G.R. No.

L-50466 May 31, 1982

CALTEX (PHILIPPINES) INC., petitioner,
vs.
CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF
PASAY, respondents.

AQUINO, J .:
This case is about the realty tax on machinery and equipment installed by Caltex
(Philippines) Inc. in its gas stations located on leased land.
The machines and equipment consists of underground tanks, elevated tank,
elevated water tanks, water tanks, gasoline pumps, computing pumps, water pumps,
car washer, car hoists, truck hoists, air compressors and tireflators. The city
assessor described the said equipment and machinery in this manner:
A gasoline service station is a piece of lot where a building or shed is
erected, a water tank if there is any is placed in one corner of the lot,
car hoists are placed in an adjacent shed, an air compressor is
attached in the wall of the shed or at the concrete wall fence.
The controversial underground tank, depository of gasoline or crude oil,
is dug deep about six feet more or less, a few meters away from the
shed. This is done to prevent conflagration because gasoline and other
combustible oil are very inflammable.
This underground tank is connected with a steel pipe to the gasoline
pump and the gasoline pump is commonly placed or constructed under
the shed. The footing of the pump is a cement pad and this cement pad
is imbedded in the pavement under the shed, and evidence that the
gasoline underground tank is attached and connected to the shed or
building through the pipe to the pump and the pump is attached and
affixed to the cement pad and pavement covered by the roof of the
building or shed.
The building or shed, the elevated water tank, the car hoist under a
separate shed, the air compressor, the underground gasoline tank,
neon lights signboard, concrete fence and pavement and the lot where
they are all placed or erected, all of them used in the pursuance of the
gasoline service station business formed the entire gasoline service-
station.
As to whether the subject properties are attached and affixed to the
tenement, it is clear they are, for the tenement we consider in this
particular case are (is) the pavement covering the entire lot which was
constructed by the owner of the gasoline station and the improvement
which holds all the properties under question, they are attached and
affixed to the pavement and to the improvement.
The pavement covering the entire lot of the gasoline service station, as
well as all the improvements, machines, equipments and apparatus are
allowed by Caltex (Philippines) Inc. ...
The underground gasoline tank is attached to the shed by the steel
pipe to the pump, so with the water tank it is connected also by a steel
pipe to the pavement, then to the electric motor which electric motor is
placed under the shed. So to say that the gasoline pumps, water
pumps and underground tanks are outside of the service station, and to
consider only the building as the service station is grossly erroneous.
(pp. 58-60, Rollo).
The said machines and equipment are loaned by Caltex to gas station operators
under an appropriate lease agreement or receipt. It is stipulated in the lease contract
that the operators, upon demand, shall return to Caltex the machines and equipment
in good condition as when received, ordinary wear and tear excepted.
The lessor of the land, where the gas station is located, does not become the owner
of the machines and equipment installed therein. Caltex retains the ownership
thereof during the term of the lease.
The city assessor of Pasay City characterized the said items of gas station
equipment and machinery as taxable realty. The realty tax on said equipment
amounts to P4,541.10 annually (p. 52, Rollo). The city board of tax appeals ruled
that they are personalty. The assessor appealed to the Central Board of Assessment
Appeals.
The Board, which was composed of Secretary of Finance Cesar Virata as chairman,
Acting Secretary of Justice Catalino Macaraig, Jr. and Secretary of Local
Government and Community Development Jose Roo, held in its decision of June 3,
1977 that the said machines and equipment are real property within the meaning of
sections 3(k) & (m) and 38 of the Real Property Tax Code, Presidential Decree No.
464, which took effect on June 1, 1974, and that the definitions of real property and
personal property in articles 415 and 416 of the Civil Code are not applicable to this
case.
The decision was reiterated by the Board (Minister Vicente Abad Santos took
Macaraig's place) in its resolution of January 12, 1978, denying Caltex's motion for
reconsideration, a copy of which was received by its lawyer on April 2, 1979.
On May 2, 1979 Caltex filed this certiorari petition wherein it prayed for the setting
aside of the Board's decision and for a declaration that t he said machines and
equipment are personal property not subject to realty tax (p. 16, Rollo).
The Solicitor General's contention that the Court of Tax Appeals has exclusive
appellate jurisdiction over this case is not correct. When Republic act No. 1125
created the Tax Court in 1954, there was as yet no Central Board of Assessment
Appeals. Section 7(3) of that law in providing that the Tax Court had jurisdiction to
review by appeal decisions of provincial or city boards of assessment appeals had in
mind the local boards of assessment appeals but not the Central Board of
Assessment Appeals which under the Real Property Tax Code has appellate
jurisdiction over decisions of the said local boards of assessment appeals and is,
therefore, in the same category as the Tax Court.
Section 36 of the Real Property Tax Code provides that the decision of the Central
Board of Assessment Appeals shall become final and executory after the lapse of
fifteen days from the receipt of its decision by the appellant. Within that fifteen-day
period, a petition for reconsideration may be filed. The Code does not provide for the
review of the Board's decision by this Court.
Consequently, the only remedy available for seeking a review by this Court of the
decision of the Central Board of Assessment Appeals is the special civil action of
certiorari, the recourse resorted to herein by Caltex (Philippines), Inc.
The issue is whether the pieces of gas station equipment and machinery already
enumerated are subject to realty tax. This issue has to be resolved primarily under
the provisions of the Assessment Law and the Real Property Tax Code.
Section 2 of the Assessment Law provides that the realty tax is due "on real
property, including land, buildings, machinery, and other improvements" not
specifically exempted in section 3 thereof. This provision is reproduced with some
modification in the Real Property Tax Code which provides:
SEC. 38. Incidence of Real Property Tax. There shall be levied,
assessed and collected in all provinces, cities and municipalities an
annual ad valorem tax on real property, such as land, buildings,
machinery and other improvements affixed or attached to real property
not hereinafter specifically exempted.
The Code contains the following definitions in its section 3:
k) Improvements is a valuable addition made to property or an
amelioration in its condition, amounting to more than mere repairs or
replacement of waste, costing labor or capital and intended to enhance
its value, beauty or utility or to adapt it for new or further purposes.
m) Machinery shall embrace machines, mechanical contrivances,
instruments, appliances and apparatus attached to the real estate. It
includes the physical facilities available for production, as well as the
installations and appurtenant service facilities, together with all other
equipment designed for or essential to its manufacturing, industrial or
agricultural purposes (See sec. 3[f], Assessment Law).
We hold that the said equipment and machinery, as appurtenances to the gas station
building or shed owned by Caltex (as to which it is subject to realty tax) and which
fixtures are necessary to the operation of the gas station, for without them the gas
station would be useless, and which have been attached or affixed permanently to
the gas station site or embedded therein, are taxable improvements and machinery
within the meaning of the Assessment Law and the Real Property Tax Code.
Caltex invokes the rule that machinery which is movable in its nature only becomes
immobilized when placed in a plant by the owner of the property or plant but not
when so placed by a tenant, a usufructuary, or any person having only a temporary
right, unless such person acted as the agent of the owner (Davao Saw Mill Co. vs.
Castillo, 61 Phil 709).
That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code
regarding machinery that becomes real property by destination. In the Davao Saw
Mills case the question was whether the machinery mounted on foundations of
cement and installed by the lessee on leased land should be regarded as real
property for purposes of execution of a judgment against the lessee. The sheriff
treated the machinery as personal property. This Court sustained the sheriff's action.
(Compare with Machinery & Engineering Supplies, Inc. vs. Court of Appeals, 96 Phil.
70, where in a replevin case machinery was treated as realty).
Here, the question is whether the gas station equipment and machinery permanently
affixed by Caltex to its gas station and pavement (which are indubitably taxable
realty) should be subject to the realty tax. This question is different from the issue
raised in the Davao Saw Mill case.
Improvements on land are commonly taxed as realty even though for some purposes
they might be considered personalty (84 C.J.S. 181-2, Notes 40 and 41). "It is a
familiar phenomenon to see things classed as real property for purposes of taxation
which on general principle might be considered personal property" (Standard Oil Co.
of New York vs. Jaramillo, 44 Phil. 630, 633).
This case is also easily distinguishable from Board of Assessment Appeals vs.
Manila Electric Co., 119 Phil. 328, where Meralco's steel towers were considered
poles within the meaning of paragraph 9 of its franchise which exempts its poles
from taxation. The steel towers were considered personalty because they were
attached to square metal frames by means of bolts and could be moved from place
to place when unscrewed and dismantled.
Nor are Caltex's gas station equipment and machinery the same as tools and
equipment in the repair shop of a bus company which were held to be personal
property not subject to realty tax (Mindanao Bus Co. vs. City Assessor, 116 Phil.
501).
The Central Board of Assessment Appeals did not commit a grave abuse of
discretion in upholding the city assessor's is imposition of the realty tax on Caltex's
gas station and equipment.
WHEREFORE, the questioned decision and resolution of the Central Board of
Assessment Appeals are affirmed. The petition for certiorari is dismissed for lack of
merit. No costs.
SO ORDERED.
G.R. No. 183137 April 10, 2013
PELIZLOY REALTY CORPORATION, represented herein by its President,
GREGORY K. LOY, Petitioner,
vs.
THE PROVINCE OF BENGUET, Respondent.
D E C I S I O N
LEONEN, J.:
The principal issue in this case is the scope of authority of a province to impose an
amusement tax.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
praying that the December 10, 2007 decision of the Regional Trial Court,- Branch 62,
La Trinidad, Benguet in Civil Case No. 06-CV-2232 be reversed and set aside and a
new one issued in which: ( 1) respondent Province of Benguet is declared as having
no authority to levy amusement taxes on admission fees for resorts, swimming
pools, bath houses, hot springs, tourist spots, and other places for recreation; (2)
Section 59, Article X of the Benguet Provincial Revenue Code of 2005 is declared null
and void; and (3) the respondent Province of Benguet is permanently enjoined from
enforcing Section 59, Article X of the Benguet Provincial Revenue Code of 2005.
Petitioner Pelizloy Realty Corporation ("Pelizloy") owns Palm Grove Resort, which is
designed for recreation and which has facilities like swimming pools, a spa and
function halls. It is located at Asin, Angalisan, Municipality of Tuba, Province of
Benguet.
On December 8, 2005, the Provincial Board of the Province of Benguet approved
Provincial Tax Ordinance No. 05-107, otherwise known as the Benguet Revenue
Code of 2005 ("Tax Ordinance"). Section 59, Article X of the Tax Ordinance levied a
ten percent (10%) amusement tax on gross receipts from admissions to "resorts,
swimming pools, bath houses, hot springs and tourist spots." Specifically, it provides
the following:
Article Ten: Amusement Tax on Admission
Section 59. Imposition of Tax. There is hereby levied a tax to be collected from the
proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses,
cockpits, dancing halls, dancing schools, night or day clubs, and other places of
amusement at the rate of thirty percent (30%) of the gross receipts from admission
fees; and
A tax of ten percent (10%) of gross receipts from admission fees for boxing, resorts,
swimming pools, bath houses, hot springs, and tourist spots is likewise levied.
[Emphasis and underscoring supplied]
Section 162 of the Tax Ordinance provided that the Tax Ordinance shall take effect
on January 1, 2006.
It was Pelizloy's position that the Tax Ordinance's imposition of a 10% amusement
tax on gross receipts from admission fees for resorts, swimming pools, bath houses,
hot springs, and tourist spots is an ultra vires act on the part of the Province of
Benguet. Thus, it filed an appeal/petition before the Secretary of Justice on January
27, 2006.
The appeal/petition was filed within the thirty (30)-day period from the effectivity of
a tax ordinance allowed by Section 187 of Republic Act No. 7160, otherwise known
as the Local Government Code (LGC).
1
The appeal/petition was docketed as MSO-
OSJ Case No. 03-2006.
Under Section 187 of the LGC, the Secretary of Justice has sixty (60) days from
receipt of the appeal to render a decision. After the lapse of which, the aggrieved
party may file appropriate proceedings with a court of competent jurisdiction.
Treating the Secretary of Justice's failure to decide on its appeal/petition within the
sixty (60) days provided by Section 187 of the LGC as an implied denial of such
appeal/petition, Pelizloy filed a Petition for Declaratory Relief and Injunction before
the Regional Trial Court, Branch 62, La Trinidad, Benguet. The petition was docketed
as Civil Case No. 06-CV-2232.
Pelizloy argued that Section 59, Article X of the Tax Ordinance imposed a percentage
tax in violation of the limitation on the taxing powers of local government units
(LGUs) under Section 133 (i) of the LGC. Thus, it was null and void ab initio. Section
133 (i) of the LGC provides:
Section 133. Common Limitations on the Taxing Powers of Local Government Units.
- Unless otherwise provided herein, the exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of the following:
x x x
(i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar
transactions on goods or services except as otherwise provided herein
The Province of Benguet assailed the Petition for Declaratory Relief and Injunction
as an improper remedy. It alleged that once a tax liability has attached, the only
remedy of a taxpayer is to pay the tax and to sue for recovery after exhausting
administrative remedies.
2

