape civil liability for their
wrongful acts by merely converting their money to
a foreign currency and depositing it in a foreign
currency deposit account with an authorized
bank.
The antecedent facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured
petitioner Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg
Bartelli detained Karen Salvacion for four days, or up to February 7, 1989 and was able to
rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989.
On February 7, 1989, after policemen and people living nearby, rescued Karen, Greg
Bartelli was arrested and detained at the Makati Municipal Jail. The policemen recovered
from Bartelli the following items: 1.) Dollar Check No. 368, Control No. 021000678-
1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.)
Dollar Account — China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.)
Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear)
used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg
Bartelli, Criminal Case No. 801 for Serious Illegal Detention and Criminal Cases Nos. 802,
803, 804, and 805 for four (4) counts of Rape. On the same day, petitioners filed with the
Regional Trial Court of Makati Civil Case No. 89-3214 for damages with preliminary
attachment against Greg Bartelli. On February 24, 1989, the day there was a scheduled The cited provision is absolute in application. It does not admit of any
hearing for Bartelli's petition for bail the latter escaped from jail. exception, nor has the same been repealed nor amended.

On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion for the The purpose of the law is to encourage dollar accounts within the
Issuance of Warrant of Arrest and Hold Departure Order. Pending the arrest of the accused country's banking system which would help in the development of the
Greg Bartelli y Northcott, the criminal cases were archived in an Order dated February 28, economy. There is no intention to render futile the basic rights of a
1989. person as was suggested in your subject letter. The law may be harsh
as some perceive it, but it is still the law. Compliance is, therefore,
enjoined.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989
granting the application of herein petitioners, for the issuance of the writ of preliminary
attachment. After petitioners gave Bond No. JCL (4) 1981 by FGU Insurance Corporation Very truly yours,
in the amount of P100,000.00, a Writ of Preliminary Attachment was issued by the trial court
on February 28, 1989.
(SGD) AGAPITO S. FAJARDO
1
Director
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China
Banking Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of Makati, China
Meanwhile, on April 10, 1989, the trial court granted petitioners' motion for leave to serve
Banking Corporation invoked Republic Act No. 1405 as its answer to the notice of
summons by publication in the Civil Case No. 89-3214 entitled "Karen Salvacion, et al. vs.
garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati Armando de
Greg Bartelli y Northcott." Summons with the complaint was a published in the Manila Times
Guzman sent his reply to China Banking Corporation saying that the garnishment did not
once a week for three consecutive weeks. Greg Bartelli failed to file his answer to the
violate the secrecy of bank deposits since the disclosure is merely incidental to a
complaint and was declared in default on August 7, 1989. After hearing the case ex-parte,
garnishment properly and legally made by virtue of a court order which has placed the
the court rendered judgment in favor of petitioners on March 29, 1990, the dispositive
subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati,
portion of which reads:
China Banking Corporation, in a letter dated March 20, 1989, invoked Section 113 of
Central Bank Circular No. 960 to the effect that the dollar deposits or defendant Greg
Bartelli are exempt from attachment, garnishment, or any other order or process of any WHEREFORE, judgment is hereby rendered in favor of plaintiffs and
court, legislative body, government agency or any administrative body, whatsoever. against defendant, ordering the latter:

This prompted the counsel for petitioners to make an inquiry with the Central Bank in a
letter dated April 25, 1989 on whether Section 113 of CB Circular No. 960 has any exception
or whether said section has been repealed or amended since said section has rendered
nugatory the substantive right of the plaintiff to have the claim sought to be enforced by the
civil action secured by way of the writ of preliminary attachment as granted to the plaintiff
under Rule 57 of the Revised Rules of Court. The Central Bank responded as follows:
1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as
moral damages;
2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr.,
and Evelina E. Salvacion the amount of P150,000.00 each or a total of
P300,000.00 for both of them;