On substantive grounds, the Province of Benguet argued that the phrase other
places of amusement in Section 140 (a) of the LGC
3
encompasses resorts,
swimming pools, bath houses, hot springs, and tourist spots since "Article 220 (b)
(sic)" of the LGC defines "amusement" as "pleasurable diversion and entertainment x
x x synonymous to relaxation, avocation, pastime, or fun."
4
However, the Province of
Benguet erroneously cited Section 220 (b) of the LGC. Section 220 of the LGC refers
to valuation of real property for real estate tax purposes. Section 131 (b) of the LGC,
the provision which actually defines "amusement", states:
Section 131. Definition of Terms. - When used in this Title, the term:
x x x
(b) "Amusement" is a pleasurable diversion and entertainment. It is synonymous to
relaxation, avocation, pastime, or fun On December 10, 2007, the RTC rendered the
assailed Decision dismissing the Petition for Declaratory Relief and Injunction for lack
of merit.
Procedurally, the RTC ruled that Declaratory Relief was a proper remedy. On the
validity of Section 59, Article X of the Tax Ordinance, the RTC noted that, while
Section 59, Article X imposes a percentage tax, Section 133 (i) of the LGC itself
allowed for exceptions. It noted that what the LGC prohibits is not the imposition by
LGUs of percentage taxes in general but the "imposition and levy of percentage tax
on sales, barters, etc., on goods and services only."
5
It further gave credence to the
Province of Benguet's assertion that resorts, swimming pools, bath houses, hot
springs, and tourist spots are encompassed by the phrase other places of
amusement in Section 140 of the LGC.
On May 21, 2008, the RTC denied Pelizloys Motion for Reconsideration.
Aggrieved, Pelizloy filed the present petition on June 10, 2008 on pure questions of
law. It assailed the legality of Section 59, Article X of the Tax Ordinance as being a
(supposedly) prohibited percentage tax per Section 133 (i) of the LGC.
In its Comment, the Province of Benguet, erroneously citing Section 40 of the LGC,
argued that Section 59, Article X of the Tax Ordinance does not levy a percentage
tax "because the imposition is not based on the total gross receipts of services of the
petitioner but solely and actually limited on the gross receipts of the admission fees
collected."
6
In addition, it argued that provinces can validly impose amusement taxes
on resorts, swimming pools, bath houses, hot springs, and tourist spots, these being
amusement places.
For resolution in this petition are the following issues:
1. Whether or not Section 59, Article X of Provincial Tax Ordinance No. 05-
107, otherwise known as the Benguet Revenue Code of 2005, levies a
percentage tax.
2. Whether or not provinces are authorized to impose amusement taxes on
admission fees to resorts, swimming pools, bath houses, hot springs, and
tourist spots for being "amusement places" under the Local Government
Code.
The power to tax "is an attribute of sovereignty,"
7
and as such, inheres in the State.
Such, however, is not true for provinces, cities, municipalities and barangays as they
are not the sovereign;
8
rather, they are mere "territorial and political subdivisions of
the Republic of the Philippines".
9

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

It is settled that a municipal corporation unlike a sovereign state is clothed with no
inherent power of taxation. The charter or statute must plainly show an intent to
confer that power or the municipality, cannot assume it. And the power when
granted is to be construed in strictissimi juris. Any doubt or ambiguity arising out of
the term used in granting that power must be resolved against the municipality.
Inferences, implications, deductions all these have no place in the interpretation
of the taxing power of a municipal corporation.
11
[Underscoring supplied]
Therefore, the power of a province to tax is limited to the extent that such power is
delegated to it either by the Constitution or by statute. Section 5, Article X of the
1987 Constitution is clear on this point:
Section 5. Each local government unit shall have the power to create its own sources
of revenues and to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local
autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments. [Underscoring supplied]
Per Section 5, Article X of the 1987 Constitution, "the power to tax is no longer
vested exclusively on Congress; local legislative bodies are now given direct
authority to levy taxes, fees and other charges."
12
Nevertheless, such authority is
"subject to such guidelines and limitations as the Congress may provide".
13

In conformity with Section 3, Article X of the 1987 Constitution,
14
Congress enacted
Republic Act No. 7160, otherwise known as the Local Government Code of 1991.
Book II of the LGC governs local taxation and fiscal matters.
Relevant provisions of Book II of the LGC establish the parameters of the taxing
powers of LGUS found below.
First, Section 130 provides for the following fundamental principles governing the
taxing powers of LGUs:
1. Taxation shall be uniform in each LGU.
2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on the taxpayer's ability
to pay;
b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive, or confiscatory;
d. not be contrary to law, public policy, national economic policy, or in
the restraint of trade.
3. The collection of local taxes, fees, charges and other impositions shall in no
case be let to any private person.
4. The revenue collected pursuant to the provisions of the LGC shall inure
solely to the benefit of, and be subject to the disposition by, the LGU levying
the tax, fee, charge or other imposition unless otherwise specifically provided
by the LGC.
5. Each LGU shall, as far as practicable, evolve a progressive system of
taxation.
Second, Section 133 provides for the common limitations on the taxing powers of
LGUs. Specifically, Section 133 (i) prohibits the levy by LGUs of percentage or value-
added tax (VAT) on sales, barters or exchanges or similar transactions on goods or
services except as otherwise provided by the LGC.
As it is Pelizloys contention that Section 59, Article X of the Tax Ordinance levies a
prohibited percentage tax, it is crucial to understand first the concept of a
percentage tax.
In Commissioner of Internal Revenue v. Citytrust Investment Phils. Inc.,
15
the
Supreme Court defined percentage tax as a "tax measured by a certain percentage
of the gross selling price or gross value in money of goods sold, bartered or
imported; or of the gross receipts or earnings derived by any person engaged in the
sale of services." Also, Republic Act No. 8424, otherwise known as the National
Internal Revenue Code (NIRC), in Section 125, Title V,
16
lists amusement taxes as
among the (other) percentage taxes which are levied regardless of whether or not a
taxpayer is already liable to pay value-added tax (VAT).
Amusement taxes are fixed at a certain percentage of the gross receipts incurred by
certain specified establishments.
Thus, applying the definition in CIR v. Citytrust and drawing from the treatment of
amusement taxes by the NIRC, amusement taxes are percentage taxes as correctly
argued by Pelizloy.
However, provinces are not barred from levying amusement taxes even if
amusement taxes are a form of percentage taxes. Section 133 (i) of the LGC
prohibits the levy of percentage taxes "except as otherwise provided" by the LGC.
Section 140 of the LGC provides:
SECTION 140. Amusement Tax - (a) The province may levy an amusement tax to be
collected from the proprietors, lessees, or operators of theaters, cinemas, concert
halls, circuses, boxing stadia, and other places of amusement at a rate of not more
than thirty percent (30%) of the gross receipts from admission fees.
(b) In the case of theaters of cinemas, the tax shall first be deducted and
withheld by their proprietors, lessees, or operators and paid to the provincial
treasurer before the gross receipts are divided between said proprietors,
lessees, or operators and the distributors of the cinematographic films.
(c) The holding of operas, concerts, dramas, recitals, painting and art
exhibitions, flower shows, musical programs, literary and oratorical
presentations, except pop, rock, or similar concerts shall be exempt from the
payment of the tax herein imposed.
(d) The Sangguniang Panlalawigan may prescribe the time, manner, terms
and conditions for the payment of tax. In case of fraud or failure to pay the
tax, the Sangguniang Panlalawigan may impose such surcharges, interests
and penalties.
(e) The proceeds from the amusement tax shall be shared equally by the
province and the municipality where such amusement places are located.
[Underscoring supplied]
Evidently, Section 140 of the LGC carves a clear exception to the general rule in
Section 133 (i). Section 140 expressly allows for the imposition by provinces of
amusement taxes on "the proprietors, lessees, or operators of theaters, cinemas,
concert halls, circuses, boxing stadia, and other places of amusement."
However, resorts, swimming pools, bath houses, hot springs, and tourist spots are
not among those places expressly mentioned by Section 140 of the LGC as being
subject to amusement taxes. Thus, the determination of whether amusement taxes
may be levied on admissions to resorts, swimming pools, bath houses, hot springs,
and tourist spots hinges on whether the phrase other places of amusement
encompasses resorts, swimming pools, bath houses, hot springs, and tourist spots.
Under the principle of ejusdem generis, "where a general word or phrase follows an
enumeration of particular and specific words of the same class or where the latter
follow the former, the general word or phrase is to be construed to include, or to be
restricted to persons, things or cases akin to, resembling, or of the same kind or
class as those specifically mentioned."
17