May 26, 1989

3. To pay plaintiffs exemplary damages of P100,000.00; and

Ms. Erlinda S. Carolino

12 Pres. Osmena Avenue 4. To pay attorney's fees in an amount equivalent to 25% of the total
amount of damages herein awarded;
South Admiral Village
Paranaque, Metro Manila
5. To pay litigation expenses of P10,000.00; plus
Dear Ms. Carolino:
6. Costs of the suit.
This is in reply to your letter dated April 25, 1989 regarding your inquiry
on Section 113, CB Circular No. 960 (1983). SO ORDERED.
The heinous acts of respondent Greg Bartelli which gave rise to the award were related in
graphic detail by the trial court in its decision as follows:
The defendant in this case was originally detained in the municipal jail
of Makati but was able to escape therefrom on February 24, 1989 as
per report of the Jail Warden of Makati to the Presiding Judge,
Honorable Manuel M. Cosico of the Regional Trial Court of Makati,
Branch 136, where he was charged with four counts of Rape and
Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly,
upon motion of plaintiffs, through counsel, summons was served upon
defendant by publication in the Manila Times, a newspaper of general
circulation as attested by the Advertising Manager of the Metro Media
Times, Inc., the publisher of the said newspaper. Defendant, however,
failed to file his answer to the complaint despite the lapse of the period
of sixty (60) days from the last publication; hence, upon motion of the
plaintiffs, through counsel, defendant was declared in default and
plaintiffs were authorized to present their evidence ex parte.
In support of the complaint, plaintiffs presented as witnesses the minor
Karen E. Salvacion, her father, Federico N. Salvacion, Jr., a certain
Joseph Aguilar and a certain Liberato Madulio, who gave the following
testimony:
Karen took her first year high school in St. Mary's Academy in Pasay
City but has recently transferred to Arellano University for her second
year.
In the afternoon of February 4, 1989, Karen was at the Plaza Fair
Makati Cinema Square, with her friend Edna Tangile whiling away her
free time. At about 3:30 p.m. while she was finishing her snack on a
concrete bench in front of Plaza Fair, an American approached her.
She was then alone because Edna Tangile had already left, and she
was about to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)
The American asked her name and introduced himself as Greg Bartelli.
He sat beside her when he talked to her. He said he was a Math
teacher and told her that he has a sister who is a nurse in New York.
His sister allegedly has a daughter who is about Karen's age and who
was with him in his house along Kalayaan Avenue. (TSN, Aug. 15,
1989, pp. 4-5)
The American asked Karen what was her favorite subject and she told
him it's Pilipino. He then invited her to go with him to his house where
she could teach Pilipino to his niece. He even gave her a stuffed toy to
persuade her to teach his niece. (Id., pp. 5-6)
They walked from Plaza Fair along Pasong Tamo, turning right to
reach the defendant's house along Kalayaan Avenue. (Id., p. 6)
When they reached the apartment house, Karen noticed that
defendant's alleged niece was not outside the house but defendant
told her maybe his niece was inside. When Karen did not see the
alleged niece inside the house, defendant told her maybe his niece
was upstairs, and invited Karen to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door.
Karen became nervous because his niece was not there. Defendant
got a piece of cotton cord and tied Karen's hands with it, and then he
undressed her. Karen cried for help but defendant strangled her. He
took a packing tape and he covered her mouth with it and he circled it
around her head. (Id., p. 7)
Then, defendant suddenly pushed Karen towards the bed which was
just near the door. He tied her feet and hands spread apart to the bed
posts. He knelt in front of her and inserted his finger in her sex organ.
She felt severe pain. She tried to shout but no sound could come out
because there were tapes on her mouth. When defendant withdrew
his finger it was full of blood and Karen felt more pain after the
withdrawal of the finger. (Id., p. 8)
He then got a Johnson's Baby Oil and he applied it to his sex organ as
well as to her sex organ. After that he forced his sex organ into her but
he was not able to do so. While he was doing it, Karen found it difficult
to breathe and she perspired a lot while feeling severe pain. She
merely presumed that he was able to insert his sex organ a little,
because she could not see. Karen could not recall how long the
defendant was in that position. (Id. pp. 8-9)
After that, he stood up and went to the bathroom to wash. He also told
Karen to take a shower and he untied her hands. Karen could only
hear the sound of the water while the defendant, she presumed, was
in the bathroom washing his sex organ. When she took a shower more
blood came out from her. In the meantime, defendant changed the
mattress because it was full of blood. After the shower, Karen was
allowed by defendant to sleep. She fell asleep because she got tired
crying. The incident happened at about 4:00 p.m. Karen had no way
of determining the exact time because defendant removed her watch.
Defendant did not care to give her food before she went to sleep. Karen
woke up at about 8:00 o'clock the following morning. (Id., pp. 9-10)
The following day, February 5, 1989, a Sunday, after a breakfast of
biscuit and coke at about 8:30 to 9:00 a.m. defendant raped Karen
while she was still bleeding. For lunch, they also took biscuit and coke.
She was raped for the second time at about 12:00 to 2:00 p.m. In the
evening, they had rice for dinner which defendant had stored
downstairs; it was he who cooked the rice that is why it looks like
"lugaw". For the third time, Karen was raped again during the night.
During those three times defendant succeeded in inserting his sex
organ but she could not say whether the organ was inserted wholly.
Karen did not see any firearm or any bladed weapon. The defendant
did not tie her hands and feet nor put a tape on her mouth anymore
but she did not cry for help for fear that she might be killed; besides,
all the windows and doors were closed. And even if she shouted for
help, nobody would hear her. She was so afraid that if somebody
would hear her and would be able to call the police, it was still possible
that as she was still inside the house, defendant might kill her. Besides,
the defendant did not leave that Sunday, ruling out her chance to call
for help. At nighttime he slept with her again. (TSN, Aug. 15, 1989, pp.
12-14)
On February 6, 1989, Monday, Karen was raped three times, once in
the morning for thirty minutes after a breakfast of biscuits; again in the
afternoon; and again in the evening. At first, Karen did not know that
there was a window because everything was covered by a carpet, until
defendant opened the window for around fifteen minutes or less to let
some air in, and she found that the window was covered by styrofoam
and plywood. After that, he again closed the window with a hammer
and he put the styrofoam, plywood, and carpet back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom and
saw a small window covered by styrofoam and she also spotted a small
hole. She stepped on the bowl and she cried for help through the hole.
She cried: "Maawa no po kayo so akin. Tulungan n'yo akong
makalabas dito. Kinidnap ako!" Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was "istorbo".
Karen pleaded for help and the woman told her to sleep and she will
call the police. She finally fell asleep but no policeman came. (TSN,
Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 o'clock the following morning, and she saw
defendant in bed, this time sleeping. She waited for him to wake up.
When he woke up, he again got some food but he always kept the door
locked. As usual, she was merely fed with biscuit and coke. On that
day, February 7, 1989, she was again raped three times. The first at
about 6:30 to 7:00 a.m., the second at about 8:30 — 9:00, and the third
was after lunch at 12:00 noon. After he had raped her for the second
time he left but only for a short while. Upon his return, he caught her
shouting for help but he did not understand what she was shouting
about. After she was raped the third time, he left the house. (TSN, Aug.
15, 1989, pp. 16-17) She again went to the bathroom and shouted for
help. After shouting for about five minutes, she heard many voices.
The voices were asking for her name and she gave her name as Karen
Salvacion. After a while, she heard a voice of a woman saying they will
just call the police. They were also telling her to change her clothes.
She went from the bathroom to the room but she did not change her
clothes being afraid that should the neighbors call for the police and
the defendant see her in different clothes, he might kill her. At that time
she was wearing a T-shirt of the American because the latter washed
her dress. (Id., p. 16)
Afterwards, defendant arrived and he opened the door. He asked her
if she had asked for help because there were many policemen outside
and she denied it. He told her to change her clothes, and she did
change to the one she was wearing on Saturday. He instructed her to
tell the police that she left home and willingly; then he went downstairs
but he locked the door. She could hear people conversing but she
could not understand what they were saying. (Id., p. 19)
When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she could.
She heard somebody going upstairs and when the door was opened,
she saw a policeman. The policeman asked her name and the reason
why she was there. She told him she was kidnapped. Downstairs, he
saw about five policemen in uniform and the defendant was talking to
them. "Nakikipag-areglo po sa mga pulis," Karen added. "The
policeman told him to just explain at the precinct. (Id., p. 20)
They went out of the house and she saw some of her neighbors in front
of the house. They rode the car of a certain person she called Kuya
Boy together with defendant, the policeman, and two of her neighbors
whom she called Kuya Bong Lacson and one Ate Nita. They were
brought to Sub-Station I and there she was investigated by a
policeman. At about 2:00 a.m., her father arrived, followed by her
mother together with some of their neighbors. Then they were brought
to the second floor of the police headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the
investigator. The written statement she gave to the police was marked
as Exhibit A. Then they proceeded to the National Bureau of
Investigation together with the investigator and her parents. At the NBI,
a doctor, a medico-legal officer, examined her private parts. It was
already 3:00 in the early morning of the following day when they
reached the NBI. (TSN, Aug. 15, 1989, p. 22) The findings of the
medico-legal officer has been marked as Exhibit B.
She was studying at the St. Mary's Academy in Pasay City at the time
of the incident but she subsequently transferred to Apolinario Mabini,
 Arellano University, situated along Taft Avenue, because she was
ashamed to be the subject of conversation in the school. She first
applied for transfer to Jose Abad Santos, Arellano University along Taft
Avenue near the Light Rail Transit Station but she was denied
admission after she told the school the true reason for her transfer.
The reason for their denial was that they might be implicated in the
case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx
After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she
has been absent-minded and is ashamed even to go out of the house.
(TSN, Sept. 12, 1989, p. 10) She appears to be restless or sad, (Id., p.
11) The father prays for P500,000.00 moral damages for Karen for this
shocking experience which probably, she would always recall until she
reaches old age, and he is not sure if she could ever recover from this
experience. (TSN, Sept. 24, 1989, pp. 10-11)
Pursuant to an Order granting leave to publish notice of decision, said notice was published
in the Manila Bulletin once a week for three consecutive weeks. After the lapse of fifteen
(15) days from the date of the last publication of the notice of judgment and the decision of
the trial court had become final, petitioners tried to execute on Bartelli's dollar deposit with
China Banking Corporation. Likewise, the bank invoked Section 113 of Central Bank
Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil down to two:
May this Court entertain the instant petition despite the fact that original jurisdiction in
petitions for declaratory relief rests with the lower court? Should Section 113 of Central
Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise
known as the Foreign Currency Deposit Act be made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No. 960
providing that "Foreign currency deposits shall be exempt from attachment, garnishment,
or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever." should be adjudged as unconstitutional on the grounds
that: 1.) it has taken away the right of petitioners to have the bank deposit of defendant
Greg Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners' favor in
violation of substantive due process guaranteed by the Constitution; 2.) it has given foreign
currency depositors an undue favor or a class privilege in violation of the equal protection
clause of the Constitution; 3.) it has provided a safe haven for criminals like the herein
respondent Greg Bartelli y Northcott since criminals could escape civil liability for their
wrongful acts by merely converting their money to a foreign currency and depositing it in a
foreign currency deposit account with an authorized bank; and 4.) The Monetary Board, in
issuing Section 113 of Central Bank Circular No. 960 has exceeded its delegated quasi-
legislative power when it took away: a.) the plaintiffs substantive right to have the claim
sought to be enforced by the civil action secured by way of the writ of preliminary
attachment as granted by Rule 57 of the Revised Rules of Court; b.) the plaintiffs
substantive right to have the judgment credit satisfied by way of the writ of execution out of
the bank deposit of the judgment debtor as granted to the judgment creditor by Rule 39 of
the Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges that the Monetary
Board in issuing Section 113 of CB Circular No. 960 did not exceed its power or authority
because the subject Section is copied verbatim from a portion of R.A. No. 6426 as amended
by P.D. 1246. Hence, it was not the Monetary Board that grants exemption from attachment
or garnishment to foreign currency deposits, but the law (R.A. 6426 as amended) itself; that
it does not violate the substantive due process guaranteed by the Constitution because a.)
it was based on a law; b.) the law seems to be reasonable; c.) it is enforced according to
regular methods of procedure; and d.) it applies to all members of a class.
Expanding, the Central Bank said; that one reason for exempting the foreign currency
deposits from attachment, garnishment or any other order or process of any court, is to
assure the development and speedy growth of the Foreign Currency Deposit System and
the Offshore Banking System in the Philippines; that another reason is to encourage the
inflow of foreign currency deposits into the banking institutions thereby placing such
institutions more in a position to properly channel the same to loans and investments in the
Philippines, thus directly contributing to the economic development of the country; that the
subject section is being enforced according to the regular methods of procedure; and that
it applies to all foreign currency deposits made by any person and therefore does not violate
the equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision is needed to promote
the public interest and the general welfare; that the State cannot just stand idly by while a
considerable segment of the society suffers from economic distress; that the State had to
take some measures to encourage economic development; and that in so doing persons
and property may be subjected to some kinds of restraints or burdens to secure the general
welfare or public interest. Respondent Central Bank also alleges that Rule 39 and Rule 57
of the Revised Rules of Court provide that some properties are exempted from
execution/attachment especially provided by law and R.A. No. 6426 as amended is such a
law, in that it specifically provides, among others, that foreign currency deposits shall be
exempted from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving reasons similar to
that of respondent Central Bank, also stated that respondent China Bank is not unmindful
of the inhuman sufferings experienced by the minor Karen E. Salvacion from the beastly
hands of Greg Bartelli; that it is only too willing to release the dollar deposit of Bartelli which
may perhaps partly mitigate the sufferings petitioner has undergone; but it is restrained
from doing so in view of R.A. No. 6426 and Section 113 of Central Bank Circular No. 960;
and that despite the harsh effect of these laws on petitioners, CBC has no other alternative
but to follow the same.
This Court finds the petition to be partly meritorious. If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom
how the incentive for foreign currency deposit could be more important than his child's rights
to said award of damages; in this case, the victim's claim for damages from this alien who
Petitioner deserves to receive the damages awarded to her by the court. But this petition
had the gall to wrong a child of tender years of a country where he is a mere visitor. This
for declaratory relief can only be entertained and treated as a petition for mandamus to
further illustrates the flaw in the questioned provisions.
require respondents to honor and comply with the writ of execution in Civil Case No. 89-
3214.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the
country's economy was in a shambles; when foreign investments were minimal and
This Court has no original and exclusive jurisdiction over a petition for declaratory
2 presumably, this was the reason why said statute was enacted. But the realities of the
relief. However, exceptions to this rule have been recognized. Thus, where the petition
present times show that the country has recovered economically; and even if not, the
has far-reaching implications and raises questions that should be resolved, it may be
3 questioned law still denies those entitled to due process of law for being unreasonable and
treated as one for mandamus.
oppressive. The intention of the questioned law may be good when enacted. The law failed
to anticipate the iniquitous effects producing outright injustice and inequality such as the
Here is a child, a 12-year old girl, who in her belief that all Americans are good and in her case before us.
gesture of kindness by teaching his alleged niece the Filipino language as requested by the
American, trustingly went with said stranger to his apartment, and there she was raped by
It has thus been said that —
said American tourist Greg Bartelli. Not once, but ten times. She was detained therein for
four (4) days. This American tourist was able to escape from the jail and avoid punishment.
5
On the other hand, the child, having received a favorable judgment in the Civil Case for But I also know, that laws and institutions must go hand in hand with
damages in the amount of more than P1,000,000.00, which amount could alleviate the the progress of the human mind. As that becomes more developed,
humiliation, anxiety, and besmirched reputation she had suffered and may continue to more enlightened, as new discoveries are made, new truths are
suffer for a long, long time; and knowing that this person who had wronged her has the disclosed and manners and opinions change with the change of
money, could not, however get the award of damages because of this unreasonable law. circumstances, institutions must advance also, and keep pace with the
This questioned law, therefore makes futile the favorable judgment and award of damages times. . . We might as well require a man to wear still the coat which
that she and her parents fully deserve. As stated by the trial court in its decision, fitted him when a boy, as civilized society to remain ever under the
regimen of their barbarous ancestors.
Indeed, after hearing the testimony of Karen, the Court believes that it
was undoubtedly a shocking and traumatic experience she had In his Comment, the Solicitor General correctly opined, thus:
undergone which could haunt her mind for a long, long time, the mere
recall of which could make her feel so humiliated, as in fact she had
The present petition has far-reaching implications on the right of a
been actually humiliated once when she was refused admission at the
national to obtain redress for a wrong committed by an alien who takes
Abad Santos High School, Arellano University, where she sought to
refuge under a law and regulation promulgated for a purpose which
transfer from another school, simply because the school authorities of
does not contemplate the application thereof envisaged by the alien.
the said High School learned about what happened to her and
More specifically, the petition raises the question whether the
allegedly feared that they might be implicated in the case.
protection against attachment, garnishment or other court process
accorded to foreign currency deposits by PD No. 1246 and CB Circular
xxx xxx xxx No. 960 applies when the deposit does not come from a lender or
investor but from a mere transient or tourist who is not expected to
maintain the deposit in the bank for long.
The reason for imposing exemplary or corrective damages is due to
the wanton and bestial manner defendant had committed the acts of
rape during a period of serious illegal detention of his hapless victim, The resolution of this question is important for the protection of
the minor Karen Salvacion whose only fault was in her being so naive nationals who are victimized in the forum by foreigners who are merely
and credulous to believe easily that defendant, an American national, passing through.
could not have such a bestial desire on her nor capable of committing
such a heinous crime. Being only 12 years old when that unfortunate
xxx xxx xxx
incident happened, she has never heard of an old Filipino adage that
in every forest there is a
4
snake, . . . .
. . . Respondents China Banking Corporation and Central Bank of the
Philippines refused to honor the writ of execution issued in Civil Case
No. 89-3214 on the strength of the following provision of Central Bank
Circular No. 960:
Sec. 113. Exemption from attachment. — Foreign
currency deposits shall be exempt from
attachment, garnishment, or any other order or
process of any court, legislative body,
government agency or any administrative body
whatsoever.
Central Bank Circular No. 960 was issued pursuant to Section 7 of
Republic Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary
Board of the Central Bank shall promulgate such
rules and regulations as may be necessary to
carry out the provisions of this Act which shall take
effect after the publication of such rules and
regulations in the Official Gazette and in a
newspaper of national circulation for at least once
a week for three consecutive weeks. In case the
Central Bank promulgates new rules and
regulations decreasing the rights of depositors,
the rules and regulations at the time the deposit
was made shall govern.
The aforecited Section 113 was copied from Section 8 of Republic Act
NO. 6426, as amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. —
All foreign currency deposits authorized under this
Act, as amended by Presidential Decree No.
1035, as well as foreign currency deposits
authorized under Presidential Decree No. 1034,
are hereby declared as and considered of an
absolutely confidential nature and, except upon
the written permission of the depositor, in no
instance shall such foreign currency deposits be
examined, inquired or looked into by any person,
government official, bureau or office whether
judicial or administrative or legislative or any other
entity whether public or private: Provided,
however, that said foreign currency deposits shall
be exempt from attachment, garnishment, or any
other order or process of any court, legislative
body, government agency or any administrative
body whatsoever.
The purpose of PD 1246 in according protection against attachment,
garnishment and other court process to foreign currency deposits is
stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as
amended by Presidential Decree No. 1035,
certain Philippine banking institutions and
branches of foreign banks are authorized to
accept deposits in foreign currency;
WHEREAS, under the provisions of Presidential
Decree No. 1034 authorizing the establishment of
an offshore banking system in the Philippines,
offshore banking units are also authorized to
receive foreign currency deposits in certain cases;
WHEREAS, in order to assure the development
and speedy growth of the Foreign Currency
Deposit System and the Offshore Banking
System in the Philippines, certain incentives were
provided for under the two Systems such as
confidentiality of deposits subject to certain
exceptions and tax exemptions on the interest
income of depositors who are nonresidents and
are not engaged in trade or business in the
Philippines;
WHEREAS, making absolute the protective cloak
of confidentiality over such foreign currency
deposits, exempting such deposits from tax, and
guaranteeing the vested rights of depositors
would better encourage the inflow of foreign
currency deposits into the banking institutions
authorized to accept such deposits in the
Philippines thereby placing such institutions more
in a position to properly channel the same to loans
and investments in the Philippines, thus directly
contributing to the economic development of the
country;
Thus, one of the principal purposes of the protection accorded to
foreign currency deposits is "to assure the development and speedy
growth of the Foreign Currency Deposit system and the Offshore
Banking in the Philippines" (3rd Whereas).
The Offshore Banking System was established by PD No. 1034. In
turn, the purposes of PD No. 1034 are as follows:
WHEREAS, conditions conducive to the
establishment of an offshore banking system,
such as political stability, a growing economy and
adequate communication facilities, among others,
exist in the Philippines;
WHEREAS, it is in the interest of developing
countries to have as wide access as possible to
the sources of capital funds for economic
development;
WHEREAS, an offshore banking system based in
the Philippines will be advantageous and
beneficial to the country by increasing our links
with foreign lenders, facilitating the flow of desired
investments into the Philippines, creating
employment opportunities and expertise in
international finance, and contributing to the
national development effort.
WHEREAS, the geographical location, physical
and human resources, and other positive factors
provide the Philippines with the clear potential to
develop as another financial center in Asia;
On the other hand, the Foreign Currency Deposit system was created
by PD. No. 1035. Its purposes are as follows:
WHEREAS, the establishment of an offshore
banking system in the Philippines has been
authorized under a separate decree;
WHEREAS, a number of local commercial banks,
as depository bank under the Foreign Currency
Deposit Act (RA No. 6426), have the resources
and managerial competence to more actively
engage in foreign exchange transactions and
participate in the grant of foreign currency loans
to resident corporations and firms;
WHEREAS, it is timely to expand the foreign
currency lending authority of the said depository
banks under RA 6426 and apply to their
transactions the same taxes as would be
applicable to transaction of the proposed offshore
banking units;
It is evident from the above [Whereas clauses] that the Offshore
Banking System and the Foreign Currency Deposit System were
designed to draw deposits from foreign lenders and investors (Vide
second Whereas of PD No. 1034; third Whereas of PD No. 1035). It is
these deposits that are induced by the two laws and given protection
and incentives by them.
Obviously, the foreign currency deposit made by a transient or a tourist
is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and
given incentives and protection by said laws because such depositor
stays only for a few days in the country and, therefore, will maintain his
deposit in the bank only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a transient. He
deposited his dollars with respondent China Banking Corporation only
for safekeeping during his temporary stay in the Philippines.
For the reasons stated above, the Solicitor General thus submits that
the dollar deposit of respondent Greg Bartelli is not entitled to the
protection of Section 113 of Central Bank Circular No. 960 and PD No.
6
1246 against attachment, garnishment or other court processes.
In fine, the application of the law depends on the extent of its justice. Eventually, if we rule
that the questioned Section 113 of Central Bank Circular No. 960 which exempts from
attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever, is applicable to a foreign
transient, injustice would result especially to a citizen aggrieved by a foreign guest like
accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides
that "in case of doubt in the interpretation or application of laws, it is presumed that the
lawmaking body intended right and justice to prevail. "Ninguno non deue enriquecerse
tortizeramente con dano de otro." Simply stated, when the statute is silent or ambiguous,
this is one of those fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).
It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be
used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the
guilty at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar against Peso?
Upholding the final and executory judgment of the lower court against the Central Bank
Circular protecting the foreign depositor? Shielding or protecting the dollar deposit of a
transient alien depositor against injustice to a national and victim of a crime? This situation
calls for fairness against legal tyranny.
We definitely cannot have both ways and rest in the belief that we have served the ends of
justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No.
1246, insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be
INAPPLICABLE to this case because of its peculiar circumstances. Respondents are
hereby REQUIRED to COMPLY with the writ of execution issued in Civil Case No. 89-3214,
"Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to
RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y Northcott in such
amount as would satisfy the judgment.
SO ORDERED.
G.R. No. 141855 February 6, 2001
ZACARIAS COMETA and HERCO REALTY & AGRICULTURAL
CORPORATION, petitioners,
vs.
COURT OF APPEALS and JOSE FRANCO, respondents.
YNARES-SANTIAGO, J.:
Challenged in this petition for review under Rule 45 of the Rules of Court is the Decision of
1
the Court of Appeals dated January 25, 1999 in CA-G.R. SP No. 48277, entitled "Zacarias
Cometa, et al. v. Non. Perfecto Laggui, et al.," and the Resolution dated January 27,
2
2000 denying petitioner's motion for reconsideration.
The pertinent factual antecedents are matters of record or are otherwise uncontroverted.
3 G.R. No. L-69294 and entitled, "Zacarias Cometa and Herco Realty and Agricultural
On July 2, 1976, the quondam Court of First Instance (CFI) of Rizal, Branch 15 at Makati
rendered a Decision in Civil Case No. 17585 for Damages, entitled "Jose Franco v. Zacarias
4 1987, this Court reversed the appellate court and withheld the granting of the writ of
Cometa," awarding to herein private respondent Jose Franco, the sum of P 57,396.85.
The judgment became final on March 9, 1978. Subsequently, a writ of execution was
issued. Pursuant thereto, the sheriff levied on execution three (3) commercial lots of
5
petitioner Zacarias Cometa located at Guadalupe, Makati.
On October 17, 1978, two (2) of the lots were sold to respondent Franco at public auction
6
for the amount of P57,396.85. The sheriffs return was made on March 12, 1981.
On November 17, 1981, petitioner Herco Realty & Agricultural Development Corporation
(Herco) filed Civil Case No. 43846 with the same CFI Rizal, Branch 15, to annul the levy
7
on execution and sale at public auction of the real properties. The complaint alleged that
the ownership of the lots had been transferred by Cometa to Herco before the execution
sale. It assailed the validity of the levy and sale on the ground that the sheriff, in disregard
of the proper procedural practice, immediately proceeded against Cometa's real properties
without first exhausting his personal properties; that the lots were sold en masse and not
by parcel; and that the said properties which are commercial lots situated in Guadalupe,
Makati, and are conservatively valued at P500,000.00, were sold only for P57,396.85, the
8
amount of the judgment.
Meanwhile, on March 22, 1982, the same court, now designated as Regional Trial Court,
Branch 60, issued an order in Civil Case No. 17585 directing the Register of Deeds of Rizal
to cancel petitioner Cometa's certificates of title to the lots and to issue new ones in favor
of respondent Franco. Cometa, who died during the pendency of the proceedings, was
substituted by his heirs, who filed before this Court a petition for certiorari questioning the
9
said order. The petition was, however, dismissed on February 28, 1983.
On May 13, 1983, Franco filed with the Regional Trial Court of Makati, Branch 140, a motion
for issuance of writ of possession. Cometa opposed the motion on the ground that there
was pending before another Regional Trial Court an action for annulment of levy and sale
10
of the properties in question.
On August 12, 1983, the trial court issued an order granting the motion; but the same was
reconsidered and set aside on November 18, 1983 on the ground that the issuance of the
11
writ of possession was premature, considering that the RTC of Makati, Branch 60, had not
yet decided the case filed by Herco and Cometa for the annulment of the levy and sale of
the properties.
Franco then instituted a special civil action for certiorari with this Court on June 27, 1984,
but the case was referred to the Intermediate Appellate Court, which subsequently reversed
the ruling of the RTC, Branch 140, on October 4, 1984, and granted the issuance of the writ
12
of possession' in Franco's favor.
Cometa and Herco elevated their cause to this Court, where the same was docketed as
Development Corporation v. IAC and Jose Franco." In a Decision dated June 30,
13
possession pending the promulgation of the resolution of the RTC, Branch 60, on the issue
of whether or not the levy and sale of Cometa's properties are valid. In the said judgment,
this Court said:
In the case at bar, the validity of the levy and sale of the properties is directly put
in issue in another case by the petitioners. This Court finds it an issue which
requires pre-emptive resolution. For if the respondent acquired no interest in the
property by virtue of the levy and sale, then, he is not entitled to its possession.
The respondent appellate court's emphasis on the failure of the petitioner to
redeem the properties within the period required by law is misplaced because
redemption, in this case, is inconsistent with petitioner's claim of invalidity of levy
and sale. Redemption is an implied admission of the regularity of the sale and
14
would estop the petitioner from later impugning its validity on that ground.
 Moreover, equitable considerations constrain us to reverse the decision of buyer has not acquired any right over the property sold to him. Hence, there is
respondent court. The fact is undisputed that the properties in question were sold nothing that could be redeemed by the owner of the property.
at an unusually lower price than their true value. Properties worth at least
P500,000.00 were sold for only P57,396.85. We do not comment on the
13. The certificate of sale of the two (2) lots was registered and annotated in the
consequences of the inadequacy because that is the very issue which confronts
corresponding certificates of title on January 25, 1980. The period of redemption
the court below in the pending case. It appearing, however, that the issuance of
expired twelve (12) months thereafter (Section 30, Rule 39, Rules of Court) - or
the writ of possession would and might work injustice because the petitioner
on January 20, 1981. Civil Case No. 43846 was filed on November 27, 1981 - or
might not be entitled thereto, we rule that it be withheld.
more than ten (10) months after the period of redemption expired. Hence, when
Civil Case No.43846 was filed, there was no longer any period of redemption that
Thereafter, in Civil Case No. 43846, Branch 60 of the Makati RTC issued an order dated could be suspended.
July 21, 1993 dismissing the case on the ground of "lack of interest in the prosecution of
the complaint" for failure of the representatives of Corneta and Herco to
xxx xxx xxx
appear.1âwphi1.nêt