The purpose and rationale of the principle was explained by the Court in National
Power Corporation v. Angas
18
as follows:
The purpose of the rule on ejusdem generis is to give effect to both the particular
and general words, by treating the particular words as indicating the class and the
general words as including all that is embraced in said class, although not specifically
named by the particular words. This is justified on the ground that if the lawmaking
body intended the general terms to be used in their unrestricted sense, it would
have not made an enumeration of particular subjects but would have used only
general terms. [2 Sutherland, Statutory Construction, 3rd ed., pp. 395-400].
19

In Philippine Basketball Association v. Court of Appeals,
20
the Supreme Court had an
opportunity to interpret a starkly similar provision or the counterpart provision of
Section 140 of the LGC in the Local Tax Code then in effect. Petitioner Philippine
Basketball Association (PBA) contended that it was subject to the imposition by LGUs
of amusement taxes (as opposed to amusement taxes imposed by the national
government).1wphi1 In support of its contentions, it cited Section 13 of Presidential
Decree No. 231, otherwise known as the Local Tax Code of 1973, (which is
analogous to Section 140 of the LGC) providing the following:
Section 13. Amusement tax on admission. - The province shall impose a tax on
admission to be collected from the proprietors, lessees, or operators of theaters,
cinematographs, concert halls, circuses and other places of amusement xxx.
Applying the principle of ejusdem generis, the Supreme Court rejected PBA's
assertions and noted that:
In determining the meaning of the phrase 'other places of amusement', one must
refer to the prior enumeration of theaters, cinematographs, concert halls and
circuses with artistic expression as their common characteristic. Professional
basketball games do not fall under the same category as theaters, cinematographs,
concert halls and circuses as the latter basically belong to artistic forms of
entertainment while the former caters to sports and gaming.
21
[Underscoring
supplied]
However, even as the phrase other places of amusement was already clarified in
Philippine Basketball Association, Section 140 of the LGC adds to the enumeration of
'places of amusement' which may properly be subject to amusement tax. Section
140 specifically mentions 'boxing stadia' in addition to "theaters, cinematographs,
concert halls and circuses" which were already mentioned in PD No. 231. Also,
'artistic expression' as a characteristic does not pertain to 'boxing stadia'.
In the present case, the Court need not embark on a laborious effort at statutory
construction. Section 131 (c) of the LGC already provides a clear definition of
amusement places:
Section 131. Definition of Terms. - When used in this Title, the term:
x x x
(c) "Amusement Places" include theaters, cinemas, concert halls, circuses and other
places of amusement where one seeks admission to entertain oneself by seeing or
viewing the show or performances [Underscoring supplied]
Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are bound by a
common typifying characteristic in that they are all venues primarily for the staging
of spectacles or the holding of public shows, exhibitions, performances, and other
events meant to be viewed by an audience. Accordingly, other places of
amusement must be interpreted in light of the typifying characteristic of being
venues "where one seeks admission to entertain oneself by seeing or viewing the
show or performances" or being venues primarily used to stage spectacles or hold
public shows, exhibitions, performances, and other events meant to be viewed by an
audience.
As defined in The New Oxford American Dictionary,
22
show means "a spectacle or
display of something, typically an impressive one";
23
while performance means "an
act of staging or presenting a play, a concert, or other form of entertainment."
24
As
such, the ordinary definitions of the words show and performance denote not only
visual engagement (i.e., the seeing or viewing of things) but also active doing (e.g.,
displaying, staging or presenting) such that actions are manifested to, and
(correspondingly) perceived by an audience.
Considering these, it is clear that resorts, swimming pools, bath houses, hot springs
and tourist spots cannot be considered venues primarily "where one seeks admission
to entertain oneself by seeing or viewing the show or performances". While it is true
that they may be venues where people are visually engaged, they are not primarily
venues for their proprietors or operators to actively display, stage or present shows
and/or performances.
Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do not
belong to the same category or class as theaters, cinemas, concert halls, circuses,
and boxing stadia. It follows that they cannot be considered as among the other
places of amusement contemplated by Section 140 of the LGC and which may
properly be subject to amusement taxes.
At this juncture, it is helpful to recall this Courts pronouncements in Icard:
The power to tax when granted to a province is to be construed in strictissimi juris.
Any doubt or ambiguity arising out of the term used in granting that power must be
resolved against the province. Inferences, implications, deductions all these have
no place in the interpretation of the taxing power of a province.
25

In this case, the definition of' amusement places' in Section 131 (c) of the LGC is a
clear basis for determining what constitutes the 'other places of amusement' which
may properly be subject to amusement tax impositions by provinces. There is no
reason for going beyond such basis. To do otherwise would be to countenance an
arbitrary interpretation/application of a tax law and to inflict an injustice on
unassuming taxpayers.
The previous pronouncements notwithstanding, it will be noted that it is only the
second paragraph of Section 59, Article X of the Tax Ordinance which imposes
amusement taxes on "resorts, swimming pools, bath houses, hot springs, and tourist
spots". The first paragraph of Section 59, Article X of the Tax Ordinance refers to
"theaters, cinemas, concert halls, circuses, cockpits, dancing halls, dancing schools,
night or day clubs, and other places of amusement".1wphi1 In any case, the issues
raised by Pelizloy are pertinent only with respect to the second paragraph of Section
59, Article X of the Tax Ordinance. Thus, there is no reason to invalidate the first
paragraph of Section 59, Article X of the Tax Ordinance. Any declaration as to the
Province of Benguet's lack of authority to levy amusement taxes must be limited to
admission fees to resorts, swimming pools, bath houses, hot springs and tourist
spots.
Moreover, the second paragraph of Section 59, Article X of the Tax Ordinance is not
limited to resorts, swimming pools, bath houses, hot springs, and tourist spots but
also covers admission fees for boxing. As Section 140 of the LGC allows for the
imposition of amusement taxes on gross receipts from admission fees to boxing
stadia, Section 59, Article X of the Tax Ordinance must be sustained with respect to
admission fees from boxing stadia.
WHEREFORE, the petition for review on certiorari is GRANTED. The second
paragraph of Section 59, Article X of the Benguet Provincial Revenue Code of 2005,
in so far as it imposes amusement taxes on admission fees to resorts, swimming
pools, bath houses, hot springs and tourist spots, is declared null and void.
Respondent Province of Benguet is permanently enjoined from enforcing the second
paragraph of Section 59, Article X of the Benguet Provincial Revenue Code of 2005
with respect to resorts, swimming pools, bath houses, hot springs and tourist spots.
SO ORDERED.
DENIS B. HABAWEL and
ALEXIS F. MEDINA,
Petitioners,




- versus -


G.R. No. 174759

Present:

CORONA, C.J., Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.