The order of dismissal was affirmed by the Court of Appeals on July 16, 1996 and by this
Court on January 20, 1997 in G.R. No. 126760. On February 26, 1997, this Court's
Resolution which, in effect, upheld the validity of the assailed levy and sale, became final
and executory.
On May 2, 1997, Franco again filed, this time with Branch 60 of the RTC of Makati City, a
motion for issuance of writ of possession and cancellation of lis pendens. The heirs of
Cometa opposed the motion claiming that they intended to redeem the properties.
23.3 Accordingly:
23.3.1. The Officer-in-Charge [is ordered] to issue the corresponding writ of
possession over the lots covered by Transfer Certificates of Title Nos. 113114
and 113115 in favor of JOSE FRANCO.
Dissatisfied, Cometa's heirs and Herco filed a petition for certiorari with the Court of
Appeals, docketed as CA-G.R. SP No. 48227, asserting that –

On December 4, 1997, Cometa's heirs consigned with the Office of the Clerk of Court, RTC, I
Makati City, the sum of P38,761.05 as purchase price for the lots, plus interest of
P78,762.69 and P1,175.25 as realty tax.
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN
DISREGARDING NO LESS THAN THE SUPREME COURT'S DECLARATION
15
On June 8, 1998, Branch 60 of the Makati City RTC issued an order which reads in part IN COMETA v. INTERMEDIATE APPELLATE COURT THAT COMETA STILL
as follows: HAS A RIGHT TO REDEEM.

6.2. With the dismissal of Civil Case No. 43846, did HERCO and the HEIRS still II
have the right to redeem?
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN DENYING
xxx xxx xxx COMETA'S REDEMPTION IN THAT EVEN ABSENT THE SUPREME COURT'S
PRONOUNCEMENT IN COMETA v. INTERMEDIATE APPELLATE COURT,
COMETA WOULD STILL HAVE THE RIGHT TO REDEEM UNDER SETTLED
11. What may be inferred from the aforesaid decisions (except Sumerariz v. DBP)
JURISPRUDENCE.
is that the running of the period of redemption is suspended if the validity of the
sale is questioned at any time within the said period of redemption.
III
12. When the validity of the sale is questioned after the period of redemption has
expired, the rule that the filing of the action questioning such validity suspends RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN DENYING
the running of the period for redemption no longer applies. This is only logical - COMETA'S REDEMPTION IN THAT AT THE VERY LEAST THE LAW
for there would no longer be any period to be suspended - it has already expired. RESOLVES ALL DOUBTS IN FAVOR OF THE RIGHT TO REDEEM.
Where the sale is declared void in such action, there would be no right of
redemption to speak of thereafter; for legally speaking, there was no sale at all.
Avoid sale would be inconsistent with a right of redemption. For in such case, the
 th
The appellate court's 10 Division thereafter promulgated a Decision dated January 25,
16
1999, affirming the order of respondent presiding Judge of Branch 60, Makati City RTC,
and denying due course to the petition.
A motion for reconsideration of the said decision was likewise denied by a Special Division
of Five Justices.
Hence, this petition for review on the following grounds:
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE
NOT HERETOFORE DECIDED BY THIS HONORABLE COURT OR HAS
DECIDED IT NOT IN ACCORD WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT IN THAT: -
A. COMETA v. INTERMEDIATE APPELLATE COURT HAS
ALREADY DETERMINED THAT COMETA STILL HAS A RIGHT TO
REDEEM.
B. EVEN ABSENT THE PRONOUNCEMENT IN COMETA v.
INTERMEDIATE APPELLATE COURT, COMET A WOULD STILL
HAVE THE RIGHT TO REDEEM UNDER SETTLED
JURISPRUDENCE.
C. AT THE VERY LEAST, THE LAW RESOLVES ALL DOUBTS IN
FAVOR OF THE RIGHT TO REDEEM.
Considering the pleadings filed by the parties, this Court resolved to dispense with the filing
of memoranda, give due course to the petition and decide the same.
The questions raised by petitioners can be reduced to the primordial issue of whether or
not petitioners can still redeem the properties subject of this litigation.
In ruling in the negative, the appellate court opined, among others, that -
Section 30, Rule 39 of the Revised Rules of Court is very explicit: "(t)he judgment
debtor or redemptioner may redeem the property from the purchaser at any
time within twelve (12) months after the sale, xxx." (italics ours) In the case at
bar, the sale took place on October 17, 1978. The Certificate of Sale was
registered and annotated on the TCT Nos. S-79894 and 79895 on January 25,
1980. The Officer's Final Deed of Sale was executed in favor of Franco on March
2, 1981. Petitioners questioned the validity of the sale only on November 27,
1981 or more than three (3) years after the said sale. We agree with respondent
judge that "(w)hen the validity of the sale is questioned after the period of
redemption has expired, the rule that the finding of the action questioning such
validity suspends the running of the redemption period, no longer applies. This is
only logical – for there would no longer be any period to be suspended - it has
already expired." We likewise agree that to still allow redemption "counted from
February 26, 1997, when the Resolution in G.R. L-126760 became final and
executory xxx would give rise to mischievous legal consequences. For this would
be a device to revive a lost right of redemption. Under this theory, a party who
lost the right of redemption could just file an action to set aside the sale on the
ground that it was a nullity confident that if the action does not prosper, he would
still be entitled to redeem thereafter. This could not be validly done." xxx The
failure of petitioners to redeem the properties after the expiration of the
17
redemption period vests title over the property to private respondent. The
Supreme Court has uniformly ruled that redemption from execution sales under
ordinary judgments pursuant to Section 30, Rule 39 of the Rules of Court should
18
be made within twelve (12) months from the registration of the same
19
xxx." In Juan Mateo vs. The Court of Appeals and Severino Alberto, 99 Phil.
1042 (unreported), the High Court categorically said that "(t)he right of
redemption in execution sales being statutory, it must, to make it effective, be
exercised in the mode prescribed by the statute." We therefore find petitioners'
invocation of the liberal ruling of the Supreme Court on the exercise of the right
to redemption to have neither factual nor legal basis. The Court has no alternative
20
but to apply Section 35 of Rule 39 of the Rules of Court to the letter.
We disagree.
21
Paraphrasing what we trenchantly pointed out in Hermoso v. CA, we test a law by its
result. A law should not be interpreted so as to cause an injustice. There are laws which
are generally valid but may seem arbitrary when applied in a particular sense because of
its peculiar circumstances. We are not bound to apply them in servile subservience to their
language. More explicitly -
. . . we interpret and apply the law not independently of but in consonance with
justice. Law and justice are inseparable, and we must keep them so. To be sure,
there are some laws that, while generally valid, may seem arbitrary when applied
in a particular case because of its peculiar circumstances. In such a situation,
we are not bound, because only of our nature and functions, to apply them
just the same, in slavish obedience to their language. What we do instead
is find a balance between the word and the will, that justice may be done
even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly
apply the law as it is worded, yielding like robots to the literal command
without regard to its cause and consequence. "Courts are apt to err by
sticking too closely to the words of the law," so we were warned, by Justice
Holmes again, "where these words import a policy that goes beyond
22
them." While we admittedly may not legislate, we nevertheless have the power
to interpret the law in such a way as to reflect the will of the legislature. While we
may not read into the law a purpose that is not there, we nevertheless have the
right to read out of it the reason for its enactment. In doing so, we defer not to
 "the letter that killeth" but to the "the spirit that vivifieth," to give effect to the
lawmaker's will.
The spirit rather than the letter of the statute determines its
construction, hence, a statute must be read according to its spirit or
intent. For what is within the spirit is within the statute although it is not
within the letter thereof, and that which is within the letter but not within
the spirit is not within the statute.Stated differently, a thing which is
within the intent of the lawmaker is as much within the statute as if
within the letter; and a thing which is within the letter of the statute is
23
not within the statute unless within the intent of the lawmakers.
Stated differently, the legal perspective within which the right to redeem can still be availed
of or not must be viewed in the light of the dictum that the policy of the law is to aid rather
24
than defeat the right of redemption. In short, the statute, being remedial, is to be construed
25
liberally to effectuate the remedy and carry out its evident spirit and purpose. Thus, the
Court allowed parties in several cases to perfect their right of redemption even beyond the
26
period prescribed therefor. We can do no less vis-à-vis the prevailing facts of this case for
the following reasons:
First, we are confronted with the grossly and patently iniquitous spectacle of petitioners
being made to pay a money judgment amounting to P57,396.85 with their two (2) parcels
of prime land conservatively valued at that time at P500,000.00, on account of the lapse of
the period given for exercising their right – despite their apparent willingness and ability to
pay the money judgment. Although this was the very fact in issue in the second case, the
gross disparity of the money judgment to the value of the levied real properties was not lost
27
on the Court when, .in Cometa v. IAC, it said that –
Moreover, equitable considerations constrain us to reverse the decision of the
respondent court (Intemediate Appellate Court). The fact is undisputed that the
properties in question were sold at an unusually lower price than their true value.
Properties worth at least P500,000.00 were sold for only P57,396.85. We do not
comment on the consequences of the inadequacy because that is the very issue
which confronts the court below in the pending case. It appearing, however, that
the issuance of the writ of possession would and might work injustice because
the petitioner might not be entitled thereto, we rule that it be withheld.
There is no question that petitioners were remiss in attending with dispatch to the protection
of their interests as regards the subject lots, and for that reason the case in the lower court
was dismissed on a technicality and no definitive pronouncement on the inadequacy of the
price paid for the levied properties was ever made. In this regard, it bears stressing that
procedural rules are not to be belittled or dismissed simply because their non-observance
may have resulted in prejudice to a party's substantive rights as in this case. Like all rules,
they are required to be followed except only when for the most persuasive of reasons they
may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his
28
thoughtlessness in not complying with the procedure prescribed.
Such compelling justifications for taking exception to the general rule are strewn all over
29
the factual landscape of this case. Pertinently, in Dayag v. Canizares, we said that -
...where a rigid application of the rule will result in a manifest failure or
miscarriage of justice, technicalities may be disregarded in order to resolve
the case. Litigations should, as much as possible, be decided on the merits
30
and not on technicalities. xxx Given the foregoing, it seems improper to nullify
Young's motion on a mere technicality. Petitioner's averments should be given
scant consideration to give way to the more substantial matter of equitably
determining the rights and obligations of the parties. It need not be emphasized
that rules of procedure must be interpreted in a manner that will help
31
secure and not defeat justice. (emphasis and italics supplied)
In short, since rules of procedure are mere tools designed to facilitate the attainment of
justice, their strict and rigid application which would result in technicalities that tend to
32
frustrate rather than promote substantial justice must always be avoided. Technicality
should not be allowed to stand in the way of equitably and completely resolving the rights
33
and obligations of the parties. It was thus towards this sacrosanct goal that this Court in
34
the recent case of Paz Reyes Aguam v. CA, et al. held:
. . . The law abhors technicalities that impede the cause of justice. The court's
35
primary duty is to render or dispense justice "A litigation is not a game of
36
technicalities." "Law suits unlike duels are not to be won by a rapier's
thrust. Technicality, when it deserts its proper office as an aid to justice and
becomes its great hindrance and chief enemy, deserves scant consideration from
37
courts." Litigations must be decided on their merits and not on
38
technicality. Every' part)' litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from
39
the unacceptable plea of technicalities. . . . the rules of procedure ought not
to be applied in a very rigid, technical sense; rules of procedure are used only to
40
help secure, not override substantial justice. It is a far better and more
prudent course of action for the court to excuse a technical lapse and
afford the parties a review of the case on appeal to attain the ends of justice
rather than dispose of the case on technicality and cause a grave injustice
to the parties, giving a false impression of speedy disposal of cases while
actually resulting in more delay, if not miscarriage of justice. (emphasis and italics
ours)
Second, while there is no dispute that mere inadequacy of the price per se will not set aside
a judicial sale of real property, nevertheless, where the inadequacy of the price is purely
41
shocking to the conscience, such that the mind revolts at it and such that a reasonable
42
man would neither directly or indirectly be likely to consent to it, the same will be set
43 44
aside. Thus, in one case, the judicial sale of land worth P60,000.00 for P867.00 was
considered shocking to the conscience. So also, the sale of properties at around 10% of
their values, as when a radio worth P1,000.00 was sold for P100.00 and a matrimonial bed
45
costing P500.00 was sold for P50.00, the price was held to be grossly inadequate. How
much more the judicial sale of two (2) prime commercial lots located in Guadalupe, Makati,
conservatively valued at P500,000.00 in 1987, to satisfy a money judgment of P57,396.85?
Third, the questionable manner in which the said lots were levied upon and sold at public
auction has, likewise, caught the attention of the Court. The manner of execution of money
judgments is governed by Section 15, Rule 39 of the Rules of Court, which was then in
force, thus:
SEC. 15. Execution of money judgments. – The officer must enforce an execution
of a money judgment by levying on all the property, real and personal property
of every name and nature whatsoever, and which may be disposed of for value,
of the judgment debtor not exempt from execution, or on a sufficient amount of
such property, if there be sufficient, and selling the same, and paying to the
judgment creditor or his attorney, so much of the proceeds as will satisfy the
judgment. Any excess in the proceeds over the judgment and the accruing costs
must be delivered to the judgment debtor, unless otherwise directed by the
judgment or order of the court. When there is more property of the judgment
debtor than is sufficient to satisfy the judgment and accruing costs, within the
view of the officer, he must levy only on such part of the property as is amply
sufficient to satisfy the judgment and costs. xxx (emphasis and italics
supplied)
In relation to the foregoing, Section 21, also of Rule 39, provides that -
SEC. 21. How property sold on execution; Who may direct manner and order of
sale. – All sales of property under execution must be made at public auction, to
the highest bidder, between the hours of nine in the morning and five in the
afternoon. After sufficient property has been sold to satisfy the execution; no
more shall be sold. When the sale is of real property, consisting of several known
lots, they must be sold separately; or, when a portion of such real property is
claimed by a third person, he may require it to be sold separately. When the sale
is of personal property capable of manual delivery, it must be sold within view of
those attending the sale and in such parcels as are likely to bring the highest
price. The judgment debtor, if present at the sale, may direct the order in which
property, real or personal, shall be sold, when such property shall consist of
several known lots or parcels which can be sold to advantage separately. Neither
the officer holding the execution nor his deputy can become a purchaser, nor be
interested directly or indirectly in any purchase at such sale. (emphasis and italics
supplied)
In the case at bar, the subject lots were sold en masse, not separately as above provided.
The unusually low price for which they were sold to the vendee, not to mention his
vehement unwillingness to allow redemption therein, only serves to heighten the
dubiousness of the transfer.
As for laches, its essence is the failure or neglect, for an unreasonable and
unexplained length of time to do that which, by the exercise of due diligence,
could or should have been done earlier; it is the negligence or omission to assert
a right within a reasonable time, warranting a presumption that the party entitled
48
to assert it either has abandoned it or declined to assert it. But there is, to be
sure, no absolute rule as to what constitutes laches or staleness of demand; each
case is to be determined according to its particular circumstances. The question
of laches is addressed to the sound discretion of the court and since laches is an
equitable doctrine, its application is controlled by equitable considerations. It
49
cannot be worked to defeat justice or to perpetrate fraud and injustice. In
the case under consideration, it would not only be impractical but well-nigh unjust
and patently iniquitous to apply laches against private respondent and vest
ownership over a valuable piece of real property in favor of petitioners . . . It is
the better rule that courts under the principle of equity, will not be guided
or bound strictly by the statute of limitations or the doctrine of laches when
50
to do so, manifest wrong or injustice would result. (Emphasis provided)
Lastly, petitioners have demonstrated, albeit tardily, an earnest and sincere desire to
redeem the subject properties when Cometa's heirs, on December 4, 1997, consigned with
the Office of the Clerk of Court, RTC Makati, the sum of P38,761.05 as purchase price for
the lots, plus interest of P78,762.69 and P1,175.25 as realty tax. The rule on redemption is
liberally construed in favor of the original owner of the property and the policy of the law is
51
to aid rather than defeat him in the exercise of his right of redemption. Thus, we allowed
parties in several cases to perfect their right of redemption even beyond the period
52
prescribed therefor.
WHEREFORE, in view of all the foregoing, the challenged Decision of the Court of Appeals
dated January 25, 1999, which affirmed the trial court's denial of petitioners' right of
redemption, as well as the subsequent Resolution dated January 27, 2000, in CA-G.R. SP
No. 48227 entitled "Zacarias Cometa, et al. v. Ron. Pedro Laggui, et al.,"
are REVERSED and SET ASIDE; and another one hereby rendered ordering respondent
Jose Franco to accept the tender of redemption made by petitioners and to deliver the
proper certificate of redemption to the latter.1âwphi1.nêt
SO ORDERED.
G.R. No. 221029
REPUBLIC OF THE PHILIPPINES, Petitioner
vs
MARELYN TANEDO MANALO, Respondent