THE COURT OF TAX APPEALS,
FIRST DIVISION,
Respondent.

Promulgated:


September 7, 2011
x---------------------------------------------------------------------------------------
--x

D E C I S I O N


BERSAMIN, J.:

Found guilty of direct contempt by the First Division of the Court of
Tax Appeals (CTA First Division), and sanctioned with imprisonment for
a period of ten days and a fine of P2,000.00, the petitioners have come
to the Court for relief through certiorari, claiming that the CTA First
Divisions finding and sentence were made in grave abuse of its
discretion because the language they used in their motion for
reconsideration as the attorneys for a party was contumacious.
Specifically, they assail the resolution dated May 16, 2006,1[1] whereby
the CTA First Division disposed as follows:




WHEREFORE, premises considered, this Court finds Attorneys
Denis B. Habawel and Alexis F. Medina of the Ponce Enrile Reyes and
Manalastas Law Offices guilty of DIRECT CONTEMPT. Each counsel is

hereby ORDERED TO PAY a fine of Two Thousand Pesos and to
SUFFER IMPRISONMENT for a period of ten (10) days.

SO ORDERED.2[2]

and the resolution dated July 26, 2006,3[3] whereby the CTA First
Division denied their motion for reconsideration and reiterated the
penalties.

Antecedents

The petitioners were the counsel of Surfield Development
Corporation (Surfield), which sought from the Office of the City
Treasurer of Mandaluyong City the refund of excess realty taxes paid
from 1995 until 2000.4[4] After the City Government of Mandaluyong







City denied its claim for refund,5[5] Surfield initiated a special civil action
for mandamus in the Regional Trial Court (RTC) in Mandaluyong City,
which was docketed as SCA No. MC03-2142 entitled Surfield
Development Corporation v. Hon. City Treasurer of Mandaluyong City,
and Hon. City Assessor of Mandaluyong City, and assigned to Branch
214.6[6] Surfield later amended its petition to include its claim for refund
of the excess taxes paid from 2001 until 2003.7[7]

On October 15, 2004, the RTC dismissed the petition on the
ground that the period to file the claim had already prescribed and that
Surfield had failed to exhaust administrative remedies. The RTC ruled
that the grant of a tax refund was not a ministerial duty compellable by
writ of mandamus.8[8]

Surfield, represented by the petitioners, elevated the dismissal to
the CTA via petition for review (CTA AC No. 5 entitled Surfield
Development Corporation v. Hon. City Treasurer and Hon. City Assessor,









Mandaluyong City).9[9] The appeal was assigned to the First Division,
composed of Presiding Justice Ernesto D. Acosta, Associate Justice
Lovell R. Bautista and Associate Justice Caesar A. Casanova.

In its decision dated January 5, 2006,10[10] the CTA First Division
denied the petition for lack of jurisdiction and for failure to exhaust the
remedies provided under Section 25311[11] and Section 22612[12] of
Republic Act No. 7160 (Local Government Code).

Undeterred, the petitioners sought reconsideration in behalf of
Surfield,13[13] insisting that the CTA had jurisdiction pursuant to Section
7(a)(3) of Republic Act No. 9282;14[14] and arguing that the CTA First
Division manifested its lack of understanding or respect for the













doctrine of stare decisis in not applying the ruling in Ty v. Trampe (G.R.
No. 117577, December 1, 1995, 250 SCRA 500), to the effect that there
was no need to file an appeal before the Local Board of Assessment
Appeals pursuant to Section 22 of Republic Act No. 7160.

On March 15, 2006, the CTA First Division denied Surfields motion
for reconsideration. On the issue of jurisdiction, the CTA First Division
explained that the jurisdiction conferred by Section 7(a)(3) of Republic
Act No. 1125, as amended by Republic Act No. 9282, referred to appeals
from the decisions, orders, or resolutions of the RTCs in local tax cases
and did not include the real property tax, an ad valorem tax, the refund
of excess payment of which Surfield was claiming. Accordingly, the CTA
First Division ruled that the jurisdiction of the CTA concerning real
property tax cases fell under a different section of Republic Act No. 9282
and under a separate book of Republic Act No. 7160.

In addition, the CTA First Division, taking notice of the language
the petitioners employed in the motion for reconsideration, required
them to explain within five days from receipt why they should not be
liable for indirect contempt or be made subject to disciplinary action,
thusly:

IN VIEW OF THE FOREGOING, petitioners Motion for
Reconsideration is hereby DENIED for lack of merit. And insofar as the
merits of the case are concerned let this Resolution be considered as
the final decision on the matter.

However, this Court finds the statements of petitioners counsel
that it is gross ignorance of the law for the Honorable Court to have
held that it has no jurisdiction over this instant petition; the grossness
of this Honorable Courts ignorance of the law is matched only by the
unequivocal expression of this Honorable Courts jurisdiction over the
instant case and this Court lacked the understanding and respect for
the doctrine of stare decisis as derogatory, offensive and
disrespectful. Lawyers are charged with the basic duty to observe and
maintain the respect due to the courts of justice and judicial officers;
they vow solemnly to conduct themselves with all good fidelityto the
courts. As a matter of fact, the first canon of legal ethics enjoins them
to maintain towards the courts a respectful attitude, not for the sake
of the temporary incumbent of the judicial office, but for the
maintenance of its superior importance. Therefore, petitioners
counsel is hereby ORDERED to explain within five (5) days from receipt
of this Resolution why he should not be held for indirect contempt
and/or subject to disciplinary action.


SO ORDERED.15[15]

The petitioners submitted a compliance dated March 27,
2006,16[16] in which they appeared to apologize but nonetheless justified
their language as, among others, necessary to bluntly call the
Honorable Courts attention to the grievousness of the error by calling a
spade by spade.17[17]
In its first assailed resolution, the CTA First Division found the
petitioners apology wanting in sincerity and humility, observing that







they chose words that were so strong, which brings disrepute the
Courts honor and integrity for brazenly pointing to the Courts alleged
ignorance and grave abuse of discretion, to wit:

In their Compliance, the Court finds no sincerity and humility
when counsels Denis B. Habawel and Alexis F. Medina asked for
apology. In fact, the counsels brazenly pointed the Courts alleged
ignorance and grave abuse of discretion. Their chosen words are so
strong, which brings disrepute the Courts honor and integrity. We
quote:

a) Admittedly, the language of the Motion for
Reconsideration was not endearing. However, the undersigned
counsel found it necessary to bluntly call the Honorable Courts
attention to the grievousness of the error by calling a spade a
spade. The advocacy needed a strong articulation of the
gravity of the error of the Honorable Court in avoiding the
substantial and transcendental issues by the simple expedient
of dismissing the petition for alleged lack of jurisdiction, in
violation of Section 14, Article VIII of the Constitution, which
requires that the Decision must express clearly and distinctly
the facts and the law on which the Decision was based (par.
3 of the Compliance; docket, p. 349);

b) Since the Honorable Court simply quoted Section
7(a)(5) and it totally ignored Section 7(a)(3), to perfunctorily
find that (U)ndoubtedly, appeals of the decisions or rulings of
the Regional Trial Court concerning real property taxes
evidently do not fall within the jurisdiction of the CTA, the
undersigned counsel formed a perception that the Honorable
Court was totally unaware or ignorant of the new provision,
Section 7(a)(3). Hence, the statements that it was gross
ignorance of the law for the Honorable Court to have held that
it has not [sic] jurisdiction, as well as, the grossness of the
Honorable Courts ignorance of the law is matched only by the
unequivocal expression of this Honorable Courts jurisdiction
over the instant case were an honest and frank articulation of
undersigned counsels perception that was influenced by its
failure to understand why the Honorable Court totally ignored
Section 7(a)(3) in ruling on its lack of jurisdiction (par. 10 of
the Compliance; docket, p. 353);18[18]



Accordingly, the CTA First Division adjudged both of the
petitioners guilty of direct contempt of court for failing to uphold their
duty of preserving the integrity and respect due to the courts,
sentencing each to suffer imprisonment of ten days and to pay
P2,000.00 as fine.
Seeking reconsideration,19[19] the petitioners submitted that they
could not be held guilty of direct contempt because: (a) the phrase
gross ignorance of the law was used in its legal sense to describe the
error of judgment and was not directed to the character or competence
of the decision makers; (b) there was no unfounded accusation or
allegation, or scandalous, offensive or menacing, intemperate,
abusive, abrasive or threatening, or vile, rude and repulsive
statements or words contained in their motion for reconsideration; (c)
there was no statement in their motion for reconsideration that brought
the authority of the CTA and the administration of the law into
disrepute; and (d) they had repeatedly offered their apology in their
compliance.20[20]







Their submissions did not convince and move the CTA First
Division to reconsider, which declared through its second assailed
resolution that:

The tone of an irate lawyer would almost always reveal the sarcasm in
the phrases used. The scurrilous attacks made in the guise of pointing
out errors of judgment almost always result to the destruction of the
high esteem and regard towards the Court.21[21]

and disposed thusly:

WHEREFORE, petitioners Motion for Reconsideration is hereby
DENIED for lack of merit. Each counsel is hereby ORDERED TO PAY a
fine of Two Thousand Pesos and to SUFFER IMPRISONMENT for a
period of ten (10) days.

SO, ORDERED.22[22]

Issues

Arguing that they were merely prompted by their (z)ealous
advocacy and an appalling error committed by the CTA First Division to





frankly describe such error as gross ignorance of the law, the petitioners
now attribute grave abuse of discretion to the CTA First Division in
finding that:

I
THE PETITIONERS LANGUAGE IN THE SUBJECT MOTION AND
COMPLIANCE WAS CONTUMACIOUS;

II
THE PETITIONERS WERE NOT SINCERE IN THEIR APOLOGY AND
WERE ARROGANT;

III
THE EXERCISE OF CONTEMPT POWER WAS WITHIN THE LIMITS SET
BY THE SUPREME COURT; AND

IV
THE PETITIONERS WERE GUILTY BEYOND REASONABLE DOUBT OF
DIRECT CONTEMPT.


The petitioners continue to posit that the phrase gross ignorance
of the law was used in its strict legal sense to emphasize the gravity of
the error of law committed by the CTA First Division; and that the
statements described by the CTA First Division as abrasive, offensive,
derogatory, offensive and disrespectful should be viewed within the
context of the general tone and language of their motion for
reconsideration; that their overall language was tempered, restrained
and respectful and should not be construed as a display of
contumacious attitude or as a flouting or arrogant belligerence in
defiance of the court to be penalized as direct contempt; that the CTA
First Division did not appreciate the sincerity of their apology; and that
they merely pointed out the error in the decision of the CTA First
Division.

For its part, the CTA First Division contends that a reading of the
motion for reconsideration and the character of the words used therein
by the petitioners indicated that their statements reflected no humility,
nor were they expressive of a contrite heart; and that their
submissions instead reflected arrogance and sarcasm, that they even
took the opportunity to again deride the public respondent on the
manner of how it wrote the decision.23[23]

The Office of the Solicitor General (OSG) opines that submitting a
pleading containing derogatory, offensive and malicious statements to
the same court or judge in which the proceedings are pending
constitutes direct contempt; and that the CTA First Division did not
abuse its discretion in finding the petitioners liable for direct contempt
under Section 1, Rule 71 of the Rules of Court.24[24]

Ruling






We dismiss the petition for certiorari, and declare that the CTA
First Division did not abuse its discretion, least of all gravely, in finding
that the petitioners committed direct contempt of court.

Canon 11 of the Code of Professional Responsibility mandates all
attorneys to observe and maintain the respect due to the courts and to
judicial officers and to insist on similar conduct by others. Rule 11.03 of
the Code of Professional Responsibility specifically enjoins all attorneys
thus:

Rule 11.03. A lawyer shall abstain from scandalous, offensive or
menacing language or behavior before the Courts.


It is conceded that an attorney or any other person may be critical
of the courts and their judges provided the criticism is made in
respectful terms and through legitimate channels. In that regard, we
have long adhered to the sentiment aptly given expression to in the
leading case of In re: Almacen:25[25]

xxx every citizen has the right to comment upon and
criticize the actuations of public officers. This right is not
diminished by the fact that the criticism is aimed at a judicial



authority, or that it is articulated by a lawyer. Such right is
especially recognized where the criticism concerns a
concluded litigation, because then the courts actuation are
thrown open to public consumption.
xxx
Courts and judges are not sacrosanct. They should and
expect critical evaluation of their performance. For like the
executive and the legislative branches, the judiciary is rooted
in the soil of democratic society, nourished by the periodic
appraisal of the citizens whom it is expected to serve.

Well-recognized therefore is the right of a lawyer, both as
an officer of the court and as a citizen, to criticize in properly
respectful terms and through legitimate channels the acts of
courts and judges.xxx
xxx
Hence, as a citizen and as officer of the court, a lawyer is
expected not only to exercise the right, but also to consider it
his duty to avail of such right. No law may abridge this
right. Nor is he professionally answerable for a scrutiny into
the official conduct of the judges, which would not expose him
to legal animadversion as a citizen. xxx
xxx
But it is the cardinal condition of all such criticism that it
shall be bona fide, and shall not spill over the walls of decency
and propriety. A wide chasm exists between fair criticism, on the one
hand, and abuse and slander of courts and the judges thereof, on the
other. Intemperate and unfair criticism is a gross violation of
the duty of respect to courts. It is such a misconduct that
subjects a lawyer to disciplinary action. (emphasis
supplied)26[26]

The test for criticizing a judges decision is, therefore, whether or
not the criticism is bona fide or done in good faith, and does not spill
over the walls of decency and propriety.