Fourth, with regard to the applicability of prescription and laches, there can be no question
RESOLUTION
that they operate as a bar in equity. However, it must be pointed out that the question of
46
prescription or laches can not work to defeat justice or to perpetrate fraud and injustice. As
47
explicitly stated by this Court in Santiago v. Court of Appeals: peralta, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court (Rules) seeks to
1
reverse and set aside the September 18, 2014 Decision and October 12, 2015
2
Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 100076. The dispositive portion
of the Decision states:
WHEREFORE, the instant appeal is GRANTED. The Decision dated 15 October 2012 of
the Regional Trial Court of Dagupan City, First Judicial Region, Branch 43, in SPEC. PROC.
NO. 2012-0005 is REVERSED and SET ASIDE.
Let a copy of this Decision be served on the Local Civil Registrar of San Juan, Metro Manila.
3 is still married to the said Japanese national who is no longer her husband or is no longer
SO ORDERED.
The facts are undisputed.
On January 10, 2012, respondent Marelyn Tanedo Manalo (Manalo) filed a petition for
cancellation of
Entry of marriage in the Civil Registry of San Juan , Metro Manila, by virtueof a judgment
of divorce Japanese court.
Finding the petition to be sufficient in form and in substance, Branch 43 of the Regional
Trial Court (RTC) of Dagupan City set the case for initial hearing on April 25, 2012. The
petition and the notice of initial hearing were published once a week for three consecutive
weeks in newspaper of general circulation. During the initial hearing, counsel for Manalo
marked the documentary evidence (consisting of the trial courts Order dated January 25,
2012, affidavit of publication, and issues of the Northern Journal dated February 21-27,
2012, February 28 - March 5, 2012, and March 6-12, 2012) for purposes of compliance with
the jurisdictional requirements.
The Office of the Solicitor General (OSG) entered its appearance for petitioner Republic of
the Philippines authorizing the Office of the City Prosecutor of Dagupan to appear on its
behalf. Likewise, a Manifestation and Motion was filed questioning the title and/or caption
of the petition considering that based on the allegations therein, the proper action should
be a petition for recognition and enforcement of a foreign judgment.
As a result, Manalo moved to admit an Amended Petition, which the court granted. The
Amended Petition, which captioned that if it is also a petition for recognition and
enforcement of foreign judgment alleged:
2. That petitioner is previously married in the Philippines to a Japanese national named
YOSHINO MINORO as shown by their Marriage Contract xxx;
3. That recently, a case for divorce was filed by herein [petitioner] in Japan and after die
proceedings, a divorce decree dated December 6, 2011 was rendered by the Japanese
Court x x x;
4. That at present, by virtue of the said divorce decree, petitioner and her divorce Japanese
husband are no longer living together and in fact, petitioner and her daughter are living
separately from said Japanese former husband;
5. That there is an imperative need to have the entry of marriage in Civil Registry of San
Juan, Metro Manila cancelled, where the petitioner and the former Japanese husband's
marriage was previously registered, in order that it would not appear anymore that petitioner
married to her, she shall not be bothered and disturbed by aid entry of marriage;
6. That this petition is filed principally for the purpose of causing the cancellation of entry of
the marriage between the petitioner and the said Japanese national, pursuant to Rule 108
of the Revised Rules of Court, which marriage was already dissolved by virtue of the
aforesaid divorce decree; [and]
7. That petitioner prays, among others, that together with the cancellation of the said entry
4
of her marriage, that she be allowed to return and use her maiden surname, MANALO.
Manalo was allowed to testify in advance as she was scheduled to leave for Japan for her
employment. Among the documents that were offered and admitted were:
1. Court Order dated January 25, 2012, finding the petition and its attachments to be
sufficient in form and in substance;
2. Affidavit of Publication;
3. Issues of the Northern Journal dated February 21-27, 2012, February 28 - March 5, 2012,
and March 6-12, 2012;
4. Certificate of Marriage between Manalo and her former Japanese husband;
5. Divorce Decree of Japanese court;
6. Authentication/Certificate issued by the Philippine Consulate General in Osaka, Japan
of the Notification of Divorce; and
5
7. Acceptance of Certificate of Divorce.
The OSG did not present any controverting evidence to rebut the allegations of Manalo.
On October 15, 2012, the trial court denied the petition for lack of merit. In ruling that the
divorce obtained by Manalo in Japan should not be recognized, it opined that, based on
Article 15 of the New Civil Code, the Philippine law "does not afford Filipinos the right to file
for a divorce whether they are in the country or living abroad, if they are married to Filipinos
or to foreigners, or if they celebrated their marriage in the Philippines or in another country"
and that unless Filipinos "are naturalized as citizens of another country, Philippine laws
shall have control over issues related to Filipinos' family rights and duties, together with the
determination of their condition and legal capacity to enter into contracts and civil relations,
6
inclusing marriages."
On appeal, the CA overturned the RTC decision. It held that Article 26 of the Family Code
of the Philippines (Family Code) is applicable even if it was Manalo who filed for divorce
against her Japanese husband because the decree may obtained makes the latter no
longer married to the former, capacitating him to remarry. Conformably with Navarro, et al.
7 Where a marriage between Filipino citizen and a foreigner is validly celebrated and a
V. Exec. Secretary Ermita, et al. ruling that the meaning of the law should be based on the
intent of the lawmakers and in view of the legislative intent behind Article 26, it would be
height of injustice to consider Manalo as still married to the Japanese national, who, in turn,
is no longer married to her. For the appellate court, the fact that it was Manalo who filed the
divorce case is inconsequential. Cited as similar to this case was Van Dorn v. Judge
8
Romilo, Jr. where the mariage between a foreigner an a Filipino was dissolved filed abroad
by the latter.
The OSG filed a motion for reconsideration, but it was denied; hence, this petition.
We deny the petition and partially affirm the CA decision.
Divorce, the legal dissolution of a lawful union for a cause arising after the marriage, are of
two types: (1) absolute divorce or a vinculo matrimonii, which terminates the marriage, and
(2) limited divorce or a mensa et thoro, which suspends it and leaves the bond in full
9 24
force. In this jurisdiction, the following rules exist:
1. Philippine law does not provide for absolute divorce; hence, our
10
courts cannot grant it.
11 12
2. Consistent with Articles 15 and 17 of the New Civil Code, the
marital bond between two Filipinos cannot be dissolved even by an
13
absolute divorce obtained abroad.
3. An absolute divorce obtained abroad by a couple, who both aliens,
may be recognized in the Philippines, provided it is consistent with their
14
respective national laws.
4. In mixed marriages involving a Filipino and a foreigner, the former
is allowed to contract a subsequent marriage in case the absolute
divorce is validly obtained abroad by the alien spouse capacitating him
15
or her to remarry.
On July 6, 1987, then President Corazon C. Aquino signed into law Executive Order (E.O.)
No. 209, otherwise known as the Family Code of the Philippines, which took effect on
16 17
August 3, 1988. Shortly thereafter , E.O. No. 227 was issued on July 17, 1987. Aside
from amending Articles 36 and 39 of the Family Code, a second paragraph was added to
18
Article 26. This provision was originally deleted by the Civil Code Revision Committee
(Committee),but it was presented and approved at a Cabinet meeting after Pres. Aquino
19
signed E.O. No. 209. As modified, Article 26 now states:
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in
force in the where country where they were solemnized, and valid there as such, shall also
be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37
and 38.
divorce is thereafter validly obtained abroad by the alien spouse capacitating him her to
remarry under Philippine law.
Paragraph 2 of Article 26 confers jurisdiction on Philippine courts to extend the effect of a
foreign divorce decree to a Filipino spouse without undergoing trial to determine the validity
20
of the dissolution of the marriage. It authorizes our courts to adopt the effects of a foreign
21
divorce decree precisely because the Philippines does not allow divorce. Philippine courts
22
cannot try the case on the merits because it is tantamount to trying a divorce case. Under
the principles of comity, our jurisdiction recognizes a valid divorce obtained by the spouse
of foreign nationality, but the legal effects thereof, e.g., on custody, care and support of the
23
children or property relations of the spouses, must still be determined by our courts.
According to Judge Alicia Sempio-Diy, a member of the Committee, the idea of the
amendment is to avoid the absurd situation of a Filipino as still being married to his or her
alien spouse, although the latter is no longer married to the former because he or she had
obtained a divorce abroad that is recognized by his or national law. The aim was that it
would solved the problem of many Filipino women who, under the New Civil Code, are still
considered married to their alien husbands even after the latter have already validly
divorced them under their (the husbands') national laws and perhaps have already married
25
again.
In 2005, this Court concluded that Paragraph 2 of Article 26 applies to a case where, at the
time of the celebration of the marriage, the parties were Filipino citizens, but later on, one
of them acquired foreign citizenship by naturalization, initiated a divorce proceeding, and
26
obtained a favorable decree. We held in Republic of the Phils. v. Orbecido III:
The jurisprudential answer lies latent in the 1998 case of Quita v. Court of
Appeals. In Quita, the parties were, as in this case, Filipino citizens when they got married.
The wife became naturalized American citizen n 1954 and obtained a divorce in the same
year. The court therein hinted, by the way of obiter dictum, that a Filipino divorced by his
naturalized foreign spouse is no longer married under Philippine law and can thus remarry.
Thus, taking into consideration the legislative intent and applying the rule of reason, we
hold that Paragraph 2 of Article 26 should be interpreted to include cases involving parties
who, at the time of the celebration of the marriage were Filipino citizens, but later on, one
of them becomes naturalized as foreign citizen and obtains divorce decree. The Filipino
spouse should likewise be allowed to remarry as if the other party were foreigner at the
time of the solemnization of the marriage. To rule otherwise would be to sanction absurdity
and injustice. x x x
If we are to give meaning to the legislative intent to avoid the absurd situation where the
Filipino spouse remains married to the alien spouse who after obtaining a divorce is no
longer married to the Filipino spouse, then the instant case must be deemed as coming
within the contemplation of Paragraph 2 of Article 26.
In view of the foregoing, we state the twin elements for the application of Paragraph 2 of
Article 26 as follows:
1. There is a valid marriage that has been celebrated between a Filipino citizen and a
foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.
The reckoning point is not the citizenship of the parties at the time of the celebration of
marriage, but their citizenship at the time valid divorced obtained abroad by the alien
spouse capacitating the latter to remarry.
Now, the Court is tasked to resolve whether, under the same provision, a Filipino citizen
has the capacity to remarry under Philippine law after initiating a divorce proceeding abroad
and obtaining a favorable judgment against his or her alien spouse who is capacitated to
remarry. Specifically, Manalo pleads for the recognition of enforcement of the divorced
decree rendered by the Japanese court and for the cancellation of the entry of marriage in
the local civil registry " in order that it would not appear anymore that she is still married to
the said Japanese national who is no longer her husband or is no longer married to her;
[and], in the event that [she] decides to be remarried, she shall not be bothered and
disturbed by said entry of marriage," and to use her maiden surname.
We rule in the affirmative.
28 29
Both Dacasin v. Dacasin and Van Dorn already recognized a foreign divorce decree that
was initiated and obtained by the Filipino spouse and extended its legal effects on the
issues of child custody and property relation,respectively.
In Dacasin, post-divorce, the former spouses executed an Agreement for the joint custody
of their minor daughter. Later on, the husband who is a US citizen, sued his Filipino wife
enforce the Agreement, alleging that it was only the latter who exercised sole custody of
their child. The trial court dismissed the action for lack of jurisdiction, on the ground, among
others, that the divorce decree is binding following the "nationality rule" prevailing in this
jurisdiction. The husband moved to reconsider, arguing that the divorce decree obtained by
his former wife is void, but it was denied. In ruling that the trial court has jurisdiction to
entertain the suit bu not to enforce the Agreement, which is void, this Court said:
Nor can petitioner rely on the divorce decree's alleged invalidity - not because the Illinois
court lacked jurisdiction or that the divorced decree violated Illinois law, but because the
divorce was obtained by his Filipino spouse - to support the Agreement's enforceability .
The argument that foreigners in this jurisdiction are not bound by foreign divorce decrees
is hardly novel. Van Dron v. Romillo settled the matter by holding that an alien spouse of a
Filipino is bound by a divorce decree obtained abroad. There, we dismissed the alien
divorcee's Philippine suit for accounting of alleged post-divorce conjugal property and
rejected his submission that the foreign divorce (obtained by the Filipino spouse) is not valid
30
in this jurisdiction x x x.
Van Dorn was decided before the Family Code took into effect. There, a complaint was filed
by the ex-husband , who is a US citizen, against his Filipino wife to render an accounting
of a business that was alleged to be a conjugal property and to be declared with right to
manage the same. Van Dorn moved to dismiss the case on the ground that the cause of
action was barred by previous judgment in the divorce proceedings that she initiated, but
the trial court denied the motion. On his part, her ex-husband averred that the divorce
decree issued by the Nevada court could not prevail over the prohibitive laws of the
Philippines and its declared national policy; that the acts and declaration of a foreign court
cannot, especially if the same is contrary to public policy, divest Philippine courts of
jurisdiction to entertain matters within its jurisdiction . In dismissing the case filed by the
alien spouse, the Court discussed the effect of the foreign divorce on the parties and their
conjugal property in the Philippines. Thus:
There can be no question as to the validity of that Nevada divorce in any of the States of
the United States. The decree is binding on private respondent as an American citizen. For
instance, private respondent cannot sue petitioner, as her husband, in any State of the
Union. What he is contending in this case is that the divorce is not valid and binding in this
jurisdiction, the same being contrary to local law and public policy.
Is it true that owing to the nationality principle embodied in Article 15 of the Civil Code, only
Philippine nationals are covered by the policy and morality. However, aliens may obtain
divorce abroad, which may be recognized in the Philippines, provided they are valid
according to their national law. In this case, the divorce in Nevada released private
respondent from the marriage from standards of American law, under which divorce
dissolves the marriage. As stated by the Federal Supreme Court of the United States
in Atherton vs. Atherton, 45 L. Ed. 794,799:
"The purpose and effect of a decree of divorce from the bond of matrimony by a court of
competent jurisdiction are to change the existing status or domestic relation of husband
and wife, and to free them both from the bond. The marriage tie, when thus severed as
stone party, ceases to bind either. A husband without a wife, or a wife without a husband,
is unknown to the law. When the law provides in the nature of penalty, that the guilty party
shall not marry again, that party, as well as the other, is still absolutely feed from the bond
of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner.
He would have no standing to sue in the case below as petitioner's husband entitled to
exercise control over conjugal assets. As he is estopped by his own representation before
said court from asserting his right over the alleged conjugal property.
To maintain, as private respondent does, that under our laws, petitioner has to be
considered still married to private respondent and still subject to a wife's obligations under
Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be obliged to live
together with, observe respect and fidelity, and render support to private respondent. The
latter should not continue to be one of her heirs with possible rights to conjugal property.
She should not be discriminated against in her own country if the ends of justice are to be
31
served.
In addition, the fact that a validity obtained foreign divorce initiated by the Filipino spouse
can be recognized and given legal effects in the Philippines is implied from Our rulings
32 33
in Fujiki v. Marinay, et al. and Medina v. Koike.
In Fujiki, the Filipino wife, with the help of her husband, who is a Japanese national, was
able to obtain a judgment from Japan's family court. Which declared the marriage between
her and her second husband, who is a Japanese national, void on the ground of bigamy.
In resolving the issue of whether a husband or wife of a prior marriage can file a petition to
recognize a foreign judgment nullifying the subsequent marriage between his her spouse
and a foreign citizen on the ground of bigamy, We ruled:
Fujiki has the personality to file a petition to recognize the Japanese Family Court judgment
nullifying the marriage between Marinay and Maekara on the ground of bigamy because
the judgment concerns his civil status as married to Marinay. For the same reason he has
the personality to file a petition under Rule 108 to cancel the entry of marriage between
Marinay and Maekara in the civil registry on the basis of the decree of the Japanese Family
Court.
There is no doubt that the prior spouse has a personal and material interest in maintaining
the integrity of the marriage he contracted and the property relations arising from it. There