Here, the petitioners motion for reconsideration contained the
following statements, to wit: (a) [i]t is gross ignorance of the law for
the Honorable Court to have held that it has no jurisdiction over the
instant petition;27[27] (b) [t]he grossness of the Honorable Courts
ignorance of the law is matched only by the unequivocal expression of
this Honorable Courts jurisdiction;28[28] and (c) the Honorable Courts
lack of understanding or respect for the doctrine of stare decisis.29[29]

The CTA First Division held the statements to constitute direct
contempt of court meriting prompt penalty.

We agree.

By such statements, the petitioners clearly and definitely
overstepped the bounds of propriety as attorneys, and disregarded their
sworn duty to respect the courts. An imputation in a pleading of gross
ignorance against a court or its judge, especially in the absence of any







evidence, is a serious allegation,30[30] and constitutes direct contempt of
court. It is settled that derogatory, offensive or malicious statements
contained in pleadings or written submissions presented to the same
court or judge in which the proceedings are pending are treated as
direct contempt because they are equivalent to a misbehavior
committed in the presence of or so near a court or judge as to interrupt
the administration of justice.31[31] This is true, even if the derogatory,
offensive or malicious statements are not read in open court.32[32]
Indeed, in Dantes v. Judge Ramon S. Caguioa,33[33] where the
petitioners motion for clarification stated that the respondent judges
decision constituted gross negligence and ignorance of the rules, and
was pure chicanery and sophistry, the Court held that a pleading
containing derogatory, offensive or malicious statements when
submitted before a court or judge in which the proceedings are pending
is direct contempt because it is equivalent to a misbehavior committed
in the presence of or so near a court or judge as to interrupt the
administration of justice.34[34]











In his dissent, Justice Del Castillo, although conceding that the
petitioners statements were strong, tactless and hurtful,35[35] regards
the statements not contemptuous, or not necessarily assuming the level
of contempt for being explanations of their position in a case under
consideration and because an unfavorable decision usually incites
bitter feelings.36[36]

Such contempt of court cannot be condoned or be simply ignored
and set aside, however, for the characterization that the statements
were strong, tactless and hurtful, although obviously correct, provides
no ground to be lenient towards the petitioners, even assuming that
such strong, tactless and hurtful statements were used to explain their
clients position in the case.37[37] The statements manifested a
disrespect towards the CTA and the members of its First Division
approaching disdain. Nor was the offensiveness of their strong, tactless
and hurtful language minimized on the basis that snide remarks or
sarcastic innuendos made by counsels are not considered contemptuous








considering that unfavorable decision usually incite bitter feelings.38[38]
By branding the CTA and the members of its First Division as totally
unaware or ignorant of Section 7(a)(3) of Republic Act No. 9282, and
making the other equally harsh statements, the petitioners plainly
assailed the legal learning of the members of the CTA First Division. To
hold such language as reflective of a very deliberate move on the part of
the petitioners to denigrate the CTA and the members of its First
Division is not altogether unwarranted.

The petitioners disdain towards the members of the CTA First
Division for ruling against their side found firm confirmation in their
compliance, in which they unrepentantly emphasized such disdain in the
following telling words:

3. Admittedly, the language of the Motion for
Reconsideration was not endearing. However, the undersigned
counsel found it necessary to bluntly call the Honorable
Courts attention to the grievousness of the error by calling a
spade a spade. The advocacy needed a strong articulation of
the gravity of the error of the Honorable Court in avoiding the
substantial and transcendental issues by the simple expedient
of dismissing the petition for alleged lack of jurisdiction, in
violation of Section 14, Article VIII of the Constitution, which
requires that the Decision must express clearly and distinctly the facts
and the law on which the Decision was based.
xxx
10. Since the Honorable Court simply quoted Section 7(a)(5), and it
totally ignored Section 7(a)(3), to perfunctorily find that
(U)ndoubtedly, appeals of the decisions or rulings of the Regional



Trial Court concerning real property taxes evidently do not fall within
the jurisdiction of the CTA, the undersigned counsel formed a
perception that the Honorable Court was totally unaware or
ignorant of the new provision, Section 7(a)(3). Hence the
statements that it was gross ignorance of the law for the Honorable
Court to have held that it has no jurisdiction, as well as, the grossness
of the Honorable Courts ignorance of the law is matched only by the
unequivocal expression of this Honorable Courts jurisdiction over the
instant case were an honest and frank articulation of undersigned
counsels perception that was influenced by its failure to understand
why the Honorable Court totally ignored Section 7(a)(3) in ruling on its
lack of jurisdiction. (emphasis supplied)39[39]


We might have been more understanding of the milieu in which
the petitioners made the statements had they convinced us that the CTA
First Division truly erred in holding itself bereft of jurisdiction over the
appeal of their client. But our review of the text of the legal provisions
involved reveals that the error was committed by them, not by the CTA
First Division. This result became immediately evident from a reading of
Section 7(a)(3) and Section 7(a)(5) of Republic Act No. 9282, the former
being the anchor for their claim that the CTA really had jurisdiction, to
wit:

Section 7. Jurisdiction. The CTA shall exercise:

(a) Exclusive appellate jurisdiction to review by appeal, as herein
provided:
xxx



(3) Decisions, orders or resolutions of the Regional Trial
Courts in local tax cases originally decided or resolved by them
in the exercise of their original or appellate jurisdiction;
(emphasis supplied)
xxx
(5) Decisions of the Central Board of Assessment Appeals
in the exercise of its appellate jurisdiction over cases involving
the assessment and taxation of real property originally
decided by the provincial or city board of assessment appeals;
(emphasis supplied)
xxx

As can be read and seen, Section 7(a)(3) covers only appeals of
the (d)ecisions, orders or resolutions of the Regional Trial Courts in
local tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction. The provision is clearly limited to
local tax disputes decided by the Regional Trial Courts. In contrast,
Section 7(a)(5) grants the CTA cognizance of appeals of the (d)ecisions
of the Central Board of Assessment Appeals in the exercise of its
appellate jurisdiction over cases involving the assessment and taxation
of real property originally decided by the provincial or city board of
assessment appeals. In its resolution of March 15, 2006, therefore, the
CTA First Division forthrightly explained why, contrary to the petitioners
urging, Section 7(a)(3) was not applicable by clarifying that a real
property tax, being an ad valorem tax, could not be treated as a local
tax.40[40]




It would have been ethically better for the petitioners to have then
retreated and simply admitted their blatant error upon being so
informed by the CTA First Division about the untenability of their legal
position on the matter, but they still persisted by going on in their
compliance dated March 27, 2006 to also blame the CTA First Division
for their perception about the CTA First Divisions being totally
oblivious of Section 7(a)(3) due to the terseness of the Decision dated
05 January 2006, viz:

12. Undersigned counsel regrets having bluntly argued
that this Honorable Court was grossly ignorant of Section
7(a)(3) because from the terseness of the Decision dated 05
January 2006, the undersigned counsel perceived the
Honorable Court as being totally oblivious of Section 7(a)(3).
Had the reasons discussed in the Resolution dated 15 March
2006 been articulated in the 05 January 2006 decision, there
would have been no basis for undersigned counsels to have
formed the above-mentioned perception.41[41] (emphasis
supplied)

The foregoing circumstances do not give cause for the Court to
excuse the petitioners contemptuous and offensive language. No
attorney, no matter his great fame or high prestige, should ever brand a
court or judge as grossly ignorant of the law, especially if there was no
sincere or legitimate reason for doing so. Every attorney must use only
fair and temperate language in arguing a worthy position on the law,
and must eschew harsh and intemperate language that has no place in



the educated ranks of the Legal Profession. Truly, the Bar should strive
to win arguments through civility and fairness, not by heated and
acrimonious tone, as the Court aptly instructed in Slade Perkins v.
Perkins,42[42] to wit:

The court notices with considerable regret the heated and
acrimonious tone of the remarks of the counsel for appellant,
in his brief, in speaking of the action of the trial judge. We
desire to express our opinion that excessive language
weakens rather than strengthens the persuasive force of legal
reasoning. We have noticed a growing tendency to use
language that experience has shown not to be conducive to
the orderly and proper administration of justice. We therefore
bespeak the attorneys of this court to desist from such
practices, and to treat their opposing attorneys, and the
judges who have decided their cases in the lower court
adversely to their contentions with that courtesy all have a
right to expect. (emphasis supplied)

We do not hesitate to punish the petitioners for the direct
contempt of court. They threw out self-restraint and courtesy, traits that
in the most trying occasions equate to rare virtues that all members of
the Legal Profession should possess and cherish. They shunted aside the
nobility of their profession. They wittingly banished the ideal that even
the highest degree of zealousness in defending the causes of clients did
not permit them to cross the line between liberty and license.43[43]





Indeed, the Court has not lacked in frequently reminding the Bar that
language, though forceful, must still be dignified; and though emphatic,
must remain respectful as befitting advocates and in keeping with the
dignity of the Legal Profession.44[44] It is always worthwhile to bear in
mind, too, that the language vehicle did not run short of expressions
that were emphatic, yet respectful; convincing, yet not derogatory; and
illuminating, yet not offensive.45[45] No attorney worthy of the title
should forget that his first and foremost status as an officer of the Court
calls upon him to be respectful and restrained in his dealings with a
court or its judge. Clearly, the petitioners criticism of the CTA First
Division was not bona fide or done in good faith, and spilled over the
walls of propriety.

The power to punish contempt of court is exercised on the
preservative and not on the vindictive principle, and only occasionally
should a court invoke its inherent power to punish contempt of court in
order to retain that respect without which the administration of justice
must falter or fail.46[46] We reiterate that the sanction the CTA First
Division has visited upon the petitioners was preservative, for the







sanction maintained and promoted the proper respect that attorneys
and their clients should bear towards the courts of justice.

Inasmuch as the circumstances indicate that the petitioners tone
of apology was probably feigned, for they did not relent but continued to
justify their contemptuous language, they do not merit any leniency.
Nonetheless, the penalty of imprisonment for ten days and a fine of
P2,000.00 is excessive punishment of the direct contempt of court for
using contemptuous and offensive language and verges on the
vindictive. The Court foregoes the imprisonment.

The Courts treatment of contemptuous and offensive language
used by counsel in pleadings and other written submissions to the courts
of law, including this Court, has not been uniform. The treatment has
dealt with contemptuous and offensive language either as contempt of
court or administrative or ethical misconduct, or as both. The sanction
has ranged from a warning (to be more circumspect), a reprimand with
stern warning against a repetition of the misconduct, a fine of
P2,000.00, a fine of P5,000.00, and even indefinite suspension from the
practice of law.

The sanction has usually been set depending on whether the
offensive language is viewed as contempt of court or as ethical
misconduct. In Re: Letter Dated 21 February 2005 of Atty. Noel S.
Sorreda,47[47] the errant lawyer who made baseless accusations of
manipulation in his letters and compliance to this Court was indefinitely
suspended from the practice of law. Although he was further declared
guilty of contempt of court, the Court prescribed no separate penalty on
him, notwithstanding that he evinced no remorse and did not apologize
for his actions that resulted from cases that were decided against his
clients for valid reasons. In Re: Conviction of Judge Adoracion G.
Angeles,48[48] the complaining State Prosecutor, despite his strong
statements to support his position not being considered as direct
contempt of court, was warned to be more circumspect in language. In
contrast, Judge Angeles was reprimanded and handed a stern warning
for the disrespectful language she used in her pleadings filed in this
Court, which declared such language to be below the standard expected
of a judicial officer. In Nuez v. Atty. Arturo B. Astorga,49[49] Atty.
Astorga was meted a P2,000.00 fine for conduct unbecoming of a lawyer
for hurling insulting language against the opposing counsel. Obviously,
the language was dealt with administratively, not as contempt of court.
In Ng v. Atty. Benjamin C. Alar,50[50] the Court prescribed a higher fine
of P5,000.00 coupled with a stern warning against Atty. Alar who, in his









motion for reconsideration and to inhibit, cast insults and diatribes
against the NLRC First Division and its members. Yet again, the fine was
a disciplinary sanction.

Despite having earlier directed the petitioners through its
resolution of March 15, 2006 that they should explain within five (5)
days from receipt of this Resolution why (they) should not be held for
indirect contempt and/or subject to disciplinary action,51[51] the CTA
First Division was content with punishing them for direct contempt under
Section 1,52[52] Rule 71 of the Rules of Court, and did not anymore
pursue the disciplinary aspect. The Court concurs with the offended
courts treatment of the offensive language as direct contempt. Thus,
we impose on each of them a fine of P2,000.00, the maximum
imposable fine under Section 1 of Rule 71, taking into consideration the
fact that the CTA is a superior court of the same level as the Court of
Appeals, the second highest court of the land. The penalty of
imprisonment, as earlier clarified, is deleted. Yet, they are warned
against using offensive or intemperate language towards a court or its
judge in the future, for they may not be as lightly treated as they now
are.






ACCORDINGLY, we DISMISS the petition for certiorari;
UPHOLD the resolutions dated May 16, 2006 and July 26, 2006; and
MODIFY the penalty imposed on Attorney Denis B. Habawel and
Attorney Alexis F. Medina by deleting the penalty of imprisonment and
sentencing them only to pay the fine of P2,000.00 each.

SO ORDERED.