is also no doubt that he is interested in the cancellation of an entry of a bigamous marriage
in the civil registry, which compromises the public record of his marriage. The interest
derives from the substantive right of the spouse not only to preserve (or dissolve, in limited
instances) his most intimate human relation, but also to protect his property interests that
arise by operation of law the moment he contracts marriage. These property interests in
marriage included the right to be supported "in keeping with the financial capacity of the
family" and preserving the property regime of the marriage.
Property rights are already substantive rights protected by the Constitution, but a spouse's
right in a marriage extends further to relational rights recognized under Title III ("Rights and
34
Obligations between Husband and Wife") of the Family Code. x x x
On the other hand, in Medina, the Filipino wife and her Japanese husband jointly filed for
divorce, which was granted.1âwphi1 Subsequently, she filed a petition before the RTC for
judicial recognition of foreign divorce and declaration of capacity to remarry pursuant to
Paragraph 2 of Article 26. The RTC denied the petition on the ground that the foreign
divorce decree and the national law of the alien spouse recognizing his capacity to obtain
a divorce must be proven in accordance with Sections 24 and 25 of Rule 132 of the Revised
Rules on Evidence. This Court agreed and ruled that, consistent with Corpuz v. Sto. Tomas,
35 36
et al. and Garcia v. Recio, the divorce decree and the national law of the alien spouse
must be proven. Instead of dismissing the case, We referred it to the CA for appropriate
action including the reception of evidence to determine and resolve the pertinent factual
issues.
There is no compelling reason to deviate from the above-mentioned rulings. When this
Court recognized a foreign divorce decree that was initiated and obtained by the Filipino
spouse and extended its legal effects on the issues of child custody and property relation,
it should not stop short in a likewise acknowledging that one of the usual and necessary
consequences of absolute divorce is the right to remarry. Indeed, there is no longer a
mutual obligation to live together and observe fidelity. When the marriage tie is severed and
ceased to exist, the civil status and the domestic relation of the former spouses change as
both of them are freed from the marital bond.
The dissent is of the view that, under the nationality principle, Manalo's personal status is
subject to Philippine law, which prohibits absolute divorce. Hence, the divorce decree which
she obtained under Japanese law cannot be given effect, as she is, without dispute, a
national not of Japan, bit of the Philippines. It is said that that a contrary ruling will subvert
not only the intention of the framers of the law, but also that of the Filipino peopl, as
expressed in the Constitution. The Court is, therefore, bound to respect the prohibition until
the legislature deems it fit to lift the same.
We beg to differ.
Paragraph 2 of Artilce 26 speaksof "a divorce x x x validly obtained abroad by the alien
spouse capacitating him or her to remarry." Based on a clear and plain reading of the
provision, it only requires that there be a divorce validly obtained abroad. The letter of the
law does not demand that the alien spouse should be the one who initiated the proceeding
wherein the divorce decree was granted. It does not distinguish whether the Filipino spouse
is the petitioner or the respondent in the foreign divorce proceeding. The Court is bound by
37
the words of the statute; neither can We put words in the mouth of lawmakers. The
legislature is presumed to know the meaning of the words to have used words advisely and
to have expressed its intent by the use of such words as are found in the statute. Verba
38
legis non est recedendum, or from the words if a statute there should be departure."
Assuming, for the sake of argument, that the word "obtained" should be interpreted to mean
that the divorce proceeding must be actually initiated by the alien spouse, still, the Court
will not follow the letter of the statute when to do so would depart from the true intent of the
legislature or would otherwise yield conclusions inconsistent with the general purpose of
39
the act. Law have ends to achieve, and statutes should be so construed as not to defeat
40
but to carry out such ends and purposes. As held in League of Cities of the Phils. et al. v.
41
COMELEC et. al.:
 51
The legislative intent is not at all times accurately reflected in the manner in which the the general welfare. It essentially involves a public right or interest that, because of its
resulting law is couched. Thus, applying a verba legis or strictly literal interpretation of a primacy, overrides individual rights, and allows the former to take precedence over the
52
statute may render it meaningless and lead to inconvience, an absurd situation or injustice. latter.
To obviate this aberration, and bearing in mind the principle that the intent or the spirit of
the law is the law itself, resort should be to the rule that the spirit of the law control its letter.
Although the Family Code was not enacted by the Congress, the same principle applies
with respect to the acts of the President which have the force and effect of law unless
To reiterate, the purpose of Paragraph 2 of Article 26 is to avoid the absurd situation where declared otherwise by the court. In this case, We find that Paragraph 2 of Article 26 violates
53 54
the Filipino spouse remains married to the alien spouse who, after a foreign divorce decree one of the essential requisites of the equal protection clause. Particularly, the limitation
that is effective in the country where it was rendered, is no longer married to the Filipino of the provision only to a foreign divorce decree initiated by the alien spouse is
spouse. The provision is a corrective measure is free to marry under the laws of his or her unreasonable as it is based on superficial, arbitrary, and whimsical classification.
42
countr. Whether the Filipino spouse initiated the foreign divorce proceeding or not, a
favorable decree dissolving the marriage bond and capacitating his or her alien spouse to
A Filipino who is married to another Filipino is not similarly situated with a Filipino who is
remarry will have the same result: the Filipino spouse will effectively be without a husband
married to a foreign citizen. There are real, material and substantial differences between
or wife. A Filipino who initiated a foreign divorce proceeding is in the same place and in like
them. Ergo, they should not be treated alike, both as to rights conferred and liabilities
circumstances as a Filipino who is at the receiving end of an alien initiated proceeding.
imposed. Without a doubt, there are political, economic cultural, and religious dissimilarities
Therefore, the subject provision should not make a distinction. In both instance, it is
as well as varying legal systems and procedures, all too unfamiliar, that a Filipino national
extended as a means to recognize the residual effect of the foreign divorce decree on a
who is married to an alien spouse has to contend with. More importantly, while a divorce
Filipinos whose marital ties to their alien spouses are severed by operations of their alien
decree obtained abroad by a Filipino against another Filipino is null and void, a divorce
spouses are severed by operation on the latter's national law.
decree obtained by an alien against his her Filipino spouse is recognized if made in
55
accordance with the national law of the foreigner.
Conveniently invoking the nationality principle is erroneous. Such principle, found under
Article 15 of the City Code, is not an absolute and unbending rule. In fact, the mer e
On the contrary, there is no real and substantial difference between a Filipino who initiated
existence of Paragraph 2 of Article 26 is a testament that the State may provide for an
a foreign divorce proceedings a Filipino who obtained a divorce decree upon the instance
exception thereto. Moreover, blind adherence to the nationality principle must be disallowed
of his or her alien spouse . In the eyes of the Philippine and foreign laws, both are
if it would cause unjust discrimination and oppression to certain classes of individuals
considered as Filipinos who have the same rights and obligations in a alien land. The
whose rights are equally protected by law. The courts have the duty to enforce the laws of
43 circumstances surrounding them are alike. Were it not for Paragraph 2 of Article 26, both
divorce as written by the Legislature only if they are constitutional.
are still married to their foreigner spouses who are no longer their wives/husbands. Hence,
to make a distinction between them based merely on the superficial difference of whether
While the Congress is allowed a wide leeway in providing for a valid classification and that they initiated the divorce proceedings or not is utterly unfair. Indeed, the treatment gives
its decision is accorded recognition and respect by the court of justice, such classification undue favor to one and unjustly discriminate against the other.
44
may be subjected to judicial review. The deference stops where the classification violates
a fundamental right, or prejudices persons accorded special protection by the
45 Further, the differentiation in Paragraph 2 Article 26 is arbitrary. There is inequality in
Constitution. When these violations arise, this Court must discharge its primary role as
treatment because a foreign divorce decree that was initiated and obtained by a Filipino
the vanguard of constitutional guaranties, and require a stricter and more exacting
46 citizen against his or her alien spouse would not be recognized even if based on grounds
adherence to constitutional limitations. If a legislative classification impermissibly 56
similar to Articles 35, 36, 37 and 38 of the Family Code. In filing for divorce based on
interferes with the exercise of a fundamental right or operates to the peculiar disadvantage
these grounds, the Filipino spouse cannot be accused of invoking foreign law at whim,
of a suspect class strict judicial scrutiny is required since it is presumed unconstitutional,
tantamount to insisting that he or she should be governed with whatever law he or she
and the burden is upon the government to prove that the classification is necessary to
chooses. The dissent's comment that Manalo should be "reminded that all is not lost, for
achieve a compelling state interest and that it is the least restrictive means to protect such
47 she may still pray for the severance of her martial ties before the RTC in accordance with
interest.
the mechanism now existing under the Family Code" is anything but comforting. For the
guidance of the bench and the bar, it would have been better if the dissent discussed in
"Fundamental rights" whose infringement leads to strict scrutiny under the equal protection detail what these "mechanism" are and how they specifically apply in Manalo's case as well
48
clause are those basic liberties explicitly or implicitly guaranteed in the Constitution. It as those who are similarly situated. If the dissent refers to a petition for declaration of nullity
includes the right to free speech, political expression, press, assembly, and forth, the right or annulment of marriage, the reality is that there is no assurance that our courts will
49
to travel, and the right to vote. On the other hand, what constitutes compelling state automatically grant the same. Besides, such proceeding is duplicitous, costly, and
interest is measured by the scale rights and powers arrayed in the Constitution and protracted. All to the prejudice of our kababayan.
50
calibrated by history. It is akin to the paramount interest of the state for which some
individual liberties must give way, such as the promotion of public interest, public safety or
It is argued that the Court's liberal interpretation of Paragraph 2 of Artilce 26 encourages
Filipinos to marry foreigners, opening the floodgate to the indiscriminate practice of Filipinos
marrying foreign nationals or initiating divorce proceedings against their alien spouses.
The supposition is speculative and unfounded.
First, the dissent falls into a hasty generalization as no data whatsoever was sworn to
support what he intends to prove. Second, We adhere to the presumption of good faith in
this jurisdiction. Under the rules on evidence, it is disputable presumed (i.e., satisfactory if
uncontradicted and overcome by other evidence) that a person is innocent of crime or
57 59
wrong, that a person takes ordinary care of his concerns, that acquiescence resulted
60
from a belief that the thing acquiesced in was conformable to the law and fact, that a man
and woman deporting themselves as husband and wife have entered into a lawful contract
61 62
of marriage, and that the law has been obeyed. It is whimsical to easily attribute any
illegal, irregular or immoral conduct on the part of a Filipino just because he or she opted
to marry a foreigner instead of a fellow Filipino. It is presumed that interracial unions are
entered into out of genuine love and affection, rather than prompted by pure lust or
profit. Third, We take judicial notice of the fact that Filipinos are relatively more forbearing
and conservative in nature and that they are more often the victims or losing end of mixed
marriages. And Fourth, it is not for Us to prejudge the motive behind Filipino's decision to
marry an alien national. In one case, it was said:
Motive for entering into a marriage are varied and complex. The State does not and cannot
dictated on the kind of life that a couple chooses to lead. Any attempt to regulate their
lifestyle would go into the realm of their right to privacy and would raise serious
constitutional questions. The right marital privacy allows married couples to structure their
marriages in almost any way they see it fit, to live together or live apart, to have children or
no children, to love one another or not, and so on. Thus, marriages entered into for other
purposes, limited or otherwise, such as convenience, companionship, money, status, and
title, provided that they comply with all the legal requisites, are equally valid. Love, though
the ideal consideration in a marriage contract, is not the only valid cause for marriage. Other
63
considerations, not precluded by law, may validly support a marriage.
The 1987 Constitution expresses that marriage, as an inviolable social institution, is the
64
foundation of the family and shall be protected by the State. Nevertheless, it was not
meant to be a general prohibition on divorce because Commissioner Jose Luis Martin C.
Gascon, in response to a question by Father Joaquin G. Bernas during the deliberations of
65
the 1986 Constitutional Commission, was categorical about this point. Their exchange
reveal as follows:
MR. RAMA. Mr. Presiding Officer, may I ask that Commissioner Bernas be recognized.
THE PRESIDING OFFICER (Mr. Colayco). Commissioner Bernas is recognized.
FR. BERNAS. Just one question, and I am not sure if it has been categorically answered. I
refer specifically to the proposal of Commissioner Gascon. Is this be understood as a
prohibition of a general law on divorce? His intention is to make this a prohibition so that
the legislature cannot pass a divorce law.
MR. GASCON. Mr. Presding Officer, that was not primarily my intention. My intention was
primarily to encourage the social institution of marriage, but not necessarily discourage
divorce. But now that the mentioned the issue of divorce, my personal opinion is to
discourage it. Mr. Presiding Officer.
FR. BERNAS. No my question is more categorical. Does this carry the meaning of
prohibiting a divorce law?
MR. GASCON. No Mr. Presiding Officer.
66
FR. BERNAS. Thank you.
Notably, a law on absolute divorce is not new in our country. Effectivity March 11, 1917,
Philippine courts could grant an absolute divorce in the grounds of adultery on the part of
the wife or concubinage on the part of the husband by virtue of Act No. 2710 of the
67
Philippine Legislature. On March 25, 1943, pursuant to the authority conferred upon him
by the Commander-in-Chief fo the Imperial Japanese Forces in the Philippines and with the
approval of the latter, the Chairman of the Philippine Executive Commission promulgated
an E.O. No. 141 ("New Divorce Law"), which repealed Act No. 2710 and provided eleven
ground for absolute divorce, such as intentional or unjustified desertion continuously for at
least one year prior to the filing of the action, slander by deed or gross insult by one spouse
against the other to such an extent as to make further living together impracticable, and a
68
spouse's incurable insanity. When the Philippines was liberated and the Commonwealth
Government was restored, it ceased to have force and effect and Act No. 2710 again
69
prevailed. From August 30, 1950, upon the effectivity of Republic Act No. 836 or the New
Civil Code, an absolute divorce obatined by Filipino citizens, whether here or abroad, is no
70
longer recognized.
Through the years, there has been constant clamor from various sectors of the Philippine
th
society to re-institute absolute divorce. As a matte of fcat, in the currnet 17 Congress,
71 72 73 74
House Bill (H.B.) Nos. 116 1062 2380 and 6027 were filed in the House of
representatives. In substitution of these bills, H.B. No. 7303 entitled "An Act Instituting
Absolute Divorce and Dissolution of Marriage in the Philippines" or the Absolute Divorce
Act of 2018 was submitted by the House Committee on Population
And Family Relations of February 8, 2018. It was approved on March 19, 2018 on Third
Reading - with 134 in favor, 57 against, and 2 absentations. Under the bill, the grounds for
a judicial decree of absolute divorce are as follows:
1. The grounds for legal separation under Article 55 of the Family Code, modified or
amended, as follows:
 a. Physical violence or grossly abusive conduct directed against the
petitioner, a common child, or a child of the petitioner;
b. Physical violence or moral pressure to compel the petitioner to
change religious or political affiliation;
c. Attempt of respondent to corrupt or induce the petitioner, a common
child, or a child of a petitioner, to engage in prostitution, or connivance
in such corruption or inducement;
d. Final judgment sentencing the respondent to imprisonment of more
than six (6) years, even if pardoned;
e. Drug addiction or habitual alchoholism ro chronic gambling of
respondent;
f. Homosexuality of the respondent;
in that order, unless after attaining the age of twenty-one (21) such
party freely cohabited with the other and both lived together as
husband and wife;
b. either party was of unsound mind, unless such party after coming to
reason, freely cohabited with the other as husband and wife;
c. The consent of either party was obtained by fraud, unless such party
afterwards with full knowledge of the facts constituting the fraud, freely
cohabited with the other husband and wife;
d. consent of either party was obtained by force, intimidation or undue
influence, unless the same having disappeared or ceased, such party
thereafter freely cohabited with the other as husband and wife;
e. Either party was physically incapable of consummating the marriage
with the other and such incapacity continues or appears to be
incurable; and

g. Contracting by the respondent of a subsequent bigamous marriage,

f. Either part was afflicted with the sexually transmissible infection
whether in the Philippines or abroad;
found to be serious or appears to be incurable.

h. Marital infidelity or perversion or having a child with another person

Provided, That the ground mentioned in b, e and f existed either at the time of the marriage
other than one's spouse during the marriage, except when upon the
or supervening after the marriage.
mutual agreement of the spouses, a child is born to them by in vitro or
a similar procedure or when the wife bears a child after being a victim
of rape; 1. When the spouses have been separated in fact for at least five (5) years at the time the
petition for absolute divorce is filed, and the reconciliation is highly improbable;
i. attempt by the respondent against the life of the petitioner, a common
child or a child of a petitioner; and 2. Psychological incapacity of either spouse as provided for in Article 36 of the Family Code,
whether or not the incapacity was present at the time of the celebration of the marriage or
later;
j. Abandonment of petitioner by respondent without justifiable cause
for more than one (1) year.
3. When one of the spouses undergoes a gender reassignment surgery or transition from
one sex to another, the other spouse is entitled to petition for absolute divorce with the
When the spouses are legally separated by judicial decree for more thath two (2) years,
transgender or transsexual as respondent, or vice-versa;
either or both spouses can petition the proper court for an absolute divorce based on said
judicial decree of legal separation.
4. Irreconcilable marital differences and conflicts which have resulted in the total breakdown
of the marriage beyond repair, despite earnest and repeated efforts at reconciliation.
1. Grounds for annulment of marriage under Article 45 of the Family Code restated as
follows:
To be sure, a good number of Filipinos led by the Roman Catholic Church react adversely
to any attempt to enact a law on absolute divorce, viewing it as contrary to our customs,
a. The party in whose behalf it is sought to have the marriage annulled
morals, and traditions that has looked upon marriage and family as an institution and their
was eighteen (18) years of age or over but below twety-one (21), and
nature of permanence,
the marriage was solemnized without the consent of the parents
guradian or personl having substitute parental authority over the party,
In the same breath that the establishment clause restricts what the government can do with
religion, it also limits what religious sects can or cannot do. They can neither cause the
government to adopt their particular doctrines as policy for everyone, nor can they cause
the government to restrict other groups. To do so, in simple terms, would cause the State
76
to adhere to a particular religion and, thus establish a state religion.
The Roman Catholic Church can neither impose its beliefs and convictions on the State
and the rest of the citizenry nor can it demand that the nation follow its beliefs, even if it is
77
sincerely believes that they are good for country. While marriage is considered a
78
sacrament, it has civil and legal consequences which are governed by the Family Code. It
is in this aspect, bereft of any ecclesiastical overtone, that the State has a legitimate right
and interest to regulate.
The declared State policy that marriage, as an inviolable social institution, is a foundation
of the family and shall be protected by the State, should not be read in total isolation but
must be harmonized with other constitutional provision. Aside from strengthening the
solidarity of the Filipino family, the State is equally mandated to actively promote its total
79
development. It is also obligated to defend, among others, the right of children to special
protection from all forms of neglect, abuse, cruelty, exploitation, and other conditions
80
prejudicial to their development. To Our mind, the State cannot effectively enforce these
obligation s if We limit the application of Paragraph 2 or Article 26 only those foreign divorce
initiated by the alien spouse. It is not amiss to point that the women and children are almost
always the helpless victims of all forms of domestic abuse and violence. In fact, among the
notable legislation passed in order to minimize, if not eradicate, the menace are R.A. No.
9262 ("Anti-Violence Against Women and Their Children Act of 2004") R.A. No. 9710 ("The
Magna Carta of Women"), R.A. No 10354 ("The Responsible Parenthood and Reproductive
Health Act of 2012") and R.A. No 9208 ("Anti-Trafficking in Person Act of 2003"), as
amended by R.A. No. 10364 ("ExpandedAnti-Trafficking in Persons Act of
2012").Moreover, in protecting and strengthening the Filipino family as a basic autonomous
social institution, the Court must not lose sight of the constitutional mandate to value the
dignity of every human person, guarantee full respect for human rights, and ensure the
81
fundamental equality before the law of women and men.
A prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We
disallow a Filipino citizen who initiated and obtained a foreign divorce from the coverage of
Paragraph 2 Article 26 and still require him or her to first avail of the existing "mechanisms"
under the Family Code, any subsequent relationship that he or she would enter in the
meantime shall be considered as illicit in the eyes of the Philippine law. Worse, any child
born out such "extra-marital" affair has to suffer the stigma of being branded as illegitimate.
Surely, these are just but a few of the adverse consequences, not only to the parent but
also to the child, if We are to hold a restrictive interpretation of the subject provision. The
irony is that the principle of inviolability of marriage under Section 2, Article XV of the
Constitution is meant to be tilted in favor of marriage and against unions not formalized by
marriage, but without denying State protection and assistance to live-in arrangements or to
82
families formed according to indigenous customs.
This Court should not turn a blind eye to the realities of the present time. With the
advancement of communication and information technology, as well as the improvement of
the transportation system that almost instantly connect people from all over the world,
mixed marriages have become not too uncommon. Likewise, it is recognized that not all
marriages are made in heaven and that imperfect humans more often than not create
83
imperfect unions. Living in a flawed world, the unfortunate reality for some is that the
attainment of the individual's full human potential and self fulfillment is not found and
achieved in the context of a marriage. Thus it is hypocritical to safeguard the quantity of
existing marriages and, at the same time, brush aside the truth that some of them are rotten
quality.
Going back, we hold that marriage, being a mutual and shared commitment between two
parties, cannot possibly be productive of any good to the society where one is considered
84
released from the marital bond while the other remains bound to it. In reiterating that the
Filipino spouse should not be discriminated against in his or her own country if the ends of
85
justice are to be served, San Luis v. San Luis quoted:
x x x In Alonzo v. Intermediate Applellate Court, the Court stated:
But as has also been aptly observed, we test a law by its results: and likewise, we may add,
by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern
of the judge should be to discover in its provisions the intent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as to cause injustice as
this is never within the legislative intent. An indispensable part of that intent, in fact, for we
presume the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance with justice.
Law and justice are inseparable, and we must keep them so. To be sure, there are some
laws that, while generally valid, may seem arbitrary when applied in a particular case
because only of our nature and functions, to apply them just the same, in slavish obedience
to their language. What we do instead is find a balance between the sord and the will, that
justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it
worded, yielding like robots to the literal command without regard to its cause and
consequence. "Courts are apt to err by sticking too closely to the words of law," so we are
warned, by Justice Holmes agaian, "where these words import a policy that goes beyond
them."
xxxx
More that twenty centuries ago, Justinian defined justice "as the constant and perpetual
wish to render every one of his due." That wish continues to motivate this Court when it
assesses the facts and the law in ever case brought to it for decisions. Justice is always an
essential ingredient of its decisions. Thus when the facts warrant, we interpret the law in a
way that will render justice, presuming that it was the intention if the lawmaker, to begin
86
with, that the law be dispensed with justice.
Indeed, where the interpretation of a statute according to its exact and literal import would Nonetheless, the Japanese law on divorce must still be proved.
lead to mischievous results or contravene the clear purpose of the legislature, it should be
construed according to its spirit and reason, disregarding as far as necessary the letter of
87 x x x The burden of proof lies with the "party who alleges the existence of a fact or thing
the law. A statute may therefore, be extended to cases not within the literal meaning of its
88 necessary in the prosecution or defense of an action." In civil cases, plaintiffs have the
terms, so long as they come within its spirit or intent.
burden of proving the material defendants have the burden of proving the material
allegations in their answer when they introduce new matters. x x x
The foregoing notwithstanding, We cannot yet write finis to this controversy by granting
Manalo's petition to recognize and enforce the divorce decree rendered by the Japanese
It is well-settled in our jurisdiction that our courts cannot take judicial notice of foreign laws.
court and to cancel the entry of marriage in the Civil Registry of San Juan, Metro Manila.
Like any other facts, they must alleged and proved. x x x The power of judicial notice must
be exercise d with caution, and every reasonable doubt upon the subject should be resolved
96
Jurisprudence has set guidelines before the Philippine courts recognize a foreign judgment in the negative.
relating to the status of a marriage where one of the parties is a citizen of foreign country.
89
Presentation solely of the divorce decree will not suffice. The fact of divorce must still first
90 Since the divorce was raised by Manalo, the burden of proving the pertinent Japanese law
be proven. Before a a foreign divorce decree can be recognized by our courts, the party
validating it, as well as her former husband's capacity to remarry, fall squarely upon her.
pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign
91 Japanese laws on persons and family relations are not among those matters that Filipino
law allowing it.
judges are supposed to know by reason of their judicial function.

x x x Before a foreign judgment is given presumptive evidentiary value, the document must
WHEREFORE, the petition for review on certiorari is DENIED. The September 18, 2014
first be presented and admitted in evidence. A divorce obtained abroad is proven by the
Decision and October 12, 2015 Resolution if the Court of Appeals in CA G.R. CV.
divorce decree itself. The decree purports to be written act or record of an act of an official
No. 100076, are AFFIRMED IN PART. The case is REMANDED to the court of origin for
body or tribunal of foreign country.
further proceedings and reception of evidence as to the relevant Japanese law on divorce.

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be
SO ORDERED
proven as a public or official record of a foreign country by either (1) an official publication
or (2) a copy thereof attested by the officer having legal custody of the document. If the
record is not kept in the Philippines, such copy must be (a) accompanied by a certificate
issued by the proper diplomatic or consular officer in the Philippine foreign service stationed
in the foreign country in which the record is kept and (b)authenticated by the seal of his
92 G.R. No. 192285
office.

MATEO ENCARNACION (Deceased), substituted by his heirs, namely: ELSA

In granting Manalo's petition, the CA noted:
DEPLIANENCARNACION, KRIZZA MARIE D. ENCARNACION, LORETA
ENCARNACION, CARMELITA E. STADERMAN, CORAZON S. ENCARNACION,
In this case, Petitioner was able to submit before the court a quo the 1) Decision of the RIZALINA ENCARNACION-PARONG, VICTORIA ENCARNACIONDULA, MARIA
Japanese Court allowing the divorce; 2) the Authentication/Certificate issued by the HELEN ENCARNACION-DAY, TERESITA ENCARNACION-MANALANG, GEORGE
Philippines Consulate General in Osaka, Japan of the Decree of Divorce; and ENCARNACION, MARY MITCHIE E. EDWARDSON, ERNESTO ENCARNACION,
3) Acceptance of Certificate of Divorce byu the Petitioner and the Japanese national. Under MATEO ENCARNACION, JR., and GRACE WAGNER, Petitioners
Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48 (b) of the Rules of Court, vs.
these documents sufficiently prove the subject Divorce Decree as a fact. Thus, We are THOMAS JOHNSON, Respondent
93
constrained to recognize the Japanese Court's judgment decreeing the divorce.
DECISION
If the opposing party fails to properly object, as in this case, the divorce decree is rendered
94
admissible a a written act of the foreign court. As it appears, the existence of the divorce
JARDELEZA, J.:
decree was not denied by the OSG; neither was the jurisdiction of the divorce court
impeached nor the validity of its proceedings challenged on the ground of collusion, fraud,
95 1
or clear mistake of fact or law, albeit an opportunity to do so. This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
2
nullify the Court of Appeals' (CA) August 12, 2009 Decision and May 13, 2010
3
Resolution in CA-G.R. SP No. 100483. The CA denied the petition for annulment of
 4 17
judgment filed by Mateo Encarnacion (Mateo) against the February 17, 2005 Order of
Branch 72 of the Regional Trial Court (RTC) of Olongapo City in Civil Case No. 110-0-2003.
The RTC granted Thomas Johnson's (respondent) prayer to further amend the amended
writ of execution in his action for recognition and enforcement of foreign judgment.
On October 6, 2000, respondent filed an action for breach of contract with prayer for
damages and costs against spouses Narvin Edwarson (Narvin) and Mary Mitchie Edwarson
(also known as Mary Encarnacion; hereinafter shall be referred to as Mary), Mateo's
daughter, before the Vancouver Registry of the Supreme Court of British Columbia,
Canada. Respondent alleged that Narvin and Mary convinced him to invest his money and
personal property in a vehicle leasing company owned by the couple, which turned out to
be a fraudulent business scheme. The couple neither deposited the promised profits into
5
his account nor gave an accounting or explanation as to where his funds went.
The Supreme Court of British Columbia gave due course to respondent's action and
ordered summons to be served upon Narvin and Mary. While service of summons was
being attempted, respondent moved that the Supreme Court of British Columbia grant him
a Mareva injunction, with ex Juris affect, to restrain Narvin and Mary from dealing with any
of their assets except as is necessary for payment of ordinary living expenses or to carry
6
on their ordinary business. On October 6, 2000, the Supreme Court of British Columbia
7
issued a Mareva injunction and authorized respondent, among others, to obtain orders in
foreign jurisdictions which would permit its enforcement in those jurisdictions.
On February 26, 2001, the Supreme Court of British Columbia issued a Default
8
Judgment finding Narvin and Mary liable to respondent in the amount of C$380,43l.00 with
interest in the amount of C$18,385.56, C$1,198.04 as cost, and for damages to be
determined. On June 29, 2001, it ordered Narvin and Mary to each pay respondent the sum
9 order, further amended the Writ of Execution as follows:
of C$25,000.00 as aggravated damages.
On February 24, 2003, respondent filed an action for recognition and enforcement of foreign
10
judgment with prayer for the recognition of the Mareva injunction with Branch 72 of the
RTC of Olongapo City, docketed as Civil Case No. 110-0-2003. Respondent also
11
simultaneously petitioned to be allowed to litigate as a pauper litigant. On February 27,
2003, the RTC granted his petition on the condition that a lien of ₱123,161.00, representing
the amount of the filing fees, would be imposed upon him in the event of a favorable
12
judgment.
13
On March 5, 2003, the RTC issued an Order restraining Narvin and Mary from disposing
or encumbering their assets, as well as those belonging to, or controlled by, the Zambales-
Canada Foundation, the 5-E Foundation, and those belonging to Mateo (for being
properties transferred in fraud of creditors). On May 12, 2003, the RTC ordered the Register
of Deeds of Zambales and the Provincial Assessor to annotate its March 5, 2003 Order on
the titles and tax declarations of all properties owned by Narvin and Mary, as well as those
14
belonging to Mateo. Thereafter, the RTC ordered the service of summonses by
15
publication upon Narvin and Mary. Despite publication, Narvin and Mary still failed to file
their answer. Accordingly, on December 1, 2003, the R TC declared them in default, and
subsequently rendered a judgment in default in accordance with the judgment of the
16
Supreme Court of British Columbia.
On March 30, 2004, the RTC issued a Writ of Execution authorizing the sheriff to attach
sufficient properties belonging to Narvin and Mary to satisfy the judgment award. On August
3, 2004, the RTC, acting on respondent's motion to modify the Writ of Execution (to include
in the writ the properties under the name of Mateo whose title and tax declarations were
18
previously annotated), modified the Writ of Execution. It issued an Amended Writ of
19
Execution on September 9, 2004 authorizing the sheriff to include the properties
registered in the name of Mateo as subject of the execution.
Subsequently, 13 levied properties not covered by certificates of title were sold in public
auction on June 23, 2004, wherein respondent placed the highest bid of
20 21
₱10,000,000.00. The properties listed in the Certificate of Sale were: (1) a
coco/agricultural land covered by Tax Declaration No. 016- 0322A in the name of "Mary
Mitchie Encarnacion;" and (2) a commercial/agricultural land covered by Tax Declaration
No. 007-0410AR in the name of "Mary Mitchie E. Edwardson."
22
On January 11, 2005, respondent filed a motion for clarificatory order seeking further
amendment of the writ of execution to expressly authorize the levy of the properties in the
name of Mateo whose title and tax declarations were previously annotated with the March
30, 2004 Order.
23
Subsequently, Mateo filed an Affidavit of Third Party Claim dated January 17, 2005 before
24
the RTC, which was noted on January 20, 2005, claiming that he is the owner of 14
parcels of land which were being levied. The records, however, are not clear as to what
25
action was taken by the RTC on Mateo's third party claim.
26
In its February 17, 2005 Order, the RTC, acting on respondent's motion for clarificatory
"x x x
"AND FURTHER ORDERS to levy the properties registered under the name of Mateo
Encarnacion which was previously annotated in the Assessors Office and the Register of
Deeds of Iba, Zambales, shall be the subject of the same under execution."
On September 10, 2007, or more than two years after the February 17, 2005 Order was
27
issued, Mateo filed a petition for annulment of judgment before the CA (CA-G.R. SP No.
100483). He alleged that he is the owner of 18 properties levied in Civil Case No. 110-0-
2003; that he was not made a party to the case; and that the inclusion of his properties in
28
the levy and execution sale were made without notice to him. Mateo, nonetheless,
admitted before the CA that he has no standing to question the proceedings on the action
for recognition and enforcement of judgment. He asserts that he is only questioning the
29
February 17, 2005 Order which deprived him of his properties.
30
In his answer, respondent countered that the tax declarations under Mateo's name cannot
be invoked as a legal basis to claim ownership over the properties. According to
respondent, Mateo fraudulently caused the issuance of these tax declarations under his
name-they were effected after the issuance of the March 5, 2003 Order and the execution The issues presented are:
31
sale on July 23, 2004. Respondent also averred that the RTC conducted an investigation
and had already excluded from the levy certain properties which undisputedly belonged to
32 I. Whether an action for annulment of judgment is the proper remedy of a third-party
Mateo.
claimant of properties levied and sold under execution sale; and

Meanwhile, another sale in Civil Case No. 110-0-2003 resulted in a Certificate of

33 II. Whether respondent, an alien, may own private lands by virtue of an execution
Sale dated November 29, 2006 in favor of respondent, covering the properties covered
sale.1âwphi1
by the following: (1) Original Certificate of Title (OCT) No. P-9496; (2) Tax Declaration No.
016-0324AR; (3) OCT No. P-9498; (4) OCT No. P-9336; (5) OCT No. P-9421; (6) OCT No.
P-9508; and (7) Tax Declaration No. 016-0845. Respondent was the highest bidder for We deny the petition. Nevertheless, we nullify the sale of the private lands to respondent
these properties in the total amount of ₱4,000,000.00. On November 3, 2008, the RTC for being a flagrant violation of Section 7, Article XII of the Constitution.
34
issued an Order granting the motion for consolidation of title filed by respondent over the
properties subject of the Certificates of Sale.
I

During the pendency of the proceedings before the CA, Mateo died and was substituted by
35 36 An action for annulment of judgment is a remedy in law independent of the case where the
his heirs (petitioners), including his daughter Mary. In their Memorandum dated January 45
12, 2009, petitioners amended their argument to aver that all the proceedings in Civil Case judgment sought to be annulled is rendered. The ultimate objective of the remedy is "to
undo or set aside the judgment or final order, and thereby grant to the petitioner an
No. 110-0-2003 should be annulled on the ground of lack of jurisdiction and extrinsic 46
37 opportunity to prosecute his cause or to ventilate his defense." The remedy is provided
fraud.
by Section 1 of Rule 47 of the Rules of Court:
38
On August 12, 2009, the CA denied the petition. It upheld the jurisdiction of the RTC over
Sec. 1. Coverage. - This Rule shall govern the annulment by the Court of Appeals of
the action of recognition of foreign judgment. By filing an Affidavit of Third Party Claim,
Mateo was deemed to have voluntarily submitted himself to the jurisdiction of the RTC. It
39 judgments or final orders and resolutions in civil actions of Regional Trial Courts for which
the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies
also ruled that the remedy of annulment of judgment is not proper because the February
are no longer available through no fault of the petitioner.
17, 2005 Order is not a final order as it merely seeks to clarify the RTC's further amended
writ of execution; the proper remedy is to move to quash the writ of execution and if
40 47
unsuccessful, to file a petition for certiorari under Rule 65 of the Rules of Court. The CA In Dare Adventure Farm Corporation v. Court of Appeals, we explained the nature of the
also said that even if procedural rules were relaxed, the petition would still fail because it remedy, to wit:
has already been barred by estoppel and laches due to Mateo's delay in filing the petition
41
despite numerous opportunities to do so. Lastly, the CA pointed out that Mateo is not the
proper party to file the petition, as he had already transferred the properties to Mary by A petition for annulment of judgment is a remedy in equity so exceptional in nature that it
virtue of a deed of quitclaim on February 27, 1995.
42 may be availed of only when other remedies are wanting, and only if the judgment, final
order or final resolution sought to be annulled was rendered by a court lacking jurisdiction
or through extrinsic fraud. Yet, the remedy, being exceptional in character, is not allowed
43
On May 13, 2010, the CA denied petitioners' motion for reconsideration. Hence, this to be so easily and readily abused by parties aggrieved by the final judgments, orders or
petition. resolutions. The Court has thus instituted safeguards by limiting the grounds for the
annulment to lack of jurisdiction and extrinsic fraud, and by prescribing in Section 1 of Rule
4 7 of the Rules of Court that the petitioner should show that the ordinary remedies of new
Petitioners reiterate their arguments before the CA that the whole proceedings in Civil Case
No. 110-0-2003 be annulled on grounds of lack of jurisdiction and extrinsic fraud because trial, appeal, petition for relief or other appropriate remedies are no longer available through
no fault of the petitioner. A petition for annulment that ignores or disregards any of the
the RTC: (1) allowed respondent to sue as an indigent party when he is willing and able to
safeguards cannot prosper.
put up a bond that may be required by the court; (2) allowed a complaint with a grossly
defective certification against forum shopping; (3) allowed service of summons by
publication in an action in personam and exercised jurisdiction on that basis; (4) recognized The attitude of judicial reluctance towards the annulment of a judgment, final order or final
a global injunction issued by a foreign court as a writ of attachment; (5) promulgated a final resolution is understandable, for the remedy disregards the time-honored doctrine of
order without requiring the presentation of evidence, even ex parte, and without distinctly immutability and unalterability of final judgments, a solid corner stone in the dispensation
48
stating the facts and the law on which it is based; (6) allowed the levy on execution of of justice by the courts. x x x (Citations omitted.)
properties belonging to a party who was not named as defendant in the civil action; and (7)
allowed the sale and delivery of the properties to a foreigner who is disqualified from owning
44
private lands under the Constitution.
In Pinausukan Seafood House, Roxas Boulevard, Inc. v. Far East Bank & Trust
49
Company, we said that owing to the extraordinary nature and objective of the remedy of
annulment of judgment or final order, there are requirements that must be complied with
before the remedy is granted. First, the remedy is only available when the petitioner can no
longer resort to the ordinary remedies of new trial, appeal, petition for relief, or other
appropriate remedies through no fault of the petitioner. Second, the ground for the remedy
is limited to either extrinsic fraud or lack of jurisdiction (although lack of due process has
been cited as a ground by jurisprudence). Third, the time for availing the remedy is set by
the rules: if based on extrinsic fraud, it must be filed within four years from the discovery of
extrinsic fraud; if based on lack of jurisdiction, it must be brought before it is barred by
laches or estoppel.
Fourth, the petition should be verified and should allege with particularity the facts and law
relied upon, and those supporting the petitioner's good and substantial cause of action or
50
defense.
Petitioners failed to show their standing to file the petition. They have also failed to comply
with the first requirement.
a.
The proper party to file a petition for annulment of judgment or final order need not be a
party to the judgment sought to be annulled. Nevertheless, it is essential that he is able to
51
prove by preponderance of evidence that he is adversely affected by the judgment. A
person not adversely affected by a decision in the civil action or proceeding cannot bring
an action for annulment of judgment under Rule 47 of the Rules of Court. The exception is
if he is a successor in interest by title subsequent to the commencement of the action, or if
52
the action or proceeding is in rem,in which case the judgment is binding against him.
53
In Bulawan v. Aquende, we held that assuming that the petitioner is not an indispensable
party to the case that is being annulled, he may still file for a petition for annulment of
judgment. Our basic ruling is that "[w]hat is essential is that he can prove his allegation that
the judgment was obtained by the use of fraud and collusion and that he would be adversely
54
affected thereby."
Here, the action sought to be annulled is a recognition of foreign judgment in a collection
case rendered by the Supreme Court of British Columbia filed by respondent against Narvin
and Mary. Under Section 48(b), Rule 39 of the Rules of Court, a foreign judgment or final
order against a person creates a "presumptive evidence of a right as between the parties
and their successors in interest by a subsequent title." We have previously held that
Philippine courts exercise limited review on foreign judgments and are not allowed to delve
into its merits. Thus, the action for recognition of foreign judgment does not require the
55
relitigation of the case under a Philippine court. Once admitted and proven in a Philippine
court, a foreign judgment can only be repelled by the parties and their successors in interest
by subsequent title on grounds external to its merits, i.e., "want of jurisdiction, want of notice
56
to the party, collusion, fraud, or clear mistake of law or fact." Consequently, the right being
enforced in the action is the subject of the collection case, which is a personal one against
the couple and their successors in interest.
Considering the foregoing, Mateo is not a party who could be adversely affected by the
outcome of Civil Case No. 110-0-2003. To begin with, he was not an indispensable party
to the action for recognition whose interest in the controversy is such that a final decree will
57
necessarily affect his rights, as he was not the judgment debtor in the action. Neither is
58
Mateo a real party in interest in Civil Case No. 110-0-2003, as aptly noted by the CA,
having already transferred his interest in the properties to Mary. Lastly, he is not a
successor in interest of Narvin and Mary.
Further, since the ultimate objective of the remedy is to grant the petitioner an opportunity
59
to prosecute his cause or ventilate his defense, granting the petition for annulment of
judgment would not give Mateo or petitioners available defenses that he originally did not
possess. Mateo and petitioners were affected only in far as the alleged properties of Mateo
were levied and sold at the public auction-which came after the judgment in Civil Case No.
60
110-0-2003. Mateo himself admitted this when he initially filed the petition. Therefore,
Mateo and his heirs cannot raise the alleged irregularities in the action for recognition of
foreign judgment; he may only question the propriety of the levy and sale of their alleged
properties.
Petitioners' arguments show that the very relief they are claiming is one against the alleged
wrongful execution of the decision (which resulted in the levy and sale of the properties
allegedly belonging to Mateo), and not the decision itself. It is apparent that had the
judgment not been executed against the properties they are claiming, they would not be
seeking to annul the judgment in Civil Case No. 110-0-2003. However, any alleged irregular
implementation of a writ of execution (or resulting levy) cannot be corrected through the
61
equitable relief of annulment of judgment; the remedy lies elsewhere.
b.
In this regard, there is another reason that militates against petitioners. The remedy of
annulment of judgment is a remedy in equity so exceptional in nature that it may only be
availed of when the ordinary or other appropriate remedies provided by law are
62
wanting without fault or neglect on the petitioner's part. It is a condition sine qua nonthat
one must have availed of the proper remedies before resorting to the action for annulment
63
of judgment.
We note that the ordinary remedies of new trial, appeal, and petition for relief were not
available to Mateo for the reason that he was not a party to Civil Case No. 110-0-2003.
Mateo was neither able to participate in the original proceedings nor resort to the other
remedies because he was not a real party in interest or an indispensable party thereto.
There are, however, other appropriate remedies available to him that he could have
resorted to.
Section 16, Rule 39 of the Rules of Court provides for the remedies of a third-party claimant
of an alleged wrongfully levied property:
Sec. 16. Proceedings where property claimed by third person. - If the property levied on is
claimed by any person other than the judgment obligor or his agent, and such person makes
an affidavit of his title thereto or right to the possession thereof, stating the grounds of such
right or title, and serves the same upon the officer making the levy and a copy thereof upon
the judgment obligee, the officer shall not be bound to keep the property, unless such
judgment obligee, on demand of the officer, files a bond approved by the court to indemnify
the third-party claimant in a sum not less than the value of the property levied on. In case
of disagreement as to such value, the same shall be determined by the court issuing the
writ of execution. No claim for damages for the taking or keeping of the property may be
enforced against the bond unless the action therefor is filed within one hundred twenty (120)
days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the property, to any
third-party claimant if such bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the property in a separate action,
or prevent the judgment obligee from claiming damages in the same or a separate action
against a third-party claimant who filed a frivolous or plainly spurious claim.
xxxx
Based on this section, a third-party claimant has the following cumulative remedies: (a) he
may avail of "terceria" by serving on the levying officer making the levy an affidavit of his
title, and serving also a copy to the judgment creditor; (b) he may file a case for damages
against the bond issued by the judgment debtor within 120 days from the date of the filing
64
of the bond; and (c) he may file "any proper action" to vindicate his claim to the property.
65
In Sy v. Discaya, and later in Power Sector Assets and Liabilities Management
66
Corporation (PSALM) v. Maun/ad Homes, Inc., we recognized the right of a third-party
claimant to file an independent action to vindicate his claim of ownership over the properties
seized under Section 16, Rule 39 of the Rules of Court. As we pointed out in Sy, a "proper
action" is entirely "distinct and separate from that in which the judgment is being enforced,
with the court of competent jurisdiction." Such a "proper action" may have for its object the
recovery of ownership or possession of the property seized by the sheriff, as well as
damages from the allegedly wrongful seizure and detention of the property. This
determination of ownership is not the proper subject of an action for annulment of
67
judgment.
In this case, the proper recourse for petitioners is to vindicate and prove their ownership
over the properties in a separate action as allowed under Section 16, Rule 39 of the Rules
of Court. This is the more prudent action since respondent also asserts that the properties
claimed were owned by Mary, and the CA upheld such assertion. At this juncture, we note
that if we grant the petition, we would be nullifying the whole proceeding in Civil Case No.
110-0-2003 which is more than what is necessary to address the remedy being sought by
petitioners.
II
While mindful of our ruling that petitioners cannot file the petition for annulment of judgment,
we nevertheless cannot turn a blind eye to the blatant violation of the Constitution's
prohibition on foreign ownership of lands. This violation was committed when respondent
was allowed to participate in the public auction sales where, as highest bidder, he acquired
land.
Section 7, Article XII of the Constitution states:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or hold
lands of the public domain.
The fundamental law is clear that aliens, whether individuals or corporations, are
68
disqualified from acquiring lands of the public domain. The right to acquire lands of the
public domain is reserved only to Filipino citizens or corporations at least 60% of the capital
69
of which is owned by Filipinos. Consequently, they are also disqualified from acquiring
private lands.
70
In Matthews v. Taylor, we took cognizance of the violation of the Constitutional prohibition
on alien land ownership despite the failure of the trial and appellate courts to consider and
apply these constitutional principles. There we said, "[t]he trial and appellate courts both
focused on the property relations of petitioner and respondent in light of the Civil Code and
Family Code provisions. They, however, failed to observe the applicable constitutional
71
principles, which, in fact, are the more decisive." We said further:
The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or
private lands in the Philippines, save only in constitutionally recognized
exceptions. There is no rule more settled than this constitutional prohibition, as more and
more aliens attempt to circumvent the provision by trying to own lands through another. In
a long line of cases, we have settled issues that directly or indirectly involve the
above constitutional provision. We had cases where aliens wanted that a particular
property be declared as part of their father's estate; that they be reimbursed the funds used
in purchasing a property titled in the name of another; that an implied trust be declared in
their (aliens') favor; and that a contract of sale be nullified or their lack of consent.
In Ting Ho, Jr. v. Teng Gui, Felix Ting Ho, a Chinese citizen, acquired a parcel of land,
together with the improvements thereon. Upon his death, his heirs (the petitioners therein)
claimed the properties as part of the estate of their deceased father, and sought the partition
of said properties among themselves. We, however, excluded the land and improvements
thereon from the estate of Felix Ting Ho, precisely because he never became the owner
thereof in light of the above-mentioned constitutional prohibition.
In Muller v. Muller, petitioner Elena Buenaventura Muller and respondent Helmut Muller
were married in Germany. During the subsistence of their marriage, respondent purchased
a parcel of land in Antipolo City and constructed a house thereon. The Antipolo property
was registered in the name of the petitioner. They eventually separated, prompting the
respondent to file a petition for separation of property. Specifically, respondent prayed for

reimbursement of the funds he paid for the acquisition of said property. In deciding the case
in favor of the petitioner, the Court held that respondent was aware that as an alien, he was
prohibited from owning a parcel of land situated in the Philippines. He had, in fact, declared
that when the spouses acquired the Antipolo property, he had it titled in the name of the
petitioner because of said prohibition. Hence, we denied his attempt at subsequently
asserting a right to the said property in the form of a claim for reimbursement. Neither did
the Court declare that an implied trust was created by operation of law in view of petitioner's
marriage to respondent. We said that to rule otherwise would permit circumvention of the
constitutional prohibition.
In Frenzel v. Catito, petitioner, an Australian citizen, was married to Teresita Santos; while
respondent, a Filipina, was married to Klaus Muller. Petitioner and respondent met and
later cohabited in a common-law relationship, during which petitioner acquired real
properties; and since he was disqualified from owning lands in the Philippines, respondent's
name appeared as the vendee in the deeds of sale. When their relationship turned sour,
petitioner filed an action for the recovery of the real properties registered in the name of
respondent, claiming that he was the real owner. Again, as in the other cases, the Court
refused to declare petitioner as the owner mainly because of the constitutional prohibition.
The Court added that being a party to an illegal contract, he could not come to court and
ask to have his illegal objective carried out. One who loses his money or property by
knowingly engaging in an illegal contract may not maintain an action for his losses.
Finally, in Cheesman v. Intermediate Appellate Court, petitioner (an American citizen) and
Criselda Cheesman acquired a parcel of land that was later registered in the latter's name.
Criselda subsequently sold the land to a third person without the knowledge of the
petitioner. The petitioner then sought the nullification of the sale as he did not give his
consent thereto. The Court held that assuming that it was his (petitioner's) intention that the
lot in question be purchased by him and his wife, he acquired no right whatever over the
property by virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; thus, the sale as to
72
him was null and void. (Emphasis supplied; citations omitted.)
75
In this case, it is undisputed that respondent is a Canadian citizen. Respondent neither
denied this, nor alleged that he became a Filipino citizen. Being an alien, he is absolutely
prohibited from acquiring private and public lands in the Philippines. Concomitantly,
respondent is also prohibited from participating in the execution sale, which has for its
object, the transfer of ownership and title of property to the highest bidder. What cannot be
legally done directly cannot be done indirectly.
In light of this, we nullify the auction sales conducted on June 23, 2004 and November 29,
2006 where respondent was declared the highest bidder, as well as the proceedings which
led to the acquisition of ownership by respondent over the lands involved. Article 1409(1)
and (7) of the Civil Code states that all contracts whose cause, object, or purpose is contrary
to law or public policy, and those expressly prohibited or declared void by law are inexistent
and void from the beginning. We thus remand the case back to Branch 72 of the RTC of
Olongapo City, to conduct anew the auction sale of the levied properties, and to exclude
respondent from participating as bidder.
WHEREFORE, the petition is DENIED. Nevertheless, the public auction sales conducted
on June 23, 2004 and November 29, 2006 in Civil Case No. 110-0-2003, and the
proceedings which resulted therefrom, are NULLIFIEDfor being contrary to Section 7,
Article XII of the Constitution. Branch 72 of the Regional Trial Court of Olongapo City, in
Civil Case No. 110-0-2003, is directed: (1) to proceed with the execution of the Decision
dated December 1, 2003; (2) to exclude respondent Thomas Johnson from participating in
any public auction sale of lands in said case; and (3) to order the delivery of the proceeds
of any public auction sale relevant to the execution of the Decision dated December 1, 2003
to respondent Thomas Johnson. No costs.
SO ORDERED.

73
Also in Hulst v. PR Builders, Inc., we said that "[b]efore resolving the question [of] whether
the CA erred in affirming the Order of the [Housing and Land Use Regulatory Board
(HLURB)] setting aside the levy made by the sheriff, it behooves this Court to address a
matter of public and national importance which completely escaped the attention of the
HLURB Arbiter and the CA: petitioner and his wife are foreign nationals who are disqualified
74
under the Constitution from owning real property in their names." There, Hulst, a Dutch
national, won an action for rescission of a contract to sell over a 210-square meter
townhouse against the developer in the HL URB. The HLURB ordered reimbursement of
the contract price to Hulst. Subsequently, the sheriff levied real properties owned by the
developer. The developer filed a motion to quash the writ of levy on the ground of over-levy
of properties, which the HLURB Arbiter granted. While the issue before the CA, and
successively before us, was whether the HLURB Arbiters erred in setting aside the levy,
we took cognizance of the violation of the Constitution that escaped both the HLURB and
the CA. We declared that the contract to sell was void.